Trigger of lien filing period based on certificate of completion

The issuance of a certificate of completion is one of the triggers that will start the lien filing period.

 

If a certificate of completion has been issued with respect to a contract or subcontract, the claims of lien of

(a) the contractor or subcontractor, and

(b) any persons engaged by or under the contractor or subcontractor

may be filed no later than 45 days after the date on which the certificate of completion was issued.

(Builders Lien Act, s. 20(1)).

 

An owner cannot unilaterally issue a certificate of completion, a valid request for a certificate is a pre-requisite:

 

On my reading of s. 7 of the Act, a certificate of completion may only be issued where there has been a request for such a certificate under s. 7(3) of the Act.  I see nothing in s. 7 that allows an owner to unilaterally declare completion of the project or a part of it through the issuance to itself of a certificate of completion. 

(Quigg Homes WV345 Ltd. v. Bosma, 2004 BCSC 1582 at para. 5).

 

Within 7 days of issuing a certificate of completion the payment certifier must give notice of it and post a copy of the notice of certificate in a prominent place:

 

(4) If a certificate of completion is issued, the payment certifier must, within 7 days,

(a)    deliver a copy of the certificate to the owner, the head contractor, if any, and the person at whose request the certificate was issued,

(b)   deliver a notice of certification of completion to all persons who submitted a request under subsection (2) in relation to the contract or subcontract, and

(c)    post, in a prominent place on the improvement, a notice of certification of completion.

(Builders Lien Act, s. 7(4)).

 

Arguably the certificate is not “issued” until posted:

 

Counsel disagree as to whether the word "issued" in ss. 8 and 20 simply refer to completing the Certificate of Completion or requires that it be posted under s. 7(4).  As I have found that there was no effective Certificate of Completion issued, it is not necessary to decide this point.  However, in obiter dicta I would note that in my opinion the process of issuance is not complete unless there is some communication of the document.  Presumably that is why s. 7(4) imposes a mandatory requirement to post a Notice of Certification of Completion on the improvement.  It is consistent with the scheme of the act that subcontractors must be notified of such certificates.

(Alterra Property Group Ltd. v. Doka Canada Ltd., 2008 BCSC 1880 at para. 15).

 

The certificate must be posted on the improvement, not elsewhere:

 

A further impediment to the petitioner is the fact that if the Certificate of Substantial Completion was posted in the site office ... the site office is on a separate parcel of land from the lot on which the improvement sits.  I do not accept the petitioner's submissions that the trailer which housed the site office is part of the improvement.  The cases cited by the petitioner in this regard are clearly distinguishable.

(Alterra Property Group Ltd. v. Doka Canada Ltd., 2008 BCSC 1880 at para. 16).

 

A payment certifier who fails or refuses to post the certificate on site as required by s. 7(4) will be liable to anyone who suffers loss or damage as a result:

 

A payment certifier who fails or refuses to comply with subsection (4) or (7) is liable to anyone who suffers loss or damage as a result.

(Builders Lien Act, s. 7(9)).

 

According to s. 20(3) (see above) a certificate of completion will not be relevant if it was issued after the project was substantially complete:

 

[T]he legislature did not intend to permit contractors and subcontractors who had failed to file a lien within 45 days of substantial completion, to escape the consequences of that failure by requesting the issuance of a certificate of completion.

 

In my opinion, where a contractor or subcontractor requests the issuance of a certificate of completion on a date which is found to be more than 45 days after substantial completion of the contract work, s.20(3) operates so as to prevent the extension or renewal of the time for filing a lien.  It is my view that, in such circumstances, the lien “…is not governed by subsection (1).” 

 

(Sytnick et al v. 633170 B.C. Ltd., 2006 BCSC 1555 at para. 16 - 17).