Congratulations! You have successfully preserved a construction lien. Now what? Section 36 of the Construction Act (the “Act”) now requires that this construction lien be “perfected” by way of issuing a Statement of Claim and commencing an action to enforce the lien. This process requires an originating process to be issued in the proper jurisdiction (Courthouse).
In ordinary civil actions, unless brought under statutes that require otherwise, the proceeding may be commenced at any court office in any county named in the originating process.[1] This means that, as a litigant in any ordinary civil action, you have the option to bring the case in a forum most convenient to you (subject to restrictions imposed by case-law that I will not get into here). Conversely, matters brought under the Act must be commenced at the Courthouse for the area in which the premises or part thereof are situate.[2] While this appears to be a straightforward requirement, there is no outright definition of “situate” in the Act or supplementary caselaw.
In fact, I previously had a case where opposing counsel and I disagreed as to whether “situate” referred to the municipal address of the property or the Land Registry Office in which the property was registered. Namely, in that case, the property appeared to be subject to an error in municipal zoning: the municipal address put the property in the City of Mississauga, whereas the property itself was registered in the Land Registry Office for the Halton Region. Due to this discrepancy, opposing counsel and I were in disagreement as to whether the proceeding ought to have been commenced in the Brampton Courthouse (for Peel Region) or in the Milton Courthouse (for Halton Region).
While this issue was amicably resolved in my case and thus never heard before a Judge, I suggest that the definition of “situate” must pertain to the latter definition for three obvious reasons:
- An Action is an Enforcement of the Lien: When preserving a claim for lien, the claimant must register it as against the property as it appears in the Land Registry Office. Once a lien is registered, it becomes an instrument on title that bears the instrument letters pertaining to that registry office. For example, an instrument in the Toronto Region bears the prefix letters “AT”. A Peel Region instrument bears the prefix letters “PR”. A Halton Region instrument bears the prefix letters “HR”. You get the point. If the requirement of perfecting the lien is to commence an action to enforce the lien – a (sometimes) registered, legal instrument – it only follows that the Action must be commenced in the jurisdiction for that area.
- Municipal Addresses Vary: it is not uncommon for properties to bear multiple municipal addresses. Take York University for example – its Keele Campus lies on the intersection of Keele Street and Steeles Avenue, which border on the Toronto and York Region jurisdictions. While officially York University lists its mailing address in the City of Toronto, it is not uncommon to also see York’s mailing address in the City of Vaughan. If, in theory, a construction project is undertaken for York University in the portion of the land that creeps into the purview of York Region’s Land Registry Office, there may be a dispute as to the proper jurisdiction.
- Limit on Sheriffs’ Enforcement Powers: Under Section 65 of the Act, one method of enforcing the construction lien is through a forced sale of the property. This sale must be Ordered and Directed by a Justice of the relevant jurisdiction – meaning that, if you commence the proceeding in an incorrect jurisdiction, an Order directing the sheriff of the incorrect jurisdiction would be unable to seize the property and conduct the sale of same.
While there is no clear and decisive caselaw on the issue (that I have seen), claimants should be relieved that, even if you commence in the wrong jurisdiction, it may not necessarily be fatal to the construction lien and there are mechanisms to transfer the Court file from one jurisdiction to another. As there is no clear answer to this question, I welcome any and all comments, feedback, and further academic discourse on this topic from my colleagues reading this post.
The foregoing is for informational purposes only and should in no way be relied upon as legal advice. If you have any further questions, or would like to schedule an appointment for legal advice tailored to your circumstances and business, please contact me at dan@fridmar.com .
[1] R.R.O. 1990, Reg. 194: Rules of Civil Procedure, r. 13.1.01(2).
[2] Construction Lien Act, R.S.O. 1990, c. C.30, s. 53(1) and O. Reg. 302/18: Procedures for Actions Under Part VIII, s. 1(1).
