Alberta Prompt Payment And Construction Lien Act—Court Confirms 180 Day Deadline To Commence An Action

Written By Brian Reid and Connor Wilson

Benjamin Franklin once said, "lost time is never found again". A recent case from the Alberta Court of King's Bench confirms the truth of this statement for any lienholder seeking to initiate a Statement of Claim past their agreed upon deadline to do so.

Facts

In Lesenko v Wild Rose Ready Mix Ltd, 2023 ABKB 148, the Lesenkos' hired a contractor who subcontracted with Wild Rose to supply concrete. Wild Rose filed two builder's liens in October 2019 for non-payment reasons. A month later, the parties entered into a consent order (the Order) under section 48 of what is now the Prompt Payment and Construction Lien Act (the PPCLA). An order under section 48 allows the court to order the registration of a lien be removed from title where the property owner pays security into court.

Pursuant to the Order, the Lesenkos' paid the agreed upon security into court and the liens were subsequently discharged from title. The Order allowed Wild Rose to commence an action to enforce the liens within 180 days from the date of the Order (under the PPCLA, 180 days is the maximum timeline for a lienholder to commence an action on a registered lien).

The 180 day period passed and Wild Rose failed to file a Statement of Claim. Instead, Wild Rose filed a Statement of Claim just prior to the expiry of the two-year general limitation period.

The Decision

The Lesenkos applied for an order dismissing the lien action and in response, Wild Rose applied for an extension to the 180 day deadline under the Order. The Court dismissed Wild Rose's request for an extension on the basis that, although the Court does have a general power to vary timelines set out in orders, the language in the Order mirrors section 48 of the PPCLA which prevents the Court from extending the time fixed by statute unless the statute gives that power. In coming to this decision, Judge Schlosser emphasized the words in section 43 whereby a "lien ceases to exist" if a fails to file a Statement of Claim within 180 days after registering its lien.

Of course, despite losing their lien claim, the Lesenkos still had the right to pursue their action in debt but did so without the benefit of the security (and leverage) of their builder's lien.

Takeaways

The decision in Lesenko confirms that even though a lien has been 'bonded off' and replaced with security through a consent order, the deadline in that order and the 180 day deadline for filing a Statement of Claim in the PPCLA must still be adhered to, failing which, the lien will cease to exist.  

If you would like more information on how this decision may affect your business, or for any other questions pertaining to builders' liens, please contact the Bennett Jones Construction group.

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