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.
