Land Title Practice Manual

23 Removal Of Claims Of Lien By Payment Of Total Amount Recoverable

In This Volume

  • 23 (1) If a claim of lien is filed by one or more members of a class of lien claimants, other than a class of lien claimants engaged by an owner, the owner, contractor, subcontractor or mortgagee authorized by the owner to disburse money secured by a mortgage may, on application, pay into court the lesser of
  • (a) the total amount of the claim or claims filed, and
  • (b) the amount owing by the payor to the person engaged by the payor through whom the liens are claimed provided the amount is at least equal to the required holdback in relation to the contract or subcontract between the payor and that person or, if the payment is made by a purchaser to whom section 35 applies, 10% of the purchase price of the improvement.
  • (2) Payment into court under an order made under subsection (1) discharges the owner from liability in respect of the claims of lien filed and
  • (a) the money paid into court stands in place of the improvement and the land or mineral title, and
  • (b) the order must provide that the claims of lien be removed from the title to the land or mineral title.
  • (3) If an application has been made under subsection (1) and the claims of lien have been removed under subsection (2), and if additional claims of lien are filed by persons claiming through the same person engaged by the payor with respect to the lien claimants whose claims of lien were removed under subsection (2), application may be made under subsection (1) to have the additional claims of lien removed under subsection (2) on payment into court of whatever additional sum is necessary to bring the amount in court up to the amount that would have been paid into court if the additional claims of lien had been filed at the time of the prior application.
  • (4) An application under subsection (1) or (3) may be brought by an application in proceedings that have been commenced to enforce a claim of lien, or by petition and the court may
  • (a) hear and receive evidence, by affidavit or orally or otherwise, that it considers necessary in order to determine the proper amount to be paid into court,
  • (b) direct the trial of an issue to determine the amount to be paid into court, and
  • (c) refuse the application if it is of the opinion that the determination of the total amount that may be recovered by lien claimants should be made at the trial of the action.
  • (5) If the amount held back by the payor from the person engaged by the payor through whom the liens are claimed exceeds the required holdback in relation to the contract or subcontract between the payor and that person, and that person has defaulted in completing or carrying out the contract or subcontract with the payor, for the purposes of subsections (1) and (3) the amount owing by the payor to that person does not include any amount that the payor is entitled to apply to remedy the default or complete the contract or subcontract.

1997-45-23, effective February 1, 1998 (B.C. Reg. 1/98); 2010-6-23, effective July 1, 2010.

PRACTICE

Cancellation of Claim of Lien

Submissions

On the Form 17 Cancellation of Charge, Notation or Filing, select Nature of Interest, Claim of Builders Lien by Court Order, and Certificate of Pending Litigation—Builders Lien Act, where applicable, and attach images of the following:

  1. a court certified copy of the court order stating that the claim of builders lien is cancelled on payment into court of a certain sum, and giving the legal description of the property; and
  2. a certificate of the registrar of the court certifying that the sum shown in the order has been paid into court.

CASE LAW

The plaintiffs filed claims of lien against the defendant’s property. The defendant made an application under s. 23(1) of the Act to pay the total value of the liens into court as security for removal of the claims and the certificates of pending litigation from title to the property. The plaintiffs opposed this motion stating that the claims and certificates of pending litigation should not be removed unless the defendant paid security for costs into court for each action in addition to the lien amounts being claimed by each plaintiff. The court granted the defendant’s application and ordered that the claims and certificates of pending litigation be removed upon payment into court of the total value of the liens. The court found that the defendant, as the owner of the property, was entitled to rely on s. 23 of the Act. As for costs, nothing in s. 23 allowed the court to order security for costs or to impose upon the owner any financial obligation with respect to his request for the discharge of the liens other than what was found in s. 23(1). Accordingly, the court ordered each party to bear its own costs (GM Electric v. Lin, 2000 BCSC 1260 (Master)).

The petitioner sought to have a claim of lien cancelled without the deposit of security. The court found no evidence from which to conclude that any amount was owing on the contract and, therefore, that the lien claimant had failed to make out a prima facie case for the lien. The court granted the petition and ordered the lien discharged (Quigg Homes WV345 Ltd. v. Bosma, 2004 BCSC 1582).