Recent Pronouncement Regarding “Services” Giving Rise
To Valid Claims of Builders Lien
Tuscany Village Holdings Ltd. V. Conquest Development Corporation, 2005 BCSC 1392

The British Columbia Supreme Court has come down with yet another pronouncement on the question as to what services are lienable. In early October 2005, Justice Burnyeat handed down the Court’s Reasons for Judgement in Tuscany Village Holdings Ltd. v. Conquest Development Corporation, 2005 BCSC 1392 (“Tuscany”).

Tuscany Village Holdings Ltd. (“TVH”) contracted with Ken Brown, through his company, Conquest Development Corporation (together “Conquest”), for certain services in relation to the development of the Tuscany Village Shopping Centre in Victoria, BC. In short, Conquest was to provide services that would typically be those of a developer relating to obtaining financing, presenting ideas, acting as a liaison between certain parties and generally assisting with bringing the development to “fruition.” In August 2005, Conquest filed a claim of builders lien for $154,805 and, after discharging the Lien by posting security, TVH brought a summary trial application to have the Lien declared invalid. TVH also sought special costs.

Conquest’s argument was essentially that the services provided by Conquest were lienable services under the Builders Lien Act. Based on the decision, it appears as though Conquest argued that the services it provided were lienable, either by virtue of being the services of an architect (which are lienable) or by virtue of being services of a contractor that were “an integral and necessary part of the actual physical construction” of the development (which are also lienable). TVH appears to have argued that the services provided by Conquest were neither those of an architect, nor those that were either integral or necessary to the actual physical construction of the Development.

The Court first reviewed the case law regarding the question of what services are, and are not, lienable under the Act and confirmed that while services need not be performed “on” the subject property, they still must be “an integral and necessary part of the actual physical construction of the project.” Mr. Justice Burnyeat then assessed the evidence of both parties and came to the conclusion that the services provided by Conquest were more akin to those that would be provided by a developer than by either an architect or a contractor and were not lienable. In the normal course, developers cannot claim valid liens and this case is yet another nail in that well closed coffin.

Tuscany doesn’t alter the existing state of the law in BC regarding the type of services that can give rise to a valid claim of lien. What Tuscany does appear to do is demonstrate and reinforce that the outcome in cases such as these is highly dependent on the facts of the case and the evidence that the parties are able to muster to support their arguments. The Court seems more than willing to look behind the terms “developer,” “contractor” and “services” to consider the nature of what the lien claimant actually contributed to a particular project and whether his or her efforts and labour give rise to rights under the Act. The flip-side of this, however, is that the categories of services that will give rise to valid lien rights under the Act are not as wide and open ended as some might hope and those that provide services best described as those of a “developer” should consider alternative means of securing payment, without relying on the Act.

Should you have any questions about this case, or about builders liens in general, contact Adam Zasada, Clark Wilson LLP, at (604) 891-7742 or e-mail: aiz@cwilson.com.

- Reproduced from Clark Wilson LLP’s “Legal Framework.”

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