Kimberley J. Wolfe

A general contractor moved to discharge a supplier’s construction lien, cancel or reduce the security posted to vacate the lien, and discharge a subcontractor’s separate lien.

The court held that the supplier’s lien was properly perfected despite the contractor not being named as a defendant, because the Construction Lien Act does not require joinder of a contractor lacking contractual privity with the lien claimant.

The court also refused to reduce the lien bond posted under s.44, finding the owner’s holdback liability exceeded the lien amount and therefore the full security remained appropriate.

The subcontractor consented to discharge of its lien if the bond was not reduced.

The court discharged the subcontractor’s lien but otherwise dismissed the motion.

The moving defendants sought summary dismissal of an action to enforce personal guarantees associated with a corporate loan secured by pledged shares.

The lender had seized and retained the pledged shares following default and asserted rights as shareholder rather than selling the collateral.

The court found that the lender elected to retain the shares “in satisfaction of the debt,” thereby extinguishing the underlying obligation and releasing the guarantors.

In the alternative, the lender’s conduct in refusing a reasonable purchase offer, delaying enforcement, and materially altering the risk without notice discharged the guarantors.

Although the limitation defence failed because the guarantee was a demand obligation and the limitation period began only upon demand, the action against the guarantors was dismissed on the other grounds.

The defendants brought a motion to discharge a Certificate of Pending Litigation (CPL) registered by the plaintiff against their properties.

The plaintiff, an electrical subcontractor, alleged that the defendant contractor breached the statutory trust provisions of the Construction Lien Act by misappropriating funds to maintain and improve the subject properties.

The defendants argued that a breach of trust claim cannot give rise to an interest in land and denied using trust funds for the properties.

The court found that a claim for a remedial constructive trust arising from a breach of statutory trust can support a CPL.

Due to the defendants' failure to provide a proper accounting of the trust funds, a triable issue remained regarding the plaintiff's interest in the lands.

The motion to discharge the CPL was dismissed.