ARTICLE
14 October 2025

No Lien Claim For Anticipated Delay Claim Damages

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Dentons Canada LLP

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A July 2025 decision of the British Columbia Supreme Court provides an important reminder about what types of work are permitted to be included in a lien claim filed under...
Canada Real Estate and Construction
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A July 2025 decision of the British Columbia Supreme Court provides an important reminder about what types of work are permitted to be included in a lien claim filed under the BC Builders Lien Act, SBC 45 (the Act).

Factual overview

The dispute in Mazzei Electric Ltd. v. Aragon, 2025 BCSC 1435arose from the redevelopment of a heritage hotel in Victoria, BC. The owner, Aragon (English Inn) Development Corp. (Aragon), retained Mazzei Electric Ltd. (Mazzei) to complete electrical work under a stipulated price contract valued at approximately CA$3.5 million. A dispute arose and Mazzei filed a CA$2.9 million lien claim, comprised of three components:

  • Invoices for work performed;
  • Holdback funds; and
  • Delay claim damages.

Aragon applied to court to cancel Mazzei's lien claim arguing that it was vexatious, frivolous or an abuse of process since it included amounts not due or payable, including amounts of invoices that had been paid and delay claim damages. Aragon argued that if the court did not agree to cancel the lien claim, Aragon should be permitted to post security at a much lower value than the CA$2.9 million lien claim due to its inflated value.

Key legal principles

The BC Supreme Court provided several key reminders regarding the scope of lien claims:

  • The Act permits a lien claim to be filed for the "price of work and material," with "work" defined in the Act as "work, labour or services"1
  • The Act does not permit lien claims for anticipated damages, or work or materials not yet supplied
  • Claims for overhead costs, financing costs and performance bonds fall outside the scope of the Act2
  • A party can have a claim for damages without having a claim of lien3

Mazzei's lien claim

The court held that when an application to cancel a lien claim is made, the lien claimant must present an arguable case for both the right to lien and the amount of the lien claim. Mazzei conceded that the lien security should be reduced by approximately CA$340,000 to reflect payments of its invoices approximately and a corresponding reduction of the holdback. This left the CA$2.29 million claim for delay damages in dispute.

Mazzei presented four invoices totalling CA$2.29 million with the entry code "09042 delay claim" and an affidavit from its construction manager stating that the delay costs included increased costs for project management and supervision, labour, general expenses, financing and estimated markup.

Mazzei's affidavit evidence stated that the value of its delay claim was an estimated amount, based on an assumption of 38-month project extension based on the most recent three-week look-ahead and the existing project schedules. As of the date of the application, the construction was ongoing. Mazzei argued that while a portion of its delay claim represented future costs or "anticipated claims it had on the filing date...delay claims are complicated and it simply cannot determine the amount on a rolling basis or as of the date of the Lien was filed." Instead, Mazzei argued it should be permitted to file a lien for the entire anticipated amount of its delay claim."4

The court rejected Mazzei's arguments finding it "an unacceptable explanation when utilizing the protections afforded under the Act."5 The Court held that the Act does not permit filing of a lien claim for anticipated damages arising from a delay claim and concluded that the portion of Mazzei's claims that were not for work performed or materials supplied should fail.6

Conclusion

While expressing "serious misgivings" about the inflated nature of the lien claim and the approach taken by Mazzei, the Court declined to cancel the lien claim. Instead the Court found that only the holdback portion of the lien claim gave rise to an arguable case and ordered that the lien claim be discharged upon posting of security in the amount of CA$285,717.88, representing the value of the holdback account.7

Key takeaways

Lien claimants should ensure that the value of lien claims are limited to the price of work performed and materials supplied that remain unpaid as of the date of the lien claim. Projected losses for work and materials not yet supplied will not stand up to court scrutiny. Some claims for delay damages may be lienable but they must be supported by evidence as to the value of the work actually performed, as was the case in Centura Building Systems (2013) Ltd. v 601 Main Partnership, 2025 BCSC 1435.

Faced with an application to post security, lien claimants must be prepared to establish the right to claim a lien and, the value of the lien claim. Failure to do so with sufficient evidence may result in a reduction or cancellation of the lien claim and potential cost consequences.

Footnotes

1. Builders Lien Act, SBC 1997, c 45, ss 2, 1(1) "work"; Mazzei Electric Ltd v Aragon, 2025 BCSC 1435 [Mazzei] at para 25.

2. Mazzei, supra note 1 at para 26, citing Q West Van Homes Inc v Fran-Car Aluminum Inc., 2008 BCCA 366 at para 53.

3. Mazzei, supra note 1 at para 33, citing Golden Hill Ventures Ltd. v Kemess Mines Inc., 2002 BCSC 1460.

4. Mazzei, supra note 1 at para 32.

5. Ibid at para 32.

6. Ibid at paras 33, 45.

7. Ibid at para 47

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