Julian Heller

The appellants, subcontractors on a school construction project, appealed a trial judgment limiting their construction lien recovery to the general contractor's 10 per cent statutory holdback.

The general contractor had posted a lien bond to vacate one of the liens before the primary subcontractor abandoned the project.

The appellants argued that posting security made the full bond amount available to all lien claimants in addition to the statutory holdback, relying on previous case law.

The Divisional Court dismissed the appeal, holding that posting security under section 44 of the Construction Lien Act does not enlarge a contractor's liability beyond the statutory holdback and proper set-offs.

The court explicitly rejected the prior ruling in Francon, confirming that a contractor's liability to lien claimants is restricted to the amount fixed by the Act.