It’s easy to remove a 1/2 million ton assembly line!

If you’re in the practice of hiring contractors to do work at your place of business, like installing leasehold improvements, or making repairs, there’s a recent case to know about (okay… not really that recent,  a 2007 Ontario Court of Appeal case).

When a contractor makes improvements to a property, they have a right to put a lien on the property if they don’t get paid. But only if the work has been integrated, or fixed, to the property. Usually, this means if work can be removed and taken away, it is not lienable.

In Kennedy Electric vs. Rumble Automation Inc., it seems that courts are prepared to take the concept of portability to the extreme. Kennedy involved the construction and installation of an assembly line at a  manufacturing plant. The work wasn’t paid for and at issue was whether the work was properly the subject of a construction lien. The court decided that although the assembly line was fixed to the floor with 3000 bolts, some bolts being as long as 8 feet, the line could be dissassembled and removed from the property. This was true even though there was evidence that the cost of removal might be as high as 10 million dollars (a figure the court thought was inflated). 

The moral of the story is that the threshold for what qualifies as an ‘improvement’ under the Construction Lien Act is a high one.