Suspension of Limitation and Procedural Time Periods: Construction Lien Expiry Periods are Suspended

On Friday the Lieutenant Governor in Council made an order under s. 7.1 of the Emergency Management and Civil Protection Act suspending limitation periods and procedural time periods (the “Suspension Order”). The suspension is retroactive to March 16, 2020 and continues for the “duration of the emergency”. Per section 7.1(4) of the Emergency Management and Civil Protection Act , the maximum suspension period is 90 days but can be further renewed in certain circumstances.

Sections 31 and 36 of the Construction Act are referred to as “other limitation periods” as listed in the Schedule to the Limitations Act, 2002. These sections of the Construction Act establish the time periods to preserve and perfect a lien. Accordingly, in our view the Suspension Order suspends the running of the clock to preserve and perfect construction liens.

Practically, since preservation of the a lien can continue to be done electronically and remotely via Teraview, it would be prudent for claimants to continue to preserve their claims in the ordinary course. To the extent courts are not available to issue construction lien actions in order to perfect a lien, the suspension order will provide relief from a lien right expiring. For owners, since the expiry of the lien periods has been suspended, statutory holdback that would otherwise have come due, cannot at this time be paid since potential lien claims have not expired. Payment of holdback will therefore likewise be suspended until the suspension period ends and the lien clock thereafter runs out. As such, on the one hand the suspension order provides relief in preserving lien rights, on the other hand it may have an inadvertent impact on cash flow in the construction pyramid as the release of statutory holdback will be delayed.

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