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ARTICLE · 23 APRIL 2024

The "Gatekeeper Function" – A Lawyer's Potential Liability In The Registration Of Construction Liens

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A construction lien is a creature of statute, established and governed by the Construction Act, RSO c C30 (the "Act"). The Act permits individuals who supply goods or services to a property...

CanadaReal Estate and Construction
Edward Lynde
Edward Lynde
Anna Lu
Anna Lu
Luigi Pasqualitto
Luigi Pasqualitto
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Introduction

A construction lien is a creature of statute, established and governed by the Construction Act, RSO c C30 (the "Act"). The Act permits individuals who supply goods or services to a property to lien that property in order to secure payment. The lien must be registered (or preserved) and the claim must be commenced (or perfected) within the timelines prescribed by the Act. The registration of construction liens is typically carried out by lawyers on behalf of their clients.

This raises the important question of when lawyers can be liable for costs, if and when they register liens that turn out to be baseless. As the recent case of 2708320 Ontario Ltd. cob Viceroy Homes v. Jia Development Inc. ("Viceroy")1 informs, subjective knowledge, recklessness or wilful blindness of a baseless lien may lead to cost liability for the registering lawyer, and a lawyer's "gatekeeping function" continues throughout the retainer.

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