Thomas G. Heintzman, O.C., Q.C., FCIArb

Does A “Pay When Paid” Clause Prevail Over The Construction Lien Act?

A pay when paid clause is one of the more contentious contractual provisions in the construction industry. That clause typically says that the subcontractor is not entitled to be paid until the contractor receives payment from the owner. Because of its perceived unfairness, the clause has been outlawed, or its effect has been substantially limited, […]

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What Is The Priority Between Building Mortgages And Construction Liens In Respect Of Holdback Amounts Greater Than The Statutory Holdback?

The priorities between lienholders and mortgagees under the Construction Lien Act are not easy to understand.  They are even more difficult to understand and apply when the owner holds back more than the statutory minimum, and when the liens are discharged by security provided by the owner or mortgagee. Under sub-section 44(1) of the Act, […]

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Decision Holding That Demolition Is Not An Improvement Is Reversed

In my article dated December 11, 2011, I reported on a decision of the British Columbia Supreme Court holding that demolition is not an “improvement” for the purposes of the B.C. Builders Lien Act (the Act).  That decision has since been reversed by the B.C. Court of Appeal.  It was not reversed on the merits, […]

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What Mortgage Payments Are “Advances” That Have Priority Over Lien Claims?

A recurring issue for construction and builders liens is whether the liens have priority over mortgage advances.  One question which does not often arise is:  what sort of payments by a mortgagee do constitute “advances” under a mortgage?  In other words, what sort of payments by a mortgagee can even qualify for priority over lien […]

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The Equitable Doctrine of Marshalling Applies To Construction Liens

Construction Law  –  Construction liens  –  Marshalling The Construction Lien Act seems to be a world unto itself, unaffected by the general principles of law.  But the recent decision of the Alberta Queen’s Bench in Gerrow v. Dorais reminds us that a construction lien is one form of secured interest.  The lien is therefore subject […]

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What Is The Role Of Owners and Contractors In The Application Of Trust Funds?

Construction Law – Construction Liens – Trust Fund Provisions The Ontario Court of Appeal has recently considered some interesting issues relating to the trust fund provisions of the Construction Lien Act of Ontario.  In Colautti Construction Ltd. v. Ashcroft Development Inc, the Court provided some useful guidance about the roles of owners and contractors in […]

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