British Columbia is set to undergo a significant transformation of its lien laws with the introduction of the Commercial Liens Act (the “CLA”). This legislation, which was passed in March 2022, aims to modernize the intricate world of commercial liens, providing much-needed clarity and consistency for both service providers and their clients. Notably, the CLA will replace several existing liens acts, including the Tugboat Worker Lien Act, Repairers Lien Act, Warehouse Lien Act, Woodworker Lien Act and Livestock Lien Act. These existing acts feature varying rules and administrative processes for liens pertaining to repair, storage, and transportation.
Currently, under the Tugboat Worker Lien Act, owners of tugboats who provide towage services have a lien on the logs or timber products they tow. If the payments for these towage services is unpaid once they are due and payable, the Supreme Court of British Columbia has the jurisdiction to make orders for realizing the lien and managing the custody and sale of the towed logs or timber products. To preserve the lien holder’s rights, tugboat owners must file an affidavit with the Supreme Court of British Columbia within 30 days from the last day of towage services. Failure to do so will result in the automatic expiration of the lien after this 30-day period. Additionally, tugboat owners must initiate legal proceedings within 30 days of filing their affidavit. The Tugboat Worker Lien Act is an underutilized statute in BC, likely due to the restrictive and ambiguous nature of the act.
The CLA introduces significant expansions and clarifications to a tug owner’s liens rights in the event of a customer’s default on payment. The CLA expands the scope of the lien to encompass all “goods” being transported or towed, removing the previous limitation to logs and timber products only. Additionally, the CLA establishes that a lien is automatically created as soon as services commence and outlines clear guidelines for determining the secured amount under the lien. Importantly, tug owners are no longer obligated to submit an affidavit within 30 days on the last day of towage, simplifying the administrative process. The CLA further provides more guidance on the enforcement, possession, and disposition of seized goods. Lastly, the CLA offers lien holders the option to return possession of the goods to their clients upon obtaining a signed acknowledgement of payment and registering the lien with the Personal Property Registry.
Another difference between the CLA and the Tugboat Worker Lien Act is that the latter states that it does not apply to the towage of goods either beginning or ending a voyage from outside of British Columbia. While the CLA is silent on the matter, given that navigation falls under the jurisdiction of the federal government, it is unlikely that the CLA will be applicable to the towage of goods beginning or ending outside the province.
It is important to note that the CLA is not yet in effect and will come into force by regulation of the Lieutenant Governor in Council. When the CLA becomes operational, we anticipate that more tug owners operating intra-provincial routes will rely on the CLA to enforce their lien rights in the event of non-payment due to the expanded scope of goods covered and the streamlined process it offers.
This article provides a general overview of the changes introduced by the CLA. If you plan to enforce your lien rights under the CLA, we recommend seeking legal advice navigate the new procedures effectively.
