1 Definitions And Interpretation

CROSS REFERENCES AND OTHER SOURCES OF INFORMATION

Interpretation of Words and Phrases

See the discussion on the “Interpretation of Words and Phrases” in the Introduction located in the front material of this Manual.

See the definition of “person” in s. 29 of the Interpretation Act, R.S.B.C. 1996, c. 238, which provides:

• “person” includes a corporation, partnership or party, and the personal or other legal representatives of a person to whom the context can apply according to law.

Use of this word in many of the above definitions should be contrasted with the use of “individual” in the definitions of “operator” and “worker”.

CASE LAW

“Deemed to Be Abandoned”

See the annotation for Coupal Climbing Cranes Ltd. v. Chen, 2004 BCSC 570, under s. 20 of this Act.

The plaintiff, a general contractor, filed a claim of builders lien against the defendants’ property on March 15, 2006. Section 1(5) of the Act states that a contract or improvement is deemed to be abandoned after 30 days if no work has been done unless the cessation of work was caused by weather, holidays, or other similar causes. In this action to determine the validity of the lien, the court found that, although no work had been done on the property between November 30, 2005, and January 9, 2006, the cessation of work was caused by weather conditions and holidays. In reaching this conclusion, the court adopted a modern and liberal approach to the interpretation of s. 1(5) of the Act and found that, if the Legislature had wanted to restrict the interpretation of the term “holidays”, it could have said “statutory holidays” rather than just “holidays”. As such, the 30-day period for deemed abandonment did not start to run until at least January 9, 2006, the time for filing the claim of lien did not start to run until at least February 9, 2006, and, thus, the plaintiff’s claim, filed on March 15, 2006, fell within the 45 days required under s. 20 of the Act (McManamna v. Farley, 2007 BCSC 1304). The Court of Appeal upheld the trial decision and added that the Legislature did not intend the deemed abandonment provision to override proof of a clear intention of the parties not to abandon a project. In the court’s view, it was more reasonable to interpret s. 1(5) as a default position applicable where the parties’ intentions were uncertain. The interpretation of deemed abandonment as creating a presumption of abandonment rebuttable by proof of an intention not to abandon accorded with the scheme of the statute and the practical realities of construction (McManamna v. Chorus, 2008 BCCA 471).

In Board of Education of School District No. 43 (Coquitlam) v. Zurich Insurance Company Ltd., 2021 BCSC 1633 (Chambers), the respondent insurer had issued a performance bond for a project in which the petitioner had engaged E Ltd. as the general contractor for construction of a secondary school. The petitioner terminated E Ltd.’s right to continue on the project due to defaults under the head contract and made a demand to the respondent under the performance bond. The petitioner and the respondent entered into a new contract (the “completion contract”) with another general contractor. The completion contract acknowledged the petitioner had retained a 10 per cent holdback ($4,270,564) of certified value of the work completed and that the retained funds would be administered and released in accordance with the Builders Lien Act. The respondent insurer claimed the holdback funds should be used to complete the project, while the petitioner claimed it was required to continue holding funds until the limitation period in s. 8(2)(a) of the Builders Lien Act expired, 55 days after the head contract was “completed, abandoned or terminated”. The court found that the clear intention of the completion contract was to continue the head contract with the new general contractor and that the head contract had not been terminated for the purposes of s. 8(2)(a). Accordingly, the petitioner was required to retain the holdback funds until the expiry of 55 days following substantial completion of the work under the completion contract.

“Engaged”

The term “engaged” in the definition of a subcontractor can mean hired or employed but it also has a broader meaning. A person can be engaged when he is being occupied, taking part in, or being involved in something, or committed to an undertaking. There is a non-commercial aspect to the meaning of “engaged” at least to the point of not requiring consideration in a pure contractual sense. In this case, the subcontractor did not take a fee from the contractor, who was his brother, but he was engaged in finding and supervising the work of his subcontractors and as such he was entitled to file a claim of builders lien for work he carried out on behalf of the contractor (Chandler v. Champion Enterprises (Canada) Ltd., 2013 BCSC 1518).

“Improvement”

The claimant, a subcontractor, fabricated large steel moulds that were moved to and installed in a shed constructed by the general contractor on lands leased from a third party. Concrete piles were driven into the ground to support the weight of both the moulds and the concrete poured into them. Footings for the moulds were built into the floor of the shed, and the assembled moulds were bolted to the footings. The claimant appealed from an order discharging its claim of builders lien against the property leased by the general contractor. In granting the appeal and reinstating the claimant’s lien, the court affirmed that the moulds were erected or built on the land, that they were attached to the land, and that they were intended to be in place for at least the duration of the project; that is, for a substantial period of time. In these circumstances, even though the moulds might be moved at some time in the future, the measure of their attachment to the land was enough to establish that they were improvements as that term is defined in s. 1(1) of the Act (Deal S.r.l. v. Cherubini Metalworks Ltd., 2001 BCCA 49).

“In Relation To”

As defined in the Act, “contractor” means a person engaged by an owner to perform or provide work or to supply material in relation to an improvement. The words “in relation to” must be limited in some way to prevent owners from getting the benefit of buildings erected or work done at the expense of those who provided the materials and did the work and to protect suppliers and workers by giving them a security interest in an owner’s land. Either there must be a direct relationship between the service and the improvement, or the work or service must be an “integral and necessary part of the actual physical construction”. In this case, there was no direct relationship between an air carrier that provided transportation of construction personnel and their baggage to a construction site and the resulting improvement. Furthermore, the air transportation was not an integral and necessary part of the improvement. In these circumstances, the air carrier was not entitled to a claim of lien under the Act (Northern Thunderbird Air Ltd. v. Royal Oak Mines Inc., 2002 BCCA 58).

“Services”

The addition of the present definition of services to the Act was intended to remedy previous uncertainty. A reasonable interpretation of such a definition in a statute that affects property rights would be to limit the definition of services to those services specifically identified as included, rather than read it as a limitless expansion of services that could come within its meaning. The definition of services should be read as remedial, including only those specified services whose inclusion might previously have been in doubt (Northern Thunderbird Air Ltd. v. Royal Oak Mines Inc.).

The inclusion of the definition of “services” in the Act has brought about no more than the change recommended by the Law Reform Commission in 1972; namely, that architects and engineers should be included within the range of persons able to claim a lien, and the definition of services should include all work done in connection with an improvement, whether or not the work was done before the commencement of the construction. However, the mischief at which the inclusion of the definition of services was aimed was limited in scope and was not intended to provide protection for architects and engineers for preconstruction work regardless of whether construction commenced. In this respect, the Court of Appeal disagreed with the decision of the trial court in Harmony Co-ordination Services Ltd. v. 542479 B.C. Ltd., below, and held that before architects and engineers have lien rights under the Act, construction of the improvement must have commenced. In this case, work done by architects and engineers for a tenant in connection with improvements to premises leased from the building’s owner fell within the definition of services and established their lien rights under the Act (Chaston Construction Corp. v. HendersonLand Holdings (Canada) Ltd., 2002 BCCA 357, followed in Stanley Paulus Architect Inc. v. Windhill Holdings Ltd., 2014 BCSC 1816).

See the annotation for “E.C.R.A.” Elderly Citizens Recreation Assn. v. Loeppky Consulting Ltd., 1999 CanLII 5631 (BC SC), under s. 25 of this Act.

“Services” and Work “in Relation to an Improvement”

The plaintiff, a residential home designer and builder, was retained by the defendants to provide design and construction services in relation to the defendants’ proposed subdivision development. The defendants terminated the plaintiff’s services before the commencement of construction and refused to pay the plaintiff’s invoice for this work. Legislative changes in the Act now provide a broader, more flexible approach to the interpretation of work “in relation to an improvement”. As contemplated under the definitions of “contractor” and “improvement”, a contractor is entitled to a lien for work including preparatory work performed off-site, provided that the work forms a necessary and integral part of the physical construction of the improvement. In the present case, the plaintiff’s work was performed “in relation to an improvement”, even though its work was performed off-site before any construction commenced. The respondents eventually built homes in the subdivision and the designs and drawings prepared by the plaintiff were substantially similar to those used by the respondents in the physical construction. Further, under the definition of “services”, the Act no longer requires that architectural or engineering services be performed on-site in some supervisory role over the construction of the improvement or that they directly contribute to the physical construction of the improvement. If the services of a contractor fall within the definition of “services as an architect or engineer”, they are lienable for intended construction, even if an improvement is never constructed. By definition, the Act does not restrict services to services performed by registered architects or professional engineers. The plaintiff was entitled to its lien because its work was performed “in relation to an improvement” and because its services fall within dictionary definitions for architects and engineers (Harmony Co-ordination Services Ltd. v. 542479 B.C. Ltd., 1999 CanLII 6125 (BC SC); but see the above annotation for Chaston Construction Corp. v. Henderson Land Holdings (Canada) Ltd., 2002 BCCA 357).

“Work”

See the annotation for Alexander Construction Ltd. v. Al-Zaibak, 2011 BCSC 590, under s. 20 of this Act.