Alberta Lien Claimants: Set Your Matter Down for Trial, or at Least Explain Why You Haven’t

Section 46 of the Prompt Payment and Construction Lien Act (the “PPCLA”) allows a party to apply for discharge of a lien and the associated certificate of lis pendens (“CLP”) if no trial has been held within two years of when the CLP was registered. However, how strictly do Alberta courts hold parties to the two-year standard, particularly given how long it takes to proceed to trial given inherent shortage of court resources? What types of delay will courts accept if the two-year standard is exceeded? To what extent does the lagging party who registered the lien receive the opportunity to explain the delay?

Background

Britannia, as owner, filed an application to release or reduce security it posted for Urban Interiors’ construction lien. Britannia did not rely on section 46 of the PPCLA directly, but argued its applicability “by analogy.” Urban Interiors raised a delay claim of just over $800,000 supported by expert evidence, to argue against a reduction in the amount of security posted.

What the Applications Judge Said

The Applications Judge (“AJ”) identified two mechanisms for releasing or reducing lien security: where new facts justify it, or pursuant to section 46 of the PPCLA. The AJ declined to reduce security based on the facts and merits of Urban Interiors’ delay claim, finding the claim arguable but not sufficient to vary security on its own.

Next, the AJ considered section 46 of the PPCLA. Specifically, section 46(2) allows a party to apply to vacate security and discharge the lien if no trial has been held within two years of the CLP’s registration date.

The AJ noted that although the two-year period is not a strict rule, it reflects the PPCLA’s objective of prompt resolution and puts the onus on the lien claimant to justify delay. Here, the proceeding had extended well beyond two years with little progress toward trial. As a result, the AJ ordered the release of security back to Britannia, emphasizing that lien security should not be maintained indefinitely. The Court noted release of security is discretionary, discretion that the Court would have exercised due to the proceeding’s minimal progress and uncertainty around the lienable delay claim.

Urban Interiors appealed.

What the Appeal Justice Said

The Court made several points that ultimately led it to allow Urban Interiors’ appeal.

First, the Court determined that Britannia failed to seek or plead relief under section 46(2) in its application. This relief was also not implied. The Court found that the AJ should not have applied this statutory remedy without notice to the parties.

Second, the Court found that section 46(2) did not apply to the matter because no CLP is required when security is posted. Further, courts should avoid applying PPCLA sections by analogy because doing so undermines the PPCLA’s clarity and conflicts with the practical approach the legislation mandates. The purpose of section 46(2) is to remove an encumbrance brought on by a lien and CLP, not to vacate security that already replaced those instruments. Here, the lien and CLP were removed many years prior to the application being heard. 

Third, the Court found that the AJ should not have exercised his discretion to apply section 46(2) because it is not a mandatory provision. The Court also noted that the AJ should have allowed Urban Interiors to raise evidence as to why the matter had not reached trial.

The Court’s next step was to determine how to deal with Britannia’s application. The Court noted that both parties were responsible for the delay. Further, the parties filed new affidavit evidence that was relevant and material to the appeal. In particular, this included the procedural record which illuminated that several related actions, applications, consent adjournments, and settlement steps had taken place.

Although the action had not proceeded in line with the PPCLA’s intentions of efficient and practical resolution, the Court found that security could not be vacated in light of Urban Interiors’ explanation for the delay, including the matter’s lengthy and active procedural history. As such, the Court reinstated the security and required Britannia to pay over $1.4 million back into court.

Takeaways

Lien claimants should push actions toward trial expediently and be prepared to explain any delay when faced with an application to vacate security or to discharge a lien and CLP. A short, simple explanation may suffice. Where significant and frequent procedural steps have been taken and continue to be taken, a court is more likely to maintain security. The same is true if the delay in getting to trial was incited by all parties involved.

However, the primary purposes of the PPCLA are prompt payment and efficient dispute resolution. As such, it is imperative to treat management of liens and other remedies under the PPCLA as though time is always of the essence.

To learn more about the two-year rule from an Ontario perspective, consider reading our March 2025 article on an Ontario case interpreting Ontario’s version of section 46 or our July 2025 article explaining the Application Judge’s decision on the Alberta case in more detail.

Delays in advancing a lien action can put your security at risk. If you’re dealing with a construction lien or facing an application to vacate security, it’s important to understand your obligations and be ready to explain any delay. Contact Anthony Burden in Calgary, Jeremy Taylor in Edmonton, or any member of Field Law’s Construction Group to discuss your situation. 

Link to decision: 1951789 Alberta Ltd. v Britannia Block General Partnership Inc., 2026 ABKB 283