With the implementation of the Prompt Payment and Construction Lien Act in 2022 came new streamlined processes, including creating the Land Titles Registry Pending Registration Queue. This Queue was developed given the amount of instrument registration requests waiting to be examined by the Land Titles Office, allowing documents to sit in the Queue while waiting to be registered. However, this created questions about what dates are to be used when calculating a claimant’s filing deadlines, given the delay between the submission date and the actual registration date.
So, when does the clock start running to determine the 180-day deadline for registering a Certificate of Lis Pendens (Pending Litigation)? A recent decision from Alberta’s Court of King’s Bench answers this question.
An overview of Alberta’s Prompt Payment and Construction Lien Act
Alberta’s Prompt Payment and Construction Lien Act provides a streamlined dispute resolution process to facilitate efficient dispute resolution and ensure that outstanding funds are timely paid. The legislation also helps prevent long-term encumbrance of lands by liens. To register a builders’ lien (construction lien) against lands for unpaid materials or work, a party must comply with strict prescribed timelines concerning:
- Registering a Statement of Lien and supporting Affidavit at the Land Titles Registry;
- Filing a Statement of Claim with the Alberta Court of King’s Bench; and
- Registering a Certificate of Lis Pendens at the Land Titles Registry.
Implementation of the Pending Registration Queue (“PRQ”)
Under the new framework, the Land Titles Office Pending Registration Queue (“PRQ”) has been established. Once documents, such as construction liens, are submitted, they are entered into the PRQ and reviewed by the registrar later based on their spot in the queue. However, the document is not registered until that later date.
Strict deadlines for claimants
Section 14.1(7) of Alberta’s Land Titles Act confirms that in situations where a claimant’s obligation to register a document is bound by a specific deadline, the document will be deemed to be registered as long as it has entered the PRQ by the prescribed deadline. However, the legislation does not explicitly address the issue of how to calculate the claimant’s subsequent registration timelines.
This issue is a critical component of how the Prompt Payment and Construction Lien Act operates to ensure prompt payment and resolution of claims, as the Certificate of Lis Pendens must be registered within 180 days of the registration date of the Statement of Lien. Otherwise, the lien will cease to exist. So, how are these deadlines dealt with under the new legislative regime?
Applicant brings application to discharge lien due to claimant’s failure to comply with registration deadline
A recent decision from the Alberta Court of King’s Bench dealt with the issue of registration deadline calculations. The facts were not in dispute in CCS Contracting Ltd v. Condominium Corporation No 1520090. The claimant submitted a lien for registration on April 2, 2022, which was eventually registered on the title on July 25, 2022. The claimant filed a Statement of Claim on October 5, 2022, within the timeline of 180 days of the lien being submitted for registration. However, the Certificate of Lis Pendens was not filed until November 21, 2022. While this was within 180 days from the registration date, it was outside of the timeframe permitted under the Prompt Payment and Construction Lien Act if time begins accumulating on the date the lien was initially submitted for registration.
Therefore, the question before the Court was whether the time to commence enforcement proceedings under the Prompt Payment and Construction Lien Act begins on the date the lien is actually registered on title or the date on which the document is entered into the PRQ.
Court highlights difference between registration request and proper registration
In its analysis, the Court noted that when a document entered the PRQ as a registration request, it is assigned a “document registration request (DRR) number,” however, once it is registered, it is given a registration number. Therefore, a registration request only indicates that the Registrar will examine the document at a future date, aside from limited exceptional circumstances. When the Registrar reviews the document, it can proceed with registration or refuse to register the request.
The Court acknowledged that the time limit under section 14.1(7) of the Land Titles Act is satisfied upon the document entering the PRQ. However, many things can happen between the time when a document is a registration request and when it is actually registered.
Ambiguity resolved in favour of lien claimant
The Court also looked to previous case law, which maintains that lien legislation is intended to be interpreted strictly. However, it is not to be construed so strictly that it would prejudice the rights of owners and third parties and would not be considered inconsistent with the legislation’s intention. In circumstances where there is ambiguity in the Prompt Payment and Construction Lien Act or amendments to the Land Titles Act, it is to be resolved in favour of the lien claimant. In this case, there was no prejudice to the applicant owner or third-party rights.
The Court ultimately found that the clock for the time period for the submission of a Certificate of Lis Pendens only begins from the date on which a lien is registered and not when it enters the PRQ.
The Construction Litigation Lawyers at DBH Law in Calgary Provide Trusted Representation in Construction Disputes
The experienced construction lawyers at DBH Law understand the unique risks involved in any construction project. Our litigation team is also aware of the expensive disputes and disagreements that can arise when something does not go as planned. Our knowledgeable lawyers work closely with clients involved in construction projects to ensure that they proactively mitigate potential risks and understand their options in the event of a dispute. To speak with a member of our team regarding your construction lien claim, contact us online or by phone at 403-252-9937.