James Dick Construction Limited v. Durham Board of Education et al. Munro Concrete Products Limited v. Durham Board of Education et al. [Indexed as: James Dick Construction Ltd. v. Durham Board of Education]
50 O.R. (3d) 308
[2000] O.J. No. 3278
Court File Nos. 49370/98 and 49371/98
Ontario Superior Court of Justice Divisional Court Hartt, Lane and Carnwath JJ. August 29, 2000
Construction liens -- Vacating liens -- Holdback -- Rights of lien claimants -- General contractor obtaining lien bond and obtaining order vacating lien -- Contractor's liability restricted to amount of statutory holdback -- Construction Lien Act, R.S.O. 1990, c. C.30.
Tasis was the contractor for the construction of a school in Whitby. It hired Bri Con as the excavation sub-contractor, and Bri Con sub-contracted with James Dick, Core and Munro.
On March 1, 1996, Munro gave written notice to Tasis of a lien for $26,454.04 that it had registered against the property and, on March 15, 1996, Tasis purchased a lien bond for the amount of the lien plus 25 per cent costs. On March 21, 1996, the Munro lien was vacated by court order. Subsequently, in making payment of Bri Con's draw of $59,986.70, Tasis held back an amount representing the amount of the lien claim bonded off. In April 1996, Bri Con abandoned the property. Tasis finished Bri Con's work for which it claimed a set-off of $414,074.72. On April 26, 1996, James Dick registered a lien for $45,674.15 and, on May 24, 1996, Core registered a lien for $18,317.81.
The lien claimants brought proceedings under the Construction Lien Act and, in those proceedings, they relied on Francon v. L. Nicolini Construction Ltd. as authority that a contractor who has posted security to vacate a lien makes that security available to satisfy the claims of all lien claimants of a class and that this security is in addition to the contractor's liability for a statutory holdback. Jenkins J., however, preferred the reasoning in Reliance Electric Ltd. v. G.N.S. Construction Ltd., which is authority that the lien claimant's rights are not enlarged by the contractor's posting security and were limited to the 10 per cent statutory holdback. James Dick and Munro appealed.
Held, the appeal should be dismissed.
Francon v. L. Nicolini Construction Ltd. is no longer good law. While the payment into court pursuant to s. 44(6) of the Construction Lien Act discharges the lien as against the land and makes the lien a charge on the amounts paid into court or posted as security, that does not mean that lien claimants become entitled to the entire amount of their claims out of that security, irrespective of the other provisions of the Act. Rather, any payment to the claimants is restricted to the amount fixed by the Act for a payer's liability. The appellant's interpretation that the contractor's liability was enlarged would leave the contractor in an intolerable position because if the contractor took no action, then the project would come to a halt but if it took action to post security, then it would be exposed to a liability it would not otherwise bear. The Construction Lien Act was not intended to operate in this way. Rather, it was framed to ensure that funds continue to flow, while also providing security for the holdbacks the payer is required to retain. Jenkins J. was correct in finding that the lien claimants' recovery was limited to Tasis' 10 per cent statutory holdback and, accordingly, the appeals should be dismissed.
APPEALS in construction lien actions under the Construction Lien Act, R.S.O. 1990, c. C.30.
Francon v. L. Nicolini Construction Ltd. (1988), 33 C.L.R. 107 (Ont. H.C.J.), not folld Other cases referred to Reliance Electric Ltd. v. G.N.S. Contractors Inc. (1989), 1989 4110 (ON SC), 70 O.R. (2d) 364 (Dist. Ct.); S.I. Guttman Ltd. v. James D. Mokry Ltd., 1968 427 (ON CA), [1969] 1 O.R. 7, 1 D.L.R. (3d) 253 (C.A.) Statutes referred to Construction Lien Act, R.S.O. 1990, c. C.30, ss. 12, 14, 17(1)- (3), 22, 23, 24, 28, 44, 80 Construction Lien Act, 1983, S.O. 1983, c. 6, s. 44 Mechanics Lien Act, R.S.O. 1980, c. 261, s. 29(2), (4) Authorities referred to Cadsby"Posting Security -- What is your Client's Exposure", Quandries and Pitfalls in Construction Liens and Construction Law (The Law Society of Upper Canada, November 7, 1996), p. 8-21
Max Shafir, Q.C., and Sandra D. Astolfo, for James Dick Construction Limited, appellant. Julian D. Heller, for Munro Concrete Products Limited, appellant. Richard J. Mazar and Pino Cianfarani, for respondents.
The judgment of the court was delivered by
CARNWATH J.: --
Background
1In 1995, Durham Board of Education ("the owner") contracted with Tasis contractors Limited ("Tasis") for the construction of a school in Whitby. Tasis, in turn, contracted with 1088597 Ontario Limited ("Bri Con") to do the excavation site services and paving. Bri Con, in turn, contracted with its subcontractors, James Dick Construction Limited ("James Dick"), Core Rentals Ltd. ("Core") and Munro Concrete Products Limited ("Munro"). Bri Con defaulted and a classic construction lien action followed, tried before J. Jenkins J. in February of 1998. James Dick, Core and Munro appeal from that judgment.
2The issues on the appeal are:
A. Was Jenkins J. right in finding that the lien claimants' recovery was limited to Tasis' 10 per cent statutory holdback?
B. Was Jenkins J. right in finding the lien claimants were not entitled to an award of interest on the money required to be held back by Tasis?
C. Was Jenkins J. right in finding Tasis had no obligation to honour a written direction from Bri Con to pay $26,454.04 to Munro out of Bri Con's draw?
D. Did Jenkins J. properly exercise his discretion in awarding $1,500 costs to Munro?
To consider these questions reference must be made to the applicable statutes. The relevant extracts are attached as Appendix "A" to these reasons [at p. 316 post].
Narrative History
3The work started in the fall of 1995. On March 1, 1996, Munro liened the property for services rendered to Bri Con, claiming $26,454.04, and gave written notice to Tasis of its lien. Tasis asked Bri Con to vacate the lien, but Bri Con did not. On March 15, 1996, Tasis purchased a lien bond for the amount claimed plus 25 per cent costs ($33,067.55). On March 19, 1996, Tasis received a written direction from Bri Con to pay $26,454.04 directly to Munro out of the February draw. Notwithstanding the direction, Tasis obtained a court order vacating the Munro lien on March 21, 1996. When Tasis received the February draw of $59,986.70 it deducted from that draw and retained $33,067.55, representing the amount of the lien claim bonded off. It deducted a further $3,664.97 for matters not concerned with this action, and on March 31, it paid to Bri Con the balance of the draw of $24,881.97.
4Bri Con abandoned the property on April 22, 1996, at which time Bri Con had performed certified work of $259,950. Tasis finished the Bri Con contract using its own forces and others. It claimed set-off against Bri Con of $414,074.72 plus GST for the completion of Bri Con's responsibilities.
5On April 26, 1996, James Dick registered a lien for $45,674.15.
6On May 24, 1996, Core (not a party to this action) registered a lien for $18,317.81.
7James Dick sued for $45,674.15. interest from March 29, 1996, and for a charge against the security posted by Tasis to remove the Munro lien. Munro sued for $26,454.04 and, in default of payment, asked that the lien of Munro be a charge on the holdbacks required to be retained under the Construction Lien Act, R.S.O. 1990, c. C.30.
The Judgment at Trial
8Jenkins J. first found that Tasis spent $402,276.37 to complete the abandoned Bri Con contract; he then found the cost to complete exceeded the balance of Bri Con's contract price, entitling Tasis to set off against moneys owing to Bri Con, up to the statutory holdback mandated by s. 24(2) of the Construction Lien Act. He found that Tasis had properly withheld the 10 per cent mandated by s. 22(1) of the Construction Lien Act in the amount of $25,995 plus GST.
9Jenkins J. found the direction to Tasis obtained by Munro from Bri Con to pay Munro directly from the February advance not to be binding upon Tasis. He found Tasis to have complied with and to be protected by s. 24(2) of the Construction Lien Act which provides that where a payer receives written notice of a lien and retains an amount sufficient to satisfy the lien in addition to the required holdbacks, the payer may then make payment on a contract or subcontract up to 90 per cent of the price of the service and materials that have been supplied under the contract or subcontract, less the amount retained. He concluded that, since Tasis had withheld the required 10 per cent and posted security for the Munro lien, it was entitled to make the subsequent payment to Bri Con on March 31 of $24,881.97.
10Jenkins J. found James Dick to have proven a claim for $45,674.15, Core to have proven a claim for $16,680.35, and Munro to have proven a claim for $26,454.04.
11Jenkins J. then considered the two competing views currently held in Ontario on the vexing question of whether a defendant contractor who has posted security to vacate a lien thereby makes that security available to satisfy the claims of all lien claimants of a class, in addition to the statutory holdback required to be retained by the contractor. In Francon v. L. Nicolini Construction Ltd. (1988), 33 C.L.R. 107 (Ont. H.C.J.), Hollinger J. held that the security, once posted, was available to satisfy the claims of all lien claimants without regard to, in that case the defendant contractor's limited liability to those lien claimants. He held this, even though there was no privity of contract between the lien claimants and the general contractor who posted the securities.
12The contrary conclusion was reached by Misener J. in Reliance Electric Ltd. v. G.N.S. Contractors Inc. (1989), 1989 4110 (ON SC), 70 O.R. (2d) 364 (Dist. Ct.), where a contractor posted security in the form of a bond to vacate claims for liens of four lien claimants. A set-off was claimed by the contractor against the excess posted as security above the statutory holdback of 10 per cent. Misener J. held the lien claimants' rights were not enlarged by the posting of security by the contractor, but were limited to the 10 per cent.
13Jenkins J. preferred the reasoning of Misener J. in Reliance Electric to that of Hollinger J. in Francon. He rejected the lien claimants' argument that the combination of posting security in court together with holding back the amount of Munro's claim for lien, followed by a payment to Bri Con, attracted additional liability to Tasis.
14Jenkins J. then proceeded to prorate the share of the various lien claimants, in accordance with his finding they were entitled to 10 per cent holdback of $25,995 plus GST. No one disputes his calculations.
15In exercising his discretion, Jenkins J. awarded Munro $1,500 costs.
Analysis
A. Was Jenkins J. right in finding the lien claimants' recovery was limited to Tasis' 10 per cent statutory holdback?
[15a] The answer to this question is "Yes".
16Until March 1, 1996, Tasis complied with s. 22(1) of the Act by holding back 10 per cent of the moneys otherwise payable to Bri Con. When notified of the Munro lien, Tasis acted as required by s. 24(2) of the Act, and withheld $33,067.55 otherwise owing to Bri Con. Tasis remained in compliance with the Act. Once Jenkins J. found that Tasis spent $402,276.37 to complete the contract Bri Con abandoned, he properly held, pursuant to s. 17(3) of the Act, that Tasis was entitled to set off the damages it incurred in completing the work Bri Con failed to perform against the moneys posted as security, as long as it retained the 10 per cent statutory holdback. He properly applied the principle in S.I. Guttman Ltd. v. James D. Mokry Ltd., 1968 427 (ON CA), [1969] 1 O.R. 7, 1 D.L.R. (3d) 253 (C.A.): A contractor who has retained money pursuant to a notice of lien is entitled to set off from the amounts retained, in excess of the 10 per cent statutory holdback, any amounts properly chargeable by him against its subcontractor. In the present case, had there been no set-off, the security posted to bond off the Munro lien for which written notice had been given under s. 24(2) would have been available to the lien claimants in addition to the 10 per cent statutory holdback. However, the contractor's right to set off trumps the ability of the lien claimants to have access to the s. 24(2) notice holdback.
17Having properly disposed of the set-off question, Jenkins J. considered the two competing views referred to above: does a defendant contractor who has posted security to vacate liens, thereby make those securities available to satisfy the claims of all lien claimants of a class, in addition to the 10 per cent statutory holdback required to be retained by the contractor? If the judgment of Hollinger J. in Francon is correct, then the face amounts of the security lodged by Tasis to bond off the lien claims of James Dick, Bathe & McClellan (not a party to this action), and Core (totaling approximately $137,000) would also be available to satisfy the proven claims of the lien claimants.
18I conclude Francon is no longer good law. It proceeded on an agreement of counsel that s. 29(2)(a) and (4) of the Mechanics Lien Act, R.S.O. 1980, c. 261, are identical in substance to s. 44 under the Construction Lien Act, 1983, S.O. 1983, c. 6. I respectfully disagree. I find s. 44 of the Construction Lien Act to be significantly different from s. 29(2) and (4) of the Mechanics Lien Act. Section 44(9) is a sophisticated set of rules that apply when liens have been bonded off. One example is sufficient: under s. 29(4) of the Mechanics Lien Act a person whose lien has been vacated by money, bond or other security has a first charge on any moneys found to be owing to that person from the money, bond or other security. Section 44(9), cl. 2 of the Construction Lien Act says that security posted is to be distributed in accordance with the priorities set out in s. 80 of the Act, that is to say pro rata among the members of each class according to their respective rights. Section 80(1)(a) specifically disentitles any person having a lien to priority over another member of the same class. The sections are not identical in substance.
19I further conclude Misener J. was correct in finding as he did in Reliance Electric that while s. 44(6) provides that upon payment into court, the lien ceases to attach to the land and becomes a charge on the amounts paid into court or posted as security, that does not mean a lien claimant (or lien claimants) becomes entitled to the entire amount of its (their) claim(s) out of that security, irrespective of the other provisions of the Act. Such payment is restricted to the amount fixed by the Act for a payer's liability and must be shared pro rata with the other lien claimants: see s. 44(9), cls. 2 and 3.
20When one examines the position of the lien claimants in this matter, both before and after the posting of security to vacate their liens, the logic of Misener J.'s decision becomes apparent. Before the posting of security, the only claim the lien claimants had was a claim to share in the 10 per cent statutory holdback. If Tasis chose to post security to vacate the claims for liens filed against its subcontractor, so the orderly flow of funds could continue to nourish the project, how can this be said to increase the contractor's liability to lien claimants to whom the contractor owes no other duty than to retain the 10 per cent statutory, holdback, and any notice holdback, subject to proper set-off? This interpretation would leave the contractor in an intolerable position -- either Tasis takes no action and the project is halted in its tracks, or Tasis posts security and exposes itself to a liability it does not otherwise bear. In my view, the Construction Lien Act is framed to insure that funds continue to flow, while also providing security for the holdbacks the payer is required to retain.
21Text writers have commented on the unfairness of the doctrine espoused in Francon and have approved that of Reliance Electric. Douglas Macklem, in Annotation (No. 1) to the Francon decision (p. 112):
Quite apart from the obvious injustice created by the decision in the case under review, it is obvious that, as the industry as a whole becomes more aware of the problem, contractors and others will be less and less likely to utilize the supposed remedy available to innocent parties under s. 44 when disputes arise between other parties on a construction project. As previously pointed out, this can have disastrous and wide ranging effects on other parties engaged on the same project who have no connection with the dispute or the disputing parties. The opportunities for industrial blackmail are obvious. A general contractor such as Nicolini is in a no-win situation. If he does not post security for the subcontractor's claims, the project will come to a halt and he will suffer substantial losses as a result of delay or a suit for breach of contract. If he does post security, his limited liability to the subcontractors may be increased many times over, usually without any prospect of his recovering these moneys from the delinquent subcontractor.
22In a similar vein is the view of Lloyd D. Cadsby, found in "Posting Security -- What is your Client's Exposure" in Quandaries and Pitfalls in Construction Liens and Construction Law, The Law Society of Upper Canada, November 7, 1996, at p. 8-21:
. . . It is the writer's opinion that the approach taken in Francon vs. Nicolini created a risk that was never intended by the provisions of Section 44 of the Construction Lien Act. This section was in the writer's view enacted in order to free lands from registered claims for lien, and substitute security, only to the extent of the owner's liability as ultimately defined in section 23 of the Construction Lien Act.
The jeopardy created by Francon, until resolved, will necessarily create uncertainty with respect to the ultimate exposure of the lien security. It appears unreasonable that the full extent of a lien bond will be available to satisfy claims for lien that exceed the statutory holdback of the owner to the lien claimant. Why should the liability of the person posting security be increased simply by the posting of security to vacate the claim for lien?
I agree with both commentators.
B. Was Jenkins J. right in finding the lien claimants were not entitled to an award of interest on the money required to be held back by Tasis?
23Section 14(2) of the Construction Lien Act denies a lien for any interest in an amount owed for services or materials supplied. James Dick submits, nevertheless, that s. 14(2) does not address interest that would have accrued if Tasis had paid its holdback liability into court in the form of cash. I find no merit in this submission. The Act permits Tasis to post a bond; it did so. It cannot be said Tasis improperly withheld money from the lien claimants by doing so.
C. Was Jenkins J. right in finding Tasis had no obligation to honour a direction from Bri Con to pay $26,454.04 to Munro out of Bri Con's draw?
24Section 28 of the Act permits a contractor to make a payment directly to a subcontractor; however, there is no obligation to do so. The direction given to Tasis by Munro did not provide for the removal for the Munro notice of lien. Tasis was at liberty to post security and obtain an order vacating the lien.
D. Did Jenkins J. properly exercise his discretion in awarding $1,500 costs to Munro?
25The $1,500 costs awarded to Munro were for quantifying its claim at trial. Jenkins J. found the majority of the time for trial was spent on the holdback argument. He found Tasis to have been successful. I find no error in principle in the exercise of his discretion in the cost award to Munro.
26The respondent Tasis shall have its costs on a party and party basis to be assessed.
Order accordingly.
APPENDIX A
Construction Lien Act, R.S.O. 1990, c. C.30
- Subject to Part IV, a trustee may, without being in breach of trust, retain from trust funds an amount that, as between the trustee and the person the trustee is liable to pay under a contract or subcontract related to the improvement, is equal to the balance in the trustee's favour of all outstanding debts, claims or damages, whether or not related to the improvement.
14(1) A person who supplies services or materials to an improvement for an owner, contractor or subcontractor, has a lien upon the interest of the owner in the premises improved for the price of those services or materials.
(2) No person is entitled to a lien for any interest on the amount owed to the person in respect of the services or materials that have been supplied by the person, but nothing in this subsection affects any right that the person may otherwise have to recover that interest.
17(1) The lien of a person is limited to the amount owing to the person in relation to the improvement and, subject to Part IV (holdbacks), it is further limited to the least amount owed in relation to the improvement by a payer to the contractor or to any subcontractor whose contract or subcontract was in whole or in part performed by the supply of services or materials giving rise to the lien.
(2) Subject to Part IV, the total value of the liens of all members of a class, as defined in section 79, is limited to the least amount owed in relation to the improvement by a payer to the contractor or to any subcontractor whose contract or subcontract was in whole or in part performed by the supply of services or materials made by the members of the class.
(3) Subject to Part IV, in determining the amount of a lien under subsection (1) or (2), there may be taken into account the amount that is, as between a payer and the person the payer is liable to pay, equal to the balance in the payer's favour of all outstanding debts, claims or damages, whether or not related to the improvement.
22(1) Each payer upon a contract or subcontract under which a lien may arise shall retain a holdback equal to 10 per cent of the price of the services or materials as they are actually supplied under the contract or subcontract until all liens that may be claimed against the holdback have expired as provided in Part V, or have been satisfied, discharged or provided for under section 44 (payment into court).
(2) Where the contract has been certified or declared to be substantially performed but services or materials remain to be supplied to complete the contract, the payer upon the contract, or a subcontract, under which a lien may arise shall retain, from the date certified or declared to be the date of substantial performance of the contract, a separate holdback equal to 10 per cent of the price of the remaining services or materials as they are actually supplied under the contract or subcontract, until all liens that may be claimed against the holdback have expired as provided in Part V, or have been satisfied, discharged or provided for under section 44.
(3) The obligation to retain the holdbacks under subsections (1) and (2) applies irrespective of whether the contract or subcontract provides for partial payments or payment on completion.
23(1) Subject to subsections (2), (3) and (4), an owner is personally liable for holdbacks that the owner is required to retain under this Part to those lien claimants who have valid liens against the owner's interest in the premises.
(2) Where the defaulting payer is the contractor, the owner's personal liability to a lien claimant or to a class of lien claimants as defined by section 79 does not exceed the holdbacks the owner is required to retain.
(3) Where the defaulting payer is a subcontractor, the owner's personal liability to a lien claimant or to a class of lien claimants as defined by section 79 does not exceed the lesser of,
(a) the holdbacks the owner is required to retain; and
(b) the holdbacks required to be retained by the contractor or a subcontractor from the lien claimant's defaulting payer.
(4) The personal liability, of an owner under this section may only be determined by an action under this Act.
(5) This section does not affect the rights acquired by any person from a judgment or order of any court before the 28th day of June, 1990.
24(1) A payer may, without jeopardy, make payments on a contract or subcontract up to 90 per cent of the price of the services or materials that have been supplied under that contract or subcontract unless, prior to making payment, the payer has received written notice of a lien.
(2) Where a payer has received written notice of a lien and has retained, in addition to the holdbacks required by this Part, an amount sufficient to satisfy the lien, the payer may, without jeopardy, make payment on a contract or subcontract up to 90 per cent of the price of the services and materials that have been supplied under that contract or subcontract, less the amount retained.
- Where an owner, contractor or subcontractor makes a payment without obligation to do so to any person having a lien for or on account of any amount owing to that person for services or materials supplied to the improvement and gives written notice of the payment or the intention to pay to the proper payer of that person, the payment shall be deemed to be a payment by the owner, contractor or subcontractor to the proper payer of that person, but no such payment reduces the amount of the holdback required to be retained under this Part or reduces the amount that must be retained in response to a written notice of lien given by a person other than the person to whom payment is made.
44(1) Upon the motion of any person, without notice to any other person, the court shall make an order vacating,
(a) where the lien attaches to the premises, the registration of a claim for lien and any certificate of action in respect of that lien; or
(b) where the lien does not attach to the premises, the claim for lien,
where the person bringing the motion pays into court, or posts security in an amount equal to, the total of,
(c) the full amount claimed as owing in the claim for lien; and
(d) the lesser of $50,000 or 25 per cent of the amount described in clause (c), as security for costs.
(2) Upon the motion of any person, the court may make an order vacating the registration of a claim for lien, and any certificate of action in respect of that lien, upon the payment into court or the posting of security of an amount that the court determines to be reasonable in the circumstances to satisfy the lien.
(3) Where the lien does not attach to the premises, the court may make an order, upon the motion of any person, vacating a claim for lien given to the owner, upon the payment into court or the posting of security of an amount that the court determines to be reasonable in the circumstances to satisfy the lien.
(4) Where a motion is made to vacate the registration of a general lien against one or more of the premises subject to that lien, the court may apportion the general lien between the premises in respect of which the motion is made and all other premises that are subject to the lien.
(5) Where an amount has been paid into court or security has been posted with the court under his section, the court, upon notice to such persons as it may require, may order where it is appropriate to do so,
(a) the reduction of the amount paid into court, and the payment of any part of the amount paid into court to the person entitled; or
(b) the reduction of the amount of security posted with the court, and the delivery up of the security posted with the court for cancellation or substitution, as the case may be.
(6) Where an order is made under clause (1)(a) or subsection (2), the lien ceases to attach to the premises and ceases to attach to the holdbacks and other amounts subject to a charge under section 21, and becomes instead a charge upon the amount paid into court or security posted, and the owner or payer shall, in respect of the operation of sections 21, 23 and 24, be in the same position as if the lien had not been preserved or written notice of the lien had not be given.
(7) Where an order is made under clause (1)(b) or subsection (3), the lien ceases to attach to the holdbacks and other amounts subject to a charge under section 21 and becomes instead a charge upon the amount paid into court or security posted and the owner or payer shall, in respect of the operation of sections 21, 23 and 24, be in the same position as if the lien had not been preserved or written notice of the lien had not been given.
(8) Where more than one motion is made under subsection (1), (2) or (3) for the payment into court or posting of security to obtain an order vacating the registration of one or more preserved or perfected liens arising from the same improvement, the court may consolidate the motions and require that the amount paid into court or security posted be adequate to satisfy all the liens that are the subject of each of the motions, or make any other order that it considers appropriate.
(9) Where an order is made under subsection (1), (2) or (3), the following rules apply:
The lien claimant whose lien was the subject of the order may proceed with an action to enforce the claim against the amount paid into court or security posted in accordance with the procedures set out in Part VIII, but no certificate of action shall be registered against the premises.
The amount paid into court or security posted is subject to the claims of all persons having a lien to the same extent as if the amount paid into court or security posted was realized by the sale of the premises in an action to enforce the lien and shall be distributed among all lien claimants in accordance with the priorities provided for in section 80.
Where any amount is realized in a lien action by the sale of the premises or otherwise, it shall be pooled into a common fund with the amount paid into court or security posted under this section, and shall be distributed among all lien claimants in accordance with the priorities provided for in section 80.
80(1) Except where it is otherwise provided by this Act,
(a) no person having a lien is entitled to any priority over another member of the same class;
(b) all amounts available to satisfy the liens in respect of an improvement shall be distributed rateably among the members of each class according to their respective rights; and
(c) the lien of every member of a class has priority over the lien of the payer of that class.
Mechanics' Lien Act, R.S.O. 1980, c. 261
29(2) Upon application, the judge or, in the Judicial District of York, the master, may, at any time,
(a) allow security for or payment into court of the amount of the claim of the lien claimant and the amount of the claims of any other subsisting lien claimants together with such costs as he may fix, and thereupon order that the registration of the claim for lien or liens and the registration of the certificate of action, if any, be vacated;
(b) upon any other proper ground, order that the registration of the claim for lien or liens and the registration of the certificate of action, if any, be vacated; or
(c) upon proper grounds, dismiss the action.
(4) Any money so paid into court, or any bond or other security for securing the like amount and satisfactory to the judge or officer, takes the place of the property discharged and is subject to the claims of every person who has at the time of the application a subsisting claim for lien or given notice of the claim under subsection 12(7) or section 15 to the same extent as if the money, bond or other security was realized by a sale of the property in an action to enforce the lien, but such amount as the judge or officer finds to be owing to the person whose lien has been so vacated is a first charge upon the money, bond or other security.
