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Construction - Appeals. Arcamm Electrical Services Ltd. v. Avison Young Real Estate Management Services LP
In Arcamm Electrical Services Ltd. v. Avison Young Real Estate Management Services LP (Ont CA, 2024) the Ontario Court of Appeal considered an appellate motion to quash an appeal, which appeal was from a successful Construction Act (CA) summary judgment [under CJA R20].
Here the court considers competing appeal routes:[5] In the motion now before this court, Arcamm seeks an order quashing the Queen appeal for want of jurisdiction (the “Motion”). It submits that the Judgment is a final order captured by s. 71 of the Construction Act and, therefore, Queen’s appeal lies to the Divisional Court, not to this court. Section 71 provides that “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.”
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[11] Arcamm submits that Queen’s appeal lies to the Divisional Court, pursuant to s. 71 of the Construction Act, and this court is without jurisdiction to hear it. It relies on the fact that its Claim was brought pursuant to the Construction Act and arose from unpaid invoices for which it registered a construction lien. It also relies on caselaw from this court which states that no right of appeal lies to it on a Construction Act matter.
[12] Queen submits this court has jurisdiction to hear its appeal. It notes that, in granting Judgment, the motion judge acted pursuant to r. 20 and r. 20 motions are not provided for in the Construction Act. Rather, r. 20 is promulgated pursuant to the Courts of Justice Act, R.S.O. 1990, c. C. 43. Further, the Judgment was based on Arcamm’s non-statutory claim in contract. Therefore, because the Judgment is a final order of a judge of the Superior Court of Justice, pursuant to s. 6(1)(b) of the Courts of Justice Act, this court has jurisdiction to hear the appeal.
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[13] I accept Queen’s submission for two reasons.
[14] First, the fact the Claim is styled as a proceeding under the Construction Act does not mean that the Construction Act automatically governs the appeal route. The jurisdiction of the court is governed by the substance of the order made: Dal Bianco v. Deem Management Services Limited, 2020 ONCA 585, 82 C.B.R. (6th) 161, at para. 11, quoting RREF II BHB IV Portofino, LLC v. Portofino Corporation, 2015 ONCA 906, 33 C.B.R. (6th) 9, at para. 12. In Dal Bianco, the appeal of a Construction Act claim lay to this court because the substance of the order under appeal related to proceedings authorized by the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3.
[15] In this case, the Judgment was not made under the Construction Act. On the contrary, the motion judge refused to grant relief under that Act. Instead, the source of the motion judge’s jurisdiction was r. 20, a rule promulgated pursuant to the Courts of Justice Act.
[16] Further, the relief granted was based on a claim for damages in contract for unpaid invoices, a non-statutory cause of action. The grounds of appeal highlight the significance of this point. Queen’s primary ground of appeal is its contention that the motion judge erred in failing to find a genuine issue requiring a trial, specifically by failing to consider the defence of contributory fault and whether Arcamm’s conduct caused or contributed to the same damages claimed in contract. Self-evidently, these issues are not matters governed by the Construction Act; they are specific to the application of the test under r. 20.
[17] Second, the cases on which Arcamm relies are fundamentally different from the present case. Arcamm referred to cases including Villa Verde L.M. Masonry Ltd. v. Pier One Masonry Inc. (2001), 2001 CanLII 7060 (ON CA), 54 O.R. (3d) 76 (C.A.); Great Northern Insulations Services Ltd. v. King Road Paving and Landscaping Inc., 2021 ONCA 367, 156 O.R. (3d) 1; and Soo Mill and Lumber Company Ltd. v. Possebon et al., 2023 ONCA 215. However, all of these cases proceeded to trial on the construction lien track under the Construction Act. In this case, r. 20 was the source of the court’s jurisdiction below; the Judgment was not made in reliance on the Construction Act.
[18] As the Judgment flowed from a r. 20 determination, Queen’s appeal lies to this court. . Gandhi v. Mayfield Arcadeium Holdings Ltd.
In Gandhi v. Mayfield Arcadeium Holdings Ltd. (Div Court, 2023) the Divisional Court considers (and allows) a time extension to commence an appeal, here under Construction Act s.71 ['Appeal to Divisional Court'] - with a 15-day limit and extension authority [under 71(2)], though the court applied RCP 'time extension to commence an appeal' standards.
In these quotes the court, the court considers these issues and the nature of construction liens:The Proposed Appeal
[14] As set out below, Mr. Gandhi failed to exercise his statutory right to appeal the Judgment within the 15-day period as prescribed by the Act.
[15] In submissions, both sides acknowledged that an appeal from the Judgment lies to the Divisional Court pursuant to ss. 71(1) of the Act, which provides:Appeal to Divisional Court
71 (1) Except 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. [16] The term “judgment” as set out in ss. 71(1) applies to any decision by which a party’s rights are finally disposed of: Villa Verde L.M. Masonry Ltd. v. Pier One Masonry Inc., 2001 CanLII 7060 (ONCA) at para 8; Heinrichs v. 374427 Ontario Ltd., 2018 ONSC 78 (Div Ct) at para 19.
[17] A declaration that a lien has expired pursuant to s. 45 of the Act is a final order, as the declaration is irrevocable and an expired lien cannot be revived: Mobilinx Hurontario Contractor v. Edge 1 Equipment Rentals Inc., 2023 ONSC 5885 at para 12. In addition, an order releasing funds held in counsel’s trust account as an alternative form of security in lieu of a claim for lien is a final order: Heinrichs at paras 12 and 18-20.
[18] In this case, the Judgment declared that the claim for lien had expired, cancelled the Lien Bond, and ordered its return to Mayfield. Having regard to the above-noted authorities, I accept that the Judgment is final and may be appealed to the Divisional Court under ss. 71(1) of the Act.
[19] Although Mr. Gandhi had a statutory right to appeal the Judgment released on October 5, 2023, he was required to deliver his notice of appeal by October 20, 2023 (i.e., within fifteen days from the date of the Judgment) pursuant to ss. 71(2) of the Act, which provides:Notice of Appeal
(2) A party wishing to appeal shall file and serve a notice of appeal within fifteen days of the date of the judgment or order, but the time for filing or serving the notice of appeal may be extended by the written consent of all parties, or by a single judge of the Divisional Court where an appropriate case is made out for doing so. ....
Legal Principles for Extending Time to Deliver a Notice of Appeal
[21] The test on a motion to extend the time for filing a notice of appeal is well established, and is described as follows:[A]ny time limit prescribed by the Rules may be extended on such terms as are just. The factors to be considered in deciding whether to extend time to appeal are: (1) whether the proposed appellant had a bona fide intention to appeal within the prescribed period; (2) the length of and explanation for the appellant’s delay; (3) any prejudice to the respondent from the granting of an extension of time; (4) the merits of the proposed appeal; and (5) whether the justice of the case requires an extension of time. At the stage of considering the justice of the case, the court must consider all of the preceding factors as well as any others that may be relevant, and balance those factors.
690 King Street Corp. v. Desco Plumbing and Heating Supply Inc., 2021 ONSC 1050 (Div Ct) at para 3; 40 Park Lane Circle v. Aiello, 2019 ONCA 451 at para 2. [22] The merit of the proposed appeal is the most important factor to consider: Robson v. Law Society of Ontario, 2023 ONCA 709 at para 5; Paulsson v. University of Illinois, 2010 ONCA 21 at para 2. Even where it is difficult to see the merits of the proposed appeal, a party should not be deprived of their right of appeal when there is no real prejudice to the other side: Correct Building Corporation v. Lehman, 2022 ONCA 723 at para 15, citing 40 Park Lane at para 8; Attorney General of Ontario v. Hazout, 2023 ONSC 1961 (Div Ct) at para 7.
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Prejudice
[31] In my view, Mr. Gandhi’s delay in serving the notice of appeal did not prejudice Mayfield in the sense contemplated under the analysis for an extension of time.
[32] In considering the issue of prejudice, the relevant consideration is not prejudice from the progress of the appeal itself which Mr. Gandhi was otherwise entitled to pursue after complying with the 15-day period for serving the notice of appeal. Instead, the relevant consideration is prejudice from the delay in delivering the notice of appeal: 40 Park Lane at para 6; 690 King Street at para 7. In this case, his delay in delivering the notice was 12 days.
[33] Mr. Gandhi had a general right of appeal under ss. 71(1) of the Act. As a result, the issue of whether Mayfield was prejudiced by its inability to enforce the Judgment is not relevant under this branch of the analysis to extend time. In any event, Mayfield could not enforce the Judgment until it was issued and entered on November 17, 2023. By then, Mayfield had been in receipt of Mr. Gandhi’s notice of appeal for 11 days. Taking this into account, I find no prejudice to Mayfield from Mr. Gandhi’s delay in delivering the notice of appeal.
Merits
[34] In my view, Mr. Gandhi’s proposed appeal is not so completely devoid of merit as to justify denying his important right of appeal in this case.
[35] The merits of a proposed appeal can be decisive on a motion to extend the time for filing a notice of appeal, regardless of how the other considerations are factored: Howard v. Martin, 2014 ONCA 309 at para 36. In cases involving a right of appeal, the focus of the merits analysis is on whether there is “so little merit in the proposed appeal that the appellant should be denied [his] important right of appeal”: Duca Community Credit Union Ltd. v. Giovannoli, 2001 CanLII 24017 (ONCA) at para 14; 40 Park Lane at para 8; 690 King Street at para 9. Where there is no real prejudice to the other side, a party should not be deprived of their right to appeal even when it is difficult to see the merits of the appeal: Correct Building at para 15; Denomme v. McArthur, 2013 ONCA 694 at para 10; 40 Park Lane at para 8; Hazout at para 7; 690 King Street at para 9.
[36] In responding to the motion, Mayfield strongly opposed the 12-day extension by vigorously arguing the merits of the proposed appeal and the litigation as a whole. In turn, the parties spent considerable time on the motion arguing the merits of the proposed appeal and the underlying litigation, particularly on the issue of whether Mr. Gandhi had a contract with Mayfield to ground his lien claim. As the court had not specifically decided this point, Mayfield invited me to find that no such contract had existed and that Mr. Gandhi had no lien rights which left his purported appeal with no real chance of success: see Torty v. Gilina, 2006 CanLII 29666 at paras 59 and 64. However, Van Rensburg J.A. strongly cautioned in 40 Park Lane at para 9 that although a case may have compelling merits that tip the balance for or against an extension of time to appeal, a judge on a motion to extend time should not consider the merits of an appeal that only a panel of the court is properly authorized to decide:In general, however, motions to extend time to appeal to this court should not devolve into a full argument on the merits of the appeal or the litigation as a whole. It is not the place of a single judge on a motion to extend time, to consider the full merits of an appeal that only a panel of the court would have the authority to determine. It is sufficient to say in this case that even a cursory review of the notice of appeal and reasons for judgment make it clear that the proposed appeal is not so completely devoid of merit that the appellant should be denied his important right of appeal. [Emphasis added]
See also: 690 King Street at para 9, and Javid Estate v. Watson, 2023 ONCA 665 at para 14. ....
[40] Taking everything into account, I find that Mr. Gandhi has arguably shown a meritorious ground of appeal that is not so devoid of merit to justify removing his important right to appeal due to lateness. In making this finding, I am guided by the following recent emphasis by the Court of Appeal in Correct Building at para 11 that some potential merit to an appeal will favour the granting of an extension of time to appeal if there is no real prejudice to the other side:Traditionally, the merits factor will be used to support granting an extension when the other factors do not favour the applicant, but because there may be some potential merit to the case, it is still in the interests of justice that the applicant's right of appeal not be removed, just because of lateness: see e.g., Howard v. Martin, 2014 ONCA 309, 42 R.F.L. (7th) 47, at para. 36; Derakhshan v. Narula, 2018 ONCA 658, 142 O.R. (3d) 535, at para. 22. More recently, in 40 Park Lane Circle v. Aiello, 2019 ONCA 451, at para. 8, van Rensburg J.A, sitting as a motion 2022 ONCA 723 (CanLII) judge, stated:Turning to the merits of the proposed appeal, the question is only whether there is "so little merit in the proposed appeal that the appellant should be denied [his] important right of appeal": Duca Community Credit Union Ltd. v. Giovannoli (2001), 2001 CanLII 24017 (ON CA), 142 O.A.C. 146 (C.A.), at para. 14. Even where it is difficult to see the merits of a proposed appeal, a party is entitled to appeal and should not be deprived of that entitlement where there is no real prejudice to the other side: Denomme, at para. 10; Auciello v. Mahadeo, 2016 ONCA 414, at para. 14. [Emphasis added]
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