COVID-19: Effect of Suspension of Limitation Periods on Lien Claims


Clark Wilson LLP has previously provided you with alerts regarding Ministerial Order No. M086. The effect of the Order is to suspend all limitation periods or other mandatory time limits to commence civil claims, subject to ultimate discretion of the court (or any other tribunal or body with like statutory power), effective as of March 26, 2020. The suspension of limitation periods will be in place until the state of emergency declared March 18, 2020 by the province in respect of the COVID-19 pandemic expires or is cancelled.

It is not yet clear what impact the Order will have on construction projects in B.C., or on the application of lien periods established by the Builders Lien Act, SBC 1997, c. 45 (the “Act”).

Parties to construction contracts in B.C. are familiar with the deadlines for filing builders liens and related deadlines for release of holdback funds set out in the Act. The Act requires that builders liens be filed within forty-five days after the date on which a certificate of completion is issued, or (depending on the circumstances) the head contract is completed, abandoned or terminated, or the improvement is completed or abandoned. The Act also requires that an action to enforce a claim of lien be commenced within one year of the lien being filed, or, within twenty-one days of service of a Notice to Commence in the form prescribed by the Act. As an owner cannot release holdback payments until all builders liens have been paid, the filing of a builders lien impacts the flow of funds on a construction project.

It appears clear based on the wording of the Order that the one year limitation period for commencing an action to enforce a claim of lien, and the twenty-one day period for commencing an action after service of a Notice to Commence, will be suspended. This means that if a contractor or material supplier has previously filed a lien, and the deadline to commence the action to perfect the lien is upcoming, that deadline will be suspended until the state of emergency in B.C. expires or is cancelled.

It is not yet clear if the Order applies to the forty-five day limitation period for the filing of builders lien claims set out in the Act.

On a plain reading of the Order, filing a builders lien pursuant to the Act is not the same as commencing a civil claim. As such, it would be overly presumptive to assume that the forty-five day filing lien deadline is suspended by the Order. The Order suspends mandatory limitation periods and mandatory time periods within which a civil action, proceeding, claim or appeal must be commenced in the Provincial Court, Supreme Court or Court of Appeal. Builders liens are not forms of actions, proceedings or claims. Builders liens are charges by which a contractor or material supplier secures interest for unpaid materials supplied or work performed to an improvement. Further, builders liens are filed with the B.C. Land Title Office, and are not commenced in the B.C. courts. Given the purpose of builders liens, and the language of the Order, it appears likely that the time period to file a lien under the Act is not subject to suspension by the Order. It also appears that other project deadlines established by the Act, such as the deadlines for payment certifiers to issue certificates of completion and for owners to make payments, will remain unaffected by the Order.

As it appears that the Order has no bearing on the release of holdback funds, it should have no impact on Shimco lien claims, or liens against the holdback. Lien claimants are likely to commence their actions to enforce Shimco liens at the earliest opportunity, notwithstanding the Order, as these actions must be commenced prior to the payment out of any holdback funds.

Until we receive further clarification from the B.C. government on the scope of the Order, it is recommended that contractors, material suppliers and owners continue to follow and comply with the builders lien deadlines set out in the Act.

It should be noted that, unlike similar orders suspending limitation periods made in Ontario and Quebec, this B.C. Order is not retroactive and applies effective March 26, 2020. Any lien rights that expired on or before March 26, 2020 are in no way extended by the Order.

It should also be noted that the Order does not say that any actions or claims must be held in abeyance  As both the B.C. courts and the B.C. Land Tittle Office do accept electronic filings, builders lien claims and related lien actions can (and likely will) still continue to be filed. The procedural deadlines set out in the B.C. Supreme Court Civil Rules that would otherwise apply to an action will, however, be suspended by the Order.

Owners, contractors and material suppliers should carefully monitor the government’s approach to ensure that they aware of all limitation periods and deadlines that will apply to their projects on the expiry or cancellation of the state of emergency.

For more legal analysis of how COVID may affect your business, or personal affairs, visit Clark Wilson’s COVID-19 Resource and FAQ pages