Executive Summary: Key Legal and Evidentiary Issues

• Dispute arose over whether a construction lien could include unpaid amounts from a prior contract.

• The second contract included language folding in prior debt into the price for new lienable work.

• Defendant argued that this retroactive inclusion violated the Construction Act’s lien framework.

• Court emphasized that parties are free to set the contract price for lienable services.

• Conflicting evidence about mutual agreement to the price clause precluded summary resolution.

• Motion to discharge or reduce lien was denied, and issues were left for trial.

Background of the contracts and lien registration

Trillium Masonry Group Inc. provided masonry services to Marydel Homes (Beaverton) Inc. under two separate contracts related to a housing development in Beaverton. The first contract, dated 2016, covered 43 lots and included no fixed lump sum price—only a per-brick rate. This agreement excluded Lot 121 and eventually resulted in an alleged outstanding balance of $193,191.70. No liens were registered under this contract, and the lien period expired.

In May 2022, a second contract was executed for Lot 121. It included a clause explicitly stating that the unpaid balance from the first contract would be “forwarded to Lot 121” and treated as part of the new contract’s price. After completing the masonry work, Trillium invoiced $35,440.42 and registered a lien for $228,632.12, representing both the old balance and new work.

Legal arguments on the motion

Marydel brought a motion under sections 44(5) and 47 of the Construction Act, seeking either to discharge the lien or to reduce the amount of security posted with the court. They argued that only work directly performed on Lot 121 was lienable and that the attempt to roll over old, non-lienable debt violated the Act. Specifically, they claimed the lien improperly captured work from the first contract, which was not tied to Lot 121 and for which the lien rights had expired.

Trillium defended the lien by asserting that the price of lienable services under the second contract included the prior balance, as explicitly stated. It emphasized that the Construction Act allows parties to freely set contract prices, and that the inclusion of a prior debt in a new contract for new services was a legitimate contractual choice.

The court’s interpretation of the Construction Act

Justice Mathai analyzed the key provisions of the Construction Act, including the definitions of “price” and “improvement.” He concluded that the Act does not prohibit a contract from setting a price for lienable services that includes prior unpaid amounts, so long as that price is properly documented in the agreement.

The court found that section 14(1) ties a lien to the “price” of the services provided for an improvement, and that section 1 of the Act allows for the contract price agreed by the parties to be determinative. Thus, as long as the contract stipulated a price for lienable work, that price could be secured by a lien, regardless of how it was calculated.

Rejection of the motion and reasoning

Because there was no dispute that masonry work was performed on Lot 121 and the contract included a specific price clause, the court found a valid basis for the lien. Marydel’s claim that the clause was added without proper agreement raised credibility issues that could not be resolved at this stage.

Importantly, the court emphasized that it lacked the “enhanced powers” available on a summary judgment motion and could not weigh evidence or assess credibility on a contested factual record under section 47.

Policy concerns and practical implications

Marydel raised concerns that accepting Trillium’s interpretation could allow contractors to revive expired lien claims through new contracts. The court acknowledged the concern but noted such arrangements would be rare and speculative, as they depend on owners voluntarily agreeing to potentially disadvantageous terms. The court found that statutory language and contract freedom outweighed such hypothetical risks.

Conclusion and next steps

The court dismissed Marydel’s motion in its entirety, upholding the lien in full. Costs of $16,000 were awarded to Trillium. The matter will now proceed to trial, where the legitimacy of the contract terms and the enforceability of the included debt will be fully litigated.