Thursday, 2 November 2017

Statutory Remedies in Construction Disputes

Author: Graham Henderson
 
In the construction industry, insolvency is a regular occurrence that often leaves innocent companies unpaid for their goods and services. Insolvency also sometimes has a domino effect leading to the non-payment of multiple contractors and suppliers.
There are remedies available to companies to protect themselves from being affected by others’ insolvencies; however, those remedies typically have strict deadlines that cannot be missed. Companies often contact legal counsel after the deadlines have passed, missing opportunities to protect themselves.
The following chart provides a summary of the most prevalent statutory remedies available to companies involved in construction disputes:



 

Remedy

Companies Eligible for Remedy

Deadline

1.

Builders’ Lien

(Builders’ Lien Act, s. 6)

A company that provided materials or services for an improvement to land.

The company must register the lien within 45 days from the last day that materials or services were provided (90 days for improvements to oil or gas wells).

2.

Vendor’s Lien

(Builders’ Lien Act, s. 17)

A company that delivered materials for use in an improvement to  land, but whose materials have not yet been incorporated into the project.

The Vendor’s Lien expires as soon as the materials are incorporated into the improvement.

3.

Possessory Lien

(Possessory Liens Act, s. 2)

A company that expended money, labour or skill on a person’s movable property (e.g. objects and equipment, but not land), and in doing so enhanced the value of that property.

The Possessory Lien expires as soon as the property is no longer in the company’s possession.

4.

Unpaid Seller’s Lien

(Sale of Goods Act, s. 40)

A company that has sold goods but is still in possession of those goods.

The Unpaid Seller’s Lien expires as soon as the goods are no longer in the company’s possession.

5.

Public Works Claim

(Public Works Act, s. 14)

A company that provided materials or services for an Alberta government public works project.

For work on a roadway: The company must deliver a notice of claim between 30 to 90 days after the last day that materials or services were provided.

For any other work: The company must deliver a notice of claim within 45 days from the last day that materials or services were provided.

6.

Thirty Day Goods Claim

(Bankruptcy and Insolvency Act, s. 81.1)

A company that delivered goods to a purchaser that is now bankrupt. The goods must have been delivered within 30 days before the date of bankruptcy.

The company must deliver a written demand within 15 days from the date of the bankruptcy.

7.

Garage Keeper’s Lien

(Garage Keepers’ Lien Act, s. 2)

A company (known as the “Garage Keeper”) that stored or repaired a motor vehicle (including heavy-duty vehicles).

The Garage Keeper’s Lien expires as soon as the vehicle is returned to its owner, unless the Garage Keeper obtained a signed acknowledgment of indebtedness.

Further, in most cases, the Garage Keeper’s Lien must be registered within 21 days after the vehicle is returned to the owner (occasionally, earlier registration may be required).

There are many nuances to the statutory remedies and deadlines listed above. It is important for companies to be aware of the remedies and to contact legal counsel as soon as possible if they believe that one of the remedies may be applicable to their situation.
If you, or someone at your company, would like more information regarding your statutory remedies, feel free to contact any of the lawyers in our construction group.

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