No Room for Mistakes: Or Is There?
Strict compliance with the Builders Lien Act (“BLA”) is generally required to ensure that builders liens are enforceable. So, what happens when there are errors on the lien or mistakes with other procedures under the BLA? The case of Toska Woodworking Inc. v Balazadeh-Nayeri, 2020 BCSC 1378 deals with an application to have multiple liens dismissed for failing to comply with the BLA.
THE FACTS
The Plaintiff, Toska Woodworking Inc. (“Toska”) entered into a contract to supply and install custom cabinetry to a home owned by the Defendants. A dispute arose between the parties and Tosko filed a lien against the Defendants’ property alleging that $92,309.71 was owing.
Toska’s first lien was missing some sections. It appeared as so:
CLAIM OFLIEN
I, TOSKA WOODWORKING INC. [claimant] of 2103, 1225 KINGSWAY AVENUE, PORT COQUITLAM [address], British Columbia,
[if claim is made by an agent, insert here “agent of the lien claimant”] state that:
1 ________________________________________________ [claimant] of _______________________________________ [address], British Columbia, claims a lien against the following land:
The Defendants sent a notice to Toska dated March 31, 2020 pursuant to s. 33 of the BLA. Notice under this section requires Toska to commence an action and file a certificate of pending litigation (“CPL”) within 21 days. Failure to file within the 21 days renders the lien completely unenforceable. The notice was addressed to “2103 & 2114, 1225 Kingsway Ave Port Coquitlam, B.C. V3C 1S2”, which is slightly different than the address on the lien shown above.
Toska commenced an action within the 21 days, however, the CPL was never filed in the Land Title Office. On July 15, 2020, after realizing their failure to file the CPL within the 21 days, Toska filed a second lien claiming that the same amount was owing.
THE DECISION
The Defendants took the position that the mistakes on the first lien were a fatal flaw because strict compliance with the form was required and, as a result, the first lien was unenforceable. They also claimed that the second lien was unenforceable because it was an abuse of process.
Regarding the first lien, the Court disagreed with the Defendants’ position stating that the error was not a fatal flaw since the claimant was clearly identified as Toska in the line directly above the missing portions. The Court agreed that the second lien was an abuse of process stating that the Toska cannot file a second builders lien in an attempt to recover from a failure to file a CPL.
In defense, Toska took the position that the notice was invalidated because the address on the notice was not the same as the one on the first lien.
The Court looked at section 33(3)(b) of the BLA which provides that the notice must be, “mailed or delivered to the address for service given in the claim of lien.” Even though the address was similar, and it was clear on the evidence that Tosko received the notice, the Court determined that strict compliance was required. The notice was not valid because the address on the notice was not the same one given on the claim of lien.
The Court concluded that Toska’s first lien remained a valid charge on the title to the Defendant’s property and the second lien was cancelled.
LESSONS LEARNED
- Exercise caution when filling out a lien. Ensure that all the details are included and correct. If you are unsure, seek legal advice in advance.
- If you fail to commence an action to enforce a lien within the appropriate time limit, it is not possible to file a second lien in an attempt to recover from that mistake.
- While strict compliance was not required universally in this case, it is good practice to ensure that all the requirements of the BLA are closely followed, notably, confirming that you have the proper address for service.
This article was written by Matthew T. Potomak, lawyer, and Jeremy S. Koch, articled student, who practice in construction law with the law firm of Kuhn LLP. This article is only intended as a guide and cannot cover every situation. It is important to get legal advice for specific situations. If you have any questions or comments about this case or other construction law matters, please contact us at 604-864-8877 (Abbotsford) or 604-684-8668 (Vancouver).
