



COURT OF APPEAL FOR ONTARIO

CITATION: Feltz Design Build Ltd. v. Larson,
    2022 ONCA 150

DATE: 20220216

DOCKET: C69360

Strathy C.J.O., Roberts and
    Sossin JJ.A.

BETWEEN

Feltz Design Build Ltd.

Plaintiff (Respondent)

and

Kevin Gary
    Larson a.k.a. Kevin Larson, Larson Properties Partnership Group
, Bennington Financial Corp., Cosman Mortgage Capital Corporation
    and Olympia Trust Company

Defendants (
Appellants
)

Eric Kerson, for the appellants

Martha Cook, for the respondent

Heard: February 14, 2022 by
    video conference

On appeal from the judgment of Justice A. Duncan Grace of the
    Superior Court of Justice, dated April 1, 2021, with reasons reported at 2021
    ONSC 2469.

REASONS FOR DECISION

OVERVIEW

[1]

This appeal arises from a decision granting partial
    summary judgment arising out of a construction lien dispute. The appellant
    Larson Properties Partnership Group (LPPG) had retained the respondent Feltz
    Design Build Limited (Feltz) to provide construction services in relation to
    a property in Stratford, Ontario.

[2]

A dispute between the parties arose over alleged
    deficiencies in the construction work undertaken by Feltz and LPPGs refusal to
    provide payment for the work done.

[3]

In September 2019, Feltz registered a lien
    against the property for the unpaid fees. In January 2020, Feltz brought an
    action against the defendants for damages due to breach of contract and breach
    of trust. In October 2020, Feltz moved for summary judgment against the
    defendants LPPG and its principal, Mr. Larson under r. 20 of the
Rules
    of Civil Procedure
, R.R.O. 1990, Reg. 194 but not as against the other
    defendants.

[4]

The motion was heard in January 2021. In an
    endorsement dated April 1, 2021, the motion judge granted summary judgment to
    Feltz against LPPG and Mr. Larson and ordered,
inter alia
, LPPG
    and Mr. Larson to pay Feltz $530,764.88 for breach of contract and breach of
    trust.

[5]

Subsequent to the decision on the summary
    judgment motion, in January 2022, on consent of the appellants, the remaining
    aspects of the action against two of the other three defendants (Bennington
    Financial Corp. and Cosman Mortgage Capital Corporation) were resolved by order
    of Rady J., including the lien enforcement proceedings. The third defendant,
    Olympia Trust Company, has been noted in default.

ANALYSIS

[6]

The appellants raise two grounds of appeal.
    First, the appellants argue that the motion judge erred in failing to find a
    genuine issue requiring a trial. Second, the appellants argue that the motion
    judge erred in finding that this matter was appropriate for partial summary
    judgment.

The motion judge did not err in finding no genuine issue
    requiring a trial

[7]

We would not give effect to the first ground of
    appeal.

[8]

The motion judge identified the proper standard
    on a motion for summary judgment under r. 20 of the
Rules of Civil
    Procedure
, citing
Hryniak v. Mauldin
, 2014 SCC 7, [2014] 1 S.C.R.
    87 and stating, at para. 22, [i]f the record assembled by the parties allows
    the motion judge to make necessary findings of fact, apply the law and reach a
    fair and just determination on the merits, there will be no need for a trial.

[9]

The motion judge explained his finding that summary
    judgment was appropriate by reference to the evidentiary record, at paras. 23-26:

[23] A substantial evidentiary record was
    compiled by the parties for the purposes of this motion. The affidavits of
    Hainsley Bailey, the project manager of Feltz and of Mr. Larson conflicted
    in various respects. When faced with allegations of delay, substandard work and
    unjustified billings, it is difficult to avoid an initial impression that the
    matter is unlikely to be ripe for a summary determination.

[24] However, the record did not end with the
    initial exchange of affidavit material. The plaintiff filed a supplementary
    motion record that contained an affidavit of the Consultants representative,
    Robert Ritz. That affidavit provided important context for the payment certificates
    and the certificate of substantial completion.

[25] Cross-examinations were conducted. A
    transcript of the lengthy cross-examination of Mr. Larson was filed. The
    plaintiffs solicitor filed a helpful factum. That was the only one the court
    received.

[26] Based on the totality of the record, I am
    of the view this case can be decided justly at this interlocutory stage. [Footnote
    omitted.]

[10]

On the record before him, the motion judge found
    that the defendants accepted that they owed Feltz money for the work completed
    under the contract but disputed the quantum.

[11]

The motion judge did not accept the defendants
    basis for disputing the quantum. The motion judge stated that counsel for the
    defendants had conceded the weakness of the defendants argument that Feltz had
    offered an all in contract and then charged more than had been quoted. The
    motion judge specifically rejected LPPCs submission that the agreement with
    Feltz was a fixed price contract, noting that the contract provided for an
    hourly rate for Feltz employees.

[12]

Having rejected LPPCs submission on that issue,
    the motion judge found that the contract required payment to be made on the
    certification of LPPCs consultant architect, who was to determine the amount
    owing by LPPC and to issue certificates of payment. After the dispute arose
    between the parties, the architect became involved and certified that Feltzs
    work had been substantially performed and Feltz was entitled to payment of the
    balance of the contract price.

[13]

The motion judge concluded his review of the
    record on the breach of contract claim by finding that LPPC owes Feltz the
    unpaid balance but is simply unwilling or unable to pay: at para. 39.

[14]

With respect to the breach of trust claim, the
    motion judge found that LPPC received funds impressed with a trust for the
    benefit of Feltz and failed to account for and remit those amounts
    notwithstanding certificates of substantial completion of Feltzs work,
    contrary to the trust obligation established under s. 7 of the
Construction
    Act
, R.S.O. 1990, c. C.30.

[15]

The motion judge found LPPC liable for breach of
    trust for the full amount of the outstanding debt, and that Mr. Larson was
    jointly liable given his knowledge and control over LPPCs operations.

[16]

The motion judges findings are entitled to
    deference and clearly were available on the record. We find no error in the
    motion judges analysis or conclusion.

There is no basis for appellate intervention on the
    partial summary judgment issue

[17]

With respect to the second ground of appeal, the
    granting of summary judgment was not partial with respect to the appellants.
    Rather, the judgment addressed the liability of the appellants and Feltzs
    claims against them in their entirety. The partial nature of the summary
    judgment, to the extent it can be characterized as such, related to the fact
    that other parties had encumbrances against the property as well and were
    included as defendants.

[18]

The appellants argue that in granting judgment
    for Feltz against the appellants, the motion judge did not address the narrow
    circumstances in which partial summary judgment will be warranted: see
Baywood
    Homes Partnership v. Haditaghi
, 2014 ONCA 450, 120 O.R. (3d) 438, at para.
    34;
Butera v. Chown, Cairns LLP
, 2017 ONCA 783, 137 O.R. (3d) 561, at
    para. 34; and
Heliotrope Investment Corporation v. 1324789 Ontario Inc.
,
    2021 ONCA 589, at para. 32. The factors to be considered in such a
    determination include whether the matter to be resolved by summary judgment
    could be bifurcated from the remaining litigation, dealt with in an expeditious
    and cost-effective manner, and whether the possibility of inconsistent findings
    by different courts could be avoided:
Butera
, at para. 34;
Malik
    v. Attia
, 2020 ONCA 787, at para. 62.

[19]

In this case, however, the respondent argues
    that the appropriateness of the partial summary judgment is no longer a live
    issue.

[20]

As set out above, subsequent to the motion
    judges decision, the parties have resolved the outstanding aspects of the
    litigation, with the exception of Olympia Trust Company, which has been noted
    in default. Consequently, the respondent takes the position that the partial
    summary judgment is now a full summary judgment decision.

[21]

The respondent relies on
Maystar General
    Contractors Inc. v. International Union of Painters and Allied Trades, Local
    1819
, 2008 ONCA 265, 90 O.R. (3d) 451, where this court held an
    appeal to be moot where the underlying basis for the appeal had fallen away as
    a result of post-judgment developments: at para. 28.

[22]

The appellants accept that there remains no
    concern regarding partial summary judgment with respect to the two defendants
    where the action by Feltz has been dismissed, but contend that since the action
    with respect to Olympia Trust Company remains alive, the partial summary
    judgment ground of appeal remains live as well.

[23]

In the alternative, the respondent contends that
    the motion judges granting of partial summary judgment was appropriate in the
    circumstances under the standard set out in
Hryniak
.

[24]

In our view, there is no basis for appellate
    intervention on this issue in this case. The concerns set out in
Baywood
    Homes
,
Butera
and
Heliotrope
do not arise in this case. No
    aspect of the liability toward Feltz remained in doubt following the judgment
    granted by the motion judge. The issue of any remedies for or against the other
    encumbrancers was a separate and discrete question, and one which for all
    intents and purposes is no longer extant.

DISPOSITION

[25]

For these reasons, we dismiss the appeal.

[26]

Feltz is entitled to costs, which are set at $12,500
    all inclusive.

G.R.
    Strathy C.J.O.

L.B.
    Roberts J.A.

L. Sossin
    J.A.


