Legal Blog

Exaggerated Lien

GTA Restoration Group Inc. v. Baillie 2020 Ont SCJ (MC)

Homeowner was able to show that the claim for lien was exaggerated by approximately $48,000 on a $163,000 lien. It attempted to have the lien discharged based on the amended provisions relating to exaggerated liens and section 47 of the Construction Act, which allows the court to discharge a lien on the basis that the claim for lien is frivolous, vexatious, or an abuse of process. The Master noted that, in a motion under section 47, each party had to submit its best evidence. He also noted that on a cross-examination on a claim for lien, an examining party is entitled to full disclosure from the lien claimant regarding all evidence relied upon to substantiate the quantum and validity of the lien. The only difference between a cross-examination and an examination for discovery is one of scope. Some questions may be relevant on a discovery that are not relevant on the cross-examination. Although the Master held that the lien was wilfully exaggerated, the evidence did not support a determination that the lien claimant was acting in the absence of good faith when preserving the lien. The Master refused to discharge the lien, but did reduce the quantum of it.

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