Before the 2017 amendments to the Construction Lien Act, now known as the Construction Act (the “Act”), the expressly prohibited certain types of actions from being joined with a Construction Lien action. Subsection 50(2) of the old legislation expressly provided that “A trust claim shall not be joined with a lien claim but may be brought in any court of competent jurisdiction”, so there wasn’t much ambiguity.
However, with the new amendment post-2017, a lot of construction lawyers noticed that this particular provision was noticeably absent, leading some to speculate whether the door to joining breach of trust claims together with construction lien actions was now open.
Well, the recent appeal case of Devlan Construction Ltd. v. SRK Woodworking Inc. (“SRK Woodworking”) at the Ontario Superior Court of Justice slammed that door shut before it could ever really be opened.
In deciding SRK Woodworking, Justice Corbett acknowledged that the Act “neither permits nor prohibits joinder of claims in a construction lien proceeding.” However, moving on to the Act’s Regulations, Justice Corbett noted that the Regulations did provide that a Plaintiff could join a lien claim and a claim for breach of a contract or subcontract.
Considering the Regulation specifically provided for this type of joinder under the Act, but not the joining of a breach of trust claim with a construction lien action, the Honourable Justice concluded that by omission the joinder of a breach of trust claim with a construction lien action was not permitted under the new act either.
This decision makes sense considering the rather complex nature of trust claims and that construction lien actions are as far as possible supposed to be a summary procedure. While a separate claim for breach of trust and construction liens may result in parties spending more time and money, the considerations towards expediting the resolution of construction lien claims so that construction projects aren’t stalled or bogged down for long periods of time to intensive litigation appear to have won out.
Max. H. Shin, Associate Lawyer