Sara Bolourchian

Scott Steel Erectors Inc. (SSE) brought a motion for the payout of statutory holdbacks retained by Ausenco Engineering Canada Inc. and for a stay of the proceedings in favour of arbitration.

The parties were involved in a construction project at the Magino Mine.

Ausenco argued that its holdback obligations ended when it posted alternate security to vacate the liens and that it had set-off claims against SSE.

The court found that the holdback was a statutory obligation that was not eliminated by posting a bond, and that set-off claims could not be deducted from the holdback.

The court ordered Ausenco to pay the principal holdback amount of $1,629,242.92 to SSE and $78,826.45 into court for another subcontractor.

The court also granted the stay, finding that the subcontracts contained mandatory arbitration clauses and that SSE had not waived its right to arbitrate by taking defensive steps to preserve its lien rights.

The moving defendants sought a stay of an Ontario action arising from cancelled purchase orders for custom fiber optic components, arguing the dispute belonged in Oregon.

Applying the Van Breda framework, the court held there was a sufficient real and substantial connection to Ontario because the goods were manufactured in Ottawa, the business relationship involved regular attendance in Ontario to monitor production, and payment obligations ran to the Ontario manufacturer.

The court further held the defendants failed to establish forum non conveniens, noting the limited weight of witness-location concerns in the era of virtual testimony, the absence of competing Oregon proceedings, and the lack of demonstrated prejudice from litigating in Ontario.

The stay motion was dismissed and the responding plaintiff received partial indemnity costs.