Executive Summary: Key Legal and Evidentiary Issues

• Logan successfully moved to have Accurate’s lien declared expired for failure to preserve under the Construction Act.

• Accurate attempted to “revive” its expired lien by performing minor work and taking photos to fabricate a new lien period.

• The court found this conduct amounted to bad faith “bootstrapping” and fell squarely within the scope of section 86(1).

• Accurate also breached a scheduling order by filing its motion materials late without leave, further impacting costs.

• Substantial indemnity costs were awarded due to the abusive strategy and needless opposition to a justified motion.

• The final costs award was adjusted for proportionality but remained significant at $45,000, payable within 45 days.

Background and lien dispute

Accurate General Contracting Ltd. had registered a construction lien against 485 Logan Developments Inc. related to unpaid construction work. Logan responded with a motion to declare the lien expired on the basis that it was not preserved within the required time under Ontario’s Construction Act. Logan also sought the return of a posted lien security and claimed substantial indemnity costs.

Allegations of bad faith lien preservation

The core allegation was that Accurate knowingly tried to preserve a lien that had already expired. Accurate sent workers to the site on December 7, 2023—after the lien period had lapsed—purportedly to install minor items such as smart switches and transformers. The court found that this was not legitimate construction work intended to advance the project but was instead staged solely to create evidence of a later lien period. Photographs were taken to support the false appearance of ongoing work.

The court described this tactic as “bootstrapping,” a practice where contractors fabricate a new timeline to revive a dead lien. This was deemed precisely the type of conduct that section 86(1) of the Construction Act aims to deter. That provision authorizes courts to impose substantial indemnity costs when a party knowingly preserves a lien that is clearly without foundation.

Procedural misconduct and motion conduct

In addition to the substantive issues, Accurate was criticized for procedural misconduct. It filed its supplementary responding motion record late, in breach of the court’s scheduling order. Although the court allowed the materials to be considered to avoid prejudice on a serious motion, it explicitly stated that this breach would factor into the costs determination.

Despite prior letters from Logan alerting Accurate to the expired lien issue and offering a no-cost resolution, Accurate refused to consent, forcing a contested motion. The court viewed this as a reckless litigation strategy that unnecessarily increased legal costs for all parties.

Costs ruling and outcome

Associate Justice Wiebe ruled in favour of Logan, confirming that it had fully succeeded on the motion. The court awarded substantial indemnity costs, rejecting Accurate’s argument that there was no finding of misconduct during the motion itself. The court found that both the improper lien preservation and the late procedural filings justified elevated costs under section 86(1).

While Logan initially sought $49,375.54, the court reduced the award slightly to $45,000 to reflect concerns about unnecessary cross-examinations and some excessive written argument. Nevertheless, the court found this amount reasonable and proportionate given the lien claim and the posted security at issue.

Accurate was ordered to pay $45,000 in substantial indemnity costs to Logan within 45 days of the decision.