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Report on Builders Liens after the Shimco Case

This report examines the decisions of the British Columbia Supreme Court and British Columbia Court of Appeal in Shimco Metal Erectors Ltd. v. Design Steel Constructors Ltd., and the court's interpretation of provisions of the Builders Lien Act. The Shimco case established a controversial remedy under the Builders Lien Act, which provides an independent lien against the hold backs that property owners, contractors, and subcontractors are required to maintain. This result surprised many legal practitioners, property owners, and participants in British Columbia's construction industry. The recommendations in this report have the effect of abolishing this lien against the hold back. Abolishing the lien against the holdback will have several benefits. It will clear up a number of procedural uncertainties that may result from the implementation of the new remedy. It will renew the conceptual clarity of the Builders Lien Act’s remedies that the 1997 revisions were designed to have. Finally, it will restore builders lien practice to the position it was widely understood to take before the Shimco case.