Court File and Parties

COURT FILE NO.: CV-22-00090594-0000 DATE: 2023 Feb 15

ONTARIO SUPERIOR COURT OF JUSTICE

IN THE MATTER OF the Construction Act, R.S.O. 1990, c. C.30

BETWEEN:

BROOK RESTORATION LTD. Plaintiff – and – GREATWISE DEVELOPMENTS LTD., PLAYFAIR RESIDENCES LIMITED and KARY ON INC. Defendants/Moving Parties

COUNSEL: M. Swartz and B. Kuchar, for the Plaintiff A. Merskey and K. Kuczynski, for the Defendants/Moving Parties

HEARD at Ottawa: January 17, 2023

TRANMER, J.

Decision on Motion

[1] This is a construction lien action.

[2] By Order dated October 7, 2022, the Defendant Greatwise Developments Ltd., having posted security in the amount of the lien claim, namely $8,058,101.79, plus the sum of $250,000 as security for costs, the lien of the Plaintiff was vacated.

[3] In this Motion, the Defendant seeks an Order discharging the lien, or, in the alternative, reducing the security posted.

[4] In the course of argument before me, the Plaintiff agreed that its lien claim should be reduced by $250,000, on account of a payment that had been made by the Defendant but overlooked by the Plaintiff.

[5] A consent Order to that extent shall issue. This reduced the lien claim amount to $7,808,107.79 inclusive of H.S.T.

Background Facts

[6] It is not disputed that the Defendant issued a Letter of Intent dated October 7, 2019 to the Plaintiff with regard to construction of an apartment complex and restoration of parking garage. The Plaintiff accepted the Letter of Intent. It is agreed that the industry standard CCDC2-2008 stipulated Price Contract was to be prepared and executed. That was not done. It is agreed that the contract price was $3,592,000, adjusted by agreement from the $3,600,000 plus H.S.T. price set out in the Letter of Intent.

[7] The Plaintiff undertook the work. It did not complete the work. It is agreed the water proofing was not completed by the Plaintiff. Deficiencies are in dispute.

[8] The Plaintiff claims that it incurred costs in the sum of $9,661,305.75 inclusive of overhead and profit in performing the work that it did.

[9] The Plaintiff credits the Defendant with payments of $2,780,236.91 (Compendium p. A315) plus the additional $250,000 admitted paid.

[10] It appears the last payment was made in October 2020.

[11] The Defendant asserts that the last work done on site by the Plaintiff was at the end of November 2021.

The Issues

[12] A significant issue in dispute is whether this was a fixed price contract with a claim for extras, as submitted by the Defendant, or a costs plus contract as submitted by the Plaintiff.

[13] On this point, it is to be noted that there are no approved change orders, or written agreements to support the difference between the Letter of Intent figure of $3,592,000 and the costs claimed by the Plaintiff in the amount of $9,661,305.75.

[14] It appears that the actual work done by the Plaintiff was performed between early January 2020 and the end of November 2021, with the further activity described by the Plaintiff at paras. 38 to 51 of its Factum from November 4, 2021 to September 15, 2022, which included on site attendances, discussions and emails.

[15] The second significant issue is whether the Plaintiff abandoned the project at the end of November 2021 as submitted by the Defendant or whether the Plaintiff did not cease its work on the project and always maintained the intention of completing the job until it was terminated by the Defendant on September 15, 2022. Other issues include whether there are errors or non lienable costs in the lien as claimed and whether the lien is frivolous, vexatious and an abuse of process.

Defendant’s Position

[16] The Defendant argues that the lien should be discharged because this is a fixed price contract and the Plaintiff has not complied with the legal obligation to “provide an itemized claim showing (i) contract accounting plus (ii) extras (with amounts claimed for each extra, including the basis on which those claims were calculated…”. (HMI Construction Inc. v. Index Energy Mills Road Corp., 2017 ONSC 4075, paras. 17 and 18.)

[17] The Defendant submits that the Plaintiff improperly produced a ledger which simply identifies all costs incurred without identifying those incurred due to changes, delay or otherwise. The Defendant argues that in its pleadings and in the cross-examination evidence of the Plaintiff representative, the Plaintiff admits that this was a fixed price contract.

[18] The Defendant submits that there are demonstrated inconsistences and errors in the calculation of the liens by the Plaintiff including non lienable items which makes the quantum of the lien as claimed unreliable.

[19] The Defendant also submits that the Plaintiff abandoned the project and that its lien claim was untimely and should be discharged. The Defendant submits that the Plaintiff refused to complete work until it was paid. The Defendant submits that the onus was on the Plaintiff to complete the work by giving notice of its timing.

[20] The Defendant argues in its Factum that the lien is frivolous, vexatious and an abuse of process.

Plaintiff’s Position

[21] The Plaintiff argues that this was a costs plus contract, that the Defendant knew it, and that the Defendant agreed to it. The Plaintiff points to the cross-examination evidence of Mr. Welch, Questions 22 to 24 and 31:

22 Q. Okay. Now am I correct in understanding as well from your evidence that the original contract figure was 3,592,000? A. Correct

23 Q. Okay. And that value is part of the build up to the 8.1 million billed to date. Fair? A. No, it’s not.

24. Q. No, it’s not? A. 3.6 million was the original letter of intent amount, which would have had overhead and profit in it. But through the course of this project, we did advise Greatwise that we were prepared to deliver it at cost. So I’m presenting our cost in this ledger. (emphasis added)

25. Q. Can you peel it back? A. So it was the original scope. It’s not – so it hasn’t been presented that way. Again, we put – what we told Greatwise through this project, as we were prepared to deliver it at cost, when we were having issues with the project and all the charges, we advised them we – costs. So what I’m presenting here are the total costs, and then I – because – so we had – one of the reasons we said that is because we were interested in creating a long-term partnership with Greatwise. I’m not putting the overhead and profit back in because that doesn’t appear to happen – to be happening. (emphasis added)

The Plaintiff also points to its letter of January 24, 2021 to support its position that this was a costs plus job. The issues of the modified architectural and structural drawings and significant variations from the drawings and specifications in which the Letter of Intent was based referred to in that letter were not resolved.

[22] The Plaintiff argues that there are significant contested issues of fact (Pentad Construction Inc. v. 2022988 Ontario Inc., 2021 ONSC 824, para. 5) and complex issues of contested facts (Structform International Ltd. v. Ashcroft Homes Construction Inc., 2013 ONSC 4544, para. 12) that should properly be resolved at trial.

[23] The Plaintiff also argues that its pleadings and its letter of January 24, 2021 specifically identify in detail the areas of increased costs caused by the changes including delay, design changes, site conditions, and additional work requested by the Defendant.

[24] The Plaintiff argues that this proves the project became a costs plus, or open book, contract. The plaintiff argues that the court cannot find that there is no reasonable prospect of the Plaintiff proving a lien for the amount it has claimed. (Structform, para. 12).

[25] The Plaintiff argues that the activities at and concerning the project after November 4, 2021, as identified in its Factum paras. 38 to 51, confirm that the Plaintiff was genuinely committed to and intended to complete the project. The Plaintiff argues that there was no abandonment in fact and law (Baeumler Quality Construction Inc. v. Pirraglia, 2018 ONSC 7610 and D’urzo Demolition Inc. v. Damaris Developments Inc., 2012 ONSC 1912).

[26] The Plaintiff disputes that it maintained that it insisted on being paid before it would do further work. There was a dispute as to deficiencies which the Plaintiff set forth in writing. The Plaintiff relies on the emails of May 12, 2022, May 24, 2022, June 3, 2022, June 22, 2022, September 15, 2022, and January 21, 2022.

[27] The Plaintiff submits that this is not a case of frivolous or vexatious lien claim and is not an abuse of process. It argues the case relied upon by the Defendants, Franro Property Development Ltd. v. Heritage Glen North Ltd. [1993] O.J. No. 2396 (Ont. Gen. Div.), is readily distinguishable.

Legal Principles

[28] Counsel referred to a number of helpful authorities.

The Construction Act, R.S.O. 1990, c. C.30

[29] The relevant sections are:

a. 14 (1) A person who supplies services or materials to an improvement for an owner, contractor or subcontractor, has a lien upon the interest of the owner in the premises improved for the price of those services or materials. b. 1 (1) “price” means, (a) the contract or subcontract price, (i) agreed on between the parties, or (ii) if no specific price has been agreed on between them, the actual market value of the services or materials that have been supplied to the improvement under the contract or subcontract, and (b) any direct costs incurred as a result of an extension of the duration of the supply of services or materials to the improvement for which the contractor or subcontractor, as the case may be, is not responsible; (“prix”) c. 44 (5) Where an amount has been paid into court or security has been posted with the court under this section, the court, upon notice to such persons as it may require, may order where it is appropriate to do so, (a) the reduction of the amount paid into court, and the payment of any part of the amount paid into court to the person entitled; or (b) the reduction of the amount of security posted with the court, and the delivery up of the security posted with the court for cancellation or substitution, as the case may be.

The Test under Section 44(5)

[30] In Pentad Construction, the Court said, on a motion to reduce security,

71 Pentad's argument has much to be said for it. The CLA was intended to provide a summary process for the determination of the claims of unpaid contractors. Section 67(1) (now s. 50(3) of the Construction Act) provides that the procedure in an action under the CLA is to be "as far as possible of a summary character, having regard to the amount and nature of the liens in question."

72 Time-consuming interlocutory motions, particularly ones requiring a deep dive into the merits of the claim, are antithetical to the summary character of the procedures established by the legislation.

80 In the result, the governing test appears to be that the court is entitled to reduce the amount of the security posted to vacate a lien "if the evidence supporting the calculation of the claim for lien fails to establish a reasonable basis for the amount claimed." See H.I.R.A., para. 10 and HMI Construction Inc. v. Index Energy Mills Road Corp., 2017 ONSC 4075 (Div. Ct.) at para. 25.

81 The assessment of the evidence in support of, or contrary to, the amount claimed is to be approached much in the same way that the evidentiary record is approached on a motion for summary judgment. See H.I.R.A, at para. 8. See also Ben-Air Systems Inc. v. Neilas (799 College St) Inc., 2014 ONSC 7205 (Master) at para. 27.

82 Judgment may be rendered on a summary judgment motion (and, by analogy, on a s. 44(5) motion) provided that the trial judge is able to reach a fair and just determination on the merits on the basis of the record filed. See Hyrniak v. Mauldin, 2014 SCC 7 at para. 49, where Karakatsanis J. held that a fair and just determination will be possible where the process (1) allows the judge to make the necessary findings of fact; (2) allows the judge to apply the law to the facts; and, (3) is a proportionate, more expeditious and less expensive means to achieve a just result.

88 In summary, I find that s. 44(5) offers a mechanism by which to determine, in a summary fashion, whether the amount claimed in a Claim for Lien is reasonable. For the purposes of this motion, the reasonableness of Pentad's claim comes down to the determination of whether Pentad is bound by the decisions of the payment certifier. It will be appropriate to make that determination, in a summary way, provided the court is able to make the necessary findings of fact and apply the law to the facts in a proportionate and cost-efficient way. It will be apparent from the conclusions I reach as this ruling proceeds, that I am satisfied that the issue at the core of this motion can appropriately be determined in a summary way.

89 In terms of making factual findings, I note that certain expectations relating to the evidentiary record have been established by the jurisprudence applicable to summary judgment motions. They are readily adaptable to motions under s. 44(5) of the CLA. They include: (a) The moving party bears the legal and persuasive burden to establish that there is no reasonable basis for the amount claimed; (b) The responding party bears an evidentiary burden to establish that there is a reasonable basis for the amount claimed; (c) Each party must "put their best foot forward" in terms of the evidentiary record; and, (d) The court is entitled to assume that the record before it contains the core substance of the evidence that the parties will present at trial.

See for instance, in the summary judgment context: Dawson v. Rexcraft Storage & Warehouse Inc., [1998] O.J. No. 3240 (C.A.) at para. 17; Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200 at paras. 26 and 32; and Penretail Management Ltd. v. 2380462 Ontario Inc. (o/a Bolton Health Centre), 2016 ONSC 600, at para. 10.

[31] Counsel also referred to Elegant Façades v. Broccollini, 2021 ONSC 8336, at para. 26, where the Court said:

A motion under s. 44(5) is conventionally approached in much the same way as a motion for summary judgment. Where there are significant genuinely contested issues of fact, it is generally preferable that they be resolved by way of a trial.

[32] In Structform International, Master MacLeod, now Regional Senior Justice, held:

The legal test

12 The test to be applied on a motion of this type is similar to the test on a summary judgment motion. That is the court must be satisfied on the basis of the motion materials that there is no reasonable prospect of the plaintiff proving a lien for the amount it has claimed. Despite the analogy to summary judgment, however, it is important to note that a motion under s. 44 of the Act is not a full-fledged summary judgment motion under Rule 20. Several cases establish that a motion under the security provisions of the Act is not the venue for determining complex issues of contested facts going to the merits of the claim.

13 The analogy to summary judgment is that the defendant must be able to show on a balance of probabilities that there is no genuine issue requiring a trial for the court to be able to conclude that the lien is inflated. The question, however, is narrower than on most summary judgment motions because there may be claims that are legitimate claims in contract or tort that are not legitimately the subject of a lien. So a critical question even if the claim itself may be legitimate is to determine what amount may legally attract the security afforded by a construction lien.

14 The largest part of the plaintiff's claim is for damages for delay and not all aspects of a delay claim may be lienable. To properly be the subject of a lien the claim must be reflective of the value of the work done on the improvement. That is it must come within the definition of "services or materials supplied to the improvement" and is limited to the "amount owing to the lien claimant in relation to the improvement". Thus additional expenses incurred because the project takes longer than anticipated such as labour costs, equipment rental and similar costs of remaining on the job will readily be found to be the basis for a valid lien. Damages at large, however, such as lost opportunity costs, loss of profits or aggravated damages will not be. Additional costs incurred offsite such as administrative overhead or lost profit and even onsite office overhead costs have been held not to be lienable. If a portion of the lien claim is attributable to damages that are not properly the subject of a lien then the security should be reduced to take that into account

15 Besides the question of lienability which it may be possible to determine on this type of motion, security can also be reduced if there are elements of the claim which are properly lienable but are clearly inflated. This will be so if the moving party defendant can establish that the maximum amount that could be recovered by the lien claimant is less than the amount of the lien.

16 Mathematical and addition errors in calculating the lien or other admissions obtained on cross examination may be taken into account in assessing the amount of the security. That said, however, the lien claimant should not be held to a standard of strict mathematical or scientific proof at this early stage of the litigation. Given the short timelines, lien claims must often be registered using the best information available at the time and as long as the amount claimed is not grossly excessive it may nevertheless be proper. It is not inherently unreasonable to include amounts in a claim for lien that must be estimated.

[33] In that case, Master MacLeod exercised his discretion under s. 44(5) to reduce the security posted by the Defendant. I note that in that case, there were admitted delays, changes, change orders submitted and approved. “The question of whether Ashcroft or Structform breached the construction contract is clearly a genuine issue. Similarly, the question of whether Ashcroft’s standard form contract was in force or not is in issue”. (paras. 19, 20). In the case, it was not disputed that it was a fixed price contract in nature. (para. 20).

Was this a fixed price contract?

[34] It is a serious and genuine dispute between these parties as to whether this was a fixed price contract or costs plus.

[35] The Defendant maintains that it was fixed price in nature, and that the Plaintiff has failed to support its lien for extra costs in accordance the law.

[36] In Selectra Inc. v. Penetanguishene (Town), 2016 ONSC 2293, Justice Douglas pointed out:

28 As a lien is limited to the amount a contractor is owed. If there is a fixed price contract, in the absence of approved change orders, the contractor cannot include in its claim for lien extra labour or materials charges for work described in the fixed price contract simply because those costs were more than usual or anticipated when the fixed price contract (or change orders) were agreed to. Some amount of risk of a cost escalation is assumed by the contractor (see Structform International Ltd. v. Ashcroft Homes Construction Inc.).

[37] Justice Gilmour in Jo/Vi Ltd. v. Balmoral Developments Inc., 2014 ONSC 6803, pointed out at para. 22(c):

Fixed price contracts are special types of contracts in construction law. Under such contracts, the contractor agrees to carry out all the work involved in the construction for a fixed sum. In that respect, the contractor takes a calculated risk that the actual cost of the work to be carried out may be more than anticipated. Irrespective of the actual amount of work involved he must perform the whole of the work, in return for which he is entitled to receive the agreed upon price, but no more.

[38] The Defendant submits that the Plaintiff was bound to advance its lien claim as stated by the Divisional Court in HMI Construction, para. 18:

When HMI was asked to account for its lien claim, it did not do so properly. HMI did not provide an itemized claim showing (i) contract accounting plus (ii) extras (with amounts claimed for each extra, including the basis on which those claims were calculated), less (iii) credits for contract work not done, and less (iv) acknowledged deficiencies (if any), plus (v) any other claims (such as delay costs). Instead, HMI provided an accounting of its total costs for the project. In the words of the motions judge, "HMI totally ignored the fact that they were bound by a fixed price contract" (para. 17). The motions judge found, correctly, that this is simply the wrong way to approach the issue where there is a written contract with a stipulated price that governs the lien claimant's claim.

[39] The Defendant submits that the Plaintiff has not done so. In that case, there was a finding of a fixed price contract. HMI calculated its lien using a costs plus approach. That was found to be the wrong approach.

Non Lienable Items

[40] The Court in Selectra identified costs that are non lienable at paras. 6, 21, 23, 24, 25, 26 and 27.

6 Selectra concedes the following deductions as being appropriate: a) Site supervisor mileage allowance $17,042.20 b) Site supervisor hotel $17,839.92 c) Site supervisor per diem $17,806.25 d) Security for Eramosa's lien (including additional 25%) $118,411.46 e) Security for Summa's lien (including additional 25%) $130,786.81 f) Project management time reduction from 940 hours to 880.75 (difference 59.25 hours x $107.28) hours x $107.28 $6356.34 g) Project supervision; $35,026.92 h) HST on project supervision; $4553.49 i) HST on items (a), (b) and (c) $6,849.48 j) Bonding $12,367.67 k) Additional 25% of Summa and Ermosa liens $49,839.65 Grand total deductions conceded by Selectra $416,888.14

21 In Stucore Construction Ltd. v. Brock University, [2001] O.J. No. 4060 ONSC Talliano J. found that charges relating to a superintendent, carpenter, labour foreman and the project manager onsite for the duration of the delay were arguably related to the supply of services and materials to the improvement as extras to the contract price. As such Talliano J. concluded those charges would support a claim for lien. I note however that the reasonableness of those charges in relation to the delay claim was not argued before Talliano J. in contrast to the circumstances before me. Talliano J. noted that damages flowing from lost profits on other jobs which a claimant was unable to undertake because of undue delay would not be lienable.

23 Costs incurred offsite such as administrative overhead and onsite office overhead costs are not lienable. Such services include, inter alia: (a) Setting up a sales office; (b) Making building permit applications; (c) Negotiating with various building trades; (d) Dealing with local municipal officials; (e) Communicating with and assisting the site supervisor with respect to decision making; (f) Supplying construction management services including inter alia reviewing tenders, selection of trades, supervision of site superintendent and coordination of trades; (g) Hiring; (h) Reviewing tender documents and calculation of bids; (i) Review of blueprints to assess material and labour requirements; (j) Communications with suppliers to solicit quotes and coordination of the responses; (k) Maintenance of binders at the office containing key project information; (l) Preparation of progress billing statements (see 697470 Ontario Ltd. v. Presidential Developments Ltd., supra).

24 General overhead expenses cannot be considered a supply of materials or services upon or in respect of an improvement as those services were "not so directly related to the construction of the improvement" to fall within the contractual chain on construction projects that are given a financial preference and a security interest by the Act. As such, general overhead expenses are not lienable (see Rudco Insulation Ltd. v. Toronto Sanitary Inc., [1998] O.J. No. 4105 ONCA).

25 Expenses incurred with respect to the purchase and repair of equipment that is not for the exclusive use of the subject property and merely adds to or maintains a person's equipment to be used by that person on future projects is not leinable (see Taylor Hardware Ltd. v. Canadian Associated Goldfields Ltd., [1929] O.J. No. 23 ONCA).

26 To recover for delay the contractor must proceed as follows: (a) The cause of the delay must be isolated and defined; (b) The delay must be analyzed to determine whether it is excusable or the responsibility of the contractor; (c) If the delay is the contractor's responsibility the contractor must bear the cost. If it is excusable the extent of the delay must be determined; (d) The contractor must prove that actual or constructive notice of the delay was given if required by the contract; (e) If must be established whether the delay affected items on the critical path or whether it merely reduced or eliminated the float; (f) The contract must be reviewed to assess whether it provides that the contractor is entitled to a remedy of extension of time only or time and compensation; and (g) The quantum of compensation must be determined.

(see Bemar Construction (Ontario) Inc. v. Mississauga (City) ONSC)

27 Expenses incurred as a result of excusable delays are not lienable. Excusable delays include: (a) Weather (b) Strikes (c) Floods (d) Acts of municipal and government authorities (e) Acts of God or Force Majeure (f) Delays by subcontractors and suppliers arising from unforeseen events caused beyond the control and without the fault or negligence of the contractor, subcontractor or suppliers; and (g) Unanticipated soil conditions beyond the reasonable contemplation of either party (See Bemar Construction (Ontario) Inc., supra)

[41] In this regard, I have also considered Structform, para. 27:

27 The extended duration costs include some costs such as crane and forming equipment as well as outside rentals such as concrete pumps. These represent claims for equipment on site for the extended duration of the contract and are legitimately lienable. Some element of the "delay costs" is simply a damage claim however and is not subject to lien rights. This would include the "head office overhead". Similarly there are meal allowance and fuel allowance charges which are amounts that were never the responsibility of Ashcroft under the contract. These amounts must be backed out of the claim for extended duration (delay) for lien purposes. The resulting claim of $733,074.28 must therefore be reduced to $596,431.16.

Abandonment

[42] I have considered the law as set out in Baeumler, at paras. 38, 40, 41, 47 and in D’urzo, at para. 17, in Anderson v. Fort William Commercial Chambers Ltd. , 1915 CarswellOnt 201 (Ont. C.A.) para. 8, and in Edgecon Construction Inc. v. 746136 Ontario Limited, 2010 ONSC 6347.

Is the Lien Frivolous, Vexatious or an Abuse of Process?

[43] I have considered the law as set out in Franro Property Development.

Analysis

I. Nature of the Contract

[44] The record contains what appear to be important indisputable facts including:

a. The fixed price contract itself was not executed. b. The wording of the Letter of Intent stated that it was based on structural drawings dated March 5, 2019 and revised drawings sent September 5, 2019. c. Final stamped steel shop drawings were not received until end of February 2020. d. Shop drawings for ramp were not received until week of September 7, 2020. e. The commencement of the work was delayed. Brook alleges no substantive work was completed before January 2020 contrary to the parties’ initial intent. f. Brook itemized its concerns in a detailed letter January 24, 2021 – the evidence is that there was no resolution. g. Greatwise acknowledged that communication and proposed a meeting (email chain at pages A444 to A455 and at Pages A458 to A467 of the Compendium). h. Brook priced one concrete pour for each floor; they were required to do 2 pours per floor. i. The huge difference between the quantum of the cost as set out in the Letter of Intent as revised, $3,500,000, compared to the costs claimed to have been incurred claim of $9,000,000. j. There are no approved change Orders or written agreements to support what is either a very large miscalculation on the part of both parties in the Letter of Intent or a costs plus agreement. k. There is the evidence of Mr. Welch, Q. 24, 31 set out above. It appears that a court could conclude that Brook told Greatwise it was proceeding as a costs project. l. There is evidence upon which a court could conclude that up until September 2022, the parties were working together to complete the work.

[45] I find that the nature of the actual agreement between the parties is a highly significant and material factual dispute in issue. This complex factual issue is beyond the scope of a s. 44 motion. It is a triable issue.

[46] The significantly genuinely contested issues of fact involved in this dispute are best resolved on a full evidentiary record following trial.

[47] Subject to my comments under Heading IV, I am not satisfied that there is no reasonable prospect that the Plaintiff can prove its lien.

[48] Therefore, the Defendant’s motion to discharge the lien on this basis is dismissed.

II. Abandonment

[49] On the record before me including the activity, discussions and communications between the parties as identified in paragraphs 38 to 51 of Brook’s Factum, I am not persuaded that Brook abandoned the project within the meaning of Baeumler, D’Urzo and Anderson.

[50] I cannot find that Brook ceased its work or did not intend to complete its work or that it demanded payment as a condition of doing so.

[51] This is a triable issue.

[52] On this point, the Defendant’s motion is dismissed.

III. Frivolous, Vexatious or Abuse of Process

[53] My findings and decisions above lead me to conclude that this lien claim is not frivolous, vexatious or an abuse of process.

[54] The cause of the claims of the Plaintiff are identified in the January 24, 2021 letter and listed in the 97 page ledger and the email chain at pages A458 to A467 of the Compendium.

IV. Lien Calculation: Errors and Non Lienable Items

[55] In its materials, the Defendant argues:

a. There is an inconsistency with respect to the H.S.T. claim which the Defendant says is an error of $252,197.65 in its favour (Factum, para. 31). b. There is a double count of profit and overhead by the Plaintiff. No dollar amount is attributed by the Defendant. c. There are unexplained ledger cost entries totalling $21,292.13 (Factum, para. 38). d. In addition, the Defendant asserts that the other errors and inconsistences that it identified total $826,986.36. (Factum, para. 41).

[56] At paragraph 59 of its Factum, the Defendant identifies certain claims by the Plaintiff that it says are not lienable. It may be that the Defendant has not quantified the total of these amounts in its Factum or in oral submissions.

[57] In oral submissions, the Defendant identifies that the Plaintiff was claiming for the following non lienable items.

Additional Executive Staff Time $ 62,100 Additional Project Management $ 73,600 Additional Administration $ 20,250 $155,950

[58] The Plaintiff did not address these submissions in its Factum or oral argument.

Decision

[59] I note that on this motion, my sole function is to determine an appropriate quantum of security, without deciding the ultimate merit of any claims. My ruling in this matter should not be seen as having any impact upon the viability of the parties’ positions or issues at trial.

[60] Considering all of the evidence and submissions presented by the parties, it would seem appropriate to reduce the amount of security posted with the Court as follows:

1. On consent by the admitted overlooked payment of $250,000, therefore reducing the lien claim to $7,808,107.79 inclusive of H.S.T.
2. It is further ordered that security posted shall be further reduced by: $ 252,197.65, para. 55(a) hereof $ 21,292.13, para. 55(c) hereof $ 826,986.36, para. 55(d) hereof $ 155,950.00 , para. 57 hereof $ 1,256,426.14
3. Therefore, it is ordered that the security posted is to be reduced to: $ 7,808,107.79 Less: 1,256,426.14 $ 6,551,681.65

Costs

[61] If the parties are unable to agree on costs after bona fide efforts to do so, they may make written submissions limited to 3 pages double spaced plus a Costs outline to be filed within 10 days.

[62] If no such submissions are received, there shall be no Order for costs.

Honourable Mr. Justice Gary W. Tranmer

Released: February 15, 2023