Canada: A Little Clarity Or More Lien Challenges? Lien Claims Before And After Certificate Of Substantial Performance In Alberta

The recent Master's decision in Chandos Construction Ltd v Twin Peaks Construction Ltd, 2016 ABQB 296 determined an issue under the Builders' Lien Act (Alberta) (BLA) which, surprisingly, had never been specifically addressed by an Alberta court. The issue was whether a lien claim for the value of work performed prior to the issuance of a certificate of substantial performance can attach to land after the owner has properly released the major lien fund. The Master determined that a lien does not attach in such circumstance.

Case Summary

Chandos Construction Ltd. was a general contractor constructing a hotel in Calgary and Twin Peaks Construction Ltd. was a structural steel supplier, hired directly by Chandos. Nearing completion of construction, a certificate of substantial performance was issued by Chandos and the owner paid the major lien fund to Chandos when permitted in accordance with the BLA. There was no dispute as to whether the certificate of substantial performance was properly issued or whether the major lien fund had been properly paid by the owner to Chandos. In addition, the owner withheld 10 percent of the value of the work performed after issuance of the certificate of substantial performance, the minor lien fund, which amounted to approximately $45,000.

Following payment of the major lien fund by the owner, Twin Peaks registered a lien in the amount of $118,756.29, most of which was for work performed prior to issuance of the certificate of substantial performance. As a result, Chandos brought an application seeking a court order that a lien for work performed prior to issuance of a certificate of substantial performance does not attach to land in the amount of the minor lien fund once the major lien fund has been properly paid by the owner. The Master reviewed the BLA and, in particular, cited section 24 of the BLA, which provides as follows:

When a certificate of substantial performance is issued,

  1. any lien arising out of work done or materials furnished before the date of issue of a certificate of substantial performance is a charge on the major lien fund, and
  2. any lien arising out of work done or materials furnished on and after the date of issue of a certificate of substantial performance of the contract is a charge on the minor lien fund. [emphasis added]

The Master concluded that only work performed on or after the issuance of a certificate of substantial performance can be the subject of a lien claim after proper payment of the major lien fund by an owner and prior to payment of the minor lien fund, if any.

Does this Create any Challenges under the BLA?

For owners, this decision confirms some advantages associated with requesting a contractor to issue a certificate of substantial performance, as once an owner properly pays the major lien fund it is no longer liable for that amount (or lien claims for work performed prior to issuance of the certificate of substantial performance). For general contractors, this decision is also a win as it reduces the likelihood of lien claims being advanced against the minor lien fund. With that said, this decision further incentivizes subcontractors to register liens after issuance of a certificate of substantial performance to preserve their lien rights which could result in a disruption to the flow of funds on a construction project.

While the facts in Chandos Construction were fairly straight forward, the decision raises some challenges under the BLA with respect to the application of the BLA, including:

  • How will this decision affect lien claims where there is a certificate of substantial performance issued for a subcontract? In particular, can a sub-subcontractor still register a lien for all unpaid amounts where a portion of the major lien fund has properly been paid by an owner to its contractor following issuance of such certificate of substantial performance? Are the lien rights of all subcontractor affected where there is a certificate of substantial performance issued under an unrelated subcontract?
  • Section 23(3) of the BLA prescribes the maximum amount a subcontractor's lien can attach to the minor lien fund and is subject to Section 13(1), which provides for the scope and extent a labourer's lien has priority. Accordingly, do the provisions of Section 24 interpreted in Chandos Construction conflict with Section 23(3), in particular considering that Section 24 does not contemplate the priority of a labourer's lien provided for within Section 13(1)?
  • Is it an equitable result where an owner maintains a minor lien fund but unpaid subcontractors cannot have recourse to the full minor lien fund as provided for in Section 23(3) and are the trust provisions sufficient protection under the BLA if a contractor/subcontractor absconds with any portion of the major lien fund?
  • In what cases will there be a practical value maintaining a minor lien fund given the application of this decision? How many subcontractors are performing work after substantial performance and when will it be worth registering a lien (and potentially incurring legal fees) for potentially very small amounts?
  • Does this decision result in further complexity administering lien claims as parties seek to determine the value of work performed by a subcontractor before and after a certificate of substantial performance is issued?
  • If unpaid contractors could lien for all amounts owing to them for work performed on a project, but only attach to the major or minor lien fund, as applicable, would that not be easier to administer?

Those are questions for another day and potentially the legislature. If anything, this decision may have confirmed one issue under the BLA but may have resulted in others requiring further consideration. We understand this case has not been appealed as of writing.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Denise D. Bright
In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions