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Construction - Appeals (2). Demikon Construction Ltd. v. Oakleigh Holdings Inc.
In Demikon Construction Ltd. v. Oakleigh Holdings Inc. (Div Court, 2024) the Ontario Divisional Court allowed a Construction Act appeal, here against an order which reduced the required amount of posted lien bond in order to vacate "a claim for a construction lien on the title of the project land".
Here the court states a Construction Act appeal route:[29] The Divisional Court has jurisdiction to hear this appeal. An appeal from a judgment under the Construction Act lies to the Divisional Court as of right, but leave is required to appeal an interlocutory order: Construction Act, ss. 71(1), 71(3). An order that “reduces a portion of the claim [for lien] from being secured to unsecured determines a substantive issue and deprives the lien claimant of certain legal rights. Such an order is a final order and can be appealed” to the Divisional Court under s. 71(1) without leave: see H.I.R.A Ltd. v. Middlesex Standard Condominium Corp. No. 823, 2018 ONSC 3661, 61 C.B.R (6th) 59 (Div. Ct), at para. 22. . JIA Development Inc. v. 2708320 Ontario Ltd. (Viceroy Homes)
In JIA Development Inc. v. 2708320 Ontario Ltd. (Viceroy Homes) (Div Court, 2024) the Ontario Divisional Court considered whether leave to appeal was required under CJA s.133(b) ['costs'], here in a Construction Act context (which has it's own costs provisions):[1] The appellants seek to appeal a decision of Associate Justice Wiebe dated March 18, 2024 in which he declined to award costs against Fogler Rubinoff LLP under s. 86(1)(b)(i) of the Construction Act, R.S.O. 1990 c. C.30. Pursuant to that provision, the court may exercise its discretion to order costs against a person who represented a party to an action where the person “knowingly participated in the preservation or perfection of a lien, or represented a party at the trial of an action, where it is clear that the claim for a lien is without foundation, is frivolous, vexatious or an abuse of process, or is for a willfully exaggerated amount, or that the lien has expired.”
[2] There is a preliminary question as to whether leave is required for the appellants to bring the appeal. During the case management process and at today’s hearing, the appellants took the position that leave was not required. They submit s. 86 of the Construction Act makes entitlement to costs of an improperly brought lien action a substantive issue for which there should be a substantive right of appeal. They rely on s. 71 of the Construction Act, which provides that an appeal lies to the Divisional Court from a judgment under the Construction Act. In their submission, the provisions of the Construction Act supersede more general costs provisions of the Courts of Justice Act, R.S.O. 1990 c. C. 43 and Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
[3] In case management directions, Justice Davies directed the issue of whether leave was required to be raised before the panel. This would allow the panel at the hearing to deal with all issues, including if leave was not required, and was more efficient than scheduling a preliminary motion to strike the notice of appeal.
[4] In our view, the appellants are required to obtain leave to bring their appeal. Section 133(b) of the Courts of Justice Act provides that “No appeal lies without leave of the court to which the appeal is to be taken where the appeal is only as to costs that are in the discretion of the court that made the order for costs.” The decision the appellants seek to appeal is only as to the claim for costs against Fogler Rubinoff, which were in the discretion of the court.
[5] Nothing in the Construction Act is inconsistent with this provision. Section 71 provides an appeal to the Divisional Court from a “judgment.” Subsection 50(2) of the Construction Act provides that the Courts of Justice Act and the rules of court apply to actions under Part VIII of the Act except to the extent of any inconsistency.
[6] The Construction Act does not define “judgment,” but the Rules of Civil Procedure do. Rule 1.03 defines a judgment to mean in relevant part “a decision that finally disposes of an application or an action on its merits.” We do not accept the appellants’ submission that the costs order in this case constitutes a judgment. It was an order that followed the result in the lien proceeding and not a separate action or application.
[7] Furthermore, s. 71 of the Construction Act does not address costs, whereas the Courts of Justice Act expressly requires that leave be obtained from an order only as to costs that are in the discretion of the court. Subsection 86(1) of the Construction Act states that costs under that provision are in the discretion of the court.
[8] We conclude that leave to appeal from this costs order is required.
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