REPRINTED BILL Bill No. 21 of 1943. A BILL TO AMEND THE MECHANICS' LIEN ACT. NOTE. The change made by

section 1 of the Bill is to strike out the reference in subsection (1) of

section 6 to the estate or interest of the owner in the land to impose the lien on the land itself.

Section 2 of the Bill makes clear when the lien for mater­ ials arises, which before was open to argument.

Section 3 of the Bill puts the husband and wife in the same position with respect to a presumption of agency of one for the other. The amendment to

section 10 made by

section 4 of the Bill merely brings the

section into line with the new sub­

section of

section

Section 5 of the Bill strikes out

section 11 of the Act and substitutes three other sections which deal with the priori­ ties as between liens and mortgages and with the disposi­ tion of the proceeds after sale of the land, the aim being to make a fair distribution as between a mortgagee and a lienholder where there is not sufficient proceeds to satisfy both claims. The value of the improvements to which the lien attaches and all subsequent improvements are taken together in ascertaining the value of the improvements for the purpose of distributing the proceeds.

Provision is made for either the mortgagee or lienholder to pur,chase the premises at a price not less than the value of the land and improvements fixed by the court. The provisions of these sections are made to apply to all liens arising before as well as after the amendments are passed and to all proceedings with respect to same, except where they have been con­ cluded by sale or an order of the court vesting the lands in the mortgagee.

Section 6 of the Bill brings the provisions of

section 12 of the Act in line with the other changes already made. Sections 14a and 14b inserted in the Act by

section 7 of the Bill provide for the cases where the contract price is not payable in money but in shares, etc. The lien, in such a case, has been held unenforceable as the Act now stands. The new

section 26a enacted by

section 8 of the Bill cures an omission in the Act. Provision is made by

section 23

(ii) for the registration of liens on oil and gas well equipment in the office of the Minister of Lands and Mines but no provision was made for cancellation of such liens by notice, etc., as provided with respect to liens registered in the Land Titles Office. The obj ect of the new

section is to provide this procedure. Subsection (6) of

section 35 of the Act is struck out by

section 10 of the Bill owing to the change made by earlier sections as to distribution of proceeds as between a mort­ gagee and lienholder.

Section 11 of the Bill incorporates in the Act a new sec­ tion 38a whi,ch empowers a judge to order the removal from the land and sale of a building or structure to satisfy a lien under the Act when the judge thinks that course a proper one having regard to the value of the building and the amount owing on the lien. In such case all the proceeds of the sale will be applied on the lien up to the amount of the claim. .

Section 12 of the Bill incorporates new provisions relat­ ing only to liens in connection with oil and gas wells. The lien is extended to cover oil and gas in place or severed and makes all persons having an interest in the oil or gas come within the definition of "owner" in the Act. Owners of the fee simple are protected to the extent of twenty per cent royalty.

Section 45 enacted by

section 12 of the Bill makes it clear that the lien applies to the interests over the twenty per cent of the owner of the fee simple. W. S. GRAY, Acting Legislative Counsel. (This note does not form a1lY part of the Bill but is offered in explanation of its provisions.)

REPRINTED BILL BILL No. 21 of 1943.

An Act to amend The Mechanics' Lien Act. (Assented to , 1943.) HIS MAJESTY, by and with the advise and consent of the Legislative Assembly of the Province of Alberta, enacts as follows: 1. The Mechanics' Lien Act, being

chapter 236 of the Revised Statutes of Alberta, 1942, is hereby amended as to

section 6 by striking out subsection (1) thereof and sub­ stituting therefor the following: "6.-

(1) Unless he signs an express agreement to the contrary and in that ~ase, subject to the provisions of sec­ tion 4, a person who performs any work or service upon or in respect of or places or furnishes any materials to be used in the making, constructing, erecting, fitting, altering, improving, demolishing, or repairing of any improvement for any owner, contractor or sub-contractor, shall by virtue thereof have a lien for so much of the price of the work, service or materials as remains due to him in the improve­ ment and the land occupied thereby or enjoyed therewith, or upon or in respect of which the work Or service is per­ formed, or upon which the materials are to be used." 2.

The said Act is further amended as to

section 7 thereof by adding at the end the following words: "or at the date of the first delivery of material." 3. The said Act is further amended as to

section 9 thereof by adding at the end the following words: "and likewise and to the same extent a wife under similar cir­ cumstances shall be conclusively presumed to be acting as the agent of the husband as well as for herself for the pur­ poses of this Act." 4. The said Act is further amended as to

section 10 by striking out subsection (1) thereof and substituting there­ for the following: "10.-

(1) Where works or improvements are put on land for a person whose only interest in such land is that of a tenant, sU,ch works or improvements shall be subject to liens arising under this Act, and if the person doing or intending to do the work gives to the owner of the fee simple or his agent notice in writing of the work to be done, the fee simple shall also be subject to such liens, un-

2 less the owner or his agent within five days after the receipt of the notice gives notice to such person that he will not be responsible therefor." 5. The said Act is further amended as to

section 11 by striking out the same and substituting therefor the fol­ lowing: 11. Liens arising by virtue of this Act shall as against the lands and improvements subject to the lien be prior to all unregistered mortgages and prior to all mortgages reg­ istered subsequent to the date the lien arose. "lla. Except as provided in

section lIb, no lien. ari~ing by virtue of this Act either before or after the comIng Into force of this

section shall be dealt with in any manner in proceedings on or in respect to a mortgage against the lands subject to the lien. "llb.-

(1) Where works or improvements are put upon premises subject to a registered mortgage, liens arising by virtue of this Act shall be prior to such mortgage to the extent of the increase in value of the mortgaged premises resulting from such works or improvements and from all subsequent improvements and no such lien shall be barred or foreclosed in any proceedings on such mortgage. "

(2) In any proceedings on such mortgage leading to sale or foreclosure of the mortgaged premises or in which sale or foreclosure or both are claimed by the mortgagee, or in any proceedings to enforce the lien, the court shall direct the mortgaged premises together with all improve­ ments to be sold by tender or by public auction, and im­ mediately prior to such sale the court shall upon proper evidence and on notice to all persons concerned, determine the value at that time of the mortgaged premises including all improvements and also the value at the time of such determination of the mortgaged premises as they existed immediately prior to the lien arising.

The amount by which the value so determined by the court of the mortgaged premises including all improvements exceeds the value so determined by the court of the mortgaged premises as they existed immediately prior to the lien arising shall be the value of the improvements for the purposes of subsection (7) hereof. "

(3) Tpe sale shall not be subject to any upset price or reserve bId but no sale shall be made unless the same is approved and confirmed by the court. "

(4) Neither the lienholder nor the mortgagee shall have the right to bid or tender at any such sale. "

(5) If the mortgaged premises are not sold in such sale procee?ings: the li~nhold~r .and the mortgagee, provided such rIght IS exercIsed WIthIn one year from the date the mortgaged premises were offered for sale shall each have the right upon application to the court in ~uch proceedings and upon notice .to the other, and to such other persons as the court may dIrect, to purchase the mortgaged premises at an amount equal to but not lower than the value of the

3 mortgaged premises including all improvements as deter­ mined by the court pursuant to the provisions of subsec­ tion (2) hereof, and if both the lienholder and the mort­ gagee apply, preference shall be given to the one having the larger claim against the mortgaged premises: "Provided that if either the lienholder or the mortgagee or both of them shall offer to purchase the mortgaged premises at an amount greater than the aforesaid valua­ tion, then in that event the mortgaged premises shall be sold to the one offering the highest price. "

(6) In the event of a sale including any sale to a mort­ gagee or lienholder the purchase moneys shall be paid into court and subject to the provisions of subsection (7) shall be paid out to the persons entitled thereto. "

(7) If the proceeds of the sale (including any sale to the mortgagee or lienholder) of the mortgaged premises are not sufficient to fully satisfy the moneys owing in re­ spect of the lien and the mortgage, such proceeds shall be divided between the lien and the mortgage in the following manner, namely; that portion of the sale proceeds bearing the same relation to the total sale proceeds as the value of the improvements determined pursuant to subsection (2) hereof bears to the value of the mortgaged premises in­ cluding all improvements determined pursuant to subsec­ tion (2) hereof shall be applied on the lien and the balance of the sale proceeds shall be applied on the mortgage: "Provided that if on this distribution of the sale proceeds the amount to be applied on either the lien or the mortgage is more than the amount owing in respect of such lien or mortgage, the excess shall be applied on the unsatisfied mortgage or lien, as the case may be.

"

(8) In this

section 'mortgage' includes mortgages if more than one and other charges and incumbrances exist­ ing and registered against the premises at the date the lien arose. "

(9) In the case of an agreement for the purchase of land where the purchase money, or part thereof, is unpaid, and the purchaser has not been registered as owner thereof, he shall for the purposes of this Act be deem,ed a mortgagor and the seller a mortgagee, whose mortgage was registered on the date of execution of the agreement for sale. "

(10) In this

section 'lien' includes liens, if more than one, arising under this Act and in the event of there being more than one lien the portion of the sale proceeds applied on the lien under subsection (7) shall be divided between the liens in proportion to the amounts by which the im­ provements in respect to which each lien arose shall be found by the court to hav€ respectively contributed to the sale price and liens arising in respect to the same improve­ ments shall between themselves share pro rata. "

(11) If the mortgaged premises are not sold when of­ fered for sale as aforesaid and are not purchased by either the lienholder or the mortgagee, then after the expiration of one year from the date the mortgaged premises were

4 offered for sale, they may again be offered for sale at inter­ vals of not less than one year in the same or any .o~her proceedings under the mortgage or lien, and the proYIslOI.lS of this

section shall apply to each such sale proCeedIngs In the same manner and to the same extent as if the mortgaged premises had not previously been offered for sale. "

(12) The provisions of this

section and section~ 11 !lnd lla shall apply to all liens arising after the comIng Into force of the same and shall also apply to all liens which arose prior thereto under the provisions of The Mechanics' Lien Act Revised Statutes of Alberta, 1922,

chapter 182, and all {iens which arose under the provisions of The M echan1:cs' Lien Act, 1930, to the same extent as if this

section had been in force when such liens arose and where legal proceedings affecting a lien have been commenced prior to the coming into force of this section, its provisions shall apply thereto unless the land has been sold and the proceeds paid to the party or parties entitled thereto, or title to the land has been vested in the mortgagee by an order of the court." 6. The said Act is further amended as to

section 12 thereof by striking out the same and substituting therefor the following: "12. Where any works or improvements upon which a lien attaches are wholly or partly destroyed by fire, any money received by reason of any insurance thereon by an owner or mortgagee or incumbrancee shall be subject to all claims for liens to the same extent as if such moneys had been realized by a sale of such land and improvements in proceedings to enforce the lien." 7. The said Act is further amended by adding immedi­ ately after

section 14 thereof the following new sections: "14a. Where the contract price or the sun1 agreed to be paid as set out in

section 13 is not money, then the value of the consideration for the performance of the work shall be the determining factor and the expression 'any sums of money whi,ch may have been duly paid', where used in the said section, shall include the fair value of any part of the consideration which may have been performed. "14b. Where the lien or liens become a charge on the percentage directed to be retained as set out in

section 14 an? th~ co~tract price is ~ot payable in money, the person prImarIly lI8;ble shall be lIable to pay the said percentage ?f t~e value I? money. !Vh~re the owner or person primar­ Ily I.Iable deSIres t~ avaIl hImself of the provisions of sub­ sectIOn (5) of

sectIOn 14 and pay the said percentage into cOl;lrt and the contrac~ pr~ce is not payable in money, then a Judge may, on applIcatIOn by the owner on such notice if ::ny,. as the jU?g~ may direct, fix the amount in money WhICh IS to be paId Into court in respect to the value of the said percentage."

5 8. The said ~ct is further amended by adding immedi­ ately after

sectIOn 26 thereQf the fQIIQwing new sectiQn: "26a. In cas.e .any lien is Qr has heretQfQre been regis­ tere~ ?y the MInI.ster Qf Lands and Mines pursuant to' the prQVISIOns Qf

sectIOn 23 all the prQvisiQns Qf this Act relat­ ing to' th.e expiry, dis~harge and vacating Qf the lien Qr as to' the filIng Qf a ,certIficate Qf lis pendens, as the case may be, shall apply mutatis mutandis to' the lien to' the same ext~nt and in the sa~e manner as if the lien were duly regIstered under

sectIOn 19 Qf this Act." 9. The said Act is further amended as to' sectiQn 35 thereQf by striking Qut subsectiQn (2) and substituting therefQr the fQIIQwing: "

(2) The judge whO' hears the applicatiQn may Qrder that the land charged with the lien be sold and when by the judgment a sale is directed Qf the land charged with the lien the judge may direct the sale to' take place at any time after judgment, allQwing, hQwever, a reasQnable time fQr advertising the sale, and may make all necessary Qrders fQr the cQmpletiQn Qf the sale and vesting the prQperty in the purchaser." 10. The said Act is further amended as to'

section 35 thereQf by striking Qut subsectiQn (6). 11. The said Act is further amended by adding immedi­ ately after sectiQn 36 thereQf the fQllQwing new sectiQn: "36a.

Where the wQrk Qr service perfQrmed Qr material furnished in respect Qf which the lien arQse results in the creatiQn Qf an imprQvement cQnsisting Qf a structure, erec­ tiQn Qr building, then nQtwithstanding that such structure, erectiQn Qr building may be affixed to' Qr have becQme part Qf the land, and nQtwithstanding the prQvisiQns Qf sectiQn lIb, the cQurt, if of the QpiniQn that, having regard to' the value Qf the imprQvement and the amQunt Qwing Qn the lien, it is prQper SO' to' dO', may UPQn appli,catiQn Qf the lienhQlder in prQceedings to' enfQrce the lien Qr in any Qther prQceed­ ings affecting the lien, Qrder such structure, erectiQn Qr building remQved and SQld and the prQceeds Qf such sale applied Qn the lien Qr liens which arQse in respect to' such imprQvement, and if such prQceeds exceed the amQunt Qwing, the excess shaH be applied in the same manner as the proceeds Qf the sale Qf the land and all imprQvements remaining thereQn WQuld be applied." 12.

The said Act is further amended by adding immedi­ ately after sectiQn 41 ther€Qf the fQIIQwing new sectiQns: "42. In additiQn to' the Qther prQvisiQns Qf this Act, where the imprQvement cQnsists of an Qil Qr gas well, the prQvisiQns Qf sectiQns 43 to' 47 inclusive shall alsO' be ap­ plicable. "43. The definitiQn Qf 'Qwner' as set Qut in paragraph (

g) Qf sectiQn 2 shall include, in additiQn to' the perSQns therein

6 set out, every person having any estate, interest or right in the oil or gas in place or in the oil or gas when severed, notwithstanding that such person has not requested the contract work to be done, is only indirectly benefited thereby and has had no dealing or contractual relationship with the contractor or person claim'ing the lien: "Provided, nevertheless, that where the oil or gas is held in fee simple, the holder of an interest in the first royalty in the oil or gas, up to twenty per cent thereof, shall not, by reason of this section, be deemed to be an owner. "44. The lien provided by

section 6 shall not only attach to the land, including the oil and gas therein, but also to the oil and gas when severed. "45. All interests in the oil or gas under any lease, mort­ gage or agreement for sale relating to the oil or gas in ex­ ,cess of the said first royalty up to but not exceeding twenty per cent shall be subject to the lien in all respects and the provisions of sections 10 and 11 shall not be applicable thereto. "46. It shall not be necessary to set out in the claim for lien set out in

section 19 the name of the owner or alleged owner and the provisions in that regard contained in the forms in the

Schedule shall not be applicable in the case of oil and gas wells. "47. In appointing a receiver pursuant to

section 36, the judge may, in addition to the powers therein conferred on such receiver, authorize him to take charge of the well and operate it and sell the production therefrom or, in the al­ ternative to take the oil and gas when produced and saved and sell the same and receive and pay into court the proceeds of the oil and gas when sold." 13. This Act shall come into force on the day upon which it is assented to.

REPRINTED BILL No. 21. THIRD SESSION NINTH LEGISLATURE 7 GEORGE VI 1943 BILL

An Act to amend The Mechanics' Lien Act. Received and read the First time ...................................... . Second time ..................................... . Third time ....................................... . HON. MR. TANNER. EDMONTON: A. Shnitka, King's Printer 1943 Title: 1943 (9th, 3rd) Bill 21,

An Act to amend The Mechanics' Lien Act