The Builders Lien Act, S.B.C. 1997, c. 45 (the “Act”) prescribes multiple time limits for filing a claim of lien. Generally, these time limits run from 45 days from the occurrence of a triggering event. It is often difficult to determine when, or if, such a triggering event has occurred.
I am asked by clients who think they may be unable to file a claim of lien due to the expiry of the applicable time limit: (a) whether they should file a claim of lien anyways; and (b) what the consequences of filing a claim under such circumstances might be.
There are two provisions of the Act which may establish consequences for a person who files a claim of lien out of time. Section 19 of the Act provides that a person who files a claim of lien against land to which the lien does not attach is liable for costs and damages incurred by the owner as a result of its filing. Section 45 of the Act provides that a person who knowingly files or causes an agent to file a claim of lien containing a false statement is liable for a fine not exceeding $2,000.00 or the amount by which the stated claim exceeds the actual claim.
These provisions of the Act apply in different circumstances. Section 19 of the Act applies only if the owner has incurred actual costs or damages as a result of filing of the claim of lien. Section 45 of the Act may apply regardless of whether the owner has incurred any costs or damages as a result of filing of the claim of lien. Section 19 of the Act is not conditional upon any specific knowledge on the part of the lien claimant, while section 45 of the Act may apply only where the lien claimant “knowingly” files the claim of lien after the applicable time limit has expired.
Even where a person has “knowingly” filed a claim of lien out of time, the courts have shown reluctance to assess penalties under section 45 of the Act against persons who have filed a claim of lien shortly after the expiry of specified time limits, holding that the filing must be tantamount to “legal blackmail” to attract such penalties. Also, a lien claimant may mitigate or eliminate any costs or damages to an owner which might be recovered under section 19 of the Act by voluntarily removing the claim of lien if it becomes apparent that the filing is out of time.
Accordingly, while my recommendation always depends on the circumstances of the case, a person generally does not need to worry about the penalties for late filing under the Act unless it is obvious that the time limit for filing has passed and/or his motives for filing are suspect.
Mark Danielson can be reached at (250) 869-1284 or [email protected].
