Identifying the parties

Lien claimants should do corporate searches to confirm the correct legal name of corporations, for both the lien claimant and the other parties named on the Claim of Lien.
 
In Centaur Products v. SRI Sports Canada, 2004 BCSC 308 the court confirmed that the land title office does a check to ensure that corporate lien claimants are properly incorporated and in existence, and that if the lien claimant is a federally incorporated company then proof of incorporation should be provided:
 
The provincial Land Title Office requires proof of federal incorporation because it cannot search for federally registered companies, it can only search for provincially registered companies.
(Centaur Products v. SRI Sports Canada, 2004 BCSC 308 at para. 7).
 
Unincorporated entities should not use corporate names that are merely intended to be used for a future corporation, but should describe themselves as an individual using a trade name e.g. John Smith dba ABC Contracting Ltd.  A sole proprietor should not list only their trade name, especially if the trade name is not registered. Section 88 of the Partnership Act, R.S.B.C. 1996, c. 348 provides that sole proprietorships must file registration statements:
 
A person who is engaged in business for trading, manufacturing or mining purposes and who is not associated in partnership with any other person or persons but who uses as his or her business name some name or designation other than his or her own name or who in his or her business name uses his or her own name with the addition of "and Company" or some other word or phrase indicating a plurality of members in the business, must file with the registrar within 3 months after the day when the business name is first used, a  registration statement in the prescribed form.
(Partnership Act, R.S.B.C. 1996, c. 348, s. 88).
 
The Government of British Columbia’s BC Registry Services website states the following under the heading: Do I need to register my business?
 
If you choose to carry on a business under a name other than your own personal name and are engaged in business for trading, manufacturing or mining purposes, you must register with the BC Registry Services within three months of your business start date.
 
Therefore, sole proprietorships operating under a trade name must be registered, and the name of the individual operating as a sole proprietorship should be stated on the lien.
 
The following cases confirm the willingness of courts to strike out liens that are defective and indicate the value of obtaining legal advice if you are either wanting to file a valid lien, or looking to defeat a lien which has been filed.
 
In B.E.H. Construction (1984) Corp. v. Matzhold, [1989] B.C.J. No. 273 (Co. Ct.) (QL) a claim of lien was struck where the lien was claimed by a corporate entity that did not exist:
 
I think it is settled law that the lien is invalid; it alleges that Danica Ltd. is the claimant but in fact Danica Ltd. was non-existent. The identification of the claimant is a matter of substance and in this case, I have no alternative but to hold that the non-compliance with the Builders Lien Act, R.S.B.C. 1979, c. 40, disentitles Micelotta to the lien he seeks.
(B.E.H. Construction (1984) Corp. v. Matzhold, [1989] B.C.J. No. 273 (Co. Ct.) (QL)).
 
In Framing Aces v. 0733961 B.C. Ltd. dba Omni Pacific, 2009 BCSC 389 the lien claimant, a framing contractor, changed its name part way through the contract. At the outset the claimant used the name “Gestion Visionnaire”, but there was no incorporated entity by that name at that time (para. 4). The claimant later started using the name “Framing Aces Inc.”, but Framing Aces Inc. was not a legal entity at that time (para. 7). Payment for framing work was directed to each of   “Gestion Visionnaire” and “Framing Aces Inc.” and the cheques were cashed (para. 13). Three builders liens were filed in the name of “Framing Aces” (para. 8), and an action was commenced against “Framing Aces Inc.”. The claims of lien were struck out for non-compliance:
 
“Framing Aces” did not exist as a legal entity as required by s. 2 of the Act and, as such, it cannot sustain the Lien Claims.  I am bound and persuaded by this court’s decisions in Nita Lake and B.E.H. Construction that the statutory form must strictly be complied with.
(Framing Aces v. 0733961 B.C. Ltd. dba Omni Pacific, 2009 BCSC 389 at para. 26).
 
In 581582 B.C. Ltd. v. Habib, 2013 BCSC 378 the claim of lien listed the lien claimant as a non-existent entity:
 
The claim of lien was filed in the name of ANE Consulting Ltd. There is no such legal entity. The legal entity that allegedly carried out the work on the property is the claimant in these proceedings, namely, 581582 B.C. Ltd. The evidence in this application showed that 581582 B.C. Ltd. carried on business under the firm name and style ANE Consulting. It is clear, however, that ANE Consulting was never an incorporated entity. 581582 BC Ltd. acknowledges that it was in error when it described itself in the lien claim as the corporate entity ANE Consulting Ltd.
(581582 B.C. Ltd. v. Habib, 2013 BCSC 378 at para. 7).
 
The court struck out the lien:
 
It is settled law in this province that a builders lien claimant must strictly comply with the requirements of the Builders Lien Act…It is equally well settled law that a non‑legal entity has no capacity to file a builder's lien…Put another way - entities that do not have legal personhood cannot obtain builder’s liens, and only a legally recognized person, such as, for example, a human being, a corporation, or a society, may apply for a builder’s lien. In the present case I am driven to the conclusion that the claim of lien was filed by a non-person.
(581582 B.C. Ltd. v. Habib, 2013 BCSC 378 at para. 8).
 
In Nita Lake Lodge Corp. v. Conpact Systems (2004) Ltd., 2006 BCSC 885 is a case where failure to properly identify a person who would become indebted to the lien claimant resulted in the claim of lien being struck out. In that case the lien claimant, Conpact, named Timberline Construction Group Western (the construction manager) rather than Nita Lake Lodge Joint Venture (the owner) as the person who retained Conpact and as the person indebted to it. The lien was held to be invalid:
 
In my opinion, the claim of lien advanced by Conpact failed to satisfy the requirements of the Act, and it is therefore extinguished pursuant to s. 22.  None of the evidence on the petition indicates that Conpact had a contract with Timberline Construction Group Western.  None of the evidence supports any claim that Timberline Construction Group Western is, or will become, indebted to Conpact.  The contracting parties are Nita Lake Joint Ventures and Conpact Systems (2004) Ltd., and the lien has been filed in respect of a non-existent claim.  The failure to describe the contracting parties is fatal to the lien claim.
(Nita Lake Lodge Corp. v. Conpact Systems (2004) Ltd., 2006 BCSC 885 at para. 11).
 
In Chandler v. Champion Enterprises (Canada) Ltd., 2013 BCSC 1518 the lien claimant, who contracted with a tenant of the property, named the owner as the person who would become indented to the lien claimant. The court followed K.A. Ray Ltd. v. UP Group Canada Limited Partnership, 2007 BCSC 1881 and held that the lien was valid:
 
In the subject case, and in K.A. Ray Limited., the party named on the form was the owner of the land. The lien is against the land not the contractor, the defendant Champion was the owner of the land and was or would become indebted to the plaintiff by operation of the BLA. Finally, while the plaintiff was not a material man per se, he did provide material (such as paint) through his subcontractors to the Property.
 
For the above reasons I conclude that the plaintiff’s answer to para. 3 on the Form 5 was not an error requiring extinguishment of his claim of lien. It follows that he had a valid lien against the property owned by the defendant Champion.
 
(Chandler v. Champion Enterprises (Canada) Ltd., 2013 BCSC 1518 at para. 43 - 44).
 
Section 28 of the Interpretation Act cannot be used to cure incorrect party descriptions
 
581582 B.C. Ltd. argues that the court should employ s. 28(1) of the Interpretation Act, R.S.B.C. 1996, c. 238 to preserve the lien notwithstanding the error on its face. That section says:
 
28(1)   If a form is prescribed under an enactment, deviations from it not affecting the substance or calculated to mislead, do not invalidate the form used.
 
The fatal flaw in 581582 B.C. Ltd.'s position is that the error in question did not have to do with a deviation from the lien form. A deviation from the lien form would involve something like inadvertently putting the date money comes due in the space allotted for sum claimed and putting the sum claimed in the where the date ought to be. It is not a deviation from the prescribed form to describe the lien claimant as something other than the actual claimant. For that reason, s. 28 of the Interpretation Act is of no assistance to the application respondent.
 
(581582 B.C. Ltd. v. Habib, 2013 BCSC 378 at para. 9 - 10).
 

 

 

 

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