Court File and Parties

Court File No.: CV-22-691830

Date: August 11, 2025

Superior Court of Justice - Ontario

Re: E-Tech Electrical Services Inc. v. Churchill Three LP, Churchill Three Develco Inc., Diamante Development Corporation and Toronto Standard Condominium Corporation No. 2890

Before: Associate Justice C. Wiebe

Counsel:

• Howard L. Shankman for Toronto Standard Condominium Corporation No. 2890
• Jonathan Frustaglio for E-Tech Electrical Services Inc.

Heard: August 7, 2025

Reasons for Decision

Background

[1] At the trial management conference on March 3, 2025, Toronto Standard Condominium Corporation No. 2890 ("TSCC 2890") asked me for leave to bring a motion for summary judgment declaring the lien of E-Tech Electrical Services Inc. ("E-Tech") registered on September 30, 2022 in the amount of $363,359.08 expired. I scheduled the motion. But I reconvened the trial management conference on March 18, 2025 to discuss the issue of leave further. While the focus of the discussion on March 18, 2025 was the issue of whether TSCC 2890 was a "home buyer," my endorsement indicates that Mr. Shankman framed the leave request more broadly, namely as being for a motion for summary judgment that would eliminate the E-Tech lien in its entirety and would let TSCC 2890 out of this action. I granted the leave accordingly.

[2] TSCC 2890 brings this motion for summary judgment "in accordance with the Statement of Defence." One stated basis of the motion is s. 47 of the Construction Act, R.S.O. 1990, c. C.30 ("CA"). TSCC 2890 filed two affidavits sworn by Aron Lee, an employee of Firstservice Property Management, a subsidiary of Firstservice Corporation, the property manager. In response, E-Tech filed two affidavits sworn by Claudio Foglia, the Vice-President of E-tech. There were no cross-examinations.

Governing Test

[3] To succeed on a motion for summary judgment the moving party must prove that there is no genuine issue requiring a trial with respect to a claim or defence; see Rule 20.04(2)(a). The motions judge should first determine if there is no genuine issue requiring trial based only on the evidence before the judge and on being satisfied that this process is fair, timely, affordable and proportionate. If there is a finding of a genuine issue requiring a trial, the motions judge should then determine whether he or she can avoid a trial by using the fact-finding powers in Rule 20.04(2.1) and (2.2) making sure that this process if fair, timely, affordable and proportionate; see Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 at paragraph 66. There was no dispute that, as the reference associate justice, I have those fact-finding powers in this motion.

[4] In Viceroy Homes v. Jia Development Inc, 2023 ONSC 2301 at paragraphs 27 and 28 I described the process to be followed in a section 47 motion. The moving party must prove that there is no triable issue as to the basis on which the lien is sought to be discharged; see Maplequest (Vaughan) Developments Inc. v. 2603774 Ontario Inc., 2020 ONSC 4308 at paragraph 25. Both parties must "put their best foot forward" in the evidence to assist the court in making this determination, and the court is entitled to make this assumption; see GTA Restoration Group Inc. v. Baillie, 2020 ONSC 5190 at paragraph 56. The lien claimant has this onus because it is invariably in the best position to provide the evidence; see GTA, op. cit., paragraph 55.

Leave

[5] Mr. Frustaglio argued that my leave for this motion was confined to the issue of whether TSCC 2890 was a "home buyer." I do not accept that argument. As I stated in paragraph 1 above, when I granted leave it was to deal with all of the issues that keep TSCC 2890 in this action.

Was TSCC 2890 a "Home Buyer"?

[6] CA section 1(1) contains a definition of "owner" that expressly excludes a "home buyer." That means that a lien (preserved or not) does not attach to the interests in the owner in the improved premises where the owner is a "home buyer."

[7] "Home buyer" has a specific definition. Because the project in issue was a condominium, I will focus on only the aspects of the definition in CA section 1(1) that pertain to a condominium. "Home" is defined to include, "a condominium one-family dwelling unit, including the common elements appurtenant thereto." A "home buyer" is defined as a person who buys the interest of an owner in a premises "that is a home" regardless of whether the home was built or not at the time of the purchase, and meets the following two criteria: (1) not more than 30 per cent of the purchase price was paid prior to conveyance, and (2) the home is not conveyed until it is ready for occupancy as evidenced in the case of a new home by the issuance of a municipal permit authorizing occupancy or the issuance under the Ontario New Home Warranties Plan Act ("ONHWPA") of a certificate of completion and possession.

[8] The evidence in the motion on this issue established the following background, undisputed facts. The owner/developer of the newly built, multi-unit, highrise condominium was Churchill Three Develco Inc. ("Churchill"). It contracted with E-Tech to have E-Tech provide electrical services and materials for this project. The condominium was created, and TSCC 2890 came into existence when the Condominium Declaration was registered on February 4, 2022. As obliged by the Declaration, TSCC 2890 purchased the two guest suites, Suites 201 and 202, from Churchill on May 2, 2022. The purpose of buying the guest suites was to rent them to unit owners for their use. The purchase price for Suite 201 was $254,250, which was financed by a vendor-take-back mortgage to Churchill for the entire price. The purchase price for Suite 202 was $180,000, which was also financed by a vendor-take-back mortgage to Churchill for the entire price. Both mortgages specified that the first monthly payment was to be made on April 4, 2023, namely 11 months after conveyance. E-Tech continued working. On September 30, 2022 it registered its claim for lien on the title to only the two guest suites in the amount of $365,359.08. The claim for lien stated that E-Tech supplied services and materials to September 23, 2022.

[9] The key evidence (attached to Mr. Lee's affidavit) is the Occupancy Permit that was issued by the City of Toronto on February 9, 2022, namely five days after the Condominium Declaration was registered. The Occupancy Permit specified the "areas to be occupied" to include Suite 201 and 202, "but excluding their balconies." There is then a list of areas stated to be "exclusions." Of note, a lengthy list of common use areas on the second floor are included in these "exclusions": two amenity spaces, a yoga room, an exercise room, a corridor, a closet, two storages, two change rooms, two saunas, two handicapped washrooms, and two washrooms. It was undisputed that these exclusions are defined in the Declaration as the common elements, and that they were excluded from the permit because they were not completed. The evidence contained no certificate of completion and possession under ONHWPA.

[10] Based on this evidence, I conclude that TSCC 2890 was not a "home buyer" at the time E-Tech registered its claim for lien. I ground this conclusion on a plain, common-sense interpretation of the "home buyer" provisions of CA section 1(1) and the evidence.

[11] There was no dispute that the two guest suites qualified as "homes" under the CA. I reiterate that "home" is defined in CA section 1(1) to include, not just the unit itself, but the "common elements appurtenant thereto." The key then to this motion is not the first requirement for being a "home buyer," namely the down payment limit, which all agreed was met in this case. The key is the second requirement, namely the requirement that the "home" not be conveyed until it is ready for occupancy as evidenced by a municipal permit authorizing occupancy or an ONHWPA certificate of completion and possession. The evidence contains no ONHWPA certificate. The onus to prove it was a home buyer rests on TSCC 2890. Therefore, I conclude from the absence of an ONHWPA certificate of completion and possession that there was none.

[12] Therefore, the issue turns on whether the February 9, 2022 City of Toronto Occupancy Permit meets the requirement of "a municipal permit authorizing occupancy" under the CA section 1(1) definition of "home buyer." In my view, it does not simply because the occupancy permit excludes the common elements appurtenant to the two guest suites. The common elements appurtenant to a unit are a part of the definition of "home."

[13] This, in my view, only makes common sense. To fully occupy a condominium unit, you should be able to occupy the common elements as well. For instance, in this case it appears that large parts of the common usage areas of the second floor were not done when the permit was issued. The second floor is where the two guest suites are situated. Most notably, the corridor was not done. It is an open question, therefore, whether anyone could even gain access to the guest suites at that time to use them. The balconies were not done. How could one occupy a guest suite when you were excluded from the balcony? This is not the occupancy that is contemplated by the CA section 1(1) definition of "home buyer." The City of Toronto Occupancy Permit is a partial occupancy permit, not a complete one.

[14] Mr. Shankman relied upon the decision of Master Saunders in Kostolnik v. Vanbots Construction Corp., [2000] O.J. No. 5041. In this case, eight condominium unit owners received their conveyances six days before the contractor registered a claim for lien. They moved to have the claim for lien discharged on the basis that they were "home buyers." They relied upon both a municipal occupancy permit and an ONHWPA certificate of completion and possession. Master Saunders agreed with them and discharged the claim for lien.

[15] I distinguish this decision for one reason. In paragraph 14 of the decision, the Master describes the occupancy certificate in that case. He said that the certificate "states that the area to be occupied is the complete building." That is not so in the case before me, where the occupancy permit was a partial occupancy and did not authorize occupancy of "the complete building."

[16] Mr. Shankman pointed to the evidence of Mr. Lee in his supplementary affidavit wherein he stated that he, Mr. Lee, talked with two members of the TSCC 2890 Board of Directors in May, 2022, Wei Du and Peter Lu, and that these two confirmed that the guest suites "were ready for occupancy." Not only is this evidence hearsay and lacking credibility, it is of no use. The issue is the legal definition of "home buyer" and the City of Toronto Occupancy Permit.

[17] I, therefore, find that TSCC 2890 was not a "home buyer" in this case. I believe that the evidence is sufficient for me to make this conclusion definitively now. I so find.

Is TSCC an "Owner"?

[18] An "owner" is defined in CA section 1(1) as a person with an interest in the premises at whose request and upon whose credit, or on whose behalf, or with whose privity or consent, or for whose direct benefit the improvement was made. TSCC 2890 asserts in its pleading that it did not request any of the work E-Tech did on the guest suites and the common elements appurtenant to the guest suites, that therefore E-Tech is not an "owner" in relation to the E-Tech lien, and that the E-Tech lien did not attach as a result. What of this issue?

[19] The following evidence is germane. Mr. Foglia swore in his initial affidavit that E-Tech supplied and installed electrical systems, fixtures and services to the guest suites and common elements at the request of TSCC 2890 both before and after the conveyances of the guest suites, and that TSCC 2890 benefitted from this work.

[20] In response, Mr. Lee swore in his supplementary affidavit that this statement was false and that he, Mr. Lee, found no evidence of direct dealings between E-Tech and TSCC 2890. He referred to his initial affidavit. In his initial affidavit Mr. Lee stated that he spoke with same Messrs. Du and Lu, the two TSCC 2890 Board of Directors members in May, 2022, and that they confirmed to him, Mr. Lee, that "neither of them have had any direct dealings or communications with the Plaintiff and that neither of them are aware of any materials or services supplied to suites 201 and 202 subsequent to May 2, 2022." Mr. Lee himself stated that he himself was unaware of any materials or services supplied to the guest suites after May 2, 2022.

[21] There was also evidence in Mr. Foglia's supplementary affidavit that E-Tech and Churchill agreed to take out the uncompleted E-Tech scope as of December 31, 2021, make that uncompleted scope a separate contract (or purchase order) and have E-Tech declare the remainder of the scope last supplied as of December 31, 2021, a declaration E-Tech swore on February 11, 2022. The new purchase order for the unfinished work totaled over $1.77 million. In his supplementary affidavit, Mr. Foglia stated that E-Tech worked under the purchase order from January, 2022 to January, 2023. To his affidavit he attached numerous invoices, invoice summaries, photographs and proofs of payments to substantiate that statement. I note that some of the invoices pertain to work on the second floor, the floor with the guest suites.

[22] I find this evidence about a "request" and benefit at minimum unclear. TSCC 2890's guest suites probably benefited in some way from E-Tech's work after December 31, 2021, particularly the common interest appurtenant to the guest suites. But whether TSCC 2890 requested the work is quite unclear. The Lee evidence about Messrs. Du and Lu is hearsay and lacking credibility as a result. It also pertains to two Board members, and it is not clear whether there were other Board members at the time and whether these other Board members had dealings with the developer and E-Tech. Also, this evidence from Mr. Lee concerns only the period after the conveyances and not the period prior to the conveyances. It is not uncommon to have input into construction from a unit purchaser prior to conveyance. Finally, neither Messrs. Foglia nor Lee were cross-examined.

[23] TSCC 2890 has the primary onus to prove that there is no issue requiring a trial. I find that it has failed to do so here. I find that there is a genuine issue requiring a trial as to whether the E-Tech lien attached to the interest of TSCC 2890 in the guest suite and its appurtenant common interests. There is no need for me to fashion a fact-finding process to resolve this issue in these reasons. We will do so at future trial management conferences.

Quantum Meruit

[24] In oral argument, Mr. Shankman raised an issue he did not raise expressly in the TSCC 2890 notice of motion and factum, namely that the E-Tech claim in unjust enrichment and quantum meruit should be struck. This issue is not a proper subject matter of a CA section 47 motion (which focuses exclusively on the construction lien remedy); but it can be raised as a part of the TSCC 2890 summary judgment motion. I will deal with it accordingly.

[25] In the statement of claim, E-Tech pleads in the alternative that the defendants, including TSCC 2890, were unjustly enriched by E-Tech and that they should pay E-Tech's claim as a matter of unjust enrichment and quantum meruit. Mr. Shankman argued that such a pleading cannot exist in a construction lien action.

[26] Mr. Shankman referred me to the decision of Master Clark in Con-Drain Co. (1983) Ltd. v. Ronto Development Corp.. In this case, a lien claimant moved to add to its statement of claim a claim of unjust enrichment as against a mortgagee who sold the improved land under power of sale. Master Clark denied the motion finding that there was no evidence of a connection between the lien claimant and the mortgagee that could support such a claim.

[27] I find that this decision does not assist TSCC 2890. Master Clark was careful to state that claims for unjust enrichment and quantum meruit are not per se prohibited in construction lien actions. He stated that, where the evidence establishes contract dealings between the parties that did not end up in a binding contract, contractual quantum meruit could be pleaded.

[28] In the case before me, the E-Tech inelegantly drafted statement of claim did not plead particulars that could give rise to a valid quantum meruit claim. However, this motion contains evidence from E-Tech concerning dealings it had with TSCC 2890. This evidence is of course disputed. But in these circumstances, I am not prepared to deny E-Tech the right to pursue these claims should it be found not to have a construction lien as against the guest suites. I deny this argument.

Conclusion

[29] I, therefore, deny the TSCC 2890 motion in its entirety. I also find that TSCC 2890 was not a "home buyer."

[30] Concerning costs, TSCC 2890 filed a costs outline that shows full indemnity costs of $29,772.18 and partial indemnity costs of $22,670.13. Mr. Shankman stated that this costs outline concerns the TSCC 2890 costs of the entire reference as its motion sought to have the entire E-Tech claim against it dismissed. The TSCC 2890 costs outline does not identify clearly the costs pertaining to this motion.

[31] E-Tech filed a costs outline that shows $10,976.82 in actual costs, $8,781.46 in substantial indemnity costs and $6,586.09 in partial indemnity costs. Mr. Frustaglio stated that E-Tech would be seeking substantial indemnity costs as this motion, according to him, unnecessarily delayed the discoveries in the reference.

[32] I encourage the parties to resolve the issue of costs. E-Tech is the successful party and should be awarded costs. If the parties cannot resolve this issue, I direct that E-Tech serve and file written submissions on costs of no more than two pages on or before August 18, 2025, that TSCC 2890 serve and file responding written submissions on costs of no more than two pages on or before August 25, 2025, and that E-Tech serve and file reply written submissions on costs of no more than one page on or before August 27, 2025. I will then render my decision on costs in writing.

Date: August 11, 2025

Associate Justice C. Wiebe