Executive Summary: Key Legal and Evidentiary Issues

• The defendant applied to release or reduce a $1,595,842.50 bond posted in lieu of a builders’ lien.

• A significant portion of the plaintiff’s $1,408,607.84 claim includes a $801,567.27 delay claim supported by expert evidence.

• The court declined to assess the lien’s validity at this stage, emphasizing the pending summary judgment applications.

• Section 46 of the Prompt Payment and Construction Lien Act was engaged by analogy to assess the timing of enforcement.

• Four years had passed since the certificate of lis pendens was registered, with the matter not yet near trial.

• The court released the security due to prolonged delay and associated costs, allowing the claim to proceed as unsecured.

Background of the dispute

1951789 Alberta Ltd., operating as Urban Interiors Group, is the plaintiff in a builders’ lien action against Britannia Block General Partnership Inc. The dispute stems from a lien registered on February 4, 2020, concerning construction work. A certificate of lis pendens was filed on June 30, 2020. By a consent order dated July 27, 2021, Applications Judge Mason permitted the lien and lis pendens to be removed in exchange for the posting of $1,595,842.50 in security, which took the form of a bond.

Security and the plaintiff's claim

Initially, the plaintiff’s brief cited a claim of $1,198,422.96, but counsel later clarified by correspondence dated May 8, 2025, that the actual lien claim was $1,408,607.84. The most contentious portion of this claim is a delay claim totaling $801,567.27, which is supported by expert evidence. The court noted that the lienability of such delay claims is fact-specific and dependent on their connection to the improvement on land.

Nature of the legal issue

The defendant applied to reduce or vacate the posted security on two grounds:

1. The facts now known may not justify the full security amount for lienable claims.

2. By analogy to section 46 of the Prompt Payment and Construction Lien Act, delays in litigation justify vacating the security due to unfairness and ongoing costs.

The plaintiff’s delay claim was acknowledged by the court as “not specious” and “arguable.” The judge emphasized that this application forum was not suitable for determining the lien’s validity, which should be addressed through pending summary judgment proceedings.

Statutory interpretation and enforcement delay

Although section 46 of the Prompt Payment and Construction Lien Act was not expressly cited in the application, it was considered by analogy. The section provides that if no trial is held within two years of registering the certificate of lis pendens, an interested party may apply to vacate it. The lien remained despite more than four years passing since registration, and the matter was still not close to trial.

Judge Farrington accepted that the provisions of sections 46 and 48 were applicable and highlighted that while the two-year period is discretionary, the plaintiff must explain delays. Here, there was no substantial explanation for the delay in moving the matter forward.

Costs and court discretion

The court noted that maintaining the bond had already cost the defendant approximately $100,000, or around $30,000 per year. Given the duration of the posting, the lack of adjudication progress, and the burdensome cost, the judge found it appropriate to release the security.

Final ruling

The court ordered the release of the $1,595,842.50 security and ruled that the plaintiff’s claims would proceed as unsecured. Even aside from the statutory considerations, the judge found that it was reasonable to do so given the current state of the action, the pending summary judgment applications, and the nature of the claim.

The court left costs open for further determination if the parties could not agree. No amount for monetary award was specified.