A party claiming a builders lien must do so by filing a “claim of lien” in the form prescribed by the Builders Lien Act, S.B.C. 1997, c. 45 (the “Act”). A lien claimant must adhere to the requirements of the Act in completing the form or risk invalidating his lien. The recent case of Omnique Construction Inc. v. Xu, 2017 BCSC 208 demonstrates the consequences of a lack of attention to detail when completing the required form.
In Omnique, the principal of a company that was hired to completed the forming and framing component of a project mistakenly named herself as the lien claimant on the form instead of the company. The form did properly state that the money was allegedly to the company, not its principal.
An action to enforce the lien was commenced in the name of the company. The defendants applied for an order cancelling the claim of builders lien on the basis that the lien claimant was improperly described on the Form. The company opposed the cancellation on the basis that the error was an innocent mistake which did not prejudice the defendants. The company submitted evidence showing how the contract among the parties was formed and to the effect that the principal of the company did not intend to name herself as lien claimant in place of the company.
The company tried to walk a fine line by distinguishing the case from other cases in which builders liens had been cancelled for similar errors. Ultimately, the court held the case was indistinguishable from such cases and ordered that the lien be cancelled. While the case is not “ground breaking” in terms of the interpretation and application of the Act, the court made several findings which will provide guidance when the questions of the validity of lien claims are raised in the future:
- The Act requires strict compliance regarding the time and manner in which a lien claim is filed. The principle of strict compliance with the Act is not fact dependent.
- The intention of the filing party is irrelevant. The manner and form of a lien claim cannot be relaxed by taking into account a party’s intention. Any inquiries into the intention of the lien claimant in filing the form are incompatible with the scheme of the Act which provides for cancellation of a lien on a summary basis, sometimes without notice to the lien claimant or necessity of a court hearing.
Omnique highlights the importance of properly completing the required form to claim a builders lien. It is important to understand the distinction between incorporated and non-incorporated forms of business when completing the Form. If you are uncertain whether you have completed the form correctly, you should seek legal advice.
Mark Danielson is an Associate with Pushor Mitchell LLP. His litigation practice covers a number of areas including business disputes, construction law, builders liens, debtor/creditor claims, and property disputes. You may contact Mark at 250-869-1284 or [email protected].
