September 15, 2016
When it comes to registering a claim for lien, the Superior Court will not allow subcontractors to extend the date for preservation of their lien by returning to the job site to carry out trivial repairs after a subcontract is otherwise complete. What you might find interesting is what the Court considers to be a trivial repair.
In Applewood v. Baun, a building owner hired Baun Construction Inc. (“Baun”) to refurbish the entrance of the Sheraton Centre in Toronto. Baun subcontracted out the supply and installation of several doors to the plaintiff, Applewood Glass & Mirror Inc. (“Applewood”). Applewood finished the door installations on June 25, 2006. On the same day, Applewood invoiced Baun for the entire amount of the subcontract but Baun did not pay the invoice. In late August, Applewood informed Baun that it accidentally installed a regular butt hinge on one of the doors instead of an electronic transfer hinge as required by the subcontract. Baun agreed to pay Applewood as long as Applewood installed the proper hinge by September 1, 2006. The correct hinge was installed on September 1 but Baun failed to pay. As such, 45 days later Applewood registered a lien.
Baun argued that Applewood’s claim for lien expired on August 9, 2006, being 45 days after it had finished installing the doors and invoiced Baun for its work on June 25, 2006. The Court agreed and found the 45 day period for registering Applewood’s lien started to run from June 25, 2006. The Court also found that replacing the butt hinge was “not” a legitimate supply of services and materials under the subcontract.
The factors the Court considered in determining the lien-clock did not start running anew were:
- Applewood had invoiced Baun for the entire amount of the subcontract on June 25 for services that were performed by that date.
- Applewood’s installation of the electronic transfer hinge was valued at only a few hundred dollars; and
- The installation of the electronic transfer hinge took only a few minutes.
In general, the Court’s position was that doing work to rectify defective or improper work did not extend the time for registering a claim for lien, and that a trivial amount of work performed or services supplied after initial completion of a contract did not serve to extend the time within which to register a claim for lien.
What should we take away from the Applewood case? It appears the Courts will not permit subcontractors to bootstrap their rights where the subcontractor returns to the work site to effect trivial repairs or additions when a subcontract has otherwise been completed. However, is the Court’s reasoning and interpretation of the facts always interpreted in the same way? In our continued analysis we will examine a more recent case, Provincial Partitions Ltd. v. Toronto (City).
Applewood Glass and Mirror Inc. v. Baun Construction Inc. et al.,  O.J. No. 4845 (S.C.J.)(QL)