Simon's Megalomaniacal Legal Resources

Construction - Appeals (2)

. Chaly v. Structured Restoration Inc.

In Chaly v. Structured Restoration Inc. (Ont CA, 2025) the Ontario Court of Appeal considered the appeal route from "an application to remove a lien registered on a property" under s.71(1) of the Construction Act:

[2] In advance of the hearing, this court raised the issue of whether it has jurisdiction over the appeal or whether the appeal lies to the Divisional Court pursuant to s. 71(1) of the Construction Act. Ms. Chaly initially made written submissions on the issue taking the position that this court has jurisdiction. The respondent took the position in its factum that the appeal should have been brought to the Divisional Court. In advance of the hearing, after reviewing the respondent’s submissions on jurisdiction, Ms. Chaly advised that she now agreed that the appeal should have been brought to the Divisional Court.

[3] The parties attended before us to address the issue of whether the appeal should be transferred to the Divisional Court and the issue of costs. They both advised that they agreed that the appeal should be transferred to the Divisional Court and that the issue of costs should be addressed by the Divisional Court.

[4] We agree that this court does not have jurisdiction over the appeal and that the appeal should be transferred to the Divisional Court. We briefly explain the basis for reaching this conclusion.

[5] Section 71(1) of the Construction Act provides that:

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.

[6] This court has interpreted s. 71(1) broadly to mean that an “appeal involving only proceedings under the Construction Lien Act, R.S.O. 1990, c. C.3”, now the Construction Act, is to be brought in the Divisional Court: Villa Verde L.M. Masonry Ltd. v. Pier One Masonry Inc. (2001), 2001 CanLII 7060 (ON CA), 54 O.R. (3d) 76 (C.A.), at para. 1. While s. 71(1) refers to “judgments” made under the Act, the Divisional Court’s jurisdiction extends to “orders” made under the Act: Villa Verde, at paras. 7-8; MGW-Homes Design Inc. v. Pasqualino, 2024 ONCA 422, 172 O.R. (3d) 770, at para. 3.

[7] In contrast to cases where an appeal lies to the Divisional Court, in Arcamm Electrical Services Ltd. v. Avison Young Real Estate Management Services LP, 2024 ONCA 251, at para. 17, this court found that the judgment appealed from in that case was “not made in reliance on the Construction Act” because the source of the court’s jurisdiction below was r. 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (emphasis added).

[8] In this case, Ms. Chaly brought an application to discharge the lien registered by the respondent. The notice of application, with which Ms. Chaly initiated the application, explicitly states that the application is brought pursuant to and in reliance on the Construction Act. In concluding that the lien was valid, the application judge interpreted s. 14(1) and the definition of “improvement” in s. 1(1) of the Construction Act. This is precisely the type of issue that falls within the ambit of the Construction Act. It was a decision made in reliance on the Construction Act.

[9] In her written submissions on the issue of jurisdiction, Ms. Chaly explained that she brought the application under s. 47(1) of the Construction Act, which gives the court the power to discharge a lien “on motion”, including “on any … proper ground”. In this case, Ms. Chaly brought an application rather than a motion. It may be that the proper route for challenging the lien was within the action brought by the respondent to seek payment for the work it had done and pursuant to which the lien was registered. However, this issue was not raised below. Moreover, it would put form over substance to decide the issue of jurisdiction on the basis of whether Ms. Chaly attempted to discharge the lien by way of an application rather than a motion. Given that the substance of Ms. Chaly’s proceeding was to challenge the validity of the lien, an issue that falls squarely within the ambit of the Construction Act pursuant to s. 47(1) and that required interpretation of provisions of the Act, we are satisfied that s. 71(1) applies in this case and that the proper route of appeal is to the Divisional Court.

[10] Pursuant to s. 110(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, this court has the power to transfer the appeal to the Divisional Court. We are satisfied that this in an appropriate case for transfer to the Divisional Court.

[11] We order that the appeal be transferred to the Divisional Court. As agreed between the parties, the costs of the appeal before this court are to be decided by the Divisional Court.

. Invoice Payment Systems Corp. v. The Block Inc.

In Invoice Payment Systems Corp. v. The Block Inc. (Ont Div Ct, 2025) the Ontario Divisional Court partly allowed an appeal, here brought against a finding that the defendant (plaintiff by counterclaim) "was entitled to a set-off for damages ... in an amount that was greater than the amount of the underlying lien claims. The judgment meant the plaintiffs, IPSC and Nikom Construction, were jointly and severally liable to pay the Block $325,824.41.".

Here the court considers appeals under the Construction Act [s.71(1) 'Appeal to Divisional Court']:

[30] Section 71(1) of the Construction Act provides the Divisional Court with jurisdiction to hear an appeal of any judgment in a construction lien proceeding, including counterclaims and cross-claims, where there is no order directing the proceeding continue as an ordinary action: TRS Components Ltd. v. Devlan Construction Ltd., 2015 ONCA 294, 125 O.R. (3d) 161, at para. 26; MGW-Homes Design Inc. v. Pasqualino, 2024 ONCA 422.

. Demikon Construction Ltd. v. Oakleigh Holdings Inc.

In Demikon Construction Ltd. v. Oakleigh Holdings Inc. (Div Court, 2024) the Ontario Divisional Court allowed a Construction Act appeal, here against an order which reduced the required amount of posted lien bond in order to vacate "a claim for a construction lien on the title of the project land".

Here the court states a Construction Act appeal route:

[29] The Divisional Court has jurisdiction to hear this appeal. An appeal from a judgment under the Construction Act lies to the Divisional Court as of right, but leave is required to appeal an interlocutory order: Construction Act, ss. 71(1), 71(3). An order that “reduces a portion of the claim [for lien] from being secured to unsecured determines a substantive issue and deprives the lien claimant of certain legal rights. Such an order is a final order and can be appealed” to the Divisional Court under s. 71(1) without leave: see H.I.R.A Ltd. v. Middlesex Standard Condominium Corp. No. 823, 2018 ONSC 3661, 61 C.B.R (6th) 59 (Div. Ct), at para. 22.

. JIA Development Inc. v. 2708320 Ontario Ltd. (Viceroy Homes)

In JIA Development Inc. v. 2708320 Ontario Ltd. (Viceroy Homes) (Div Court, 2024) the Ontario Divisional Court considered whether leave to appeal was required under CJA s.133(b) ['costs'], here in a Construction Act context (which has it's own costs provisions):

[1] The appellants seek to appeal a decision of Associate Justice Wiebe dated March 18, 2024 in which he declined to award costs against Fogler Rubinoff LLP under s. 86(1)(b)(i) of the Construction Act, R.S.O. 1990 c. C.30. Pursuant to that provision, the court may exercise its discretion to order costs against a person who represented a party to an action where the person “knowingly participated in the preservation or perfection of a lien, or represented a party at the trial of an action, where it is clear that the claim for a lien is without foundation, is frivolous, vexatious or an abuse of process, or is for a willfully exaggerated amount, or that the lien has expired.”

[2] There is a preliminary question as to whether leave is required for the appellants to bring the appeal. During the case management process and at today’s hearing, the appellants took the position that leave was not required. They submit s. 86 of the Construction Act makes entitlement to costs of an improperly brought lien action a substantive issue for which there should be a substantive right of appeal. They rely on s. 71 of the Construction Act, which provides that an appeal lies to the Divisional Court from a judgment under the Construction Act. In their submission, the provisions of the Construction Act supersede more general costs provisions of the Courts of Justice Act, R.S.O. 1990 c. C. 43 and Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[3] In case management directions, Justice Davies directed the issue of whether leave was required to be raised before the panel. This would allow the panel at the hearing to deal with all issues, including if leave was not required, and was more efficient than scheduling a preliminary motion to strike the notice of appeal.

[4] In our view, the appellants are required to obtain leave to bring their appeal. Section 133(b) of the Courts of Justice Act provides that “No appeal lies without leave of the court to which the appeal is to be taken where the appeal is only as to costs that are in the discretion of the court that made the order for costs.” The decision the appellants seek to appeal is only as to the claim for costs against Fogler Rubinoff, which were in the discretion of the court.

[5] Nothing in the Construction Act is inconsistent with this provision. Section 71 provides an appeal to the Divisional Court from a “judgment.” Subsection 50(2) of the Construction Act provides that the Courts of Justice Act and the rules of court apply to actions under Part VIII of the Act except to the extent of any inconsistency.

[6] The Construction Act does not define “judgment,” but the Rules of Civil Procedure do. Rule 1.03 defines a judgment to mean in relevant part “a decision that finally disposes of an application or an action on its merits.” We do not accept the appellants’ submission that the costs order in this case constitutes a judgment. It was an order that followed the result in the lien proceeding and not a separate action or application.

[7] Furthermore, s. 71 of the Construction Act does not address costs, whereas the Courts of Justice Act expressly requires that leave be obtained from an order only as to costs that are in the discretion of the court. Subsection 86(1) of the Construction Act states that costs under that provision are in the discretion of the court.

[8] We conclude that leave to appeal from this costs order is required.