LEGAL
Going, Going, Gone?
Relief from strict compliance with timelines
under builders’ liens legislation
With limited exceptions, those who are unpaid
for the performance of work, provision of services
or delivery of materials to a construction
project have the right to register a builder’s lien
against the legal title of the owner of the land on which the
work, services or materials were performed, supplied or delivered.
Typically, the lien is registered for the value of the unpaid
work, services or materials. Once the lien is proved, the
lien claimant may take steps to sell the owner’s interest in the
land in order to be paid.
The provincial builders’ liens statutes set out rigid timelines
for filing the liens, as well as filing actions to prove
the liens, and registering certificates of pending litigation
(“CPLs”) against title to the affected land. The rationale for
rigid timelines is that the timely administration of the construction
lien process provides certainty for lenders who
are financing the project, as well as subsequent purchasers
of the property, all of whom rely on the accuracy of title
information when advancing funds or closing a purchase.
For this reason, courts have typically taken a hard line
when it comes to compliance with the statutorily imposed
timelines. However, two recent decisions from the Alberta
courts suggest that strict compliance with these timelines
can sometimes be avoided.
Case one
In TRG Developments Corp. v. Kee Installations Ltd.,
Kee Installations (“Kee”) and Universal Properties Inc.
(“Universal”) worked on land owned by TRG Developments
(“TRG”). In August 2013, Kee and Universal filed builders’
liens against the land. The question before the Alberta Court
of Appeal was whether the liens ceased to exist because no
CPL had been registered against title within 180 days from
the date the liens were registered, as required by section 43 of
the Alberta Builders’ Lien Act.
What makes the case unique is that, while the lien claimants
did indeed fail to file a CPL within 180 days, there were a series of
applications within that timeframe related to the liens.
In October 2013, TRG filed an application to discharge
the liens and a Notice to Prove Lien, on the basis that the
liens were invalid because TRG was not a landowner and did
not request the work. Kee and Universal responded by filing
affidavits proving the liens, upon which they were crossexamined.
In the meantime, the hearing of the application
was adjourned, at TRG’s request. By all accounts, this piece of
litigation was proceeding in the normal course.
Several months later, Kee and Universal brought applications
seeking a declaration that their liens were valid,
but without also filing the CPL. These applications were
adjourned at TRG’s request.
Immediately after the 180-day period to file a CPL had
expired, TRG had the Registrar of Land Titles cancel the lien
registrations on the basis of the missed timeline. Kee and
Universal brought an application to restore the liens.
The Court of Appeal held that where an application is
brought by an owner under s. 48 of the Act, which challenges
the validity of the lien based on non-compliance with the Act,
“there is no question of non-compliance with s. 43” (para.
9). In other words, in these particular circumstances where
the owner had attempted to have the liens declared invalid,
and therefore clearly had actual notice that the liens had
been registered, there was no need for the lienholders to register
a CPL within 180 days.
This decision is contrary to the strict language of section
43 that a lien that has been registered “ceases to exist” after
180 days unless a CPL has been filed.
In sidestepping the strictures of the Act, the Court of
Appeal was quick to note that no third party rights were
affected by its decision and that TRG’s position would have
been the same had the Act been strictly complied with.
By Jason E. Roberts, Fillmore Riley
FORD PREFECT/SHUTTERSTOCK.COM
CONTINUED ON PAGE 77
Ten Years of Piling Canada 75
/SHUTTERSTOCK.COM
