In CCS Contracting Ltd v Condominium Corporation No 1520090, 2023 ABKB 147 (“CCS Contracting”), Master Schlosser determined that it is only after a lien appears as registered on title that the 180-day clock begins regarding commencing an action and registering a Certificate of Lis Pendens (“CLP”).
Prior to the decision in CCS Contracting, it was unclear whether the 180-day clock began when a party submitted a lien to the Pending Registration Queue (the “Queue”), or when the lien appeared as registered on title. This stemmed from ambiguity in the wording of the Prompt Payment Construction Lien Act, c P-26.4 (“PPCLA”) and amendments to the Land Titles Act, RSA 2000, c L-4 (“LTA”).
CSS Contracting provides certainty to lien claimants regarding statutory deadlines and may allow lien claimants to extend the timelines for commencing an action. This decision also creates more uncertainty for owners that are notified a lien has been submitted to the Queue on one of their projects.
Amendments to the Land Titles Act
A recent surge in registrations of instruments at Land Titles led to the creation of a new process under the LTA called the Pending Registration Queue (the “Queue”).
When a lien is submitted to the Queue, it is put in line with other instruments waiting to be examined by staff at Land Titles. A lien must be examined by Land Titles before it can appear as registered on title. While an instrument sits in the Queue, it appears on title as a pending registration. The delay between submission to the Queue and registering on title can sometimes take months.
The LTA was amended to account for this delay, as otherwise the delay between submission and registration could jeopardize time-sensitive instruments, such as liens. Specifically, section 14.1(7) of the LTA was amended to state that where an instrument must be registered within a specific period of time, submission to the Queue will be considered “registration”, unless the instrument is removed from the Queue.
The wording of this amendment suggested that submission of a lien to the Queue is equivalent to “registration”, but it was not clear how this section applied to other sections of the PPCLA.
In CCS Contracting, the Plaintiff submitted their lien to the Queue on April 8, 2022. On July 25, 2022, Land Titles examined the lien and approved it to be registered on title. The Plaintiff filed a statement of claim on October 5, 2022, and registered its CLP on November 21, 2022. In this case, the delay between the Plaintiff’s lien being submitted to the Queue and being registered on title was over 3 months.
The dispute in this case arose over when a lien is considered “registered”. Under the PPCLA, lien claimants have 180 days after a lien is “registered” to file a statement of claim and register a CLP with Land Titles. If this is not done, a lien ceases to exist.
The Defendant in CCS Contracting applied to discharge the Plaintiff’s lien, arguing that the lien was registered when the Plaintiff submitted it to Land Titles for placement in the Queue. There was more than 180 days between when the lien was submitted to the Queue on April 8, 2022, and when the CLP was registered on November 21, 2022.
The Plaintiff submitted that a lien is only “registered” when it appears on title, and not while a lien sits in the Queue. Less than 180 days had passed between the lien being registered on title on October 5, 2022, and the registration of the CLP on November 21, 2022.
Master Schlosser looked at the processes associated with the Queue and found the submission to the Queue did not amount to “registration”. When a lien is submitted to the Queue, it is given a document registration request (“DRR”) number, and is placed in a lineup to be examined by staff at Land Titles. Receiving a DRR number is not a guarantee that the lien will be registered. Land Titles can refuse to register the lien or cancel the lien based on certain grounds in the PPCLA and the Pending Registration Queue Regulation, AR 43/2021. Master Schlosser found a submission to the Queue only a request for registration, not registration itself.
Master Schlosser stated that lien legislation is to be interpreted strictly, but consistently with the intent of the legislation, and not so as to prejudice the rights of owners and third parties. Master Schlosser determined that any ambiguity between the PPCLA and LTA should be resolved in favour of the lien claimant.
CCS Contracting gives certainty to lien claimants by providing a clear deadline for the 180-day statutory requirement to commence litigation and register a CLP. Further, so long as delays exist with through the Queue system, the deadline for a lien claimant to file their statement of claim may be extended by the length of said delay.
Conversely, CCS Contracting creates uncertainty for owners. When a lien is in the Queue, it is unknown when it will be registered as the delays at Land Titles are constantly changing.
Whitelaw Twining is a leading practitioner in construction and lien matters. Please contact us for assistance in filing or defending against construction liens, and to learn how this decision may affect you or your business.
Written by Tanner E. Oscapella and articling student Ali Sarhill.