(1) In this Act:

• "certificate of completion" means a certificate under section 7 stating that work under a contract or subcontract has been completed and includes an order made under section 7(5);

• "claim of lien" means a claim of lien in the prescribed form;

• "class of lien claimants" means all lien claimants engaged by the same person in connection with an improvement;

• "completed", if used with reference to a contract or subcontract in respect of an improvement, means substantially completed or performed, not necessarily totally completed or performed;

• "contractor" means a person engaged by an owner to do one or more of the following in relation to an improvement:

  • (a) perform or provide work;

  • (b) supply material; but does not include a worker; "court" means the Supreme Court;

• "head contractor" means a contractor who is engaged to do substantially all of the work respecting an improvement, whether or not others are engaged as subcontractors, material suppliers or workers;

• "holdback period" means the period of time calculated under section 8;

• "improvement" includes anything made, constructed, erected, built, altered, repaired or added to, in, on or under land, and attached to it or intended to become a part of it, and also includes any clearing, excavating, digging. drilling, tunneling, filling, grading or ditching of, in, on or under land;

• "land title office" means the land title office for the land title district or districts in which the land or any part of it is located and on which the improvement is made or is being made;

• "lien claimant" means a person who files a claim of lien under this Act;

• "lien holder" means a person entitled to a lien under this Act;

• "material" means movable property that is delivered to the land on which the improvement is located and is intended to become part of the improvement. either directly or in a transformed state, or is consumed or used in the making of the improvement, including equipment rented without an operator.

• "material supplier" means a contractor or subcontractor who supplies only material in relation to an improvement;

• "notice of certification of completion" means a notice in the prescribed form stating that a certificate of completion or a court order to the same effect has been issued;

• "notice of interest" means a notice in the prescribed form warning other persons that the owner's interest in the land described in the notice is not bound by a lien claimed under this Act in respect of an improvement on the land unless that improvement is undertaken at the express request of the owner;

• "notice to commence an action" means a notice in the prescribed form requiring a claim holder to commence an action to enforce a claim of lien;

• "operator" means an individual who operates equipment at an improvement site but does not include an individual who temporarily or periodically is present at the improvement site to install, inspect, service, empty or remove equipment;

• "owner" includes a person who has, at the time a claim of lien is filed under this Act. an estate or interest, whether legal or equitable, in the land on which the improvement is located, at whose request and

  • (a) on whose credit.

  • (b) on whose behalf,

  • (c) with whose knowledge or consent, or

  • (d) for whose direct benefit

• work is done or material is supplied, and includes all persons claiming under the owner, but does not include a mortgagee unless the mortgagee is in possession of the land;

• "registrar" means the registrar of a land title office;

• "required holdback" means, in relation to a contract or subcontract, the amount required under section 4 to be retained from payments under that contract or subcontract, less any payments made under an entitlement to payment arising under section 9;

• "services" includes

  • (a) services as an architect or engineer-whether provided before or after the construction of an improvement has begun, and

  • (b) the rental of equipment, with an operator, for use in making an improvement;

• "subcontractor" means a person engaged by a contractor or another subcontractor to do one or more of the following in relation to an improvement:

  • (a) perform or provide work;

  • (b) supply material;

• but does not include a worker or a person engaged by an architect. an engineer or a material supplier;
  "wages" means money earned by a worker for work and includes

  • (a) salaries, commissions or money, paid or payable by an employer to an employee for work,

  • (b) money that is paid or payable by an employer as an incentive and that relates to hours of work, production or efficiency,

  • (c) money, including the amount of any liability under section 63 of the Employment Standards Act, required to be paid by an employer to an employee under that Act,

  • (d) money required to be paid in accordance with a determination or an order of the tribunal under the Employment Standards Act,

  • (e) money required under a contract of employment to be paid, for an employee's benefit, to a fund, insurer or other person and includes money payable under Parts 10 and 11 of the Employment Standards Act. and

  • (f) money required to be paid under a collective agreement;

• "work" means work. labour or services. skilled or unskilled, on an improvement;

• "worker" means an individual engaged by an owner, contractor or subcontractor for wages in any kind of work. whether engaged under a contract of service or not. but does not include an architect or engineer or a person engaged by an architect or engineer.

(2) For the purposes of this Act. a head contract, contract or subcontract is. substantially performed if the work to be done under that contract is capable of completion or correction at a cost of not more than

• (a) 3% of the first $500 000 of the contract price,

• (b) 2% of the next $500 000 of the contract price, and

• (c) 1 % of the balance of the contract price.

(3) For the purposes of this Act, an improvement is completed if the improvement or a substantial part of it is ready for use or is being used for the purpose intended

(4) For the purposes of this Act, the construction of a strata lot is completed. or a contract for its construction is substantially performed, not later than the date the strata lot is first occupied.

(5) For the purposes of this Act. a contract or improvement is deemed to be abandoned on the expiry of a period of 30 days during which no work has been done in connection with the contract or improvement, unless the cause for the cessation of work was and continued to be a strike, lockout, sickness, weather conditions, holidays, a court order, shortage of material or other similar cause.

(6) Anything that may be done under this Act by or with reference to an owner, contractor, subcontractor, worker or mortgagee is valid if done by or with reference to an agent of that person.

 (1) Subject to this Act, a contractor, subcontractor or worker who, in relation to an improvement,

• (a) performs or provides work,

• (b) supplies material, or

• (c) does any combination of those things as referred to in paragraphs (a) and (b) has a lien for the price of the work and material, to the extent that the price remains unpaid, on all of the following

• (d) the interest of the owner in the improvement;

• (e) the improvement itself.,

• (f) the land in, on or under which the improvement is located;

• (g) the material delivered to or placed on the land.

(2) Subsection (1) does not create a lien in favour of a person who performs or provides work or supplies material to an architect, engineer or material supplier.

(1) An improvement done with the prior knowledge, but not at the request, of an owner is deemed to have been done at the request of the owner.

(2) Subsection (1) does not apply to an improvement made Alter the owner has filed a notice of interest in the land title office.

(1) The person primarily liable on each contract, and the person primarily liable on each subcontract, under which a lien may arise under this Act must retain a holdback equal to 10% of the greater of

• (a) the value of the work or material as they are actually provided under the contract or subcontract, and

• (b) the amount of any payment made on account of the contract or subcontract price.

(2) The obligation to retain the holdback under subsection (1) applies whether or not the contract or subcontract provides for periodic payments or payment on completion.

(3) For the purposes of subsection (1), value must be calculated on the basis of the contract or subcontract price or, if there is no specific price, on the basis of the actual value of the work or material.

(4) Subject to section 5 (4), if a mortgagee is a savings institution and is authorized by the owner to disburse the money secured by a mortgage, the mortgagee may retain as a holdback the amount required to be retained by the owner as the payor on the contract and the retention by the mortgagee of that amount is deemed to be compliance with this section by the owner.

(5) Subject to section 5 (4), a mortgagee who retains or agrees to retain a holdback under subsection (4) of this section

• (a) has the same rights and obligations in relation to the holdback as if it had been retained by the owner, and

• (b) is liable to the owner or any lien holder who suffers loss or damage as a result of the failure of the mortgagee

  • (i) to retain the holdback as agreed, or

  • (ii) to fulfill the mortgagee's obligations in relation to the holdback.

(6) Despite subsection (1) (a), a holdback must not be retained from a worker, material supplier, architect or engineer.

(7) A person who, in good faith. purchases an improvement. including a strata lot, may, despite an agreement to the contrary, retain from the vendor a holdback equal to 10% of the purchase price.

(8) A person is not entitled to retain a holdback under subsection (7) if the person is already required to retain a holdback under section 75 (2) of the Condominium Act in respect of the strata lot.

(9) Subject to section 34, a holdback required to be retained under this section is subject to a lien under this Act, and each holdback is charged with payment of all persons engaged, in connection with the improvement, by or under the person from whom the holdback is retained.

• (a) establish at a savings institution a holdback account for each contract under which a lien may arise,

• (b) pay into the holdback account the amount the owner is required to retain under section 4, and

• (c) administer the.holdback account together with the contractor from whom the holdback was retained.

(2) Subject to sections 9 and 34, all amounts deposited into a holdback account

• (a) are charged with payment of all liens arising under the contractor from whom the holdback was retained,

• (b) subject to paragraph (a). are held in trust for the contractor referred to in paragraph (a). and

• (c) must not be paid out of the account without the agreement of all the persons who administer the account.

(3) An administrator of a holdback account may apply to the court for directions respecting administration of the account, and the court may make any order it considers appropriate, including one or more of the following orders:

• (a) that the owner establish and maintain a holdback account as sole administrator;

• (b) that some or all of the money in the holdback account be paid into court under section 23 for the removal of claims of lien;

• (c) that an administrator be removed or replaced;

• (d) that a lien holder be paid.

(4) If the mortgagee retains a holdback under section 4 (4), this section other than this subsection does not apply.

(5) If there is more than one owner, only one of the owners is required to establish and administer the holdback account.

(6) Unless otherwise agreed. interest on, the holdback account accrues to the owner during the holdback period and after that accrues to the credit of the contractor from whom the holdback was retained.

(7) Failure by the owner to comply with subsection (l) (b) constitutes an act of default under the contract and the contractor, on 10 days' notice, may suspend operations for as long as the default continues.

(8) This section does not apply to

• (a) the government, if the government is an owner, or

• (b) a contract in respect of an improvement, if the aggregate value of work and material provided is less than $100 000.

(2) A payment applied contrary to this section does not reduce the liability under this Act of the person making the payment.

(3) This section does not apply to money held in excess of the required holdback.

 (1) In this section, "payment certifier" means

• (a) an architect, engineer or other person identified in the contract or subcontract as the person responsible for payment certification, or

• (b) if there is no person as described in paragraph (a),

  • (i) the owner acting alone in respect of amounts due to the contractor or

  • (ii) the owner and the contractor acting together in respect of amounts due to any subcontractor.

(2) A lien holder in respect of an improvement may, by making a written request, require that the payment certifier for the improvement deliver to the lien holder

• (a) particulars of any certificate of completion issued under this section before and after the request, or

• (b) particulars of certificates of completion issued, before and after the request. with respect to stipulated contracts or subcontracts.

(3) On the request of a contractor or subcontractor the payment certifier must, within 10 days after the date of the request. determine whether the contract or subcontract has been completed and, if the payment certifier determines that it has been completed. the payment certifier must issue a certificate of completion.

(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 .1 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.

(5) If the payment certifier fails or refuses to issue a certificate of completion as provided in subsection (3), the court may, on application by the person.who requested the certificate and on being satisfied that the contract or subcontract has been completed, make an order declaring that the contract or subcontract has been completed.

(6) An order under subsection (5)

• (a) may be made on terms and conditions as to costs or otherwise that the court considers just, and

• (b) has the same effect as a certificate of completion issued by a payment certifier.

(7) If an order.is made under subsection (5) declaring that a contract or subcontract has been completed, the payment certifier must comply with subsection (4) as if the order were a certificate of completion.

(8) A payment certifier who receives a request under subsection (3) and who fails or refuses, without reasonable excuse and within the time specified in that subsection, to issue a certificate of completion respecting the contract or subcontract is liable to anyone who suffers loss or damage as a result.

(9) 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.

(10) A certificate of completion may be in the prescribed form and, if it is in the prescribed form, it is sufficient to comply with this Act.

(1) If a certificate of completion is issued with respect to a contract or subcontract, the holdback period in relation to

• (a) the contract or subcontract, and.

• (b) any subcontract under the contract or subcontract expires at the end of 55 days after the certificate of completion is issued.

(2) The holdback period for a contract or subcontract that is not governed. by subsection (1) expires at the end of 55 days after

• (a) the head contract is completed, abandoned or terminated. if the owner engaged a head contractor, or

• (b) the improvement is completed or abandoned, if paragraph (a) does not apply.

(3) If a holdback is retained by a purchaser under section 4 (7), the holdback period expires on the later of

• (a) 55 days after the acceptance for registration at a land title office of the purchaser's interest, and

• (b) the day the period would have expired if the holdback had been made with respect to a contract to which subsection (2) applies

(4) Payment of a holdback required to be retained under section 4 may be made after expiry of the holdback. period, and all liens of the person to whom the holdback is paid, and of any person engaged by or under the person to whom the holdback is paid, are then discharged unless in the meantime a claim of lien is filed by one of those persons or Proceedings are commenced to enforce lien against the holdback.

(1) A contractor is entitled to receive, from the holdback retained by the owner from the contractor an amount equal to the holdback amount applicable to a subcontract if

• (a) a certificate of completion has been issued in respect of the subcontract to which the contractor was a party, and

• (b) the holdback period established under section 8 (1) has expired without any claims of lien being filed that arose under the subcontract.

(2) An owner is deemed to have complied with the requirements of section 4 even if the amount retained has been reduced to a lesser percentage than is required by that section if

• (a) an amount is paid to a contractor in accordance with subsection (1) of this section, and

• (b) the amount retained by the owner would have complied with the requirements of section 4 had no payments been made under this section

(3) Subsections (1) and (2) apply if a certificate of completion is given in relation to subcontract to which a contractor is not a party

(4) If a contractor is entitled to an amount under subsection (1), payment may be made from the holdback account established under section 5.

(1) Money received by a contractor or subcontractor on account of the price of the contract or subcontract constitutes a trust fund for the benefit of persons engaged in connection with the improvement by that contractor or subcontractor and the contractor or subcontractor is the trustee of the fund.

(2) Until all of the beneficiaries of the fund referred to in subsection (1) are paid, a contractor or subcontractor must not appropriate any part of the fund to that person's own use or to a use not authorized by the trust.

(3) If the liens of a class of lien claimants are discharged under this Act by the payment of an amount that is less than the amount owing to the person who engaged the class, the members of the class are subrogated to the rights under subsections (1) and (2) of the person who engaged the class.

(4) Subsections (1) and (2) do not apply to money received by an architect, engineer or material supplier.

(1) A contractor or subcontractor commits an offence if that person

• (a) appropriates or converts any part of a fund in contravention of section l0, or

• (b) contravenes section 13 (2).

(2) A person who commits an offence under subsection (1) (a) is liable to a fine of not more than $ 10 000 or to imprisonment for a term of not more than 2 years, or both.

(3) If a contractor or subcontractor is a corporation. a director or officer of the corporation who knowingly assents to or acquiesces in an offence under subsection (1) (a) by the corporation commits the offence in addition to the corporation.

(4) Despite subsections (1) to (3),

• (a) to the extent that a contractor or subcontractor has paid for work or material supplied under a contract or subcontract, the retention by the contractor or subcontractor of trust money in an amount equal to the amount paid is not an appropriation or conversion that contravenes section 10, and

• (b) if money is loaned to a person on whom a trust is imposed by section 10 and is used to pay for all or part of work or material supplied, trust money may be applied to discharge the loan to the extent that the lender's money was so used by the trustee. and money so applied is not an appropriation or conversion that contravenes section 10.

(5) An information must not be laid in respect of an alleged offence under subsection (1) or (3) more than 3 years after the alleged offence occurred.

(6) Subsection (4) (b) does not limit the rights of a lender who, in the ordinary course of business, receives money in good faith from a person on whom a trust is imposed under section 10.

(7) If a contractor or subcontractor commingles, with other money, any part of the fund referred to in section 10 that, of itself, does not constitute a breach of the trust created under section 10 (1) or a contravention of section 10 (2).

(1) In the case of money owing to a contractor or subcontractor that would, if paid, to the contractor or subcontractor, be subject to a trust under section 1 0. the money. if it is paid into court under an attachment under the Court Order Enforcement Act, is subject to a trust as if it had been paid to the contractor or subcontractor, and the interest of the garnishor is subordinate to the interest of the beneficiaries of the trust.

(2) A garnishee under an attachment referred to in subsection (l) must, at the time of payment into court, file in the court re registry a notice in the prescribed form and deliver a copy of the notice to the garnishor.

(3) If a notice is filed under subsection (2), the registrar of the court must not pay out of court without an order of the court any money paid into court under subsection (1).

(4) Money held in a holdback account established under section 5 is not subject to garnishment.

(5) If money is paid into court under this Act by a contractor, subcontractor or owner. the money becomes or remains subject to the trust imposed by section 10.

An action by a beneficiary or against a trustee of a trust created under section 10 must not be commenced later than one year after

• (a) the head contract is completed, abandoned or terminated or

• (b) if the owner did not engage a head contractor, the completion or abandonment of the improvement in respect of which the money over which a trust is claimed became available.

(1) Except as provided in section 18. a claim of lien is made by filing in the land title office a claim of lien in the prescribed form.

(2) An agent who represents more than one lien claimant may, with respect to a particular improvement, make a single claim of lien on behalf of all of the lien claimants represented, and the prescribed form may be altered accordingly for that purpose.

(3) The registrar must not allow a claim of lien to be filed unless satisfied that the land is adequately described.

(4) On the filing of the claim of lien in the land title office, the registrar must endorse a memorandum of the filing on the register of title to the land or against the estate or interest in the land described in the claim of lien.

(1) If an owner enters into a single contract for improvements on more than one parcel of land, alien claimant providing work or material under that contract, or under a subcontract, may choose to have the lien follow the form of the contract and be a lien against each parcel for the price of all work and material provided to all of the parcels of land.

(2) If a lien is claimed under subsection (1) against several parcels of land, on application to the court by any person with an interest in or charge on the land, the court may apportion the lien among the parcels for the purpose of determining the lien claimant's rights as against persons having rights in particular parcels.