Lien by “subcontractor”

According to s. 2 of the Builders Lien Act “subcontractors” may be entitled to liens. Section 1 of the Builders Lien Act includes the following definition for “subcontractor”:
“[S]ubcontractor” means a person engaged by a contractor or another subcontractor to do one or more of the following in relation to an improvement:
(a) perform or provide work;
(b) supply material;
but does not include a worker or a person engaged by an architect, an engineer or a material supplier.
(Builders Lien Act, s. 1(1)).
In West Fraser Mills Ltd. v. BKB Construction Inc., 2011 BCSC 1460 the owner, West Fraser,  sold a paper machine to Fibre Source, who then sold it to Pelita, who hired BKB to remove it, who then subcontracted some of that removal work to NDF. Confirming that a “subcontractor” need not contract directly with the party who contracted with the owner but can indeed be at the bottom of a long contractual chain, both BKB and NDF were found to be subcontractors:
West Fraser was required to allow the respondents [BKB and NDF] to carry out their work on the property under its contract with Fibre Source. The Act does not require a direct contractual relationship between the respondents [BKB and NDF] and West Fraser for liens to arise. Additionally, it does not require a contractual relationship between BKB or NDF and any person engaged directly by West Fraser. I find that the respondents do fall under the definition of a subcontractor in accordance with the Act.
(West Fraser Mills Ltd. v. BKB Construction Inc., 2011 BCSC 1460 at para. 35).
In Chandler v. Champion Enterprises (Canada) Ltd., 2013 BCSC 1518 a landlord and tenant agreed that the tenant would pay reduced rent in the amount of $40,000 in exchange for performing renovations to the property. The tenant had his brother, the plaintiff, act as a project manager and it was agreed between the brothers that the plaintiff would have various trades perform the work which the tenant would pay for. Since they were brothers, it was agreed that the tenant would not pay the plaintiff for the project management services. Eventually the tenant left town without paying the plaintiff, his brother, for the amount paid to the trades. The plaintiff filed a lien. One of the arguments the owner raised was that the plaintiff had not been “engaged” as required by s. 1(1) and was therefore not a subcontractor. The court rejected that argument and held that fair payment (in this case a profit to the tenant’s brother) was not a pre-requisite for being “engaged”:
I accept that “engaged” can mean hired or employed but it also has a broader meaning. A person can be engaged when he is being occupied, taking part or being involved in something or committed to an undertaking. I conclude there is a non-commercial aspect to the meaning of “engaged” at least to the point of not requiring consideration in a pure contractual sense. It was open to the legislature to use words such as employed, hired or even retained or similar words to require a commercial aspect to sub-contracting but it did not use those words. A subcontractor is someone who is “engaged” for certain things and, absent any indication to the contrary, the legislature must be taken to have intended its regular meaning.
I accept that the plaintiff was not employed by Mark Chandler. However, in my view, he was engaged in the sense of being occupied and involved with the work and committed to it. He provided people to do the work and he supervised it. For these reasons, I conclude that the plaintiff was a subcontractor for the purposes of the BLA. I should add that not every commitment, involvement or moral obligation will give rise to a sub-contracting relationship under the BLA. But in this case the plaintiff was engaged in working on the improvement and, as it turned out, this included some risk.
(Chandler v. Champion Enterprises (Canada) Ltd., 2013 BCSC 1518 at para. 33 and 35).




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