Carrel v. Hart

Carrel v. Hart

The contract was an entire contract covering all five contiguous duplexes, entitling the claimant to a general mechanics' lien upon all the lots; under ss.7(3) and 13(1) of the Mechanics' Lien Act a registered mortgagee cannot claim priority for payments/advances made after the first lien arose, so the appellant’s completion costs were subordinate to Hart’s lien, but a prior mortgage that retained its priority by registration and was not thereby surrendered or effectively extinguished by postponement retains priority over the lien (court allowed appeal on priority as to the Albrechtsen mortgage).

Citation
[1934] SCR 10
Parties
Appellant (mortgagee): Frank Carrel; Respondent (lien Claimant): Albert A. Hart
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
22 December 1933
Procedural Posture
Appeal Concerning Priorities Under the Mechanics' Lien Act / Supreme Court of Canada Judgment and Subsequent Motion to Vary the Judgment
Outcome
Appeal dismissed in main part; motion to vary judgment allowed in part (appeal allowed on issue of priority as to the Albrechtsen mortgage); respondent's mechanics' lien upheld and given priority over appellant's completion expenditures but the prior Albrechtsen mortgage (assigned to appellant) retains priority over...
Legal Topics
Lien Priority, Mortgagee's Expenditures, General Lien for Multiple Buildings, Interpretation of Mechanics' Lien Act, Effect of Postponement/assignment of Mortgages
Source Language
English
Property Law Mortgages Mechanics' Liens Priority of Encumbrances Lien Priority Mortgagee's Expenditures General Lien for Multiple Buildings Interpretation of Mechanics' Lien Act +1 more

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Parties

Frank Carrel

Appellant (mortgagee)

Albert A. Hart

Respondent (lien Claimant)

Procedural Posture

Appeal Concerning Priorities Under the Mechanics' Lien Act / Supreme Court of Canada Judgment and Subsequent Motion to Vary the Judgment

Legal Issues

  1. 1 Whether the brick contract was an entire contract covering five contiguous duplexes
  2. 2 Whether a mechanics' lien under an entire contract can attach as a general lien upon several contiguous lots
  3. 3 Whether a registered mechanics' lien has priority over amounts expended by a mortgagee in completing a building after lien registration

Ratio Decidendi

The contract was an entire contract covering all five contiguous duplexes, entitling the claimant to a general mechanics' lien upon all the lots; under ss.7(3) and 13(1) of the Mechanics' Lien Act a registered mortgagee cannot claim priority for payments/advances made after the first lien arose, so the appellant’s completion costs were subordinate to Hart’s lien, but a prior mortgage that retained its priority by registration and was not thereby surrendered or effectively extinguished by postponement retains priority over the lien (court allowed appeal on priority as to the Albrechtsen mortgage).

Court Disposition

Appeal dismissed in main part; motion to vary judgment allowed in part (appeal allowed on issue of priority as to the Albrechtsen mortgage); respondent's mechanics' lien upheld and given priority over appellant's completion expenditures but the prior Albrechtsen mortgage (assigned to appellant) retains priority over...

Orders

  • Respondent Hart's mechanics' lien sustained as a general lien against the properties and held to have priority over the appellant's $12,500 (approx.) completion expenditure
  • Appellant's motion to vary was allowed: the appeal is allowed in respect of the priority of the Albrechtsen mortgage and that mortgage (assigned to appellant) has priority over Hart's lien