Executive Summary: Key Legal and Evidentiary Issues

• The core issue was whether the plaintiff’s construction lien expired for failure to set the action down for trial within the two-year deadline.

• The plaintiff submitted the trial record electronically one day before the deadline but it was rejected due to procedural deficiencies.

• The defendants argued the filing was invalid because the pleadings were not closed and the trial record was incomplete.

• The plaintiff contended that the irregularity was procedural and curable under the Rules of Civil Procedure.

• The court accepted that the trial record submission met the statutory deadline, despite its later rejection by the registrar.

• The motion to declare the lien expired was dismissed, and the action was deemed properly set down for trial on time.

Background and dispute over lien preservation

A3 Construction Inc. registered a construction lien for $243,026.17 against the residential property of David and Kirsten Chalmers. The lien was registered on March 4, 2021, and perfected on June 7, 2021, through the commencement of an action and registration of a certificate of action. Under section 37 of Ontario’s Construction Act, A3 had two years from that date—until June 7, 2023—to either obtain a trial order or set the action down for trial to preserve the lien.

On June 6, 2023, A3 submitted a trial record for electronic filing using the Civil Submissions Online Portal. However, on June 9, the court advised that the filing was rejected because the pleadings remained open; the Bank of Nova Scotia, a named defendant, had not filed a defence nor been noted in default. That default was rectified on June 21, and A3 submitted two further trial records in July and October. The final submission was accepted on October 16, 2023.

Defendants’ motion and procedural objections

The Chalmers defendants brought a motion under section 46 of the Construction Act seeking a declaration that the lien had expired due to failure to meet the two-year deadline. They argued that the first trial record was invalid since the pleadings were not closed and the record lacked required certifications under Rule 48.03. They emphasized that the online portal's terms clearly state that a document is not filed until accepted by the registrar, and it warns against using the system when a limitation period is five business days or fewer away.

They contended that had A3 attended in person, the procedural issue could have been rectified before the deadline.

Plaintiff’s position on curable irregularity

A3 countered that the trial record was submitted in good faith before the statutory deadline and any deficiencies were procedural rather than substantive. Citing Rule 2.01 of the Rules of Civil Procedure and the decision in 1475707 Ontario Inc. v. Foran, A3 argued that procedural irregularities—such as a record submitted before pleadings closed—do not nullify an otherwise valid attempt to preserve a lien.

A3 also relied on the court’s Civil Procedures Manual, suggesting that the registrar should have accepted the record and flagged the issue rather than rejecting it outright.

Court’s interpretation of the Construction Act and Rules

The court held that the Construction Act defers to the Rules of Civil Procedure for procedural matters like how an action is set down for trial. Although the Act was amended after the Foran decision, the court found that the functional principle remains intact under section 50(2) and its related regulation.

While acknowledging that the first trial record was technically deficient, the court found that A3 had served the trial record and submitted it before the expiry date. Like in Foran, this effort demonstrated that the action was being actively pursued and was sufficient to satisfy the legislative intent behind section 37 of the Act.

The court rejected the argument that use of the online portal undermined the filing. Had the court registrar accepted the filing, the document would have been marked as filed on June 6, which was within the limitation period.

Conclusion and result

The court dismissed the Chalmers’ motion and granted A3’s cross-motion. It declared that the action was properly set down for trial as of June 6, 2023. The lien was therefore preserved, and the certificate of action remained valid. The court invited cost submissions if the parties could not resolve the issue independently.