In a recent decision that underscores the limits of lien rights under Ontario’s Construction Act (“Act”), the Superior Court of Justice declined to discharge a disputed lien but reduced its value by nearly half, cutting costs for general overhead and materials never delivered to site.
At the center of Homes by Hendriks Inc. v. Honsberger, 2025 ONSC 2237, is a failed construction relationship between homeowners, Marc and Rachel Honsberger, and Homes by Hendriks Inc. the builder contracted to construct a garage and in-law suite on the owners’ Vineland property.
The Contractor registered a lien for $299,000 in January 2023. The owners brought a motion to discharge or reduce the lien under sections 35 and 47 of the Act, alleging the lien was both out of time and exaggerated.
Timing: A Genuine Issue for Trial
The owners argued the lien had expired, asserting the contractor’s last “lienable” work occurred before November 10, 2022. Although the contractor conceded construction had slowed, it relied on subcontractor activity and rental records to show work continued into mid-December, including framing, utility trenching, and equipment rentals.
The court noted that the evidentiary burden on a section 47 motion is analogous to summary judgment: a moving party must show there is no triable issue. Justice Reid declined to discharge the lien, finding the conflicting evidence on last supply of services raised a “genuine issue requiring a trial”.
Jurisdiction to Reduce: Broad, Not Bound by s. 44(5)
The contractor argued late in the hearing that the court lacked jurisdiction to reduce a lien unless a lien bond or payment into court had been made. Justice Reid disagreed, emphasizing the broader remedial power under section 35 and relying on the recent case of RJ Concrete v. Eco Depot, 2022 ONSC 1759, which confirms the court’s ability to reduce a lien for wrongful exaggeration even without vacating funds.
Cutting the Fat: Exaggerated Claims Do Not Survive
Justice Reid ultimately reduced the contractor’s lien by $145,121.47, removing amounts related to materials never delivered to the project, and improperly claimed overhead costs. The court found that the contractor had billed for over $58,000 in supplies that never arrived on site. Under section 14 of the Act, a lien can only be claimed for materials actually supplied to the improvement, not merely ordered or invoiced elsewhere.
The court also rejected the contractor’s attempt to include a 20% “builder markup” as part of its lien. This markup, totaling over $86,000, was described by the contractor as office-related overhead. Tasks like calling trades, reviewing invoices, and preparing billing statements, while potentially recoverable in contract, are not lienable. Justice Reid relied on Selectra Inc. v. Penetanguishene, 2016 ONSC 2293 to confirm that general or offsite overhead costs are not lienable because they are too remote from the physical improvement to justify a security interest under the Act.
However, not all of the contractor’s administrative or supervisory work was excluded. The court upheld the portion of the lien related to logged hours by the contractor’s project manager because his time was specifically tracked to the Project and involved direct oversight of construction work. Drawing on authority from Marino v. Bay-Walsh, [2002] O.J. No. 2211 (S.C.J.), and Selectra, the court confirmed that project management, when demonstrably tied to the improvement, is lienable.
Takeaways
This decision serves as a reminder that while the Act is designed to provide powerful remedies for contractors and suppliers, those remedies are not limitless. General office work, procurement that never materializes, and administrative markup, even if contractually agreed, will not pass muster.
Justice Reid’s approach also reinforces the evidentiary rigor demanded on lien motions. The burden falls squarely on the lien claimant to lead its best evidence, not hearsay or vague assertions, or risk reduction or discharge.