The Court of King’s Bench of Alberta's decision in The Micro Collective Inc v Hutterian Brethren Church of Tschetter (The Micro Collective), addresses the interplay between the "new" Prompt Payment and Construction Lien Act (PPCLA) and the former Builders’ Lien Act (BLA). In The Micro Collective, the Court held that where the transition provisions require the application of the former BLA, the shorter statutory lien registration deadline is decisive. Under both the BLA and the PPCLA, once the statutory period expires, the lien "ceases to exist," and the Court’s corrective powers under the Land Titles Act (LTA) cannot be used to extend the deadlines.
This decision underscores the importance of precision and timing in lien registration, particularly for construction projects caught in the PPCLA transition period.
Background
This dispute arose on a construction project involving a cannabis greenhouse on lands owned by the Hutterian Brethren Church of Tschetter which had engaged The Micro Collective Inc. to provide design work, labour and on-site assistance.
Because the contract was entered into before the PPCLA came into force on August 29, 2022, the transitional provisions of the PPCLA applied, and the contract was governed by the BLA. As a result, the Plaintiffs' lien claims were subject to the 45-day lien registration deadline under the BLA instead of the current 60-day timeline under the PPCLA.
Further, by the time the liens were submitted to Land Titles, the pending registration queue system under the LTA was in force. This was significant because Section 14.1(7) of the LTA provides that, when an enactment requires registration within a specific period, the requirement is satisfied when the instrument is entered into the queue and not when it is delivered to Land Titles. Unfortunately for The Micro Collective Inc., the lien was not entered into the queue until the 47th day after services were last provided.
The Applications Judge’s Decision
The lien claimants applied for: (a) an extension of the registration deadline by one day; or (b) an order deeming the liens to have been entered into the queue on Monday instead of Tuesday. In response, the Defendants sought an order discharging the liens entirely under section 42 of the PPCLA (formerly section 31 of the BLA), which provides that if a lien is not registered within the prescribed time, "the lien ceases to exist."
No Power to Save an Expired Lien
The Court agreed with the landowners and discharged the liens on the basis that, under section 190 of the LTA, the Court's power to correct certificates of title cannot override the PPCLA or the BLA, which explicitly state that once the statutory deadline is missed, a lien ceases to exist.
Even if Discretion Existed, It Would Not Be Used
The Court further held that even if it had discretion to backdate the registration of the liens, it would decline to exercise it because allowing the Court to adjust queue entry dates would undermine the Land Titles system, which depends on certainty of priority established by actual queue timestamps, not delivery dates.
Key Takeaways
This decision illustrates how the PPCLA's transitional regime continues to shape lien litigation. The Honourable Applications Judge J.T. Prowse confirmed that when the transition provisions require applying the former BLA, its 45-day registration deadline applies, regardless of whether the work was performed after the PPCLA came into force. Accordingly, lien claimants must carefully determine which statute applies. Miscalculating the governing deadline, assuming the PPCLA's 60-days applies when it is the BLA's 45-days which applies, can result in the lien being automatically extinguished.
Further, as the Court emphasized in A.G. Clark Holdings Ltd v 1352986 Alberta Ltd, there was a two-year transition period after the PPCLA came into force, during which pre-existing contracts were required to become compliant with the new legislation. This can result in different lien deadlines applying to different contracts on the same project, depending on when each contract was signed. These provisions may create uncertainty, as both the old and new regimes can apply to different contracts within a single project.
If you have any detailed questions or require tailored advice on how prompt payment, adjudication, and construction lien matters can affect your project, please contact one of the members of our Construction Law practice group.
