Executive Summary: Key Legal and Evidentiary Issues

• Justice McCarthy considered whether Meadowlands' construction lien had expired under section 31(3)(b) of the Construction Act.
   
• Privity of contract emerged as a central issue, since no written agreement existed between Meadowlands and Paris Baguette.
   
• Credibility played a decisive role, as Mirza's claim of an oral contract with a "Chinese owner" was found unsupported by the evidentiary record.
   
• A March 8, 2024 invoice submitted by Meadowlands was treated as a sham document duplicating earlier billed work.
   
• Adverse inference was drawn from Meadowlands' failure to provide backup documentation despite undertakings to do so.
   
• The court also addressed whether a landlord remains a necessary party once a lien has been bonded off.
   

Facts of the case

Meadowlands Group Inc. and Faisal Mirza, its principal and directing mind, brought a construction lien claim against Hark Construction Ltd., Paris Baguette ("PBC"), and 12652463 Canada Inc. ("126"). Meadowlands worked as a sub-contractor on a café project owned by PBC at 47 Harry Walker Parkway South, Unit A.510/11/12, in Newmarket. PBC had contracted with Hark to act as general contractor and to hire and pay sub-contractors; no written contract ever existed between PBC and Meadowlands. Under its sub-contract with Hark, Meadowlands supplied labour and materials between July 2023 and September 27, 2023, and issued an invoice to Hark for $39,568, dated and due September 27, 2023, referencing services provided as of July 20, 2023. PBC opened for business as a café on September 29, 2023, and the contract between PBC and Hark was substantially completed by December 15 or 31, 2023, with Hark's final invoice dated December 13, 2023. According to PBC's evidence, it never dealt or communicated with Meadowlands, no contract was signed between them, and no invoice was ever issued by Meadowlands to PBC. In April 2024, Meadowlands sued PBC and Hark in Small Claims Court; that action was dismissed against PBC for lack of privity of contract. On May 2, 2024, seven months after PBC opened and two weeks after the Small Claims Court ruling, Meadowlands registered a claim for lien in the amount of $39,568.20 and later commenced this action to perfect the lien. After PBC posted a lien bond, the lien was vacated by court order on June 14, 2024. PBC and 126 then moved under section 47 of the Construction Act for a declaration that the lien had expired, its discharge, dismissal of the action, delivery up of the lien bond, and substantial indemnity costs.

Policy and legislative provisions at issue

The motion turned on section 47 of the Construction Act, which authorizes the court to vacate the registration of a lien and certificate of action and to declare a lien expired, applying a standard the court described as akin to summary judgment without enhanced powers — namely, whether a genuine triable issue exists. Section 31(3)(b) of the Construction Act was central to the analysis: it requires "other persons," including sub-contractors, to preserve a lien within 60 days of the earliest of (i) the date the person last supplied services or materials to the improvement, (ii) the date the contract between the owner and contractor is completed, abandoned, or terminated, or (iii) the date a subcontract is certified complete where the services were supplied under it. The court identified the relevant "contract" for this purpose as the agreement between PBC and Hark.

Reasoning and analysis

Justice McCarthy found no written or oral contract existed between Meadowlands and PBC. Mirza's assertion of an oral agreement through a "Chinese owner" of PBC was rejected as neither believable nor credible, particularly since the only PBC representative who visited the site during construction was identified as a Mr. Zuccarello. The contract between PBC and Hark did not contemplate any contractual relationship between Hark's sub-contractors and PBC, and any payments Meadowlands received came from Hark alone. Meadowlands' invoice was addressed only to Hark and referenced work performed in July 2023, consistent with a February 14, 2024 email in which Meadowlands stated it was awaiting late payment from Hark for summer 2023 work. Mirza's claim that Meadowlands performed further work at the café in January, February, or March 2024 lacked corroboration from any email, text, work order, record, witness, or time sheet. Because Meadowlands' lien was based solely on the original invoice for work completed by September 27, 2023, the court found the 60-day preservation period expired no later than November 27, 2023. Even accepting that Meadowlands returned to the café as late as March 2024, Mirza acknowledged this involved only minor deficiency work — a few cracked tiles — which, under established case law, cannot extend the lien preservation period. Mirza also conceded in cross-examination that Meadowlands' last work likely predated the February email. The court characterized a March 8, 2024 invoice — described in the source as mailed to "126" [source inconsistency: elsewhere the source describes this invoice as replacing the original addressee "Hark" with "126 and PBC"] — as a sham, being a revised version of the original invoice for identical work already billed eight months earlier. Given Meadowlands' failure to produce supporting documentation despite undertakings to do so, the court drew an adverse inference against it. The Small Claims Court's earlier finding of no privity of contract with PBC was reaffirmed, and the court held that no privity ever existed between Meadowlands and 126, noting that once a lien is bonded off, a landlord is no longer a necessary party. Finally, the court observed that without privity of contract, a sub-contractor's only remedy against an owner is a construction lien, precluding claims in quantum meruit or unjust enrichment.

Ruling and overall outcome

Justice McCarthy allowed the motion, ruling in favour of the moving defendants, PBC and 126. The court declared that Meadowlands' lien had expired, ordered it discharged, dismissed the action against the defendants, and directed that the lien bond be delivered up for cancellation. No monetary damages were awarded to any party in this decision; the question of costs, along with the form and content of the order, was left to be addressed at a subsequent case conference before the Newmarket trial coordinator.