Under Ontario’s Construction Lien Act, there are strict timelines to preserve lien rights. With some nuances, a supplier’s lien must be registered within 45 days from the last date on which services are provided, or materials supplied to an improvement. But what happens when a trade comes back to the site to effectively bang in a couple more nails? Does such work extend the last date of supply? Is the clock on its lien rights re-set?
The short answer is no. If the work is indeed trivial, the trade is out of luck. The expiry of a lien period cannot be rectified by returning to the site and providing minimal services. Such behaviour has been described as an attempt to “bootstrap” a claim for lien, and the Courts don’t buy it.
The onus will always lie with the lien claimant to demonstrate that the claim for lien was registered and preserved within the time restrictions under the Construction Lien Act. Whether further work will be deemed to properly be a continuation of the supply of services, or falls into the category of too trivial to extend the lien period is always a factual question. The court will look to such factors as the value of the entire contract as compared to the value of the additional work, the amount of time and effort required to complete the work, whether the work was in respect of deficiencies, and whether the contract was billed in full prior to the attendance to do the additional work. Factors such as these speak to whether the additional work is at its core an inappropriate attempt re-start the lien period clock, as opposed to a genuine continuation of services.
The Courts have established a number of general principles when further work will not act to extend a lien period:
- An attempt to bootstrap lien rights after their expiry by conducting additional work will not extend the time within which a claim for lien must be registered – in other words, the continued work must be bona fide. Holding back minimal work, or attending on site to conduct “sham” work, will not extend the lien expiry date;
- Doing work to rectify defective or improper work does not extend the time for registering a claim for lien;
- A trivial amount of work performed or services supplied after completion of a contract will not serve to extend the time within which a claim for lien must be registered;
- Note also that section 2(3) of the Construction Lien Act deems a contract complete or materials to have been last supplied when the price to complete the work, correct a known defect, or provide last supply is less than 1% of the contract price, or $1000, whichever is less.
A brief re-appearance by a trade on site cannot affect the running of the lien period. To find otherwise would allow contractors to hold back a tiny bit of work and in effect insure themselves against the lien period expiring, extending their lien rights for months or even years. On a principled basis, that is not how lien rights are intended to work.