COURT FILE NO.: CV-20-00004244-00
DATE: 2023 10 12
SUPERIOR COURT OF JUSTICE – ONTARIO
7755 Hurontario Street, Brampton ON L6W 4T6
RE:
ECO-POWER ELECTRICAL COMPANY LIMITED, Plaintiff
AND:
UNDER THE SUN HOME RENOVATIONS LTD., UNDER THE SUN REALTY INC., SIMONE, Luigi SIMONE, Miranda, Defendants
BEFORE:
Regional Superior Justice L. Ricchetti
COUNSEL:
FRUSTAGLIO, J., for the Plaintiff
SANGHA, J., for the Defendants: SIMONE, Luigi and SIMONE, Miranda
HEARD:
October 5, 2023, by video conference
Motion on notice - ENDORSEMENT
The Preliminary Issue
[1] There are several motions before the court – but not before me today. The outstanding motions to be heard and decided are:
• a motion by the Plaintiff for summary judgement scheduled for May;
• a motion by the Simone’s to set aside their default and to discharge the lien as expired.
[2] However, there is a preliminary issue to be decided which brings the matter before me today: Whether the Simones have standing to bring their motion to discharge the lien as expired?
Background
[3] Eco-Power Electrical Company Limited (Eco-Power) supplied services and materials to 2425 Old Pheasant Road, Mississauga (Property) under contract to Under the Sun Home Renovations Ltd. and/or Under the Sun Realty Inc. (Under the Sun).
[4] Under the Sun contracted to perform for various works directly with the owners, Luigi and Miranda Simone (the Simone’s).
[5] The Simone’s were the owners of the Property.
[6] The total price of Eco-Power’s subcontract with Under the Sun was $36,447.02.
[7] Eco-Power was not paid the balance owing to it under its subcontract being $30,034.77.
[8] Its last day of supply was October 13, 2020. Eco-Power registered a lien.
[9] Eco-Power preserved and perfected its lien in accordance with the Construction Act. A Statement of Claim and Certificate of Action were served on November 13, 2020.
[10] None of the Defendants delivered a Statement of Defence.
[11] On January 28, 2021, all Defendants were noted in default.
[12] The financial dispute appears to be that the Simone’s paid Under the Sun without retaining a 10% holdback. If the lien is valid, the Simone’s are liable to Eco-Power for holdback they should have retained, up to the amount outstanding to Eco-Power from Under the Sun.
[13] According to Eco-Power, the amount of the holdback the Simones were required to retain under the Construction Act is sufficient to pay the entirety of Eco-Power’s outstanding balance from Under the Sun.
The Simones’ Position
[14] The Simones submit that “any person” can bring a motion under s. 46(1) of the Construction Act for a declaration that the lien has expired and a dismissal of the action. Therefore, they are not precluded from doing so, just because they have been noted in default.
[15] In the alternative, the Simone’s submit the court should grant leave under s. 5(2) O. Reg 302/18 to permit them to bring this motion to vacate Eco Power’s lien claim as expired.
The Plaintiff’s position
[16] The Plaintiff submits that, permitting the Simone’s to move to declare that the lien is expired, is contrary to the prohibition in s. 5 of O. Reg 302/18.
[17] Further, leave should not be granted as the Simones are deemed to have admitted all the facts and claim of the Plaintiff.
The Law
[18] The Construction Act provides:
46 (1) Where a perfected lien that attaches to the premises has expired under section 37, the court, upon the motion of any person, shall declare that the lien has expired and shall make an order dismissing the action to enforce that lien and vacating the registration of a claim for lien and the certificate of action in respect of that action.
(Emphasis added.)
[19] Section 5 of O. Reg 302/18 provides:
- (1) If a person against whom a claim is made in a statement of claim, counterclaim, crossclaim or third party claim defaults in the delivery of a defence to that claim, the person against whom the claim is made may be noted in default.
(2) If a defendant or third party has been noted in default under subsection (1), the defendant or third party may not contest the claim of the person who named the defendant or third party as a defendant or third party, or file a statement of defence, except with leave of the court.
(3) A court may grant leave under subsection (2) only if the court is satisfied that there is evidence to support a defence.
(4) If the court grants leave under subsection (2), the court may,
(a) make any order as to costs that it considers appropriate; and
(b) give directions as to the conduct of the action.
(Emphasis added.)
Analysis
[20] In my view, it is not necessary to decide whether “any person” in s.46(1) permits a defendant noted in default can bring a motion to declare that a lien has expired.
[21] At the heart of the Simone’s motion is that Eco-Power failed to set this matter down for trial within 2 years of the action being commenced.
[22] There appears to be little or no dispute that the trial record in this proceeding was filed on January 13, 2023, more than two months after the mandatory statutory two-year deadline.
[23] I am satisfied that leave should be granted under s. 5(2) of the O. Reg 302/18 as there is evidence to support a defence – namely that the lien has expired for failure to set the matter down for trial within 2 years of perfecting the lien. See s. 37 (1) 2 of the Construction Act.
[24] The motions to still be decided are:
• the Simone’s motion to set aside of the default;
• the Simone’s motion to declare the lien expired; and
• the Plaintiff’s motion for summary judgment;
[25] The outstanding motions should be heard together at the currently scheduled May 2024 hearing date.
[26] Combining these motions is efficient from the administration of justice’s perspective, necessary to reduce the number of motions in what is supposed to be a summary proceeding and, lastly, given the amount of money at issue in this claim. So ordered.
Costs
[27] While the Simones were successful, it was their actions in failing to deliver a defence approximately 3 years ago and now seek to defend Eco-Power’s claim, that has led to this issue being litigated.
[28] There will be no costs of this motion.
RSJ Ricchetti
Released: October 12, 2023
COURT FILE NO.: CV-20-00004244-00
DATE: 2023 10 12
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
ECO-POWER ELECTRICAL COMPANY LIMITED
Plaintiff
- and –
UNDER THE SUN HOME RENOVATIONS LTD.,
UNDER THE SUN REALTY INC.,
SIMONE, Luigi, and
SIMONE, Miranda
Defendants
ENDORSEMENT
RSJ Ricchetti
Released: October 12, 2023