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Construction - "Owner" [CA s.1(1)]. Dalren Limited v. Loadstar Trailers Inc.
In Dalren Limited v. Loadstar Trailers Inc. (Ont CA, 2026) the Ontario Court of Appeal considered the provision of CA s.87.3(1)(b) ['Transition, Construction Lien Amendment Act, 2017'], which involves whether the prior Construction Lien Act or the 'new' Construction Act (July 1, 2018) governs.
Here the court considers the meaning of the term "owner" under s.1(1) of the CA:[55] The object of construction lien legislation “is to prevent owners of land getting the benefit of buildings erected and work done at their instance on their land without paying for them”: Kevin Patrick McGuinness, Construction Lien Remedies in Ontario, 2nd ed. (Scarborough: Carswell, 1997), at § 5.73.
[56] A construction lien is, in essence, a charge or security on an improvement in favour of the party who has contributed to the enhancement of value to the lands. It is also a charge on holdback funds, which are required to be maintained by owners, contractors and other parties during a construction project: Annik Forristal, Leonard Ricchetti and Tim J. Murphy, Construction Law in Canada, 2nd ed. (Toronto: LexisNexis, 2025), at § 11.02.
[57] There are three preliminary requirements for a party to establish entitlement to a lien: (i) the supply of services or materials; (ii) to an improvement; (iii) for an owner, contractor or subcontractor: Forristal, at § 11.02(1)(a). A lien arises when a party first supplies services or materials to an improvement. The statutory protections of both the Former and Amended Acts immediately come into play once construction or work is commenced: at § 11.02(1)(h).
[58] Therefore, for a party seeking to establish entitlement to a lien, it is critical to determine who the “owner” is. The definition of “owner” is the same under both the Former and Amended Acts, at s. 1(1):“owner” means any person, including the Crown, having an interest in a premises at whose request and,
(a) upon whose credit, or
(b) on whose behalf, or
(c) with whose privity or consent, or
(d) for whose direct benefit,
an improvement is made to the premises but does not include a home buyer. [59] This definition of “owner” is broad and is not limited to the legal or registered owner of the property: Forristal, at § 11.02(1)(c). Fundamentally, in the construction lien regime, an “owner” is one whose interest in the premises can be subject to a lien: Ravenda Homes Ltd. v. 1372708 Ontario Inc., 2017 ONCA 834, 78 C.L.R. (4th) 1, at para. 29.
[60] Courts will look to the substance, not the form, of the arrangements between the parties to determine whether someone is an “owner”: Phoenix Assurance Co. v. Bird Construction Co., 1984 CanLII 79 (SCC), [1984] 2 S.C.R. 199, at paras. 25-27, citing Northern Electric Co. v. Manufacturers Life Insurance Co., 1976 CanLII 203 (SCC), [1977] 2 S.C.R. 762 and Hamilton (City) v. Cipriani, 1976 CanLII 35 (SCC), [1977] 1 S.C.R. 169.
[61] As Cronk J.A. wrote for this Court, “the overall arrangements between the parties must be scrutinized in an ‘ownership’ inquiry to ascertain the real substance of the enterprise at issue. … [T]he form of the parties’ arrangements cannot be allowed to mask their true character”: Parkland Plumbing & Heating Ltd. v. Minaki Lodge Resort 2002 Inc., 2009 ONCA 256, 250 O.A.C. 232, at para. 58 (citations omitted).
[62] As stated above, a construction lien does not arise until materials or services are supplied to the improvement. Accordingly, taking a functional approach, courts have held that the relevant time for determining whether a person is an “owner” is the date on which the lien claimant supplied materials or services to an improvement: RSG Mechanical Inc. v. 1398796 Ontario Inc., 2015 ONSC 2070, 41 C.L.R. (4th) 124 (Div. Ct.), at para. 55, citing Leyburn Electrical Ltd. v. Merton Development Corp., [1998] O.J. No. 2428 (Div. Ct.).
[63] Here, 197 had an ownership interest in the Dodge Street premises at the time when a lien could arise, i.e. at the outset of construction. This satisfied the application judge that 197 was an owner of the premises within s. 87.3(1)(b).
[64] I agree. The application judge’s approach reflects the practical reality that procurement may and sometimes does precede ownership.
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