Court File and Parties

Court File No.: CV-23-81869 (Hamilton) Date: 2024 08 21

SUPERIOR COURT OF JUSTICE - ONTARIO

In the Matter of: the Construction Act, RSO 1990, c C.30, as amended

Re: TRUGRP INC., Plaintiff

• and - KARMINA HOLDINGS INC., DR. H.A. DEMIAN MEDICINE PROFESSIONAL CORPORATION, and DOMPOL ENTERPRISES INC., Defendants

Before: Associate Justice Todd Robinson

Counsel: G. Camelino, for the plaintiff Z. Flemming-Giannotti, for the defendants, Karmina Holdings Inc. and Dr. H.A. Demian Medicine Corporation R. Coutinho, for the Accountant of the Superior Court of Justice S. Lakhani, for the Bank of Montreal

Endorsement (Motion to Set Aside Vacating Order)

[1] On April 15, 2024, I released my reasons for decision on the motion by TruGrp Inc. (“TruGrp”) to set aside my prior vacating order (2024 ONSC 2165). In that decision, I directed that both the Accountant of the Superior Court of Justice (the “Accountant”) and the Bank of Montreal (“BMO”) be served and afforded an opportunity to take a position on the motion. The motion had not been brought on notice to either of them.

[2] In particular, arguments raised during oral submissions on the motion required that I interpret the meaning of the Accountant’s role as “custodian” of lien security in s. 3(7) of O Reg 191/95 under the Public Guardian and Trustee Act, RSO 1990, c P.51. I could not fairly decide that issue without first affording the Accountant an opportunity to consider and, if necessary, make submissions on its role, as well as potentially respond to the argued interpretations of an email from a trust analyst in the Accountant’s office tendered by TruGrp. BMO was also potentially affected by alternative relief arguments made by TruGrp concerning directions that could be given on language in the letter of credit.

[3] Both the Accountant and BMO have provided written positions, which have now been submitted for my review. With respect to the disputed language in the letter of credit, a lawyer for the Accountant has advised as follows:

The letter of credit with standard form provisions permitting the issuing bank to decline renewal of the letter upon providing the Accountant with at least thirty days’ notice as well as a bank draft for the amount of letter of credit, less any payments already made under it, is sufficient authority for the Accountant to accept and deposit the bank draft provided that a court Order has permitted the payment into Court of the letter of credit with these provisions.

[4] In addition, the letter from the Accountant’s lawyer explains the Accountant’s position on when a further court order is required. In particular, in circumstances where parties other than the issuing bank seek to substitute the letter of credit with a bank draft, which is not contemplated by the approved letter of credit, the Accountant requires compliance with subrule 72.03(2) of the Rules of Civil Procedure, RRO 1990, Reg 194 – i.e., a court order approving the substitution of lien security. The Accountant otherwise takes no position on the motion.

[5] BMO has confirmed that it agrees with the above extract from the Accountant’s position letter, and otherwise takes no position on the motion.

[6] Simply put, the Accountant has confirmed that it will accept and deposit a bank draft submitted by the issuing bank in accordance with the terms of the letter of credit, provided that the letter of credit with such terms has been posted pursuant to a court order approving that form. BMO agrees.

[7] Following my receipt of the two position letters with confirmation that neither the Accountant nor BMO wish to make any further submissions, I asked that TruGrp and Karmina discuss the following questions in order to determine if a further hearing was required:

(a) In light of the positions received from the Accountant and BMO, is the plaintiff still pursuing relief on its motion? (b) If so: (i) Which disputed issue(s) remain in dispute following the positions received? (ii) Does either party have additional submissions to make arising from the position letters provided by the Accountant and BMO?

[8] TruGrp has confirmed that its concerns regarding the potential extinguishment of the lien security have been addressed by the Accountant’s new position and that it has no further submissions to make on the merits of the motion. Karmina takes the position that TruGrp is, in effect, withdrawing its motion and seeks an opportunity to make submissions as to costs. Karmina further disputes that the Accountant’s position is “new”, as characterized by TruGrp.

[9] Neither party has identified any outstanding issues, other than costs. Since it appears that the only remaining dispute is costs of the motion, I encourage the parties to discuss and seek to settle costs. If they cannot, then costs submissions shall be made orally by thirty (30) minute hearing booked on one of my construction lien motions lists. Any case law or offers to settle relied upon by either side shall be exchanged, submitted to my Assistant Trial Coordinator (ATC), and uploaded to Case Center at least five (5) days prior to the hearing. A confirmation of motion should be submitted in the ordinary course. The hearing for costs submissions should be coordinated through my ATC to ensure that a date in Calendly before me is selected. The hearing shall be booked (but not necessarily heard) within thirty (30) days, failing which the parties shall be deemed to have agreed on costs.

ASSOCIATE JUSTICE TODD ROBINSON DATE: August 21, 2024