Parkerdean Plumbing and Mechanical Inc. v. Best Builders Ltd.

2019 BCSC 1969 Parkerdean Plumbing and Mechanical Inc. v. Best Builders Ltd.

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Parkerdean Plumbing and Mechanical Inc. v. Best Builders Ltd., 2019 BCSC 1969 Date: 20191118 Docket: S1510312 Registry: Vancouver Between: Parkerdean Plumbing and Mechanical Inc. Plaintiff And Best Builders Ltd., Wai Kuen Tang and Hong Kee Teo Defendants Before: Master Elwood (In Chambers) Reasons for Judgment Counsel for the Plaintiff: D. Bennett Counsel for the Defendants: A. Delmonico Place and Date of Hearing: Vancouver, B.C. May 30, 2019 Place and Date of Judgment: Vancouver, B.C. November 18, 2019 I. INTRODUCTION [1] The defendants apply for an order dismissing this action for want of prosecution and cancelling a builders lien and certificate of pending litigation. [2] The action arises out of a home renovation project. The plaintiff, a sub-contractor on the project, alleges unpaid invoices. The plaintiff filed a builders lien against the homeowners' property. The plaintiff acknowledges a lengthy delay in prosecuting the action. The reason given for the delay is financial hardship, which the plaintiff argues was caused by the general contractor's breach of contract. [3] For the reasons which follow, I have concluded that the claim of builders lien and the claims against the homeowners must be dismissed for want of prosecution, but the plaintiff's claim in contract against the general contractor may continue, provided the

plaintiff takes steps to resume the action and move it to trial with proper dispatch. II. BACKGROUND [4] The plaintiff, Parkerdean Plumbing and Mechanical ("Parkerdean"), is a plumbing and mechanical contractor. Parkerdean is owned and operated by Dean Bennett. [5] The defendant, Best Builders Ltd. ("Best Builders"), is a general contractor. Best Builders contracted with the defendants, Wai Kuen Tang and Hong Kee Teo (the "Homeowners"), to renovate their home in West Vancouver (the "Property"). [6] On August 18, 2014, Best Builders entered into a purchase order for "Parker Dean Plumbing" to provide plumbing and mechanical work on the project. Disputes arose between Best Builders and Mr. Bennett over invoicing, performance and delay. Effective October 31, 2014, Best Builders terminated all of its sub-contracts with Parkerdean, Mr. Bennett and a related numbered company. Pakerdean alleges that the termination was without cause and in breach of contract. [7] On December 15, 2014, Parkerdean filed a notice of civil claim and a claim of lien against the Property under the Builders Lien Act, R.S.B.C. 1997, c. 45, alleging that $77,202.50 was due and owing under a contract with Best Builders. Parkerdean filed a builders lien (the "Lien") and a certificate of pending litigation (the "CPL") against title to the Property in the Land Title Office. [8] Mr. Bennett deposes that he attempted

to negotiate a resolution with Best Builders, and only turned to the courts as a last resort to collect what was owing to Parkerdean on the project. After the action was commenced, Mr. Bennett and Parkerdean offered to remove the Lien upon payment of the outstanding invoices. Negotiations were attempted, without success. [9] On January 8, 2016, Best Builders filed a response to civil claim and a counterclaim. On January 29, 2016, Parkerdean filed a response to counterclaim. [10] On October 18, 2017, Parkerdean filed a notice of intention to act in person. Since that date, it has been represented by Mr. Bennett. [11] The home renovation project was completed in August or September of 2015. To date, the Homeowners have paid Best Builders $2,306,052 for the work on the project. They continue to retain a holdback as required by the Builders Lien Act in the amount of $13,233.85. [12] There has been no progress in the action since pleadings closed. The parties have not exchanged lists of documents. There have been no examinations for discovery. There is no trial date. III. ANALYSIS [13] The court's authority to dismiss an action for want of prosecution is found in Rule 22-7(7) of the Supreme Court Civil Rules, B.C. Reg 168/2009. On an application to dismiss for want of prosecution, it must be shown that: (a) there has been inordinate delay; (b) the inordinate delay is inexcusable;

and (c) the delay has caused, or is likely to cause, serious prejudice to the defendant. The final and decisive question, which encompasses the other three, is whether, on balance, justice requires a dismissal of the action: Wiegert v. Rogers, 2019 BCCA 334 at para. 31; Azeri v. Esmati‑Seifabad, 2009 BCCA 133 at para. 9; 0690860 Manitoba Ltd. v. Country West Construction Ltd., 2009 BCCA 535 at paras. 27-28. [14] Inordinate delay is delay that is immoderate, uncontrolled, excessive and out of proportion to the matters in question: Wiegart at para. 32; Azeri at para. 8; Sahyoun v. Ho, 2015 BCSC 392 at para.

17. The concept is relative; some cases call for more expeditious prosecution than others: Sun Wave Forest Products Ltd. v. Xu, 2018 BCCA 63 at para.

25. The date of commencement of the action is typically identified as the point from which delay is measured. The delay should be analysed holistically, not in a piece-meal fashion, and the extent to which it may be excusable is highly fact-dependent: Ed Bulley Ventures Ltd. v. The Pantry Hospitality Corporation, 2014 BCCA 52 at para. 38; 0690860 at para. 29. [15] Once a defendant demonstrates that the delay is inordinate and inexcusable, prejudice is presumed and the onus shifts to the plaintiff to rebut the presumption of prejudice: Wiegert at para. 33; Busse v. Chertkow, 1999 BCCA 313 at para.

18. The concern is with the prejudice that a defendant will suffer in mounting and presenting a defence if the matter goes to trial. Relevant matters include failing memories, unavailable witnesses and the loss or destruction of physical evidence: Wiegert at para. 33; 0690860 at para. 27. [16] The overarching consideration is whether justice requires dismissal of the action. This analysis is highly fact-dependent. Relevant matters include the length of and reasons for the delay, the stage of the litigation, the context in which the delay occurred and the role of counsel in causing the delay: Wiegert at para. 33; 0690860 at para.

29. A. Is the Delay Inordinate? [17] An action that includes a claim of builders lien requires diligent prosecution. In Lebon Construction Ltd. v. Wiebe (1995), 10 B.C.L.R. (3d) 102 (C.A.), the Court of Appeal held that the builders lien provisions confer a special privilege of securing a claim against real property which, in turn, carries with it an obligation to obtain an expeditious determination of the validity of the claim: paras. 39, 41. [18] This case is straightforward, and should have been concluded some time ago. Parkerdean claims damages against Best Builders for breach of contract, a trust based on the Builders Lien Act and unjust enrichment, all of which are based on a project which concluded in 2015. [19] Parkerdean has not taken a substantive step in the proceeding since filing its response to counterclaim, a delay of more than three years. [20] On February 5, 2018, Mr. Bennett reached out to counsel for Best Builders to suggest negotiations to reach a settlement by February 12, 2018. There is no evidence that Mr. Bennett took any action after this deadline passed with no response. While efforts at reaching a negotiated resolution are to be encouraged, they are not a substitute for prosecuting a claim in the absence of productive engagement between the parties. [21] I find that Parkerdean's delay is inordinate, particularly in the context of a builders lien

claim. B. Is the Delay Excusable? [22] Mr. Bennett deposes that Parkerdean was destabilized financially as a result of unpaid invoices of $77,000 on the project with Best Builders. This was, he says, a significant sum for a small business like Parkerdean. The company could not acquire inventory to bid on further jobs. Not being able to overcome the shortfall, Parkerdean was forced to scale back its operations. In September 2015, Mr. Bennett ceased self-employment through Parkerdean and began working as a project manager for Daryl-Evans Mechanical Ltd. It appears that Parkerdean subsequently shut down its operations. [23] Mr. Bennett filed for personal bankruptcy on December 1, 2015. His liabilities included Parkerdean's outstanding obligations to Canada Revenue Agency, the Director of Employment Standards and the Royal Bank of Canada. [24] On January 12, 2017, Mr. Bennet made a consumer proposal that included monthly payments for the benefit of his creditors. His bankruptcy was annulled, although he was still insolvent. [25] On April 28, 2017, Mr. Bennet was let go from Daryl-Evans in a corporate restructuring. After a period of time on Employment Insurance, Mr. Bennet began working again as a project manager. He says he cannot take on projects as a contractor because he lacks the funds to do so. He also has family obligations, including child support payments, which have

strained his limited financial resourses. [26] Parkerdean was dissolved on December 17, 2018, presumable for failing to file the standard corporate documents. [27] Mr. Bennett advises the court that, although he lacked the wherewithal to afford a lawyer or to prosecute this action while he struggled though the financial turbulence in the aftermath of the failed project with Best Builder, he is committed to proceeding now. [28] Impecuniosity may provide an excuse for a delay; however, it should not be accepted as excuse irrespective of the length of delay: Busse v. Robinson Morelli Chertkow, 1998 CanLii 6588 (B.C.S.C.) at para.

25. It is incumbent on a plaintiff who seeks to excuse delay on the basis of impecuniosity to provide adequate financial information to explain the inaction. [29] In Trak Energy Corporation v. Happy Valley Resort Ltd., 2015 BCSC 1928 at para. 42, Mr. Justice Betton rejected an excuse based on financial circumstances because it was not supported with specific evidence, and went on to say this: [43] Even if I were to accept the blanket assertion of impecuniosity, the plaintiff's own affidavit material suggests that any financial issues were resolved by January 4, 2012. More than three years have passed since that date and there has been minimal activity since then. [30] In this case, there is no documentary evidence of Parkerdean's financial circumstances. However, I am prepared to accept Mr. Bennett's personal financial difficulties as evidence of the financial circumstances of his company. While Mr. Bennett may not be the legal alter ego of Parkerdean, it is clear that his financial struggles were closely related to those of the company. A number of the personal debts that forced Mr. Bennett into personal bankruptcy were incurred attempting to keep the company afloat financially. [31] The difficulty I have is that there is no clear picture of Mr. Bennett's financial means since he emerged from bankruptcy in 2017. The financial challenges that Mr. Bennett and his company began

encountering in 2015 do not explain why this action has remained dormant so long, particularly when Mr. Bennett seems to have regained his financial footing somewhat in 2018. To provide a full excuse for the extended delay, there would need to be more specific and more current financial information about Mr. Bennett and the company. C. Has the Delay Caused, or Is It Likely to Cause, Serious Prejudice to the Defendants? [32] In Wilson v. Hrytsak, [1997] B.C.J. No. 1115 (S.C.), Master Joyce held that prejudice is to be presumed from a plaintiff's failure to enforce a claim of builders lien. As Master Joyce noted at para. 20, a builders lien impairs the property owner's freedom to use his or her property, regardless of whether the owner has an actual need to sell the property. Once a builders lien is filed, it is not possible for the owner to cancel the charge except to post security or to have the underlying claim dismissed on its merits. [33] In Trak, Mr. Justice Betton found that the presumption of prejudice which arises when property or funds are held as security is supported by the expiry of a limitation period during the delay (paras. 53 - 54), which is also the case here. [34] In addition to the presumed prejudice, the defendants submit there is actual prejudice in this case. Ms. Tang deposes that she and her husband would like to obtain another property as an investment or

to assist their son with acquiring a larger home, but their bank has told them that they must get the Lien removed before they will be able to obtain a mortgage against the Property. [35] The evidence that the bank will not provide financing to the Homeowners is hearsay. Moreover, there is no evidence that the Homeowners have discussed the details of their financing objectives with the bank. The Property has significant equity. The response from the bank in evidence is very general in nature, and does not rule out a mortgage with the relatively small builders' lien charge on title. [36] However, I accept the incontrovertible fact that the continuing presence of the Lien on title impairs the Homeowners' freedom to deal with their property. This is serious prejudice resulting from Parkerdean's delay. [37] For its part, Best Builders has been prejudiced by the holdback of approximately $13,000. That Best Builders has been deprived of these funds for over four years is clearly prejudicial to its economic interests: Braich v. Nureach Developers Ltd., 1997 BCSC 3856 at para.

15. D. Interests of Justice [38] The Homeowners are elderly. They depose that the litigation is stressful and hard on their health, and that it is burdensome for them to keep track of the holdback. [39] In my view, the interests of justice demand that the builders' lien claim be dismissed. Parkerdean's failure to prosecute the claim is unfair to the Homeowners as they move into retirement, at a time when they should be able to fully enjoy their property free of the burden and stress of delayed litigation. [40] The builders' lien claim is the only proper lis between Parkerdean and the Homeowners. The notice of civil claim does not allege breach of contract against the Homeowners. While Parkerdean alleges unjust enrichment against all defendants, the claim is a bare conclusion of law with no supporting facts. A subcontractor like Parkerdean has a claim in contract against the contractor with whom it contracts and supplemental remedies under the Builders Lien Act. Courts rarely find unjust enrichment in circumstances like the present: Park v. K.S. Mechanical Ltd., 2012 BCSC 1751 at para. 39. [41] For these reasons, I would dismiss all of the claims against the Homeowners for want of prosecution. I would also cancel the CPL. [42] This leaves the claim in contract against Best Builders. The claim is for a modest sum, but potentially significant to Mr. Bennett's financial future. The

prejudice to Best Builder once the holdback is released is not significant in my view. While there is a degree of prejudice to be presumed from Parkerdean's delay, there is no evidence of actual prejudice to Best Builders' ability to defend the claim. Although the Homeowners' memories of the events will have faded given their age and health, it is not clear to me how their evidence would be necessary for Best Builders' defence. [43] In Wilson, Master Joyce dismissed the plaintiff's action to prove his builders' lien claim for want of prosecution, but allowed him to proceed with an action in contract. [44] In my view, the interests of justice in this case likewise justify an order dismissing the action to prove the builder's claim, but allowing Parkerdean to maintain its action against Best Builders in contract. [45] Parkerdean must, without further delay, take steps to have its corporate status restored and to proceed with the action in accordance with the timelines under the Rules. [46] Best Builders may, of course, maintain its counterclaim against Parkerdean. IV. CONCLUSION [47] The relief sought in the notice of civil claim with respect to the Builders Lien Act is dismissed for want of prosecution. [48] The action against the Homeowners is dismissed for want of prosecution. [49] By consent, the counterclaim by the Homeowners is dismissed without costs. [50] The Lien and the

CPL are cancelled from title to the Property. The Registrar of the Land Titles Office in New Westminster shall cause the Lien and the CPL to be cancelled upon receipt of an application submitted by or on behalf of the Homeowners supported by a certified copy of this court's order. [51] The Homeowners are awarded costs of the action. [52] Best Builders is awarded costs of this application in any event of the cause. [53] Best Builders is given leave to renew the application to dismiss the action in its entirety should Parkerdean fail to move the action forward with reasonable dispatch. "Master Elwood"