Teepee Excavation & Grading Ltd. et al. v. Niran Construction Ltd. et al., (2000) 133 O.A.C. 247 (CA)

• Judge: Carthy, Rosenberg and O'Connor, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: May 17, 2000
• Jurisdiction: Ontario
• Citations: (2000), 133 O.A.C. 247 (CA)

Teepee Excavation v. Niran Constr. (2000), 133 O.A.C. 247 (CA)

MLB headnote and full text

Temp. Cite: [2000] O.A.C. TBEd. JL.009

In The Matter Of the Construction Lien Act, R.S.O. 1990, c. C.30, as amended

Teepee Excavation & Grading Ltd. and Springview Landscape Inc. (plaintiffs/respondents) v. Niran Construction Ltd. and Victoria Wood Development Corporation Inc. (defendants/appellant in appeal)

(C33077)

Indexed As: Teepee Excavation & Grading Ltd. et al. v. Niran Construction Ltd. et al.

Ontario Court of Appeal

Carthy, Rosenberg and O'Connor, JJ.A.

July 7, 2000.

Summary:

The plaintiffs, Teepee Excavation and Springview Landscape, issued a claim for a lien and a claim for payment. The defendant, Niran, filed a defence and counterclaim for recovery of the costs of posting a bond to vacate the liens and damages for breach of contract. The lien expired because the action was not set down for trial within two years from commencement of the action. Niran moved for an order: declaring that the lien had expired; dismissing the action; and allowing summary judgment on the portion of the counterclaim regarding recovery of bond premiums paid.

A Master of the Ontario Superior Court dismissed the action and granted judgment to Niran on its counterclaim. The plaintiffs appealed. At issue was whether the entire claim had to be dismissed or the contract claim could continue at the court's discre­tion.

The Ontario Divisional Court, in a judg­ment not reported in this series of reports, allowed the appeal, holding that the Master erred in giving no reasons for his decision and not making a statement regarding the exercise of his discretion. Niran and another defendant appealed.

The Ontario Court of Appeal set aside the Ontario Divisional Court's decision and reinstated the Master's decision.

Mechanics' Liens - Topic 3

General principles and definitions - Gen­eral principles - Purpose of mechanics' lien legislation - The Ontario Court of Appeal discussed the purpose of the Construction Lien Act, stating that "the broad purpose of the legislation is to provide an efficient means of dealing with trade claimants that would otherwise be left behind without security if unpaid on a building project where payments typically flow from above and follow performance. On a failing or failed project, there may be many such claimants. In setting down the rules, the Act does not go so far as to restrict claims thereunder to lien claims. Contract claims by the plaintiff and counterclaims of any kind are permitted, presumably to avoid duplication of proceedings." - See para­graph 24.

Mechanics' Liens - Topic 6922

Loss or discharge of lien - Discontinuance of action - Expiry of limitation period (effect on contract claims) - In a lien claim action, which included a counterclaim for, inter alia, breach of contract, the lien action was dismissed because it was not set down for trial within the prescribed time - On appeal, the issue was whether the entire action had to be dismissed or whether the court had discretion to permit the contract claim to continue (Construction Lien Act, s. 46(1), s. 47(1)(d)) - The Ontario Divi­sional Court held that: a lien action could include a breach of contract and a lien claim: dismissing the lien claim (s. 46(1)) because it expired did not dispose of the contract claim; and a court had discretion whether to dismiss the contract claim (s. 47(1)(d)) - The Ontario Court of Appeal agreed with this interpretation.

Mechanics' Liens - Topic 6922

Loss or discharge of lien - Discontinuance of action - Expiry of limitation period (effect on contract claims) - A lien claim action, which included a counterclaim for, inter alia, breach of contract, was dis­missed because it was not set down for trial within the prescribed time - At issue, on appeal, was if the entire action had to be dismissed or if there was a discretion to permit the contract claim to continue (Con­struction Lien Act, s. 46(1), s. 47(1)(d)) - The Ontario Divisional Court held that the court had the discretion to permit the contract claim to continue, but set aside the Master's decision because he failed to give any reasons or statement regarding the exercise of his discretion - The Ontario Court of Appeal agreed with the Act's interpretation, but held that the Master exercised his discretion and concluded the entire action should be dismissed.

Mechanics' Liens - Topic 8007

Practice - General - Setting case down for trial (Expiry of limitation period) - [See both Mechanics' Liens - Topic 6922 ].

Mechanics' Liens - Topic 8009.1

Practice - General - Parallel action in contract - [See both Mechanics' Liens - Topic 6922 ].

Cases Noticed:

Goodale A.J. (Archie) Ltd. v. Risidore Brothers Ltd. et al. (1976), 8 O.R.(2d) 427 (C.A.), refd to. [para. 13].

Bird Construction Co. v. C.S. Yachts Ltd. and Tennyson (1990), 38 O.A.C. 147; 46 C.L.R. 192 (C.A.), refd to. [para. 14].

Schultz (Benjamin) & Associates Ltd. v. Samet (1991), 52 O.A.C. 180; 83 D.L.R.(4th) 574 (Div. Ct.), refd to. [para. 17].

612354 Ontario Ltd. v. Tonecraft Corp. (1991), 5 O.R.(3d) 764 (Gen. Div.), refd to. [para. 19].

Eurocor Ltd. v. Vernich (1992), 9 O.R.(3d) 631 (Gen. Div.), refd to. [para. 20].

Golden City Ceramic & Tile Co. v. Iona Corp. (1993), 106 D.L.R.(4th) 532 (Ont. Div. Ct.), refd to. [para. 21].

Statutes Noticed:

Construction Lien Act, R.S.O. 1990, c. C-30, sect. 46(1) [para. 3]; sect. 47(1) [para. 4].

Counsel:

Robert C. Harason, for the appellant;

Richard B. Jones, for the respondent.

This appeal was heard on May 17, 2000, by Carthy, Rosenberg and O'Connor, JJ.A., of the Ontario Court of Appeal. Carthy, J.A., delivered the following decision for the court on July 7, 2000.