Ruling notes conflicting precedents, not counsel inadvertence, affected how parties acted
In extending the time to perfect an appeal against the dismissal of a lien action, the Ontario Court of Appeal noted that the parties operated under the assumption that it lacked jurisdiction over the appeal, given its competing jurisprudence on this issue.
In Castle Homes Design Inc. v. McKenzie, 2026 ONCA 98, a contract between the parties provided that the plaintiff construction company would build and install an outdoor swimming pool and deck on the defendant’s property.
After a dispute arose regarding the contracted work, the construction company registered a lien against the property. Before the Ontario Superior Court of Justice, the company filed a lien action under s. 50 of Ontario’s Construction Act, 1990.
The construction company missed deadlines under the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, and two timetables the court had ordered in case management conferences. The company also failed to pay most of the cost orders issued against it.
On Mar. 17, 2025, the property owner moved to dismiss the lien action based on the construction company’s failure to comply with the court’s orders and timetables.
On Aug. 21, 2025, the motion judge dismissed the lien action, discharged the lien, and awarded the property owner $26,556.87 in substantial indemnity costs.
On Sept. 22, 2025, before the Ontario Court of Appeal, the construction company filed a notice of appeal against the dismissal order.
On Nov. 17, 2025, the property owner’s counsel advised the construction company’s counsel that the company should have submitted the appeal to the Ontario Divisional Court under the statutory appeal route in s. 71 of the Construction Act.
The construction company’s counsel reviewed the matter, agreed with the position of the property owner’s counsel, and unsuccessfully sought consent to an extension of time to file a Divisional Court appeal.
On Nov. 26, 2025, the registrar warned that they would dismiss the appeal for delay if the construction company did not perfect it by Dec. 17, 2025. The company failed to perfect the appeal by that date.
On Dec. 17, 2025, the construction company moved to transfer the appeal to the Divisional Court under s. 110 of Ontario’s Courts of Justice Act, 1990 (CJA). Alternatively, the company sought to extend the time to perfect the appeal in the Ontario Court of Appeal.
The Court of Appeal for Ontario dismissed the motion to transfer the appeal. However, the appeal court granted the motion to extend the time to perfect the appeal and gave the construction company leave to perfect its appeal by Feb. 23.
Regarding the motion to transfer the appeal to the Divisional Court, the appeal court declined to exercise its discretion to grant a transfer.
Under s. 110 of the CJA, the appeal court noted that a condition precedent to transferring an appeal was a finding that the party had brought the appeal to the wrong court. The appeal court could not make such a finding, as the construction company might have properly brought an appeal to it, depending on which of the competing precedents applied.
The appeal court ruled that the interests of justice favoured the appeal remaining before it, given that it could resolve the apparent conflict between its own precedents and offer clarity, potentially through a five-judge panel.
The appeal court saw a strong public interest in clarifying the appeal route, consistent with the Construction Act’s purpose of promoting the efficient and cost-effective resolution of construction disputes.
Regarding the motion to extend the time to perfect the appeal, the appeal court deemed it unnecessary to consider the relevant factors in detail, as the interests of justice favoured a modest extension of time.
The appeal court said this case did not involve the simple inadvertence of the parties or their counsel. The appeal court added that the parties had agreed on Nov. 20, 2025, that the construction company should have appealed to the Divisional Court, well before the registrar-set deadline of Dec. 17, 2025.
In the circumstances, the appeal court held that denying the construction company the opportunity to perfect the appeal would go against the interests of justice.
