Peoples Trust Secures Victory on Lien Priority Motion

On November 28, 2024, the Ontario Superior Court of Justice (Commercial List) ruled in favour of Peoples Trust in Peoples Trust Company v. Vandyk-Backyard Queensview Limited, a significant decision affirming the priority of registered mortgages over unperfected construction liens.

Acting for Peoples Trust, our team (Dominique Michaud and Philip Holdsworth) successfully argued that the statutory framework under the Construction Act creates a clear and decisive code for lien priorities. Justice Osborne agreed that commercial lenders are entitled to rely on title searches and statutory declarations when advancing funds. Importantly, the Court rejected attempts by lien claimants to impose additional due diligence obligations on mortgage lenders, emphasizing the need for contractors to act promptly in preserving their lien rights.

This decision offers critical clarity for commercial construction lenders: registered mortgages retain their priority when statutory conditions are met. For developers and contractors, it underscores the importance of proactive lien registration to protect claims.

Our success reflects the strategic advocacy and technical precision required to navigate complex construction financing disputes. This ruling will guide stakeholders in balancing their rights while reinforcing the integrity of Ontario’s construction lien regime.