A court-appointed receiver sought directions regarding priority to remaining sale proceeds between a mortgagee and a construction lien claimant.
The mortgagee had advanced funds partly to refinance an earlier mortgage before the lien claimant’s work began.
The court held that advances used to discharge the prior mortgage constituted non‑construction advances under s. 78(3) of the Construction Lien Act and therefore had priority over the lien claim.
The lien claimant failed to establish that its work related to the same improvement financed by the earlier mortgage.
Subrogation principles also supported the mortgagee’s priority position.
