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If no liens have been registered, the owner can pay the major lien fund to the contractor 45 days (90 days in the case of an oil or gas well) from the issue of the certificate. If no certificate has been issued, payment may be made when the contract is completed.

In the Chandos case, Twin Peaks Construction Ltd., a subcontractor, registered a lien after the owner paid out the major lien fund to the general contractor, Chandos Construction Ltd. Most of the work subject to Twin Peaks’ lien, however, was for work done before the certificate issued.

Master Andrew Robertson ruled that the lien for that portion of the work done before the certificate issued attached to the major lien fund only, and not the minor lien fund. Because the major lien fund had been properly paid out, there was nothing regarding that portion of the work to which the lien could attach.

Robertson ordered Twin Peaks to discharge its lien, but did require the owner to pay into court the amount claimed for work done after the certificate was issued. He noted that Twin Peaks could still seek recovery from Chandos for the earlier work by way of a common law breach of contract claim and/or a statutory breach of trust claim under the BLA.

“Owners should therefore consider requiring contractors to issue certificates, as they can significantly limit owners’ liability under the Act,” the Blakes lawyers advise. “Additionally, owners (or contractors required to remove liens on owners’ behalf) should ensure that when they apply to pay money into court to remove a lien registered after the certificate was issued, there is evidence before the court on when the work was performed or materials supplied to ensure that they do not pay more than necessary into court.”

Financial Post