Executive Summary: Key Legal and Evidentiary Issues

• Bridge Lake Electric Ltd. filed a builders lien against the Whiteheads' property, claiming it was owed $48,460.25 as of December 4, 2020.
• Central to the dispute is whether substantial completion of the head contract occurred by November 27, 2020, which would have required the lien to be filed no later than January 11, 2021.
• Under the Builders Lien Act's 3-2-1 Formula applied to the final contract price of $2,907,169.03, the threshold for substantial completion was agreed by both parties to be $44,071.70.
• Evidence from the contractor, Thomas Kellermeier, estimated only $6,810.10 worth of work remained as of November 27, 2020 — well below the substantial completion threshold.
• Filed on March 2, 2021, the lien was 50 days past the statutory deadline and therefore extinguished by operation of s. 22 of the Builders Lien Act.
• Cancellation of the certificate of pending litigation was also ordered because the plaintiff took no steps in the proceeding for over a year, and its claim for the CPL was pleaded solely on the basis of the now-extinguished lien.

Facts of the case

Lisa Dawn Whitehead and Albert William Whitehead are the registered owners of a rural residential property located northwest of Kamloops, British Columbia, legally described as PID 017-836-590, Block B of District Lot 4524, Lillooet District. On July 10, 2019, the Whiteheads contracted with Kellermeier Contracting Ltd. for the construction of a single-family home on what was then a vacant lot, under what the court refers to as the Head Contract. The original contract price was $1,620,780, with the final price reaching $2,907,169.03. In or about August 2019, Bridge Lake Electric Ltd. was engaged as a subcontractor to Kellermeier to provide electrical contracting services on the property.

On March 2, 2021, Bridge Lake Electric filed a builders lien in the Kamloops Land Title Office under registration number CA9913096, alleging it was owed $48,460.25 as of December 4, 2020. On September 2, 2021, it also filed a certificate of pending litigation (CPL) under registration number CA9333151 against title to the same property. The Whiteheads applied to the court for orders cancelling both the lien and the CPL.

Contractual and statutory provisions at issue

The Head Contract described the scope of work as the construction of a new single-family home as per building plans by Streamline Enterprises Drafting and Design and as per cost estimates and subcontractor quotes. It included a list of progress payment milestones — from footings through to completion and readiness for occupancy — but made no reference to landscaping. For extra work outside the initial cost estimate, payment was due in full upon completion of that work.

The key statutory provision was s. 20(2)(a) of the Builders Lien Act, S.B.C. 1997, c. 45, which requires a lien to be filed no later than 45 days after the head contract has been completed, abandoned, or terminated, where no certificate of completion has been issued. "Substantially performed" is defined under s. 1(2) of the Act using the 3-2-1 Formula: 3% of the first $500,000 of the contract price, 2% of the next $500,000, and 1% of the balance. Applied to the final contract price of $2,907,169.03, both parties agreed the substantial completion threshold was $44,071.70. Under s. 22, a lien not filed within the required time is extinguished. The CPL issue turned on s. 252 of the Land Title Act, R.S.B.C. 1996, c. 250, which permits a registered owner to apply to cancel a CPL where no step has been taken in the proceeding for one year.

Court's reasoning and analysis

On the builders lien, the key factual question was whether substantial completion occurred by November 27, 2020 — the date of a completion/final inspection by the Cariboo Regional District — or later, as the plaintiff contended. The First Site Inspection Report identified three outstanding items: deck guards and stairs including handrails (lakeside); a structural engineer's CD schedule to be filed with the District; and a Teza ventilation calculation sheet. Thomas Kellermeier, the principal and owner of Kellermeier, gave affidavit evidence that items two and three required no physical work — only filings with the District. For the remaining deck guards and handrails, his estimate was that $6,810.10 worth of work remained as of November 27, 2020, a figure well below the $44,071.70 threshold. The court also noted that the Whiteheads received occupancy approval on November 27, 2020, which, while not determinative on its own, was treated as some evidence of substantial completion.

The plaintiff pointed to the Second Site Inspection Report dated February 17, 2021, noting entries of "Previous Issues Resolved" and "Final Inspection — Close File," and to Kellermeier's Final Invoice dated March 1, 2021 for $54,086.42, as evidence that substantial completion had not yet occurred at the time of the first inspection. The plaintiff also argued that references to landscaping in the invoices — including an entry on the Final Invoice reading "Rest landscaping — to be determined with John Martens" — suggested landscaping was within the Head Contract's scope and remained incomplete. The court rejected this reasoning. The Head Contract contained no reference to landscaping, and the building plans addressed only the structure of the house. The court further noted that an invoice dated November 18, 2020 — before the alleged date of substantial completion — referred to "remaining landscaping work — final bill," suggesting any landscaping had been completed by that point. Even treating the two landscaping items on the Final Invoice (a $500 rock delivery and a $1,500 bobcat rental) as post-November 27 work, the total remaining work would amount to only $8,810.10 — still far below the $44,071.70 threshold. The court found, consistent with the approach in Garside v. Stirling, 2013 BCSC 1457, that invoices were not the best measure of completion and that Mr. Kellermeier's evidence provided a more accurate basis for assessing the outstanding work. The court concluded that substantial completion had occurred by November 27, 2020, making January 11, 2021 the deadline for filing the lien. Because the lien was not filed until March 2, 2021 — approximately 50 days after the deadline — it was extinguished under s. 22 of the Builders Lien Act.

On the CPL, the court found both statutory preconditions under s. 252 of the Land Title Act were satisfied: the CPL was registered, and no steps had been taken in the proceeding for over a year before the plaintiff's Notice of Intention to Proceed was filed on November 4, 2024. Prejudice to the Whiteheads, as owners of the encumbered property, was presumed. The plaintiff offered no sufficient justification for the delay, attributing it to outstanding document production by the Whiteheads; the court held that this did not prevent the plaintiff from taking substantive steps. Regarding the plaintiff's prospects on a claim for an interest in land, the court found that the plaintiff's pleadings tied the CPL solely to the lien claim, and that without the lien, there was no viable basis for the CPL to stand.

Ruling and overall outcome

The Whiteheads succeeded on both applications. The court ordered the cancellation of the builders lien filed under registration number CA9913096, the cancellation of the CPL filed under registration number CA9333151, and the striking out of the plaintiff's lien and CPL claims as pleaded in the Notice of Civil Claim. Costs of the application were ordered payable by Bridge Lake Electric Ltd. to the Whiteheads in any event of the cause. No specific monetary quantum for costs was stated in the judgment.