Law Times

Law Times • apriL 18, 2016 Page 7 www.lawtimesnews.com COMMENT The war is over: construction lien changes in 2016 T here are some fairly subtle but long awaited changes coming to construction lien practices in Ontario in 2016. For several years now, issues have arisen among the construction law bar, masters at the Ontario Superior Court, and staff at Ontario's Land Registry Offices, not so much over how to get construction liens registered on title (more on this later) but more so over how to get construction liens off of title when no longer needed. There are a plethora of reasons why a construction lien might need to be regis- tered against title but generally only three reasons why a construction lien, once reg- istered, would need to be removed from the registered title. Firstly, the contractor (and, for the purposes of this article, this could mean any lien claimant), for what- ever reason, signifies that the construction lien has been released, presumably because the contractor has been paid or otherwise satisfied. The exact reasons a contractor elects to release the construction lien are irrelevant to the Land Registry Office — it is sufficient for the Land Registry Office to know that the contractor no longer wants to have the construction lien on title to the owner's property. Alternatively, a construction lien might, for whatever reason, be discharged by court order, presumably because there is some invalidity to the construction lien or the underlying construction contract or receivable. Again, the exact reason for which a construction lien is discharged by a court is irrelevant to the Land Reg- istry Office — it is sufficient for the Land Registry Office staff to know that a court of competent jurisdiction has adjudicated that the construction lien should no lon- ger be registered on title. Finally, a construction lien might be vacated by court or- der whenever the owner has posted a bond, letter of credit, or other security satisfactory to the court to stand as alternative security in lieu of the real prop- erty construction lien. Again, why a court decides to vacate a construction lien is irrelevant to the Land Registry Office — it is sufficient for the Land Regis- try Office to know that a court of competent jurisdiction orders that the construction lien be effectively vacated. The highlighted relevant verbs "re- leased," "discharged," and "vacated" are at the heart of this running debate. Up until now, the province's electronic land registration system allowed one specific instrument pursuant to which a construc- tion lien could be removed from title, and it was called a Discharge of Construction Lien. To the Land Registry Office, a Dis- charge of Construction Lien operated to remove a registered construction lien from the title on which it had previously been registered, with no normative value or meaning to be ascribed to the use of the word "Discharge" in the title of the relevant instrument. In other words, to the Land Registry Office, the Discharge of Construction Lien was the prescribed instrument that triggered the deletion of the construction lien from title — it was not seen as necessarily confirming that the construction lien had been discharged at law. Indeed, the said construction lien might be coming off title because it was be- ing released by the contractor, or it might be that the construction lien was being va- cated because the owner has put up some alternative security that was satisfactory to the master (typically a bond, hence the term, "bonding off "). The Land Registry Of- fice read nothing into the use of a Discharge of Construc- tion Lien other than the fact that the construction lien was to be removed from the regis- tered title. The construction law bar, however, interpreted the Dis- charge of Construction Lien quite literally as referring only to a removal of the construction lien from title as a result of a court order discharg- ing the construction lien. This became problematic when the construction lien was being removed from title because it had been bonded off. When being bonded off, the construction lien comes off of the real property, but it remains a valid lien against that approved substitute collateral. The construction law bar has always been concerned that, by calling it a Discharge of Construction Lien, its members might be misled into believing that the lien itself no longer existed when, in fact, the lien had merely come off the real property but re- mained perfectly valid as against the alter- native collateral. At the prompting of the construction law bar, there has been a proliferation of attempted "fixes" to combat the perceived problems with using a Discharge of Con- struction Lien when in fact the construc- tion lien was only intended to be vacated. The province's land registry offices started seeing unusual court orders explicitly or- dering the land registrar to use alternatives to the prescribed Application to Discharge Construction Lien. These customized va- cating orders have caused unnecessary grief and inconvenience to the masters who have to issue such court orders, and to the province's land registration staff who have to process such court orders. Well, those days of semantic strife are effectively over. After consultations with the province's construction law bar and the superior court masters who deal with con- struction liens, the ministry introduced a new document type to the electronic land registration system called, fittingly, an Application to Delete Construction Lien, which will replace the long-impugned Discharge of Construction Lien. The hope is that the new term "Delete" in the name of the instrument will not imply a dis- charge when in fact the construction lien was either vacated or released. Of course, real estate and construction law lawyers who come across an Application to Delete Construction Lien on title will still need to read the complete instrument to see if the construction lien was in fact discharged, vacated, or released, but at least the title of the document will no longer mislead prac- titioners into believing that the construc- tion lien was fully discharged when in fact it might only have been vacated. But wait, there's more. Coming soon to a Land Registry Office near you, the min- istry will (finally) be phasing out, some time in 2016, the practice of accepting pa- per construction lien registrations, bring- ing construction liens in line with the 99% of other real estate documents that cur- rently get filed digitally in the electronic land registration system. LT uJeffrey Lem is editor-in-chief of Real Property Reports and director of titles for the province of Ontario. e opinions ex- pressed in this article are personal to him and not attributable or referable to the On- tario government. The Dirt Je rey Lem Je rey Lem Parental alienation: a problem without a remedy? BY JAMES HERBERT W hat makes me nervous as a family law- yer? Parental alienation cases. Why? Be- cause they do not always have a happy ending, no matter how good a job I do. A recent example of this is L. (N.) v. M. (R.R.). The case is important because it shows the weight given to the wish- es of teenaged children in high-conf lict custody cases; it finds that their wishes must be respected even if those wishes are objectively unreasonable. That case involved two boys, 16 and 18 years old, who refused to see their fa- ther. The parties agreed to arbitrate their dispute. There was a 14-day arbitral hearing, the majority of which was devoted to the custody and access issue. The arbitrator made significant findings. First, the arbitrator found the mother had alienated the children from the father. Sec- ond, the arbitrator found that the mother should have no contact with the children for an indefinite period of time. Third, the arbitrator found that the father should be per- mitted to enrol the children in the Family Bridges work- shop. This is a workshop designed to repair relationships between alienated children and victim parents. The program starts off with an intensive four-day session where the children, the victim parent, and a group of professionals meet and attempt to heal the relationship. In the program, the professionals and victim parent at- tempt to show the alienated child that his or her views of the victim parent are unjustified. After the four-day session, the children return home to live with the victim parent. They have counselling with a mental health pro- fessional to continue progress towards forming a more accurate view of the victim parent. Contact with the alienator is limited while the children make progress, to prevent backsliding. In February 2015, the arbitrator met with the boys to tell them that they should attend the workshop. On the same day, the father obtained a court order in accordance with the arbitral award, in- cluding an order that the police enforce the order. The teens did not receive the news well. The 18-year-old yelled and swore. The 16-year-old ran away from the father as they were leaving the arbitrator's office, and he went to his brother's apartment. Later that day, the mother drove him to the police station. He ran away again as his father tried to bring him to the program. By the time the arbitral decision was reached, the el- der brother was 18 years old — an adult in the eyes of the law. The father realized that it was hopeless to try to compel an adult to live with him or attend the work- shop, so the father focused his efforts on the 16-year- old. The father wanted the police to enforce the order, by compelling the 16-year-old to go to the workshop. The police disagreed. Six days after the court made the or- der for police enforcement, the police brought a motion to rescind the police enforcement clause. e 16-year-old continued to refuse to comply with the order in the months following the initial attempt to enforce the arbitrator's order. He never resumed living with the father and never attended the Family Bridges workshop. e matter came to a head in 2015, when it came before Perkins. He heard three motions. First, the father made a motion for police enforce- ment and for information about the 16-year-old's whereabouts. Second, the mother made a motion for an order allowing the boys to live with her. ird, the chil- dren made a motion for an order allowing them to de- cide where to live and to rescind the previous order that required them to attend the Family Bridges workshop. e children were represented by their own lawyer. Superior Court Justice Craig Perkins had a difficult decision to make. On the one hand, the mother had alienated the children from the fa- ther, and he was understandably trying to re- connect with the children. On the other hand, the boys were teenagers and their opinions, no mat- ter how unjustified, had to be given great weight. Perkins came down on the side of children's autonomy. He set aside the custody order and police enforcement clause. He ordered that neither parent have custody. Perkins reviewed the law and found that in many areas the law recognized the rights of 16-year-olds to decide issues. e Children's Law Reform Act allows children to withdraw from parental control. e Health Care Consent Act allows children to refuse medical treat- ments. e key factor was the children's age. Had the children been younger, their views would likely have been given less weight and the court would probably have been prepared to compel the children to live with the father and attend the Family Bridges workshop. What lessons can be learned from this case? One thing that is clear is that this was a volatile, high- conflict relationship long before separation. In 2006, the father was charged with domestic as- sault on the mother, but he was acquitted. In 2012, each party was charged with assaulting the other. Years of high conflict between parents can lead to the alienation of children. In this case, the boys grew up in a virtual "war zone" between the parents and eventually took a side — the mother's. Parents may choose to handle a volatile situation differently while their children are younger. One thing is for sure: is case shows it is easier to prevent alienation from occurring in the first place than it is to "fix" an existing alienation. LT uJames Herbert has practised family law at Chappell Partners LLP for 25 years. u SPEAKER'S CORNER

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