Construction Law - SCJ

Tedescon applied to set aside or appeal an arbitral award that ordered it to pay damages to the County of Simcoe for abandoning a road reconstruction contract.

The arbitrator had found that Tedescon was justified in stopping work due to the County's contract administrator's bias, but simultaneously held that Tedescon's refusal to remobilize constituted an unlawful abandonment.

The Superior Court dismissed Tedescon's application under s. 46 of the Arbitration Act, finding no jurisdictional error or breach of fairness in the arbitrator's accounting methodology.

The Court also dismissed the applications for leave to appeal under s. 45(1), holding that the parties' agreement to 'final and binding' arbitration implicitly precluded any right of appeal.

Although the Court noted the arbitrator made an extricable error of law by finding Tedescon liable for repudiation despite having a contractual right to stop work, the Court was bound by the arbitration agreement's privative language and could not intervene.

The defendant in a construction lien action brought a motion to compel the plaintiff to answer undertakings and questions taken under advisement during examinations for discovery.

The plaintiff argued the defendant required leave under the former Construction Lien Act to bring the motion.

The court held that leave was implicitly granted by the discovery plan and was necessary to expedite the resolution of the dispute.

Applying the principles of proportionality and relevance, the court ordered the plaintiff to answer the majority of the outstanding questions, noting that undertakings must be honoured once given.

The court declined to order answers to questions regarding document authenticity and the plaintiff's opinion on a report prepared by the defendant's consultant.

The moving defendants sought an order under Rule 6.01 to have the condominium corporation's complex breach of contract and professional negligence action tried together with ten simplified procedure tort actions brought by individual homeowners arising from the same roof leak incident.

The court dismissed the motion, finding that despite the common incident, the actions involved different causes of action, different levels of complexity, and were at vastly different stages of litigation.

The court held it would be unjust to delay the homeowners' advanced simplified proceedings to allow the corporation's more complex action to catch up.

Following the dismissal of the plaintiff's motion to oppose the confirmation of a referee's report granting partial summary judgment, the defendant sought costs of $40,872.16 on a partial indemnity basis.

The plaintiff argued costs should be deferred to the final disposition of the reference or reduced.

The court declined to defer costs, noting that costs should generally be awarded for every step of the litigation process.

The court fixed costs at $35,000, finding this amount closer to the reasonable expectations of the parties given the complexity and importance of the issues.

In CCAA proceedings arising from a major construction project, the monitor sought an order authorizing release of a contractor-specific holdback notwithstanding the continued construction of the project and the resulting technical inability to satisfy the timing requirements of the construction lien regime.

The court held that s. 11 of the CCAA gave it jurisdiction to deem compliance with statutory preconditions where doing so usefully furthered the remedial objectives of the restructuring, caused no demonstrated prejudice, and preserved the substantive rights of affected stakeholders.

The court also held that it could protect the monitor and CRO from potential personal liability under specified tax statutes for implementing the court-authorized payment, but revised the proposed wording to grant a narrower and more direct liability shield.

The holdback release order was approved with modifications, including removal of an unnecessary overlapping protection.

The plaintiff's motion to oppose confirmation of an Associate Justice's interim report in a construction lien matter was dismissed.

The successful defendants sought costs on a substantial indemnity basis due to an unaccepted offer to settle.

The court considered the defendants' success, the offer to settle, the importance of the issue, and the scale of the underlying litigation, fixing costs at $65,000 all inclusive.

The plaintiff contractor sued for unpaid invoices relating to the construction of concrete grain silos.

The defendant grain company counterclaimed for damages, alleging construction deficiencies caused water infiltration and grain spoilage.

The court found that the contractor's defective workmanship caused water infiltration in two silos.

The court awarded the defendant damages for repair costs, increased labour, and future repairs, while dismissing claims for spoiled grain due to lack of documentary evidence.

The court also held that the defendant's counterclaim was not statute-barred because the limitation period did not commence while the contractor was actively attempting to repair the defects.

The plaintiff was awarded its unpaid invoices, but the individual defendant was found not personally liable.

On an initial CCAA application following an NOI filed two days earlier under the BIA, the court granted relief to permit an insolvent trenchless construction group to continue restructuring as a going concern.

The court held that continuation under the CCAA was consistent with the remedial purposes identified in Century Services, and that an initial stay, extension of the stay to a non-applicant affiliate, temporary protection against calls on performance bonds, DIP financing, administration and directors’ charges, CRO approval, and critical supplier payment authority were all reasonably necessary.

The court also granted a lien regularization order tailored to ongoing construction projects, finding it preserved cash flow while substituting a court-supervised claims process that maintained lien claimants’ substantive rights.

The application was supported by the proposed monitor and senior secured lender, and was not opposed by the surety.

The applicant submitted the lowest bid for a City of Toronto sewer and watermain project.

The City disqualified the bid, concluding the applicant lacked the requisite corporate experience because its personnel's experience was gained at a different company.

The City then cancelled and reissued the tender.

The court found the applicant's bid was compliant, a Contract A was formed, and the City breached the contract by cancelling the tender without a valid basis.

However, the court noted the tender's broad limitation of liability clause might preclude expectation damages and requested further submissions on its enforceability, while awarding the applicant costs of the motion.

The plaintiff, a subcontractor providing swing stage labour, brought a construction lien and breach of contract claim against the general contractor and owner for unpaid invoices totaling $36,761.73.

The defendants counterclaimed for deficiency correction costs and alleged overbilling, including disputed travel time.

The court found that the defendants fundamentally breached the oral contract by refusing payment based on groundless deficiency claims and terminating the contract without cause.

The court held that travel time was compensable under the agreement and awarded the plaintiff $35,643.03, dismissing the defendants' counterclaim.

Following a trial where the plaintiff succeeded in its construction lien and damages claims, the court determined the costs and interest payable.

The court found the defendant's settlement efforts unreasonable, noting she rejected a settlement conference recommendation and a reasonable Rule 49 offer from the plaintiff.

Applying the principles of proportionality and the factors under Rule 57.01, the court awarded the plaintiff costs of $135,000, representing a reduction from the $186,044.09 claimed, along with prejudgment and post-judgment interest.

The moving party, a woodworking contractor, brought a motion under Rules 45.01 and 45.02 for an interim order preserving the proceeds of any sale of the responding party's residential condominium.

The moving party had previously proven its construction lien and was awarded costs and interest in a Master's report, which the responding party was moving to oppose.

The court found that Rule 45.01(1) applied because the report created a connection between the awarded costs and interest and the proceeds of the condominium's sale, and there was evidence the responding party was attempting to sell the unit without notifying his counsel.

The court ordered that $220,000 from any sale proceeds be paid into court pending the final determination of the motion opposing confirmation of the report.

The applicant subcontractor sought an order that the respondent law firm pay $39,812.68, which the firm had received from its client (the general contractor) for legal fees.

The funds originated from a settlement in a construction lien action.

The court found that the funds were impressed with a statutory trust under section 8 of the Construction Lien Act.

The court held that the law firm was in 'knowing receipt' of trust funds when it transferred the money from its trust account to its general account to pay its legal fees, as it had knowledge of the applicant's outstanding trust claim against the contractor.

The law firm was ordered to pay the funds to the applicant as a constructive trustee.

The plaintiffs purchased a cottage and later discovered significant structural issues and Building Code violations during renovations.

They sued the Township for negligent building inspections and failure to enforce the Building Code Act.

The court found that the Township owed a duty of care to the plaintiffs and breached that duty by granting a building permit without proper plans and failing to identify structural deficiencies during inspections.

The Township was held liable for the costs to remedy the Code violations and for the plaintiffs' mental distress, resulting in a total damages award of $361,875.33.

The plaintiff in a construction lien action brought a motion for leave to amend its Statement of Claim to plead restitution unjust enrichment and for leave to file a document brief at trial.

The court denied leave to amend, finding that the proposed amendments were legally untenable because the Construction Lien Act prohibits joining non-contractual claims, such as pure restitution unjust enrichment, in a lien action.

However, the court granted the plaintiff leave to file its document brief at trial, as the documents were potentially relevant and any prejudice from late service was mitigated by a trial adjournment.

Costs of $7,500 were awarded to the responding party.

The defendants hired the plaintiff to construct a modular home.

A dispute arose, and the plaintiff registered a construction lien.

The defendants obtained an order vacating the lien upon posting security and subsequently brought a motion to have the security returned, arguing the lien was not perfected within the statutory timelines under the Construction Lien Act.

The court found that the contract was abandoned at the latest on December 2, 2017, and since the statement of claim was issued more than 90 days later, the lien expired.

The court ordered the return of the security to the defendants.

Following a decision confirming a Master's Report with a minor variation and dismissing both the plaintiff's motion to oppose confirmation and the defendant's conditional opposition, both parties sought costs.

The plaintiff sought partial indemnity costs, while the defendant sought partial or substantial indemnity costs.

The court found that success was divided, as neither party achieved their primary aspirations on the motions.

Consequently, the court ordered that there be no order as to costs.

The plaintiff contractor brought a motion for summary judgment for unpaid invoices and breach of trust under the Construction Lien Act.

The corporate defendant conceded liability for the invoices.

The issue was whether the individual defendant, the sole directing mind of the corporation, was personally liable for breach of trust under s. 13.

The plaintiff argued that the corporation's rental income used to self-finance the improvements constituted a trust fund under s. 7(1).

The court dismissed the motion against the individual defendant, holding that s. 7(1) requires a distinct fund specifically earmarked for financing the construction, and general revenues do not qualify.

The moving parties (defendants) brought a motion under Rule 21.01(3) to strike paragraphs from the plaintiff's statement of claim, arguing the claims were barred by res judicata and abuse of process due to a prior construction lien action.

The plaintiff had previously obtained a default judgment on a counterclaim in the lien action and now alleged the moving parties stripped the corporate defendant's assets to make it judgment proof.

The court dismissed the motion, finding that the issues of fraud and asset stripping against the personal defendants were not and could not have been adjudicated in the prior lien action, as there was no judgment against the corporate defendant at that time.

The defendant was successful on a summary judgment motion dismissing the plaintiff's construction lien claim on the basis of diplomatic immunity.

The defendant sought partial indemnity costs, while the plaintiff sought substantial indemnity costs based on a pre-hearing offer to settle.

The court found the plaintiff's offer was conditional and the motion's outcome was less favourable to the plaintiff than the offer's terms.

The court awarded the defendant partial indemnity costs fixed at $16,885.00, noting the complexity and novelty of the international law issues involved.