In Pryers Construction Ltd. v. MVMB Holdings Inc., the Divisional Court holds that the special circumstances doctrine is not available to a plaintiff in an action to enforce a construction lien.
[14] In the present case, Riverside was an “owner” within the meaning of s. 1 of the CLA. As a result, Pryers was entitled to a lien on Riverside’s interest in the premises. As that interest was leasehold, Pryers’ ultimate remedy under the Act would have been a sale of the remaining term of the lease, if any. However, Pryers failed to preserve its lien against Riverside’s interest, and as a result, it expired in July 2016.
[15] The trial judge held, and Pryers argues, that the “special circumstances” doctrine was available, that such circumstances existed, and that as a result, Pryers was entitled to enforce its lien against Riverside as an “owner” of the property. This was an error of law.[16] Where the “special circumstances” doctrine is available, the court has discretion to add new parties or new causes of action, following the expiry of a limitation period. With respect to actions governed by the LA2002, this doctrine was abolished by s. 21 of that statute: Joseph v. Paramount Canada’s Wonderland (2008), 90 O.R. (3d) 301 (C.A.), at paras. 16 and 25. However, with respect to actions where the applicable limitation period is prescribed by a statute other than the LA2002, the “special circumstances” doctrine may remain available: Bikur Cholim Jewish Volunteer Services v. Langston (2009), 2009 ONCA 196 (CanLII), 94 O.R. (3d) 401 (C.A.), at para. 51.[17] Relying upon Bikur Cholim, Pryers argues that the “special circumstances” doctrine is available to a plaintiff in a construction lien action, and that the trial judge was therefore correct in allowing Riverside to be added as a party defendant, for the purpose of enforcing a lien against it as an “owner”, notwithstanding that the lien was neither preserved nor perfected. I disagree for the following reasons.[18] It does not follow from the decision in Bikur Cholim that all limitation or other time periods, contained in statutes other than the LA2002, may be extended based upon the “special circumstances” doctrine. In that case, the court referred to its decision in Swain Estate v. Lake of the Woods District Hospital (1992), 1992 CanLII 7601 (ON CA), 9 O.R. (3d) 74 (C.A.) where the doctrine was held to apply to an action governed by s. 38(3) of the Trustee Act, R.S.O. 1990, c. T.23, and went on to say that the doctrine survived in relation to such actions, despite the fact that it had been abolished for cases governed by the LA2002. However, the doctrine has never been held to apply in an action to enforce a construction lien.[19] In Delview Construction Ltd. v. Meringolo (2004), 2004 CanLII 11188 (ON CA), 71 O.R. (3d) 1 (C.A.), at para. 11, the court said the following:[T]he courts have noted that unlike limitation periods where there is a discretion to extend under the Basarsky v. Quinlan, 1971 CanLII 5 (SCC), [1972] S.C.R. 380 line of cases, the time limits set out in the CLA are prescribed by statute and “[leave] no room for judicial discretion”.Basarsky is one of the sources of the “special circumstances” doctrine.
[20] In K.H. Custom Homes Ltd. v. Smiley, 2015 ONSC 6037 (Div. Ct.), at paras. 4f, this court said the following about the statutory deadlines in the CLA:
These requirements are statutory. They are mandatory. The court has no discretion to relieve from them. The language of the CLA is clear on this point, as is consistent appellate authority.This conclusion is consistent with the scheme of the CLA. The first two requirements [time limits for preservation and perfection of liens] are essential to the timely flow of funds on construction sites: persons advancing money to pay for construction may rely upon the state of title before making an advance. This reliance would be compromised if late liens could be placed on title as a result of the court’s exercise of discretion after-the-fact. [Footnotes omitted.]
[21] The CLA does not contain a limitation period applicable to claims for breach of contract joined with actions to enforce claims for lien, and there is no conflict between the provisions of the CLA and the LA2002 in relation to such claims. Accordingly, the two-year limitation period under the LA2002 applies to contractual claims joined with lien claims: see LA2002, s. 19. In the present case, that limitation period had expired in March of 2018, approximately eight months before the motion to add Riverside was made.