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November 23, 2009

Lien Times for Lenders: Plan with Care

By Amy Mortimore

From time to time, we receive questions about court decisions from other provinces. One Ontario case which has garnered some interest in British Columbia is Parkland Plumbing & Heating Ltd. v. Minaki Lodge Resort 2002 Inc. 2009 ONCA 256, a decision of the Ontario Court of Appeal. The question in this case was whether or not a company that had loaned monies and had secured them by way of a mortgage but was related to the developer was an "owner" within the meaning of the Ontario Construction Lien Act (the equivalent of our Builders Lien Act). The reason that this was an important question for the parties was because if the lender was an "owner", it would rank lower in priority than the lien claimants and there were insufficient funds to pay the mortgage and the lien claims.

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