Registering a Builders Lien Against Each Parcel Under One Contract

The Dispute

A family hired a construction company to build two houses, each with a carriage house, on a lot that was to be subdivided first. The lot was divided, the houses were largely finished, and the owners had paid the company a sum in the low seven figures. The company then registered a lien on each of the two new lots for the balance it said was still owing, and the owners wanted both off title.

The Parties’ Positions

The owners applied to strike both claims of lien and the corresponding certificates of pending litigation, sought a fine under section 45 of the Builders Lien Act, and advanced several grounds, including that the contractor had filed the liens out of time. One ground was section 16(1), which provides that a claimant under a single contract for improvements on more than one parcel “may choose to have the lien follow the form of the contract”, which the owners read as requiring one lien over both parcels. Another was the omission of the lien claimant’s name and address from the numbered paragraph of the prescribed form calling for them, the owners relying on Nita Lake Lodge Corp. v. Conpact Systems (2004) Ltd. for strict compliance with the Act.

The contractor maintained that its pleading removed any doubt about what was claimed, the notice of civil claim having put the amount at the sum of one lien and not the aggregate of the two. It relied on Coastal Building Products Div of Laurus Manufacturing and Sales Inc. v. Gill, where liens for the full amount had been filed against two properties and the pleadings had likewise clarified the sum claimed. On the form, the contractor relied on section 28(1) of the Interpretation Act, under which deviations from a prescribed form “not affecting the substance or calculated to mislead, do not invalidate the form used”. Its name and address appeared in the preamble of each form, though not in the numbered paragraph.

The Court’s Decision

The court dismissed the application, reading section 16 as permissive and declining to read the permissive “may” as the mandatory “must” merely because one lien would have made the amount claimed clearer. It observed that on other facts, where a party needed to discharge liens quickly to permit financing or a sale, filing multiple liens each for the full amount might be improper or an abuse of process.

On the form the court applied section 28(1) of the Interpretation Act, holding the omission neither material nor misleading, and distinguished the decisions where the lien claimant named did not exist. It refused the alternative request to discharge the lien from one property, having no evidence of the work done on each or the equity in either, and ordered costs in the cause. Both liens and both certificates of pending litigation stayed on title, leaving the contractor’s security for the balance intact.

Key Lessons for Lien Claimants and Owners of Multiple Parcels

• State the amount claimed once, on the form and again in the pleading. The notice of civil claim put the claim at the amount of one lien and not the aggregate of the two, which answered any suggestion of security claimed twice.
• Settle before filing whether to register one lien over every parcel or a separate lien against each. Section 16(1) is worded permissively, so both routes were open on this record, and a government guide describing the single-lien process does not carry the force of legislation.
• Complete every numbered paragraph of the prescribed claim of lien form, including information already given in its preamble. The omission here was found neither material nor misleading, whereas section 28(1) gave no assistance where the lien claimant named did not exist.
• Tender evidence of value and of the work performed on each parcel when seeking to clear a lien from one of several parcels. The court declined to apportion, having no way of knowing how much work was done on which property and no evidence of the equity in either.

The outcome of this application turned on the wording of the claims of lien, on the pleading already filed in the action, and on the material before the court when it was heard. A similar application may resolve differently.

ATAC LAW acts for owners, contractors, subcontractors and suppliers in construction disputes in British Columbia, including builders lien claims and applications to remove them from title.

Mike C. Stewart acted for the lien claimant on the application to strike the claims of lien.