Summary Judgment and Section 37

Introduction

Summary judgment is a procedural tool intended to provide a fair and just alternative procedure, “without the expense and delay of a trial”.[1] The Construction Act (the “Act”) does not explicitly provide for the availability of summary judgment; however, it is widely accepted that parties may bring a motion for summary judgment in construction lien matters.[2] In fact, in Industrial Refrigerated Systems Inc. v. Quality Meat Packers, the court held that leave should rarely be refused, particularly when the motion has been heard on its merits.[3]

It remains to be seen, however, whether a summary judgment can satisfy section 37 of the Act. In this article, we argue that the answer is that summary judgment should satisfy section 37. Summary judgment is a dispositive procedure, which, once granted, disposes of the claim. If leave is granted under the Act, it can dispose of a claim for lien, leaving nothing to be set down for trial.

The purpose of section 37

Section 37 requires a lien claimant to set the lien action down for trial or obtain an order for trial within two years of commencement. Section 46(1) imposes a consequence for non-compliance: if the lien has expired under section 37, the court must declare the lien expired and dismiss the action. The provision serves a discipline-of-procedure function. It ensures that lien claims are resolved as expeditiously as possible and is applied strictly.

The test for summary judgment and its application to lien claims

Rule 20.04(2)(a) of the Ontario Rules of Civil Procedure requires the court to grant summary judgment if there is no genuine issue requiring a trial with respect to a claim or a defence. Where the court finds that there is no genuine issue requiring a trial on the entirety of the plaintiff’s claim, including a lien claim, and grants judgment accordingly, the result is a dispositive judgment that determines the lien claimant’s entitlement and the owner’s obligation to pay.

Supportive case authority

In 310 Waste Ltd. v. Casboro Industries Ltd., the Ontario Court of Appeal determined that a reserve judgment on the issue of the claimant’s ability to lien does not suspend the operation of section 37 of the Act.[4] While the Court of Appeal determined that a reserve judgment did not suspend the operation of section 37, it expressly declined to decide whether there could ever be circumstances that would warrant non-strict compliance with section 37.[5] Specifically, the Court of Appeal found that the case before it was not a case of a legal or practical impossibility, and that it would not have been contemptuous for the claimant to set its action down for trial while the subject judgment was under reserve.[6]

While not deciding the issue, the Court of Appeal therefore left the door open for situations where strict compliance with section 37 of the Act may not be possible or appropriate. For example, where a summary judgment disposes of a lien claim and orders payment of the amount registered on the basis that there is no genuine issue requiring trial, it would be inappropriate for the lien claimant to then set the action down for trial or obtain an order for a trial of the action.

This is supported by the decision in Built-Con Contracting Ltd. v. Lisgar Construction Company, in which Master Wiebe (now Associate Justice Wiebe) left open the possibility of a default judgment satisfying section 37 of the Act.[7] In this case, Built-Con noted Lisgar in default for failing to deliver a Statement of Defence and obtained a Registrar’s default judgment against Lisgar.[8] Master Wiebe determined that, because the Registrar does not have jurisdiction to issue default judgments for lien remedies, the default judgment in question was not a lien judgment; however, if Built-Con had moved before a judge for default judgment on both its contract and lien actions, section 37 would be met.[9]

A default judgment is dispositive of a claim. If Built-Con suggested that default judgment could satisfy section 37, with the proper authority, it would be open to a court to find that a summary judgment, granted with leave under the Act, would be dispositive of a lien claim and accordingly satisfy section 37.

Conclusion

A summary judgment granted on a lien claim, with leave under the Act, should satisfy section 37 where it disposes of the lien in its entirety within the statutory period. This conclusion is consistent with the statutory purpose of timely resolution, related jurisprudence, and the principles of proportionality and efficiency.