Executive Summary: Key Legal and Evidentiary Issues

• Central issue concerned whether the contractor’s construction lien expired because it was not perfected within the 150-day period after the renovation contract was terminated or abandoned.
• Evidence of termination focused on the owners’ escalating complaint emails, changing the locks, hiring a new contractor, and the contractor’s removal of tools, building permit, and portable toilet from the site.
• Abandonment analysis turned on whether there was a permanent cessation of work and an objective intention not to complete the project, measured by conduct rather than the contractor’s asserted subjective intentions.
• A critical evidentiary dispute arose over whether the contractor attempted to contact the homeowners after 18 August 2022, with the court giving weight to the absence of corroborating records and documentation.
• Procedurally, the appeal examined the permissible scope of fact-finding on a motion under s. 47 of the Construction Act, rejecting arguments that the motion judge improperly used “enhanced” summary judgment powers or a “best foot forward” standard.
• The Divisional Court upheld the motion judge’s findings of termination or, alternatively, abandonment, and consequently confirmed that the lien had expired and the appeal should be dismissed with costs.

Background and parties

This case arises from a residential renovation dispute between JP Reno Inc. (the Contractor) and the homeowners, Norman Mark Warner and Sabrina Tomic (the Homeowners), concerning work on a house in London, Ontario. The Contractor’s principal was John Pankiewicz (JP). The litigation reached the Ontario Superior Court of Justice (Divisional Court) as an appeal from a motion decision that discharged the Contractor’s construction lien and vacated the related registrations. The appeal is reported as JP Reno Inc. v. Warner, 2026 ONSC 1065. The underlying motion decision was issued by Justice Spencer Nicholson in 2024.

The renovation contract and breakdown of the relationship

On 5 January 2021, the parties entered into a written contract for renovations to the Property. The original contract price was $69,474.83 plus HST, but by August 2022 the Homeowners had paid substantially more than that amount as the work proceeded and change orders were implemented. The Homeowners did not live at the Property during the renovation and became increasingly dissatisfied with delays. Emails from June to August 2022 recorded their mounting frustration and referred to missed completion dates stretching from October 2021 to late 2022. They also told JP they were obtaining quotes from other contractors, and the motion judge found that JP knew they were exploring replacements. Against this deteriorating backdrop, a pivotal meeting occurred at the Property on 17 August 2022. JP demanded a further $90,000 to continue work; the Homeowners resisted and later described him as leaving angrily, allegedly claiming “this is my house.” That same day JP sent an email listing labour and materials he said were unpaid and warning that continuation of the project depended on immediate payment, failing which he would escalate the matter.

Events surrounding termination or abandonment of the contract

Immediately after the 17 August meeting, the Homeowners changed the locks on the Property to prevent JP and his crew from entering. On 18 August 2022 they sent a strongly worded email disputing JP’s account, reiterating the long delays, asserting they had always paid promptly, and stating that they felt he had taken advantage of both their trust and finances. While they expressed lingering “faith” in his intentions, the tone was plainly one of serious breakdown. On the morning of 18 August 2022 JP returned to the Property accompanied by police, retrieved at least most of his tools, and removed the building permit from the front door. That same day he contacted the rental company to arrange for removal of the portable toilet, which was required by occupational health and safety legislation for ongoing construction. The portable toilet was picked up on 25 August 2022. The motion judge found that, after 18 August 2022, the Contractor did not perform any further substantive renovation work on the Property, aside from some clean-up, and that JP provided no satisfactory evidence of communications showing an intention to carry on with the project. The Contractor asserted that JP tried to contact the Homeowners by phone on 19 and 22 August 2022 to continue the project, but there was no corroborating documentation, and the Homeowners’ phone records did not reflect such calls. In September 2022 the Homeowners retained a new contractor to finish the renovations.

Construction lien preservation and perfection under the statute

The dispute turned on Ontario’s Construction Act, a statute that creates construction liens and sets strict deadlines for their preservation and perfection. Under s. 14(1), a person who supplies services or materials to an improvement receives a lien against the owner’s interest in the premises for the price of those services or materials. To enforce that lien, the Act requires compliance with a two-step process: “preserving” the lien, and then “perfecting” it. Preservation is effected by registering a claim for lien on title under s. 34(1)(a). A contractor’s lien must be preserved within 60 days of the earlier of completion of the contract or its abandonment or termination, as provided in s. 31(2)(b). Perfection, in turn, is achieved by commencing an action and registering a certificate of action within 90 days after the last day on which the lien could have been preserved, under s. 36(2) and s. 36(3)(a). Because these timelines are part of a comprehensive statutory scheme that affects priority and title, the courts apply them strictly and do not exercise discretion to extend them. The Contractor in this case registered its claim for lien on 13 October 2022, stating that materials and services had been supplied from 5 January 2021 to 28 August 2022. There was no dispute that this step preserved the lien within the statutory period for preservation. The key question was whether the lien was perfected on time.

The motion to vacate the lien

On 20 January 2023, the Contractor commenced a construction lien action and obtained and registered a certificate of action on the same day. The Homeowners defended and counterclaimed, then, on 10 October 2023, brought a motion under s. 47 of the Construction Act. They argued that the contract had been terminated or abandoned on 17 or 18 August 2022 and that the 150-day window (60 days to preserve plus 90 days to perfect) therefore expired before the certificate of action was registered. If August 18 was the relevant date, the last day to perfect the lien would have been 14 January 2023, but the certificate was registered on 20 January 2023, rendering the lien out of time. They sought a declaration that the lien had expired, an order vacating both the claim for lien and the certificate of action, and dismissal of the lien action. The Contractor contested the motion. It claimed the contract had not been terminated or abandoned before the lien steps, asserted JP had attempted to contact the Homeowners to continue work after 18 August 2022, and argued that the timelines ran from a later date. It also said the motion judge on a s. 47 motion could not weigh credibility in the manner used on a summary judgment motion under Rule 20 of the Rules of Civil Procedure.

The motion judge’s findings and legal conclusions

Justice Nicholson reserved and released reasons on 23 May 2024. He found that, considering all the circumstances, the Homeowners had terminated the contract effective 18 August 2022. The terminating conduct included the pattern of increasingly critical emails, the decision to change the locks immediately after the heated 17 August meeting, the retrieval of tools with police assistance, removal of the building permit and portable toilet, the absence of further substantial work, and the later hiring of a new contractor. While Mr. Warner admitted he had never sent a message explicitly stating the Contractor was fired or the contract terminated, the motion judge held that termination may be communicated implicitly and that the “tenor” of the communications, coupled with locking JP out, clearly conveyed a desire to end the relationship. In the alternative, the motion judge found that even if he was wrong about termination, the Contractor had abandoned the contract on 18 August 2022. He emphasized JP’s removal of tools and infrastructure necessary for ongoing construction, the lack of any convincing evidence of follow-up communications, and the absence of any steps by the Contractor to resume substantive work. These actions and inaction, viewed objectively, showed a permanent cessation of work and an intention not to complete the project. On this analysis, the 150-day period for preservation and perfection of the lien began on 18 August 2022. Because the certificate of action was not registered until 20 January 2023, the lien had expired and could not be perfected. The motion judge held that there was “no genuine triable issue” regarding perfection being out of time, declared the lien expired prior to perfection, ordered the lien and certificate of action vacated and discharged, allowed the underlying action to continue as an ordinary civil claim, and awarded costs to the Homeowners.

The appeal to the Divisional Court

JP Reno Inc. appealed to the Divisional Court, arguing principally that the motion judge had erred in both his legal approach and factual findings. First, the Contractor submitted that a contract cannot be treated as terminated for the purposes of s. 31 unless a formal notice of termination is published under former s. 31(6) of the Construction Act; because no such notice was shown, it argued that the judge could not find termination as of 18 August 2022. Second, it contended that the record did not satisfy the standard required on a s. 47 motion to show either termination or abandonment, insisting that there was no clear and unequivocal communication that the Contractor was fired and no express indication from JP that he intended to abandon the job. Third, it maintained that the motion judge had impermissibly used “enhanced” Rule 20-type fact-finding powers—such as weighing credibility and drawing inferences from circumstantial evidence—that are not available on a s. 47 motion to discharge a lien. Linked to this, the Contractor criticized the reference in the reasons to “best foot forward” analysis, arguing that Divisional Court authority specifically rejected that approach on s. 47 motions. Finally, the Contractor said that any conflicts in the evidence, including whether JP attempted to contact the Homeowners after 18 August 2022, should have been left to a full trial where viva voce evidence could be tested.

The Divisional Court’s analysis of the statutory scheme

The Divisional Court confirmed that it had jurisdiction over the appeal and applied the standard of review from Housen v. Nikolaisen: correctness for questions of law, and palpable and overriding error for findings of fact or mixed fact and law absent an extricable legal error. It agreed with the motion judge’s framing of s. 47 motions as “akin” to summary judgment motions in that the court asks whether there is a genuine triable issue on the basis for discharging the lien, but emphasized that the procedures and available powers differ. The court reviewed the Construction Act provisions governing creation, preservation, and perfection of liens, reiterating that strict compliance with the statutory timelines is mandatory. The lienholder bears the evidentiary burden of proving that the lien was preserved and perfected on time. The court also endorsed the line of cases holding that termination or abandonment is established where there is a permanent cessation or stoppage of work combined with an intention to end the contract, assessed objectively from the parties’ conduct rather than solely from their stated subjective intentions.

Rejection of the Contractor’s legal arguments on termination and abandonment

On the question of termination, the Divisional Court rejected the Contractor’s attempt to elevate publication of a s. 31(6) notice into a necessary precondition for finding that a contract was terminated under the Act. It noted that this issue had not even been raised before the motion judge and that, in any event, the statutory scheme did not make such notice determinative of whether termination in fact occurred between the parties. Even assuming a notice might be required for some purposes, the court held that the result in this case would stand on the separate finding of abandonment, which does not depend on formal notice. Turning to the evidentiary record, the court held that the motion judge was entitled to rely on the cumulative circumstances—emails, lock changes, removal of tools and permit, removal of the portable toilet, cessation of work, and later engagement of a new contractor—to find that the Homeowners terminated the contract effective 18 August 2022. The absence of an email expressly stating “you are fired” did not preclude an objective conclusion that the relationship had been brought to an end.

Findings on evidentiary standards and fact-finding on a s. 47 motion

The Divisional Court also rejected the Contractor’s argument that the motion judge had used an improper evidentiary standard or exceeded his fact-finding powers. It held that the applicable standard of proof on a s. 47 motion remains the usual civil “balance of probabilities,” not an elevated “clear and convincing evidence” threshold. While the court in some cases has spoken of clear and convincing proof in the summary judgment context, this language does not alter the underlying standard of proof nor bar judges from drawing reasonable inferences from the record. The court confirmed that, although enhanced summary judgment powers under Rule 20 are not available on a s. 47 motion, a judge is still permitted to evaluate the evidence, draw logical inferences, and conclude that the lienholder has or has not met its burden. In this case, the motion judge was entitled to note the absence of documentary corroboration for JP’s claimed phone calls and texts, and to regard the Homeowners’ documentary evidence as more persuasive. The Divisional Court further observed that, much like in earlier authority, the motion judge could infer from the lack of emails, texts, or invoices showing efforts to resume work that such evidence did not exist. There was no error in concluding that the Contractor had not discharged its onus to show that the lien remained valid.

Outcome and financial result

Ultimately, the Divisional Court held that there was no palpable and overriding error in the motion judge’s factual findings that the contract was either terminated or, in any event, abandoned as of 18 August 2022, and no legal error in his application of the Construction Act timelines. With that date fixed as the relevant termination or abandonment date, the 150-day deadline for perfecting the lien expired before the certificate of action was registered on 20 January 2023. The court therefore agreed that the lien had expired prior to perfection and that there was no genuine triable issue on that point. The appeal was dismissed, and the order vacating and discharging the lien and certificate of action, while allowing the underlying civil action to continue, was left in place. As a result, the successful parties on the appeal were the Homeowners, Norman Mark Warner and Sabrina Tomic, and the Divisional Court ordered the Contractor, JP Reno Inc., to pay their appeal costs in the agreed amount of $15,000, with no other additional damages or quantifiable monetary awards specified in the decision.