Parkland Plumbing & Heating Ltd. v. Minaki Lodge Resort 2002 Inc.

Parkland Plumbing & Heating Ltd. v. Minaki Lodge Resort 2002 Inc.

Trial judge's factual findings that Archer exercised complete control, the companies (including Celestine and Minaki Inc.) were indistinguishable, and the overall commercial conduct (including failure to insure and advancing funds without enforcing security) justified treating Celestine as an "owner" within s.1(1); therefore s.78(1) gives Parkland's lien priority over Celestine's Second Mortgage and s.78(3) does not displace that result where the mortgagee itself qualifies as owner.

Citation
2009 ONCA 256
Parties
Plaintiff (appellant): Parkland Plumbing & Heating Ltd.; Defendant (respondent): Minaki Lodge Resort 2002 Inc.; Defendant (respondent): Celestine Mortgage Corporation; Defendant (respondent): Philip David Archer; Defendant (respondent): Carson Painting and Decorating Ltd.; Defendant (respondent): Archer Group of Companies
Court
Court of Appeal for Ontario
Jurisdiction
Canada
Judgment Date
24 March 2009
Procedural Posture
Civil — Construction Lien Priority / Appeal to Court of Appeal From Divisional Court Decision (appeal of Trial Judgment)
Outcome
Appeal allowed; Divisional Court order set aside; declaration that Parkland's lien has priority under the Construction Lien Act over Celestine's Second Mortgage
Legal Topics
Construction Lien Priority, Definition of "owner" Under Construction Lien Act, Lifting the Corporate Veil, Statutory Interpretation of Priorities (s.78)
Source Language
English
Construction Law Property Law Commercial Law Construction Lien Priority Definition of "owner" Under Construction Lien Act Lifting the Corporate Veil Statutory Interpretation of Priorities (s.78)

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Parties

Parkland Plumbing & Heating Ltd.

Plaintiff (appellant)

Minaki Lodge Resort 2002 Inc.

Defendant (respondent)

Celestine Mortgage Corporation

Defendant (respondent)

Philip David Archer

Defendant (respondent)

Carson Painting and Decorating Ltd.

Defendant (respondent)

Archer Group of Companies

Defendant (respondent)

Procedural Posture

Civil — Construction Lien Priority / Appeal to Court of Appeal From Divisional Court Decision (appeal of Trial Judgment)

Legal Issues

  1. 1 Whether Celestine Mortgage Corporation was an "owner" of the mortgaged premises within s.1(1) of the Construction Lien Act for purposes of s.78 priorities
  2. 2 If not an owner, whether the Second Mortgage has priority to the extent of funds advanced to acquire the premises
  3. 3 Whether s.78(3) creates an "owner's priority" for purchase‑money advances that displaces lien priority

Ratio Decidendi

Trial judge's factual findings that Archer exercised complete control, the companies (including Celestine and Minaki Inc.) were indistinguishable, and the overall commercial conduct (including failure to insure and advancing funds without enforcing security) justified treating Celestine as an "owner" within s.1(1); therefore s.78(1) gives Parkland's lien priority over Celestine's Second Mortgage and s.78(3) does not displace that result where the mortgagee itself qualifies as owner.

Court Disposition

Appeal allowed; Divisional Court order set aside; declaration that Parkland's lien has priority under the Construction Lien Act over Celestine's Second Mortgage

Orders

  • Set aside Divisional Court order dated August 1, 2007
  • Declare that Parkland's lien has priority over the Second Mortgage held by Celestine Mortgage Corporation