In the case of Iraca Construction Services Corp. v. Ghorbankhani (2023 BCSC 855), Justice E. McDonald addressed the issue of securitization of a builder’s lien under section 24 of the Builders Lien Act. This provision allows for the cancellation of a claim of lien by providing satisfactory security for the payment. Notably, the court has discretion to determine the value of the security, which may be less than the actual lien amount.
In this case, the defendant, who was a homeowner, sought to secure the plaintiff-builder’s claim of lien for a nominal amount of $1, contending that their counterclaim for deficiencies far exceeded the lien amount. However, Justice McDonald found that there was insufficient evidence to effectively evaluate the value of the homeowner’s counterclaim.
To make its determination, the court examined the evidence presented, which included third-party invoices for works beyond the original scope and invoices for works performed on another property. Given this context, Justice McDonald could not reasonably discount the value of the plaintiff’s lien by assessing the damages claimed by the defendant.
Justice McDonald relied on the legal principle established in Troico Home Solutions & Manufacturing Inc. v. Kandakou (2022 BCSC 1172), which states that when a counterclaim cannot be quantified, it cannot be considered against a builder’s claim of lien under section 24. This case underscores the importance of consistent and reliable evidence when seeking to secure a lien for an amount less than its face value.
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