April 20, 2016
In Built-Con Contracting Ltd. v. Lisgar Construction Company a Division of United Shelters Limited, Master Wiebe determined that a plaintiff’s default judgment obtained from a registrar over the counter was insufficient to satisfy section 37 of the Construction Lien Act which requires a perfected lien must be set down for trial within two years after the action is commenced.
Built-Con, the plaintiff in this case, registered a claim for lien on May 2011. The defendant, Lisgar, posted a lien bond in early June 2011 and obtained an order vacating the lien. On June 20, 2011, Built-Con commenced an action against Lisgar. The statement of claim asserted a lien against the posted security but after service of the statement of claim very little occurred. Eventually, Built-Con noted Lisgar in default and obtained default judgment from the registrar on March 29, 2012. Nothing happened thereafter until Lisgar discovered the default judgment in July, 2015. It then brought a motion to set aside the default judgment and a declaration the claim for lien had expired pursuant to section 37 of the Construction Lien Act.
Master Wiebe dismissed the motion to set aside the default judgment by finding that Lisgar had not put forward evidence to support a credible defence. Accordingly, the default judgment was upheld. Nonetheless, Lisgar argued the lien claim had expired and the default judgment from the registrar was not sufficient to satisfy section 37 of the Construction Lien Act. Based upon this technical, but correct argument, Master Wiebe determined the registrar does not have jurisdiction under R. 19.04 of the Rules of Civil Procedure, to issue default judgments for lien remedies. As a result, Master Wiebe ordered the lien bond posted by Lisgar to be returned for cancellation. Built-Con argued, with some persuasiveness, that it was illogical to set an action down for trial where judgment was obtained. However, Master Wiebe confirmed that jurisdiction is jurisdiction. The proper course of action would have been for Built-Con to bring a motion for judgment before a judge under R. 19.05 in order to obtain judgment on its lien remedies, as opposed to seeking relief from a registrar over the counter.
This case demonstrates a technical but important lesson for plaintiff’s side construction lien counsel. Specifically, when moving for judgment on an undefended construction lien action, it is imperative counsel moves for judgment before a judge; not a master. Otherwise, the above issue could occur and the client will be left with the normal enforcement remedies available, garnishments, writs, etc., as opposed to the superior remedies afforded by the Construction Lien Act.