Executive Summary: Key Legal and Evidentiary Issues

• The Supreme Court of British Columbia considered whether two builders liens filed by Cancon Construction Ltd. were filed within the time limits set by the Builders Lien Act.
   
• Central to the dispute was whether a notice of certification of completion had been posted in a "prominent" location as required by section 7(4)(c) of the Act.
   
• Credibility concerns arose from inconsistencies in the evidence of the petitioner's project manager regarding when and how the notice was posted.
   
• Another key issue was whether the general contractor's agreement qualified as a "head contract" under section 20(2)(a), given that a portion of the project's work was contracted directly by the owner.
   
• Justice Hughes also had to determine when the "improvement" as a whole was completed for purposes of section 20(2)(b).
   
• Evidentiary gaps, including unproduced photographs and unexplained discrepancies in witness affidavits, factored heavily into the court's findings.
   

Facts of the case

1110486 B.C. Limited, the petitioner and owner of a property at 9500 Garden City Road in Richmond, contracted with KPI Construction (Reverie) Ltd. as general contractor to build a 13-unit townhome development called "Reverie Kingdom." The KPI Contract, dated August 10, 2022, had an original price of $4,978,228.50, later increased to $4,990,309.44 plus GST. In May 2023, KPI subcontracted the project's on-site and off-site civil work to Cancon Construction Ltd. for $1,000,000 plus GST. Separately, in June 2024, the petitioner contracted directly with Cancon for storm and sanitary sewer connections for $65,000 plus GST.

On June 14, 2024, Cancon filed two claims of lien against the property: a General Lien and a Civil Lien. The petitioner brought this petition seeking to have both liens cancelled under section 25 of the Builders Lien Act on the basis that they were filed after the applicable 45-day filing periods had expired.

The dispute traced back to a Certificate of Completion issued for the KPI Contract on February 6, 2024, by the project's payment certifier, Matthew Cheng of Matthew Cheng Architect Inc. A corresponding Notice of Certification of Completion was prepared, and the petitioner's project manager, Zhen (Anthony) Cao, testified he posted it on the door of a mechanical closet inside the project's site office on or about February 9, 2024. Cancon's construction foreman and operations manager both testified they visited the site repeatedly in February through May 2024 and never saw the notice posted anywhere. Additional copies of the notice later appeared in exterior locations at the project, but the court found these were not actually posted until sometime after May 8, 2024 — likely after the liens had already been filed, when the petitioner's counsel was responding to Cancon's request for proof of posting.

Policy and legislative provisions at issue

Section 20(1) of the Builders Lien Act allows a lien to be filed no later than 45 days after a certificate of completion is issued. Section 7(4)(c) requires that, once a certificate of completion is issued, the payment certifier must post a notice of certification of completion "in a prominent place on the improvement." Where section 20(1) does not apply, section 20(2)(a) provides that a lien must be filed within 45 days of completion of the "head contract," defined under section 1(1) as a contract for substantially all of the work respecting an improvement. If there is no head contract, section 20(2)(b) instead ties the filing deadline to completion of the "improvement" itself, defined under section 1(3) as being ready for use, or in use, for its intended purpose.

Reasoning and analysis

Justice Hughes first considered whether the notice had been posted in a "prominent" location, adopting the Concise Oxford English Dictionary's definition of "prominent" as "particularly noticeable." The court found Mr. Cao's evidence about the site office's accessibility unreliable, noting inconsistencies between his affidavits about whether the garage door was "usually" open or only open "from time to time." The court preferred the evidence of Cancon's witnesses, who visited the site during the relevant period and never saw the notice, and concluded that a mechanical closet door inside a site office used primarily by KPI was not sufficiently noticeable to qualify as prominent. As a result, the lien filing period was not triggered under section 20(1).

Turning to section 20(2)(a), the court examined whether the KPI Contract constituted a "head contract" covering substantially all of the project's work. The petitioner bore the burden of proof on this point but did not adequately account for work contracted directly with third parties, including Cancon's own $65,000 Sewer Services Contract, BC Hydro's electrical work — likely valued at over $200,000, with at least $129,394 confirmed for the "extension portion" — roughly $102,000 in water and traffic signal work by the City of Richmond, and $34,500 in sanitary sewer work by Superior City Services Ltd. Justice Hughes found this represented at least $400,000, or approximately 8% of the KPI Contract's value, and held that this was substantial enough that KPI had not been engaged for substantially all of the project's work. The KPI Contract therefore did not qualify as a head contract.

With both earlier triggers rejected, the court turned to section 20(2)(b) and the completion of the "improvement," which it found meant the Reverie Kingdom project as a whole rather than any individual contractor's scope of work. Justice Hughes rejected the petitioner's argument that the project was complete once purchaser walkthroughs occurred in mid-March 2024, pointing to evidence that the project remained an active construction site at that time, including mandatory safety waivers and hard hats for walkthrough attendees, the absence of BC Hydro power until late April or early May 2024, and the fact that occupancy permits had not been issued by that point [the judgment separately notes no direct evidence of the permits' exact issuance date, while stating elsewhere that they were not issued until some point in May 2024 at the earliest]. The court found that the townhouses were only ready for their intended use once they were conveyed to purchasers, beginning May 23, 2024.

Ruling and overall outcome

Justice Hughes concluded that the 45-day lien filing period for both the General Lien and the Civil Lien was triggered by conveyance of the first units to purchasers on May 23, 2024, and expired on July 7, 2024. Since both liens were filed on June 14, 2024, they were filed within time under section 20(2)(b) of the Act, and neither was extinguished under section 22. The petition for cancellation of the liens was dismissed, with the successful party, Cancon Construction Ltd., awarded costs; the judgment does not specify a dollar amount for those costs.