Ontario Superior Court of Justice Divisional Court enforces summary judgements, finding Cost Savings arrangement in construction contracts lienable

April 8, 2022

Dominus Construction Corporation v. H&W Development Corp., 2019 ONSC 7235
Dominus Construction Corporation v. H&W Development Corp., 2020 ONSC 8134
Dominus Construction Corporation v. H&W Development Corp., 2022 ONSC 1240

In a February 28, 2022 decision, Justices Kristjanson, Favreau and Nishikawa of the Ontario Superior Court of Justice Divisional Court (the “Court”) dismissed an appeal by H&W Development Corp. (“H&W”), the Defendant and Plaintiff by Counterclaim. H&W appealed the decision of the Honourable Justice Casullo granting summary judgement in favour of Dominus Construction Corporation (“Dominus”), as Plaintiff/Lien Claimant and Defendant by Counterclaim, whereby Dominus was entitled to payment for its share of “cost savings” under a construction management contract with H&W.

The construction dispute was commenced by Dominus by way of a claim for lien and involved motions in respect of Dominus’ 50% share of the costs savings in connection with the construction of the Fontana Residential Condominiums in Markham, Ontario (the “Project”). H&W maintained that no costs savings were realized on the Project according to their interpretation of the cost savings provision, and H&W sought damages of approximately $11 million by way of a counterclaim against Dominus.

In 2019, and later again in 2020, the Ontario Superior Court of Justice (Newmarket) affirmed that the cost savings provision in the construction management contract formed part of the contract price, and therefore the amount claimed by Dominus pursuant to the costs savings provision was properly lienable.

The Court ultimately agreed that the contract bore the interpretation sought by Dominus and ordered summary judgment in favour of Dominus. The Court also ordered H&W to pay Dominus’ legal costs in connection with the motions.

Miller Thomson advised Dominus in the competing summary judgments as well as appeal proceedings with a team led by Riccardo Del Vecchio, and comprised of Paul Guaragna, Enzo Di Iorio and Mark De Sanctis (Construction Litigation).

Our Construction Litigation Group is comprised of highly seasoned litigators who offer clients, including domestic and foreign owners, developers, engineers, architects, contractors, subcontractors, suppliers and manufacturers, effective representation in construction disputes involving contracts, construction defects, extras, delay claims, liens, bonds and more. Learn more about our full suite of legal services.