Executive Summary: Key Legal and Evidentiary Issues

• The defendants sought a nunc pro tunc order extending the time for service of an expert report, retroactive to June 26, 2024.
   
• Central to the motion was whether Rule 53.03 of the Rules of Civil Procedure applied to an action commenced under the Construction Lien Act.
   
• Justice Mak examined the interaction between sections 61(6) and 67(3) of the Construction Lien Act and the pre-trial conference provisions of the Rules.
   
• Whether the defendants' counsel's misreading of a prior endorsement amounted to a reasonable explanation for late service was a key evidentiary issue.
   
• The conjunctive test under Rule 53.08(1) required the defendants to establish both a reasonable explanation and absence of unfair prejudice.
   
• Costs of the motion remained unresolved pending further submissions from the parties.
   

Facts of the case

The plaintiff, 1277703 Ontario Inc. o/a Classic View, alleged that the defendants, Naama Yokev and Akiva Yokev, owed $260,000 plus HST for materials and services supplied for the construction of a residential building between March 26, 2018, and September 14, 2018. The defendants counterclaimed, alleging that the plaintiff and/or the defendants by counterclaim caused them to lose $500,000 by abandoning the project and leaving deficient and incomplete work. The action was commenced under the Construction Lien Act, R.S.O. 1990, c. C.30, after the plaintiff registered a claim for lien on September 27, 2018, and issued a Statement of Claim on October 10, 2018. A first pre-trial conference took place on July 26, 2022, resulting in an endorsement (the "first endorsement") that set a comprehensive timetable, including an order that "Expert reports, if any, [were] to be served pursuant to the Rules." A second pre-trial conference occurred on June 18, 2024, at which the plaintiff's claim for lien was discharged on consent for failure to perfect the lien, and a third pre-trial conference was ordered. On June 26, 2024, the defendants served an expert report from Eden Engineering & Design Inc., dated November 2, 2018. The plaintiff and defendants by counterclaim opposed the use of this report at trial, prompting the defendants to bring the motion at issue, seeking an order extending the time for service of the report nunc pro tunc to June 26, 2024.

Policy and legislative provisions at issue

The motion turned on the interplay between several provisions. Subrules 53.03(1) and (2) of the Rules of Civil Procedure require service of expert reports not less than 90 days (or, for responding reports, 60 days) before a pre-trial conference scheduled under Rule 50.02(1) or (2). Section 61(6) of the Construction Lien Act provides that "Rule 50 of the Rules of Civil Procedure does not apply to an action under this Act," while section 67(3) provides that the Courts of Justice Act and the Rules apply to Construction Lien Act proceedings only where not inconsistent with the Act. Section 87.3(a) of the Construction Act preserves application of the former Construction Lien Act to improvements contracted before July 1, 2018. Subrule 53.03(4)(b) permits the court to extend or abridge time for service of an expert report on motion, and the discretion to grant such an extension is governed by the conjunctive test in Rule 53.08(1), which requires a reasonable explanation for the failure to serve on time and an absence of prejudice that cannot be compensated by costs or adjournment.

Reasoning and analysis

Associate Justice Mak first determined that because the underlying contract predated July 1, 2018, the Construction Lien Act as it read on June 29, 2018, governed the action. Reading sections 61(6) and 67(3) of the Construction Lien Act together, the court concluded that pre-trial conferences in Construction Lien Act proceedings are not "scheduled" under Rule 50.02(1) or (2), and that Rule 53.03's deadlines therefore do not apply to such proceedings unless the court orders otherwise. However, the court found that the first endorsement's direction that "Expert reports, if any, [were] to be served pursuant to the Rules" constituted such an order, and that the only sensible reading of this direction—considered alongside the endorsement's requirement that the matter be certified ready for the Fall 2023 trial sittings—was that expert reports were due 90 days before the second pre-trial conference (for responding reports, 60 days). The second endorsement, which addressed the anticipated late service of the defendants' report, did not retroactively excuse this deadline. Applying this timeline, the court found the defendants served the Eden Engineering & Design Inc. report late. Turning to the Rule 53.08(1) test, the court held that the defendants' counsel's stated belief that the report was not due until after the second pre-trial conference was an unreasonable misreading of the first endorsement, not a mere inadvertent error of fact as had been found in the distinguishable authority of Quinn et al v. Rogers et al., 2024 ONSC 1967. Because the defendants could not satisfy the first branch of the conjunctive test—a reasonable explanation for the delay—the court did not go on to consider whether the plaintiff and defendants by counterclaim would suffer uncompensable prejudice.

Ruling and overall outcome

The court dismissed the defendants' motion, declining to extend the time for service of the expert report nunc pro tunc to June 26, 2024. The plaintiff and defendants by counterclaim were the successful parties on the motion. No monetary amount was awarded or ordered in this decision; the parties had each submitted costs outlines at the hearing, and the court directed that if they could not agree on the disposition of costs, they were to provide written submissions—limited to three single-sided pages—within specified timelines following the release of the decision.