When a dispute erupts on a construction project, builders’ liens become a powerful tool for subcontractors to secure payment for their work. But what happens if a lien is filed for much more than the subcontractor is actually owed? Can the employee who signed and swore the lien affidavit on behalf of the company be held liable personally?
The Saskatchewan Court of Appeal answered this question in JV&M Civil Constructors Inc. v. Farnham, 2025 SKCA 72. It was clarified that the individual who signs a lien on behalf of a company cannot be sued personally just because the lien amount may be exaggerated.
This decision offers helpful clarity for contractors, subcontractors, and the people working behind the scenes to prepare lien filings.
What happened in JV&M Civil Constructors Inc. v. Farnham?
This case arose out of work performed on the Ministikwan Lake Water Treatment Plant and a pump station. The owner, Ministikwan Lake Cree Nation, hired JV&M Civil Constructors (“JV&M”) as the general contractor. JV&M then subcontracted the mechanical and electrical work to Black & McDonald (“B&M”). As work progressed, JV&M and B&M disagreed over the quality and timing of the work. JV&M did not pay B&M the full contract price, and in response B&M filed a builders’ lien claiming money was owed to them. The lien was signed and sworn by Brian Farnham (“Farnham”), a manager at B&M.
Litigation ensued and B&M sued JV&M, claiming unpaid amounts. JV&M countersued, arguing that the lien exaggerated. Further, JV&M sought to have Farnham held personally liable because he was the one who submitted the lien paperwork.
Can you sue an individual for a “grossly exaggerated” lien?
The key issue was section 53 of The Builders’ Lien Act, SS 1984-85-86, c B-7.1 (the “Act”), which creates statutory penalties where a builder’s lien is “grossly exaggerated” or filed without proper basis. JV&M argued that because Farnham signed the lien affidavit and verified its amount, he should personally face liability if the lien turned out to be overstated.
What did the Chambers judge decide about personal liability?
The Chambers judge held that the lien claimant was B&M and not Farnham. The judge reasoned that since section 53 imposes liability only on the lien claimant, and not the individual agent, a personal claim against Farnham disclosed no reasonable cause of action. The judge further held that it constituted an abuse of process. Portions of the counterclaim that sought relief against Farnham were struck out. JV&M appealed against this decision of the Chambers judge.
How did the Saskatchewan Court of Appeal deal with personal liability under section 53?
The Court of Appeal held that the Act is designed to deal with liens between companies involved in the construction contract, not individual employees. The Court noted that only the claimant named on the lien, i.e. the corporation, can be liable. The party who claims to be owed the money, the lien claimant, is the one who would benefit from the lien and, therefore, is the one who takes the risk if the lien is improper.
The individual agent of the corporate entity, who signs or registers the lien does not become a lien claimant and bears no personal exposure under the statute. Individual agents (like employees) act on behalf of the company, and do not gain anything personally by filing the lien. Put simply, the law aims at the corporation making the claim, not the person filling out the paperwork.
Even if a lien amount turns out to be wrong, the responsibility lies with the company, not the individual who signed the forms.
Can you pursue negligence or costs against an employee who files a lien?
JV&M also argued that even if Farnham was not liable under lien legislation, he could still be sued for negligence or at least be held personally responsible for legal costs. The Court disagreed again. It was held that there is no duty of care owed by a subcontractor’s employee to a contractor when filing a lien claim.
Regarding costs, it was noted that section 97(1) of the Act provides a mechanism for costs to be imposed on an agent of a party. Since the wording of the section expressly authorizes the Court to order costs against a non-party, it is unnecessary to name an agent as a party in order to be able to secure costs against them. Therefore, naming Farnham personally as a defendant was unnecessary.
In conclusion, the Court found no reasonable legal claim against Farnham. It also stated that JV&M was not entitled to pursue its counterclaim against Farnham on the sole basis that he may be liable for a cost award at the conclusion of the action. The Chambers judge’s decision was upheld, the appeal dismissed, and Farnham removed from the lawsuit entirely.
Why does this decision matter for lien filings in Saskatchewan?
This case has practical value for anyone involved in lien filings in Saskatchewan. For the employees of lien-claiming entities, the decision provides reprieve to individuals doing the paperwork on behalf of their company and clarifies that filing a lien on behalf of your company does not expose you to personal liability simply because you signed the affidavit verifying the amount claimed.
Saskatchewan’s approach contrasts with some interpretations in other provinces (particularly Alberta) and confirms a strict reading of who qualifies as a “lien claimant.”
For contractors and owners, the ruling reinforces that challenges to exaggerated liens must be directed toward the company asserting the lien. The proper avenue remains within the builders’ lien framework and the Court process. Attempting to draw individual employees personally into lien litigation is unnecessary and may be viewed as an abuse of process. Overall, this decision maintains the integrity of lien rights while ensuring that accountability remains with the party who stands to benefit from the lien.
Liens are often filed in high-pressure situations where invoices are disputed, and project timelines are strained. This decision keeps the focus where it belongs, on the business relationships at the heart of the construction project.
Given the Court of Appeal’s finding, it is also advisable for clients to execute their own lien documents through an authorized corporate representative, rather than having legal counsel sign, to ensure clarity as to who the lien claimant is, and to avoid any unnecessary confusion regarding the personal liability of individuals who are not connected to the lien claimant.
How are exaggerated builders’ liens treated in other provinces?
Courts across Canada have considered similar issues arising from allegedly exaggerated builders’ liens, including the scope of statutory penalties and the proper target of such claims. While the legislative frameworks differ from province to province, the underlying policy tensions are consistent: balancing the protection of lien rights with safeguards against abuse.
For example, in Darwin Construction (BC) Ltd. v PC Urban Glenaire Holdings Ltd. [Darwin], the British Columbia Court of Appeal upheld the outright cancellation of a lien on the basis that it was grossly inflated and constituted an abuse of process. While Saskatchewan’s decision in JV&M focuses on who may be held liable under the Act, the British Columbia decision highlights the court’s willingness, in appropriate cases, to cancel a lien entirely where the amount claimed is excessive and unsupported. We have previously written about the Darwin decision here.
In 2708320 Ontario Ltd. cob Viceroy Homes v. Jia Development Inc. [Viceroy], the Ontario Superior Court of Justice examined when a lawyer may be liable for costs under section 86 of Ontario’s Construction Act where a lien is alleged to be baseless or exaggerated. The Court confirmed that, at the time of preservation, liability requires actual knowledge of the lien’s lack of foundation, though a negligence standard may apply as the action progresses. While the Ontario case concerns counsel rather than corporate employees, it similarly illustrates that personal exposure in the lien context depends strictly on the statutory language and the individual’s role. We have previously written about the Viceroy decision here.
What should construction parties in Saskatchewan do next?
JV&M Civil Constructors Inc. v. Farnham, 2025 SKCA 72 confirms that in Saskatchewan, exposure for a “grossly exaggerated” lien under The Builders’ Lien Act, SS 1984‑85‑86, c B‑7.1 lies with the corporate lien claimant, not with individual employees who sign lien documents on its behalf. At the same time, the decision underscores that owners and contractors dealing with inflated lien claims must use the statutory tools available against the lien‑claiming entity, rather than trying to pull employees or other agents into the fray as personal defendants.
For owners, contractors and subcontractors, this is a good moment to revisit internal lien procedures: who signs your liens, how lien amounts are verified, and how you respond when you are on the receiving end of a claim that appears exaggerated or abusive. Clear internal policies, documented assessments of lien quantum, and early advice on strategy can help protect both corporate rights and individual employees while keeping projects moving.
How we can help
Miller Thomson’s Construction and Infrastructure lawyers regularly advise owners, developers, contractors and subcontractors on builders’ lien strategy, enforcement and defence across Saskatchewan and other provinces. Whether you are considering registering a lien, facing what you believe is a grossly exaggerated claim, or looking to update your internal lien signing and approval processes, our team can help you assess your options and respond efficiently. If you have questions about how JV&M Civil Constructors Inc. v. Farnham or other recent lien decisions may affect your projects or standard practices, please contact a member of our Construction and Infrastructure group to discuss your specific situation.
