



COURT OF APPEAL FOR ONTARIO

CITATION: Hamilton (City) v. Thier + Curran Architects Inc.,
    2015 ONCA 64

DATE: 20150202

DOCKET: C58419 & C58427

Strathy C.J.O., Laskin and Brown JJ.A.

BETWEEN

C58419

City of Hamilton

Plaintiff

and

Thier + Curran Architects Inc.

Defendant (Appellant)

and

Urban Mechanical Contracting Ltd., Tricin
    Electric Ltd.

Third Parties (Respondents)

and

The Atlas Corporation, MHPM Project Managers and
    H.H. Angus and Associates Limited

Third Parties

BETWEEN

C58427

The Atlas Corporation

Plaintiff

and

Thier + Curran Architects Inc.

Defendant (Appellant)

and

Urban Mechanical Contracting Ltd., Tricin
    Electric Ltd.

Third Parties (Respondents)

and

The City of Hamilton, MHPM Project Managers and
    H.H. Angus and Associates Limited

Third Parties

P. John Brunner, for the appellant

Emilio Bisceglia, for the respondents

Heard: January 8, 2015

On appeal from the orders of Justice Alan C. R. Whitten of
    the Superior Court of Justice, dated January 30, 2014.

Brown J.A.:

Overview

[1]

Difficulties encountered in the
    reconstruction and redevelopment of the Wentworth Lodge in Hamilton between
    2006 and 2008 spawned several pieces of litigation, two of which are the
    subject of these appeals.  The project owner, The City of Hamilton, and the
    general contractor, The Atlas Corporation, have asserted claims against the
    projects architect, the appellant, Thier + Curran Architects Inc. (TCA).  In
    turn, TCA commenced Third Party Claims seeking contribution and indemnity
    against the projects mechanical sub-contractor, Urban Mechanical Contracting
    Ltd., and its electrical sub-contractor, Tricin Electric Ltd.

[2]

Urban and Tricin successfully
    moved for summary judgment, and by orders dated January 30, 2014 (the Orders)
    the motion judge dismissed TCAs Third Party Claims. TCA appeals those Orders.

[3]

For the reasons that follow, I
    would allow the appeals.  In my view, the issues in the third party claims are
    inextricably linked to the issues in the main actions, and summary judgment did
    not permit a fair and just determination of the Third Party Claims on their
    merits.

The legal proceedings
    concerning the project

[4]

A brief overview of the various
    actions is in order. Significant delays accompanied the project.  Who should
    bear responsibility for the costs of those delays is one of the issues lying at
    the heart of the various actions.  The motion judge had case managed the
    actions since 2010.  In late 2013, he made a case management order establishing
    the sequence for the trial of three groups of claims concerning the project
    (the Trial Sequencing Order).

[5]

The first group of proceedings
    consisted of actions brought by the sub-trades, Urban and Tricin, seeking
    payment.  Each sub-trade brought an action under the
Construction Lien Act
[1]
against the City and Atlas, as well as one against
    the bonding company, Aviva Insurance Company of Canada, Atlas and the City.
    Under the Trial Sequencing Order, the claims of Urban and Tricin are to proceed
    first to trial, with the trial scheduled to commence this March.

[6]

Next, Atlas commenced an action
    against the City under the
Construction Lien Act
seeking payment. 
    Under the Trial Scheduling Order, the Atlas lien claim will be tried after the
    lien claims of the two sub-trades.

[7]

Instead of issuing a Third Party
    Claim against TCA in the Atlas action, the City commenced a separate action
    seeking contribution and indemnity from TCA for any amounts it might be found
    liable to pay Atlas or the sub-trades.  In the Citys action, TCA issued a
    Third Party Claim against Urban, Tricin and others, seeking contribution and
    indemnity for any damages or costs for which TCA might be found liable to the
    City in respect of the Citys liability to Atlas.

[8]

Finally, Atlas commenced an action
    against TCA in which it asserted a claim in negligence alleging that TCAs
    failure to perform its work properly had caused Atlas delays and additional
    costs to complete the project.  In that action, TCA issued a Third Party Claim
    against Urban, Tricin and others seeking contribution and indemnity with
    respect to any damages and costs for which TCA might be found liable to Atlas.

[9]

Neither Urban nor Tricin defended
    the main actions in respect of which TCA issued Third Party Claims.

[10]

Under the Trial Sequencing Order,
    the actions by the City and Atlas against TCA will proceed to trial last.

The decision of the motion
    judge

[11]

The summary judgment motion of
    Urban and Tricin was supported by short affidavits, which attached brief
    extracts from the examination for discovery of the TCA representative, Bill
    Curran, who testified that Urban and Tricin had done excellent jobs on the
    project, Tricin had done its job appropriately and Tricin had not been
    negligent.

[12]

In response, TCA filed an
    affidavit from Curran, which explained the context in which he had given his answers
    on discovery.  In his affidavit Curran also contended that evidence existed which
    showed Urban and Tricin had been responsible in part for the damages claimed by
    Atlas.

[13]

TCA also adduced an affidavit from
    a professional engineer, David Mellett, which appended and summarized expert
    reports filed in the several proceedings by the City, Atlas, Urban and Tricin. 
    Mellett observed that no consensus existed among the experts about the causes
    of the delay to the project.  Although it was not possible to apportion
    responsibility for the delay with precision, Mellett stated it was possible that
    Urban and Tricin ultimately might be found to have contributed to the projects
    delays.

[14]

In an oral ruling the motion judge
    concluded that no genuine issue requiring a trial of the Third Party Claims
    against Urban and Tricin existed:

To talk in terms of potentialities makes a litigation process
    on a go-forward basis extremely tenuous. Obviously, anything has potential. But
    this is not a firm evidentiary basis for liability, however claimed. In fact,
    it is tantamount to a case based on opinion versus that of facts. The interests
    of justice for the subs requires that they know the case to be met and that
    requires a factual basis beyond that of mere pleadings. Pleadings are not
    facts. The evidence, if you can call it that, of the basis of the action
    against the subs, is so tenuous that there is no genuine issue for trial. No
    one should have to go to trial because of an opinion based on other opinions of
    potentiality.

[15]

The motion judge continued by
    acknowledging that notwithstanding his dismissal of TCAs Third Party Claims
    against the two sub-trades, the issue of their responsibility for the projects
    delay would remain a live one for adjudication in the remaining proceedings:

As it is, delay will still be dealt within the various claims
    for lien and counter-actions. There is no indication that in the fact-finding
    process, the Architects would end up being responsible for delays occasioned by
    the subs. There is absolutely no evidence of that possibility and, hence,
    contribution and indemnity becomes moot.

Standard of review

[16]

In
Hryniak
v. Mauldin
, the Supreme Court of Canada
    held that
absent an error of law, the
    exercise of powers by a motion judge under Rule 20 of the
Rules of
    Civil Procedure
attracts deference. Whether
    a genuine issue requiring a trial exists is a question of mixed fact and law.
    Where there is no extricable error in principle, findings of mixed fact and law
    should not be overturned, absent palpable and overriding error.
[2]

Analysis

[17]

While TCA raised several grounds
    of appeal, a single ground is dispositive of the appeal: did the motion judge
    err in dismissing the Third Party Claims when genuine issues requiring a trial
    existed as to whether the two sub-trades were directly liable to the general
    contractor, Atlas, and to the City, issues which in turn necessitated a trial
    with respect to TCAs claims for contribution and indemnity?

[18]

Summary judgment is available in
    the case of third party claims.  Rule 20.09 of the
Rules of Civil Procedure
so provides, and in
Bongiardina v. York (Regional Municipality)
this court observed that nothing in Rule 20 suggested that third party claims
    were to be considered on a different footing from the main action.
[3]
That said, in
Bongiardina
this court issued a caveat:

[15] There might well be cases in which it would be
    inappropriate to bring a motion for summary judgment in respect of a third party
    claim. For example, if the third party claim could not be resolved without
    detailed knowledge of the factual circumstances that gave rise to the main
    action, a motion for summary judgment would be premature.

[19]

Earlier, in
Ese Sports Co. v.
    Continental Insurance Co.
, Sharpe J., as he then was, described the
    situation in which defendants in actions involving third party claims often
    find themselves: they are caught in the middle between the plaintiff and the
    third party, with a defendant really only knowing whether it has a claim
    against a third party for contribution and indemnity when it learns whether it
    has successfully defended the main action.  That situation poses a tactical
    difficulty for the defendant: it would hardly be in its interests to show a powerful
    case of wrong-doing against the third party on a motion for summary judgment when
    that would only go to bolster the case of the plaintiff against it in the main
    action.
[4]


[20]

In the present case,
    notwithstanding the dismissal of the TCA Third Party Claims against Urban and
    Tricin by the motion judge, the issue of what responsibility, if any, Urban and
    Tricin may bear for project delays remains a live issue for the trial of the
    lien claims and related actions scheduled to commence this March.  That results
    from the positions taken by the City and Atlas in their defences to the claims
    advanced against them by Urban and Tricin in their
Construction Lien Act
and bondholder actions.  In its statements of defence in those actions, the
    City has alleged that Urban and Tricin caused or contributed to many of the
    delays and costs of the project.
[5]
Atlas, in its statements of defence, alleged that Urban and Tricin breached
    their sub-contracts by failing to adhere to the construction schedule, failing
    to provide sufficient numbers of qualified workers to complete its work
    properly and causing a number of the delays on the project.
[6]
Consequently, the summary judgments granted by the motion judge did not resolve
    the issue of the responsibility of the two sub-trades for any construction
    delays.

[21]

Nor was that issue resolved by the
    admissions made by Curran on his examination for discovery, as was submitted by
    Urban and Tricin.  Those third parties did not file any other evidence on the
    summary judgment motions.  By contrast, TCA filed an affidavit from Curran
    explaining that he had given his discovery answers before the parties to the
    various actions had delivered their expert reports.  TCA also filed an
    affidavit from Mallet attaching those expert reports and summarizing the
    experts opinions.  That evidence from Curran and Mellet highlighted how the
    delay issue in the Third Party Claims was closely interconnected with the delay
    issue in the main actions.

[22]

As this Court stated in
Baywood
    Homes Partnership v. Haditaghi
, a summary judgment motion judge commits an
    error in principle when he or she fails to assess the advisability of the
    summary judgment process in the context of the litigation as a whole.
[7]
In
Hryniak
,
the Supreme Court of
    Canada emphasized the need to assess the appropriateness of granting summary
    judgment where the dismissal of a claim against one defendant would still see
    the claim proceed to trial in any event against other defendants; granting partial
    summary judgment in such circumstances would risk creating duplicative
    proceedings or inconsistent findings of fact.
[8]


[23]

In my respectful view, the motion
    judge committed such an error in principle by granting summary judgment
    dismissing the Third Party Claims of TCA against Urban and Tricin.  In his
    reasons, the motion judge acknowledged that dismissing the Third Party Claims
    would not put to rest the issue of any responsibility Urban and Tricin might
    bear for the construction delays at the project: delay will still be dealt
    within the various claims for lien and counter-actions.  The granting of
    summary judgment dismissing the Third Party Claims creates a risk of
    inconsistent findings of fact concerning the responsibility of Urban and Tricin
    for any construction delays.  Given that risk, it was an error in principle for
    the motion judge to view the dismissal of the TCA Third Party Claims as a
    proportionate means to achieve a just result.  The facts concerning the delay
    issues advanced in the TCA Third Party Claims are too closely intertwined with
    the facts about delay raised in the main actions involving the Wentworth Lodge
    project to permit the granting of summary judgment dismissing the Third Party
    Claims before the main actions have been tried.

DISPOSITION

[24]

For those reasons, I would allow
    the appeals and set aside the Orders granting summary judgment dismissing the
    TCA Third Party Claims.

[25]

The motion judge did not fix the
    costs of the summary judgment motion.  TCA sought its costs of the motion on a
    partial indemnity scale in the amount of $22,382.57, all-in, and its costs of
    the appeal in the amount of $27,476.46.  The respondents submitted that $7,500
    was a more appropriate amount for the costs of the appeal.

[26]

Given the disposition of the
    appeals, I would remit the issue of the costs of the summary judgment motion to
    the motion judge for determination.  I would order costs of the appeal in the
    amount of $7,500.00, all inclusive.

Released: February 2, 2015 (GS)

David
    Brown J.A.

I
    agree G.R. Strathy C.J.O.

I
    agree John Laskin J.A.





[1]
R.S.O. 1990, c. C.30.



[2]
2014 SCC 7, [2014] 1 S.C.R. 87, at para. 81.



[3]
(2000), 49 O.R. (3d) 641 (C.A.), at para.
14.



[4]

(1995), 31 C.C.L.I. (2d) 184 (Ont. Gen. Div.), at paras.
6
    to 8.



[5]
City Statement of Defence and Crossclaim in the Urban
CLA
action, at para. 15; City Statement
    of Defence and Crossclaim in Tricin
CLA
action, at para. 15; and City Statement of Defence and Crossclaim in Tricin
    bondholder action, at para. 15.



[6]
Atlas Statement of Defence and Crossclaim in the Urban bondholder action, at para.
    14; Atlas Statement of Defence and Crossclaim in the Urban
CLA
action, at para. 8;  Atlas Statement
    of Defence and Crossclaim in Tricin
CLA
action, at para. 8; and Atlas Statement of Defence, Counterclaim and Crossclaim
    in the Tricin bondholder action, at para. 17.



[7]
2014 ONCA 450, 120 O.R. (3d) 438, at para. 33



[8]

Hryniak,
at
para.
    60.


