Key Facts:

• The case revolves around a lien claim from Hannan Custom Building Ltd. (“Hannan”) for unpaid services and materials in a townhouse renovation project.
• The defendants, homeowners Irwin and Lynch, engaged DC Builders for the renovations and paid $417,832.51 during the project.
• Hannan sought $114,027.27 for unpaid invoices but later reduced this claim.
• The homeowners denied any direct contract with Hannan and acknowledged liability only for the statutory 10% holdback under the Construction Act.

Issues Addressed:

1. Contractual Relationships:

   • The court determined there was no direct contract between Hannan and the homeowners. Instead, the homeowners had a contract with DC Builders, who subcontracted Hannan.

2. Lien Validity:

   • Hannan proved a lien of $100,874.05, excluding certain charges deemed non-lienable (e.g., vacation pay for independent contractors).

3. Homeowners’ Liability:

   • Liability was limited to the 10% statutory holdback amount of $46,854.89, including HST.

4. Set-Off Claims:

   • The court found valid set-off claims for incomplete or deficient work, including drywall, in-floor heating, and a rain shower head, which offset any remaining contract balance above the holdback amount.

Rulings:

• Judgment: Hannan was awarded $46,854.89, the amount of the holdback under the Construction Act.
• Costs and Interest: To be determined, with submissions scheduled.

Key Legal Principles:

• Contract Formation: Objectively assessed; requires offer, acceptance, and agreement on essential terms.
• Construction Act Rights: Subcontractors can recover only the statutory holdback unless they have a direct contract with the owner.
• Lien Exclusions: Costs like voluntary vacation pay for independent contractors are not lienable.