Infinite Construction Development Ltd. v. Chen

Decision 1: Move under s. 47 of the Construction Act — press the “best foot forward” threshold

The conventional response to a contested lien is to defend through trial: examinations for discovery, motion practice, eventually a multi-day Construction Act trial. That route would have left the $1,185,000 cloud on title for 18–36 months. A s. 47 motion to discharge offered a faster path — if we could demonstrate that there was no triable issue on validity of the assignment or on the lien claimant’s status as a “contractor”.

We pressed Associate Justice Robinson on the threshold. Infinite argued for the more lien-claimant-friendly threshold from GTA General Contractors Ltd. v. 2566213 Ontario Inc., 2019 ONSC 7370 — that a s. 47 motion must fail unless it is “patently obvious” the lien claimant cannot succeed. We anchored on the more rigorous post-Divisional Court framework from R&V Construction Management Inc. v. Baradaran, 2020 ONSC 3111 (Div Ct) and Maplequest (Vaughan) Developments Inc. v. 2603774 Ontario Inc., 2020 ONSC 4308 (Div Ct), under which a s. 47 motion akin to summary judgment imposes a “best foot forward” obligation on both parties. Robinson AJ accepted that framework at paras. 22–23 of the reasons. The threshold debate mattered: it set the evidentiary expectations Infinite had to meet to keep its lien alive, which it ultimately did not meet.

Decision 2: Attack the assignment on three doctrinal pillars — pleadings, Statute of Frauds, and equitable assignment intention

Infinite’s entire claim to lien rights depended on the alleged assignment of the renovation contract from 103 Canada to Infinite. The natural defensive instinct would have been to engage on the factual question of whether Infinite did the work. We did not. Engaging on the factual work-record gives the lien claimant evidentiary footing on the “de facto general contractor” theory.

Instead, we built three doctrinal attacks on the assignment itself. First, the pleadings: Infinite’s statement of claim used “agent and representative” language, not “assignment” language. Robinson AJ accepted at paras. 25–28 that issues are framed by the pleadings (per Rodaro v. Royal Bank of Canada) and that Infinite’s motion position was internally inconsistent with its own statement of claim. Second, the legal-assignment requirements under s. 53(1) of the Conveyancing and Law of Property Act — which Infinite conceded were not met (no written assignment, no notice to debtor before lien registration). Third, the equitable-assignment intention requirement from Nadeau v. Caparelli, 2016 ONCA 730: the form must clearly show an intention that the assignee is to have the benefit of the chose in action. Robinson AJ found at paras. 31–52 that Infinite’s evidence on intention was “sparse”: no affidavit from Mr. Xu (103 Canada’s principal); no contemporaneous documents; no e-signature authentication on the “Representation Agreement”; and Mr. Chen continued paying 103 Canada throughout the alleged assignment period. The equitable-assignment theory failed.

Decision 3: Establish that “contractor” status under the Construction Act is doctrinal, not factual

Even if the assignment had succeeded, Infinite still had to be a “contractor” under s. 1(1) of the Construction Act for the longer 60-day-from-completion lien deadline under s. 31(2)(b) to apply. Infinite argued that its de facto role as general contractor — running site meetings, instructing trades, communicating with Mr. Zhang and Mr. Cai — supported “contractor” status under Centrum Renovations & Repair Inc. v. Ditta, 2006 CanLII 39082.

We pressed the doctrinal point: the Construction Act definitions of “contractor” and “subcontractor” turn on contractual relationships in the construction pyramid, not factual indicia of role. Without a direct contract with the owner (or an agent of the owner), a party performing the full scope of work for a general contractor is still a subcontractor under s. 1(1). Robinson AJ adopted that framework at paras. 57–61. With the assignment failing, Infinite was a subcontractor; s. 31(3)(b) applied (60 days from last supply). We then showed that the only post-July 2021 work was deficiency remediation (which does not extend lien rights under Demasi Contracting Inc. and AMT Group Inc., 2013 ONSC 5555) and pest control (not lienable). The lien rights had expired before either claim for lien was registered.

Decision 4: Frame the $1,185,000 vs $155,894 discrepancy as bad faith / abuse of process — with a candid acknowledgment that the argument was rejected

Each registered claim for lien displayed $1,185,000 in the “Consideration” field on title, while the actual amount Infinite was claiming was $155,894 — a roughly seven-fold discrepancy. We argued under the GTA Restoration framework (where wilful exaggeration of a lien may be a basis for finding abuse of process under s. 47) that the registration was made in bad faith and ought to be discharged on that ground in addition to the assignment and timeliness grounds.

Honest acknowledgment: this argument was rejected. Robinson AJ held at paras. 71–76 that the $1,185,000 figure was a Teraview-generated “Consideration” field error, not part of the prescribed claim-for-lien form, and that the “Statements” section accurately reflected the lien amounts being claimed. He accepted Mr. Ma’s evidence that the higher figure was a misunderstanding about what to put in that field. The discharge order Robinson AJ ultimately granted rested on the assignment and timeliness grounds, not on bad faith. We disclose this candidly because the bad-faith framing is a doctrinally available argument that did not carry the day on this record.

1. The contractor/subcontractor distinction in the Construction Act is doctrinal, not factual. A subcontractor that has performed the entire scope of a general contractor’s work, run the site, and dealt directly with the owner’s representatives is still a subcontractor under s. 1(1) of the Construction Act if there is no direct contract (or valid assignment) with the owner. The 60-day clock under s. 31(3)(b) starts from last supply, not from contract completion. Owners facing inflated subcontractor liens should focus on the contractual chain, not the work-record narrative.

2. Equitable assignment requires more than self-serving assertion. Where the alleged assignment is not in writing, the assignor (here, 103 Canada) must produce evidence of intention — typically an affidavit from the assignor’s principal, contemporaneous documents, or notice to the debtor prior to enforcement. A document e-signed years after the fact, immediately before the assignee’s enforcement step, on the eve of the debtor’s formal demand, with no authentication of the assignor’s signature, will not establish triable issue. Nadeau v. Caparelli, 2016 ONCA 730 sets the standard: the form used must clearly show an intention that the assignee is to have the benefit of the chose in action.

3. If you want security for costs, lead the independent searches yourself. Rule 56.01(1)(d) and (e) place the threshold onus on the moving party. Relying solely on the lien claimant’s voluntary disclosure — financial statements, notices of assessment — is rarely enough. PPSA registrations, writs of seizure and sale, court-file searches, corporate searches: these are the searches that move the threshold from “the lien claimant’s disclosure looks thin” to “there is good reason to believe the lien claimant lacks sufficient assets in Ontario.” Without those searches, the threshold rarely gets met, and the security-for-costs request fails before the just-and-equitable analysis is even reached.