COURT FILE NO.: CV-19-618562 DATE: May 22, 2024
ONTARIO SUPERIOR COURT OF JUSTICE
IN THE MATTER OF the Construction Act, R.S.O. 1990, c.C.30
BETWEEN:
QUALITY GENERAL CONTRACTOR’S INC. Plaintiff
David Marcovitch for the plaintiff, Tel.: 416-783-7770, Fax:: 416-783-9568, Email: dmm@law-in-to.com;
-and-
JUDY WU, IVAN ZEE HIN CHAN, RANNA HOMES AND RENOVATIONS INC., ANTHONY RANALLO and THE TORONTO-DOMINION BANK Defendants
Iris Pichini for Judy Wu and Ivan Zee Hin Chan; Tel.: 416-365-1110, Fax:: 416-365-1876, Email: ipichini@weirfoulds.com.
HEARD: January 30, 2024
Associate Justice C. Wiebe
REASONS FOR JUDGMENT
I. Introduction
[1] On October 19, 2023 the defendants, Judy Wu and Ivan Zee Hin Chan (together “the Owners”), brought a motion under Construction Act, R.S.O. 1990, c. C.30 (“CA”) sections 45 and 47 seeking an order declaring the claim for lien of the plaintiff, Quality General Contractor’s Inc. (“Quality”), expired due to a failure to perfect, discharging the claim for lien from title and dismissing this action against the Owners. After a discussion on that day and later on October 30, 2023, I ordered on consent that this motion be turned into a summary trial of the following three issues:
a) Which CA applied, the old one or the new one?
b) Was there a contract between the Owners and Quality, and, if so, what was it?
c) What was Quality’s last date of supply?
[2] In closing argument, Quality conceded the Owners’ position namely that the old CA applies. I think that was an appropriate concession as the subject “contract” between the Owners and Ranna Homes and Renovations Inc. (“Ranna”) clearly predated July 1, 2018. Therefore, I will focus on the last two questions.
II. Background
[3] Quality filed the following affidavits as evidence in chief: the affidavit of Quality’s president, Nicolino Carlucci (“Nick”); the affidavit of Luz Maria Aguilera Diaz; an affidavit of Ensico Sanchez Mario Alejandro; two affidavits from Nick’s sons, Valentino and Paolo, who worked for a time on the project; and the affidavit of Elvin Casco, a plumbing subcontractor who worked for Quality on the project. The Owners filed two affidavits sworn by Ivan Zee Hin Chan (“Ivan”), one of the Owners. All were cross-examined. From these affidavits and the cross-examinations, the following facts appear not to be in dispute.
[4] The Owners reside at 27 Dukinfield Crescent, North York (“the Property”). On May 1, 2018 the Owner entered into a written contract (“the Contract”) with Ranna whereby Ranna would be the general contractor for specified renovations to the main floor and basement of the Property, to be done at a fixed price of $141,250 (HST inclusive). The Contract specified that the work would be completed by October 2, 2018.
[5] Ranna retained Quality as its subcontractor to do much of the work. This subcontract was not put into evidence, but it is undisputed that Quality was Ranna’s “subcontractor.”
[6] From July to October, 2018 the Owners and Ranna agreed to certain extras. Ranna rendered invoices for these extras. The Owners dispute the one sent by email on January 10, 2019. In the end, the Owners say that the total contract price inclusive of HST came to $160,304.50. The Owners paid Ranna a total of $134,987 by way of 12 cheques issued from May, 2018 to October, 2018.
[7] Meanwhile, Quality worked on the project and rendered several invoices to Ranna. Its invoices are stated as being issued to Ranna and have dates starting on August 4, 2018 and ending January 10, 2019.
[8] By October, 2018 Ranna owed Quality a significant amount money. Quality asserts that Ranna was not paying its trades and suppliers and was “going bankrupt.” Quality told the Owners it intended to stop work due to the nonpayment. What amount was owed to Quality at that time was unclear. Nick says in his affidavit at one point it was $76,000, and at another between $60,000 and $64,000. Quality asserts that on October 31, 2018 it reached an oral agreement with the Owners whereby the Owners guaranteed payment of Quality’s unpaid accounts to Ranna at the end of the project in return for Quality’s continued work. The Owners deny this agreement.
[9] On December 4, 2018 Ivan paid Mr. Alejandro $1,200 in cash. Ivan said in his affidavit this was a gift to allow Mr. Alejandro to travel to Mexico on a family matter. Mr. Alejandro states that this payment was not a gift, but payment for the work he did.
[10] On January 7, 2019 Ranna moved its equipment to a corner of the basement and had its cleaner perform post-construction cleaning. The Owners had planned to have their own cleaners clean the premises on January 10, 2029, but postponed that work to allow Ranna to pick up its tools and equipment. On January 9, 2019 the Owners changed the security code.
[11] The Owners left on a vacation to Japan on January 12, 2019, planning to return on January 26, 2019. They left control of the Property with their parents, who lived nearby.
[12] On January 21, Nick made an entry in his site diary describing work of painting and cleaning in the Property in advance of the Owners’ cleaning work the next day.
[13] January 22, 2019 is the date that triggers the Quality 45-day lien period as the Quality claim for lien was registered on March 8, 2019. On January 22, 2019 the Owners’ cleaners, Aspen Cleaning, attended at the Property to complete post-construction cleaning. Nick’s site diary shows no entry for that day.
[14] On January 23 and 24, 2019 Quality did not work on the Property. Nick states in his affidavit that his forces were on another project those two days.
[15] On Saturday, January 26, 2019 the Owners returned from their vacation. Ivan says in his affidavit that the Property was “clean and empty.”
[16] On February 3, 2019 Nick emailed the principal of Ranna, Anthony Ranallo, (“Anthony”), stating that Quality invoices numbered 269697, 269698, 084351, 084352, 084353 and 084354 were the “last remaining accounts to complete the project at 27 Dukinfield Cres.” The last of these invoices, the one numbered 084354, has the latest date, January 10, 2019.
[17] On March 2, 2019 Nick met with the Owners. Ms. Diaz asserts in her affidavit that she attended as well, which the Owners deny. Nick alleges that the Owners failed to honour their oral agreement of October 31, 2018 at this time. The Owners state that Nick simply advised them that, as Quality had not been paid, it was registering a claim for lien.
[18] On March 8, 2019 Quality registered a claim for lien on the title to the Property in the amount of $90,279.42. The stated last date of supply was “January 24, 2019.” In the “Statements” field, Quality identifies Ranna as the person it supplied, and states that it supplied pursuant to a subcontract it had with Ranna. Quality’s present lawyer, Mr. Marcovitch, is identified as the one who signed the document for Quality.
[19] On April 23, 2019 Quality commenced this action and registered a certificate of action. In the statement of claim Quality describes Ranna as the one who retained Quality to do work on the project. Quality pleads the alleged oral agreement of October, 2018. The Owners delivered a statement of defence and crossclaim on September 6, 2019.
[20] Ranna and Anthony Ranallo were noted in default, and on September 6, 2019 Quality obtained a default judgment against Ranna and Mr. Ranallo on its breach of contract claim requiring that Ranna and Mr. Ranallo pay Quality $90,940.24 plus costs to be assessed. The default judgment contains post-judgment interest entitlement at 3% per annum. The action against the Toronto-Dominion Bank was discontinued on April 13, 2021.
[21] On March 23, 2021 Mr. Marcovitch emailed counsel for the Owners with photographs of Nick’s site diary for Friday, January 25, 2019 and Saturday, January 26, 2019. The entry on January 25, 2019 contains statements that this is Quality’s “last day worked” and “our landmark” for registering a claim for lien. The Owners assert that these entries lack all credibility.
[22] Ms. Diaz maintains in her affidavit that she worked on the Property on January 25, 2019 for 15 hours doing painting, caulking and deficiency work.
[23] On June 30, 2021 Ms. Pichini conducted a section 40 cross-examination of Nick. As part of his answers to undertakings, Nick produced for the first time on October 11, 2021 four additional Quality invoices, each of which is dated January 30, 2019. These invoices identify the Owners as payers. The first one, invoice 084355, describes work done from January 11, 2019 to January 26, 2019 and totals $5,150 (HST inclusive). The second and third invoices, invoices 084358 and 084359, describe extra work done directly for the Owners and total $9,000 (HST inclusive). The fourth invoice, invoice 084360, is a statement of accounts and refers to all of the Quality invoices including the January 30, 2019 invoices. Mr. Marcovitch stated in the covering email that the last day of supply shown in the claim for lien, January 24, 2019, was “an error.” The Owners assert that these invoices lack all credibility.
[24] On August 25, 2022 Quality obtained a judgment of reference from Justice C.J. Brown. I issued an order for trial on March 3, 2023. I became seized of this reference at the first trial management conference on May 15, 2023. Ms. Pichini asked that I schedule a section 45 motion by the Owners, arguing that there was strong evidence that Quality lien had expired. I scheduled the motion to be returnable August 14, 2023. At Mr. Marcovitch’s request, the motion return date was adjourned to October 19, 2023. On that day, as stated above, I converted the motion into a trial of an issue.
Witnesses
[25] Before I analyze the issues, I will make a comment on the credibility of the witnesses. The witnesses for Quality generally lacked credibility. This was particularly the case with Nick. I expected some bias from him in favour of the plaintiff, as he is its principal. However, his evidence only accentuated this bias. Nick’s affidavit strayed into argument rather than evidence. It lacked detail and corroboration. For instance, there was no written contemporaneous correspondence or document of any kind confirming the oral agreement Nick says Qualtiy reached with the Owners on October 31, 2018. Given this alleged agreement’s importance to Quality, the glaring absence of such corroboration was telling. In addition, and most importantly, all the Quality employees and workers stated in oral evidence that they submitted time sheets to Quality documenting their work on site. These time sheets would be critical in establishing the work done. None of these were produced.
[26] In cross-examination, Nick was contradictory. For instance, he said at one point that there were no entries in his diary for January 23 and 24, 2019, but then said there were, although not produced. Concerning his February 3, 2019 email to Anthony Ranallo, the one wherein he described the Quality invoices that ended on January 10, 2019 as the “last remaining accounts to complete the project,” Nick said in cross-examination that he was now “not sure” they were the last invoices. Nick also was evasive. He resisted the suggestion that the Quality invoices were for work done and not future work, but then grudgingly conceded the point. He curiously described his diary entries as being accurate concerning the workers on site, but not accurate in describing the work done. Not having produced a diary entry for January 22, 2019, he said he “did not recall” whether there was in fact such an entry. In general, I found Nick’s evidence to be evasive, self-serving and difficult to believe.
[27] The evidence of the two Spanish speaking witnesses, Ms. Diaz and Mr. Alejandro, was also problematic. Both were employees of Quality at the time and showed bias in favour of the plaintiff. Their affidavits lacked detail and corroboration of any kind. In cross-examination, both made assertions they could not sustain. Neither spoke English. Yet, in her affidavit, Ms. Diaz stated that she was present at both meetings on October 31, 2018 and March 2, 2019, and understood what happened. In cross-examination, Ms. Diaz said she used a computer translator. She then backtracked and said that Nick told her what happened at these meetings. In short, her evidence on these points turned out to be hearsay. She also conceded in cross-examination not understanding words that appeared in her affidavit, such as “concessions.” Ms. Diaz came across as essentially a mouthpiece for Nick’s evidence. Mr. Alejandro in turn insisted the payment he received on December 4, 2018 was pursuant to an “oral contract” with the Owners and not a gift. Yet, he did not deny telling the Owners about having to return to Mexico due to a family matter, and doing just that the day after he got the Owners’ money. He too seemed to be a mouthpiece for Nick’s evidence.
[28] The affidavits of Nick’s two sons, Valentino and Paolo, were of limited value. They concerned the alleged contract with the Owners and were full of hearsay. In cross-examination, however, they were surprisingly candid, admitting against the interest of the plaintiff that their last days of work, January 18 and 21, 2019, concerned deficiency correction and that deficiency work was all that remained. The affidavit of the plumber, Elvin Casco, was also of limited value. It was focused on a basement drainage issue that he dealt with in December, 2018. In cross-examination, he admitted, also against the interest of the plaintiff, that he finished his work on January 2, 2019. In the end, I found that the only credible evidence from these three witnesses emerged in cross-examination and assisted the defendants.
[29] The evidence of Ivan for the defendants, on the other hand, was much more credible. Ivan swore two affidavits. They were both carefully prepared, detailed and well corroborated. As Ivan is a party, there was of course a natural bias in favour of the defendants to be considered. But the detail and corroboration that Ivan applied to both affidavits was impressive and more than offset this concern. In cross-examination, Ivan was not swayed. His statements accorded with the other evidence. For instance, he maintained that he was not aware Ranna was insolvent, as alleged by Quality. Indeed, other than Nick’s assertions, there was no evidence that Ranna was insolvent. Also, Ivan showed through texts and emails that the defendants consistently looked to Ranna to finish its work, but that he also tried to get Anthony Ranallo to pay Ranna’s subtrades.
[30] For these reasons, I prefer the evidence of Ivan, on the one hand, over that of Nick, Ms. Diaz and Mr. Alejandro, on the other, whenever the two conflicted concerning the issues in dispute.
Contract Issue
[31] Quality asserts that it reached an oral agreement with the Owners on or about October 31, 2018 whereby the Owners guaranteed payment of Quality’s past and future unpaid accounts to Ranna on this project. This alleged contract is not a contract for services and materials, namely a construction contract. It is contract of guarantee. The Owners deny this assertion.
[32] As stated by Associate Justice Robinson in Bellsam Contracting Limited v. Torgerson, 2023 ONSC 468, para. 35, an enforceable contract has five elements: offer, acceptance, consideration, certainty of essential terms, and an intention to create a legal relationship. Determining whether a contract is formed is done through an objective assessment, namely a determination of how each party’s conduct would appear to a reasonable person in the position of the other party; see Ethiopian Orthodox Tewahedo Church of Canada St. Mary Cathedral v. Aga, 2021 SCC 22, [2021] 1 SCR 868, para. 35. It does not matter whether a party does or does not subjectively intend to contract. It matters whether that party’s conduct is such that a reasonable person in the position of the other party would conclude that the party intended to be bound by the contract; see Ethiopian Orthodox, supra, at paras. 37 – 38. The court must consider the factual matrix between the parties; see Bellsom Contracting, supra, at para. 36.
[33] Quality has the onus of proving this guarantee, as it is alleging it. Having considered the evidence and the submissions of the parties, I have concluded that Quality has failed to meet its onus and that the conduct of the parties, when assessed objectively, shows that the alleged contract was not formed. The following are my reasons:
a) Offer and acceptance: There was no written confirmation of any kind (ie. email, text or note) on or about October 31, 2018, or at any time prior to the litigation, that Quality made an offer to continue working in return for a guarantee of payment of its unpaid accounts from the Owners. Similarly, there was no written confirmation of any kind that such an offer, if made, was accepted by the Owners. As stated earlier, this absence of written confirmation is telling. It is hard to accept that Nick would not have memorialized this alleged oral agreement in writing in some way at or about the time he alleges it was made, given its alleged importance to Quality’s continued work.
Short of such corroboration, this evidence boils down to Nick’s assertions of an offer and acceptance, which Ivan denies. Ivan denied such an agreement because it made no business sense to him, as the Owners might in this way end up paying twice for work done. As stated earlier, I find Ivan a much more credible witness than Nick, and I accept his denial here.
b) Consideration: The consideration for the alleged guarantee was Quality’s continued work in circumstances where it was not obligated to do so due to unpaid accounts. The non-payment by Ranna was not disputed, although the amount of that debt was unclear. However, there was no evidence that Quality took any steps to suspend its work or terminate its subcontract with Ranna because of the non-payment of accounts by the end of October, 2018. Without such evidence, it is an open question as to how serious the rift between Quality and Ranna was by the end of October, 2018. After all, Quality continued to work for and bill Ranna and pursue Ranna for payment, until the end of the project.
c) Intention to create legal relationship: An intention to create the guarantee alleged by Quality in this case would, in my view, have involved a negotiation over terms. Ivan struck me as a careful person with a business acumen. For the Owners to guarantee Ranna’s obligation as alleged, they would have required at minimum a careful accounting of the existing and future Ranna debt to Quality. Furthermore, the Owners would have notified Anthony Ranallo concerning such accounting, as they would want to ensure its accuracy to enable them to apply payments they made to Quality under the guarantee against monies that they might otherwise owe Ranna.
There was no evidence that any of this took place. Indeed, it was shocking to read and hear Nick himself express uncertainty even at trial as to the Ranna debt as of October 31, 2018. The discussions between Nick and the Owners at the end of October, 2018 appeared to be nothing more than that – discussions.
d) Legal sufficiency: As stated earlier, the alleged agreement is not a construction contract, namely a contract for the supply of services and materials to a project. It is a guarantee. With guarantees there is an important legal hurdle, namely section 4 of the Statute of Frauds, R.S.O. 1990, c. S.19. The relevant part of the section says this: “No action shall be brought . . . to charge any person upon any special promise to answer for the debt, default or miscarriage of any other person . . . unless the agreement upon which the action is brought, or some memorandum or note thereof is in writing and signed by the party to be charged therewith or some person thereunto lawfully authorized by the party.” Essentially, this means that an oral promise of guarantee, as alleged by Quality in this case, is unenforceable.
I alerted counsel to this issue in oral argument, as they had not anticipated it; but they nevertheless addressed it. To get around the problem, Mr. Marcovitch argued that there was part performance by the Owners. I do not accept that argument. First, there was the payment to Mr. Alejandro. For the reasons already stated, I accept Ivan’s evidence that the Owners’ $1,200 payment to Mr. Alejandro on December 4, 2018 was a gift and not due to a guarantee. Second, Quality’s statement of account invoice 084360 dated January 30, 2019 included a note (obviously from Nick) that the Owners paid “me” $2,500 in cash as “the start of payments to come.” This note was uncorroborated. In his initial affidavit Ivan denied paying any cash to Quality, as he said they only paid Ranna, their contractor. The payment history put into evidence by Ivan corroborated this point. I believe Ivan. In short, the alleged oral guarantee, if made, is unenforceable.
[34] My discussion of this topic cannot be complete without addressing in detail the four Quality invoices dated January 30, 2019. They are the first invoices that describe the Owners as being liable to Quality directly for alleged new work (ie. January 30, 2019 invoices 084355, 084358 and 084359) and for Ranna’s previous unpaid accounts (ie. January 30, 2019 statement of accounts 084360).
[35] I do not accept these four invoices as being at all credible. First, these invoices were produced by Nick to the Owners for the first time on October 11, 2021 in answer to his undertakings given at his section 40 cross-examination. This is over 2 ½ years after their stated date. There was no explanation from Nick for this inordinate delay.
[36] Second, none of these invoices are referred to in the email Nick sent to Anthony Ranallo on February 3, 2019. The February 3, 2019 email is the one wherein Nick describes Quality invoices numbered 269697, 269698, 084351, 084352, 084353 and 084354 as the “last remaining accounts to complete the project at 27 Dukinfield Cres.” The last of these invoices and the one with the latest date, invoice numbered 084354, is dated January 10, 2019. None of the January 30, 2019 invoices are referred to in the February 3, 2019 email despite the fact that January 30, 2019 was just four days before February 3, 2019. This absence most glaringly includes Nick’s failure in the February 3, 2019 email to refer to January 30, 2019 invoice numbered 084355 which purports to be a “final invoice” for contract work stated to have been done from January 11, 2019 to January 26, 2019. When confronted with this contradiction in cross-examination, Nick said he was now “not sure” whether the invoices listed in his February 3, 2019 email were indeed the last invoices. This was an evasive and self-serving answer, and I do not accept it.
[37] Third, Ivan went into considerable detail in his initial affidavit concerning the contents of the January 30, 2019 invoices. Using photographs and Quality’s invoicing prior to January 10, 2019, Ivan showed that the work described in these invoices was done and billed by Quality prior to January 10, 2019, or was done by the Owners, or was not done at all. He addressed the described hardware work, the lighting installation, the basement flooring work, the basement laundry room rectification, the painting, and the plumbing repair. The thoroughness and detail of this part of his affidavit was impressive. In cross-examination, this evidence was not challenged. I accept it.
[38] As a result, I conclude that these January 30, 2019 invoices are not at all credible. I find that they were created by Nick after he unsuccessfully tried to get payment from Ranna. I find that Nick did this in part to create a narrative after-the-fact that the Owners had orally guaranteed Quality’s unpaid accounts. This narrative does not accord with the evidence.
[39] I find Quality failed to meet its onus on this issue and that there was no oral guarantee agreement between Quality and the Owners. I also find that, if one existed, it was unenforceable.
Last Day of Supply
[40] The Owners assert that the Quality lien has expired on account of a failure by Quality to preserve it in time. As the old CA applies, and as it is clear and undisputed that Quality was a “subcontractor” under the CA (ie. having supplied to a “contractor”), and as there was no certificate of substantial performance or certificate of subcontract completion, Quality had 45 days from the date it last supplied services and materials to the improvement to register its claim for lien; see old CA section 31(3)(a)(ii).
[41] Quality registered its claim for lien on March 8, 2019. That means that Quality must prove that it last supplied services and materials to the improvement in question on or after Tuesday, January 22, 2019 to avoid having its lien declared expired under old CA section 45.
[42] Here are some preliminary points. The onus rests on Quality to prove this point, as it must prove all the elements of its claim for lien to gain the benefit of the remedy; see Toronto Zenith Contracting Limited v Fermar Paving Limited, 2016 ONSC 4696, at para. 25. Repair work and deficiency correction are not lienable supply of services and materials and do not extend the 45-day period within which a lien claimant must preserve its lien; see Toronto Zenith, supra, para. 27.
[43] Having considered the evidence and the submissions, I have decided that Quality has not met its onus of proving that it did lienable work on or after January 22, 2019. The following are my reasons.
[44] There is no dispute that Quality did not work on the project on January 22, 2019. That makes sense as the Owners’ cleaners, Aspen Cleaning, attended at the house on that day to do its thorough cleaning. Ivan made it clear in his affidavit that Aspen required that there be no other trades on site while they cleaned. The evidence contains an Aspen invoice rendered on January 22, 2019 for the cleaning it did on January 21 and 22, 2019. Nick produced pages from his daily site diary. There are no entries for January 22, 2019.
[45] It is undisputed that Quality did not work on the project on January 23 and 24, 2019 and after January 26, 2019. This is curious as January 24, 2019 is the date identified in the Quality claim for lien, registered on March 8, 2019, as its last date of supply. In an email dated October 11, 2021, just over 2 ½ years after the claim for lien was registered, Mr. Marcovitch stated that this date in the claim for lien was “an error.”
[46] The date in contention is January 25, 2019. Quality asserts that it worked on the project on that date. I have already dealt with the January 30, 2019 invoices that Quality delivered on October 11, 2021. One of those invoices, invoice numbered 084355, purports to be a “final invoice” for contract work done from January 11 to January 26, 2019. As stated earlier, I do not accept these invoices as being at all credible. They were generated to construct an inaccurate narrative after the fact and do not accord with the evidence. I reiterate that point here in dealing with the lien timeliness issue.
[47] There is other evidence from Quality on this point. On March 23, 2021 Nick produced two pages from his site diary for January 25 and 26, 2019. The entry for January 25, 2019 is the most important. The Owners were on vacation at this time, and their parents, who lived nearby, controlled the house. The Owners were returning the next day, January 26, 2019. The January 25, 2019 diary entry states that Ivan’s father let Quality personnel into the house that day “to complete all deficiencies” for fifteen hours. It then goes on about how this date will be “our last day of work if Anthony can’t pay.” At another point, the entry describes the date as the “landmark” for registering the Quality claim for lien. The entry for January 26, 2019 does not describe work taking place, but does reiterate that “the last date was 25 of January.” Ivan stated in his initial affidavit that when the Owners returned on January 26, 2019, they found the house “clean and empty.”
[48] I find Nick’s site diary entries for January 25 and 26, 2019 lacking credibility. First, the repeated references in the entries to January 25, 2019 being the “landmark” date for the purpose of registering the Quality claim for lien suggests strongly that these entries were created after-the-fact, namely after the Quality claim for lien was registered and its timeliness was in issue. This is not the language Quality would have used for genuine work on January 25, 2019. The Owners evidence was convincing that Quality’s real last day of work, not including deficiencies, was January 7, 2019. This means that January 25, 2019 was well within Quality’s 45-day lien preservation period. The site diary entry for that date should have just described the work without bothering about identifying a “landmark” date for lien preservation. The appearance of this language, therefore, suggests that the entry was made later after the lien was in jeopardy to create the impression of work on January 25, 2019 when it did not exist. These documents have all the earmarks of the January 30, 2019 invoices that I also found lacking all credibility.
[49] Second, the Quality affidavit evidence of the work on January 25, 2019 was unconvincing. Nick’s affidavit and his cross-examination on this point added nothing to what was in his site diary entry and the January 30, 2019 invoices, which I have dealt with. The evidence of Ms. Diaz about her “work” on January 25, 2019 was also not credible. In her affidavit, she described work that was not “completing deficiencies,” to use the words of Nick’s site diary. She said she was painting and caulking on that day. In cross-examination, she scaled back her evidence to accord with the diary by stating that she did only “touch-ups” and cleaning. This change undermined her credibility. In any event, as stated earlier, I generally found Ms. Diaz to be nothing but a mouthpiece for Nick. I do not accept her evidence on this point.
[50] Third, and most importantly, Quality did not produce the time sheets that Ms. Diaz, Mr. Alejandro, Valentino Carlucci and Paolo Carlucci all said in cross-examination they created and gave to Quality. These time sheets would be critical documents on this issue. They are usually records created by those doing the work and are created on the day of the work or shortly thereafter. They are considered the strongest evidence of the fact of the work. That Quality did not produce them causes me to draw an adverse inference against Quality, namely that the time sheets do not substantiate the position Quality now takes that its last date of supply was January 25, 2019 and that it did work on the project on or after January 22, 2019.
[51] I make one final comment here. If in fact work took place on January 25, 2019, which I do not find, the evidence indicates that it was nothing but deficiency correction work. That is what is described in Nick’s diary entry for that day and in Ms. Diaz’s final evidence. As stated earlier, deficiency correction work does not extent the lien preservation period.
[52] Therefore, for all these reasons, I find that Quality has failed to meet its onus of proving the timeliness of its claim for lien. I find and declare that the Quality lien has expired on account of the failure by Quality to have it preserved.
Conclusion
[53] In conclusion, I reiterate my findings: there was no oral guarantee agreement between Quality and the Owners as alleged; if there was one, it is unenforceable; and the Quality lien has expired on account of the failure by Quality to have it preserved.
[54] Concerning costs, I note that the Owners served, filed and uploaded a costs outline for the trial of an issue that showed 35,532.42 in partial indemnity costs, $52,298.63 in substantial indemnity costs and $59,220.70 in actual costs. Quality served and filed a costs outline that shows $16,200 in partial indemnity costs and $26,200 in full indemnity costs.
[55] Given the result, it appears that the Owners are the successful party and should be entitled to costs. I encourage the parties to confer and come to an agreement on costs.
[56] If they cannot agree, written submissions on costs must be served, filed and uploaded in accordance with the following schedule. The Owners must serve, file and upload written submissions on costs of no more that three (3) pages on or before May 31, 2024. Quality must on or before June 11, 2024 serve, file and upload responding written submissions on costs of no more than three (3) pages. The Owners must serve, file and upload reply written submissions on costs of no more than one (1) page on or before June 14, 2024.
[57] I will be away all of June, 2024, and will try to render my decision on costs as soon as possible upon my return. When I render my decision on costs, I will prepare my interim report for execution and confirmation.
[58] Once that is done, I do not see that there are any other issues to be determined in this reference. In my directions of October 19, 2023 I speculated that, if the Owners succeeded on all the issues (which they have), there would still be an issue of holdback to be determined. This is incorrect as the relevance of the holdback issue depends on the existence of proven subtrade liens. There are no other claims for lien in this reference, and I found that the lien of Quality is expired. Without liens, the Owners’ holdback liability to Ranna subcontractors is at an end.
[59] As stated earlier, Quality has a default judgment against Ranna and Mr. Ranallo, and has discontinued this action against the Toronto-Dominion Bank. There do not appear to be other issues to determine.
[60] Therefore, I will not schedule another trial management conference in this reference unless the parties ask me to.
Released: May 22, 2024
ASSOCIATE JUSTICE C. WIEBE
COURT FILE NO.: CV-19-618562 ONTARIO SUPERIOR COURT OF JUSTICE In the matter of the Construction Act, R.S.O. 1990, c. C.30 BETWEEN: Quality General Contractors Inc. Plaintiff
- and - Judy Wu, Ivan Zee Hin Chan, Ranna Homes and Renovations Inc., Anthony Ranallo and The Toronto-Dominion Bank Defendants REASONS FOR JUDGMENT Associate Justice C. Wiebe Released: May 22, 2024