Executive Summary: Key Legal and Evidentiary Issues

• Leave under s. 67(2) of the Construction Lien Act for interlocutory motions and when such leave promotes efficiency and cost savings

• Threshold for Rule 39.03 pre-motion examinations: “reasonable evidentiary basis” for relevance; not a high bar

• Quashing examinations: abuse of process/fishing expedition standards and limits on using 39.03 as de facto discovery

• Hearsay in motion affidavits permitted on information and belief if source and belief are set out (Rule 39.01(4))

• Interplay of ADR “upstream disputes” clause in subcontract and a stay of lien proceedings

• Effect of triage/timetable orders on the right to conduct Rule 39.03 examinations; waiver arguments rejected

Facts
York1 Trillium Transfer Ltd. (Bethridge) sought over $13.1 million from Mobilinx for unpaid invoices under a subcontract to receive, treat, and dispose of excavated soil for the Hazel McCallion Line transit project. The project structure involved a Project Agreement between a project company and the contracting authority (Ontario Infrastructure and Lands Corporation and Metrolinx), a Construction Contract between that project company and Mobilinx, and a subcontract between Mobilinx and York1. The subcontract’s s. 12 contained an ADR clause requiring disputes “related to” or having issues in common with disputes between Mobilinx and upstream parties to be referred to the upstream ADR process. York1 commenced a lien action on April 12, 2024. Mobilinx filed a defence reserving the right to seek a stay, then moved to stay the lien action, claiming York1’s claim overlapped with “Upstream Disputes” to be addressed via ADR under s. 12. York1 disputed that ADR had been properly invoked because Mobilinx had not delivered a formal Notice of Dispute, and argued Mobilinx was using ADR to delay payment.

Procedural background
Mobilinx moved for leave to bring a motion to quash York1’s proposed Rule 39.03(1) examinations of two Mobilinx representatives, Mostafa Al Salman and Francisco Barreto, arguing their evidence was unnecessary and the examinations abusive; York1 cross-moved (with leave) to strike portions of a Mobilinx counsel affidavit as hearsay/argument. The court granted Mobilinx leave to bring its motion but ultimately dismissed the motion to quash; it denied York1 leave for its cross-motion and, in any event, would not have granted it. The timetable set at triage did not include Rule 39.03 examinations, but the court held that did not bar York1 from conducting them and did not amount to waiver.

Legal issues and principles
The court applied s. 67(2) of the Construction Lien Act to determine whether interlocutory leave should be granted, emphasizing motions that shorten proceedings and save costs warrant leave. On Rule 39.03, the court adopted the “reasonable evidentiary basis” test for relevance to the pending motion and confirmed the threshold is not high; once possible relevance is shown, the burden shifts to the challenger to demonstrate abuse of process. 39.03 cannot be used as general discovery, but courts may confine scope rather than quash outright. On affidavits, hearsay is permissible on motions if the affiant identifies source and belief under Rule 39.01(4); opinion/argument in non-expert affidavits may be treated as submissions when fairness requires.

Analysis
The stay motion’s core questions were whether York1’s claim “relates to” or shares issues with the Upstream Disputes and, if so, whether the subcontract’s ADR mechanism requires referral. The court found York1 met the modest burden to justify examining Mr. Salman and Mr. Barreto because they directly handled York1’s payment communications and could speak to assurances of partial payments, any conditions tied to consortium/government funding, and whether York1 was notified that ADR/Upstream Disputes governed non-payment. Their testimony could clarify whether payments were contingent on upstream resolutions or merely delayed for administrative reasons, making their evidence relevant to the stay issues. Mobilinx’s position that its affiant, Mr. Abdelmaksoud, “covered the field” did not preclude York1 from examining other witnesses with relevant, potentially different knowledge; allowing such examinations is not abusive even if overlapping. The court distinguished authorities where summonses were quashed for fishing expeditions or redundancy, noting here there was concrete, document-anchored context (e.g., emails and meeting notes) linking these witnesses to the disputed issues. As for York1’s cross-motion to strike parts of counsel’s affidavit, the court declined leave and noted hearsay is permitted on motions if properly framed; any argumentative content was treated as submissions, especially as both sides’ affidavits included argumentative elements.

Outcome and implications
Leave was granted to Mobilinx to bring the motion, but the motion to quash York1’s proposed Rule 39.03 examinations of Mr. Salman and Mr. Barreto was dismissed — York1 won on the examination issue. Leave for York1’s cross-motion to strike affidavit passages was denied, and the court indicated it would not have granted the strike in any event — Mobilinx won on the cross-motion issue. Costs submissions were invited on a short written schedule if not resolved. Practically, York1 may examine the two Mobilinx representatives on matters central to the stay motion, including any link between the lien claim and Upstream Disputes/ADR, while the stay motion itself remains to be determined on a fuller record. The decision underscores the low threshold for Rule 39.03 relevance, the court’s reluctance to foreclose targeted pre-motion examinations where they can clarify contested facts, and a pragmatic approach to affidavit content on motions.