Executive Summary: Key Legal and Evidentiary Issues

• Whether Northern Bulk’s (NBL’s) perfected lien expired under s. 37 of the Construction Act because its lien action was not set down for trial or ordered to trial within two years.
• Interpretation of “improvement,” “land,” and “premises” under the Construction Act, and whether “improvement” can expand lien rights beyond the specific lands described in the registered claim for lien.
• Determination of whether NBL’s lien, registered on turbine lands, could be enforced in the Corbiere lien action, which related to separate, non-abutting transmission line lands about 100 kilometres away.
• Consideration of how the statutory scheme protects owners and mortgagees by requiring clear identification of the specific lands encumbered by a lien, and the consequences of failing to lien all relevant parcels.
• Assessment of prior authorities that treated “lands enjoyed therewith” as extending lien coverage to additional parcels, and the Divisional Court’s express disagreement with those approaches.
• Allocation of responsibility for the procedural failure to set NBL’s action down within the statutory two-year period, resulting in dismissal of the appeal and an order that NBL pay $10,000 in costs to the respondent.

Background and parties involved

The dispute arises from a large-scale wind power infrastructure project known as the Henvey Inlet Wind facility. The project involved the construction of wind turbines and related transmission lines to generate and transmit electricity to the provincial grid. Henvey Inlet Wind LP (“Henvey”) was the project owner. It retained Construction Energie Renouvelable GP/S.E.N.C. (“CER”) as general contractor to construct the wind turbines, and PowerTel Utilities Contractors Limited (“PowerTel”) as general contractor to construct the transmission lines. The work on both components formed part of a single, integrated power generating facility. TimberRidge Forestry (1378796 Ontario Limited) was engaged by CER to provide road maintenance services related to turbine construction, and TimberRidge in turn subcontracted a portion of that work to 1499545 Ontario Inc. o/a Northern Bulk Logistics (“NBL”). NBL was therefore a sub-subcontractor on the turbine side of the project. When TimberRidge failed to pay NBL for its services, NBL registered a construction lien (the “NBL lien”) in the amount of $507,730.66 on the lands where the wind turbines were constructed. Those lands were owned by the Ministry of Lands and Forests. NBL’s lien was preserved and perfected on time. Separately, PowerTel engaged E. Corbiere & Sons Contracting (“Corbiere”), a partnership between Aaron and Curtis Corbiere, to perform drilling and blasting services for the transmission lines. Corbiere registered and perfected its own construction lien (the “Corbiere lien”) over 66 parcels of land on which the transmission line was constructed. Those parcels were owned by Henvey Inlet Wind LP and Henvey Inlet Wind GP Inc., and Corbiere set its action down for trial on March 19, 2021, within the two-year period required by the Construction Act.

The competing liens and different properties

A critical factual feature was that the NBL lien and the Corbiere lien were registered against different properties. NBL liened the turbine lands owned by the Ministry of Lands and Forests. Corbiere liened 66 separate parcels associated with the transmission line corridor, owned by Henvey-related entities. The two sets of lands were approximately 100 kilometres apart and did not abut each other. NBL’s action to enforce its lien was not set down for trial within two years after the commencement of the action, nor was any order for trial obtained within that period. By contrast, Corbiere’s transmission line lien action was properly advanced and set down in time.

Procedural posture and issue on appeal

NBL appealed a motion decision of Gordon J., dated January 6, 2025, which held that NBL’s lien had expired because NBL failed to comply with section 37 of the Construction Act. Section 37 provides that a perfected lien expires immediately after the second anniversary of the commencement of the action that perfected it unless, on or before that anniversary, either an order for trial is made in an action in which the lien may be enforced or the action is set down for trial. NBL argued on the motion—and again on appeal—that, despite not setting its own action down within the two-year period, its lien had not expired because it could instead be enforced in the Corbiere lien action. It relied on the notion that both liens related to one overall project: an integrated wind facility including turbines and transmission lines. If both liens concerned the same “improvement” within the meaning of the Act, NBL contended, then the Corbiere proceeding should count as “an action in which the lien may be enforced” for section 37 purposes, thereby preserving NBL’s lien.

Statutory definitions and the meaning of “improvement” and “premises”

The appeal turned on the proper interpretation of several key defined terms in the Construction Act: “improvement,” “land,” and “premises.” The Act defines “improvement” in respect of any land as, among other things, any alteration, addition, capital repair, construction, erection, installation, or demolition on the land. “Premises” is defined to include the improvement, “all materials supplied to the improvement,” and “the land occupied by the improvement, or enjoyed therewith, or the land upon or in respect of which the improvement was done or made.” The Court emphasized the modern approach to statutory interpretation, which requires reading these terms in their entire context and in harmony with the scheme and purpose of the Act. The Act is designed to provide lien claimants with security for payment for labour and materials supplied to improvements on land, but it does so through a “strict regimen” that must be followed to maintain and enforce those liens. The Court stressed that the same words—“improvement,” “land,” “premises”—must carry a consistent meaning across the statute, whether in relation to preservation and perfection, substantial performance, holdbacks, or trust obligations.

Linking improvements to specific lands

The Divisional Court accepted that multiple improvements can exist on the same parcel of land and that a single improvement can span multiple parcels. It also accepted that different contractors and subcontractors may perform work under different contracts on the same improvement. However, the Court drew a firm line at the point of enforcement: it held that the lien claimant’s ability to enforce a lien is limited to the specific lands described in its registered claim for lien. The description of the land in the claim for lien determines the land on which the improvement was made and against which the claimant seeks to enforce its security. A claimant may, for strategic, financial, or inadvertent reasons, choose to lien only some parcels associated with an improvement. But once the claim for lien is registered, the security interest is confined to the lands actually described. The Court underscored that the ultimate remedy in a lien action is the potential sale of the encumbered lands to satisfy the lien judgment. If a claimant did not register against certain lands, it cannot later seek to enforce its lien rights against those un-liened parcels by piggybacking on another party’s lien.

Rejection of an expansive “lands enjoyed therewith” theory

NBL argued that the statutory phrase “land … enjoyed therewith” in the definition of “premises” should be read expansively to bring additional lands, not described in its claim, within the lien’s reach, especially where the larger project is functionally integrated. The Court rejected this submission. It interpreted “therewith” as meaning “with or in the thing mentioned,” and concluded that in context, it referred to the land that the lien claimant itself has identified in its claim for lien as being associated with the improvement. In other words, the lands “enjoyed therewith” are those that the claimant has actually certified in its registration, not any broader footprint of a commercial project. The Court also considered and expressly disagreed with earlier decisions—such as Phoenix Drywall and Beaver Material Handling—that had effectively allowed a lien registered over one parcel to attach to additional, related parcels based on integrated use or ownership, even though those extra parcels were not described in the claim for lien. The Divisional Court held that letting “improvement” drive or expand the definition of “premises” in that way undermines the certainty required by the Act and is inconsistent with its scheme.

Protection of owners, lenders, and other stakeholders

A central policy concern for the Court was the need for clear, reliable notice to owners, mortgagees, and other parties with interests in the land. Those parties rely on land registration systems to determine whether their lands are encumbered by construction liens and to assess priorities, risks, and funding decisions. If a lien could later be enforced against parcels that were never identified in the claim for lien, stakeholders in those parcels would have no way of knowing about the potential claims or adjusting their conduct, including bonding off liens, controlling advances, or managing holdback and trust funds. The Court concluded that the “extraordinary relief” the Act provides—security over land for unpaid labour and materials—must be balanced by the requirement that the land subject to the lien be “clear and certain.” It therefore held that NBL could not enforce its lien in the Corbiere proceedings because NBL had not liened any of the lands encumbered by the Corbiere lien.

Standard of review and approach to mixed questions

On the appeal, the Court applied the standard of review framework from Housen v. Nikolaisen. Questions of law—such as the interpretation of the statutory definitions and section 37—were reviewed for correctness. Questions of fact were reviewable only for palpable and overriding error, and mixed questions of fact and law attracted deference except where a distinct legal error could be extricated. The Court accepted that determining whether services and materials have been provided to the “same improvement” can be a fact-finding exercise. However, it found no legal error in the motion judge’s approach and no palpable and overriding error in his application of the statutory scheme to the evidence about the different lands and separate liens.

Outcome of the appeal and financial consequences

Having concluded that “improvement” does not expand the lands against which a lien can be enforced, and that NBL’s lien could not be enforced in the Corbiere action because it encumbered entirely different parcels, the Court held that NBL could not rely on the Corbiere proceeding to satisfy section 37. Since NBL had not set its own lien action down for trial, nor obtained an order for trial, within two years of commencing the action that perfected its lien, NBL’s lien expired by operation of section 37(1). The Divisional Court therefore dismissed the appeal and upheld the motion judge’s decision. In the result, the successful party on the appeal was the respondent (Pattern Development and the other named respondents), and the Court ordered NBL to pay costs fixed in the agreed, inclusive amount of $10,000 to the respondent, with no other damages or monetary awards specified in the decision.