Post-Completion Meeting Insufficient to Preserve Lien Rights Under the PPCLA

In the recent case of Phoenix Treatment Systems Ltd v 1924613 Alberta Ltd.[1], Application Judge Summers made the decision to strike a lien for failing to be registered in the time limit set out under section 41(2) of the Prompt Payment and Construction Lien Act (the “PPCLA”)[2]

McLennan Ross successfully represented the Defendant in an application to have a lien registered against their property struck. The decision provides useful guidance on what constitutes “work on or in respect of an improvement” under Alberta’s PPCLA, and highlights the strict statutory limits governing entitlement to lien rights.

Background

The Defendant property owner retained the Plaintiff to perform plumbing work on a commercial property. The plumbing work was completed on May 22, 2024. On June 3, 2024, the Plaintiff attended a meeting with the Defendant’s insurance adjuster to explain the completed work. The Plaintiff subsequently registered a lien on August 1, 2024, which was 70 days after the plumbing work was complete, but 59 days after the meeting with the adjuster. The central issue before the Court was whether attendance at the meeting constituted “work on or in respect of an improvement,” such that the meeting extended the time for registering the lien under the PPCLA.[3]

Statutory Framework

Section 6(1) of the PPCLA provides for the creation of a lien where a person “does or causes to be done any work on or in respect of an improvement, or furnishes any materials to be used in or in respect of an improvement.”

The PPCLA defines “work” to include the performance of services on the improvement.[4]

The PPCLA defines “improvement” to include anything constructed, erected, built, placed, dug or drilled, or intended to be constructed, erected, built, placed, dug or drilled, on or in land except a thing that is neither affixed to the land nor intended to be or become part of the land.[5]

Importantly, Section 41(2) of the PPCLA imposes strict timelines for preserving lien rights. Subject to limited exceptions, a lien must be registered within 60 days from the last date materials are furnished, the date services are completed, or the contract to provide materials or services is abandoned.

Interpreting Lien Rights Under the PPCLA

The Court confirmed that longstanding principles governing the interpretation of the predecessor Builders’ Lien Act continue to apply under the PPCLA.[6] Courts adopt a bifurcated approach to the interpretation of the PPCLA:

1. Lien claimants must strictly comply with statutory requirements establishing entitlement to a lien; and
2. Once entitlement is established, the legislation may be interpreted liberally with respect to the rights it confers.[7]

The Court reviewed several authorities interpreting the scope of “work on or in respect of an improvement,” emphasizing that services must be directly related to the construction of the improvement itself in order to support lien rights.[8] The jurisprudence distinguishes between services integrally tied to the construction of an improvement, which may support a lien, and indirect or maintenance activities that will not.[9]

While acknowledging that no decision addressed the precise issue before it, the Court drew on prior cases for general guidance and identified Hugomark v Ontario (“Hugomark”) as the most analogous authority.[10] In Hugomark, the Ontario Superior Court held that attendance at meetings relating to a construction dispute did not constitute the direct supply of services to the site or towards an improvement, and therefore did not extend the applicable lien period.

Decision

The Court concluded that the Plaintiff’s attendance at a meeting with the insurance adjuster did not constitute “work on or in respect of an improvement” under the PPCLA. No physical work was performed on the property at the meeting, and the meeting was not part of the original plumbing contract. Accordingly, the lien was registered more than 60 days after completion of the plumbing work, outside of the time limit prescribed in section 41(2) of the PPCLA and as such, was struck. Costs were awarded in favour of the Defendant.[11]

Key Takeaway

This decision provides a helpful reminder that lien rights under the PPCLA arise strictly from statute and that claimants must clearly bring themselves within the statutory prerequisites to establish entitlement to a lien before any liberal interpretation of the rights conferred under the PPCLA will apply. Not all project-related activities will qualify as “work on or in respect of an improvement” capable of extending lien timelines. Communications, meetings, or other post-completion steps that are not directly tied to work done on the improvement of the land will generally not revive or extend lien rights.

Parties should ensure liens are registered well within statutory deadlines, rather than relying on arguments that ancillary activities constitute continuing work on the improvement.

Our Construction Law teams regularly advise clients on the registration of construction liens. Whether you are considering registering or disputing a lien, our team can assist in protecting your interests and achieving your objectives.