Case: MGW-Homes Design Inc. v. Pasqualino, 2024 ONCA 422

Keywords: construction dispute interim adjudication; appellate jurisdiction; Construction Act, RSO 1990, c C.30

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Synopsis:

The Appellant, MGW-Homes Design Inc., performs work and supplies materials for the Respondent’s home renovation. Following a dispute between the parties, the Appellant registers a “Claim for Lien” in the amount of $169,184.69 and issues a statement of claim. The Respondent pays that amount into court, plus $42,296.24 as security for costs. The lien is vacated. The Respondent delivers a statement of defence and counterclaim. (See para. 5).

The Appellant seeks a “construction dispute interim adjudication”, a relatively new procedure available since 2019 under Part II.1 of the Construction Act, RSO 1990, c C.30. The adjudicator determines the Respondent must pay $119,314, inclusive of HST. The Respondent is denied leave to judicially review that determination pursuant to s. 13.18 of the Construction Act. (See paras. 6-9).

The Appellant then files the adjudicator’s determination. (See para. 10). The Respondent brings a motion to vacate the writ on the basis that the Appellant failed to give the required notice. The Motion Judge (Chozik J.) allows the motion, and bars the Appellant from re-filing writs of execution or taking any enforcement steps in connection with the adjudicator’s order. (See para. 12).

The Appellant appeals, arguing the Motion Judge erred by finding the failure to provide notice is a barrier to taking enforcement steps. (See para. 13). As a preliminary matter, the Appellant raises the issue of jurisdiction (having perfected its appeal in both Divisional Court and the Court of Appeal). (See para. 14). The Court of Appeal (Miller, Harvison Young, and Thorburn JJ.A.) dismisses the appeal. For the Court of Appeal, the Motion Judge’s order falls within the meaning of “judgment” in s. 71(1) of the Construction Act and so the appeal lies to Divisional Court. (See paras. 3, 36).

Importance:

The “novel” issue addressed by the Court of Appeal was which appellate court – the Court of Appeal or Divisional Court – has jurisdiction over the Motion Judge’s decision. Put another way, does s. 71(1) of the Construction Act or s. 6(1)(b) of the Courts of Justice Act, RSO 1990, c C.43govern this situation?

For the Court of Appeal, that question turns on the definition of “judgment” in s. 71(1) of the Construction Act: “[e]xcept as otherwise provided in this section, an appeal lies to the Divisional Court from a judgment or an order on a motion to oppose confirmation of a report under this Act.” (See para. 16).

The Court of Appeal rejected the Respondent’s submission that, because s. 71(1) is an “exception to the normal appeal route” under s. 6(1)(b) of the Courts of Justice Act, it should be interpreted narrowly. (See para. 24). For the Court of Appeal, a provision found in a “special act” [sic] (e.g., the Construction Act) takes precedence over the more “general” appeal provisions in the Courts of Justice Act. (See para. 25; see also Bird Construction Co. Ltd. v. C.S. Yachts Ltd. and Tennyson, 38 OAC 147, 17 CLR 225 (not available on CanLII) at para. 9 and Villa Verde L.M. Masonry Ltd. v. Pier One Masonry Inc., 2001 CanLII 7060 (ON CA) at para. 9).

In addition, the Court of Appeal found that “efficiency – both financial and temporal – animates the Construction Act”. (See para. 22). For the Court, a “narrow” interpretation of s. 71(1) would “undermine the purpose of efficiency and would be contrary to case law interpreting the appeal provision”. (See para. 24; see also paras. 34-36).

Ultimately, and of interest for future matters, the Court of Appeal determined that:

    • an adjudication under Part II.1 of the Construction Act should be considered a “proceeding under the Act”; and
    • a motion judge’s order on the enforceability of an adjudicator’s determination is a “judgment…under [the] Act”. (See para. 36).

As a consequence, an appeal from an adjudicator’s determination in this context should be brought to Divisional Court.

Counsel for the Appellant: John Margie and Jay Nathwani (Margie Strub Construction Law LLP, Toronto)

Counsel for the Respondent: Krista Chaytor (WeirFoulds LLP, Toronto) and Carlo Pasqualino (Pasqualino Law, Oakville)

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