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LIENS - Payment of monies into court - Effect of posting security

Wednesday, June 06, 2018 @ 8:25 AM  

Lexis Advance® Quicklaw®
Appeal by the plaintiff from an order reducing the amount of security paid into court to secure the appellant’s builders lien claim from $1,136,593 to $550,000. The underlying dispute concerned the value of work done for the construction of a mixed-use residential tower by the appellant prior to its termination by the respondent developer. The appellant’s claim included components for base contract work, extra work and changes, and interference by the developer. The developer applied to have the lien discharged or reduced. The developer took the position that the lien amount was grossly excessive. It alleged that the claim amounted to approximately the total amount to be paid to the appellant pursuant to the contract that was terminated well before completion of all of the work. The developer argued that the lien claim included claims such as change orders and expenses incurred due to interference with the appellant’s ability to perform the work which could not be claimed because of non compliance with the notice provisions of the contract. The judge found that a significant portion of the difference between the two work in progress reports related to items which, although properly claimable at the trial of the underlying action, should not be secured by this powerful pre-judgment weapon.

HELD: Appeal allowed. The only inference consistent with the record and the reasons was that the judge, in ordering reduced security, discounted in its entirety the interference or delay claim made by the appellant. There was uncontradicted evidence that the appellant made early complaints of interference or delay affecting the completion of the project. The judge ventured into a difficult analysis of the claim on the merits, including contractual interpretation without considering the context, rather than applying the cautious approach directed by the authorities. He thereby erred in applying the test in reducing the security.

Centura Building Systems (2013) Ltd. v. 601 Main Partnership, [2018] B.C.J. No. 796, British Columbia Court of Appeal, H. Groberman and J.E.D. Savage and B. Fisher JJ.A., May 3, 2018. Digest No. TLD-June42018006