Tushar Subharwal

This decision concerns the allocation of costs and prejudgment interest following a construction lien action.

The court awarded partial indemnity costs to the plaintiff, Zagros Homes Development Inc., against Cando 1 Construction Inc., and substantial indemnity costs to the Owners (Ernest Mbenkum and Alliance Lipenja) against both Zagros and Cando.

The court also exercised its discretion to award prejudgment interest at 2.5% per annum, higher than the statutory rate, due to market conditions.

The decision clarifies the approach to costs where parties have not succeeded against all defendants and addresses the application of prejudgment interest rates in the post-pandemic context.

The court considered a claim for lien and breach of contract by Zagros Homes Development Inc. against the owners and construction manager/general contractor of a residential construction project.

The court found that Zagros had a valid subcontract with Cando 1 Construction Inc., that Cando breached the contract by terminating it and hiring the sub-subcontractor directly, and that Zagros was entitled to damages for unpaid work.

However, the court found that Zagros failed to prove the timeliness of its lien claim, and thus the lien was declared expired and vacated.