Richard J. Mazar

The appellants appealed a trial judgment finding corporate breach of a distribution agreement, personal liability of a director, and awarding damages.

The Court of Appeal allowed the appeal in part, setting aside the finding of personal liability against the director as there was no evidence he acted outside his authority or for his own benefit.

The court also set aside the damages award, finding the trial judge erred in awarding mitigation costs beyond the notice period and relying on unproven financial statements.

The matter of damages and trial costs was remitted for a new trial.

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.