Ontario Court Upholds Ruling Reducing Exaggerated Lien

The Ontario Superior Court of Justice (Divisional Court) recently released its decision in HMI Construction Inc. v. Index Energy Mills Road Corp., upholding a motion decision that reduces the security required to vacate liens registered under the Construction Lien Act (CLA). The decision illustrates the importance for contractors to correctly calculate their lien claims, the remedies available to an owner when a contractor fails to do so resulting in an exaggerated lien claim, and the willingness of courts to grant those remedies in appropriate cases.

BACKGROUND

The defendants had brought a motion requesting an order under section 47 of the CLA discharging two construction liens totalling over C$32-million registered by the plaintiff, or in the alternative, an order pursuant to section 44 of the CLA that the liens be vacated by posting security in an amount less than the amount claimed by the plaintiff. The motions judge held that the plaintiff had significantly