Executive Overview
Ontario's Small Claims Court underwent a transformative expansion on October 1, 2025, increasing its monetary jurisdiction from $35,000 to $50,000. This landmark change revolutionized access to justice for construction disputes, enabling contractors, subcontractors, and property owners to resolve mid-value lien claims through streamlined procedures rather than costly Superior Court litigation. Construction liens under $50,000 can now be referred to Small Claims Court after perfection in Superior Court, offering cost-effective resolution while maintaining robust legal protections under the Construction Act.
Legislative Landscape: The 2025-2026 Transformation
Small Claims Court Expansion Creates New Opportunities
The October 1, 2025 increase to $50,000 represents a 43% expansion in Small Claims Court jurisdiction. This change affects construction disputes in three critical ways. First, contractors with claims between $35,001 and $50,000 can now access simplified procedures, reduced formality, and lower costs compared to full Superior Court litigation. Second, property owners facing liens in this range benefit from faster resolution timelines Small Claims Court typically resolves matters within 12-18 months versus 24-36 months in Superior Court. Third, the appeal threshold increased from $3,500 to $5,000, reducing frivolous appeals and providing greater finality to decisions.
Construction Act Amendments Reshape Lien Strategy
January 1, 2026 brought sweeping Construction Act amendments through Bill 60 (Fighting Delays and Building Faster Act, 2025). The most significant change decouples annual holdback release from lien expiry owners must now release holdback annually based on contract anniversary dates, but lien preservation, perfection, and expiry timelines remain anchored to traditional triggers like substantial completion or contract abandonment. This reform preserves contractor security while improving cash flow for long-term projects.
Case Study: Expired Lien Dismissed, But Contract Claim Survives: Dual Strategy Saves Recovery
Nova Concrete Inc. v. 2035211 Ontario Inc., 2022 ONSC 2391, illustrates the critical importance of pleading alternative remedies in construction disputes. Nova Concrete registered a $250,000 lien in February 2017 for concrete foundation work at a Toronto seniors' residence. The defendant-owner failed to defend the action for four years, remaining in default throughout the proceedings. When the defendant's successor corporation finally moved to discharge the lien, Associate Justice Robinson confronted two issues: whether the lien had expired due to untimely preservation, and whether the plaintiff's litigation delay warranted dismissal under Section 47 of the Construction Act.
The lien failed on timing grounds, Nova Concrete could not establish with evidence that lien-preserving work occurred within the mandatory 45-day window following contract completion or abandonment. The Court declared the lien expired and ordered return of security posted to vacate it. However, Justice Robinson identified that Nova Concrete's Statement of Claim contained material facts supporting a breach of contract claim, even though the pleading never explicitly invoked "breach" language. Under Section 55(1) of the former Construction Lien Act (now Section 3(2) of O.Reg 302/18), plaintiffs may join lien claims with contract claims in a single action.
The Court dismissed the lien remedy but permitted the action to proceed as a breach of contract claim under ordinary Superior Court procedure. This salvaged Nova Concrete's recovery opportunity despite losing lien security. On the delay issue, Justice Robinson rejected the defendant's Section 47 motion to dismiss for litigation delay, holding that a party in default for over four years failing to meet "the most basic obligation in litigation, namely defending an action" has no reasonable complaint about plaintiff delay. The contextual analysis applied by the Court of Appeal in Franchetti requires defendants to provide evidence supporting their defence before delay becomes a "proper ground" for dismissal under Section 47.
Strategic Implication: Defendant Default Cannot Defeat Delay Claims
How WhatAboutLaw Applies This Precedent:
Our firm drafts every construction lien Statement of Claim to include comprehensive breach of contract allegations as alternative or concurrent relief. Even when lien rights expire due to timing disputes or procedural defects, clients retain contract-based recovery rights. We aggressively oppose Section 47 discharge motions by highlighting defendant non-compliance owners who fail to defend actions, refuse document production, or miss court-ordered deadlines cannot claim prejudice from plaintiff delay. In Small Claims Court referrals between $35,000-$50,000, this dual-remedy strategy proves especially valuable, as the 15% cost recovery cap (maximum $7,500) makes preserving substantive claims paramount.