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In This Volume

  • 20 (1) If a certificate of completion has been issued with respect to a contract or subcontract, the claims of lien of
  • (a) the contractor or subcontractor, and
  • (b) any persons engaged by or under the contractor or subcontractor
  • may be filed no later than 45 days after the date on which the certificate of completion was issued.
  • (2) A claim of lien that is not governed by subsection (1) may be filed no later than 45 days after
  • (a) the head contract has been completed, abandoned or terminated, if the owner engaged a head contractor, or
  • (b) the improvement has been completed or abandoned, if paragraph (a) does not apply.
  • (3) Subsection (1) does not operate to extend or renew the time for filing of a claim of lien if
  • (a) that time would otherwise be determined with reference to the time an earlier certificate of completion was issued, or
  • (b) time had started to run under subsection (2).
  • (4) On the filing of a claim of lien under this Act, the registrar or gold commissioner has no duty to inquire as to whether or not the lien claimant has complied with the time limit for filing the claim of lien.

1997-45-20, effective February 1, 1998 (B.C. Reg. 1/98).

CROSS REFERENCES AND OTHER SOURCES OF INFORMATION

Time for Filing under the Strata Property Act

See s. 88(1) of the Strata Property Act in this Manual, which provides:

  • 88 (1) Despite any other Act or agreement to the contrary, if an owner developer conveys a strata lot to a purchaser, a claim of lien under the Builders Lien Act filed against the strata lot, or against the strata lot’s share in the common property, must be filed before the earlier of
  • (a) the date on which the time for filing a claim of lien under the Builders Lien Act expires, and
  • (b) the date which is 45 days after the date the strata lot is conveyed to the purchaser.

CASE LAW

The plaintiff filed a claim of lien against the defendant arising from the plaintiff’s work on machinery and equipment affixed to the defendant’s land. The plaintiff submitted two invoices dated August and October 2000 but did no further work on the improvements to the land after the date of the last invoice. The plaintiff filed a claim of lien in February 2001, stating that payment from the defendant was due January 2001. The defendant brought an action to dismiss the plaintiff’s claim, stating that the plaintiff’s claim was not filed within the 45 days required by s. 20 of the Act. The defendant argued that, even though no work had been done since October 2000, it was “on call” to the plaintiff and that this was legally analogous to working under a “head contract”. In cancelling the plaintiff’s claim, the court found no evidence of an ongoing contract analogous to a head contract outside of the work invoiced. In addition, the court found that the claim of lien was materially misleading and that the choice of date upon which the debt was said to become owing was fictitious in the sense that there was no evidence that date had any significance to any real event involving the work done for which the claim of lien was made. Accordingly, the court found that the lien was filed out of time and made an order to have special costs assessed against the defendant (Concord Industrial Services Ltd. v. 371773 B.C. Ltd., 2002 BCSC 900 (Chambers)).

The petitioner, a general contractor, subcontracted certain works under its head contract to the respondent. In July 2001, the respondent completed the work under its contract and a certificate of completion was issued in October 2001. The respondent returned to the worksite in the late fall for reasons disputed by the parties. The petitioner claimed the respondent returned to correct deficiencies associated with the original construction while the respondent claimed it returned to do work under a new contract. In April 2002, the respondent filed a claim of lien against the property. This was followed by the filing of another lien by a second respondent who provided materials to the first respondent during the period in question. The petitioner sought an order under of the Act that the liens were not filed in time. The court granted the petitioner’s application. It found that the petitioner’s letter requesting the respondent to return to the worksite contemplated remedial work, that the respondent’s agreement to do the work was done without prejudice to its existing rights, and that the letter was completely inconsistent with the formation of a new contract. On these facts, the court found no grounds to refer the matter to the trial list. Under the certificate of completion issued in October 2001, the time for filing claims of lien expired 45 days later in December 2001. Accordingly, the liens against the petitioner were extinguished by operation of s. 22 of the Act (Marbella Pacific Construction Ltd. v. Fast Trac Bobcat & Excavating Services, 2002 BCSC 803).

The plaintiff sought a declaration of entitlement to a builder’s lien in the amount of $37,500 against lands owned by the defendants. In 1996, the defendants’ general contractor entered into an agreement to rent a crane from the plaintiff. In 1997, the defendants terminated the contract with the general contractor. The defendants then agreed with the plaintiff to assume all of the terms and conditions of the rental agreement and to pay the general contractor’s arrears if the plaintiff waived the filing of a lien against the property. The plaintiff also agreed not to remove the crane from the defendants’ property until the defendants had made arrangements for a new general contractor. The defendants made rental payments from 1997 to 2000, although not always in full, and arrears began to mount. In 2000, the defendants asked the plaintiff to remove the crane. The plaintiff then filed this claim of lien. The court found that the claim of lien was filed out of time and therefore that it was invalid. Under s. 20(2)(a) of the Act, the lien was not filed within 45 days of the termination of the defendants’ contract with the general contractor. Under s. 20(2)(b), the lien was not filed within 45 days after the improvement had been completed or abandoned. Section 1(5) of the Act provides for “deemed abandonment” in the event of a strike, lockout, sickness, weather conditions, holidays, a court order, shortage of material, or other similar cause. The events listed in s. 1(5) reflect a specific cause for work stoppage that is wholly unconnected to any particular party’s subjective intent to abandon a project. Although there had been no activity at the defendants’ property since March 1997, the parties’ agreement to keep the crane on the site while no work was being performed could not legitimately be said to be causally linked to the stoppage or cessation of work. Indeed, the parties’ agreement was an after-product of the cessation of the work. While the court declined to validate the lien, it granted the plaintiff’s claim for personal judgment and costs against the defendants (Coupal Climbing Cranes Ltd. v. Chen, 2004 BCSC 570).

The plaintiff, a construction management firm, filed a claim of builders lien more than 45 days after the municipality issued an occupancy permit and the owner moved into the premises. In an application by the owner to have the claim of lien dismissed, the plaintiff argued that the claim related to the construction management contract and not to the actual occupancy of the residence and that the time for filing the claim started to run only after the contract was completed and all the remedial work was done. The court held that the issue under s. 20(2)(b) of the Act is whether the “improvement” and not the “contract” has been completed. In dismissing the claim of lien, the court accepted that an occupancy permit is prima facie proof that premises are “ready for use” even though there may be minor or remedial work that remains outstanding (Carmel Pacific Enterprises Inc. v. Spirit Equestrian Centre Ltd., 2005 BCCA 266).

See the annotation for McManamna v. Farley, 2008 BCCA 471, with respect to the running of time for the filing of a claim of builders lien where a contract or improvement has been deemed to be abandoned.

The plaintiff was a general contractor hired by the defendant to build a home. For several months during construction, the defendant refused to pay the plaintiff’s invoices and the non-payment resulted in unresolved disagreements between the parties. During this period, the plaintiff did no additional work on the site although he attended the site regularly to provide maintenance services, to clear away debris, and to ensure doors were secured. At no time during this period did either party provide written notice to the other of default or termination. After several additional months during which the invoices remained unpaid, the plaintiff gave formal written notice of his intention to terminate the contract and, at about the same time, filed a claim of lien. In this action, the defendant applied for an order cancelling the petitioner’s claim of lien on the grounds that the petitioner had abandoned the project and was out of time. The court found that, although the plaintiff’s activities during the period of non-payment and disagreement were minimal, they were sufficient to constitute “work” on an improvement within the meaning of s. 1(1) of the Builders Lien Act. Further, until written notice was given, the plaintiff remained willing to continue with the project provided the outstanding invoices were paid. In dismissing the defendant’s application, the court held that the time for filing the claim of lien began to run when written notice was given, and accordingly the claim of lien was filed in time (Alexander Construction Ltd. v. Al-Zaibak, 2011 BCSC 590).

The petitioner owned three adjoining lots in downtown Kamloops. It wished to consolidate the properties into a single parcel for the purpose of a multi-use development project, expected to cost about $19 million. To advance the project, the petitioner retained the personal respondent, a project manager in the construction industry who did business through the corporate respondent. The petitioner said the parties made an oral agreement for a management fee of $10,000 a month to the respondents. The respondents claimed there was a written agreement for $12,000 a month and an additional fee of $500,000 payable: (1) at $10,416 per month plus GST until paid in full; and (2) on the earlier of substantial completion of the building or termination of the agreement, the balance of the additional fee not otherwise paid. The petitioner denied the existence of the written agreement and said the signature appearing on it on its behalf was a forgery. The respondents started working on the project in either November 2018 or January 2019. The parties disagreed on the start date as well. In January 2019, the respondents obtained a demolition permit and, by April 2019, demolition of the buildings on all three lots was complete. The respondents then arranged for the site to be graded, which was completed in about May 2019. No further work had been done on the properties since then. The respondents continued to provide project management services from May until August 2019, including developing quantities for materials for construction, sourcing materials for construction, revising the project budget for construction, sourcing materials and equipment for shoring the planned excavation, and meeting with architects and engineers in order to initiate revisions to the construction drawings. One of the respondents, K.S., attended the site on a regular basis during that timeframe to meet with the contractor and reinstate security fencing. To the point that the respondents stopped working on the project in August 2019, the petitioner had paid them a total of $30,000. Funding issues stalled the project so, in August 2019, K.S. arranged a meeting between the petitioner and others with a view to obtaining additional investment to allow the project to continue. The petitioner subsequently entered into a joint venture partnership to construct the building. In August 2019, the respondents issued an invoice to the petitioner in the total amount of $617,352. The respondents registered a lien on October 1, 2019, against title to the properties, in respect of the monies alleged to be owed. They claimed the whole of the additional management fee because, by about September 30, 2019, they believed that the petitioner had repudiated the written agreement, thereby triggering the obligation to pay the remainder of the additional fee. In October 2019, the petitioner paid $10,000, the amount it believed was owing. It applied to cancel a claim of lien filed by the respondents or, alternatively, to have the claim of lien removed by posting security. Held, security of $174,939 ordered. Section 20 of the Builders Lien Act governs the time limit for filing a lien. Under s. 20(2), a claim of lien not governed by s. 20(1) may be filed no later than 45 days after

  • (a) the head contract has been completed, abandoned or terminated, if the owner engaged a head contractor, or
  • (b) the improvement has been completed or abandoned, if paragraph (a) does not apply.

The petitioner sought to rely on s. 20(2)(b) by saying the buildings were demolished and the site graded, and those were “improvements” that were “completed” in May 2019, which was greater than the 45 days before the filing of the lien. As set out in s. 1(1) of the Act, “improvement” is defined as: “anything made, constructed, erected, built, altered, repaired or added to, in, on or under land, and attached to it or intended to become a part of it, and also includes any clearing, excavating, digging, drilling, tunnelling, filling, grading or ditching of, in, on or under land”. Section 1(3) provides that an improvement is completed if it “or a substantial part of it is ready for use or is being used for the purpose intended”. Here, the petitioner retained the respondents to manage the construction of a building on the properties. The case law supported a finding that the “improvement” was the construction of the building as a whole. While the demolition and grading were done greater than 45 days before the filing of the lien, the “improvement”, for the purposes of the statute, had not yet been completed. As a result, the lien was in time. The respondents also provided “work” or “services” that created a lienable interest under the Act. The tasks they provided fit within the definition of “services” on an improvement as the term “services” is used in the Act. The respondents’ work went beyond merely obtaining financing or promoting the project. Rather, the respondents were involved in tasks that were directly related to the construction of the project. Given that the lien would not be cancelled for either of the two reasons advanced, the petitioner said that it should be cancelled on the posting of appropriate security. The respondents agreed with that position; however, they disagreed on the appropriate amount to be posted. The petitioner’s position was that as low as $10,000 ought to be posted, but it did allow for an upper end of $161,749. The respondents also provided a calculation based upon the terms of the written agreement, which came to $174,939. The court would order security in that amount (1182604 B.C. Ltd. v. Orak Contracting Ltd., 2020 BCSC 2229).

The defendant P. Co. contracted to perform demolition and excavation work for the defendant owner’s house construction project. The plaintiff contracted with P. Co. to supply and deliver soil and fill and related services. The plaintiff completed its work in July 2018 and filed a lien claim in February 2019. In dismissing the defendant’s application to dismiss plaintiff’s claim of lien as having been filed out of time, the court found the lien filed in time, having been filed before the improvement was completed. The court also found P. Co.’s principal personally liable for the plaintiff’s claim of $6,894 on the basis that the owner paid the entire contract amount, while directing that certain payments under the contract be made to a company other than P. Co., to the plaintiff’s prejudice (K Bajwa Trucking Ltd. v. Power Excavating Ltd., 2021 BCSC 782 (Chambers)).