Section 37 of the Ontario Construction Act states that a perfected lien expires two years after the commencement of the action that perfected the lien, unless the matter is set down for trial or an order is made for the trial of an action in which the lien may be enforced. But can a lien arising from a project be enforced in a separate lien action arising from the same project? How does the wording of the Act factor into the analysis? And finally, how do similar provisions in Ontario’s legislation and the Alberta PPCLA compare?

Background

CER was the general contractor for the wind turbines on a wind power project in Ontario. NBL was a sub-subcontractor under CER who claimed $507,730.66 for unpaid work and filed a lien on the lands housing the wind turbines on the project (the “NBL Lien”).

PowerTel was the general contractor for the transmission lines on the project. Corbiere was a subcontractor under PowerTel who filed a lien on the lands housing the transmission lines on the project (the “Corbiere Lien”). The wind turbines and transmission lines were on differing lands, although both lands were part of the same project.

The NBL Lien was not set down for trial within two years. Thus, the NBL Lien was considered expired unless enforceable in another action under section 37 of the Construction Act. The Corbiere Lien was set down for trial within two years. Although both liens arose from the project, NBL had no contract with PowerTel, and Corbiere had no contract with CER.

CER sought to discharge the NBL Lien, arguing that it had ceased to exist under section 37 of the Act because NBL had not set the matter down for trial within two years. NBL’s position was that the lien was still enforceable under the concurrent action arising from the Corbiere Lien.

NBL argued that if both liens related to the same premises, NBL ought to have been served with the notice of trial in the Corbiere action. This would render NBL a party to the Corbiere action and allow its lien to be enforced within that action. NBL also argued that the meaning of “improvement” in the Act includes and drives the meaning of “premises”. Both NBL and Corbiere provided services in respect of the same improvement (the project), so both liens ought to have been preserved against the same premises.

What the Court Said

The question before the court was whether NBL’s lien could be enforced within the Corbiere action.

The Court disagreed with NBL’s interpretation of the Act, finding that the meaning of “improvement” is tied to land itself, not the overall premises.

Corbiere described specific lands constituting the premises for the purpose of its lien, which included Corbiere’s improvements to the premises.

However, NBL’s lien claim described different lands than those described in the Corbiere Lien. This made sense, because the wind turbines and transmission lines were located on separately titled parcels of land. Thus, the court found that the Corbiere Lien and NBL Lien related to different improvements on the premises for the purposes of the Act, such that the NBL Lien could not be enforced under the Corbiere action.

Alberta Equivalent

Unlike section 37 of the Ontario Act, section 46(2) of the Alberta Prompt Payment and Construction Lien Act allows a party to apply to remove a lien and vacate the certificate of lis pendens if no trial has been held within two years of the certificate’s registration. In Ontario, the lien automatically expires without judicial intervention unless the matter is set down for trial or an order for the trial of the action is made within two years.

Section 46(2) of the PPCLA is not a mandatory provision. In 1361556 v Alberta Ltd v Ristorante Cosa Nostra Inc, 2021 ABQB 157, the court stated that the onus is on the lien claimant to explain the delay in getting to trial. Case law prior to this case indicates that the explanation need not be extensive. In A.R. Baziuk Architect Ltd. v. Isaak Properties Ltd., no explanation was given. Explanations from other cases include non-litigation delay (awaiting advice and payment from a bankruptcy trustee, see West Fab Homes Ltd v Duncan, 1996 ABCA 382), and the lien claimant’s insolvency (see Heron Building Co v Sunset Diesel Service Ltd, 2006 ABQB 137).

Although the purpose of the PPCLA is to ensure that lien claims are prosecuted promptly, the court in 1361556 stated that failing to bring a lien claim to trial within two years simply entitles the Court to ask why it has not. This is a marked difference from the mandatory provisions in the Ontario Act, but makes sense given that it is difficult to bring a matter to trial within two years, compared to simply having the matter set down (i.e. scheduled) for trial at some point in the future.

Section 46(2) of the PPCLA (and the former Builders’ Lien Act) is often intertwined with delay applications under Rules 4.31 and 4.33 and their predecessors. As such, when considering section 46(2) applications, Alberta courts often consider evidence of prejudice due to the delay in moving to trial, as well as the extent of and reasoning behind the lien claimant’s inaction.  

Takeaways

Lien claimants should endeavor to bring their matters to trial as quickly as possible, regardless of which province the lien action is commenced. However, this is one area where the result varies between the provinces. While Ontario utilizes a bright-line rule, Alberta’s approach allows the court discretion based on the reason for delay.

As lien rights generally are a nuanced area of law, it is best to seek legal advice as soon as possible. Please contact Anthony Burden or Grant Szelewicki in Calgary, Ryan Krushelnitzky in Edmonton, or any member of Field Law's Construction Group for guidance and assistance in this area.

Link to decision: 1499545 Ontario Inc. (Northern Bulk Logistics) v. Construction Energie Renouvelable GP/S.E.N.C., 2025 ONSC 111