UCY Construction & Project Management Inc. v. Yuan, 2024 ONSC 339

CITATION: UCY Construction & Project Management Inc. v. Yuan, 2024 ONSC339 COURT FILE NO.: CV-21-672293 DATE: January 15, 2024 SUPERIOR COURT OF JUSTICE - ONTARIO RE: UCY Construction & Project Management Inc. v. Wen Tai Yuan, Kamali Design Home Builder Inc., Firm Capital Mortgage Fund Inc., Shawn Wadhwa and Rajan Wadhwa ; BEFORE: ASSOCIATE JUSTICE C. WIEBE COUNSEL: John W. Montgomery for Kamali Design Home Builder Inc. (“Kamali”); Patrick Di Monte for UCY Construction & Project Management Inc. (“UCY”). HEARD: January 15, 2024. ENDORSEMENT [ 1 ] There were two motions argued before me on January 15, 2024 in this action: (

a) a motion by Kamali for an order declaring the UCY lien expired under Construction Act, R.S.O. 1990, c. C.30 (“ CA ”)

section 46 due to the UCY lien action having failed to meet the requirements of CA

section 37; and (

b) a motion by UCY for an order validating service of the statement of claim and extending the time to serve that statement of claim. UCY was a subcontractor, and Kamali was the contractor. The project was the construction of a large residential home. KAMALI

SECTION 46 MOTION [ 2 ] Mr. Di Monte conceded that the statement of claim was issued on November 18, 2021, that this action had not been set down for trial and that there was no order for trial in this action even as of today, must less as of November 18, 2023. It was undisputed that there are no other claims for lien on title. [ 3 ] Therefore, I had no choice but to declare the UCY lien expired pursuant to CA sections 37 and 46, and dismiss the action to enforce this lien.

At the request of counsel, I ordered that the remainder of this action be governed by the Rules of Civil Procedure. [ 4 ] Concerning costs, as this motion was on notice and disputed, I found that Kamali was entitled to the costs of this motion. The issue was the quantum. Mr. Montgomery had prepared but not filed a costs outline. Mr. Di Monte had not uploaded any costs outline. [ 5 ] Mr. Montgomery stated that his costs outline showed 6 hours, which at his full rate of $450/hour, produced a total of $2,700 in actual costs. There were no claimed disbursements. Adding the one hour he spent in argument today, Mr.

Montgomery said he wanted $2,234 in partial indemnity costs for Kamali. Mr. Di Monte wanted no order as to costs arguing that this motion was related to the in- writing motion that Kamali brought in 2023 for an order declaring the UCY lien expired due to a failure to have the statement of claim served, a motion that was never heard for a variety of reasons. [ 6 ] I did not agree with Mr. Di Monte, as this motion was a separate motion under

section 46 that succeeded on the grounds specified by CA

section 37. I granted Kamali $1,500 in partial indemnity costs to be paid by UCY in thirty (30) days. UCY MOTION TO VALIDATE SERVICE [ 7 ] UCY moved for an order validating service of the statement of claim on the owner, Wen Tai Yuan, and Kamali. After the result in the

section 46 motion, Mr. Di Monte indicated that UCY was not interested in pursuing the mortgagees, Firm Capital Mortgage Fund Inc. and the two Wadhwas.

[ 8 ] Concerning the owner, Wen Tai Yuan, the evidence showed that he resides in China and that the subject property is under the management of Mei Rong Yang under a power of attorney for property. This power of attorney is registered on title. Mei Rong Yang is a real estate salesperson with two offices in Markham, Ontario. [ 9 ] There was no explanation given by Mr.

Di Monte for the failure by UCY to utilize CA section 87(1) and have the statement of claim served by registered or certified mail on Mei Rong Yang at the subject property, 100 Bayview Village Ridge, Toronto, and the two Markham offices within the 90 days service period specified by the Ont. Reg. 302/18, section 1(2). Instead, UCY allowed the 90 period to pass and then instructed a process server to personally serve Mei Rong Yang at one of the Markham offices in May, 2022. This attempt was not successful. [ 10 ] The evidence shows that on June 16, 2022 Mr.

Di Monte couriered a copy of the statement of claim to Mei Rong Yang at one of the Markham offices. In an affidavit filed in the in-writing motion, Mei Rong Yang deposed that this letter and the statement of claim were received on June 16, 2022. I note that Mr. Di Monte filed an affidavit of service showing that he served the motion record for this motion on Mei Rong Yang by courier on January 4, 2024 on the same Markham office address. While the manner of this service was not in accordance with the Rules, I waive this non-compliance given the demonstrated success of the courier delivery on June 16, 2022.

Mei Rong Yang responded to neither the June 16, 2022 correspondence nor the service of the motion record. [ 11 ] With the expiration of the UCY lien, I asked Mr. Di Monte whether UCY wished to pursue the owner. He said it did, as there is a claim in quantum meruit against the owner. I, therefore, was called on to make a ruling. [ 12 ] Despite the lack of an explanation for the delay in service, I found Mei Rong Yang’s absence at this motion to be sufficient grounds to grant the order validating service effective as of June 16, 2022. The owner did not appear to oppose this motion.

It is also clear that the statement of claim came to the attention of Mei Rong Yang (the owner’s attorney for the subject property) on June 16, 2022. Furthermore, there did not appear to be any prejudice to the owner in such an order, as June 16, 2022 fell within the applicable limitation period. I granted an order validating service on the owner on June 16, 2022 and extending the time for service to that date nunc pro tunc . [ 13 ] Concerning Kamali, after an argument, Mr.

Montgomery advised that Kamali would not oppose an order validating service of the statement of claim on Kamali on September 20, 2022 and extending the time for service to that date nunc pro tunc , as September 20, 2022 was the date on which Mr. Mostafa Kamali, the principal of Kamali, swore his affidavit in this motion in which he conceded having a copy of the statement of claim in his possession. That is what I ordered. [ 14 ] Concerning costs, I ordered no costs of this motion.

I found that, while UCY was successful in obtaining the validating order it sought, UCY made this motion necessary by its failure to serve the statement of claim in a timely way using the service method mandated by CA section 87(1). [ 15 ] Therefore, in

summary, I ordered the following: • that the delivery of the statement of claim by courier on June 16, 2022 to the owner, Wen Tai Yuan, through his attorney for the subject property, Mei Rong Yang, is valid service on Wen Tai Yuan, and that the period for service on Wen Tai Yuan was extended to that date nunc pro tunc ; • that service of the statement of claim validly took place on Kamali on September 20, 2022, and that the period for service on Kamali was extended to that date nunc pro tunc ; • that service be deemed to be effective five days after this order plus another copy of the statement of claim are mailed to Mei Rong Yang and Kamali; • that Kamali and Wen Tai Yuan will have 45 days after service of the statement of claim to defend; • that there is no order validating service on the three mortgagees, Firm Capital Mortgage Fund Inc. and the two Wadhwas; and • that there is no order as the costs of this motion. [ 16 ] I have revised and signed the submitted draft order in the

section 46 order. It is enclosed with this endorsement. As for the validation order, I require that Mr. Di Monte submit a draft order approved as to form and content for my signature. DATE: January 15, 2024 _____________________________ ASSOCIATE JUSTICE C. WIEBE