Stephen Swartz

Following the dismissal of the Mortgagees' motion to discharge construction liens based on alleged mortgage priority, the successful Lien Claimants sought substantial indemnity costs.

The court awarded substantial indemnity costs of $15,435.02, finding that the Mortgagees acted unreasonably by proceeding with a deficient evidentiary record, changing the scope of the motion, and insisting on an urgent hearing despite the flaws in their case.

The moving party mortgagees brought a motion under section 47 of the Construction Act to discharge construction liens registered by the responding party lien claimants, arguing their mortgage had priority.

The court found the mortgage was not a collateral or building mortgage.

However, because earlier development work on the same improvement predated the mortgage registration, the mortgage was a subsequent mortgage under section 78(5) and (6).

The mortgagees failed to meet their onus of proving they did not receive written notice of a lien prior to the mortgage advance, as their only evidence was a bald hearsay statement from an assignee.

The motion to discharge the liens was dismissed.