Canada: Ex Parte Motions To Vacate Liens Vs. Ex Parte Motions To Declare Liens Expired – Different Burdens On The Moving Party

In certain prescribed circumstances, a party to a dispute may bring a motion without notice to the other party (an ex parte motion). Since the absent party does not have the opportunity to address and respond to the contents of the motion, ex parte motions give rise to a heightened obligation of fairness and disclosure by the moving party. Even where legislation may permit a motion to be brought without notice, it may still be good practice to bring the motion on notice to the other party.

Here, Mobilinx Hurontario Contractor ("Mobilinx") brought a motion under s.45 of the Construction Act, R.S.O. 1990, c. C. 30, ("Act") to declare the lien of Edge1 Equipment Rentals Inc. ("Edge1") expired, on the basis that it was preserved out of time.

In his decision on the motion in Mobilinx Hurontario Contractor v. Edge1 Equipment Rentals Inc., [2023] O.J. No. 4589 (S.C.J.), released October 18, 2023, Associate Justice Robinson held that the evidence tendered by Mobilinx in support of its argument that the procurement process for the improvement was commenced prior to July 1, 2018, was insufficient to meet the "high evidentiary burden" on Mobilinx when moving for an ex parte declaration that Edge1's lien had expired.

Associate Justice Robinson distinguished between the evidentiary requirements of an ex parte motion to vacate a lien under s. 44 of the Act, with the evidentiary requirements of an ex parte motion to declare a lien expired under s. 45 of the Act.

Section 44 of the Act provides that any person may make a motion without notice to any other person to vacate a lien, and the Court may make an order vacating the lien upon payment into court or the posting of security.¹

Associate Justice Robinson described a motion under s. 44 of the Act as a method to "change the security for a lien", which seeks "interlocutory relief that does not prejudice an absent lien claimant".² Under section 44(6) of the Act, where an order vacating a lien is made, the lien ceases to attach to the premises and becomes a charge upon the amount paid in court or security posted.³

Associate Justice Robinson noted in particular, as it relates to s.44 motions: "No determinations are made on the validity of the lien".⁴

By contrast, s. 45 of the Act allows any person to bring a motion, without notice, for a declaration that a lien has expired, and, where the Court is satisfied that a lien (that does not attach to the premises) has not been preserved or perfected in time, the Court shall declare the lien expired.⁵

Associate Justice Robinson held that a motion to declare a lien expired under s. 45 of the Act seeks an irrevocable final order, giving rise to a much higher evidentiary onus on the moving party.⁶ The evidence required on a motion under s. 45 must satisfy the court that the absent lien claimant would not be able to advance any additional evidence to reasonably lead to a different disposition. The evidence must support a clear finding that the lien expired.⁷

In its motion material, Mobilinx relied on documents obtained from Infrastructure Ontario which it said evidenced that the procurement process for the project was commenced in October 2016, by way of request for qualifications. Because the procurement process predated July 1, 2018, Mobilinx argued, the transition rules in s. 87.3(1)(b) of the Act dictated that the provisions of the former Construction Lien Act applied to the improvement.⁸ As a result, Mobilinx argued, Edge1's lien was out of time.

Importantly, Mobilinx had brought a prior motion under s.44 of the Act to vacate another lien purportedly related to the same project. On the prior motion, Associate Justice Robinson accepted that the former Construction Lien Act applied. However, that acceptance did not assist Mobilinx in the present motion. Decisions on ex parte vacating motions about the transition provisions are not binding.⁹ Associate Justice Robinson held as follows:

Whether or not any endorsement expressly says it (and my prior endorsement did not), any decision under s. 87.3 on a vacating motion must reasonably be restricted to the purposes of that motion. To view it otherwise raises serious concerns about the ability of one party, in an ex parte context, to obtain an order that impacts not only the lien rights of all lien claimants on a project, but also the availability and applicability of a plethora of other rights, obligations, and remedies under the Construction Act.¹⁰

Associate Justice Robinson held that the evidence Mobilinx tendered to support that the procurement process for the improvement was commenced prior to July 1, 2018, was insufficient to meet the high evidentiary burden under s. 45 of the Act. The evidence consisted solely of a law clerk's affidavit relying on a review of Infrastructure Ontario's website for the "Hazel McCallion Line (Hurontario LRT) project", amounting to unverifiable double hearsay.¹¹

Accordingly, Associate Justice Robinson dismissed the motion without prejudice to a future motion on further and better evidence, or alternatively a motion on notice to Edge1.¹²

This decision serves as a cautionary reminder to the construction bar when bringing an ex parte motion under s. 45 of the Act, to ensure that the evidence supports a clear finding that the subject lien has expired. The moving party may also be well advised to bring the motion on notice, to avoid the risk of delay, and/or multiple attendances.

Footnotes

1. Construction Act, R.S.O. 1990, c. C.30, s. 44 (1) and (2)

2. Mobilinx Hurontario Contractor v. Edge1 Equipment Rentals Inc., 2023 ONSC 5885, at para 11

3. Supra note 1, at s. 44(6)

4. Supra note 2, at para 11.

5. Supra note 1, at s. 45 (1) and (2).

6. Supra note 2, at para 12

7. Davis v. Under Construction Incorporated, 2020 ONSC 3466

8. Construction Act, R.S.O. 1990, c. C.30, s. 87.3 (1)(b)

9. Supra note 2, at para 10 and 15.

10. Supra note 2, 2023 ONSC 5885, at para 14

11. Supra note 2, 2023 ONSC 5885, at para 19-21

12. Supra note 2, 2023 ONSC 5885, at para 3 and 26.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.