Legal Blog

Abandonment

6705058 Manitoba Ltd. v. Penguin Heating and Cooling Technologies Inc. 2016 Man QB

Under section 31 of the Construction Lien Act, a general’s lien period runs from the earlier of a number of dates. One of them is the date on which the contract is abandoned. Manitoba has the same concept for a subcontractor. The validity of the mechanical sub’s claim for lien depended upon the date that the sub was held to have abandoned the contract. The court summarised the abandonment principles as follows:

a) A mere cessation of work is not sufficient. It needs a coexisting intention to discontinue performing the work.

b) The lien claimant has the onus to prove no abandonment.

c) Evidence of subjective abandonment may be sufficient (i.e. a contractor walking off the job and refusing to continue to perform work).

d) Objective evidence of abandonment should be examined to determine whether the contractor was “ready, willing and able” to continue performing the work.

e) The court should examine the evidence to determine when a reasonable contractor would be entitled to conclude that a cessation of work was not merely temporary, but represented the termination and abandonment of the contract.

Written by Jonathan Speigel Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.