Court File and Parties

COURT FILE NO.: CV-16-126024 DATE: 20230112 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 2369119 Ontario Inc., Plaintiff AND: Mehrzad Kondazi and Baraheh Safari, Defendants

BEFORE: Associate Justice Jolley

COUNSEL: Louis Vittas, counsel for the moving party defendants Nicholas Tibollo, counsel for the responding party plaintiff

HEARD: 6 January 2023

Reasons for Decision

[1] The defendants seek an order dismissing this action for delay and discharging the construction lien and certificate of action pursuant to section 47 of the Construction Lien Act, R.S.O. 1990, c.30 (the “Act”), which both parties agree is the Act applicable to this action.

[2] If the matter is not dismissed for delay, the defendants seek an order discharging the construction lien and certificate of action as having been registered out of time.

Motion to dismiss for delay

[3] Under section 47 of the Act, an action may be dismissed on “any proper ground and subject to any terms and conditions that the court considers appropriate in the circumstances”. The defendants rely on the principles articulated in Whitestone Gate Development Inc. v. Perpetual Succession for East Toronto Chinese Baptist Church 2022 ONSC 459 in support of their position that the action should be dismissed for delay. The plaintiff did not contest those principles and I adopt them for the purpose of this motion.

[4] Considering all the evidence before me, I am of the view that it would not be appropriate to dismiss the action on this basis. The plaintiff served the defendants with the statement of claim on 3 June 2016. The defendants sought an extension of time to file a defence, which the plaintiff granted. However, when no defence was forthcoming after a warning and more than 18 months had passed, the plaintiff noted the defendants in default and, in February 2018, obtained default judgment. The defendants brought their motion to set aside the default judgment in November 2018 and filed their defence and counterclaim, to which the plaintiff responded. Pleadings were not closed until 18 January 2019.

[5] Once pleadings were closed, the parties held the first construction pretrial conference in November 2019. The regular trajectory of the action was then interrupted by the pandemic. The second pretrial conference was ultimately held in March 2021, albeit only after the defendants had attempted for some months to obtain dates from plaintiff’s counsel. It is conceded that the plaintiff did not attend the scheduled discovery that was ordered at the second pretrial conference. By way of explanation, Mr. Azizi, the plaintiff’s director, deposed that its then lawyer did not advise him of the discovery date or obligation.

[6] In the fall of 2021, the defendants attempted to schedule a third pretrial conference, which was opposed by plaintiff’s counsel due to a falling out between him and his client. Ultimately, plaintiff’s then counsel obtained a removal order in April 2022. The parties attended a third pretrial conference in June 2022, at which the plaintiff was ordered to pay costs for failing to have retained new counsel by that point. The plaintiff retained new counsel in July 2022 and, since that time the matter has proceeded to the point where it is ready for trial, subject to answers to undertakings being provided by February 6 and 7, 2023.

[7] At the plaintiff’s request, the defendants recently served their sworn affidavit of documents and the parties have conducted examinations for discovery, without prejudice to the defendants’ position on this motion.

[8] The defendants argue that the plaintiff failed to pay the costs award which was due 15 July 2022. The evidence shows that the defendants received the cheque, which was dated 11 July 2022 but refused to cash it, as it was delivered a few days after it was due. I do not find the plaintiff in breach of that order.

[9] On the record before me, I cannot find that the delay was inordinate or inexcusable, or intentional and contumelious. There is no evidence that a fair trial is not possible. While the plaintiff cannot be commended for how it has conducted the action, where there was delay, it has provided an explanation to demonstrate that it was not intentional and that it did not cause prejudice. It attempted to find a lawyer in the less than two months between the date of the removal order and the third pretrial conference. It was in discussions with new counsel but was not able to conclude the retainer until a month or so after that date.

[10] The request to dismiss the action on the basis of delay is dismissed.

Discharge of the lien as registered out of time

[11] The lien was registered on 1 February 2016 and the certificate of action on 18 March 2016. The Act provides that contractor’s lien expires at the conclusion of the 45 day period next following the occurrence of the earlier of the date the contract is completed and the date the contract is abandoned. (subparagraph 31(2)(b)).

[12] The defendants argued that the plaintiff did not attend at the property after 9 December 2015 and, presumably, had completed or abandoned the project by that date. The plaintiff claimed that it rendered services or supplied materials from 3 September 2015 to 19 December 2015. While the service or supply date is relevant to subcontractor liens rather than contractor liens, presumably the plaintiff led this evidence simply to demonstrate that it had neither abandoned nor completed the project.

[13] The defendants also rely on their assertion that they terminated the contract with the plaintiff on 9 December 2015 during a meeting at their home. That termination, they argue, constitutes abandonment for the purposes of section 31 of the Act and starts the 45 day clock running for registration of the lien.

[14] In order to succeed on this aspect of their motion, the defendants acknowledge that they must demonstrate that there is no genuine issue requiring a trial with respect to whether the lien claim was registered in a timely manner.

[15] I find that the evidence on this motion does not meet that high threshold.

[16] Mr. Azizi deposed that he was at the property on 19 December 2015 and taped and plastered the walls and ceiling in the garage (home office), did trim work and finished the window that was installed in the garage, finished the trim work on the door that led from the garage into the home and supplied and installed cabinetry in the garage. He valued his work that day at between $2,600 and $3,000.

[17] Mr Perez, the plaintiff’s general manager, deposed that he was with Mr. Azizi on 19 December 2015 at the property and did the work in question. There remained work to be done at that date, but it was not completed before the plaintiff was told on December 25 to no longer attend. The letter from the defendants to the plaintiff, referenced below, also confirms that the plaintiff had not yet started the renovation of the basement.

[18] As to the abandonment/termination date, the parties agree that this is a question of fact. On the record before me, the evidence is not so clear that it does not require a trial. Mr. Azizi has given contradictory evidence of when he was last on site. His affidavit stated it was December 19 but on cross examination he indicated he agreed he thought it was December 8 and then later changed that date to December 19.

[19] In addition to the contradicting and contradictory evidence of the plaintiff on the date it last worked on site, there is the interpretation of the termination letter written by the defendants to the plaintiff. The letter is dated 25 December 2015. The defendants characterize it as a reiteration of the reasons they had terminated the contract earlier, on December 9. However, the letter can equally be read as being the date of termination itself. It does not speak to an earlier termination on December 9. It does not use a phrase such as “as earlier discussed” or “as I previously notified you”. Instead, it states “at this point, waiting for you to finish is unacceptable” and “at this point in time I cannot trust your work or workmanship”. The letter ends: “Therefore I would like to inform you, your services are no longer required at my house. You are no longer permitted to enter or step foot on my property.” (emphasis added)

[20] There is no clear and cogent evidence that the contract was terminated and therefore abandoned on 9 December 2015 rather than 25 December 2015, as implied in this letter. I find there is a genuine issue for trial concerning the date of abandonment on the evidence of the plaintiff and the defendants.

[21] The motion to discharge the lien and certificate of action is dismissed.

Costs

[22] The parties agreed at the conclusion of the motion that the unsuccessful party would pay $4,000 in costs to the successful party. The defendants shall pay the plaintiff this sum within 30 days of this decision.

[23] Given the amount in issue in this action, I encourage the parties to continue to work toward a cost effective resolution.

Associate Justice Jolley Date: 12 January 2023