Personal Liability For Abandoned Liens – Caution For Claimants

A December, 2016 decision from Justice MacLeod called Petrelli Construction v Phillips, [2016] O.J. No. 6798 reminds us that a decision to initiate but not prosecute a lien action can result in personal liability on the directing mind of the lien claimant.

In this case, Petrelli Construction filed a claim for lien in 2013.  Because the lien was not bonded off, Petrelli Construction perfected its lien by commencing an action against the owners of the property.  The initial contract for home renovation services was in the amount of approximately $466,000.00, of which $422,000.00 was paid.  After factoring in alleged extras, the plaintiff's lien was for approximately $185,000.00.

Because of a significant amount of set-offs that the owners were able to prove, the defendants were successful on a motion in 2014 to vacate the lien without the necessity of posting security.  For more than two years after that motion, the plaintiff took no steps to prosecute the action;