Ancillary Work, Intention Of The Parties And Hypothecs: An Additional Headache For Contractors?

On May 5, 2014 the Québec Court of Appeal upheld a judgment of the Superior Court dismissing a motion for forced surrender and ordering the radiation of several registrations in the Land Register¹.  

The appeal was essentially aimed at determining whether or not the spreading and grading of fill on a vacant industrial lot could be considered construction work giving rise to a legal hypothec. 

The owner of the property, in contracting out this work at a cost of more than $900,000, sought to render the lot in question more attractive for building upon and thus more appealing to potential buyers. The work was done between March 28, 2008 and January 19, 2009. On November 24, 2008, the owner's plan to sell the property to a third party for the construction thereon of a processing centre was put on hold following the collapse of the market for such projects.