|
Construction - Orders. Prasher Steel Ltd. v. Pre-Eng Contracting Ltd.
In Prasher Steel Ltd. v. Pre-Eng Contracting Ltd. (Div Court, 2024) the Divisional Court dismissed a Construction Lien Act appeal [under CLA 71(1)] (the case pre-dates the new Construction Act), here finding that upon the expiration of lien rights that an order could still be made that 'personal judgment' (damages) issue:[9] ... The trial judge erred in law in finding that separate claims for lien must be registered in respect to separate subcontracts between the same parties for the same improvement. Liens arise upon the provision of services or materials to an improvement, and the time to claim a lien expires based on the date of last supply of services or materials to the improvement. Absent certification of substantial performance or completion, it matters not whether a subcontractor provides its services or materials under one subcontract or multiple subcontracts – the subcontractor lien arises upon first supply and persists until expiry following the date of last supply of services or materials.
....
[14] The trial judge then went on to conclude that the lien claims under the Structural Steel contract were not timely (paras. 100-101, 419[3]) and ordered that the judgment in respect to the Structural Steel contract is enforceable as a personal judgment only (para. 421).
....
(b) Issue (e): personal judgment pursuant to s. 63 of the Act
[19] Pre-Eng argues that the trial judge could not, in law, grant personal judgment against it in respect to the Structural Steel contract because the lien claims respecting those claims failed. Pre-Eng also argues that the trial judge ought not to have exercised his discretion under s. 63 of the Act to grant personal judgment on the Structural Steel claims.
[20] I do not accept either of these arguments.
[21] Section 63 provides:Subject to paragraph 3 of subsection 36(4) (sheltering), the court may award any lien claimant a personal judgment, whether the claimant proves the lien or not, upon any ground relating to the claim that is disclosed by the evidence against any party to the action for any amount that may be due to the claimant and that the claimant might have recovered in a proceeding against that party. [22] The discretion afforded by s. 63 applies “whether the claimant proves the lien or not.” In this case, the ground “relating to the claim” was a contract claim inherent in the lien claim. There is no argument available to Pre-Eng that the judgment ordered under the Structural Steel contract was not “disclosed by the evidence”.
[23] Pre-Eng cites one case in support of its position: Tilar Roofing Ltd. v. John Boddy Developments Ltd., (1986), 20 CLR 161 (Master Sischy). Tilar is clearly distinguishable. At para. 6 of that decision, the learned Master stated:... the exercise of a discretion in granting personal judgment may differ, depending on whether it is determined prior to trial that the plaintiff is not entitled to a lien, or whether this is only discovered after all the evidence has been heard. [24] In the case at bar, it was in the trial judgment that the court ordered that the claim for lien in respect to the Structural Steel contract was out of time – “after all the evidence ha[d] been heard.” In Tilar, this finding was “determined prior to trial.”
[25] Section 63 exists to address the situation that arose on the trial judge’s analysis in this case – where Prasher had a valid claim in contract, that was proved at trial, but its lien failed because it was not preserved and perfected in time. The trial judge properly applied s. 63 of the Act; I would not give effect to this ground of appeal.
....
[35] The Supreme Court of Canada’s decision in Rocky Mountain was based on the language of The Mechanics Lien Act, RSA 1942, c. 236, s.22, which expressly provided for termination of lien rights 35 days after “completion or abandonment of the… subcontract.” The Legislature of Ontario chose to change this language when the CLA was enacted in 1983, and no Ontario court has followed Rocky Mountain to find expiry of subcontracts on a subcontract-by-subcontract basis since that time.
[36] Rocky Mountain does continue to be applied in Ontario in respect to prevenient arrangements, to permit claims under multiple separate contracts to expire on the basis of the date of last supply where there is an arrangement to this effect between the parties: Wood Lumber Co. (Ontario) Ltd. v. Eng, 1999 CanLII 15030, paras. 18-21 (Div. Ct.); Oaks Precast v. G.L. Trenching Ltd., 28 CLR (2d) 312, paras. 14-19 (OCJ (Gen. Div.)); Larochelle Group Corporation v. Cabral, 2000 CanLII 2452, paras. 16-19 (ON SC); Ramers Builders Supplies (Toronto) Ltd. v. Roitman, 2004 CanLII 1281, paras. 31-34 (ON SC); Riddell Contracting Ltd. v. 2004778 Ontario Inc., 2003 CanLII 16397, paras. 53-57 (ON SC). Aside from cases involving prevenient arrangements, Rocky Mountain does not apply to the expiry of subcontractor lien claims.
[37] On the plain language of s. 31(3)(ii), Prasher’s lien rights in respect to all of the services and materials it supplied to the improvement expired 45 days after the date of its last supply of services or materials to the improvement. The trial judge found as a fact that the date of last supply was August 12, 2012, and thus that the claim for lien was timely. The trial judge erred in concluding that the claims respecting the Structural Steel subcontract had to be preserved separately and earlier than the claims under the Miscellaneous Metals subcontract, and that aspect of the judgment must be reversed.
|
