Chapter 3

The Participants – A “Who’s Who”

 

3.1 What terminology does the Act use to describe
the various participants in a construction project?

Participants

Commentary: the Act recognizes the specific roles of the owner, the construction lender, contractors, the head contractor, subcontractors, architects and engineers, material suppliers and workers. Most, but not all, of the terms are defined in the Act.

It is important to note that the definitions can overlap so the same participant may fall within the definition of both “material supplier” and “subcontractor.” That person would be affected by all provisions which refer to subcontractors generally as well as provisions that refer only to material suppliers.

3.2 What is the distinction between a contractor
and a subcontractor?

“Contractors” and
“subcontractors”

  Commentary: both of these terms are defined in the Act. A contractor is a person engaged directly by an owner to provide work or supply material in relation to an improvement. A subcontractor is a person who is engaged by a contractor or another subcontractor to perform work or supply material.

[See the definitions of “contractor” and “subcontractor” in section 1(1)]

A “contractor” or “subcontractor” may be either a corporation or a natural person.

Where a lien is claimed by a corporation, that corporation must be incorporated under the laws of British Columbia or registered as an extra-provincial company entitled to carry on business in British Columbia.

[See Coulson paragraph 1.3]

3.3 What is a “head contractor” and why is the term
expressly defined?

“Head contractor”

Commentary: a “head contractor” is the contractor who is engaged to do substantially all of the work respecting an improvement. Not every project will have a “head contractor.” The significance of the definition is that the running of time to do certain things under the Act will depend on whether the project has a head contractor.

[See the definitions of “head contractor” in section 1(1) and sections 8(2) and 20(2)]

3.4 What about architects and engineers?

Architects and engineers

Commentary: architects and engineers are persons engaged to provide design and supervisory services. They are normally, but need not necessarily be, engaged by the owner. When they are engaged by the owner, they fall within the definition of “contractor.” The expression “architects and engineers” is used, but not defined in the Act – they are expressly referred to in several provisions. Services provided by “architects and engineers” are expressly included within the definition of “services.”

It is the policy of the Act that, while architects and engineers are within the Act, persons who are engaged by or under them, whether as workers, material suppliers or subcontractors, do not have rights under the Act. The expression “architects and engineers” is used in several places in the Act to carry forward this policy.

[See the definitions of “subcontractor” and “worker” in section 1(1) and see sections 2(2) and 10(4)]

Because no further rights can arise in favour of a person engaged under an architect or engineer, no holdback is retained from payments to them.

[See section 4(6) and paragraph 5.9]

An architect or engineer will frequently (but not always) be a “payment certifier” under the Act.

[See section 7(1) and paragraph 10.2]

3.5 Who is an owner?

Definition of “owner”

Commentary: in most cases, the owner will be the developer who has engaged the contractors and generally been the prime mover in the project. In the Act, however, the term “owner” is defined to embrace a wide variety of persons who may have some kind of interest in the land:

“Owner” includes a person who has, at the time a claim of lien is filed under this Act, an estate or interest, whether legal or equitable, in the land on which the improvement is located, at whose request and

(a) on whose credit,
(b) on whose behalf,
(c) with whose knowledge or consent, or
(d) for whose direct benefit

work is done or material is supplied, and includes all persons claiming under the owner, but does not include a mortgagee unless the mortgagee is in possession of the land;

[See the definition of “owner” in section 1(1)]

Thus, an “owner” might include a tenant who has ordered improvements to rented premises or a co-owner such as a joint tenant.

On the face of the definition, a person is not an “owner” unless that person has requested the supply of work or material. Elsewhere, however, the Act provides that work done with the knowledge of a non-contracting owner is deemed to have been done at the request of that owner.

[See section 3(1)]

The word “owner” is used in numerous places in the Act for the purposes of stipulating rights and liabilities of persons who come within the definition.

3.6 What about the construction lender?

The construction lender

Commentary: various provisions of the Act apply expressly to the person who provides the financing for the construction project. Generally, when the Act wishes to refer to that lender, it uses the word “mortgagee” although the term is not defined in the Act.

Although the mortgagee will have an interest in the land, the definition of “owner” expressly excludes the mortgagee except in very narrow circumstances.

[See sections 1(1), 1(6), 4(4), 4(5), 5(4), 23(1), 32, 41, and 44 for specific references to the mortgagee]

3.7 What is the significance of being a “material supplier”?

Material supplier

Commentary: the Act defines “material supplier” to mean a contractor or subcontractor who supplies only material in relation to an improvement. “Material” is a defined term in the Act.

[See paragraph 4.7]

Most provisions using the term “material supplier” aim to limit the rights of persons who might be claiming under the material supplier. Material suppliers are similar to architects and engineers in this regard. Thus, no lien or trust rights are created under the Act for a person engaged by or under a material supplier and no holdback is retained from a payment to a material supplier.

[See the definitions of “contractor” and “subcontractor” and sections 2(2), 4(6) and 10(4). See also paragraphs 4.3 and 5.9]

3.8 What are workers?

“Worker”

Commentary: “worker” is defined in the Act as an individual engaged by an owner, contractor or subcontractor for wages. Since “workers” are excluded from the definitions of both “contractor” and “subcontractor,” they comprise a specific category of participants in a construction project. The Act gives workers’ wages a special priority when funds realized under the Act are distributed.

[See sections 37(2) and 38(1)]

No holdback is to be retained from a worker.

[See section 4(6)]

In stipulating that a worker must be an “individual,” the definition differs from that of “contractor” and “subcontractor” which refer to a “person.” The Interpretation Act gives the word “person” an extended definition so it embraces artificial bodies such as corporations.

[See the definition of “person” in the Interpretation Act, R.S.B.C. 1976, c. 238, s. 29]

By using the word “individual,” the Act confers the special status of worker only on natural living persons.

Go back to Chapter 2, ahead to Chapter 4, or return to the Table of Contents.


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