In Hi-Tide Shoring & Foundations (2012) Ltd. v. Chandos Construction Ltd., 2024 BCSC 903, a project’s sub-subcontractor (the “Plaintiff”) sought summary judgment against its engaging subcontractor (the “Subcontractor”) and a declaration of lien against the general contractor’s (“G.C.”) and the Subcontractor’s holdback accounts, as secured by the G.C.’s lien bond. The G.C. argued that the declaration and lien attachment sought by the Plaintiff was premature because the 55-day holdback period required under the Builder’s Lien Act (“BLA”) had not been triggered by the head contract’s completion (by certificate or otherwise).
Justice Blok granted the Plaintiff summary judgment against the Subcontractor, noting that the latter took no position on this issue. However, Blok J. accepted the G.C.’s argument that the lien’s declaration was premature. No certificate of completion had been issued for the project’s head contract or the Subcontractor’s contract, nor was the head contract abandoned, terminated, or completed. Therefore, other lien claimants still had the opportunity to claim against and ratably share in the Subcontractor’s holdback, as secured.
While a moot point in light of the foregoing, Blok J. addressed the Plaintiff’s claim that its lien was attached to the G.C.’s entire lien bond. Section 24(5) of the BLA establishes that an owner’s liability is not expanded by issuing a security for a lien beyond the amount prescribed under section 34, which caps liability at 10% of the head contract. Here, the G.C. was serving as the owner’s agent. Consequently, the Plaintiff’s declaration of lien would only attach to the Subcontractor’s holdback account in substitution for the subject lands. Yet, Blok J. also reaffirmed the principle in Shimco Metal Erectors Ltd. v. Design Steel Constructors Ltd., 2002 BCSC 238, aff’d 2003 BCCA 193, that subcontractors may claim a lien against all holdback accounts by operation of section 4(9) of the BLA. Once the holdback period elapsed, then, the Plaintiff’s Shimco lien could attach to the G.C.’s entire lien bond.
For subcontractors, the case reiterates the importance of requesting and obtaining a certificate of substantial completion from the project’s payment certifier. This will trigger the lien period and allow for subsequent lien enforcement actions. For the broader construction industry, the case reaffirms that the boundary between a statutory claim-of-lien and a Shimco lien is ambiguous and requires legislative reform.