legalmatters
The potential lien for maintenance work in Ontario — and beyond BY ROB KENNALEY AND JOSH WINTER
Landscape contractors and subcontractors in Canada have grappled, for many years, with whether or not they have lien rights for the services and materials they provide. Historically in this regard, Canadian Courts have generally found services such as snow removal and grass-cutting do not amount to an “improvement” and do not give rise to lien rights, although there is not as much clarity in the law as we might like. Construction lawyers, in addressing the issues, have generally drawn a distinction between actual construction (which is considered lienable) and maintenance (which is not). Conventional wisdom, we would say, is that you will have lien rights if you lay sod or install pavers but would not have lien rights if you merely cut the grass or plow the snow. The distinction is not as clear as it could be,
however, and there are a litany of other services that have been the topic of debate. Recently in Ontario, in US Steel Canada Inc., Re, 2016, the Court considered a case where US Steel Canada entered into a landscape contract with a contractor whereby the contractor would provide landscape services to the site three days a week. A dispute in relation to payment arose and the contractor subsequently registered a lien against the land and commenced an action. A question arose as to whether the work done or materials supplied amounted to an “improvement” under the Act. The Court found the following supply of goods and services gave rise to lien rights: (a) the adding of soil and the supply of 15 flower plants; (b) spraying for weeds where
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the contractor provided their own material; and (c) removing weeds, spreading dirt and gravel, and installing filter cloth. The Court went one step further and even suggested “grounds keeping” would give rise to lien rights. This because, strictly speaking, grounds keeping amounts to an alteration or repair of the land under the applicable definition of “improvement” under Ontario’s Construction Lien Act. The case has opened the door for landscape maintenance contractors in Ontario to argue that their services should be considered lienable. The case might also be used to support similar arguments in other jurisdictions. The decision might also lead to confusion. Should the addition of top soil or mulch, as part of regular maintenance, be considered an addition, alteration, or repair to the land? Further confusion might arise if we look beyond the landscape trades. Take, for instance, the contractor who installs a pool. Clearly, the installation of the pool will give rise to rights, and filling the pool with water and chlorine, etc., before it is turned over would be part of that work. It is not so clear, however, that the pool company who returns to open the pool in the spring should have lien rights for adding water and chemicals, even though it is arguable it has altered the land. This type of work is generally viewed to be maintenance work which does not give rise to lien rights. In Ontario, the legislature has decided to address the confusion as part of the Construction Lien Act Amendment Act, 2017 which was passed into law on December 12, 2017. When its substantial changes come into force, Ontario’s Construction Lien Act will become the “Construction Act.” One of these will be to change the definition of improvement to 46 | MARCH 2018 | LANDSCAPE TRADES