Construction Law - SCJ

Following a trial under the Construction Lien Act, the successful contractor sought substantial indemnity costs after obtaining judgment for unpaid construction work and successfully defending a counterclaim.

The court considered factors under Rules 49 and 57.01 of the Rules of Civil Procedure, including settlement offers, proportionality, the complexity of the proceeding, and litigation conduct.

The contractor did not achieve a result better than its Rule 49 offer to settle and therefore was not entitled to substantial indemnity costs.

The court nevertheless found the contractor overwhelmingly successful and awarded costs on a partial indemnity scale.

Costs were fixed at $108,943.67 inclusive of fees, disbursements, and HST.

The moving party sought an order that two related civil actions arising from the same construction project be tried together or sequentially with common documentary production and discoveries.

The court considered Rule 6.01(1) of the Rules of Civil Procedure and found that the actions arose out of the same series of transactions and shared common questions of law and fact relating to subcontract obligations, valuation of work, entitlement to payment, and liability under a payment bond.

The court accepted that there would be significant overlap in witnesses and documentary evidence concerning the bridge project and the dealings among the subcontractor, contractor, owner, and surety.

The court also accepted that separate proceedings could risk inconsistent findings.

The motion was granted and the actions were ordered to proceed together or sequentially with coordinated disclosure and discovery.

The applicant sought a declaration under s. 178(1)(d) of the Bankruptcy and Insolvency Act that a prior judgment debt for breach of trust arising from construction trust funds was not released by the respondent’s bankruptcy discharge.

The respondent argued the original judgment was improperly obtained and that there was no evidence of wrongdoing sufficient to bring the debt within the statutory exception.

The court rejected the procedural challenge, finding the respondent had been properly served and had participated in the earlier proceeding.

Reviewing the evidentiary record, the court held the respondent failed to account for trust funds impressed under the Construction Lien Act and lacked credibility in denying involvement.

The failure to account for the trust funds constituted wrongdoing sufficient to trigger the s. 178(1)(d) exception.

A homeowner sued a contractor for a refund of the contract price after a lakeside dock constructed under a five‑year workmanship and materials warranty became uneven after two winters.

The contractor argued the damage was caused by extraordinary ice and weather conditions rather than defective construction and counterclaimed for defamation based on threatening emails and alleged reputational harm.

The court found the precise physical cause of the uplift uncertain but concluded the dock’s premature failure, absent a satisfactory exculpatory explanation, entitled the plaintiff to damages.

However, the plaintiff failed to mitigate losses by investigating repair options, and the evidence established the dock was repairable at modest cost.

The court awarded damages limited to the estimated repair cost and dismissed the defendant’s defamation counterclaim for lack of proof of publication or actual loss.

The plaintiff subcontractor moved for partial summary judgment against the contractor for funds received from the Ministry of Transportation under a highway paving project.

The contractor had admitted in its pleadings that, after specified deductions, $297,710.82 from a $450,000 payment was owed to the plaintiff but later sought to withhold payment pending determination of counterclaims and other related proceedings.

Applying the summary judgment framework and the “full appreciation test” from Combined Air Mechanical Services Inc. v. Flesch, the court held the issue was document‑driven and that the admissions in the pleadings established the debt.

The defendant failed to demonstrate a genuine issue requiring a trial and had not properly pleaded a set‑off.

Partial summary judgment was granted for the admitted amount with prejudgment interest, while the request to have additional funds paid into court was denied.

The defendants brought a motion for summary judgment dismissing a collection action as statute-barred under the Limitations Act, 2002.

The plaintiff sought recovery of approximately $62,000 for construction work performed in 2006–2007 but did not commence the action until 2012.

The plaintiff argued that promissory estoppel prevented reliance on the limitation defence and that a breach of trust claim under the Construction Lien Act was only discovered in 2011.

The court held that the claim for breach of contract was discovered by August 2008 at the latest and that there was no written acknowledgment of liability sufficient to restart the limitation period or support promissory estoppel.

The court further held that the breach of trust claim was discoverable at the same time as the breach of contract through reasonable diligence, rendering the entire action statute-barred.

A homeowner brought a Small Claims Court action against a roofing contractor alleging defective roofing work and seeking recovery of the full cost of the roof or the cost to replace it entirely.

The court found that the underlying structural issue of sagging plywood between roof trusses pre‑existed the contractor’s work and contributed to the roof’s uneven appearance.

However, the contractor was partially liable for shortcomings including failing to install the agreed number of vents, installing insufficient ridge venting, and failing to adequately address problems on a specific rear section of the roof.

The plaintiff failed to prove that the entire roof required replacement.

The court awarded partial damages based on a reasonable estimate of the cost to repair the affected section.

A construction contractor brought a motion seeking to stay its own court action so that the parties’ dispute over project delays and asbestos-related issues could proceed under the arbitration provisions contained in a CCDC-2 construction contract.

The defendant argued the motion was brought too late and that the contractual dispute resolution process had been discharged.

The court held that although s. 7 of the Arbitration Act, 1991 did not apply because the moving party had commenced the action, the court retained authority under s. 106 of the Courts of Justice Act to stay the proceeding.

Given the strong policy favouring arbitration and the parties’ contractual agreement to resolve disputes through the contract’s dispute resolution process culminating in arbitration, the court exercised its discretion to stay the action.

Issues regarding delay or compliance with contractual timelines were matters for the arbitrator.

Following a motion concerning a construction lien priority dispute, the court determined the issue of costs between the parties.

The responding party was the successful party on the only issue in dispute and relied on a Rule 49 offer to seek partial indemnity costs to the date of the offer and substantial indemnity costs thereafter.

The moving party argued it should receive costs because the responding party conceded a minor adjustment to the holdback amount prior to the hearing.

The court rejected that argument, holding the concession did not justify depriving the successful party of costs.

Applying the factors governing costs assessment, including those articulated in Boucher v. Public Accountants Council for the Province of Ontario, the court fixed costs at $17,300 inclusive of disbursements and taxes.

The defendants brought a Rule 21 motion seeking a determination before trial that the plaintiffs’ claim against a surety under a performance bond could not exceed the bond amount and requesting that the action be stayed or limited accordingly.

The dispute arose from a subcontract for compensation grouting work on the Toronto‑York Spadina Subway Extension project.

The plaintiffs alleged that the subcontractor’s breaches caused extensive delay damages and that the surety’s conduct, including alleged inaction and misrepresentation following default, exposed it to liability beyond the bond amount.

The court held that it was not plain and obvious that the plaintiffs’ claim had no reasonable prospect of success, particularly where the pleadings alleged conduct by the surety potentially giving rise to liability beyond the bond cap.

As the legal question was unsettled in Canadian jurisprudence and factual issues remained disputed, the motion was dismissed.

A masonry subcontractor sued a residential home builder and its principals for unpaid invoices relating to masonry work across several housing projects.

The central dispute concerned whether the parties had agreed that the subcontractor could charge additional amounts for masonry work associated with minor grade variations on building lots.

The court accepted the builder’s evidence that, after earlier disputes, the parties agreed that only major grade changes such as walk‑outs, walk‑ups, or look‑outs would justify extra charges.

Numerous individual invoice disputes and counterclaims were resolved on the evidence, resulting in partial recoveries and credits between the parties.

Claims under Part II of the Construction Lien Act alleging breach of trust and personal liability against the corporate principals were dismissed due to lack of evidence of trust breach.

The contractor appealed a decision of a master following a two‑day trial concerning a residential renovation contract and a construction lien dispute.

The master had denied the contractor any fee or profit and ordered the homeowners to reimburse only half of the contractor’s expenditures after finding a breach of a purported “timely reporting” obligation.

The contractor argued the master misinterpreted the contract by imposing obligations not contained in its plain language.

The court held that the master appeared to disregard the contract’s terms and erred in denying fees and profit on that basis.

The appeal was allowed and the contractor, as the successful party on appeal, was entitled to costs on a partial indemnity basis.

The defendant brought a motion seeking a determination that a construction lien was registered outside the time limits prescribed by the Construction Lien Act.

The moving party argued the lien was invalid because the only invoice for work performed had been delivered more than 45 days before the lien was registered.

The responding party produced time records showing additional work at the project site within 45 days of the lien registration.

The court found insufficient evidence to determine whether the work fell within the lien period and noted disputes about the date of last work and substantial completion.

Concluding that genuine issues requiring a trial remained, the court dismissed the motion for summary judgment.

The moving party sought to set aside a Master's report and withdraw an admission regarding the date of a mortgage advance relevant to lien priority under the Construction Lien Act.

The admission established that funds were advanced on November 19, 2009, giving the lien claimant priority over the mortgage advance.

The court held the moving party failed to satisfy the leave test required to bring the interlocutory motion and withdraw the admission.

The evidence showed the admission resulted from litigation strategy and failure to obtain available documents rather than inadvertence or mistaken instructions.

The motion was dismissed and the Master's report left undisturbed.

A reference under the Construction Lien Act required the court to determine whether the contractual relationship between a developer and a construction company was one of owner and construction manager (agent) or owner and general contractor.

The written agreement used a construction management form contract but included amendments allowing the contractor to contract directly with trades and assume risk for cost overruns beyond a specified threshold.

The court found ambiguity in the contract language and admitted extrinsic evidence to interpret the parties’ relationship.

Examining the contractual provisions and the parties’ conduct, including direct contracting with trades and liability for payment and cost overruns, the court concluded the arrangement functioned in substance as a general contracting structure.

Accordingly, the contractor was treated as a general contractor for purposes of determining priorities and holdback obligations under the Construction Lien Act.

A residential home builder commenced an action to recover unpaid amounts under a construction contract and enforce a construction lien.

The homeowners argued that the governing contract price was an earlier quotation and that omitted items generated credits reducing the contract value, and they counterclaimed for deficiencies.

The court found that the binding agreement was the written contract executed by the homeowners after construction commenced, setting the contract price at $725,000 inclusive of GST.

The court rejected the homeowners’ interpretation that “omit” items created credits and held there was no documentary evidence supporting such a claim.

The construction lien was also found to have been registered within the statutory 45‑day period under the Construction Lien Act.

Judgment was granted to the builder subject to a modest deduction for proven deficiencies.

Following a construction lien trial in which the contractor substantially succeeded and the homeowners’ counterclaim largely failed, the court determined the appropriate costs award.

The contractor had recovered most of its lien claim while the homeowners succeeded only minimally on their counterclaim.

The court considered factors under Rule 57.01(1) and the discretionary costs authority under the Courts of Justice Act and Construction Lien Act.

Due to repeated non‑compliance with court orders, failure to attend pre‑trial events, and trial by ambush conduct by the homeowners, the court awarded a combination of partial indemnity and substantial indemnity costs.

Total costs were fixed at $12,235.91 inclusive of HST, payable jointly and severally by the homeowners.

The defendants brought a motion to set aside a default judgment in a construction lien proceeding under the Construction Lien Act.

The court applied both the Rules of Civil Procedure and the statutory requirements under the Act, which require promptness, a reasonable explanation for the failure to defend, and evidence supporting a genuine defence.

The defendants demonstrated a viable defence alleging incomplete and deficient work and potential set-off exceeding the lien claim.

Although the defendants’ conduct regarding service and delay was criticized, the court found there was always an intention to defend and little prejudice to the plaintiff because security had been paid into court.

The default judgment and noting of default were set aside and the defendants were granted time to deliver a defence.

The plaintiff brought a motion under Rule 34.15 of the Rules of Civil Procedure seeking an order compelling the defendant contractor to answer certain undertakings and refused questions arising from an examination for discovery.

The disputed questions concerned information about bonuses allegedly paid by the project owner to the contractor for work performed by the plaintiff subcontractor.

The defendant argued that the bonus issue constituted a new claim improperly raised in the plaintiff’s reply rather than the statement of claim and therefore refused to answer discovery questions on the topic.

The court held that the bonus issue formed part of the existing pleadings and that any challenge to the adequacy of the pleading should have been brought by motion to strike or amend.

The questions were relevant to the issues as pleaded and were ordered to be answered within a specified time.

The plaintiff subcontractor brought a motion for summary judgment seeking payment allegedly owed by the defendant general contractor on several construction projects and also sought an order requiring the defendant, as plaintiff by counterclaim, to post security for costs.

The court held that the plaintiff failed to meet the evidentiary burden required on a summary judgment motion.

The affidavit evidence provided only conclusory assertions regarding amounts owed and failed to set out the contractual framework, the work performed, or proof supporting the claimed entitlement to payment.

Applying the principles governing summary judgment motions, the court found the plaintiff had not put its best foot forward and had not provided a record capable of permitting adjudication on the merits.

The request for security for costs was also denied due to the absence of a factual foundation.