Legal Blog

Improvement

There are times when a subcontractor performs work and it is not self-evident that the work is lienable. The case of Re A.G. Simpson Co., a 2002 decision of the Ontario Superior Court of Justice, deals with one of those times.

Background

The sub – who happened, in this case, to be the general because the contract was directly with the owner – supplied all material and services to demolish and remove existing parts of an assembly line, designed and constructed new equipment, and then installed that equipment on the assembly line. The owner used the assembly line to produce car parts for GM. The owner ran into financial difficulties and the sub registered a claim for lien. The owner moved to vacate the claim for lien on the ground that the work was not lienable.

Question 

This was a motion, not a trial. To be successful, the owner had to demonstrate that there was no genuine issue for trial. This is a very high standard.

The motion turned on whether the work done was part of an improvement. Improvement is defined in the Construction Lien Act as:

(a)  any alteration, addition or repair to, or

(b) any construction, erection or installation on

any land, and includes the demolition or removal of any building, structure or works or part thereof …”

Argument 

The owner argued that the sub had merely provided work and material located inside a building; to be lienable the work had to be integrated into the building. The sub argued that the owner and GM had a long-term relationship, the materials supplied were such that without them the assembly line would not function, and the equipment was attached to the permanent electrical and mechanical systems of the building.

Outcome 

The judge dismissed the motion. He held that there was a genuine issue for trial and that whether the work supplied was an “improvement” depended on a full understanding of the factual matrix of who owns what and how long it was intended and expected that the assembly line might be in place.

Do we know anything more because of this decision? Not much. As usual, the answer depends on the facts.