Late Builders Liens Claims in BC

Late Builders Liens Claims in BC 

Did you know that you can still potentially recover money even if you filed your builders lien more than 45 days after the termination of a contract? You could still get paid for your work.

According to a recent case in the BC Supreme Court, contractors and sub-contractors who register their builders liens more than 45 days after the termination of a contract can potentially recover money based on unjust enrichment. 

The key factor is whether the sub-contractor has had direct dealings with the owner or developer. 

Builders Liens in BC vs Ontario

On July 1, 2018, the Ontario Construction Act came into force. One of the new changes is the requirement for a party terminating a contract to publish a notice of termination in the Daily Commercial News.

This is important in the realm of builders liens because in order for a contractor to protect their lien, they must file within a specified period after a triggering event. The termination of a contract is one of these triggering events. 

In BC, there is no such requirement to publish a notice of termination. Contractors can lose out on lien claims if they do not file within 45 days of the termination of a head contract. In many instances, contractors are not even aware the contract was terminated. Contractors are also often not aware of who the general contractor is, as there is high turnover. This adds layers of difficulty in filing builders lien claims. However, there may be other ways to recover compensation for the work already rendered by contractors. 

One such case was Hans Demolition & Excavating Ltd. v Green Oak Development (West 7th) Corp. Hans Demolition claimed that it had not been paid for excavation and shotcrete work in a project developed by Green Oak. Hans Demolition was subcontracted by Webster Development. Hans Demolition filed a builder’s lien on February 9, 2017. Green Oak argued it had terminated its contract with the head contractor, Webster Development, on September 1, 2016. 

Unjust Enrichment 

The Court found that the builders lien was invalid per the Builders Lien Act in that case as it was filed after 45 days the contract had been terminated. Lien claimants have the onus to prove that the lien is valid, a standard of proof that Hans Demolition could not establish.

1 Construction Act, RSO 1990, c 30, s.31(6).

2 Builders Lien Act, SBC 1997, c 45, s.20(2).

3 Hans Demolition & Excavating Ltd v Green Oak Development (West 7th) Corp, 2021 BCSC 1472 at para 77 [Hans Demolition].

4 Ibid at para 86.

5 Ibid at para 83. 

6 Ibid at para 91, citing Rempel Bros Concrete Ltd v Mason, (1992) 8 CLR (2d) 257, CanLii 1277 (BCSC).

However, the court allowed Hans Demolition to recover based on the doctrine of unjust enrichment. 

Unjust enrichment is a remedy that exists outside of the written legislation. It seeks to “restor[e] a benefit which justice does not permit one to retain”. In order for a claim of unjust enrichment to succeed, the following elements must be claimed: 

  1. Enrichment to the defendant;
  2. The corresponding deprivation of the plaintiff; and 
  3. The absence of a juristic reason for the enrichment.

In this case, the owner of Green Oak, Mr. Habibi, had made personal guarantees that Hans Demolition would be paid. Hans Demolition dealt directly with the owner instead of through a head contractor or a general contractor as a middleman. The Court ruled that Green Oak couldn’t say its contract was a juristic reason for the enrichment after its owner made personal assurances that Hans Demolition would be paid. 

The Court noted that typically, sub-contractors would not be able to claim unjust enrichment against owners because sub-contractors do not have a direct relationship with the owner; sub-contractors contract with the head contractor.

The key difference is the assurances and representations made directly by the owner about payment, which Mr. Habibi of Green Oak did. This results in there being “no clear demarcation … in the business relationship between the owner and the sub-contractor. 

*Please note that this information is intended for informational purposes only. there are always other considerations and interpretations of the law.  This does not constitute legal advice. For more information or assistance with a residential tenancy eviction matter, contact our office to speak with a lawyer directly.  

7 Ibid at para 83.

8 Kerr v Baranow, 2011 SCC 10 at para 31.

9 Pettkus v Becker, [1980] 2 SCR 834 at 848.

10 Hans Demolition, supra note 3 at para 106.

11 Ibid at para 112.

12 Ibid at para 129.