M. Handler

Two unpaid construction lien claimants sought priority over a first mortgagee holding a $6.5 million vendor take-back (VTB) mortgage on a contaminated commercial property.

The court had to determine the actual value of the property on the date the first lien arose and whether the VTB constituted an 'advance' under section 78(3) of the Construction Lien Act.

The court found that the actual value of the property was at least $6.5 million, relying on arm's length offers rather than the lien claimants' expert opinion, and held that a VTB mortgage is an advance equivalent to an institutional mortgage.

Consequently, the mortgagee's interest took priority over the lien claimants.

A construction lien action arising from renovations to one property prompted competing motions concerning claims related to a separate renovation project at another property.

The lien claimant sought to add the other property’s owner as a defendant and amend its claim to recover unpaid invoices relating to that project, while the defendant sought to add that owner as a plaintiff by counterclaim and include claims for overpayments.

The court held that s. 55(1) of the Construction Lien Act restricts lien claimants from joining unrelated contract claims and therefore refused the requested amendment and joinder.

However, under s. 55(2) the defendant’s counterclaim against the lien claimant could include claims arising from another contract between the same parties, even if unrelated to the improvement.

The motion to sever those portions of the counterclaim was dismissed, while both motions to add the additional party failed.

A construction contractor sued a homeowner for unpaid amounts under a residential renovation contract and for authorized extras.

The homeowner counterclaimed for alleged deficiencies, completion costs, and other expenses.

The court reconstructed the terms of the contract based on quotes, oral agreements, and communications because no written contract existed.

It found the homeowner breached the contract by refusing to pay a reasonable portion of the progress payment and by denying the contractor access to complete the work and remedy minor deficiencies.

The court held that the contractor was entitled to the unpaid contract balance and payment for authorized extras, subject to deductions for reasonable completion costs.

Judgment was granted for the contractor and the counterclaim was dismissed.