Executive Summary: Key Legal and Evidentiary Issues

• Subcontractor filed a lien after a payment dispute over electrical work performed on a project.

• Defendant argued the work exceeded the scope of contract and sought to discharge the lien.

• A prior adjudication ordered payment to Feldt, which Gorbern refused to honour.

• Defendant claimed the lien action should be stayed pending compliance with the adjudicator’s order.

• Court emphasized that adjudication does not eliminate lien rights or restrict civil action.

• Motion to discharge or stay was dismissed as triable issues remained unresolved.

Background and nature of the dispute

Feldt Electric Ltd., an electrical subcontractor, performed work for Gorbern Mechanical Contractors Limited on a construction project involving Hamilton Health Sciences. After a dispute arose over payment, Feldt registered a lien for $364,848.78, alleging it had not been paid for work performed. The scope of the work included significant electrical installations, some of which Gorbern claimed were outside the scope of the original contract.

Feldt initiated adjudication under Ontario’s Construction Act. The adjudicator issued a binding determination that Gorbern owed Feldt $254,977.31. However, Gorbern did not pay and instead brought a motion in Superior Court seeking to have the lien discharged or the action stayed, arguing that Feldt had not complied with the adjudicator’s order and had filed a lien for an excessive amount that included non-lienable work.

Defendant’s motion and legal position

Gorbern’s primary argument was that Feldt had ignored the adjudicator’s award, undermining the spirit of prompt payment and good faith required under the Construction Act. They argued that this non-compliance warranted a stay or discharge of the lien under sections 44(5) and 47. Alternatively, they contended the lien should be invalidated for overstating the amount or including improper charges.

Gorbern further asserted that much of the work claimed was outside the subcontract scope and thus non-lienable. They also challenged Feldt’s lien registration as a strategic pressure tactic following a legitimate adjudication outcome that Feldt chose to ignore by not enforcing it via court.

Court’s analysis and decision

The court reviewed the legislative framework under the Construction Act, confirming that adjudication and lien actions are distinct remedies. Justice Morgan held that while adjudication provides an expedited mechanism to resolve disputes, it does not preclude a lien claimant from pursuing its statutory rights in parallel.

The court found that the issues raised by Gorbern—such as the scope of work, overbilling, and contract interpretation—could not be resolved on the motion record. These were factual and legal disputes that required full adjudication at trial. The court emphasized that it is not empowered under section 47 to determine factual disputes or credibility on a motion with contested evidence.

Justice Morgan rejected the argument that the lien should be discharged for non-compliance with the adjudication ruling. He confirmed that the Construction Act does not impose such a consequence, and a lien action remains available even after adjudication.

Outcome and winner

The court dismissed Gorbern’s motion to discharge the lien or stay the action. Feldt Electric Ltd. was permitted to continue its lien proceeding. The ruling reinforced that adjudication does not override lien rights and that motions to strike must be supported by clear and undisputed evidence, which was not present here. Costs of the motion were not addressed in the ruling and may be determined later. Feldt Electric Ltd. was the successful party.