Executive Summary: Key Legal and Evidentiary Issues

• Interaction between the Construction Act’s expedited lien regime and Rule 24.01 of the Rules of Civil Procedure in motions to dismiss for delay in lien actions
• Scope of the court’s discretion under s. 47 of the Construction Act to dismiss a lien and joined contract/unjust enrichment action for inordinate and inexcusable delay
• Evidentiary failure by the plaintiff to prove service of the statement of claim and to explain more than four years of inactivity in advancing the action
• Presumption of prejudice arising from prolonged delay in litigation, especially in construction matters intended to proceed summarily and be ready for trial within two years
• Effect of a plaintiff’s reliance on counsel’s health issues without showing its own efforts to pursue the claim or have other counsel step in
• Appropriateness of substantial indemnity costs against a lien claimant whose expired lien and inaction unnecessarily tied up title and forced the defendants to bring a motion

Background and facts of the dispute
The dispute arose out of a residential construction contract between Rosswill Pools 1995 Ltd. and homeowners Richard Agostino Mandarino and Enza Abate for the construction of an in-ground swimming pool on the defendants’ property. The work was completed around August 2020. Following completion, Rosswill preserved a construction lien against the defendants’ property in October 2020 under the Construction Act. To perfect its lien, the plaintiff commenced an action in January 2021 and registered a certificate of action on title to the property. The claim for lien, together with the certificate of action, remained on title for several years. During this period, the action did not move forward beyond the pleadings stage. There was a fundamental evidentiary dispute about whether the statement of claim had ever been served. Mr. Mandarino swore unequivocally that neither he nor his spouse had been served. The plaintiff asserted that service had occurred, but provided no affidavit of service, no documentary proof, and no detail from its principal establishing a basis for that belief. In October 2024, when the defendants attempted to refinance their property, their lawyers contacted plaintiff’s counsel to confirm the status of the lien, whether the action had been set down for trial, and whether the claim had been served. An offer to settle appears to have been made by the plaintiff’s lawyer, but the plaintiff still did not take concrete steps to advance the litigation or remove the lien from title.

Procedural history and motion for dismissal
By late summer 2025, court and title searches confirmed that no trial record had been filed, no trial order had issued, and no other liens remained on title apart from Rosswill’s expired lien claim. The defendants then brought a motion seeking to declare the lien expired, discharge the lien and certificate of action from title, and dismiss the action in its entirety for delay. They relied on sections 31, 36, 37, 46 and 47 of the Construction Act and various rules under the Rules of Civil Procedure, in particular Rule 24.01 on dismissal for delay. At the initial return of the motion, the plaintiff conceded that the lien had in fact expired. On that basis, the court granted relief declaring the lien expired and vacated the lien and related registrations from title by order. However, the plaintiff opposed dismissal of its joined breach of contract and unjust enrichment claims, seeking to preserve those causes of action despite the expiry of the lien and the prolonged delay. The court reserved on the dismissal question and then issued reasons dealing exclusively with whether the entire proceeding, including the non-lien claims, should be dismissed for delay.

Legal framework: Construction Act and Rule 24.01
The defendants argued that Rule 24.01(1)(a) should apply to this case in conjunction with O. Reg. 302/18 under the Construction Act, which requires that a statement of claim be served within 90 days after issuance in a lien action. They submitted that the plaintiff’s failure to serve within that period justified dismissal for delay. The plaintiff responded that Rule 24.01 is inconsistent with the Construction Act framework and therefore should not apply in lien proceedings, relying on the statutory provision that the Rules only apply in lien actions where they are not inconsistent with the Act and its regulations. The Associate Justice accepted that reasoning and held that all of Rule 24.01 is inconsistent with the Construction Act scheme. He pointed to his earlier decisions where specific portions of Rule 24.01 had already been found inapplicable in lien cases, and reaffirmed that s. 47 of the Construction Act independently grants the court broad discretion to dismiss an action “on any proper ground,” including delay. In a prior case (Whitestone), the court had recognized that dismissal for delay in lien actions is available directly under s. 47, and that importing the more rigid Rule 24.01 thresholds would improperly restrict the wide discretionary power conferred by the statute. Although the court ruled that Rule 24.01 does not apply of its own force in lien actions, it treated the established dismissal-for-delay jurisprudence under that rule as useful guidance. The key principles considered included the need for an intentional or inordinate and inexcusable delay attributable to the plaintiff, the presumption of prejudice arising from prolonged delay, the plaintiff’s responsibility to move the action forward, and the court’s inherent jurisdiction to control its process and prevent abuse.

Evidence regarding delay and lack of service
On the facts, the action was nearly five years old by the time of the motion and had not progressed beyond pleadings. There was no credible evidence that the statement of claim had ever been served on the defendants. The plaintiff produced no affidavit of service and its principal did not identify any reliable source for the assertion that service had occurred. In contrast, Mr. Mandarino gave clear affidavit evidence that he and his wife were never served with a statement of claim from Rosswill. The court accepted this uncontradicted evidence and found as a fact that the defendants had not been served. The court also rejected the plaintiff’s attempt to undermine Mr. Mandarino’s credibility through unsworn allegations that he had been convicted of fraud in the United States. There was no evidence before the court of any such conviction, and no basis to draw an inference that he was lying about service. The court emphasized that motions must be decided on the evidentiary record properly before it, not on unproven assertions or invitations to question a party live during submissions.

Assessment of inordinate and inexcusable delay
The court scrutinized what, if any, explanation Rosswill offered for the delay. The sole explanation in the plaintiff’s affidavit was one sentence stating that its lawyer had been dealing with serious health issues affecting him and his family over the past couple of years. In oral submissions, counsel elaborated on those health problems, and the Associate Justice expressed sympathy and accepted that they were genuine and serious. Nonetheless, he found the explanation incomplete. The health difficulties, even if accepted, only explained why that particular lawyer might not have actively advanced the case; they did not explain why other lawyers in the firm could not assist, or what the plaintiff itself had done over a four-year period to pursue its rights, check on the status of the file, or press for progress. There was no evidence that Rosswill intended to actively prosecute its claim during this time. In the context of a construction lien action, which the statute expressly contemplates should be ready for trial within two years and conducted as expeditiously and summarily as possible, the court held that the more-than-four-year delay, coupled with the failure even to effect service, was both inordinate and inexcusable. The plaintiff had ignored the prescribed timelines in O. Reg. 302/18 and the broader imperative under s. 37 of the Construction Act for timely prosecution of lien proceedings.

Prejudice, culture shift and the lien context
The plaintiff argued that the defendants had not demonstrated actual prejudice and that, in any event, there would be no prejudice in allowing the contract and unjust enrichment claims to proceed even if the lien was gone. The Associate Justice rejected this approach to onus. He reiterated that long delay gives rise to at least a presumption of prejudice, relieving defendants of the need to lead detailed evidence of prejudice unless the plaintiff provides a solid explanation and addresses the prejudice issue. He also noted that the Ontario Court of Appeal has recently stressed a “culture shift” toward intolerance of excessive delay, recognizing that the mere passage of significant time can itself constitute prejudice sufficient to warrant dismissal in appropriate cases. Against that backdrop, the plaintiff’s failure to adduce any evidence about preservation of documents, availability of witnesses, or other prejudice-related factors was treated as a serious omission. The fact that this was a residential construction project completed nearly five years earlier, where records and memories could reasonably be expected to degrade, reinforced the concern. Importantly, the court underlined that lien actions are meant to be of a summary character. When a plaintiff elects to join a contract claim and an unjust enrichment claim to a lien proceeding, those joined claims remain subject to the same expedited statutory framework; the plaintiff cannot use joinder to escape the Construction Act’s expectation of a quick, focused resolution.

Disposition of the action and costs outcome
Having found that the defendants were never served, that the action had stagnated for more than four years, that the delay was inordinate and inexcusable, and that the plaintiff had not rebutted the presumption of prejudice, the court concluded this was an appropriate case for dismissal under s. 47 of the Construction Act. It dismissed the entire action, not only the lien claim (which had already been declared expired) but also the joined breach of contract and unjust enrichment claims. On costs, the defendants sought substantial indemnity costs of $5,668.39 for the motion, relying on s. 86(1) of the Construction Act and the court’s earlier decision in Whitestone. The Associate Justice agreed that this was an appropriate case for substantial indemnity. He stressed that the construction lien remedy is a special, powerful tool that must be pursued “in earnest,” and that tying up title for years while ignoring the statutory framework and failing to advance the proceeding should not be condoned. Here, Rosswill had not even served its claim, yet allowed the lien and certificate of action to remain on title and refused to voluntarily release them despite conceding non-compliance with the Act. The court therefore ordered the plaintiff, Rosswill Pools 1995 Ltd., to pay the defendants, Richard Agostino Mandarino and Enza Abate, substantial indemnity costs fixed at $5,668.39, including HST and disbursements, payable within 30 days. In result, the defendants were the successful parties, obtaining both dismissal of the entire proceeding and a monetary award in their favour in the amount of $5,668.39 in costs.