Court File and Parties

Court File No.: CV-17-00003764-00 Date: 2022 03 23 Ontario Superior Court of Justice

Triplecrete Limited Plaintiff

and

Pentad Construction Limited, Sundial Homes (Castlemore) Limited and The Corporation of the City of Brampton Defendants

Before: Ricchetti RSJ.

Heard: In Writing.

Costs Endorsement

The Positions on Costs

[1] Sundial Homes (Castlemore) Limited’s (“Sundial”) summary judgment motion to dismiss Triplecrete Limited’s (“Triplecrete”) action was granted subject to the issue of costs being decided by this court.

[2] Written cost submissions were received from both parties.

[3] Sundial seeks substantial indemnity costs of $72,711.00 for fees and $2,627.42 for disbursement plus HST (total $87,934.55) against Triplecrete or $54,961.18 on a partial indemnity basis.

[4] Triplecrete submits that costs should be awarded in the amount of $3,146 all inclusive.

Background

[5] Sundial was the owner of the property. Sundial retained Pentad Construction Limited (“Pentad”) as the site servicing contractor. Pentad retained Triplecrete to perform concrete work.

[6] Sundial and Pentad had a dispute. Sundial stopped paying Pentad. Pentad stopped paying Triplecrete.

[7] Triplecrete registered a lien in 2017 for $96,204.94 seeking payment and claimed holdback against Sundial and also advanced claims of quantum meruit and unjust enrichment against Sundial. There were cross claims between Pentad and Sundial in this proceeding.

[8] And then there were other proceedings. Sundial commenced a separate action against Pentad relating to the main dispute.

[9] Pentad appears to have closed as it did not defend the Sundial claim nor Triplecrete’s claim in the summary judgment motions I dealt with.

[10] Returning to this proceeding, Triplecrete failed to set down its lien action within two years, resulting in its lien being discharged and vacated. However, Triplecrete’s claim continued as a “normal” action against Sundial and Pentad.

[11] The problem is that there was no privity of contract between Triplecrete and Sundial. The only claims Triplecrete raised against Sundial were quantum meruit and unjust enrichment. These types of claims cannot be made in a construction lien type proceeding because it would seriously undermine the statutory scheme in the Construction Lien Act (now the Construction Act) which provides remedies between parties who have no privity – lien, holdback and trust rights. See MGL Construction Inc. v. Boutet and Folk, 2015 ONSC 4477:

[21] Second, and related to one above, there is consistent authority for the proposition that claims in restitutionary quantum meruit by subcontractors against owners should not be allowed because to do so would circumvent and undermine the scheme established by the construction lien legislation. The existence of the CLA is in effect the juristic reason for any unjust enrichment by the owner that a subcontractor may otherwise be able to establish. The CLA provides subcontractors with specific in personam remedies against owners which turn on the concepts of lien and holdback. To give subcontractors the added non-statutory remedy of restitutionary quantum meruit when the statutory remedies fail would undermine the statute. In Barrie Trim v. Heath et al., 2010 ONSC 2107 (Div. Ct.) at paragraph 8, Justice Healey quoted from the British Columbia Supreme Court in Elbee Development Corp. v. A&D Masonry Ltd. [1999] as follows: “To extend the remedy of unjust enrichment in circumstances such as are found involving A&D [subcontractor] and Elbee [owner] would be an unwarranted intrusion into the construction field.” In the above noted Hussey Seating case, the court held on page 7 that to allow such unjust enrichment claims would undermine the construction lien legislation, as “an owner [is] not the guarantor of every debt owed by its contractor.” I note that the claims for quantum meruit in the above noted Yorkwest case, which were rejected by the Divisional Court, were asserted by subcontractors against owners. I agree with these points.

(Emphasis added.)

[12] I agree there was no merit to Triplecrete’s remaining claim against Sundial in these circumstances.

[13] Despite this, Triplecrete continued to pursue its claim against Pentad but also required Sundial to proceed in this action.

[14] After serving its motion materials, Sundial made an offer that, if Triplecrete consented to the dismissal against Sundial and pay Sundial its partial indemnity costs, the motion could be avoided. Triplecrete did not accept this offer. However, within several weeks, Triplecrete confirmed it would not oppose the motion but that the “no opposition” would be “subject to the issue of costs”.

[15] Now, Sundial seeks substantial indemnity costs of the entire action.

[16] During this recent flurry of summary judgment motions, Triplecrete obtained judgment against Pentad, Sundial obtained judgment against Pentad, Sundial obtained this dismissal of Triplecrete’s claim against Sundial.

[17] There is no dispute that Sundial is entitled to some costs. The issues are scale, quantum and whether a Sanderson order should be made.

Scale of Costs

[18] I disagree that Sundial is entitled to substantial indemnity costs of the entire action. Triplecrete’s action only became unmeritorious after Triplecrete failed to set the lien action down for trial and its lien was vacated on October 28, 2019. At that point, all of Triplecrete’s remaining claims were no longer viable as having no merit.

[19] The Sundial “offer” on September 30, 2021, is not a factor as Sundial had to bring the motion (it threatened to do so in September 2020) and had previously advised (February 6, 2020) Triplecrete’s counsel that if forced to bring the motion it would seek substantial indemnity costs. Undeterred, Triplecrete’s counsel sought to press the matter on against Sundial. Accordingly, Sundial was forced to bring the summary judgment motion. AND it was successful, albeit on an unopposed basis. Therefore, the “offer” does not add to the issue of costs.

[20] In my view, Sundial is entitled to partial indemnity costs of Triplecrete’s action to October 28, 2019, and substantial indemnity costs thereafter, including for the summary judgment motion.

Quantum

[21] Now this becomes complex.

[22] Sundial alleges that its summary judgment motion against Triplecrete was “extensive” and “voluminous” yet, at the same time states Sundial states Triplecrete’s claim was so obvious without merit that substantial indemnity costs should be ordered. There is an inconsistency there.

[23] And in this case Sundial claims against Triplecrete that 103.7 hours was needed to prepare for the motion. Hardly a claim that was so obvious without merit.

[24] Part of the answer is that Sundial’s summary judgment motion, was essentially brought to deal with Triplecrete’s claim, but also to deal with Pentad’s cross claim and Pentad’s counterclaim in Sundial’s action.

[25] Separating what relates to the motion to dismiss the Triplecrete claim and what relates to Pentad’s claims and cross claim is simply an impossible task, especially given the limited information in the Sundial Bill of Costs filed.

[26] The other factor is that the Triplecrete claim was only for approximately $97,000. There is an obvious proportionality issue.

[27] I agree with Triplecrete that Sundial’s intended motion to discharge the Triplecrete lien for alleged lack of service of the Statement of Claim should not be recoverable. It was never brought.

[28] I agree with Sundial that its costs to vacate the Triplecrete lien are properly costs of the action. And should be payable by Triplecrete, not Pentad. Especially, where Triplecrete’s lien never proceeded to trial (or even past the setting the action down stage).

[29] Similarly, I agree with Sundial that the motion to discharge Triplecrete’s lien for not setting the action down for two years, is properly a cost of the action and this court has jurisdiction to award such costs even when the ex parte order is silent on the issue. It is only where the order on the interlocutory motion expressly deals with the issue of costs that costs of the action should not include additional or a different cost result.

[30] So, what is reasonable in the circumstances? I find that Sundial’s partial indemnity costs for the following steps appear reasonable in the circumstances. Partial Indemnity:

• $2,461 for the motion to vacate the lien;
• $1,246 for the for proceeding with the lien action after receipt of the Statement of Claim; and
• $5,619 for the motion to discharge the lien for failure to set action down for trial.

[31] The following are reasonable amounts for the remaining steps given the complexity, amount at issue and results. Substantial Indemnity:

• $5,000 for dealing generally with the action prior to bringing the summary judgment motion
• $20,000 for the summary judgment motion
• $500 for cost submissions

[32] The total amount of costs for fees assessed is $34,826 plus HST.

[33] On the issue of disbursements, Triplecrete, other than submitting that there are no receipts for the disbursements, did not make any other submissions.

[34] Having reviewed the disbursements claimed, with one exception, the amounts are reasonable and were reasonably incurred.

[35] The exception is the “paralegal charges” of which there is no information and given the substantial hours sought against Triplecrete by its lawyers, I am not satisfied that Sundial has established this disbursement as reasonable.

[36] Accordingly, I find that disbursements are fixed at $1,452.12 inclusive of HST.

Sanderson Order

[37] Triplecrete seeks a Sanderson Order, whereby the costs should be paid by Pentad.

[38] It is simply too late to raise this issue in a dispute between Triplecrete and Sundial on the issue of costs. Pentad has no notice of this claim for costs against it.

[39] Equally important, I see no reason why such an order should be made after Triplecrete’s lien was vacated and it was left with an unmeritorious claim in tort, the fact Triplecrete chose to continue with its action is not a reasonable basis to allow Triplecrete to avoid costs of choosing to proceed in this fashion.

[40] I do not find that any of the factors relevant to a Sanderson Order apply in this case.

[41] I find no merit to this submission.

Conclusion

[42] Triplecrete shall pay to Sundial costs in the sum of $40,805.58 (all inclusive) forthwith.

RSJ Ricchetti Date: March 23, 2022

Superior Court of Justice - Ontario Between: Triplecrete Limited -and- Pentad Construction Limited, Sundial Homes (Castlemore) Limited and The Corporation of the City of Brampton Cost Endorsement RSJ Ricchetti. Date: March 23, 2022