Holdback Is Not a Security Blanket: What KingSett v. Mapleview Changes

In KingSett Mortgage Corporation v. Mapleview Developments Ltd., 2026 ONCA 512, contractors with perfected liens argued that their holdback priority over the construction lender should be calculated as ten per cent of the total value of all invoices rendered. The Court of Appeal disagreed. Lien claimants have priority to the extent of a deficiency in the holdbacks, and where invoices had been paid in full — including the ten per cent component — and no subcontractor lien claims existed, there was no deficiency referable to that work. The broader calculation would have allowed the same ten per cent to be recovered twice.

The practical effect is to narrow the recovery pool for general contractors in exactly the situation where it matters most. The decision is confined to fact patterns without subcontractor lien claims, so a subcontractor's position needs separate analysis. But the general contractor's working assumption that ten per cent of contract value forms a protected floor no longer holds.

Read alongside a softer residential market and elevated developer credit risk, the message is that unpaid invoice aging is the real measure of exposure. That is a project controls metric before it is a legal one, and it is one most contractors already have the data to produce.

A related line of authority on trust funds is worth noting in the same breath. Ontario courts have held that depositing project receipts into a single general operating account breaches the Construction Act trust provisions even where detailed project-specific internal records are maintained. Accurate bookkeeping is not a substitute for segregation, and personal liability can follow.