BC Court Of Appeal: Inconsequential Defect In Builders Lien Form Does Not Invalidate Claim Of Lien

• Published date: 22 June 2021
• Subject Matter: Litigation, Mediation & Arbitration, Real Estate and Construction, Trials & Appeals & Compensation, Construction & Planning
• Law Firm: Alexander Holburn Beaudin + Lang LLP
• Author: Mr Scott Harcus

In the recent decision of A.W. Kennedy Construction Inc. v. Wan, 2021 BCCA 175, the BC Court of Appeal had an opportunity to consider whether a non-substantive error on a Claim of Lien form rendered the claim of lien invalid under sections 15 and 22 of the Builders Lien Act ("BLA").

Section 15 (1) of the BLA provides that "... a claim of lien is made by filing in the land title office a claim of lien in the prescribed form" [emphasis added] and section 22 states that "a lien in respect of which a claim of lien is not filed in the manner and within the time provided in this Act is extinguished."

The Claim of Lien in question deviated from the prescribed form in that the first paragraph of the Claim of Lien was left blank. This section of the form requires the lien claimant to set out its name and address. However, this information was not missing from the Claim of Lien, as the lien claimant had included the company name and address in the preamble of the form. Insofar as this was the case, the deviation could not have prejudiced anyone as all the necessary information was on the form.

Those unfamiliar with the case law concerning the validity of builder's liens would quite reasonably question how such an innocent harmless mistake could possibly invalidate a lien. However, for those more familiar with the relevant precedents, it may not be particularly surprising that it took BC's highest court and a 12-page decision to conclude that this intuitive response was entirely correct. In finding that the Claim of Lien was valid notwithstanding the omission, the BC Court of Appeal reviewed the history of the legislation and case law, which stands for the proposition that there must be "strict compliance" with the provisions of the BLA.

In 1997, the BLA was amended to remove a broad curative provision which stated that only substantial compliance was needed for a lien to be valid unless the affected party could establish that the defect caused prejudice. In the decision of Nita Lake Lodge Corp v. Conpact Systems (2004) Ltd., 2006 BCSC 885, the court interpreted the removal of this curative provision to signify the intention of the legislature to preclude courts from curing defective claims. The rationale for requiring "strict compliance" with all provisions in the BLA was that the Act created new propriety rights.

The BC Court of Appeal noted that the court in Nita Lake had not considered the general curative provision...