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Security to vacate liens limited to owner’s contractual exposure to contractor.
The owner of a residential subdivision development brought a motion under s. 44(2) of the Construction Lien Act to vacate multiple construction liens upon posting security.
The project contractor had abandoned the project and later became bankrupt, leaving several subcontractor lien claims totaling approximately $2.9 million.
The court held that the owner’s exposure to subcontractor liens could not exceed the amount potentially owed to the contractor under the contract.
After resolving a dispute regarding corrected payment certificates issued by the project consultant, the court determined the correct unpaid certified amount and fixed the security required to vacate the liens accordingly.
The court also determined that security for costs should be calculated based on the owner’s potential contractual exposure rather than the aggregate value of all lien claims.
Court coordinates dozens of construction lien actions without full consolidation.
Multiple motions arose in more than 45 construction lien actions concerning five related solar farm projects across Eastern Ontario.
The plaintiff sought transfer and consolidation of numerous lien actions, while the general contractor sought reduction of security posted to vacate liens under the Construction Lien Act.
The court declined full consolidation, instead designating “main actions” for each project and implementing procedural directions to coordinate litigation efficiently while avoiding administrative burdens associated with transferring and merging dozens of proceedings.
The court partially granted the motion to reduce security where duplicate or inflated lien claims were conceded, while adjourning the balance pending further negotiations and analysis of holdback exposure and overlapping claims.
