The Court of Appeal for Ontario handed down its decision in Parkland Plumbing & Heating Ltd. v. Minaki Lodge Resort 2002 Inc., 2009 ONCA 256 on March 24, 2009. The appellant, Parkland Plumbing & Heating Ltd., was the representative plaintiff on behalf of 14 construction lien claimants. The respondents included Minaki Lodge Resort 2002 Inc., Celestine Mortgage Corporation and Archer Group of Companies, which were all owned and/or controlled by Philip David Archer, who was also a respondent.
The dispute concerned the redevelopment of the Minaki Lodge in Minaki, Ontario. The failure to pay construction trades for renovation work resulted in the registration of liens against title to the Minaki Lodge in the spring of 2003. The aggregate of the original lien claims registered was approximately $1.6 million. However, due to several factors, some lien claimants abandoned their claims prior to trial leaving lien claimants owed some $875,000 to carry on to trial. Minaki Lodge was closed down by Labour Day in 2003. The main building was destroyed by fire on October 13, 2003. No fire insurance had been put in place by Minaki Lodge or the mortgagee, Celestine. In November 2003, Celestine started power of sale proceedings with respect to its $5 million mortgage, which had replaced an earlier $1 million mortgage registered when the property had been acquired.
On April 26, 2005, the various lien claimants' actions were consolidated and Parkland was granted carriage of the consolidated proceedings. The trial proceeded in August 2005 before Justice Peter G. Jarvis. By agreement, the sole issue to be determined was whether or not the claims for lien had priority over the mortgages registered by Celestine. This included consideration as to whether or not Celestine was an “owner” within the meaning of section 1 of the Ontario Construction Lien Act and the priority scheme set out in section 78 of the said Act.
On May 19, 2006, the trial judge ruled that Celestine was an “owner” and as a result, the claims for lien had priority over the mortgages registered by Celestine. In doing so, the trial judge held that, on the evidence, Celestine and Minaki were “indistinguishable.”
In the interim, the lien claimants had intervened in the Celestine mortgage proceedings and had a trustee appointed pursuant to the Act. The premises were sold for approximately $1.9 million and the funds held pending an appeal of the trial decision launched by Celestine.
The first appeal was heard by Justices Susan E. Greer, John R.R. Jennings and Anthony E. Cusinato of the Ontario Superior Court of Justice sitting as a panel of the Divisional Court. The majority of the Divisional Court (Justices Greer and Jennings) ruled that the trial judge had erred in finding that Celestine was an “owner,” opining that Justice Jarvis had placed too much emphasis on the failure of Celestine to insist that Minaki obtain fire insurance. The majority further held that none of the indicia of “owner” with respect to Celestine had been made out. The majority ruled that Celestine had priority over the lien claimants, at least to the extent of $2.2 million advanced prior to the time the first lien arose. Justice Cusinato dissented, reasoning that the trial judge's findings did not rest solely on the lack of fire insurance but rather were based upon many other factors cited in the trial decision, which supported the finding that Celestine was an “owner.”
Parkland was granted leave to appeal to the Ontario Court of Appeal on April 4, 2008. The appeal was heard October 20, 2008 by Justices J.C. MacPherson, E.A. Cronk and Paul Rouleau. On March 24, 2009, a unanimous Court of Appeal released its decision granting Parkland's appeal. The Court of Appeal found that the majority of the Divisional Court had misapprehended the trial judge's reasons and found that the trial judge's ruling that Celestine was an “owner” rested on many factors and not merely the lack of fire insurance. The Court of Appeal also found that the trial judge's finding that Celestine and Minaki were indistinguishable was, on the record, unimpeachable.
Parkland was represented during the proceedings before the Ontario Court of Appeal by a team from Lang Michener LLP led by Glenn Grenier, which included Nairn Waterman, Brent McPherson and Mark Wiffen. Parkland and the lien claimants were also represented throughout by carriage counsel from Hook Seller & Lundin, LLP including James Hook and Randall Seller.
Minaki Lodge and Celestine were represented by Roderick Johansen of Carrel + Partners LLP.
The dispute concerned the redevelopment of the Minaki Lodge in Minaki, Ontario. The failure to pay construction trades for renovation work resulted in the registration of liens against title to the Minaki Lodge in the spring of 2003. The aggregate of the original lien claims registered was approximately $1.6 million. However, due to several factors, some lien claimants abandoned their claims prior to trial leaving lien claimants owed some $875,000 to carry on to trial. Minaki Lodge was closed down by Labour Day in 2003. The main building was destroyed by fire on October 13, 2003. No fire insurance had been put in place by Minaki Lodge or the mortgagee, Celestine. In November 2003, Celestine started power of sale proceedings with respect to its $5 million mortgage, which had replaced an earlier $1 million mortgage registered when the property had been acquired.
On April 26, 2005, the various lien claimants' actions were consolidated and Parkland was granted carriage of the consolidated proceedings. The trial proceeded in August 2005 before Justice Peter G. Jarvis. By agreement, the sole issue to be determined was whether or not the claims for lien had priority over the mortgages registered by Celestine. This included consideration as to whether or not Celestine was an “owner” within the meaning of section 1 of the Ontario Construction Lien Act and the priority scheme set out in section 78 of the said Act.
On May 19, 2006, the trial judge ruled that Celestine was an “owner” and as a result, the claims for lien had priority over the mortgages registered by Celestine. In doing so, the trial judge held that, on the evidence, Celestine and Minaki were “indistinguishable.”
In the interim, the lien claimants had intervened in the Celestine mortgage proceedings and had a trustee appointed pursuant to the Act. The premises were sold for approximately $1.9 million and the funds held pending an appeal of the trial decision launched by Celestine.
The first appeal was heard by Justices Susan E. Greer, John R.R. Jennings and Anthony E. Cusinato of the Ontario Superior Court of Justice sitting as a panel of the Divisional Court. The majority of the Divisional Court (Justices Greer and Jennings) ruled that the trial judge had erred in finding that Celestine was an “owner,” opining that Justice Jarvis had placed too much emphasis on the failure of Celestine to insist that Minaki obtain fire insurance. The majority further held that none of the indicia of “owner” with respect to Celestine had been made out. The majority ruled that Celestine had priority over the lien claimants, at least to the extent of $2.2 million advanced prior to the time the first lien arose. Justice Cusinato dissented, reasoning that the trial judge's findings did not rest solely on the lack of fire insurance but rather were based upon many other factors cited in the trial decision, which supported the finding that Celestine was an “owner.”
Parkland was granted leave to appeal to the Ontario Court of Appeal on April 4, 2008. The appeal was heard October 20, 2008 by Justices J.C. MacPherson, E.A. Cronk and Paul Rouleau. On March 24, 2009, a unanimous Court of Appeal released its decision granting Parkland's appeal. The Court of Appeal found that the majority of the Divisional Court had misapprehended the trial judge's reasons and found that the trial judge's ruling that Celestine was an “owner” rested on many factors and not merely the lack of fire insurance. The Court of Appeal also found that the trial judge's finding that Celestine and Minaki were indistinguishable was, on the record, unimpeachable.
Parkland was represented during the proceedings before the Ontario Court of Appeal by a team from Lang Michener LLP led by Glenn Grenier, which included Nairn Waterman, Brent McPherson and Mark Wiffen. Parkland and the lien claimants were also represented throughout by carriage counsel from Hook Seller & Lundin, LLP including James Hook and Randall Seller.
Minaki Lodge and Celestine were represented by Roderick Johansen of Carrel + Partners LLP.
Lawyer(s)
Firm(s)
Hook, Seller & Lundin LLP
Carrel + Partners LLP