Lien Sheltering
When an entity higher in the construction pyramid fails or
refuses to pay those below it, this can cause a growing cascade of
lien claimants. This is especially concerning, and costly, for
those subcontractors providing services on a construction project
with smaller lien claims.
Fortunately a lien claimant can shelter their lien under the
another claimant's, and in fact, this is another method of
perfection1. In Sesco Ltd. et al. v. Life
Centre Non-Profit Housing Corp. (Ajax) et al., (1996)
13 O.T.C. 98 (GD), the Ontario Court of Justice, General
Division, overturned the lower court's finding that a
sheltering lien must be for similar or identical materials or
service2. Therefore, a lien can be
‘horizontal', across the pyramid, as long as it is for
the same improvement, but it is restricted to the nature of the
relief sought in the statement of claim under which it is
sheltering.
