Executive Summary: Key Legal and Evidentiary Issues

• Interaction between the Construction Act’s two-year lien expiry and Rule 24.01(1)(c) of the Rules of Civil Procedure on dismissal for delay in setting an action down for trial
• Characterization of the plaintiff’s work as lienable “remediation” under the Construction Act, rather than non-lienable “maintenance,” and the resulting jurisdiction of the Superior Court of Justice
• Whether a lien claimant’s decision to await the outcome of a pending appeal on jurisdiction amounts to unreasonable or contumelious delay justifying dismissal
• Effect of defendants’ conduct, including attempts to challenge jurisdiction and findings of evasive behaviour on service, on the assessment of responsibility for delay
• Application of horizontal stare decisis requiring a motions judge to follow prior decisions (notably Smith v. Hudson’s Bay Company and subsequent cases) on the inconsistency of Rule 24.01(1)(c) with the Construction Act
• Allocation of costs for an unsuccessful delay/vacating-lien motion, including fixing a reasonable quantum of partial indemnity costs in light of the issues and prior appearances

Factual background

The dispute arises from construction work performed by Structured Restoration Inc. on a residential property located at 5 Firelane 14B, Niagara-on-the-Lake, Ontario. The property is owned by the defendant, Elena Attin, who resides there with her daughter and co-defendant, Alisa Chaly. The plaintiff completed its work on February 10, 2024 and subsequently registered a construction lien against the property on March 20, 2024. The lien was then perfected by the issuance of a Statement of Claim and Certificate of Action on July 10, 2024. The amount in issue under the lien proceeding is $16,273.65. The case therefore concerns a relatively modest residential construction dispute but engages the statutory protections afforded to lien claimants under Ontario’s Construction Act.

Before the present action was underway, the defendants took the initiative to challenge the plaintiff’s use of the construction lien process. On March 28, 2024 they filed an Application (court file CV-24-00062169-0000) seeking to vacate the lien on the basis that the Superior Court of Justice lacked jurisdiction. Their central factual and legal assertion was that the work allegedly performed by Structured Restoration Inc. was not lienable construction or remediation work, but mere maintenance. On that characterization, they argued, the Construction Act would not apply and any dispute over payment should be pursued in the Small Claims Court as an ordinary debt claim, not via a lien in the Superior Court.

Prior application on lienability and jurisdiction

The defendants’ jurisdictional challenge came before Justice Donohue, who heard the application on March 19, 2025. In reasons released March 21, 2025, Donohue J. rejected the defendants’ characterization of the work. She concluded that the plaintiff’s services constituted remediation work that fell within the scope of the Construction Act, not simple maintenance as alleged by the property owners. On that basis, she held that the claim was properly brought as a construction lien claim and that the Superior Court of Justice had jurisdiction to hear and determine it. This earlier decision fixed the foundational legal framework for the dispute: the matter was to be treated as a construction lien proceeding governed by the timelines and protections in the Construction Act.

The defendants did not accept that outcome. They appealed Donohue J.’s decision by filing a notice of appeal to the Court of Appeal for Ontario on April 15, 2024. In December 2025, the appeal was administratively transferred to the Divisional Court because the amount in dispute was within that court’s monetary jurisdiction. As of the time of Justice Standryk’s decision in 2026, the appeal to the Divisional Court had not yet been scheduled for hearing. This pending appeal over jurisdiction and lienability formed a key backdrop to the parties’ positions on delay and to the plaintiff’s procedural strategy.

Procedural steps in the lien action

Within the lien action itself, the plaintiff took steps consistent with the Construction Act framework. After the defendants launched their application attacking the lien, the plaintiff responded by issuing its Statement of Claim and Certificate of Action on September 9, 2024, thereby perfecting the lien as required under the statute. The litigation then became entangled in service difficulties. Those problems were significant enough that the plaintiff had to bring a motion to validate service of the Statement of Claim. On December 19, 2024, Justice Latimer granted an order validating service and made findings that the materials “amply” justified that relief and depicted “silliness on the part of the defendants to evade service and avoid engagement with the civil court process.” Although the defendants have disputed that characterization, the order and underlying findings remained in place and were treated as part of the evidentiary record in the delay motion.

The plaintiff also pointed out that the appeal originally had a hearing date before the Court of Appeal (November 15, 2025), but the Court of Appeal later advised that the matter belonged in the Divisional Court given the amount in dispute. The plaintiff argued that the defendants then failed to take steps to move the appeal forward in the Divisional Court, contributing to continued uncertainty over jurisdiction. This uncertainty, the plaintiff contended, had a direct bearing on whether it was appropriate to set the lien action down for trial in the Superior Court while an appeal was pending that could ultimately strip that court of jurisdiction.

The defendants’ motion to dismiss for delay and vacate the lien

Against this procedural backdrop, the defendants brought a motion under Rule 24.01(1)(c) of the Rules of Civil Procedure seeking two principal forms of relief: dismissal of the plaintiff’s action for delay and vacating of the construction lien. They argued that more than six months had elapsed since the close of pleadings and that the plaintiff had failed to set the action down for trial. They also stressed the practical and financial pressures created by the continuing lien, submitting evidence that the lien was due to expire shortly before their planned mortgage refinancing and that they intended to list the property for sale. The continuing presence of the lien, they said, interfered with both refinancing and sale, and they portrayed the plaintiff’s inaction as a tactic to gain leverage without moving the case toward resolution.

The defendants acknowledged that they had the option of vacating the lien by paying the disputed amount into court, but they maintained that this was not financially realistic for them. They contended that paying money into court would not eliminate the underlying litigation over the debt while still tying up funds, and that it removed any real incentive for the plaintiff to actively advance the proceeding. They further invoked the Construction Act’s objectives and summary procedure, arguing that construction lien matters are meant to be handled quickly and efficiently, not through prolonged, complex litigation. From their perspective, regardless of how the appeal on jurisdiction ultimately turned out, the plaintiff still had to prove its claim, and the outstanding appeal should not be allowed to justify inaction in the main action.

The plaintiff’s response on delay and statutory timelines

Structured Restoration Inc. resisted the Rule 24.01(1)(c) motion, arguing that there had been no intentional or contumelious default on its part and no inexcusable delay raising a real risk that a fair trial would no longer be possible. The plaintiff emphasized the procedural history: it had perfected the lien within the statutory deadlines; it had dealt with service issues by obtaining an order validating service; and it had been confronted with a jurisdictional challenge that had moved from an application before Donohue J. to a pending appeal now in the Divisional Court. In this context, the plaintiff said, their decision not to set the matter down for trial while the question of jurisdiction remained under appellate review was a reasonable and prudent course, not an attempt to delay.

The plaintiff also relied on the statutory regime in the Construction Act. Under that Act, a perfected lien expires on the second anniversary of the commencement of the action that perfected it, unless either an order for trial has been obtained or the action has been set down for trial. The plaintiff argued that these statutory provisions create a self-contained timetable for lien enforcement and that they supersede or displace any inconsistent timelines embedded in the Rules of Civil Procedure. The key thrust of their argument was that Rule 24.01(1)(c)—with its six-month standard for setting down an action for trial—cannot apply in a manner that truncates the two-year period that the Construction Act expressly affords lien claimants.

Legal framework: Rule 24.01(1)(c) and the Construction Act

Justice Standryk began the legal analysis by accepting that the defendants were formally relying on Rule 24.01(1)(c), which permits dismissal where a plaintiff has failed to set an action down for trial within six months of the close of pleadings. The court then reaffirmed the governing test for dismissal for delay: the moving defendant must show either intentional, contumelious default or that the plaintiff (or their lawyers) are responsible for inexcusable delay creating a substantial risk that a fair trial may no longer be possible. This test is drawn from Woodheath Developments Ltd. v. Goldman and Armstrong v. McCall and forms the usual common-law framework for Rule 24 motions.

However, the court identified a more fundamental threshold issue: whether a Rule 24.01(1)(c) motion is even available in the context of a construction lien action governed by the Construction Act. In this regard, Justice Standryk relied heavily on the earlier decision in Smith v. Hudson’s Bay Company, subsequently applied in cases such as Rosswill Pools 1995 Ltd. v. Mandarino, Constantinidis v. Lumar Design Group Inc., and Bernach v. Makepeace. In Smith, the court held that Rule 24.01(1)(c) (then mis-cited as Rule 27.01) was inconsistent with the construction lien statutory scheme and therefore inapplicable.

The statutory foundation for that conclusion lies in the provisions of the Construction Lien Act (now the Construction Act) that govern the relationship between the Act and the Rules of Civil Procedure. Under the former Act’s section 67(3), now reflected in section 50(2) of the Construction Act, the Rules apply except where they are inconsistent with the Act. In addition, section 37(1) of both the former and current legislation stipulates that a lien expires on the second anniversary of the commencement of the lien action unless an order for trial has been obtained or the action has been set down for trial. Smith reasoned that imposing the six-month “set down” trigger in Rule 24.01(1)(c) would effectively shorten the legislatively mandated two-year window granted to lien claimants to preserve their lien rights by taking one of those steps. Because such a truncation would directly conflict with the Act’s express timeline, the Rule was held to be inconsistent and therefore inapplicable to lien actions.

Justice Standryk applied that reasoning here, emphasizing principles of horizontal stare decisis. While Smith is not a Court of Appeal ruling, it is a Superior Court decision directly on point. Judicial comity and the need for consistency in the law strongly support following such precedents absent cogent reasons to depart. The factual context in Smith was not meaningfully different from the present case, and Smith’s analysis of the interaction between the Rules and the Construction Act remained persuasive. On this basis, Justice Standryk held that Rule 24.01(1)(c) cannot be invoked to dismiss a construction lien action for failure to set the matter down for trial within six months of the close of pleadings. The statutory two-year period under section 37(1) governs, and the lien in this case had not yet expired.

Assessment of alleged delay and responsibility

Having determined that the defendants’ chosen procedural vehicle was inconsistent with the Construction Act scheme, the court further considered the actual record of delay. It noted that the perfected lien would not expire until the second anniversary of the commencement of the action and that the plaintiff’s claim accordingly remained viable and subsisting within the statutory timelines. The court accepted that the plaintiff had not yet set the matter down for trial but attributed much of that reluctance to the defendants’ own decision to pursue an appeal on the threshold issue of jurisdiction and lienability.

Justice Standryk reasoned that if the defendants were to succeed on their appeal, the Superior Court would lose jurisdiction over the proceeding entirely because of the relatively small amount in issue, which would place the matter within the Small Claims Court’s purview. In that scenario, steps taken to set the matter down for trial in the Superior Court would prove wasted and potentially ultra vires. The plaintiff’s choice to wait for the appellate court’s determination before committing further judicial resources was therefore characterized as a “measured and responsible approach” aligned with principles of judicial economy, rather than as a sign of indifference or strategic delay.

The court also returned to the earlier findings by Justice Latimer on service. Latimer J. had concluded that the evidentiary record “amply justified” an order validating service and referred to “silliness on the part of the defendants to evade service and avoid engagement with the civil court process.” While the defendants continued to dispute that description, Justice Standryk treated those prior findings as part of the record and as evidence that at least some of the procedural delay was attributable to the defendants’ own conduct. When these factors were combined—the pending appeal initiated by the defendants, the service issues resolved against them, and the ongoing statutory viability of the lien—the court found no basis to characterize the plaintiff’s conduct as dilatory or contumelious.

Directions on next steps and ongoing obligations

Although the defendants’ motion was dismissed, Justice Standryk acknowledged that the pending appeal before the Divisional Court created real complexity for scheduling and managing the lien action. The court responded to the plaintiff’s request for guidance by clarifying that the appeal does not relieve the plaintiff of its obligation to comply with the Construction Act timelines. In particular, the plaintiff must still ensure that the action is set down for trial or that an order for trial is obtained within the two-year window prescribed by section 37(1), failing which the lien would expire by operation of statute.

At the same time, the court recognized that the eventual outcome of the jurisdictional appeal could require procedural adjustments. Justice Standryk therefore expressed an expectation that, should the appeal result in a determination affecting the Superior Court’s jurisdiction before any trial date is reached, the parties will cooperate to address the procedural consequences, including any necessary transfer of the dispute to the Small Claims Court. This guidance underscores that while the appeal justifies some caution and delay, it does not freeze the statutory clock entirely, and the plaintiff must continue to manage the action with the Construction Act’s strict deadlines in view.

Costs and overall outcome

On the issue of costs, Justice Standryk applied the general principle that the successful party on a motion is presumptively entitled to its costs. Structured Restoration Inc. had succeeded in resisting the defendants’ attempt to dismiss the action and vacate the lien. The plaintiff filed a Bill of Costs seeking partial indemnity costs in the amount of $7,022.36. The court was not aware of any outstanding offers to settle that might affect the assessment of costs and therefore evaluated the claimed amount in light of Rule 57.01 considerations, including the result achieved, the complexity of the legal issues regarding the interaction between the Rules and the Construction Act, the indemnity principle, and the fact that multiple court appearances had been required. The court was satisfied that the claimed amount was fair and reasonable. It therefore fixed costs payable by the defendants to the plaintiff at $7,022.36, inclusive of fees, disbursements and H.S.T., to be paid within 60 days. As a result, the plaintiff, Structured Restoration Inc., emerged as the successful party on the motion, with its lien action preserved and a monetary award of $7,022.36 in motion costs ordered in its favour; no damages have yet been determined on the underlying lien claim itself.