In a priority dispute under the Construction Lien Act, the court determined the relative priorities of several mortgagees and construction lien claimants.
The court held that professional fees incurred by a first mortgagee to protect its security constituted an 'advance' under section 78(6) of the Act, granting it priority.
The court also found that a $10 million advance made jointly to two borrowers under a second mortgage was an advance in respect of that mortgage, giving it priority over the lien claimants.
However, the court ruled that an advance made under a loan agreement to a third party was not an advance in respect of a collateral mortgage given by the developer as guarantor, meaning the lien claimants had priority over the collateral mortgage.
