Arcamm Electrical Services Ltd. v. Avison Young Real Estate Management Services LP, 2024 ONCA 251
An appeal from a summary judgment under r. 20 lies to the Court of Appeal, even if the appeal concerned findings by the motion judge that Arcamm's invoices were not "proper invoices" for the purposes of s. 6.1 of the Construction Act and that Queen was an "owner" under the Construction Act and was contractually liable to Arcamm.
In this case, the judgment was not made under the Construction Act. Instead, the source of the motion judge's jurisdiction was r. 20, a rule promulgated pursuant to the Courts of Justice Act.
In addition, the relief granted was based on a claim for damages in contract for unpaid invoices, a non-statutory cause of action. The grounds of appeal highlighted the significance of this point. Queen's primary ground of appeal was its contention that the motion judge erred in failing to find a genuine issue requiring a trial, specifically by failing to consider the defence of contributory fault and whether Arcamm's conduct caused or contributed to the same damages claimed in contract. These issues were not matters governed by the Construction Act; they were specific to the application of the test under r. 20.
1593095 Ontario Ltd. (Northwood Window and Door Centre) v. McCann, 2024 ONSC 163 (S.C.J.)
A breach of contract by a contractor is not carte blanche for the homeowners to make extravagant claims amounting to a complete refund of what was paid for the work. The homeowners must act reasonably and prudently and must mitigate their losses if possible.
Demikon Construction Ltd. v. Oakley Holdings Inc. et al, 2024 ONSC 2151 (S.C.J.)
Direct payments under s. 28 of the Construction Act can be made to any persons having a lien, not just to persons who have a claim for lien. Valid s. 28 payments can be made to any person, "...on account of any amount owing to that person for services or materials", which would encompass persons who have an amount owing to them for services and materials. It would not require them to be lien claimants.
There is no reason why payments made under s. 28 payments would not factor into the court's summary exercise in s. 44(5). As stated by McCarty J.:
Indeed, how could they not? Common sense, fairness, simple accounting, commercial reality, the mechanics of security and the entire scheme and purpose of the Act would all be perverted if direct subcontractor payments were not central to the court's analysis of a security reduction motion. Moreover, s. 29 clearly stipulates that payments made in accordance with that part of the Act operate as a discharge of the lien to the extent of the amount paid. Section 17(1) of the Act stipulates that the lien of a person is "limited to the amount owing to the person", while s. 17(3) clarifies that the amount as between payer and the person the payer is liable to pay is "equal to the balance in the payer's favour of all outstanding debts, claims or damages". Undoubtedly, the terminology "amount owing" and "balance" contemplates a lien value subject to updating, credits, reductions, and adjustments.
2708320 Ontario Ltd. cob Viceroy Homes v. Jia Development Inc., 2024 ONSC 1608 (A.J.)
The court discussed whether liability for costs under section 86(1)(b)(i) includes conduct that is "reckless" and "willfully blind." Recklessness and willful blindness have been defined as having a level of knowledge that is the moral equivalent of actual knowledge. Such conduct is well beyond mere negligence or a laziness underlying a failure to inquire. It involves knowledge of an actual risk that is at the level of a "clear probability" and then a failure to act to avoid the risk or make inquiries. The court concluded that liability for costs under section 86(1)(b)(i) includes recklessness and willful blindness. Statutory interpretation was one reason for this conclusion. Section 86(1)(b)(i) includes the phrase "where it is clear that the lien is without foundation, or is for a grossly excessive amount, or that the lien has expired." That phrase is not necessary to the rest of the sentence. It was added to capture the situations where the representative does not have actual knowledge of the baselessness of the claim but knowledge of a "clear probability" that it is baseless and fails to act or inquire.
The second reason for this interpretation is the lawyer's gatekeeper function. Where the lawyer's knowledge has reached that of a "clear probability" of the claim's baselessness, the lawyer's duty to the court, the property owner and others who may be adversely affected should supersede the lawyer's duty to the client, and the lawyer should investigate or refuse to participate.
Atlas Dewatering Corporation v. Harvie Construction Inc., 2024 ONSC 1775 (S.C.J.)
In a case involving two experienced contractors, where a contract was silent on payment terms, the court implied a term that interim payments would be made. The level of sophistication of both parties, along with the billing of monthly progress draws, allowed the court to infer that interim billing and payment was an expected part of the contract for the parties. The court discussedMarden Mechanical Ltd. v. West–Con Developments Inc., 2007 CarswellOnt 1629, where Corbett J. found that there was an implied term that interim payments would be made. The court found that although the contract was silent as to payment terms, it contemplated progress draws because it would have been unreasonable to expect the contractor to perform three quarters of the contract work by building a warehouse and then wait months for payment while another building was being constructed before it could complete the contract work and get paid. Also referenced was a decision of Master Sandler, RSG Heating & Air Conditioning Ltd. v. Maxximum Design & Construction Inc., [2002] O.J. No. 3844, in which he held that even though there are no payment terms in a quotation, and no formal contract superseding the quotation and acceptance, the usual practice is for interim billing when a job is to take more than one month.
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