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Full text of "Report of Ontario Law Reform Commission : The Mechanics' lien act"

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York Form No 2-1089 — Cooper Graphics 



Digitized by the Internet Archive 

in 2011 with funding from 

Osgoode Hall Law School and Law Commission of Ontario 



http://www.archive.org/details/reportofontarOOonta 



Texts 




ONTARIO 



REPORT 



OF 



ONTARIO LAW REFORM COMMISSION 



THE MECHANICS' LIEN ACT 



DEPARTMENT OF THE ATTORNEY GENERAL 



February 22, 1966 




ONTARIO 



ONTARIO LAW REFORM COMMISSION 



COMMISSIONERS 

HONOURABLE JAMES C. McRUER. LL.D. 

CHAIRMAN 

DEAN H. ALLAN LEAL. Q.C.. LL.M.. LL.D. 
HONOURABLE RICHARD A. BELL. P.C., Q.C. 
W. GIBSON GRAY. Q.C. 
WILLIAM R. POOLE. Q.C. 



COUNSEL 

WILLIAM B. COMMON. Q.C. 

SECRETARY 

MISS A. F. CHUTE 

PARLIAMENT BUILDINGS 
TORONTO 2 



To The Honourable A. A. Wishart, Q.C, 

Attorney-General for Ontario. 

Dear Mr. Attorney: 

The Commission begs leave to submit the following report recom- 
mending legislation to amend the law relating to mechanics' liens. 

In order to give all those interested in the subject an opportunity to 
make submissions to the Commission, notices were placed in the Ontario 
Reports on the 2nd and 9th days of April, 1965, inviting suggestions for 
revision or amendments to The Mechanics' Lien Act. In addition, letters 
were written to the Judges of the County and District Courts of Ontario, 
labour organizations, the Canadian Bar Association and other bodies 
requesting them to submit their views as to what amendments were 
deemed advisable. 

Pursuant to these requests, submissions were received from twenty 
County and District Court Judges, from twenty-two members of the 
legal profession and from the following organizations: 

The Canadian Bar Association 

Ontario General Contractors Association 

Canadian Association of Equipment Dealers 

Sudbury and District Chamber of Commerce 

The Building and Construction Trades Council of Ottawa, 

Hull and District 
Canadian Plumbing and Mechanical Contractors Association 
Ontario Federation of Labour 
The Canadian Credit Men's Association Limited 
The Lumbermen's Credit Bureau Inc. 
Ontario Federation of Construction Associations 
Members of the Bar of Middlesex County 
The Board of Trade of Metropolitan Toronto 
J. L. Biddell, F.C.A., The Clarkson Company Ltd. 
All Canada Insurance Federation. 

[3] 



The Com mission gave consideration to holding public hearings but 
came to the conclusion that such hearings were not necessary in view of 
the number and quality of the written submissions that it had received. 

A comparative study has been made of mechanics' lien legislation 
in the other Provinces of Canada, the Northwest and Yukon Territories 
and some of the United States of America, particularly the State of 
New York. In addition, the report of the Honourable Harold F. Thom- 
son, who was appointed a Royal Commissioner to inquire into the law 
relating to Mechanics' Liens in the Province of Saskatchewan in 1963, 
was given close examination. Investigation has shown that there is no 
comparable legislation in the United Kingdom nor in the Common- 
wealth countries of Australia and New Zealand. 

We wish to acknowledge the valuable assistance that we have had 
from His Honour Judge Ian MacRae, the Senior County Court Judge 
of the County of Middlesex. With a long experience in administering 
The Mechanics' Lien Act, Judge MacRae gave generously of his time 
not only in the preparation of submissions to the Commission, but 
attending at meetings of the Commission to discuss with the members 
proposed amendments to the Act. 

It is convenient to deal with the submissions and representations 
made together with our recommendations under the following headings: 

I Suggested Repeal of The Mechanics' Lien Act 

II Suggested Radical Changes in Basic Principles of the Act 

III Transfer of Jurisdiction to the County and District Courts 

IV Amendments in the Substantive Law 

V Amendments Relative to Proceedings to Realize a Claim for 
Lien. 

I 

SUGGESTED REPEAL OF THE MECHANICS' 

LIEN ACT 

A few suggestions were made that The Mechanics' Lien Act should 
be repealed on the ground that it is discriminatory legislation and that 
creditors' claims for work done or materials supplied should be enforced 
in the courts in the same manner as in ordinary claims for debt. This 
legislation has been in force since 1873 and it has been accepted as a 
special protection to workmen, contractors and suppliers engaged in the 
construction and building trades. The philosophy of the legislation is 
that those who have contributed labour and material to the creation or 
improvement of a building or work should have some protection against 
loss of the contribution they have made to the development of the asset. 
Our conclusion is that the philosophy of the Act is sound and that it 
would not be in the public interest to repeal it. 



II 

SUGGESTED RADICAL CHANGES IN 
BASIC PRINCIPLES OF THE ACT 

In the brief presented by the Board of Trade of Metropolitan 
Toronto, representations were made that, if given effect to, would 
amount to a radical departure from the basic philosophy of the Act. 
For several years, the Board of Trade has sponsored a conference dealing 
with the provisions of The Mechanics' Lien Act. This conference was 
composed of representatives of the following organizations: 

Association of Ontario Trade Contractors 
Board of Trade of Metropolitan Toronto 
Canadian Construction Association 
Canadian Credit Men's Association 
The Canadian Manufacturers' Association 
The Lumbermen's Credit Bureau, Inc. 
The Ontario Association of Architects 
Ontario General Contractors Association 
Ontario Road Builders' Association 

Toronto Construction Association (formerly Toronto Builders' 
Exchange) 

After a very extensive study of the Act, a brief dated November 15, 
1962, was prepared and submitted to the Attorney General of Ontario. 
This brief, which recommended certain amendments to the Act, has 
been referred by the Minister to this Commission. In addition, the 
Board of Trade of Metropolitan Toronto by a letter dated November 24, 
1965, submitted to the Commission thirteen proposals for amendments 
to the Act that had been suggested. The conference had reached sub- 
stantial agreement in support of five proposals that dealt with general 
amendments to the Act. These we have dealt with in Part III. There 
was sharp division of opinion in the conference with regard to proposals 
6 to 13, which are as follows: 

6. Responsibility for default 

It is proposed that a new principle be introduced which would 
require that, where a contractor or a subcontractor defaults on his 
obligations to his own subs and suppliers on the contract, the latter 
would be allowed to by-pass the defaulter and press their claims, 
(but only if they agree to fulfill their contract obligations), against 
the person who hired the defaulter on the contract. (Stated simply, 
where a person in the contract chain defaults, the person who hired 
him (the "hiring party") must take over his obligations on the 
contract.) 

The owner of the land may now use all but 15% of the value of 
the work performed on his structure since the date of the last 
progress certificate paid by him to finance his completion cost. 



Under the new proposals, the owner who engages a contractor who 
defaults on his obligations will be required to pay creditors of the 
defaulter on the contract all, or substantially all, of their con- 
tribution up to the date of default. 

7. Holdbacks 

It is proposed that all sections of the present Act, which require 
a holdback from payments to contractors or which refer to the 
release of such holdback, be completely eliminated. Nothing in the 
revised Act will require or authorize a holdback with the result that 
any holdback arrangements between contracting parties must be 
mutually agreed to in their contract. Arising out of the foregoing, 
and as indicated in item 6 above, the protection against liens given 
to the owner of the land if he retains the statutory holdback will be 
drastically revised. 

It is recognized that, if the Lien Act does not require a hold- 
back, many owners and general contractors will provide for a 
holdback as a term of most contracts they let. These holdbacks in 
many cases may be expressed as a percentage of the contract price 
but it is reasonable to expect that they should not be nearly as 
large as the present 15% statutory holdback and the terms of their 
release should be much less strict than is presently the case. 

Under the new proposals, where a holdback has been retained 
by contract and the contractor defaults, the defaulter's creditors 
will be entitled to their own specific share of the holdback fund in 
the "hiring party's" hands and will retain their existing priority 
over any person to whom the contractor's receivables may have 
been assigned. 

8. Principles of establishing a "lien" 

In order to establish the principles of making the "hiring 
party" responsible for the obligations incurred by his contractor on 
the contract as described in item 6 above, it is proposed that there 
would be two types of "lien claims". 

The first of these would be the lien filed on the land in exactly 
the same form as at present. The only persons who would be 
qualified to lien the land under the new system, however, would be 
persons who had a contract directly with the owner of the land and 
persons having a direct contract with such persons (i.e., the sup- 
pliers and subcontractors to a general or prime contractor would be 
entitled to register a lien on the land but subcontractors and 
suppliers to subcontractors would no longer be able to register the 
present type of lien). 

In lieu of the right to register a lien on the land, those persons 
whose claim arose out of work performed for a subcontractor would 
obtain a "privileged claim" against the person for whom their own 



principal was working in the event that their own principal de- 
faulted. The effect of the privileged claim would be to give these 
persons a valid claim due and payable by the "hiring party" 
forthwith upon demand being made on him. This privileged claim 
would not be secured by a charge on the land but would be a valid 
claim against a presumably solvent person which could be collected 
in the ordinary course of business. Only in the event of a double 
bankruptcy, i.e. the bankruptcy of the claimant's own principal as 
well as the bankruptcy of the "hiring party", could the privileged 
claim conceivably be of less value than the right to file a lien on the 
land. Where a vendor is fearful that a "double bankruptcy" may 
occur, he can protect himself by insisting that his own customer 
use his own "prior notice" option. (See below.) 

9. Expiry of lien or privileged claim 

All of the provisions of the present Act which require the filing 
of a lien or the expiry of the right to file a lien within or after a 
period of thirty-seven (37) days following the completion of a 
contract or the supply of materials or services should be amended 
and provided the person supplying the materials or services on the 
contract has otherwise qualified for a lien or a privileged claim, 
(by his performance and proper notice, etc.), his rights should not 
expire until a date six months following the completion of his own 
contract. 

10. Option to give "prior notice" of claim 

As described in item 3 above, there would be two categories of 
"lien claims", i.e. the lien and the privileged claim. Each claimant 
regardless of his category would have the option of improving the 
"status" of his claim (i.e. his potential recovery from it), by giving 
"prior notice" of his contract for work or material supplied, to the 
person who has hired his principal on the contract. The giving of 
such "prior notice" would entitle the claimant to full payment of 
his account from the hiring party if his own principal should de- 
fault. "Prior notice" would consist of forwarding to the "hiring 
party" a general description of the contract for work giving the 
contract price or, in the case of the supply of material, a copy of 
the sales invoice containing appropriate wording to indicate that it 
constitutes "prior notice" under the Lien Act. The giving of "prior 
notice" would have a similar effect to separating the claimant's 
portion of the contract from the general contract and making it a 
separate contract with the "hiring party". 

Those persons who do not wish to give prior notice of their 
contract will still retain their right to a lien or a privileged claim 
and under the new proposals as described in item 11 hereunder 
will ordinarily be entitled to recover a substantially larger claim 
from the "hiring party" than is the case under the present Lien 
Act. 



8 

11. Amount for which a lien or privileged claim may be asserted 

In conjunction with items 7 to 9 inclusive, it is proposed that 
the liability of owners and contractors whose own contractors 
default (i.e., the liability of the "hiring party") will be increased to 
provide that they shall be liable to pay a substantially greater 
amount to creditors of the defaulting contractor than the present 
lien laws provide. 

Whereas the practical effect of the existing law is that unpaid 
creditors who have lien rights only participate in the fund provided 
by 15% of the work performed on the contract up to the date of 
default, it is now proposed that those creditors who give "prior 
notice" of their contract to the person against whom they poten- 
tially may have a lien or privileged claim will be entitled to recover 
the full value of the work performed by them and unpaid up to the 
date their own principal defaults. 

Each person who is entitled to a lien or "privileged claim" but 
who has not elected to give "prior notice" of his contract will 
ordinarily be enabled to recover a much larger sum from the "hiring 
party" than the present Lien Act affords. Instead of being re- 
stricted to the statutory holdback fund (which nowadays consists 
almost entirely of his and his fellow lienholders' own money), he 
will be entitled to his own share based on his billings of all the work 
performed on the contract up to the date of default which has not 
been paid for by the "hiring party". 

If there has been a holdback retained by the "hiring party" 
under the terms of the contract, the subcontractor or supplier will 
be entitled to his own share of that fund, based again upon his 
billings, not on his outstanding account. 

There will be separate calculations to cover the distribution of 
the holdback fund and the unpaid work fund, after deducting in 
each case the part of each fund specifically reserved for those 
claimants who gave the hiring party "prior notice". 

12. Obligation of lien claimant to complete his contract 

In order to improve the salvage for all creditors from the 
affairs of an insolvent contractor, and in part to offset the in- 
creased obligations imposed on the hiring party, it is proposed that 
any person who wishes to assert his right to a lien or a privileged 
claim must agree to complete his contract if requested to do so 
immediately by the hiring party upon receiving notice of his claim. 
Under such circumstances, the claimant will be entitled to demand 
reasonable security for the payment by the hiring party of whatever 
lien or privileged claim he possesses and for payment of his account 
for the remainder of the contract. Under no circumstances will he 
be able to assess against the hiring party any penalties or damage 



claims to which he may have become entitled arising out of the 
default by his own principal on the contract. If he has not given 
"prior notice" of his contract, he will not be entitled to collect any 
deficiency which may exist between his unpaid account at the date 
of default and the amount to which he is entitled under his lien or 
privileged claim. 

Claimant who has not given "prior notice' 

A claimant who did not give prior notice of his contract and 
who refuses to complete his contract at the contract price applicable 
to the work remaining to be done at the date of default will be 
disqualified from any claims under the Lien Act and the amount of 
the claim to which he otherwise would be entitled will revert to the 
hiring party. If the hiring party does not elect to have such a con- 
senting claimant complete his contract, he may at his option 
require the claimant to accept as a payment on his lien or privileged 
claim for work performed subsequent to the last paid progress 
certificate the return for credit at their full invoice value of all 
or any part of the claimant's materials on the project site which 
at the date of default were not incorporated into the structure and 
were not included in a progress certificate paid by the hiring 
party prior to the date of default by the contractor. 

Claimant who has given "prior notice' 

Where the claimant had given the hiring party prior notice of 
his contract, the hiring party has the option of requiring the 
claimant to complete his contract, substituting the hiring party 
for the defaulting contractor, subject to proper security for full 
payment to the claimant being provided. If such a claimant 
refuses to complete his contract, he will be disqualified from any 
claims under the Lien Act and the amount of the claim to which he 
would otherwise be entitled will revert to the hiring party. 

If the hiring party declines to have such a consenting claimant 
complete his contract, the hiring party shall be responsible to the 
claimant for the full amount of the work performed including the 
material delivered to the site to the date of default. 

13. Revisions to the "trust provisions" {Section 3 of the Ontario 
Mechanics' Lien Act) 

Basic amendments should be made to section 3 of the Ontario 
Act to — 

(i) Eliminate the need for contractors to keep all contract funds in 
separate accounts. This is never done in practice, but the 
present Act prescribes penalties for failure to do so. 

(ii) Establish classes of beneficiaries of the trust moneys and 
priorities among them. 



10 

(iii) Permit payments which have already been made to assignees 
of the contractor to be retained by the recipients even though 
they were not entitled to rank as beneficiaries. 

These proposals were strongly opposed in a brief submitted to the 
Commission by The Lumbermen's Credit Bureau, Inc., which is an 
organization with a membership of 151 companies engaged in the 
building supply business, including the following trades: lumber, trim, 
sash, doors, flooring, asphalt, brick, builders' supplies and ready-mix 
concrete, concrete blocks and stone, construction materials handling, 
electrical supplies and appliances, glass and hardware. 

Proposals 6 to 13 were strongly supported in a submission made by 
J. L. Biddell, President of The Clarkson Company Limited, who has had 
wide experience as a trustee in bankruptcy and was a Board of Trade 
representative on the conference. It is fair to say that Mr. Biddell is the 
author of the proposals contained in items 6 to 13. Air. Biddell's sub- 
missions are supported by the Ontario Federation of Construction 
Associations. 

In view of the fact that the adoption of proposals 6 to 13 would 
fundamentally change the underlying philosophy of The Mechanics' 
Lien Act and require very wide legislative changes, these should be 
dealt with before considering other suggested amendments to the Act. 

The Mechanics' Lien Act, as originally conceived, was legislation 
designed primarily to protect the wage earner and the material man or 
supplier. While the legislation has not kept pace with the economic 
development of the province, there have been no widespread recom- 
mendations made to the Commission for a change in the prevailing 
philosophy of the Act. 

We have come to the conclusion that the proposals contained in 
items 6 to 13 of the Board of Trade brief are undesirable for the following 
among other reasons: 

(1) The proposal that the hiring party should be financially 
responsible for the obligations of his contractor, if adopted, 
would create by a statute an entirely new concept of con- 
tractual relationship. It would mean that a contractor would 
be liable to pay subcontractors of his subcontractors not- 
withstanding that he might have no power to select them nor 
control them in the performance of the sub-subcontract. 
Likewise, an owner who hires a contractor would be liable to 
pay all the subcontractors, while he might not have power to 
control the terms of the subcontract. This we believe to be 
an undesirable change in the law of contract. While there is a 
measure of vicarious liability under the present Act, the 
owner or the contractor, as the case may be, is protected by 
the provisions respecting the fifteen or twenty per cent 
holdback. 



11 

(2) The requirement that the ''hired party" be obliged to fulfil 
the contract of the hiring party would place an obligation on 
workmen impossible of performance. The practical result in 
the view of the Commission would deprive the wage earner of 
benefits he has now under the Act. We think that it would be 
a wide departure from the principles of the present Act to 
require wage earners to take over the obligations of a con- 
tractor or a subcontractor before they could realize their 
claims for liens for wages. 

(3) The suggestion of a "privileged claim" contained in item 8 
would be very impractical in so far as small contractors and 
wage earners are concerned. We think that it would be un- 
reasonable to require wage earners and small contractors to 
seek out the hiring party of their employers in order to protect 
themselves against nonpayment of their wages or sums owing 
on their small contracts. The complexity of modern construc- 
tion and financing would preclude the wage earner or small 
contractor, who has not continuous access to legal advice, 
from any real benefits. 

(4) We will have some recommendations to make with regard to 
the holdback provisions of the present Act, but we are opposed 
to the abolition of the holdback provisions. To rely on 
voluntary holdbacks would, in our view, be detrimental to the 
interests of those for whose benefit the Act has been passed. 

(5) The suggested restrictions on the right to file a lien, while 
protecting the interests of the general contractor and his 
immediate subcontractor, would, in our view, be discrimina- 
tory legislation as far as the interests of the wage earners 
and the small subcontractors are concerned. 



Ill 

TRANSFER OF JURISDICTION TO 
COUNTY AND DISTRICT COURTS 

The jurisdiction to try an action to realize a claim for a lien is vested 
in the Supreme Court of Ontario irrespective of the amount of the claim. 
A claim for lien in the amount of $25.00 for debt ordinarily recoverable 
in a Division Court must be enforced in the Supreme Court. The Act 
further provides that with the exception of the County of York the 
action shall be tried by a local Judge of the Supreme Court, subject to 
the trial taking place before a Judge of the Supreme Court upon the 
application of any party. In the County of York, the action shall be 
tried by a Judge of the Supreme Court but the Judge may refer the 
whole action to the Master for trial pursuant to section 69 of The 
Judicature Act or the Judge may direct a reference to the Master 
pursuant to section 68 or section 69 of that Act. 



12 

We think that the procedure in the County of York is cumbersome 
and adds unnecessary expense to the proceedings. It is our conclusion 
that there should be no special procedure for the County of York and 
that Mechanics' Lien actions should be dealt with in the same way in 
the County of York as they are dealt with in other parts of Ontario. 

We recommend that actions to realize a claim for lien should be 
tried in the County or District Court with a right to any party to have 
the proceedings removed into the Supreme Court upon application 
to a Judge of the Supreme Court if the action would ordinarily come 
within the jurisdiction of that Court. The trial of these actions in the 
County and District Courts, with their extended jurisdiction, will 
provide a more efficient and expeditious procedure under the Act. 



IV 

AMENDMENTS IN THE SUBSTANTIVE LAW 

Many briefs and submissions were received dealing with suggested 
amendments to specific sections of the Act. After giving all these 
submissions careful consideration, we make the following recommenda- 
tions: 

Section 1 (Interpretation section) 

The term "completion of the contract" appears several times in the 
legislation. These words have caused some confusion in the cases. 
A trivial piece of work of little value may be held to be the "completion 
of the contract". It is recommended that this phrase be defined as 
follows: 

" 'completion of the contract' means substantial performance, not 
necessarily total performance, of the contract." 

This definition appears as section 1(a) of The Mechanics' Lien Act of 
New Brunswick, R.S.N.B. 1952, c. 142, hereinafter referred to as the 
New Brunswick Act. 

The word "labourer" should be defined so as to meet the objection 
that the Act may not apply to all wage earners. We think the definition 
of "labourer" set out in the New Brunswick Act, section 1 (g), should be 
adopted : 

'labourer' means a person employed for wages in any kind of 
labour whether employed under a contract of service or not." 

The term "wages" in this provision does not include employee 
benefits such as vacation pay credits, welfare plans and contribution to 
pension funds which are in reality part of the wages of the wage earner. 
The definition of "wages" (section 1 (g)) should be amended so as to 
include such benefits whether they arise by statute or contract. 



13 

Section 2 

This section reads as follows: 

"Nothing in this Act extends to any public street or highway, or to 
any work or improvement done or caused to be done by a municipal 
corporation thereon." 

We think that the holdback provisions of the Act should apply to 
work done by private developers in laying out streets, sidewalks and 
sewers at the instance of a municipality. Further provisions of the Act 
with respect to realizing a claim for a lien could not be made applicable 
to municipal property, e.g. the installation of a sewer or the laying of a 
sidewalk. 

Section 3 

This section creates a trust fund for the money received by a 
builder or a contractor or subcontractor on account of the contract price. 

Section 3 — Subsection 1 

Many submissions were made that advances to the owner, or at his 
instance, on a building mortgage on a project should form part of a trust 
fund provided for under this section. We agree with these submissions 
with the reservation that provision should be made whereby the 
advances might be used in proper cases to pay off prior encumbrances. 

We think that, where it is shown that money has been lent to the 
holder of the trust fund, the lender should qualify as a beneficiary under 
the trust to the extent that it can be established by him that his un- 
recovered loan had been used to make payments of claims of persons 
who, in the absence of such payments, would have themselves been 
beneficiaries of the trust. 

Section 3 — Subsection 3 

For the purposes of clarification, section 3, subsection 3, of the 
Mechanics' Lien Act of British Columbia, R.S.B.C. 1960, c. 238, should 
be substituted for the present subsection 3. It reads: 

"Notwithstanding this section, where a contractor or subcon- 
tractor has paid in whole or in part for any materials supplied on 
account of the contract, or has paid any workman or subcontractor 
who has performed any work or placed or furnished any material 
in respect of such contract, the retention by such contractor or 
subcontractor of any amount equal to the amount so paid by him 
shall not be deemed an appropriation or conversion thereof to his 
own use, or to any use not authorized by the trust." 

Section 4 — Subsection 2 

The figure "$25" should be substituted for the figure "$15" in this 
subsection to conform more closely to present-day rates of remunera- 
tion. 



14 



Section 5 — Subsection 1 



This subsection creates a general right to a lien but makes no 
provision for a lien in favour of a lessor of equipment to an owner, 
general contractor or subcontractor. We think that persons who lease 
equipment to an owner, general contractor or subcontractor should be 
entitled to a mechanics' lien for the rent of the equipment for the period 
that the equipment is used on the contract site, provided 

(a) that the equipment is delivered to the contract site by the 
lessor or his agent, who shall not be the contractor or the 
subcontractor who is primarily liable to the lessor under the 
lease or an employee or agent of the said contractor or sub- 
contractor, and 

(b) that the term of the lease is less than one year or, in the case 
of equipment leased for a specific contract, the lease therefor 
terminates upon the completion of the lessee's portion of 
the contract. 

In drafting the legislation, care should be taken that the lien should 
extend only to the rent of the equipment while it is being used on the 
contract site. 

Section 7 — Subsection 3 

This subsection dealing with priority of mortgages refers to "prior 
mortgage or other charge existing in fact before any lien arises". This 
subsection should be amended by making it clear that the priority 
extends to a "prior registered mortgage or other registered charge". 
Attention is drawn to the provisions of section 8 of the New Brunswick 
Act which in effect is a combination of section 7, subsection 3, and sec- 
tion 13 of the Ontario Act. 

Section 7 — Subsection 6 

This subsection provides that, where an agreement for the purchase 
of land under which the purchase money or any part is unpaid and no 
conveyance has been made to the purchaser, the purchaser shall be 
deemed a mortgagor and the vendor a mortgagee for the purpose of the 
Act. This subsection should be redrafted to provide that it shall be 
applicable to a registered agreement for sale and purchase of land and 
that any moneys bona fide secured or payable thereunder should have 
the same priority over a lien as in the case of a prior registered mort- 
gage; provided that the agreement is registered before the lien arises and 
the priority extends only to money bona fide paid under the agreement. 
The suggested amendment conforms with section 7, subsection 3, of the 
British Columbia Act (R.S.B.C. 1960, c. 238). 

Section 11 — Subsection 1 

This section provides for retention of certain percentages for the 
contract price for a period of thirty-seven days after the completion or 



15 

abandonment of the work as a protection to subcontractors and wage 
earners. This is popularly referred to as the "holdback". 

Section 11 — Subsection 2 

In a brief submitted by the Canadian Bar Association dealing with 
this subsection, the suggestion was made that it should be amended to 
provide for a holdback of twenty per cent on the first $25,000 in all 
contracts and where a contract exceeds $25,000 the holdback should be 
fifteen per cent of the excess. It was suggested also that, where extras 
have the effect of increasing the contract to more than $25,000, these 
extras should be considered part of the contract and that the holdback 
should be calculated on the total amount. We think that the section 
as it is now is clear and easy of application. If it were amended, as 
suggested, many difficulties would be created in its application. 

Section 11 — Subsection 3 

Provision should be made for an application to the Court for an 
order that the contract has been completed where an architect, engineer 
or other person neglects or refuses to give a certificate in a proper case. 
Attention is drawn to section 13 (3) of the revision of the Saskatchewan 
Act recommended by the Honourable Mr. Justice Thomson in his 
report, which reads as follows: 

"If the said architect, engineer or other person neglects or refuses to 
issue or deliver the said certificate of completion within the ten 
days limited for so doing, a judge, upon the application of the 
contractor or subcontractor desiring the same and, upon being 
satisfied that the contract has been completed, may make an order 
that the said contract has been completed upon such terms and 
conditions as to costs or otherwise as may seem just, and such order 
shall have the same force and effect as a certificate of completion 
issued by the said architect, engineer or other person would have." 

Section 12 

Subsection 1 of this section provides for the situation where an 
owner, contractor or subcontractor makes direct payments to persons 
entitled to a lien. Subsection 2 deals with the right of the subcontractor 
to enforce his lien notwithstanding the non-completion or the abandon- 
ment of the contract and is unrelated to the provisions of subsection 1. 
Subsection 2 should be re-enacted as a separate section. 

Section 13 — Subsection 1 

This subsection provides that the lien has priority over judgments, 
executions, assignments, attachments, garnishments and receiving 
orders issued or made after the lien arose and over payments and 
advances made under the mortgage after notice in writing has been 
given at the address endorsed on the conveyance or mortgage as 
provided by section 45 of The Registry Act. The mere fact that a 



16 

notice is left at an address as provided in the present section may not 
constitute any notice as the mortgagee might have changed his address 
in the meantime. Notice in writing of the lien should be given by leaving 
it at the proper address of the grantor under a conveyance or the 
mortgagee as the case may be. The responsibility to determine the 
proper address should be on the lien claimant who always has an 
alternative protection by filing his lien. If such amendment is made, 
the words "at the address endorsed on such conveyance or mortgage 
pursuant to section 45 of The Registry Act" should be deleted. 



Section 14 — Subsection 1 

Submissions were made that this subsection should be amended to 
extend the period for priority for wages from thirty days to six weeks by 
substituting six weeks for thirty days in the second line. The Mechan- 
ics' Lien Act of Alberta (Statutes of Alberta, 1960, c. 64, s. 12) provides 
for a priority of six weeks. In British Columbia, the period is 25 days 
(R.S.B.C. 1960, c. 238, s. 6 (2) ). In Manitoba and New Brunswick, the 
period is thirty days (R.S.M. 1954, c. 157, s. 20 (4); R.S.N. B. 1952, 
c. 142, s. 9 (2) ). We do not feel that it is clear that it would be in the 
interests of the wage earners to increase the present period to six weeks. 
The thirty days provided in the present Act tends to give less latitude 
to the contractor to finance the project in question at the expense of the 
wage earner and tends to exert pressure for prompt payment of wages. 
We think the priority of thirty days should be retained. 

We are asked to explore the possibility of extending the provisions 
of The Mechanics' Lien Act to provide lien security for wages of em- 
ployees in industrial undertakings. This proposal is one of wide 
economic significance in the manufacture and production of goods. We 
do not think that it should be considered in relation to the provisions 
of The Mechanics' Lien Act. 



Section 15 

This section provides for a lien for the unpaid purchase price of 
materials actually delivered for the purpose of being incorporated into a 
building or works, but which have not been actually so incorporated. 
Under this section the lien is on the material not on the real property. 
Many questions arise in its application. One asks: How is the lien to be 
realized and how does one enforce a lien on sand and gravel delivered to 
a project site when some has been supplied by one supplier and some by 
another and some portion of that supplied is incorporated into the 
building and some is not? We do not think the lien claimant under 
subsection 1 should be in any different position from the lien claimant 
who has delivered material to the property and the material has been 
actually incorporated into the building or works. This section should be 
redrafted accordingly. 



17 



Section 16 — Subsection 1 



This subsection deals with the registration of a claim for lien. 
Clause (a) should be amended to provide that a claim for a lien shall 
include an address for service upon the person claiming the lien, which 
address shall, after registration of the lien, be the place at or where 
service may be made upon the claimant either personally or by reg- 
istered mail. Provision should be made that all services, other than 
service of a statement of claim and notice of trial, may be made by 
registered mail at the address for service contained in the claim for lien, 
unless the Court otherwise directs. 



Section 21 — Subsection 5 

This subsection provides that an unregistered lienholder shall give 
written notice of his lien to the owner, the mortgagee and the lienholder 
who has commenced the action before the day appointed for the trial 
of the action and shall deposit particulars of his claim verified by 
affidavit with the proper officer of the county or district concerned. The 
reference to "proper officer" is vague and uncertain. If our recom- 
mendation that the trial of lien actions be removed into the jurisdiction 
of the County and District Courts is accepted, the words "Office of the 
Clerk of the County or District Court concerned" should be substituted 
for the words "proper officer". 

A number of representations were received suggesting that the 
benefit of the Act should be confined to those who actually have 
registered claims for liens within the prescribed period, and what is 
known colloquially as the "umbrella principle" should be abandoned. 
After careful consideration, a majority of the Commissioners decided 
that the existing provisions of the Act still constitute a useful and valid 
feature of it and recommend that no change in principle be made in the 
protection extended to unregistered lien claimants. One of the Com- 
missioners, Mr. Bell, does not concur in this majority opinion and 
believes that there is now no valid reason for the retention of this 
principle. 



Section 28 — Subsection 3 

This subsection provides for the production and inspection, 
pursuant to an order of the judge having jurisdiction to try the action 
or, in the County of York, the master, of any contract or agreement or 
mortgage or agreement for sale. We think the right to production should 
be broadened. The subsection should be amended by adding the words 
"or the contractor or subcontractor, as the case may be" after the 
words "unpaid vendor or his agent" and adding the words "or the state 
of the accounts or other relevant documents" after the words "to 
inspect any such contract or agreement or mortgage or agreement for 
sale". 



18 



V 

AMENDMENTS RELATIVE TO PROCEEDINGS 
TO REALIZE A CLAIM FOR LIEN 

In Part III of this report we recommended that the jurisdiction in 
actions to realize a claim for a lien be transferred from the Supreme 
Court of Ontario to the County and District Courts. In the light of 
various submissions received, we have considered whether the sub- 
stitution of proceedings different from those now provided under The 
Mechanics' Lien Act would be an improvement. It has been suggested 
that claims might be determined by a summary procedure, e.g. the 
commencement of proceedings by an originating notice and a sub- 
sequent application for directions. It was suggested that such pro- 
cedure would be more effective and expeditious. We are not convinced 
that the suggested change would simplify or expedite the proceedings. 
A notice of motion with a proper affidavit attached is no simpler than 
drawing a statement of claim and would not likely be any more precise 
in setting out the issues than is necessary in a statement of claim. It 
involves two documents instead of one. What we have said is subject 
to following recommendations with respect to the proceedings to 
realize a claim for lien. 



Section 25 — Subsection 4 (a) 

The power of the Judge under this section is limited to making an 
order that the registration of a lien and the registration of a certificate 
of action be vacated on proper grounds. The Judge has no power to 
dismiss the action before trial. We are told that the practice in Toronto 
and elsewhere is to make such orders. However, in some jurisdictions 
it has been held that the Judge cannot make an order vacating the 
registration of the lien and the certificate of action before the trial or 
dismiss any action without a trial, even on consent. The County or 
District Court should have power to vacate the registration of the lien, 
the registration of the certificate of action and to dismiss the action at 
any time on proper grounds. 



Section 25 — Subsection 7 

Our attention has been drawn to Form 83 set out in "Mechanics' 
Liens in Canada" by Macklem and Bristow at page 372. We do not 
approve of the use of this form. We recommend that section 25, 
subsection 7, be amended to make it clear that "the certificate of the 
proper registrar certifying the facts entitling the applicant to such 
order" should be the certificate of search under The Land Titles Act or 
the registrar's abstract under The Registry Act, as the case may be, 
together with a certified copy of the registered claim for lien. 



19 



Proposed subsection 9 



Attention is drawn to Bill 14 which was given its first reading on 
January 27th, 1966, proposing to amend section 25 by adding subsection 
9 as set out in the Bill. We suggest that it would be convenient to 
consider our recommendations along with this Bill. 

Section 29 — Subsection 2 

This subsection which provides for service and filing of the state- 
ment of claim and statement of defense should be amended to provide 
that the statement of claim should be served within thirty days after it 
is filed and that the statement of defence should be delivered within 
ten days after the statement of claim is served, with power in the Court 
to extend the time of service of either pleading. 

Section 30 

This section should be amended to give the Court power to order 
the delivery of pleadings on behalf of all parties "deemed to be parties 
to the action" as provided by the section and to order production and 
examination for discovery in proper cases. 

Section 31 — Subsection 1 

This subsection should be amended to provide that, where the claim 
is for a lien in respect of land located in more than one County, the 
plaintiff should have the right to elect to proceed in any County or 
District in which the land against which the lien is claimed is situated 
and that the trial of the action should take place in that County or 
District subject to any further order of the Court. 

Section 32 — Subsection 4 

The power given to the Court under this subsection to appoint a 
trustee to manage and sell or manage or sell the property in question 
under the supervision and direction of the Court is not wide enough. 
This subsection should be amended to provide that the power of the 
trustee appointed should be extended to permit him to mortgage the 
property with the approval of the Court to facilitate the completion of a 
building and the eventual sale of the property. In addition, the Court 
should in the judgment delivered after the trial or following the judg- 
ment in proper cases have power to appoint a trustee with any or all of 
the following powers: to manage, to sell or to mortgage the property. 

The Court should be empowered to make an order for the pre- 
servation of the property and materials in question. Such power should 
be exercisable at any time even after judgment especially when an 
appeal is pending. 

Section 34 

This section should be amended to make it clear that the Court 
may make an order giving a lienholder the carriage of the proceedings 



20 

at any time and from time to time. It may be that the lienholder 
having the carriage of the proceedings which affects other lienholders 
may not be conducting the proceedings in such a way as to protect 
their interest. 

Section 35 

Provision should be made that any party to any action or any other 
interested party should have the right to apply to the Court for direc- 
tions with respect to discovery, production, pleadings or amendments 
thereto or all matters relating to the trial of the action. 

Section 35 — Subsection 1 

This subsection should be amended to provide that a formal order 
for an appointment for the trial should be signed by the Judge and that 
this order should be entered in the proceedings where it will be available 
upon search to any person interested. 

In order to reduce the incidence of inflated or insupportable 
claims for liens, an interested party should be given the right to apply to 
the Court for an order to cross-examine a lien claimant on his affidavit 
supporting his claim for lien. 

Section 35 — Subsection 4 (c) 

This paragraph makes provision for the content of the judgment 
according to Form 6. Schedule 3 to Form 6 provides that there shall be 
included in the judgment the names of persons entitled to encumbrances 
other than mechanics' liens, the amounts thereof and costs. When 
clause (c) of subsection 4 and Form 6 are read together, it would ap- 
pear that the owner is required to pay into Court a sum required not 
only to discharge the amount of the judgment for the liens but the 
amount of the subsequent encumbrances as well in order to have the 
liens discharged or vacated, failing which the sale would proceed in the 
ordinary manner. The amount that the owner should be required to 
pay into court in this event should be the gross amount of the lien 
together with the costs as directed in the judgment. Form 6 should be 
amended accordingly. 

Paragraph 4 of Form 6 should be further amended to provide that, 
in case of default in payment into Court and a sale being ordered, the 
amount realized on the sale of the owner's interest should be dis- 
tributed to the lienholders together with the costs of the action and to 
prior, intermediate and subsequent encumbrancers in accordance with 
their priorities as found by the Court. 

Section 35 — Subsection 6 

This subsection should be amended to provide that where a sale is 
directed the Court may refer the matter to the Clerk of the County or 
District Court in proper cases to supervise the conduct of the sale. 



21 



Section 35 — Subsection 9 



Should the recommendation made in Part III of this report, that 
the jurisdiction be transferred to the County and District Courts, not 
be adopted, this subsection should be amended or a new subsection 
enacted to provide relief in the event of the trial Judge dying or be- 
coming incapacitated or failing to deliver judgment within a reasonable 
time. If the recommendation is adopted, no amendment would be 
required as the provisions of Consolidated Rule 401 would apply. 

Section 36 — Subsection 3 

This subsection has no relation to the matters dealt with in sub- 
sections 1 and 2 and should more properly appear as clause (d) of sub- 
section 4 of section 35. In any event, the word "valid" appearing 
in the first line of the subsection should be deleted. The result of this 
amendment would be that a claimant would have a right to obtain a 
personal judgment even though he failed to establish that he was at any 
time entitled to a lien. 

Section 38 

Should the jurisdiction to try actions for lien claims be transferred 
to the County and District Courts, the section should be repealed in 
view of the provisions of the Consolidated Rules of Practice which 
would apply to the payment of money into Court. 

Section 40 

Should the jurisdiction to try actions for lien claims be transferred 
to the County and District Courts, subsections 1, 2, 3 and 4 of this 
section should be repealed and the general provisions for appeal as 
provided by The County Courts Act and the relevant rules of practice 
relied on. 

Sections 42 and 43 

These sections impose limitations on the quantum of costs. The 
limitation of 25 per cent of the total amount found to have been actually 
due on the liens should be maintained. Within this limitation, the 
Judge trying the action should have power in his discretion to allow and 
fix costs and direct by whom and in what proportion they shall be paid. 
It should be made clear that the ordinary provisions as to costs with 
respect to the trial of cases in the County or District Courts do not 
apply. 

Section 48 — Subsection 1 

This section which provides for a statutory lien in^favour of a 
mechanic or other person in respect of work done on a chattel might be 
interpreted that a lien would not arise where skill was bestowed on a 
chattel unless material was supplied with it. In its present form, it is in 



22 

the conjunctive. We think it should be in the disjunctive. The first 
two lines should be amended to read as follows: 

"Every mechanic or other person who has bestowed money, skill 
or materials upon any chattel . . . ." 

Forms 1, 2 and 3 

Forms 1, 2 and 3 do not appear to be quite accurate when read 
with section 16, subsection 1 (a). In the last line of paragraph 1 of 

Forms 1 and 2 the words "on or before the day of , 19 . . " 

do not conform precisely with the provisions of section 16, subsection 
1 (a) which require that the claim for lien should state the last day on 
which the work or service was done or the materials furnished or 
placed, or, in the alternative, the date when the work was to be done or 
the materials furnished or placed. The suggested Form A recommended 
by the Saskatchewan Royal Commission is much clearer and would, 
if adopted, more precisely conform to the statute. 

Form 3 should likewise be amended to conform to our recommenda- 
tion with respect to the amendment of Forms 1 and 2 so as to show 
clearly the last date on which the work was performed or the last date 
on which the work is to be performed. 

Form 6 

The recommended amendments to Form 6 are discussed and set 
out on page 20. 



In making the recommendations for amendment to the Act, we 
have dealt specifically with those sections which we believe require 
substantial amendment. Should the recommendations be accepted in 
principle in whole or in part, the Act will require considerable revision 
to conform with the proposed amendments. This is particularly so with 
reference to the transfer of jurisdiction to the County and District 
Courts. The legislation has been a development of more than eighty 
years. Many of the sections do not measure up to to-day's standards 
of draftsmanship. Particular attention is drawn to the instances where 
unrelated subject-matters are dealt with in the same section. This 
particularly applies to provisions dealing with procedure, which should 
all be gathered together in one part of the Act. 

Submissions were received from the All Canada Insurance Federa- 
tion to the effect that the Act should be amended to give wage earners, 
material men and subcontractors a cause of action against a surety on a 
performance bond when the principal defaults in any obligation to the 
claimant. A proposed amendment was submitted, which is attached 
hereto as Schedule A. The proposed legislation should be considered 



23 

apart from the law respecting mechanics' liens and, if adopted, in- 
corporated in a separate statute. This has been done in Manitoba (see 
The Guarantors' Liability Act, Statutes of Manitoba, 1965, c. 30) and 
in British Columbia (see Laws Declaratory Amendment Act, R.S.B.C. 
1960, c. 213, as amended in 1964, c. 27, s. 3). The provisions of The 
Public Works Creditors Payment Act (Statutes of Ontario, 1962-63, 
c. 121) and its administration are related to these proposals. We feel 
that the relevant departments of government should be consulted 
before we make a final recommendation. 

All of which is respectfully submitted. 

James C. McRuer, 

Chairman 

H. Allan Leal, 

Commissioner 

Richard A. Bell, 

Commissioner 

William R. Poole, 

Commissioner 

W. Gibson Gray, 

Commissioner 

February 22, 1966 



24 



SCHEDULE A 

SUGGESTED NEW SECTION TO THE MECHANICS' 

LIEN ACT (ONT.) 

49. — (1) A claimant under a labour and material payment bond that 
guarantees payment to the claimant as denned therein and subject to 
the terms and conditions contained therein shall have a cause of action 
against the surety named in such bond in the event that the principal 
named in the bond defaults in any obligation with respect to payment 
to such claimant. Such action shall be on his own behalf and on behalf 
of all other claimants to recover the amount of the claim or claims, and 
any moneys recovered shall be solely for the benefit ot the claimants. 

(2) In an action against a surety under this section, the Judge 
may give judgment in favour of each claimant who is entitled to recover 
under the bond and subject to the provisions of subsection (3) of this 
section all moneys recovered under the judgment shall be distributed 
pro rata among the claimants in whose favour the judgment is given. 

(3) Nothing in this section makes the surety liable for an amount 
in excess of the amount which he undertakes to pay under the bond 
and the surety's liability under the bond shall be reduced by and to the 
extent of any payment made in good faith to claimants either before 
or after judgment is obtained against the surety. 

(4) Every principal named in a payment bond shall display and 
keep displayed in a conspicuous place on the work a notice giving 
information to the effect that a payment bond has been provided, the 
name and address of the principal, surety and obligee and the require- 
ments for asserting such cause of action against the surety. 

(5) A person who fails to comply with subsection (4) is guilty of an 
offence and on summary conviction is liable to a fine of not less than 
$10 and not more than $100 for each day during which default continues. 

(6) The surety, upon satisfaction of its obligation to any claimant 
under the payment bond, shall be subrogated to all rights of such 
claimant. 



THE PROPOSED 
THE MECHANICS' LIEN ACT 



Explanatory Notes 

General. The purpose of this Bill is to incorporate in the Act the 
amendments recommended by the Ontario Law Reform Commission in 
its Report to the Attorney General dated February 22, 1966, and to make 
other minor amendments designed to clarify the intent of the Act. 

It is not intended that the Bill be passed at the present Session of the 
Legislature. It is introduced in order that it may be given general dis- 
tribution throughout the Province in convenient form for study by all 
interested persons and organizations. 

Comments and suggestions will be welcomed by the Attorney General 
before the next Session of the Legislature and should be addressed to him 
at the Parliament Buildings, Toronto. 

In the following notes, "O.L.R.C. Rep." means the Report of the 
Ontario Law Reform Commission on Mechanics' Liens dated February 22, 
1966. Copies of this Report can be obtained upon request to the Office 
of the Attorney General, Parliament Buildings, Toronto. 

Section 1 — Subsection 1. Clauses a, c and j are new. The other 
clauses have been amended. See O.L.R.C. Rep., p. 12. 

Subsection 2. This is new. 

Section 2. The exception is new. See O.L.R.C. Rep., p. 13. 

Section 3 — Subsection 1. The trust fund provisions of the Act are 
extended in favour of persons who have rented equipment to be used on the 
contract site. See also s. 5 (4). 

Subsection 2. This subsection (formerly subsection 3) has been 
amended to complement the amendments made to subsection 1. See 
also O.L.R.C. Rep., p. 13. 

Subsections 3 and 4. These provisions are new. They create a trust 
fund of advances under building mortgages, etc. See O.L.R.C. Rep., 
p. 13. 

Subsection 5. This was formerly subsection 2. The amendments 
are designed to clarify the intent. 

Section 4. The amendments in subsections 1 and 2 are designed to 
clarify the intent. See also O.L.R.C. Rep., p. 13. Subsection 3 is un- 
changed. 

Section 5 — Subsections 1, 2 and 3. The language is simplified in 
order to clarify the intent. 

Subsection 4. This provision is new. It creates a lien in favour of 
persons who rent equipment for use on a contract site. See O.L.R.C. 
Rep., p. 14. 

Section 6. The amendments are designed to clarify the intent. 

Section 7 — Subsections 1, 2 and 4. The amendments are designed 
to clarify the intent. 

Subsection 3. The present provision applies to mortgages existing in 
fact before any lien arose. This is amended so that the provision will 
apply only to mortgages that were registered before any lien arose. See 
O.L.R.C. Rep., p. 13. 

Subsection 5. No change. 

Subsection 6. The provision is re-enacted to apply only to registered 
agreements, etc. See O.L.R.C. Rep., p. 14. 

[27] 



28 

Sections 8 and 9. No change. 

Section 10. The words "or service" are deleted as "work" includes 
"service". See subsection 2 of section 1 of the Bill. 

Section 11 — Subsection 1. See note to section 10. 

Subsection 2. No change. 

Subsections 3 and 4. See note to section 10. 

Subsection 5. This provision is new. See O.L.R.C. Rep., pp. 14, 15. 

Subsection 6. Formerly s. 11 (5). One editorial change only. 

Subsection 7. Formerly s. 11 (6). No change. 

Subsection 8. Formerly s. 11 (7). Editorial changes only. 

Subsection 9. Formerly s. 11 (8). No change. 

Subsection 10. Formerly s. 11 (9). Editorial changes only. 

Section 12. What was formerly subsection 1 is now section 12. 
No change. See O.L.R.C. Rep., p. 15. 

Section 13. Formerly subsection 2 of section 12. It isTgiven ]a 
section number as it has no relation to section 12. No change in substance. 
See O.L.R.C. Rep., pp. 15, 16. 

Section 14. Formerly section 13. Subsection 1. The words 
"at the address endorsed on such conveyance or mortgage pursuant 
to section 45 of The Registry Act" are deleted in order to require proper 
notice to be given. See O.L.R.C. Rep., pp. 15, 16. 

Subsections 2 and 3. No change. 

Section 15. Formerly section 14. Editorial changes only. 

The old section 15 is deleted and the lien on materials unincorporated 
in the project is abolished. See O.L.R.C. Rep., p. 16. 

Section 16 — Subsection 1. A number of editorial changes are made 
and a specific address for service is required in clause a. See O.L.R.C. 
Rep., p. 17. 

Subsections 2 and 3. No change. 

Section 17. Editorial changes only. 

Section 18. Editorial changes only. 

Section 19. The provisions deleted are now covered by The Registry 
Ad. 

Section 20. The intent is clarified. 

Section 21 — Subsection 1. No change. 

Subsection 2. Editorial changes only. 

Subsection 3. No change. 

Subsection 4. Editorial changes only. 

Subsection 5. Editorial changes only. See O.L.R.C. Rep., p. 17. 

Section 22. Editorial changes only. 



29 

Section 23. Editorial changes only. 

Section 24. Editorial changes only. 

Section 25 — Subsection 1. Editorial changes only. Subsections 2 
and 3 are deleted as their provisions are now covered by The Registry Act. 

Subsection 2. Formerly subsection 4. Editorial changes only, 
except that clause c is new. See O.L.R.C. Rep., pp. 18, 19. 

Subsections 3 and 4. Formerly subsections 5 and 6. Editorial 
changes only. 

Subsection 5. Formerly subsection 7. The provisions are brought 
into line with The Land Titles Act and The Registry Act. See O.L.R.C. 
Rep., p. 18. 

Subsection 6. Formerly subsection 8. Editorial changes only. 

Subsection 7. New. This was enacted at the current Session of the 
Legislature. See O.L.R.C. Rep., p. 19. 

Sections 26 and 27. No change. 

Section 28 — Subsections 1 and 2. Editorial changes only. 

Subsection 3. Extends the right of inspection. See O.L.R.C. Rep., 
p. 17. 

Section 29. The effect of these amendments is to transfer jurisdic- 
tion in lien actions from the Supreme Court to the county and district 
courts. See O.L.R.C. Rep., pp. 11, 12, 19. 

Subsection 7 was formerly section 30. 

Section 30. This was formerly section 31. It is brought into line 
with the amendments made in the new section 29. See O.L.R.C. Rep., 
p. 19. 

The former subsection 1 of section 32 is deleted as it is now dealt with 
elsewhere in the Act. See subsection 4 of section 35 of the Bill. 

Section 31. Formerly subsections 2 to 8 of section 32. The changes 
in subsections 1 and 2 are editorial only. The scope of subsection 3, 
which provides for the appointment of trustees to manage, sell, etc., is 
extended to give a power to mortgage. See O.L.R.C. Rep., p. 19. 

Subsections 4, 5, 6 and 7. Editorial changes only. 

Section 32. This is new. 

Section S3. Editorial changes only. 

Section 34. The changes are editorial and are designed to clarify the 
intent. See O.L.R.C. Rep., pp. 19, 20. 

Section 35 — Subsection 1. The changes are editorial only, except 
that the words "and the order, signed by the judge, shall form part of the 
record of the proceedings" are new. See O.L.R.C. Rep., pp. 20, 21. 

Subsections 2 and 3. Editorial changes only. 

Subsection 4. Editorial changes only, except that the words "includ- 
ing any set-off and counterclaim" in clause a are new. They formerly 
appeared in subsection 1 of section 32. 

Subsection 5. Editorial changes only. 



30 

Subsection 6. The words "under the supervision and direction of the 
court" are new. The other changes are editorial only. See O.L.R.C. 
Rep., p. 20. 

Subsections 7, 8 and 9. Editorial changes only. 

Subsection 10. This is new. See O.L.R.C. Rep., pp. 19, 20. 

Section 36 — Subsections 1 and 2. Editorial changes only. 

Section 37. Formerly subsection 3 of section 36. This is given 
a section number as it does not relate to the subject-matter of section 
36. The word "valid" is deleted as being redundant. See O.L.R.C. 
Rep., p. 21. 

Section 38. Formerly section 37. No change. 

The former section 38 is deleted. This will be covered in the rules of 
practice and procedure. 

Section 39. Editorial changes only. 

Section 40 — Subsection 1. An appeal to the Court of Appeal is 
provided in all cases under this Act. 

Subsection 2. Editorial changes only. 

Section 41. No change. 

Section 42. The new section 42 combines former sections 42, 43, 44, 
45 and 46. Editorial changes only. See O.L.R.C. Rep., p. 21. 

Section 43. Formerly section 47. Editorial changes only. See 
O.L.R.C. Rep., pp. 21, 22. 

Section 44. This is new. See O.L.R.C. Rep., p. 17. 

Section 45. Formerly section 48. Editorial changes only. See 
O.L.R.C. Rep., pp. 21, 22. 

Section 46. The purpose of this new section is to transfer the forms 
from the Act to the regulations. 



DRAFT BILL 



The Mechanics' Lien Act, 1966 

HER MAJESTY, by and with the advice and consent of 
the Legislative Assembly of the Province of Ontario, 
enacts as follows: 

1.— (1) In this Act, t^r' 

(a) "completion of the contract" means substantial per- 
formance, not necessarily total performance, of the 
contract; 

(b) "contractor" means a person contracting with or 
employed directly by the owner or his agent for the 
doing of work or the placing or furnishing of materials 
for any of the purposes mentioned in this Act; 

(c) "court" means a court having jurisdiction under this 
Act; 

(d) "judge" means a judge of the court; 

(e) "materials" includes every kind of movable property; 

(/) "owner" includes any person and corporation, includ- 
ing a municipal corporation and a railway company, 
having any estate or interest in the land upon which 
or in respect of which work is done or materials are 
placed or furnished, at whose request, and 

(i) upon whose credit, or 

(ii) on whose behalf, or 

(iii) with whose privity or consent, or 

(iv) for whose direct benefit, 

work is done or materials are placed or furnished and 
all persons claiming under him or it whose rights 
are acquired after the work in respect of which the 
lien is claimed is commenced or the materials placed 
or furnished have been commenced to be placed or 
furnished ; 

[311 



32 



(g) "registrar" includes a master of titles; 

(h) "registry office" includes a land titles office; 



Work 

includes 

service 



Exception 
of streets 



(i) "subcontractor" means a person not contracting with 
or employed directly by the owner or his agent for 
any of the purposes mentioned in this Act, but con- 
tracting with or employed by a contractor or, under 
him, by another subcontractor; 

(j) "wages" means the money earned by a workman for 
work done by time or as piece work, and includes all 
monetary supplementary benefits, whether statutory 
or contractual; 

(k) "workman" means a person employed for wages in 
any kind of labour, whether employed under a 
contract of service or not. R.S.O. 1960, c. 233, 
s. 1, amended. 

(2) In this Act, the expression "the doing of work" in- 
cludes the performance of a service, and corresponding expres- 
sions have corresponding meanings. New. 



2. Nothing in this Act extends to any public street or 
or highways highway, or to any work or improvement done or caused to 
be done by a municipal corporation thereon, except that the 
provisions of section 1 1 as to the retention and payment of 
percentages by the ow r ner apply mutatis mutandis to any 
such work or improvement. R.S.O. 1960, c. 233, s. 2, amended. 



Contract 
price a 
trust fund 



Exception 



3. — (1) All sums received by a builder or contractor or a 
subcontractor on account of the contract price constitute a 
trust fund in the hands of the builder or contractor or of the 
subcontractor, as the case may be, for the benefit of the 
proprietor, builder or contractor, subcontractors, Workmen's 
Compensation Board, workmen and persons who have supplied 
material on account of the contract or who have rented 
equipment to be used on the contract site, and the builder or 
contractor or the subcontractor, as the case may be, is the 
trustee of all such sums so received by him and, until all work- 
men and all persons who have supplied materials on the 
contract or who have rented equipment to be used on the 
contract site and all subcontractors are paid for work done 
or materials supplied on the contract and the Workmen's 
Compensation Board is paid any assessment with respect 
thereto, may not appropriate or convert any part thereof to 
his own use or to any use not authorized by the trust. 

(2) Notwithstanding subsection 1, where a builder, con- 
tractor or subcontractor has paid in whole or in part for any 



33 

materials supplied on account of the contract or for any rented 
equipment or has paid any workman who has performed any 
work or any subcontractor who has placed or furnished any 
material in respect of the contract, the retention by such 
builder, contractor or subcontractor of a sum equal to the sum 
so paid by him shall be deemed not to be an appropriation or 
conversion thereof to his own use or to any use not authorized 
by the trust. R.S.O. 1960, c. 233, s. 3 (1, 3), amended. 

(3) All sums received by an owner, which are intended by Advances on 

. ... mortgage, 

the lender and the owner to be used in the financing, including etc., a trust 

the payment of prior encumbrances, of a building, structure 
or work, constitute, subject to the payment of prior encum- 
brances, a trust fund in the hands of the owner for the benefit 
of the persons mentioned in subsection 1, and, until the claims 
of all such persons have been paid, the owner may not appro- 
priate or convert any part thereof to his own use or to any use 
not authorized by the trust. 

(4) Notwithstanding subsection 3, where an owner has Exce P tion 
himself paid in whole or in part for any work done, for any 
materials placed or furnished or for any rented equipment, 

the retention by him from any moneys received from the 
lender under subsection 3 of a sum equal to the sum so paid 
by him shall be deemed not to be an appropriation or conver- 
sion thereof to his own use or to a use not authorized by the 
trust. New. 

(5) Every person who appropriates or converts any part of p e ^}ty and 
the trust moneys referred to in subsection 1 or 3 to his own 

use or to any use not authorized by the trust is guilty of an 
offence and on summary conviction is liable to a fine of not 
more than $5,000 or to imprisonment for a term of not more 
than two years, or to both, and every director or officer of a cor- 
poration who knowingly assents to or acquiesces in any such 
offence by the corporation is guilty of such offence, in addition 
to the corporation, and on summary conviction is liable to a 
fine of not more than $5,000 or to imprisonment for a term of 
not more than two years, or to both. R.S.O. 1960, c. 233, 
s. 3 (2), amended. 

4. — (1) Every agreement, oral or written, express or wliv?ng ent9 
implied, on the part of any workman that this Act does not *f Act ation 
apply to or that the remedies provided by it are not available are void 
for the benefit of such workman is void. 

(2) Subsection 1 does not apply, Exception 

(a) to a manager, officer or foreman; or 

(b) to any person whose wages are more than $25 a day. 



34 

SdrdVarty 1 (^) ■^ T ° a g reemen t deprives any person otherwise entitled 
of agreement to a lien under this Act, who is not a party to the agreement, 

waiving hen fl1 r rii' i • « • f ■• 

ol the benefit ol the lien, but it attaches, notwithstanding 
such agreement. R.S.O. 1960, c. 233, s. 4, amended. 



CREATION OF LIENS 



General 
right to a 
lien 



5. — (1) Unless he signs an express agreement to the con- 
trary and in that case subject to section 4, any person who 
does any work upon or in respect of, or places or furnishes any 
materials to be used in, the making, constructing, erecting, 
fitting, altering, improving or repairing of any land, building, 
structure or works or the appurtenances to any of them for any 
owner, contractor or subcontractor by virtue thereof has a 
lien for the price of the work or materials upon the estate or 
interest of the owner in the land, building, structure or works 
and appurtenances and the land occupied thereby or enjoyed 
therewith, or upon or in respect of which the work is done, or 
upon which the materials are placed or furnished to be used, 
limited, however, in amount to the sum justly due to the 
person entitled to the lien and to the sum justly owing, except 
as herein provided, by the owner, and the placing or furnishing 
of the materials to be used upon the land or such other place 
in the immediate vicinity of the land designated by the owner 
or his agent is good and sufficient delivery for the purpose of 
this Act, but delivery on the designated land does not make 
such land subject to a lien. 



(2) The lien given by subsection 1 attaches as therein set 
out where the materials delivered to be used are incorporated 



Lien 

attaches 

where 

incorporated into the land, building, structure or works, notwithstanding 
bunding that the materials may not have been delivered in strict 
accordance with subsection 1. 



Interpre- 
tation 



(3) In subsection 1, "agent" includes the contractor or sub- 
contractor for whom the materials are placed or furnished, 
unless the person placing or furnishing the materials has had 
actual notice from the owner to the contrary. R.S.O. 1960, 
c. 233, s. 5, amended. 



Lien for 

rented 

equipment 



When 
husband's 
interest 
liable for 
work done 
or materials 
furnished 
on land of 
married 
woman 



(4) A person who rents equipment to an owner, contractor 
or subcontractor for use on a contract site shall be deemed 
for the purposes of this Act to have performed a service and 
has a lien for the price of the rental of the equipment used on 
the contract site. New. 

6. Where work is done or materials are placed or furnished 
to be used upon or in respect of the land of a married woman, or 
in which she has an interest or an inchoate right of dower, with 
the privity or consent of her husband, he shall be presumed 



35 

conclusively to be acting as her agent as well as for himself for 
the purposes of this Act unless before doing the work or 
placing or furnishing the materials the person doing the work 
or placing or furnishing the materials has had actual notice to 
the contrary. R.S.O. 1960, c. 233, s. 6, amended. 

7. — (1) Where the estate or interest upon which the lien ^arged e !s ate 
attaches is leasehold, the fee simple is also subject to the lien leasehold 
if the person doing the work or placing or furnishing the 
material gives notice in writing, by personal service, to the 
owner or his agent of the work to be done or material to be 
placed or furnished unless the owner or his agent within ten 
days thereafter gives notice in writing, by personal service, 
to such person that he will not be responsible therefor. 

(2) No forfeiture or attempted forfeiture of the lease on or°c?nceiia- 
the part of the landlord, or cancellation or attempted cancel- fease° effect 
lation of the lease except for non-payment of rent, deprives of on lien- 
any person otherwise entitled to a lien of the benefit of the 

lien, but the person entitled to the lien may pay any rent 
accruing after he becomes so entitled, and the amount so paid 
may be added to his claim. 

(3) Where the land and premises upon or in respect of which mortgagee 
any work is done or materials are placed or furnished are 
encumbered by a mortgage or other charge that was registered 

in the proper registry office before any lien under this Act 
arose, the mortgage or other charge has priority over all liens 
under this Act to the extent of the actual value of the land 
and premises at the time the first lien arose, such value to be 
ascertained by the judge. 



(4) The time at which the first lien arose shall be deemed to^Jj ( ar 



When first 

be the time at which the first work was done or the first 
materials placed or furnished, irrespective of whether a claim 
for lien in respect thereof is registered or enforced and whether 
or not such lien is before the court. 

(5) Any mortgage existing as a valid security, notwith- Future 
standing that it is a prior mortgage within the meaning of 
subsection 3, may also secure future advances, subject to 
subsection 1 of section 14. 

(6) A registered agreement for the sale and purchase of^eement 
land and any moneys bona fide secured or payable there- for sale an <j[ 
under has the same priority over a lien as is provided for a land has 

, , u^-%jc , same priority 

mortgage and mortgage moneys in subsections 3 and 5, and as mortgage 
for the purposes of this Act the seller shall be deemed to be 
a mortgagee, and any moneys bona fide secured and payable 



36 



under such agreement shall be deemed to be mortgage moneys 
bona fide secured or advanced. R.S.O. 1960, c. 233, s. 7, 
amended. 



Application 
of insurance 



8. Where any of the property upon which a lien attaches 
is wholly or partly destroyed by fire, any money received 
by reason of any insurance thereon by an owner or prior 
mortgagee or chargee shall take the place of the property so 
destroyed and is, after satisfying any prior mortgage or charge 
in the manner and to the extent set out in subsection 3 of 
section 7, subject to the claims of all persons for liens to the 
same extent as if the money had been realized by a sale of 
the property in an action to enforce the lien. R.S.O. 1960, 
c. 233, s. 8. 



aSounUf 9. Save as herein otherwise provided, the lien does not 
fiabmty attach so as to make the owner liable for a greater sum than 

the sum payable by the owner to the contractor. R.S.O. 

1960, c. 233, s. 9. 



Limit of 
lien when 
claimed by 
other 
than con- 
tractor 



10. Save as herein otherwise provided, where the lien is 
claimed by any person other than the contractor, the amount 
that may be claimed in respect thereof is limited to the amount 
owing to the contractor or subcontractor or other person for 
whom the work has been done or the materials were placed or 
furnished. R.S.O. 1960, c. 233, s. 10, amended. 



Holdback 



11. — (1) In all cases, the person primarily liable upon any 
contract under or by virtue of which a lien may arise shall, 
as the work is done or the materials are furnished under the 
contract, retain for a period of thirty-seven days after the 
completion or abandonment of the work done or to be done 
under the contract 20 per cent of the value of the work and 
materials actually done, placed or furnished, as mentioned in 
section 5, irrespective of whether the contract or subcontract 
provides for partial payments or payment on completion of 
the work, and the value shall be calculated upon evidence 
given in that regard on the basis of the contract price or, if 
there is no specific contract price, on the basis of the actual 
value of the work or materials. R.S.O. 1960, c. 233, s. 11 (1), 
amended. 



Idem, 
where con- 
tract price 
exceeds 
$25,000 



(2) Where the contract price or actual value exceeds 
$25,000, the amount to be retained is 15 per cent instead of 
20 per cent. R.S.O. 1960, c. 233, s. 11 (2). 



S e amount ^ ^ n tne case °^ a con tract that is under the supervision 

retained of an architect, engineer or other person upon whose certifi- 
cate payments are to be made, where thirty-seven days have 
elapsed after a certificate issued by that architect, engineer or 



37 

other person to the effect that the subcontract has been com- 
pleted to his satisfaction has been given to the person primarily 
liable upon that contract and to the person who became a 
subcontractor by a subcontract made directly under that 
contract, the amount to be retained by the person primarily 
liable upon that contract shall be reduced by 15 per cent or 
20 per cent, as the case may be, of the subcontract price or, if 
there is no specific subcontract price, by 15 per cent or 20 per 
cent, as the case may be, of the actual value of the work 
done or materials placed or furnished under that subcontract, 
but this subsection does not operate if and so long as any lien 
derived under that subcontract is preserved by anything done 
under this Act. 

(4) Where a certificate issued by an architect, engineer Idem 
or other person to the effect that a subcontract by which a 
subcontractor became a subcontractor has been completed to 

the satisfaction of that architect, engineer or other person has 
been given to that subcontractor, then for the purposes of 
subsections 1, 2 and 3 of section 21 and section 23 that sub- 
contract and any materials placed or furnished or to be 
placed or furnished thereunder and any work done or to be 
done thereunder shall, so far as concerns any lien thereunder 
of that subcontractor, be deemed to have been completed or 
placed or furnished not later than the time at which the certi- 
ficate was so given. R.S.O. 1960, c. 233, s. 11 (3, 4), amended. 

(5) Where the architect, engineer or other person upon P°JJ r * ° rder 
whose certificate payments are to be made under a contract certificate 
neglects or refuses to issue or deliver a certificate as required, 

the court, upon application and upon being satisfied that the 
certificate should have been issued and delivered, may make 
an order, upon such terms and conditions as to costs and other- 
wise as it deems just, that the contract has been completed, 
and any such order has the same force and effect as if the certi- 
ficate had been issued and delivered by the architect, engineer 
or other person. New. 

(6) The lien is a charge upon the amount directed to be 1 ^ e ® t n of 
retained by this section in favour of lien claimants whose liens amounts 
are derived under persons to whom the moneys so required 

to be retained are respectively payable. 

(7) All payments up to 80 per cent as fixed by subsection 1 ^ctein* 8 
or up to 85 per cent as fixed by subsection 2 and payments good faith 
permitted as a result of the operation of subsections 3 and 4 notice of 
made in good faith by an owner to a contractor, or by a con- 
tractor to a subcontractor, or by one subcontractor to another 
subcontractor, before notice in writing of the lien given by 



38 

the person claiming the lien to the owner, contractor or sub- 
contractor, as the case may be, operate as a discharge pro tanto 
of the lien. 



Payment of 
percentage 
and 

discharge 
of liens 



(8) Payment of the percentage required to be retained 
under this section may be validly made so as to discharge 
all liens or charges in respect thereof after the expiration of 
the period of thirty-seven days mentioned in subsection 1 
unless in the meantime proceedings have been commenced to 
enforce any lien or charge against the percentage as provided 
by sections 22 and 23, in which case the owner may pay the 
percentage into court in the proceedings, and such payment 
constitutes valid payment in discharge of the owner to the 
amount thereof. 



Amendment 
of contracts 



Where 
percentage 
not to be 
applied 



Payments 
made 
directly 
by owner 
to persons 
entitled to 
lien 



(9) Every contract is amended in so far as is necessary to 
be in conformity with this section. R.S.O. 1960, c. 233, 
s. 11 (5-8). 

(10) Where the contractor or subcontractor makes default 
in completing his contract, the percentage shall not, as against 
any lien claimant who by virtue of subsection 6 has a charge 
thereupon, be applied by the owner, contractor or subcon- 
tractor to the completion of the contract or for any other 
purpose nor to the payment of damages for the non-completion 
of the contract by the contractor or subcontractor nor in 
payment or satisfaction of any claim against the contractor or 
subcontractor. R.S.O. 1960, c. 233, s. 11 (9), amended. 

12. If an owner, contractor or subcontractor makes a 
payment to any person entitled to a lien under section 5 
for or on account of any debt, justly due to him for work 
done or for materials placed or furnished to be used as therein 
mentioned, for which he is not primarily liable, and within 
three days afterwards gives written notice of the payment 
to the person primarily liable, or his agent, the payment shall 
be deemed to be a payment on his contract generally to the 
contractor or subcontractor primarily liable but not so as to 
affect the percentage to be retained by the owner as provided 
by section 11. R.S.O. 1960, c. 233, s. 12 (1), amended. 



Rights of 
subcon- 
tractor 



13. Every subcontractor is entitled to enforce his lien not- 
withstanding the non-completion or abandonment of the 
contract by any contractor or subcontractor under whom he 
claims. R.S.O. 1960, c. 233, s. 12 (2). 



Priority of 
lien 



14. — (1) The lien has priority over all judgments, execu- 
tions, assignments, attachments, garnishments and receiving 
orders recovered, issued or made after the lien arises, and over 
all payments or advances made on account of any conveyance 



39 

or mortgage after notice in writing of the lien has been given 
to the person making such payments or after registration of a 
claim for the lien as hereinafter provided, and, in the absence 
of such notice in writing or the registration of a claim for lien, 
all such payments or advances have priority over any such 
lien. R.S.O. 1960, c. 233, s. 13 (1), amended. 

(2) Except where it is otherwise provided by this Act, among 7 
no person entitled to a lien on any property or money is lienholders 
entitled to any priority or preference over another person of 

the same class entitled to a lien on such property or money, 
and each class of lienholders ranks pari passu for their several 
amounts, and the proceeds of any sale shall be distributed 
among them pro rata according to their several classes and 
rights. 

(3) Any conveyance, mortgage or charge of or on land ^er^to* 6 
given to any person entitled to a lien thereon under this Act pe f?.°, n H t 
in payment of or as security for any such claim, whether lien void as 
given before or after such lien claim has arisen, shall, as holders 
against other parties entitled to liens under this Act, on any 

such land be deemed to be fraudulent and void. R.S.O. 1960, 
c. 233, s. 13 (2, 3). 



PRIORITY OF WAGES 

15. — (1) Every workman whose lien is for wages has ^{^"jjj of 
priority to the extent of thirty days wages over all other liens wages 
derived through the same contractor or subcontractor to the 
extent of and on the 20 per cent or 15 per cent, as the case may 
be, directed to be retained by section 1 1 to which the contractor 
or subcontractor through whom the lien is derived is entitled, 
and all such workmen rank thereon pari passu. 

(2) Every wage-earner is entitled to enforce a lien in respect 1 f e n n fo i n Cing 
of any contract or subcontract that has not been completed such cases 
and, notwithstanding anything to the contrary in this Act, 

may serve a notice of motion on the proper persons, returnable 
in four days after service thereof before the court, that the 
applicant will on the return of the motion ask for judgment on 
his claim for lien, registered particulars of which shall accom- 
pany the notice of motion duly verified by affidavit. 

(3) If the contract has not been completed when the lien p^rc^ntage 8 
is claimed by a wage-earner, the percentage shall be calcu- ™ke^ col- 
lated on the value of the work done or materials placed or fulfilled 
furnished by the contractor or subcontractor by whom the 
wage-earner is employed, having regard to the contract price, 

if any. 



40 

?efeat es to (^) Every device by an owner, contractor or subcontractor 

priority of to defeat the priority given to a wage-earner for his wages 
earners and every payment made for the purpose of defeating or im- 

pairing a lien are void. R.S.O. 1960, c. 233, s. 14, amended. 



REGISTRATION 



Registration 
of claim 
for lien 



16. — (1) A claim for a lien may be registered in the proper 
registry office and shall set out, 



(a) the name and an address for service of the person 
claiming the lien and of the owner or of the person 
whom the person claiming the lien, or his agent, 
believes to be the owner of the land, and of the person 
for whom the work was or is to be done, or the 
materials were or are to be placed or furnished, and 
the time within which the same was or was to be 
done or placed or furnished; 

(b) a short description of the work done or to be done, 
or the materials placed or furnished or to be placed 
or furnished; 

(c) the sum claimed as due or to become due; 



R.S.O. I960, 
cc. 204, 348 



(d) a description of the land as required by The Land 
Titles Act or The Registry Act and the regulations 
thereunder, as the case may be; and 



(e) the date of expiry of the period of credit when credit 
has been given. R.S.O. 1960, c. 233, s. 16 (1), 
amended. 



Verification 
of claim 



(2) The claim shall be verified in duplicate by the affidavit 
of the person claiming the lien, or of his agent or assignee 
who has a personal knowledge of the matters required to be 
verified, and the affidavit of the agent or assignee shall state 
that he has such knowledge. 



Lien 

against 

railway 



(3) When it is desired to register a claim for lien against a 
railway, it is sufficient description of the land of the railway 
company to describe it as the land of the railway company, 
and every such claim shall be registered in the general register 
in the office for the registry division within which the lien is 
claimed to have arisen. R.S.O. 1960, c. 233, s. 16 (2, 3). 



be h inci m ded ^ ' • — W A claim for lien may include claims against any 

in claim number of properties, and any number of persons claiming 

liens upon the same property may unite therein, but, where 



41 

more than one lien is included in one claim, each claim for 
lien shall be verified by affidavit as provided in section 16. 

(2) The court has jurisdiction equitably to apportion against ment r of° n " 
the respective properties the amounts included in any claim or claims 
claims under subsection 1. R.S.O. 1960, c. 233, s. 17, amended. 

18. — (1) Substantial compliance with sections 16, 17 and fn registering 
29 is sufficient and no claim for lien is invalidated by reason of liens 
failure to comply with any of the requirements of such sections 
unless, in the opinion of the judge, the owner, contractor or 
subcontractor, mortgagee or other person is prejudiced thereby, 
and then only to the extent to which he is thereby prejudiced. 

(2) Nothing in this section dispenses with registration of n e e c?ssary lon 
the claim for lien. R.S.O. 1960, c. 233, s. 18, amended. 

19. A duplicate of the claim for lien, bearing the registrar's f e U fiied ate t0 
certificate of registration, shall be filed in the office of the clerk 

of the county or district court of the county or district in 
which the land is situate on or before the trial of the action. 
R.S.O. 1960, c. 233, s. 19 (1), amended. 

20. Where a claim is so registered, the person entitled tortus 

a lien shall be deemed to be a purchaser pro tanto and a claimant 
purchaser within the provisions of The Registry Act and The ^^g ^oS' 
Land Titles Act, but, except as herein otherwise provided, 
those Acts do not apply to any lien arising under this Act. 
R.S.O. 1960, c. 233, s. 20, amended. 

21. — (1) A claim for lien by a contractor or subcontractor ^j^t^f 
in cases not otherwise provided for may be registered before registration 
or during the performance of the contract or of the subcontract 
or within thirty-seven days after the completion or abandon- 
ment of the contract or of the subcontract, as the case may 
be. R.S.O. 1960, c. 233, s. 21 (1). 

(2) A claim for lien for materials may be registered before Materials 
or during the placing or furnishing thereof, or within thirty- 
seven days after the placing or furnishing of the last material 

so placed or furnished. R.S.O. 1960, c. 233, s. 21 (2), amended. 

(3) A claim for lien for services may be registered at any Services 
time during the performance of the service or within thirty- 
seven days after the completion of the service. R.S.O. 1960, 

c. 233, s. 21 (3). 

(4) A claim for lien for wages may be registered at any time Wa 8 es 
during the doing of the work for which the wages are claimed 

or within thirty-seven days after the last work was done for 
which the lien is claimed. 



42 



Duty of 
lien claimant 
whose lien 
is not 
registered 



(5) Every lien claimant who does not register a claim for 
lien and whose lien is preserved by an action commenced by 
another lien claimant shall, before the day appointed for the 
trial of the action, give written notice of his lien to the owner 
or his agent, the mortgagee or his agent and the lien claimant 
who has commenced the action, and shall deposit with the 
clerk of the county or district court in which the action has 
been commenced the particulars of his claim verified by 
affidavit. R.S.O. 1960, c. 233, s. 21 (4, 5), amended. 



Expiry of 
liens 



EXPIRY AND DISCHARGE 

22. — (1) Every lien for which a claim is not registered 
ceases to exist on the expiration of the time limited in section 21 
for the registration thereof unless in the meantime an action 
is commenced to realize the claim or in which the claim may be 
realized and a certificate thereof is registered in the registry 
office in which the claim might have been registered. 



Vacating 
orders 



(2) Where a certificate of action has been registered for 
two years or more in the registry office and no appointment 
has been taken out for the trial of the action, the judge may, 
upon the application ex parte of any interested person, make 
an order vacating the certificate of action and discharging all 
liens depending thereon. R.S.O. 1960, c. 233, s. 22, amended. 



When lien 

to cease 

if registered 

and not 

proceeded 

upon 



Assignment 
or death of 
lien 
claimant 



23. Every lien for which a claim is registered ceases to 
exist on the expiration of ninety days after the work has been 
completed or the materials have been placed or furnished, or 
after the expiry of the period of credit, where such period is 
mentioned in the registered claim for lien, unless in the 
meantime an action is commenced to realize the claim or in 
which the claim may be realized, and a certificate is registered 
as provided by section 22. R.S.O. 1960, c. 233, s. 23, amended. 

24. The rights of a lien claimant may be assigned by an 
instrument in writing and, if not assigned, upon his death 
pass to his personal representative. R.S.O. 1960, c. 233, s. 24, 
amended. 



Discharge 
of lien 



25. — (1) A claim for lien may be discharged by the regis- 
tration of a receipt acknowledging payment, 



(a) where made by a claimant that is not a corporation, 
signed by the claimant or his agent duly authorized 
in writing and verified by affidavit; 



(b) where made by a claimant that is a corporation, 
sealed with its corporate seal. R.S.O. 1960, c. 233, 
s. 25 (1), amended. 



43 

(2) Upon application, the court may, at any time, payment ° r 

into court 
and vacating 

(a) allow security for or payment into court of the certificate 
amount of the claim and such costs as it may fix, of action 
and thereupon order that the registration of the 

claim for lien be discharged and that the registration 
of the certificate of action, if any, be vacated; 

(b) upon any other proper ground, order that the regis- 
tration of the claim for lien be discharged and that 
the registration of the certificate of action, if any, 
be vacated; or 

(c) upon proper grounds, dismiss the action. R.S.O. 
1960, c. 233, s. 25 (4), amended. 

(3) Notwithstanding sections 22 and 23, where an Order ^der^under 
to vacate the registration of a lien is made under clause a of 6UDS - 2 > 

i • ii-i • . cl. a 

subsection 2, the hen does not cease to exist for the reason that 
no certificate of action is registered. 

(4) Any money so paid into court, or any bond or other Money paid 
security for securing the like amount and satisfactory to the 

court, takes the place of the property discharged and is 
subject to the claims of every person who has at the time of 
the application registered his claim for lien or given notice 
of the claim under subsection 6 of section 11 or section 14 to 
the same extent as if the money, bond or other security was 
realized by a sale of the property in an action to enforce the 
lien, but such amount as the court finds to be owing to the 
person whose lien has been so vacated is a first charge upon 
the money, bond or other security. 

(5) Where the certificate required by section 22 or 23 where notice 

. • i » i • • °^ apphca- 

has not been registered within the prescribed time and an tion to 
application is made to vacate the registration of a claim requisite 
for lien after the time for registration of the certificate, the 
order vacating the lien may be made ex parte upon production 
of a certificate of search under The Land Titles Act or of a regis- R.s.o. i960, 
trar's abstract under The Registry Act, as the case may be, 
together with a certified copy of the registered claim for lien. 
R.S.O. 1960, c. 233, s. 25 (5-7), amended. 

(6) Where money has been paid into court or a bond m oney out f 
deposited in court pursuant to an order under subsection 2, ofcourt 
the court may, with the consent of all parties and lien claimants 
affected, order the money to be paid out to the persons entitled 
thereto or the delivery up of the bond for cancellation, as the 

case may be. 1961-62, c. 78, s. 1, amended. 



44 



m?mber atlon (?) ^ n or< ^ er discharging a claim for lien or vacating a 
certificate of action shall be registered by registering the 
order or a certificate thereof, under the seal of the court, that 

cc.^o^ffs' deludes a description of the land as required by The Land 
Titles Act or The Registry Act and the regulations thereunder, 
as the case may be, and a reference to the registration number 
of every registered claim for lien and certificate of action 
affected thereby. 1966, c. 84, s. 1, amended. 



EFFECT OF TAKING SECURITY OR EXTENDING TIME 



Effect 
generally 



26. — (1) The taking of any security for, or the acceptance 
of any promissory note or bill of exchange for, or the taking 
of any acknowledgment of the claim, or the giving of time 
for the payment thereof, or the taking of any proceedings for 
the recovery, or the recovery of a personal judgment for the 
claim, does not merge, waive, pay, satisfy, prejudice or destroy 
the lien unless the claimant agrees in writing that it has that 
effect. R.S.O. 1960, c. 233, s. 26 (1). 



Where 
period 
of credit 
not expired 



(2) Where any such promissory note or bill of exchange 
has been negotiated, the lien claimant does not thereby lose 
his right to claim for lien if, at the time of bringing his action 
to enforce it or where an action is brought by another lien 
claimant, he is, at the time of proving his claim in the action, 
the holder of such promissory note or bill of exchange. 



(3) Nothing in subsection 2 extends the time limited by 



Time for 
bringing 

action not this Act for bringing an action to enforce a claim for lien. 

extended fe fe 



Time for (4) A person who has extended the time for payment of a 

action by claim for which he has a claim for lien, in order to obtain the 

gave°time° benefit of this section, shall commence an action to enforce 

for payment ^ c i a j. m w ithin the time prescribed by this Act and shall 

register a certificate as required by sections 22 and 23, but no 

further proceedings shall be taken in the action until the 

expiration of such extension of time. R.S.O. 1960, c. 233, 

s. 26 (2-4), amended. 



Proving 
claim in 
action by 
another 
person 



27. Where the period of credit in respect of a claim has not 
expired, or where there has been an extension of time, for 
payment of the claim, the lien claimant may nevertheless, if 
an action is commenced by any other person to enforce a claim 
for lien against the same property, prove and obtain payment 
of his claim in the action as if the period of credit or the 
extended time had expired. R.S.O. 1960, c. 233, s. 27. 



45 



LIEN CLAIMANT S RIGHTS TO INFORMATION 



28. — (1) Any lien claimant may, in writing, at any time of contract 
demand of the owner or his agent the production, for inspec- ment ree ~ 
tion, of the contract or agreement with the contractor for 
or in respect of which the work is or is to be done or the 
materials are or are to be placed or furnished, if the contract or 
agreement is in writing or, if not in writing, the terms of the 
contract or agreement and the state of the accounts between 
the owner and the contractor, and, if the owner or his agent 
does not, at the time of the demand or within a reasonable 
time thereafter, produce the contract or agreement if in writing 
or, if not in writing, does not inform the person making the 
demand of the terms of the contract or agreement and the 
amount due and unpaid upon the contract or agreement or if 
he knowingly falsely states the terms of the contract or agree- 
ment or the amount due or unpaid thereon and if the person 
claiming the lien sustains loss by reason of the refusal or 
neglect or false statement, the owner is liable to him for the 
amount of the loss in an action therefor or in any action for 
the enforcement of a lien under this Act, and subsection 4 of 
section 35 applies. 

(2) Any lien claimant may in writing at any time demand of ©f ^no?t^ nt 
a mortgagee or unpaid vendor or his agent the terms of any g^ntSd 1 " 
mortgage on the land or of any agreement for the purchase vendor 
of the land in respect of which the work is or is to be done or the 
materials are or are to be placed or furnished and a statement 
showing the amount advanced on the mortgage or the amount 

owing on the agreement, as the case may be, and, if the mort- 
gagee or vendor or his agent fails to inform the lien claimant at 
the time of the demand or within a reasonable time thereafter 
of the terms of the mortgage or agreement and the amount 
advanced or owing thereon or if he knowingly falsely states 
the terms of the mortgage or agreement and the amount 
owing thereon and the lien claimant sustains loss by the refusal 
or neglect or misstatement, the mortgagee or vendor is liable 
to him for the amount of the loss in an action therefor or in 
any action for the enforcement of a lien under this Act, and 
subsection 4 of section 35 applies. 

(3) The court may, on a summary application at any time ofcontract 
before or after an action is commenced for the enforcement of m en t r6e " 
the claim for lien, make an order requiring the owner or his 

agent or the mortgagee or his agent or the unpaid vendor or 
his agent or the contractor or subcontractor or his agent, as 
the case may be, to produce and permit any lien claimant to 
inspect any such contract or agreement or mortgage or agree- 
ment for sale or the accounts or any other relevant document 
upon such terms as to costs as the court deems just. R.S.O. 
1960, c. 233, s. 28, amended. 



46 



ACTIONS 

enforceable ^^. — ~W A claim for lien is enforceable in an action in the 
county or district court of the county or district in which the 
land or part thereof is situate. 



Statement 
of claim, 
filing of 



(2) The action shall be commenced by filing a statement of 
claim in the office of the clerk of the court. 



Idem, 

service 



Statement 
of defence 



Parties 



(3) The statement of claim shall be served within thirty 
days after it is filed, but the court may extend the time for 
service. 

(4) The statement of defence in the action shall be delivered 
within ten days after the statement of claim has been served, 
but the court may extend the time for delivery. 

(5) It is not necessary to make any lien claimants parties 
defendant to the action, but all lien claimants served with the 
notice of trial shall for all purposes be deemed to be parties 
to the action. 



Motion 
to speed 
trial 



Lien 

claimants 
joining in 
action 



(6) After the commencement of the action, any lien claimant 
or other person interested may apply to the court to speed the 
trial of the action. R.S.O. 1960, c. 233, s. 29, amended. 

(7) Any number of lien claimants claiming liens on the same 
land may join in an action, and an action brought by a lien 
claimant shall be deemed to be brought on behalf of himself 
and all other lien claimants. R.S.O. 1960, c. 233, s. 30, 
amended. 



Place of 
trial 



Removal 
of action 
into S.C.O. 



30.— (1) Except as provided in subsection 2, the action 
shall be tried in the county or district court in which the 
action was commenced. 

(2) Upon the application of any party or other interested 
person made according to the practice of the Supreme Court 
and upon notice, a judge of the Supreme Court may direct 
that the action be tried by a judge of the Supreme Court at 
a regular sittings of the court for the trial of actions in the 
county or district in which the action was commenced. 
R.S.O. 1960, c. 233, s. 31 (1, 2), amended. 



Where con- 
tract covers 
several 
buildings 



31. — (1) Where an owner enters into an entire contract for 
the supply of materials to be used in several buildings, the per- 
son supplying the materials may ask to have his lien follow the 
form of the contract and that it be for an entire sum upon all 
the buildings, but, in case the owner has sold one or more of 
the buildings, the court has jurisdiction equitably to apportion 
against the respective buildings the amount included in the 
claim for lien under the entire contract. 



47 

(2) At any time after the delivery of the statement of appoint a 
claim, the court may, on the application of any lien claimant, receiver of 

- . • r ^GIluS £111(1 

mortgagee or other person interested, appoint a receiver ot profits 
the rents and profits of the property against which the claim 
for lien is registered, upon such terms and upon the giving of 
such security or without security as the court deems just. 

(3) Any lien claimant, mortgagee or other person interested direct 1 " 
may make an application to the court at any time before or Ip^J-^ 
after judgment, which may hear viva voce or affidavit evidence trustee 
or both and appoint, upon such terms and upon the giving of 

such security or without security as the court deems just, a 
trustee or trustees with power to manage, mortgage and sell, 
or manage, mortgage or sell, the property against which the 
claim for lien is registered, and the exercise of such powers 
shall be under the supervision and direction of the court, and 
with power, when so directed by the court, to complete or 
partially complete the property, and, in the event that mort- 
gage moneys are advanced to the trustee or trustees as the 
result of any of the powers conferred upon him or them under 
this subsection, such moneys take priority over every claim of 
lien existing as of the date of the appointment. 

(4) Any property directed to be sold under subsection 3 offerecTfor 
may be offered for sale subject to any mortgage or other charge sale 

or encumbrance if the court so directs, but only in cases 
where there is no dispute as to the priority of any such mort- 
gage. 

(5) The proceeds of any sale made by a trustee under sub- f™^ p^ld 
section 3 shall be paid into court and are subject to the claims int ° court 
of all lien claimants, mortgagees or other persons interested in 

the property so sold as their respective rights are deter- 
mined, and, in so far as applicable, section 36 applies. 

(6) The court shall make all necessary orders for the com- ° o r ^ ^^ 
pletion of the sale, for the vesting of the property in the pur- of sale 
chaser, and for possession. 

(7) Any such vesting order so made of property so sold o^tituf 
by a trustee appointed under subsection 3 vests the title of the 
property free from all claims for liens, encumbrances and 
interests of any kind including dower, except in cases where 

sale is made subject to any mortgage, charge, encumbrance 
or interest as hereinbefore provided, but nothing in this section 
or in this Act shall be deemed to extinguish the right to dower, 
if any, of any married woman or the right to have the value 
of her dower ascertained and deducted from the proceeds of 
the sale so paid into court. R.S.O. 1960, c. 233, s. 32 (2-8), 
amended. 



48 



Order for 
preserva- 
tion of 
property 



32. At any time after delivery of the statement of claim 
and before judgment, or after judgment and pending the 
hearing and determination of any appeal, any lien claimant, 
mortgagee or other interested person may make an application 
to the court having jurisdiction to try the action, which may 
hear viva voce or affidavit evidence or both and make an order 
for the preservation of any property pending the determination 
of the action and any appeal. New. 



Consolida- 
tion of 
actions 



33. Where more actions than one are brought to realize 
liens in respect of the same land, the court may, on the applica- 
tion of any party to any one of the actions or on the application 
of any other person interested, consolidate all such actions 
into one action and award the conduct of the consolidated 
action to any plaintiff as the court deems just. R.S.O. 1960, 
c. 233, s. 33, amended. 



Transferring 34. Any lien claimant entitled to the benefit of an action 

carnage of J . 

proceedings may at any time apply to the court lor the carriage 01 the 
proceedings, and the court may make an order awarding such 
lien claimant the carriage of the proceedings. R.S.O. 1960, 
c. 233, s. 34, amended, 

da P y P ?o? ting 35.— (1) After the delivery of the statement of defence, 
trial where the plaintiff's claim is disputed, or after the time for 

delivery of defence in all other cases, either party may apply 
ex parte to a judge to fix a day for the trial thereof, and the 
judge shall appoint the time and place of trial, and the order, 
signed by the judge, shall form part of the record of the 
proceedings. 



Notice of 
trial and 
service 



(2) The party obtaining an appointment for the trial shall, 
at least ten clear days before the day appointed, serve notice 
of trial upon the solicitors for the defendants who appear 
by solicitors and upon the defendants who appear in person, 
and upon all the lienholders who have registered their claims 
as required by this Act or of whose claims he has notice, and 
upon all other persons having any charge, encumbrance 
or claim on the land subsequent in priority to the lien, who 
are not parties, and such service shall be personal unless 
otherwise directed by the judge who may direct in what 
manner the notice of trial is to be served. 



Idem 



(3) Where any person interested in the land has been 
served with a statement of claim and makes default in de- 
livering a statement of defence, he shall nevertheless be served 
with notice of trial and is entitled to defend on such terms as 
to costs and otherwise as the court deems just. 



49 

(4) The court, Trial 

(a) shall try the action, including any set-off and counter- 
claim, and all questions that arise therein or that are 
necessary to be tried in order to completely dispose 
of the action and to adjust the rights and liabilities 
of the persons appearing before it or upon whom 
notice of trial has been served; 

(b) shall take all accounts, make all inquiries, give all 
directions and do all other things necessary to finally 
dispose of the action and of all matters, questions and 
accounts arising therein or at the trial, and to adjust 
the rights and liabilities of and give all necessary 
relief to all parties to the action and all persons who 
have been served with the notice of trial; and 

(c) shall embody the results of the trial in a judgment, 
which judgment may direct payment forthwith 
by the person or persons primarily liable to pay 
the amount of the claims and costs as ascertained by 
the judgment, and execution may be issued therefor 
forthwith. 

(5) The form of the judgment may be varied by the court varyform of 
in order to meet the circumstances of the case so as to afford judgment 
to any party to the proceedings any right or remedy in the 
judgment to which he is entitled. 

(6) The court may order that the estate or interest charged Sale 
with the lien be sold, may refer the conduct of the sale to the 
clerk of the court, and may direct the sale to take place at any 
time after judgment, allowing, however, a reasonable time 
for advertising the sale. 

(7) A lien claimant who did not prove his claim at the trial, u|* ting in 
on application to the court, may be let in to prove his claim, claimants 
on such terms as to costs and otherwise as are deemed just, not proved 
at any time before the amount realized in the action for at trial 
the satisfaction of liens has been distributed, and, where his 

claim is allowed, the judgment shall be amended so as to 
include his claim. 

(8) Any lien claimant for an amount not exceeding $200^^ of 
may be represented by an agent who is not a solicitor. to a repre- 8 

sentation 

(9) An action may be tried by any judge of the court having be Vried"}*/ 
jurisdiction to try the action notwithstanding: that the time anv .J ud e e 
and place for the trial thereof were appointed and fixed by jurisdiction 
another such judge. R.S.O. 1960, c. 233, s. 35, amended. 



50 



Applications 

for 

directions 



(10) Any party to an action under this Act or any other 
interested person may at any time and from time to time 
apply to the court for directions as to pleadings, discovery, 
production or any other matter relating to the action, includ- 
ing the cross-examination of a lien claimant or his agent or 
assignee on his affidavit verifying the claim. New. 



Report 
where sale 
is had 



36. — (1) Where a sale is had, the moneys arising there- 
from shall be paid into court to the credit of the action, and 
the court shall direct to whom the moneys in court shall be 
paid and may add to the claim of the person conducting the 
action his fees and actual disbursements incurred in connection 
with the sale, and, where sufficient to satisfy the judgment 
and costs is not realized from the sale, the court shall certify the 
amount of the deficiency and the names of the persons who 
are entitled to recover the same, showing the amount that each 
is entitled to recover and the persons adjudged to pay the 
same, giving credit for payments made, if any, under sub- 
section 4 of section 35, and the persons so entitled may 
enforce payment of the amounts so found to be due by execu- 
tion or otherwise. 



of°saie letion (2) The court may make all necessary orders for the com- 
pletion of the sale and for vesting the property in the purchaser. 
R.S.O. 1960, c. 233, s. 36 (1, 2), amended. 



Where 
lien not 
established 



37. Where a claimant fails to establish a lien, he may 
nevertheless recover a personal judgment against any party 
to the action for such sum as may appear to be due to him 
and which he might recover in an action against such party. 
R.S.O. 1960, c. 233, s. 36 (3), amended. 



Right of 38. Where property subject to a lien is sold in an action 

henholders ,.,.,,, • • i , , i 

whose claims to enforce a hen, every henholder is entitled to share in the 

payable to proceeds of the sale in respect of the amount then owing to 

proceeds him, although the same or part thereof was not payable at 

the time of the commencement of the action or is not then 

presently payable. R.S.O. 1960, c. 233, s. 37. 



Stated case 



STATED CASE 

39. — (1) If in the course of proceedings to enforce a lien a 
question of law arises, the judge trying the case may, at the 
request of any party, state the question in the form of a stated 
case for the opinion of the Court of Appeal, and the stated 
case shall thereupon be set down to be heard before the 
Court of Appeal and notice of hearing shall be served by the 
party setting down upon all parties concerned. R.S.O. I960, 
c. 233, s. 39 (1), amended. 



51 
(2) The stated case shall set forth the facts material for T ^ ar ^ 8 - , 

v ' . mission of 

the determination of the question raised, and all papers neces- papers 
sary for the hearing of the appeal shall be transmitted to the 
registrar of the Court of Appeal. R.S.O. 1960, c. 233, s. 39 (2). 

APPEAL 

40. — (1) An appeal lies from any judgment under this Act Appeal 
to the Court of Appeal as provided in The County Courts Act. R.s.o. i960, 
R.S.O. 1960, c. 233, s. 40 (1), amended. 

(2) The costs of an appeal shall not be governed by sub- Co8ts , of 
sections 2 and 3 of section 42, but, subject to any order of the 
Court of Appeal, shall be upon the scale of costs allowed in 
county court appeals where the amount involved is within the 
proper competence of the county court, and, where it exceeds 
that amount, upon the Supreme Court scale. R.S.O. 1960, 
c. 233, s. 40 (5), amended. 

FEES AND COSTS 

41. The fee payable by every plaintiff, every plaintiff by Fee 
counterclaim and every lien claimant, including every person 
recovering a personal judgment, in any action to realize a lien 
under this Act is, 

(a) $5 on a claim or counterclaim not exceeding $500; 

(b) $10 on a claim or counterclaim exceeding $500 but 
not exceeding $1,000; 

(c) $10 on a claim or counterclaim exceeding $1,000, 
plus $1 for every $1,000 or fraction thereof in excess of 
$1,000, 

but no fee is payable on a claim for wages only, and in no case 
shall the fee on a claim exceed $75 or on a counterclaim exceed 
$25. R.S.O. 1960, c. 233, s. 41. 

42. — (1) Subject to subsections 2, 3, 4 and 5, any order c^s not 
as to costs in an action under this Act is in the discretion of provided 

for 

the judge who tries the action. R.S.O. 1960, c. 233, s. 46, 
amended. 

(2) The costs of the action, exclusive of actual disburse- J^ 1 ^^ 
ments, awarded to the plaintiffs and successful lienholders, plaintiffs 
shall not exceed in the aggregate 25 per cent of the total 
amount found to have been actually due on the liens at the 
time of the registration thereof, and shall be apportioned and 
borne in such proportion as the judge who tries the action 
may direct, but in making the apportionment he shall have 



52 

regard to the actual services rendered by or on behalf of the 
parties respectively, provided that, where a counterclaim is 
set up by a defendant, the amount and apportionment of the 
costs in respect thereof are in the discretion of the judge. 
R.S.O. 1960, c. 233, s. 42, amended. 

costsa°ain t ^ Where costs are awarded against the plaintiff or other 
plaintiffs persons claiming liens, they shall not exceed, except in the case 
of a counterclaim, 25 per cent of the claim of the plaintiff and 
the other claimants, besides actual disbursements, and shall 
be apportioned and borne as the judge may direct. R.S.O. 
1960, c. 233, s. 43, amended. 

Sast S ex h e e n e ^ Where the least expensive course is not taken by a 
sive course plaintiff, the costs allowed to him shall in no case exceed 
what would have been incurred if the least expensive course 
had been taken. R.S.O. 1960, c. 233, s. 44. 

Costs of (5) Where a lien is discharged or vacated under section 25 

drawing and i • i ■ r • • 

registering or where judgment is given in favour of or against a claim 

and vacating f ....... . ri ? . . - 

registration for a lien, in addition to the costs ol the action, the judge 
may allow a reasonable amount for the costs of drawing and 
registering the claim for lien or of vacating the registration 
thereof, but this does not apply where the claimant fails to 
establish a valid lien. R.S.O. 1960, c. 233, s. 45, amended. 

RULES OF PROCEDURE 

Rules ; of 43. — (1) The object of this Act being to enforce liens at 

the least expense, the procedure shall be as far as possible of 
a summary character, having regard to the amount and nature 
of the liens in question. 

interiocu- (i\ Except where otherwise provided by this Act, no inter- 

tory proceed- v y ^ , • , . , , 

ings locutory proceedings shall be permitted without the consent 

of the court, and then only upon proper proof that such 
proceedings are necessary. 



Assistance 
of experts 



(3) The court may obtain the assistance of any merchant, 
accountant, actuary, building contractor, architect, engineer 
or person in such way as it deems fit, the better to enable it 
to determine any matter of fact in question, and may fix the 
remuneration of any such person and direct payment thereof 
by any of the parties. R.S.O. 1960, c. 233, s. 47, amended. 



SERVICE OF DOCUMENTS 



Service of 
documents 



44. Except where otherwise directed by the court, all 
documents under this Act, other than statements of claim 
and notices of trial, are sufficiently served upon the intended 
recipient if sent by registered mail addressed to him at his 
address for service. New. 



53 



LIENS ON CHATTELS 



45. — (1) Every person who has bestowed money, skill or Sj?ttoi° f 

materials upon any chattel or thing in the alteration or im- lienhoider 
provement of its properties or for the purpose of imparting chattel 
an additional value to it, so as thereby to be entitled to a lien 
upon the chattel or thing for the amount or value of the money 
or skill and material bestowed, has, while the lien exists but not 
afterwards, in case the amount to which he is entitled remains 
unpaid for three months after it ought to have been paid, the 
right, in addition to any other remedy to which he may be 
entitled, to sell by auction the chattel or thing on giving one 
week's notice by advertisement in a newspaper published in 
the municipality in which the work was done, or in case there 
is no newspaper published in the municipality then in the 
newspaper published nearest thereto, setting forth the name of 
the person indebted, the amount of the debt, a description 
of the chattel or thing to be sold, the time and place of sale, 
and the name of the auctioneer, and leaving a like notice in 
writing at the last known place of residence, if any, of the 
owner, if he is a resident of the municipality. 

(2) Such person shall apply the proceeds of the sale in ^proceeds 
payment of the amount due to him and the costs of advertising of sale 
and sale and shall upon application pay over any surplus to the 
person entitled thereto. R.S.O. 1960, c. 233, s. 48, amended. 



FORMS 

46. The Lieutenant Governor in Council may make regu- Forms 
lations prescribing forms and providing for their use. New. 

MISCELLANEOUS 

47. The Mechanics Lien Act, The Mechanics Lien Amend- ^ §33: 1960, 
ment Act, 1961-62, The Mechanics 1 Lien Amendment Act, J 9 fg". 62, 
1962-63 and The Mechanics Lien Amendment Act, 1966 are 1962-63, 

c. 79 " 

repealed. 1966,' c. 84, 

repealed 

48. This Act comes into force on a day to be named by the ment mence 
Lieutenant Governor by his proclamation. 

49. This Act may be cited as The Mechanics Lien A ct, Short title 
1966. 



*ct^ 



Ra^Utf 




ONTARIO 



SUPPLEMENTARY REPORT OF 



ONTARIO LAW REFORM COMMISSION 



TO 



THE ATTORNEY GENERAL FOR ONTARIO 



ON 



THE MECHANICS' LIEN ACT 



The Ontario Law Reform Commission was established by section 1 
of The Ontario Law Reform Commission Act, 1964 for the purpose of 
promoting the reform of the law and legal institutions. The Commis- 
sioners are: 

H. Allan Leal, Q.C., LL.M., LL.D., Chairman 
Honourable James C. McRuer, LL.D. 
Honourable Richard A. Bell, P.C., Q.C. 
W. Gibson Gray, Q.C. 
William R. Poole, Q.C. 

Mr. William B. Common, Q.C, is Counsel to the Commission. 
The Secretary of the Commission is Miss A. F. Chute, and its offices 
are at Room 470, Parliament Buildings, Toronto, Ontario, Canada. 




ONTARIO LAW REFORM COMMISSION 



PARLIAMENT BUILDINGS 
TORONTO 2 



To The Honourable A. A. Wishart, Q.C., 

Minister of Justice and Attorney General for Ontario. 

Re: The Mechanics' Lien Act 



Dear Mr. Attorney: 

1. Mechanics' lien legislation has existed in this province for almost 
100 years. During this period we have evolved from an essentially rural 
and agricultural community to a complex industrial and commercial 
society. Although the basic principle of the legislation remains unassail- 
able, it is generally acknowledged that in certain matters of detail the 
statutory provisions are unsatisfactory. As a result of representations 
made to it and to the Attorney General, the Commission in 1965 under- 
took a study of the legislation and on February 22, 1966 submitted its 
report recommending amendments to The Mechanics' Lien Act, R.S.O. 
1960, c. 233. A draft Bill, based on the report and entitled The Mechan- 
ics' Lien Act, 1966, was introduced and given first reading on June 27, 
1966. 

2. It was felt that all interested persons and organizations should be 
given an opportunity of studying the proposed legislation before final 
enactment and accordingly the Bill was not carried beyond first reading. 

3. The report of the Commission, to which the draft Bill was 
appended, was widely circulated by the Attorney General and comment 
invited. Representations were received from many individuals, organiza- 
tions and institutions. A list of those who made submissions is appended 
hereto as Appendix A. 

13] 



4. The Commission, on January 4, 1967, held public hearings in the 
Parliament Buildings, Queen's Park, Toronto, at which time further 
written and oral representations were received. A list of those who 
made submissions is appended hereto as Appendix B. 

5. The Commission has considered carefully all the representations 
received and wishes to express appreciation to all who made submissions. 

6. In its report, the Commission referred to the thirteen proposals 
for amendment of the Act emanating from the conference and studies 
sponsored by the Board of Trade of Metropolitan Toronto. After 
careful consideration, the Commission decided that proposals 6 to 13 of 
the conference report were unacceptable for the reason that their adoption 
and implementation would alter completely the basic philosophy of the 
legislation. That philosophy, which is amply demonstrated by the 
provisions of the Act, is that where an asset has been created by the 
application of labour and materials it should stand as security for pay- 
ment for such labour and materials. The Act was neither designed, 
nor does it purport, to regulate the economics of the construction industry. 
While the structure and operation of the Act may have a bearing on this 
problem, it is the opinion of the Commission that the legislation should 
not be altered to correct any problems in the economics of the industry 
at the expense of those for whose benefit the legislation was passed. 
The Act should remain a workman's and supplier's protection Act. 

7. In deference to those pressing the proposal, attention was again 
directed to their recommendation that the lien remedy be restricted to 
contractors and subcontractors and that for sub-subcontractors and their 
suppliers a "privileged claim" be substituted for a lien. The concept 
of the "privileged claim" is not new in Canada since similar, though not 
identical, provisions have existed in the Civil Code of the Province of 
Quebec for 100 years. It is clear from the Quebec experience with the 
"privileged claim" that it has not solved the economic problems of the 
construction industry in that province. It has been advocated by at least 
one Quebec authority that a solution to those problems may be found 
in taking a closer look at the credit and financial policies of those engaged 
in the industry. 

8. A consideration of the many briefs and submissions has led the 
Commission to further conclusions which are the basis of the following 
recommendations for the redrafting of Bill 190: 

Section 2 

The recommendation contained in the Commission's report was 
that the provisions of the Act dealing with the retention and distribution 
of "holdback" should apply in those circumstances where the work was 
being done by a private developer, for example, pursuant to a sub- 
division agreement made with a municipality under which the private 
developer undertakes to lay out streets, sidewalks and sewers, etc., but 
not in cases of work being done by a municipality or its contractor. 



Section 2 of the existing legislation (R.S.O. 1960, c. 233) reads as 
follows: 

"Nothing in this Act extends to any public street or highway, 
or to any work or improvement done or caused to be done by a 
municipal corporation thereon." 

Section 2 of Bill 190 reads as follows: 

"Nothing in this Act extends to any public street or highway, 
or to any work or improvement done or caused to be done by a 
municipal corporation thereon, except that the provisions of section 
11 as to the retention and payment of percentages by the owner 
apply mutatis mutandis to any such work or improvement." 

It is evident that the section as amended by Bill 190 would carry the 
recommendation of the Commission beyond that which was intended. 
This section should be redrafted in order to confine it to the intent of the 
recommendation. 

Section 3 

Subsection 1 

Section 3 of Bill 190 is a revised version of section 3 of The Mechan- 
ics' Lien Act, R.S.O. 1960, c. 233, and contains what are known as the 
"trust provisions" of the Act. The trust provisions were added to the 
legislation with the intention of giving potential lien claimants further 
security by constituting the contract moneys a trust fund for the payment 
of their money claims. Conceptually this protection operates in advance 
of steps taken to realize on a claim for lien by sale of the property and 
should forestall any "short fall" on the distribution amongst the lien 
holders of the proceeds of the sale. 

The Commission is aware that the contract moneys are frequently 
the only security available which contractors can offer to a bank or other 
lending institution to obtain advances necessary to perform the contract. 
The Commission is also aware that in some cases there will be a specific 
assignment of contract moneys to the bank, in other cases a general 
assignment of accounts receivable and in still other cases merely an 
arrangement for payment of contract moneys into a bank account. 
Whatever the particular arrangement, the lending institutions have 
looked to the contract moneys for repayment of the loan. Since the lien 
claimants have looked to the same funds for payment of their claims, 
this has led to frequent dispute and much litigation in which the lending 
institutions have not fared well. It may be redundant to add that in 
the process the lien claimants have not been overcompensated. 

In its report, the Commission adopted the principle in the sub- 
missions of the Conference of the Board of Trade of Metropolitan Toronto 
that, where it is shown that money has been lent to the holder of a trust 
fund, the lending institution should qualify as a beneficiary under the 
trust to the extent that it can be established by it that its unrecovered 



loan has been used to make payments of claims of persons who, in the 
absence of such payments, would have themselves been beneficiaries 
of the trust. In a sense, the lending institution would be subrogated to 
the position of the lien claimant as beneficiary of the trust. 

This principle is not reflected in Bill 190 so far as its provisions 
relate to advances made to a contractor and section 3 should be redrafted, 
preferably by the addition of a new subsection, to provide that, where 
money has been lent to a builder, contractor or subcontractor and has 
been used by him to pay lien claimants, the application of a sum equal 
to the sum so used to repay the lender shall not be a breach of trust. 

Subsection 3 

As stated in its report, many submissions were made to the Com- 
mission that advances to the owner, or at his instance, on a building 
mortage on a project should form part of a trust fund provided for in 
section 3. It is contended, and the Commission agrees, that subsection 
3 of Bill 190 goes beyond "advances to an owner . . . on a building 
mortgage." It would appear to apply equally to any loans to the owner 
whether secured on other land, on personalty or whether unsecured. 

The reasons stated for the modification of the trust provisions under 
subsection 1 to accommodate advances made to contractors and sub- 
contractors apply with equal force to cases where advances are made 
to owners. Accordingly, section 3 of Bill 190 should contain an addi- 
tional subsection to provide that, where money has been lent to an owner 
and has been used by him to pay lien claimants, in whole or in part, the 
application of a sum equal to the sum so used to repay the lender shall be 
deemed not to be a breach of the trust. 

It has been submitted to the Commission that section 3 should 
provide for a time limit upon the assertion of claims to trust moneys. 
It is alleged that one of the harshest aspects of the present section 3, 
from the point of view of the lending institutions, is that claims to trust 
moneys in the hands of the lender may be made and frequently are made 
long after construction has been completed and after the lender has 
released any other security it may have held. It is clear from what is 
now recommended by the Commission that the lending institution is 
not in jeopardy so long as the trust funds in its hands do not exceed 
the sum used by the owner or contractor in payment of claims of potential 
lien holders. The submission that the claim against trust funds should 
be barred unless notice of the claim has been given to the lender within 
60 days (or other selected period) from the receipt of such trust moneys 
by the lender simply means the time may run against the claimant with- 
out any knowledge on his part that the lending institution has received 
trust funds. This is contrary to the customary principles of limitation 
provisions and entirely at odds with the position of beneficiaries of a 
trust whether statutory or otherwise. For these reasons, the Commission 
is opposed to the insertion of a limitation provision. 



Further representations have been made to the Commission with 
respect to subsection 3 that the lender may not always know the in- 
tention of the owner and the purpose of the section could be defeated 
if it became necessary to prove this intention. The Commission recom- 
mends that subsection 3 be redrafted to give effect to this submission. 

It was also submitted that the words "the purchase price of the land" 
should be inserted immediately before the words "the payment of prior 
encumbrances" in both places in which the latter expression appears in 
the subsection, as in many cases a portion of the first advance under a 
mortgage is required to take up title rather than to pay off an encum- 
brance. Subsection 3 should make it clear that the advances by way 
of financing the project should be available to pay off prior encumbrances 
of whatever character. 

It was not the intention of the Commission that the provisions of 
subsection 3 should apply to debenture funds raised by municipal 
corporations for the financing of public works and accordingly it should 
be made clear in redrafting this subsection that it does not apply to the 
proceeds of debenture issues. 

Subsection 5 

This subsection in Bill 190 replaces section 3 (2) of the present Act 
which imposes a penalty on every "builder, contractor or subcontractor". 
These words were replaced by the word "person" in section 3 (5) of 
Bill 190 so as to include not only the "builder, contractor or subcon- 
tractor" referred to in section 3 (1) but also the "owner" mentioned in 
section 3 (3). The word "person" is wide enough to include someone 
other than the trustee of the fund and goes further than the Commission 
intended. It is pointed out, as well, that there was no intention to 
impose strict criminal liability and therefore the subsection should be 
redrafted to read "Every owner, builder, contractor who knowingly 
appropriates ..." 

In concluding the comment on the statutory trust provisions, the 
Commission records that one of the Commissioners, Mr. Bell, while 
concurring in the proposed amendments to section 3, would prefer the 
outright repeal of the section. 

Section 4 

Subsection 2 (b) 

This section deals with the right of workmen to contract out of the 
protection and remedies provided in the Act. In the present Act, the 
right to contract out is available to a workman whose wages exceed $15 
a day. In its initial report, the Commission recommended an increase 
to $25 a day and this recommendation is reflected in Bill 190. As a 
result of representations received from the Ontario Federation of Labour, 
the Commission is now persuaded that a more realistic and acceptable 
figure would be $35 a day and so recommends. 



Section 5 

Subsection 4 

The Commission in its initial report recommended that the legis- 
lation should provide for a lien in favour of those who rented or leased 
equipment used on a contract site. The Commission is persuaded that 
the wording of section 5 (4) in Bill 190 reading "for the price of the 
rental of the equipment used on the contract site" may not be sufficiently 
precise to avoid abuse. It should be made clear that the rental for which 
a lien is available is that which is reasonable and justly due in the circum- 
stances. 

Section 7 

Subsection 1 

To make it clear that it is the owner of the freehold to whom notice 
in writing must be given, the words "in fee simple" should be added after 
the word "owner" in the fifth and seventh lines of this subsection. 

Section 11 

Subsection 5 

This subsection should be redrafted to make it clear that the certi- 
ficate referred to in the subsection is the same certificate as that referred 
to in section 11 (3). 

Section 11 

Subsection 10 

The words "required to be retained" should be added after the word 
"percentage" in the second line of the subsection to make the wording 
uniform with that used in section 11 (8). 

Section 21 

Subsection 5 

In its report the Commission stated that a number of representa- 
tions had been received suggesting that the benefit of the Act should be 
confined to those who have registered claims for liens within the pre- 
scribed period, and that what is known colloquially as the "umbrella 
principle" should be abandoned in the legislation. The majority of the 
Commissioners decided that the existing provisions of the Act still con- 
stituted a useful and valid feature and no change in the principle was 
recommended. As a result of further evidence and research, the Com- 
missioners are now of the opinion that the original minority view should 
prevail and that no substantial harm will result from abandoning the 
"umbrella principle", but that procedural advantages will be gained. 
The repeal of the provisions establishing this principle will greatly 
facilitate the trial of some mechanics' lien actions. The Commission 
is now satisfied that no hardship will result from requiring lien claimants 
to register their claims. Accordingly, section 21 (5) should be deleted 
and section 22 (1) should be recast. 



Section 25 

Subsection 2 

Section 25 (2) of Bill 190 should be redrafted to provide that upon 
payment into court under clause a, or upon any other proper ground 
under clause b, the "registration of the claim for lien and the registration 
of the certificate of action, if any, be vacated." This wording, while 
vacating the registration, will preserve the lien in proper cases. 

Subsection 3 

Section 25 (3) of Bill 190 provides that where an order is made 
vacating the registration of a lien on payment into court under clause 
a of section 25 (2) the lien does not cease to exist for the reason that no 
certificate of action is registered. The same principle should apply 
where the registration is vacated upon any other proper ground under 
clause b of section 25 (2). 

Subsection 4 

The reference to "subsection 6 of section 11" in line 6 of section 
25 (4) of Bill 190 should read "subsection 7 of section 11". 

Subsection 6 

Section 25 (6) of Bill 190 confers jurisdiction on the court to order 
money to be paid out to the persons entitled thereto or the delivering up 
of a bond for cancellation only with the consent of all parties and lien 
claimants affected. The requirements for consent of all parties and lien 
claimants affected should be dispensed with, but it should be made clear 
that the jurisdiction should not be exercised ex parte. This provision 
will fill the procedural gap in the existing legislation which contains no 
provision for payment out or cancellation of a bond except with the 
consent of the parties and lien claimants. 

Section 29 

In the original report of the Commission it was pointed out that 
jurisdiction to try an action to realize a claim for a lien was vested in the 
Supreme Court of Ontario irrespective of the amount of the lien. A 
claim for lien in the amount of $25 for a debt ordinarily recoverable in 
a division court must be enforced in the Supreme Court. As now framed, 
the Act further provides that with the exception of the County of York, 
the action should be tried by a local judge of the Supreme Court, subject 
to the trial taking place before a judge of the Supreme Court upon the 
application of any party. In the County of York, the action is tried by a 
judge of the Supreme Court, but the judge on the consent of the parties 
not under disability may refer the whole action to the master for trial 
pursuant to section 69 of The Judicature Act, or the judge, in proper 
cases, may direct a reference to the master pursuant to section 68 or 
section 69 of that Act. The Commission recommended that actions to 
realize a claim for lien should be tried in the county or district court 
with a right to any party to have the proceedings removed into the 



10 

Supreme Court upon application to a judge of the Supreme Court where 
the amount involved in the action would ordinarily come within the 
jurisdiction of the Court. It was the opinion of the Commission that 
the trial of these actions in the county and district courts, with their 
extended jurisdiction, would provide a more efficient and expeditious 
procedure. 



Accordingly, Bill 190 provided in section 29 that a claim for lien 
is enforceable in an action in the county or district court of the county or 
district in which the land or part thereof is situated, subject to the 
provision in section 30 that upon the application of any party or other 
interested person made according to the practice of the Supreme Court 
and upon notice, a judge of the Supreme Court may direct that the 
action be tried by a judge of the Supreme Court at the regular sittings 
of the Court for the trial of actions in the county or district in which the 
action was commenced. 



The Commission has received representations that the present 
practice in the County of York of referring lien actions to the masters of 
the Supreme Court for trial should be continued. These representations 
would appear to be based on the ground of expediency rather than 
principle. The Commission remains resolute in its recommendation 
that jurisdiction in these matters should be uniform throughout the 
province and that on the ground of principle the county court is the most 
effective and logical forum for the adjudication of these issues. Nothing 
that the Commission has heard has persuaded it to depart from this 
principle. The Commission is mindful that some problems may exist 
in the County of York which might require resolution before the scheme 
could be implemented, but, on balance, we see no reason why once the 
step were taken the outcome would not be a better arrangement for all 
concerned. 

Section 31 

Subsection 1 

The provisions of section 31 (1) appear to have no close correlation 
with the remaining subsections of that section and accordingly section 31 
(1) should be renumbered section 31 and the remaining subsections should 
be included under a new section 32 and the following sections should be 
renumbered. 



Subsection 3 

In its report the Commission recommended that the power to 
mortgage be granted to trustees under section 31 (3) in addition to those 
powers already enjoyed. It has been suggested that the power to lease 
be added as well, and the Commission so recommends. 



11 

Some inconvenience in the trial of mechanics' liens actions has arisen 
from the fact that lien claimants remain mute on the question of the 
priority of mortgages or other charges or encumbrances in those cases 
where a property is being offered for sale under the provisions of sec- 
tion 31 (3). The only jurisdiction to direct a sale under that subsection 
is where there is no dispute as to the priority of any mortgage on the 
property. The Commission is satisfied that it would be advantageous 
for the court to have the power to direct a sale under the court's super- 
vision in cases where the priority of the mortgage is disputed, or where 
the lien claimants refuse to take a position one way or the other. The 
concluding phrase of section 25 (4) should be deleted so that the sub- 
section would then read: 

"31. — (4) Any property directed to be sold under subsection 3 may 
be offered for sale subject to any mortgage or other charge or 
encumbrance if the court so directs." 



Subsection 6 

The provisions of section 31 (6) should be extended to empower the 
court to vest authority in the trustee to make a mortgage or lease as 
well as a sale. 



Section 40 

Subsection 1 

The existing legislation provides in section 40 (1) that a judgment 
in respect of a claim or counterclaim for an amount not exceeding $200 
is final and without appeal. This limitation on appeals was not carried 
forward into section 40 of Bill 190. The limitation on appeal which 
does not appear in Bill 190 should be inserted with the monetary figure 
in the same amount, namely, $200. 



Section 43 

To this section should be added a new subsection 4 reading as follows: 

"43. — (4) Unless otherwise provided in this Act or in the County 
Courts Act, the Rules of Practice and Procedure of the Supreme 
Court apply to proceedings under this Act." 

Section 44 

The words "relating to an action" should be added after the word 
"documents" in the second line. 



12 

9. Throughout its deliberations the Commission was made mindful 
of the wide divergence of views entertained by the various group interests 
with respect to this particular legislation. Not all these views were 
reconcilable. The Commission is convinced, however, that if the recom- 
mendations contained in this report are implemented it will have gone 
as far as one can go in accommodating the various interests without 
destroying or distorting the basic principles of the Act. 

All of which is respectfully submitted. 

H. Allan Leal, 

Chairman 

James C. McRuer, 

Commissioner 

Richard A. Bell, 

Commissioner 

W. Gibson Gray, 

Commissioner 

William R. Poole, 

Commissioner 

May 26, 1967. 



APPENDIX A 

Atlin, Gordon, Esq., dated October 3, 1966 

Austin, A. MacN., Esq., dated August 29, 1966 

Baird, David E., Esq., dated September 8, 1966 

Board of Education, Borough of North York, Armstrong, Kemp, Young 
& Burrows, its solicitors, dated February 16, 1967 

Bristow, D. I., Esq., dated September 28, 1966 

Bristow, D. I., Esq., dated September 29, 1966 

Bristow, D. I., Esq., dated October 7, 1966 

Canadian Bankers' Association, The, dated May 9, 1967 

Canadian Construction Association meeting January-February, 1966, 
Messrs. Wilson and Sadler 

Canadian Credit Men's Association Limited, dated November 24, 1966 

Canadian Life Insurance Association, The, dated January 31, 1967 

Clarkson Company Limited, The, dated November 10, 1966 

Clarkson Company Limited, The, dated January 30, 1967 

Clarkson Company Limited, The, dated March 14, 1967 

Costello, Judge F., dated September 14, 1966 

Darby, Judge Thomas J., dated November 7, 1966 

Lamprey, Glyn, Esq., dated November 22, 1966 

Lefebvre, Mark E., Esq., dated September 20, 1966 

Macklem, D. N., Esq., dated September 27, 1966 

MacRae, Judge Ian, dated March 14, 1966 

May, Rowland F., Esq., Q.C., dated April 4, 1966 

Montreal Construction Association— Report of the Bankruptcy and 
Privileges Committee for 1965 — R. W. Wilson, Chairman 

Ontario Federation of Construction Associations, dated December 21, 
1966 

Ross, Judge James F. W., dated February 8, 1966 

White, Mr. John, M.P. (Chairman's memorandum of Mr. White's 
submission dated September 14, 1966) 

13 



APPENDIX B 

J. L. Biddell, Esq., 

The Clarkson Company Limited 

Rowland F. May, Esq., Q.C., 

The Lumbermen's Credit Bureau, Inc. 

Douglas F. Hamilton, Esq., 
Secretary-Treasurer, 
Ontario Federation of Labour 

David I. Baird, Esq., 

Messrs. Harries, Houser, Brown & Houlden 

R. D. Garland, Esq., 

Chairman, Mechanics' Lien Act Committee, 
Ontario Federation of Construction Associations 

Douglas N. Macklem, Esq., Q.C., 

The Canadian Credit Men's Association Limited 

David I. Bristow, Esq., 

Messrs. Timmins & Bristow 

John F. Sadler, Esq., 

The Canadian Credit Men's Association Limited 



14 



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(**j CAT. NO J»3 233 PRINTED IN U.S.A.