The case Westport Insurance v. BDA Inc., 2024 ONSC 5450, is a legal dispute involving Westport Insurance Corporation (surety) and High Tech Power Inc. (contractor), arising from a construction project subcontract.

Key Points:

• Parties Involved:

  • Westport Insurance: Plaintiff, acting as the surety.
  • High Tech Power Inc.: Defendant, subcontracted by BDA Inc. for electrical work.
  • BDA Inc.: General contractor on the project.

• Background:

  • High Tech entered a subcontract with BDA for electrical work on a project in Bronte, Ontario.
  • Westport issued performance and labour bonds to secure High Tech’s work, with the project valued at over $2 million.
  • A dispute arose, leading BDA to terminate the subcontract and claim under the bonds. Westport paid BDA advances but later denied liability.

• Key Legal Issues:

  1. Security Interest: Westport claimed a security interest over funds awarded to High Tech under an interim adjudication (ODACC Determination) which ordered BDA to pay High Tech for unpaid invoices.
  2. Event of Default: Westport argued that High Tech defaulted on obligations, including payment to suppliers and workers.
  3. Priority of Claims: High Tech sought immediate payment of the funds, while Westport asserted priority based on the indemnity agreement.

• Ruling:

  • The court held that Westport had a valid security interest but deferred payment pending ongoing litigation, directing the disputed funds to be paid into court. No final monetary award or costs were granted in this motion.