Legal Costs (Construction)

Caselaw.Ninja, Riverview Group Publishing 2021 ©
Date Retrieved:	2024-11-23
CLNP Page ID:	2059
Page Categories:	Construction & Renovation
Citation:	Legal Costs (Construction), CLNP 2059, <>, retrieved on 2024-11-23
Editor:	MKent
Last Updated:	2023/01/22

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Construction Act, R.S.O. 1990, c. C.30

Costs

86 (1) Subject to subsection (2), any order as to the costs in an action, application, motion or any other step in a proceeding under this Act is in the discretion of the court, and an order as to costs may be made against,

(a) a party to the action or motion; or

(b) a person who represented a party to the action, application or motion, where the person,

(i) knowingly participated in the preservation or perfection of a lien, or represented a party at the trial of an action, where it is clear that the claim for a lien is without foundation, is frivolous, vexatious or an abuse of process, or is for a wilfully exaggerated amount, or that the lien has expired, or

(ii) prejudiced or delayed the conduct of the action,

and the order may be made on a substantial indemnity basis, including where the motion is heard by a person other than a judge or the action has been referred under section 58.

Where least expensive course not taken

(2) Where the least expensive course is not taken by a party, the costs allowed to the party shall not exceed what would have been incurred had the least expensive course been taken.

Reid v. Xiao, 2022 ONSC 4524 (CanLII)

[32] That does not mean the quantum of a plaintiff’s recovery is irrelevant. Subrule 57.01(1)(a) of the Rules provides that the court may consider the amount claimed and the amount recovered in the proceeding when deciding costs. That discretionary consideration is consistent with the broad costs discretion afforded in s. 86 of the CLA.

(...)

[64] For the reasons above, I find that Mr. Reid is entitled to recover his legal fees paid for preserving and perfecting his lien, closing pleadings, and obtaining the judgment of reference, on a partial indemnity basis, plus his disbursements in the action. I am otherwise persuaded that Mr. Reid’s failure to engage in reasonable settlement negotiations (based on the submissions before me), particularly following the Owners’ offer to settle, and his seeming unwillingness to appreciate the evidentiary shortcomings in his case and offer to compromise his claim, support that Mr. Reid should ultimately be awarded no costs for his own time.

[65] I thereby fix Mr. Reid’s costs of the action on a partial indemnity basis in the amount of $9,000, including HST and disbursements. That figure is comprised of $4,700, including HST, for his legal fees incurred at the beginning of litigation, plus $4,300 in disbursements.

Brian Stucco Construction Inc. v. Nili-Ardakani, 2021 ONSC 8541 (CanLII)

[5] Costs in lien actions are governed by s. 86 of the Construction Act, RSO 1990, c C.30. That section provides the court with broad discretion to award costs against a party or, in particular circumstances, a person who represented that party, including on a substantial indemnity basis.

[6] Procedure in a lien action is to be as far as possible of a summary character, having regard to the amount and nature of the liens in question: Construction Act, s. 50(3). Whether the conduct of a party has been consistent with the summary nature of lien proceedings is always relevant in assessing costs. Notably, such an assessment is expressly mandated by s. 86(2) of the Construction Act, which provides that where the least expensive course is not taken by a party, costs awarded to that party shall not exceed what would have been incurred had the least expensive course been taken.

(...)

[46] I disagree that oral offers to settle cannot be considered in assessing costs under s. 86 of the Construction Act. Rule 49.13 permits the court to consider any offer to settle when exercising its discretion with respect to costs, albeit that the rule specifically contemplates written offers. However, Rule 49 only applies in a lien action to the extent it is not inconsistent with the Construction Act. In my view, applying Rule 49 in a manner that curtails my discretion to consider any offer to settle is inconsistent with the broad language in s. 86 of the Construction Act and the scheme of the act.

London Eco-Roof Manufacturing Inc. v. Syson, 2020 ONSC 3101 (CanLII)

[82] There nevertheless is a particular dimension of such refused admissions that I think deserving of further comment, relating to LER’s failure to admit/acknowledge that there was no binding oral agreement requiring Mr Syson to pay an additional $5,000, (in relation to the work done on the “whiskers” of his residence), and LER’s failure to admit/acknowledge that the construction lien registered by LER accordingly was overstated by that $5,000 amount. In particular:

(...)

d. I frankly found that aspect of the litigation to be troubling. At the very least, I think LER, by continuing to assert that the proper value of its construction lien was $15,000 and not $10,000, (at the direction of Mr Malec), effectively condoned a situation where its registered construction lien, (which LER persisted in trying to enforce), was for a wilfully exaggerated amount.

e. As noted above, the provisions of s.86(1)(b)(i) of the Construction Act, supra, now expressly refer to the possibility of cost consequences when a person who represents a party to a construction lien action knowingly participates in preservation of a lien where it is clear that the claim for a lien is for a willfully exaggerated amount. In my view, while the amended provisions express and highlight that possible consideration, that does not negate the possibility of a court taking such realities into consideration when exercising the broad cost discretion conferred by section 86 of the Construction Lien Act, supra.