Updates to Bill 37: Builders’ Lien (Prompt Payment) Amendment Act, 2020

22 avril 2021 | Emma L. Johnston, Bronwhyn Simmons, Julia S. Amelio

( Disponible en anglais seulement )

On April 8, 2021, the Government of Alberta introduced Bill 62, Red Tape Reduction Implementation Act. The Bill passed its first reading the same day. If Bill 62 receives royal assent, it will bring further changes to the Builders’ Lien (Prompt Payment) Amendment Act, 2020.

Miller Thomson last provided insight into Bill 37, the Builders’ Lien (Prompt Payment) Amendment Act, 2020 late last year. Bill 37 received royal assent on December 9, 2020, and is due to be proclaimed into law in July 2021. Our previous updates discuss the new Builders’ Lien (Prompt Payment) Amendment Act, 2020 (the “Act”) in further detail.

These changes add additional shape to the final system, however, as the regulations remain outstanding, questions remain. A discussion of the current update is below.

Application of the Act to Provincial Government

Bill 62 establishes that the Act will not apply to construction contracts involving the provincial government. Specifically, the Act will not apply to public works or to agreements to finance and undertake an improvement if the Crown is a party to the agreement. This change is in line with our initial interpretation of Bill 62, but the amendments found in Bill 37 clearly state that the Public Works Act, RSA 2000, c P-46 will continue to apply and not the Act. The inclusion of this exclusion in the Act itself, as opposed to an implication of Section 14 of the Interpretation Act, RSA 2000, c I-8, suggests that existing practice and jurisprudence will have to be rethought, particularly on projects where the Crown is involved as a financier.

Codification that Consultants will be Brought within the Scope of the Act

Bill 62 states that the Act or any provisions of the Act may apply to a prescribed class of professionals acting in a consultative capacity. The types of consultants brought within the scope of the Act will be set out in the forthcoming regulations.

While the types of consultants are not yet known, it is realistic to expect that this section will be a codification of jurisprudence providing that consultants (architects for instance) are entitled to the protection of the Act where the work performed is part of an improvement to the lands.

Electronic “posting” of a Certificate of Substantial Completion

Bill 62 allows the Certificate of Substantial Performance to be provided electronically if it is in accordance with the applicable agreement as an alternative to posting in a conspicuous place on-site.

This reflects the current practice which often sees Certificate of Substantial Performance being circulated electronically and physically posted. Parties should be careful relying on electronic posting. It will be important to ensure that (1) notice is provided to all parties on the project that may be impacted by the Certificate of Substantial Performance and (2) all parties have in fact agreed to electronic circulation.

Adjudication

The most significant updates in Bill 62 are to the adjudication process. The exact format of Adjudication under the Act remains unknown as many key features are to be introduced by regulation, however, the changes as they currently stand would appear to confirm the legislative intent is to allow parties to choose how to resolve their disputes, by either adjudication, court action or arbitration.

Specifically, Bill 62 removes language from Bill 37 that stated the adjudicator’s determination was final and binding. Instead, the adjudicator’s decision is binding on the parties, except where:

  • a court order is made in respect of the matter;
  • a party applies for a judicial review of the decision;
  • the parties have entered into a written agreement to appoint an arbitrator; or
  • the parties have entered into a written agreement that resolves the matters.

In addition, the amendments, as currently drafted, provide that adjudication is available where no party has already commenced an action in court on the same issue. If a party commences an action in court on the same date the dispute is referred to adjudication, the adjudicator must discontinue the adjudication. The action in court will proceed.

Further, the notice of adjudication must be given prior to the completion of the contract or subcontract unless the parties agree otherwise.

Bill 62 removes the listed grounds for bringing a judicial review of an adjudicator’s determination in Bill 37. Instead, the new rules for a judicial review will be contained in the regulations. Applications for judicial review must be made within 30 days of receiving the notice of determination.

Effect of Adjudicator’s Determination

Following adjudication, and upon the adjudication reaching a decision, the adjudicator must issue a written notice of determination accompanied by the adjudicator’s order.

An adjudicator’s order can be registered by a clerk of the court as an order of the court if the following requirements are met:

  • the order is submitted to the clerk of the court not less than 30 days after the parties have received the order;
  • neither party has applied for a judicial review of the decision under section 33.7;
  • the parties have not entered into a written agreement to appoint an arbitrator under the Arbitration Act;
  • the parties have not entered into a written agreement that resolves the matter;
  • additional requirements, if any, are to be set out in the regulations.

The possibility to register an adjudicator’s order expires 2 years after the notice of determination is issued or 2 years after the date of the final determination of an application for judicial review.

Stay Tuned…

The Act brings substantial changes to the construction industry, and substantial questions remain in respect to the final regime. As noted the Bill is in the early stages of working its way through the Alberta Legislature and the regulations remain outstanding. Additional changes and clarification should be expected. Miller Thomson will be monitoring for any changes to Bill 62 and the regulations and provide updates as more information becomes available.

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