British Columbia Court Of Appeal Confirms Exaggerated Builder's Lien Claims May Face Cancellation, Not Reduction

• Published date: 05 April 2024
• Law Firm: Miller Thomson LLP
• Author: Ms Emma Johnston, Cobi Dayan and Annie Redmond

Parties facing grossly exaggerated lien claims now have some additional arsenal to defeat the liens before trial. In Darwin Construction (BC) Ltd. v PC Urban Glenaire Holdings Ltd., the British Columbia Court of Appeal ("BCCA") clarified the circumstances under which a builder's lien can be cancelled where the lien claim is both exaggerated and unsubstantiated.¹ While courts have previously reduced exaggerated lien amounts, this ruling represents the first instance where a court has canceled a lien without conditions due to an excessive and evidentiary unsupported lien amount.²

JUDICIAL HISTORY

The lien claimant in Darwin claimed a lien in the amount of $3 million, which was later found to be over double the maximum lienable amount. The developer applied to have the lien cancelled in its entirety, or to have the amount of the security for the lien reduced to a nominal amount of $1.³ Due to a number of unsuccessful demands for the lien claimant to produce documents, the developer set down its application for hearing and provided the lien claimant with notice of the foregoing.

A few days before the application hearing, the lien claimant requested an adjournment. The parties agreed to an adjournment by way of a consent order, which required the lien claimant to deliver a response to the application. The lien claimant failed to produce a response and on the hearing of the developer's application, counsel for the lien claimant sought an adjournment. The Chambers Judge refused the adjournment application and reduced the amount of the lien bond security to $500,000.⁴

APPEAL PROCEEDINGS

The lien...