When Lien Security Is On The Line: The Evidentiary Standard To Lien For Delay Damages

In the fall of 2025, we reported on a British Columbia Supreme Court decision involving a dispute over electrical work on a heritage hotel redevelopment in Victoria. Since then, the Court has released another decision involving the same project, Mazzei Electric Ltd. v. Aragon (English Inn) Development Corp., 2026 BCSC 562 (Mazzei #2), which underscores that lien claimants must support the value of their claims with solid evidence.

Background

In the original July 2025 decision, Mazzei Electric Ltd. v. Aragon, 2025 BCSC 1435 (Mazzei #1), Mazzei’s lien claim included a CA$2.3 million delay claim. The Court found that the delay claim was "anticipated" only and was not supported by evidence of actual work performed or materials supplied. As a result, the Court ordered that no security was required for the delay claim portion of the lien, and set security at the holdback amount of CA$285,717.88. Importantly, the Court noted that its order did "not prejudice the plaintiff from filing further liens in accordance with the Act."¹

The second lien

On December 11, 2025, Mazzei filed a second lien totaling approximately CA$2.1 million. Mazzei attempted to address the evidentiary gaps identified in Mazzei #1 in two ways:

• Mazzei commissioned an independent forensic consulting report from Revay Management Consultants Ltd. (the Revay Report) to quantify its actual delay costs. The Revay Report calculated Mazzei's delay costs as CA$2.9 million. Mazzei then adjusted the lien amount to account for security already held in trust.
• Mazzei provided a detailed invoice itemizing the costs it expended for additional labour hours, wage escalation, overtime premiums, staff costs and indirect costs during the delay period. The lien claim also included claims for unabsorbed head office overheads, financing costs, and markup on labour costs.

The owner/developer applied to cancel the new lien as an abuse of process under s. 25 of the Builders Lien Act (the Act) or alternatively to again post reduced security under s. 24 of the Act.

Cancellation refused — again

Applying the same low threshold as in Mazzei #1, Justice LeBlanc declined to cancel the new lien under s.25 of the Act. The Court found that Mazzei established at least an arguable right to a lien, and that the competing delay claims would be resolved in the pending arbitration.²

Evidentiary issues persist

Despite Mazzei's effort to cure the evidentiary issues identified in Mazzei #1, the Court expressed "serious misgivings" about the evidence supporting the delay claim portion:

• The Revay Report’s conclusions were not sworn evidence. Mazzei's construction manager did not adopt the conclusions in his affidavit. Instead, he relied on advice from counsel that the Revay Report supported the lien amount.³
• The Revay Report included several unverified and uncorroborated assumptions:
• Phase 1 was completed when Phase 2 began and that all of Mazzei's hours after that point could be allocated to Phase 2;
• Hours expended by Mazzei were to address deficiencies;
• All delays were attributable to Aragon;
• Mazzei did not underbid on the project and that all additional hours were attributable to delay; and
• A portion of salaried employee time represented the price of work performed on the project or was sufficiently connected to lienable work.
• The Court characterized Mazzei’s construction manager’s statement that the new lien represented work and materials "actually performed" as the type of "bald statement" cautioned against in Strata Plan LMS 2262 v. Belgrove Construction Ltd. [2003] B.C.J. (Q.L). No 756 (BCSC).⁴

Security reduced to CA$350,000

Given the evidentiary shortcomings described above, the Court ordered security of only CA$350,000 to clear the CA$2.1 million lien claim. In fixing the amount, it weighed the lien amount against the contract price and change orders, amounts already paid and the competing delay claims.⁵ The Court was careful to note it was not deciding the merits of the delay claims, which remained for another proceeding.

Key takeaways

• A forensic report is not a substitute for sworn evidence. Mazzei did what any diligent litigant would do after losing the first round: it retained an independent forensic consultant to quantify its delay costs. But the report still fell short because its conclusions were not sworn evidence, the affiant did not adopt them, and the underlying assumptions were not supported by evidence. The lesson is straightforward a forensic consultant’s report can help frame and quantify a delay claim, but the claimant must still prove the factual link between the claimed amounts and lienable work through verified records and sworn evidence.⁶ Lien claimants relying on delay claims should expect that unsupported assumptions will face close judicial scrutiny on any application to fix security.⁷
• The test for surviving lien cancellation remains low. The low threshold under s. 25 of the Act saved Mazzei's lien from cancellation because it was not "plain and obvious" the claim would fail.⁸ However, the same evidence was found insufficient when the Court considered whether to reduce security under s. 24.

Footnotes

1. Mazzei #1, at para. 48. ↩

2. Mazzei #2, at paras. 40–51. ↩

3. Mazzei #2, at para. 17-18 and 49. ↩

4. Mazzei #2, at paras. 39 and 49. ↩

5. Mazzei #2, at paras. 60–63. ↩

6. Mazzei #2, at para. 47–49. ↩

7. Mazzei #2, at paras. 53–59. ↩

8. Mazzei #2, at paras. 40–50. ↩