Background

• The case involves a construction lien dispute between Scott Steel Erectors Inc. (subcontractor) and Ausenco Engineering Canada Inc. (contractor) regarding the Magino Gold Mine Project in Northern Ontario.
• Scott Steel and Scott Concrete Services Inc. were separately contracted by Ausenco under three fixed-price subcontracts:
  1. Building Subcontract (metal buildings for the processing plant)
  2. SMP Subcontract (structural steel, mechanical, and piping work)
  3. Concrete Subcontract (concrete work, performed by Scott Concrete)
• On July 25, 2023, Scott Steel registered a $35,250,000 lien, including claims for unpaid amounts and delay damages across all three subcontracts.

Ausenco’s Motion

Ausenco sought to discharge or reduce the lien under the Construction Act, arguing:

1. Scott Steel could not lien for the Concrete Subcontract since it was not a party.
2. The Building and Concrete Subcontract liens were untimely.
3. The lien was exaggerated, particularly regarding delay damages.

Court’s Findings

• Promissory Estoppel May Apply: A triable issue exists regarding whether Scott Steel and Scott Concrete were treated “as one”, potentially allowing Scott Steel to lien for the Concrete Subcontract.
• Exaggerated Delay Damages: The court found no triable issue regarding delay damages for the Building and SMP Subcontracts, as:
  • Fixed-price contracts do not normally allow delay claims.
  • Scott Steel failed to provide timely notice.
  • Claimed damages varied significantly without sufficient documentation.
• Lien Reduced: The court reduced the lien to $26,747,526.53, allowing delay damages only under the Concrete Subcontract.
• Costs deferred to the trial judge?.

Partial success for both parties:

• Ausenco succeeded in reducing the lien due to exaggerated claims.
• Scott Steel succeeded in maintaining the lien (albeit at a reduced amount) and establishing a triable issue on promissory estoppel regarding the Concrete Subcontract.