Megan Fougere

CS Capital Limited, a secured creditor and mortgagee, brought a motion seeking a declaration that its mortgage had priority over construction lien claims on a property.

The court dismissed the motion, finding that the mortgage was not registered prior to the time the first lien arose in respect of the overall improvement project.

Furthermore, the court determined that the mortgage was a collateral mortgage securing a guarantee of a separate debt, and therefore no "advance" was made in respect of it for the purposes of priority under the Construction Act.

The applicant, HMI, brought a motion to refer a consolidated construction lien action, involving seventeen liens totaling over $42 million, to a single private arbitration and to stay the court proceedings.

The consolidated action was divided into three streams (A, B, C) based on contractual relationships.

The motion was opposed by various lien claimants and other parties.

The court dismissed the motion, finding that a consolidated arbitration could not be ordered due to significant conflicts in arbitration clauses across the different contracts, the inclusion of third parties who had not consented to arbitration, the failure to follow contractual dispute resolution protocols (including mediation), and potential for increased costs and delays for some parties.

The court emphasized the consensual nature of arbitration and declined to impose non-consensual amendments to contracts or stay the court action.