Executive Summary: Key Legal and Evidentiary Issues

• Central question was whether a post-completion meeting with an insurance adjuster qualified as “work on or in respect of an improvement” under the Prompt Payment and Construction Lien Act (PPCLA) so as to affect the 60-day lien filing period.
• The plumbing work was completed on May 22, 2024, and the lien was submitted for registration on August 1, 2024; the lien was therefore in time only if the June 3, 2024 meeting counted as lienable “work.”
• Alberta’s bifurcated interpretive approach to lien legislation required strict compliance with the statutory preconditions for the creation and timing of a lien, even though other lien-related matters can receive a more liberal interpretation.
• Prior Alberta and Ontario authorities guided the Court toward the view that only services directly related to the process of construction or improvement qualify as “work,” and that meetings about claims or disputes concerning the work are not lienable services.
• The meeting with the insurer’s adjuster, held almost two weeks after the plumbing work had been completed, was found not to involve work on the improvement and was not shown to be part of the original plumbing contract between the parties.
• The lien was held to be out of time and was ordered struck, with costs to follow the event under Column 1 of Schedule C of the Alberta Rules of Court, and no specific dollar amount stated in the decision.

Background and facts of the dispute

Phoenix Treatment Systems Ltd (the plaintiff) was retained by 1924613 Alberta Ltd (the defendant), the owner of the Grande Cache Mall, to carry out plumbing work after a sewer backup on the mall lands. There was no written agreement between the parties. The plumbing work was completed on May 22, 2024. After the work had been done, the defendant’s representative asked the plaintiff to attend again at the lands to meet with the defendant’s insurance adjuster and explain the work that had been completed. This meeting with the insurance adjuster took place on June 3, 2024 and is referred to in the decision as the “Meeting.” The plaintiff submitted its lien against the lands for registration on August 1, 2024. That date is 70 days after May 22, 2024 and 59 days after the June 3, 2024 Meeting. Because the PPCLA sets a 60-day deadline for registering a lien for the performance of services, the central factual and legal issue was whether the Meeting qualified as “work on or in respect of an improvement.”

Statutory framework under the PPCLA

The decision sets out the main PPCLA provisions governing lien creation and timing. Section 6(1) provides that a person who does or causes to be done any work on or in respect of an improvement, or furnishes any material to be used in or in respect of an improvement, for an owner, contractor, or subcontractor, has a lien on the owner’s estate or interest in the land for the unpaid price of the work or material. The statute defines “improvement” as anything constructed, erected, built, placed, dug or drilled, or intended to be constructed, erected, built, placed, dug or drilled, on or in land, except a thing that is neither affixed to the land nor intended to be or become part of the land. It also provides that “work” includes the performance of services on the improvement. Subsection 41(2) of the PPCLA states that a lien for the performance of services may be registered within a period that begins when the lien arises and ends 60 days from the day the performance of the services is completed or the contract to provide the services is abandoned, subject to exceptions not applicable in this case. In this matter, the question whether the lien was registered within the 60-day period turned on whether the Meeting constituted “work on or in respect of an improvement” so as to be considered part of the performance of services.

Approach to interpreting lien legislation

Applications Judge Summers reviewed Alberta case law on how lien legislation is to be interpreted, focusing on authorities dealing with the former Builders’ Lien Act, the predecessor to the PPCLA. The Court adopted the existing bifurcated approach described by Justice Nixon in Young EnergyServe Inc v LR Ltd, LR Processing Partnership. Under that approach, a strict interpretation is required at the first stage, when determining whether a claimant falls within the statutory language conferring lien rights and whether the statutory preconditions, including timing, are satisfied. This reflects statements approved by the Supreme Court of Canada that the right to a lien is purely statutory, that the statute is strictly construed as to the persons entitled to its benefits and as to the procedure required to perfect the lien, and that a claimant must clearly bring itself within the terms of the statute. Once a lien right has been clearly established, however, the court may apply a more liberal and remedial interpretation to other matters dealt with in the legislation in order to accomplish its purposes. This two-step method was endorsed earlier in TRG Developments Corp v Kee Installations Ltd. The judge noted that there is no change from the Builders’ Lien Act to the PPCLA that alters this analysis. Because the issue in this case concerned whether the Meeting fell within the statutory concept of “work on or in respect of an improvement” and therefore affected the timing of the lien, the Court held that the statutory requirements had to be strictly interpreted.

Case law on what counts as “work” in respect of an improvement

The Court reviewed several authorities addressing what types of services amount to “work” on or in respect of an improvement. In Hett v Samoth Realty Projects Ltd, the Appellate Division held that an agent hired to develop a rental housing project did not have a lien under the Builders’ Lien Act. The Court observed there that services need not be physically performed upon the improvement to fall within the Act, but they must be directly related to the process of construction. It listed examples such as inspiration, development of concepts, logistics, zoning applications, legal services, and accounting services as not falling within “services upon the improvement” as defined by the case law. In Peter Hemingway Architect Ltd v Abacus Cities Ltd, the Alberta Court of Appeal ruled that an architect held a valid lien for services provided for an intended project, even when the project was never actually started. In Leduc Estates Ltd v IBI Group, Master Funduk, whose decision was later upheld on appeal, concluded that there was no valid lien for “preliminary valuation, subsequent investigation and preparing subdivision plans” for converting a quarter section of land from agricultural to residential use, and felt bound to follow Hett. The Court then referred to PTI Group Inc v ANG Gathering & Processing Ltd, where the Alberta Court of Appeal held that providing subsistence services such as catering and lodging at a site adjacent to a pipeline right of way where a pipeline was being constructed gave rise to a lien on the right of way. Those subsistence services were seen as directly related to construction, and the Court followed earlier cases recognizing liens for services of a cook at a work campsite and for providing plumbing services and gas for stoves and heating at a work campsite. Finally, the Court cited Young EnergyServe, where cleaning, repairing, and relining the interior of tanks and pressure vessels, and replacing worn or faulty piping and pressure valves at a gas plant, were found not to meet the definition of “improvement.” That work was characterized there as “maintenance” rather than work that resulted in something being “constructed, erected, built, placed, dug or drilled.” From these authorities, the Court took general guidance that the work must be directly related to the process of construction to be lienable.

Persuasive Ontario authority on post-work meetings

Because there was no Alberta case directly addressing whether post-completion meetings could qualify as work extending lien rights, the Court considered the Ontario case Hugomark v Ontario. In that case, Hugomark Services Inc argued that its liens remained valid even though the notices of lien were not served within 45 days of the last work done, on the basis that later meetings with the owner and contractor to resolve its claims were a continuation of the supply of services. Justice Hennessy rejected that position, stating that attendance at resolution meetings did not constitute a direct supply of services to the site or towards an improvement of the site, and that such meetings had nothing to do with the actual construction, performance of work, or improvement of the premises. She noted that there was no authority for treating off-site construction-claim meetings as a direct “supply of services or materials to an improvement” capable of extending lien rights, and held that the plaintiff’s attendance at dispute-resolution meetings did not extend the timeline within which to place a lien on the project. Applications Judge Summers found the reasoning in Hugomark persuasive in addressing the issue in this case.

Application of the law to the June 3, 2024 meeting

Turning to the specific facts, the Court held that the plaintiff’s Meeting with the insurance adjuster on June 3, 2024 did not constitute “work on or in respect of an improvement” under the PPCLA. By that date, the plumbing work had been completed on May 22, 2024. At the Meeting, no work was done on the improvement itself. The plaintiff’s attendance was to explain work that had already been carried out after the sewer backup. The Court also noted that there was no evidence that such a meeting formed part of the original plumbing contract between the plaintiff and the defendant. In light of the requirement that lienable services be directly related to the process of construction, and the Hugomark authority rejecting post-work claim-resolution meetings as lienable services, the Court concluded that the Meeting did not qualify as “work on or in respect of an improvement” for the purposes of the PPCLA. As a result, for timing purposes the performance of the services was completed on May 22, 2024, and the lien registered on August 1, 2024 fell outside the 60-day period prescribed by subsection 41(2).

Ruling and overall outcome

On this basis, the Court concluded that the lien had not been registered in time and ordered that it be struck. The decision further provides that costs will follow the event under Column 1 of Schedule C of the Alberta Rules of Court. The judgment does not specify any dollar amount or exact monetary figure for costs or any other award.