A recent Ontario Superior Court decision from April 2022, Louis Jones Construction Ltd. v. Rocque, 2022 ONSC 2362, adds to the line of cases dealing with motions brought under Section 47 of Ontario's construction lien legislation to discharge an expired lien. In dispute in this case was the operation of the transition provisions in Section 87.3 of Ontario's Construction Act,  RSO 1990, c C.30 (“Act”).

Despite procedural differences, motions under Section 47 of Ontario's lien legislation are similar to motions for summary judgment under Ontario's Rules of Civil Procedure (the “Rules”) from the perspective of the underlying test. Both involve consideration of whether or not a “triable issue” exists in respect of an issue in dispute. In the case of Section 47 motions to discharge a lien (which are defensive in nature, because they do not provide a means for the plaintiff to obtain judgment), the court needs to determine whether there is “a triable issue in respect to any of the bases on which discharge of the lien is sought.” A major difference however, are the procedural tools and powers at the court's disposal in respect of such motions.

On a motion for summary judgment, Rules 20.04(2.1) and (2.2) of the Rules give the court “enhanced” fact finding powers, including the ability to weigh evidence, evaluate credibility of deponents and draw reasonable inferences based on the evidence.

These same “enhanced powers” are not available on a Section 47 motion, which can lead to tactical disadvantages for a moving party.

Background

In November 2016 pursuant to an oral agreement, the defendant owner, Roxanne Rocque (“Rocque”), retained her nephew, Jonathan Rocque, and his company, J-Rock Construction (“J-Rock”), to perform certain renovations and construction improvements on her residential property. The renovations included winterizing the underside of Rocque's house, replacing the kitchen and living room ceilings, insulating the attic, remodeling the entrance, adding a storage room, redoing the kitchen, replacing some of the electrical work and installing doors and molding.

Rocque claimed that the work began mid-November 2016. Rocque's property was flooded in May 2017.

In mid-November 2018, J-Rock hired the plaintiff/subcontractor lien claimant, Louis Jones Construction (“Louis Jones”), to perform excavation and foundation work on Roque's property. Louis Jones in turn leased equipment from the plaintiff/supplier lien claimant, Sunbelt Rentals of Canada Inc. (“Sunbelt”), including a Bobcat track skidsteer (the “Bobcat”). The affidavits of Rocque and Jonathan Rocque delivered in respect of the motion listed the improvements Rocque expected J-Rock to complete under their contract (and those improvements did not include any improvements to the foundation of the property).

Louis Jones stopped working on the property on December 19, 2018. However, the Bobcat was left on the property so that J-Rock could continue to use it.

J-Rock claims it asked for the Bobcat to be removed on December 21, 2018. Louis Jones, on the other hand, claimed the request was not made until January 2, 2019. Ultimately, the Bobcat was picked up by Sunbelt on January 3, 2019.

Louis Jones registered a construction lien against the property on February 15, 2019, 44 days after January 2, 2019. Sunbelt registered its construction lien on February 19, 2019, which amounted to 45 days after January 2, 2019 due to the Family Day holiday on February 18, 2019.

Rocque brought a motion under Section 47 of the Act to have the liens discharged on the basis that they were not preserved it time. Rocque's position was that the deadlines imposed by the “old” Construction Lien Act applied, instead of the new timelines under the Act, because the lien claimants' respective contracts fell under the umbrella of her November, 2016 contract with J-Rock. Rocque also alleged that the last date of supply was in December, 2018. Accordingly, Rocque argued that neither lien was preserved within 45 days.

The issues and the court's decision

To decide the motion, the court had to deal with two issues:

  1. was there a triable issue in respect of whether the “old” Construction Lien Act  (with its 45-day preservation deadline) or the Act  (with its 60-day preservation deadline) applied to the plaintiffs' liens, specifically, was a contract for the improvement entered into or a procurement process commenced before July 1, 2018?; and
  2. was there a triable issue in respect of when the plaintiffs last supplied services and materials to Roque's property.

Section 87.3(1) of the Act provides that the provisions of the old Construction Lien Act apply to an improvement if a contract for the improvement was entered into before July 1, 2018, or a procurement process for the improvement was commenced before July 1, 2018 by the owner of the premises.

The court held that, without the ”enhanced powers” available on summary judgment motions, there was too much conflicting evidence for the issues to be resolved based on a paper record.

While Rocque maintained that Louis Jones' subcontract fell under the umbrella of her November, 2016 contract with J-Rock, the contract with J-Rock was not in writing, and there was insufficient evidence that the excavation and foundation work which Louis Jones completed was contemplated in November 2016, as opposed to the work being supplied under a separate or new contract including possibly for improvements necessitated by the May 2017 flood.

With respect to the issue of the lien claimants' last supply of services and/or materials to Rocque's property, there was too much conflicting evidence regarding when the request was made for the Bobcat to be removed from the property.

Key takeaways

The type and nature of motion being sought and heard (e.g., a Section 47 motion versus a summary judgment motion), and whether the motion is brought and heard in the context of a reference under Ontario's lien legislation (triggering the leave requirement) are important variables dictating, among other things, the construction lien referee's jurisdiction and the procedural tools and powers available to the court. This case serves as a reminder that the “enhanced powers” which the court (including a construction lien referee1) may use on a summary judgment motion are not available to the court on a Section 47 motion. Motions under Rules 20 and 21 of the Rules in cases “referred” to the court for trial under Ontario's lien legislation may be brought before a construction lien referee if leave is granted, and a construction lien referee may use the Enhanced Powers in disposing of such motions. As such, in circumstances where oral evidence and cross-examination are required in order to make findings of fact and credibility, a party bringing a Section 47 motion will likely face an uphill battle.

Footnote

1 It appears that the newly added possible construction lien referees under Ontario's lien legislation (namely decision makers in Small Claims Court) may not use the Enhanced Powers. However, given recent changes to Ontario's lien legislation including in respect of the list of possible construction lien referees having been expanded to include deputy judges of the Small Claims Court or the Small Claims Court Administrative Judge, where the jurisdiction allows, (and not only masters, case management masters and persons agreed on by the parties); and the facts that the “Enhanced Powers” are established under Rule 20 of the Rules and matters in small claims court are determined under the Rules of the Small Claims Court (which do not contemplate motions for summary judgment); there is still some uncertainty concerning the jurisdiction, powers and authority of such newly added possible referees on reference.

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