This chapter briefly discusses the history and current state of the law of liens. It starts with an outline of liens at common law, then proceeds to discuss the key features of the Forestry Workers Lien for Wages Act.[35]

A.           What is a lien?

The common law lien dates back to at least the 18th century.[36] At its core, such a lien consists merely of a right for a person to retain property already in his or her possession until a demand of some sort, usually for payment, has been satisfied.[37] Typically it is given to people who have preserved or improved the value of that property.[38] The common law provides only this right to retain – the lien holder cannot sell the property to satisfy any debt without first obtaining a court order.[39] Further, the lien is lost if the lien holder gives up possession of the property.[40] The common law lien is thus a relatively narrow, restrictive method for ensuring the payment of a debt. [41]

From the 19th century onwards, however, legislatures around the common law world expanded the scope and content of lien rights via statute. This was particularly common in North America, where a number of liens that bear very little resemblance to a classic common law lien were developed.

One of these new types of statutory lien was a lien for workers engaged in various primary industries such as agriculture, forestry and mining.[42] They were developed as an early form of worker protection, in industries where employers were short of cash and workers could not be sure of being paid their wages when work was completed.[43]  This paper is concerned primarily with forestry liens, but the other forms of liens developed at this time provide useful points of comparison, both in terms of the original policy intent and in terms of how they have been reformed (or not reformed) over the past century, and are therefore discussed below.

 

B.           The Forestry Workers Lien for Wages Act

The Forestry Workers Lien for Wages Act (“the Act”) is a provincial statute designed to protect the financial interests of those engaged in logging work.  It does this by giving logging workers a lien over timber they have worked on to secure monies that are owing to them. It also sets out processes for the seizure and sale of timber and for dispute resolution by a court if necessary. 

The Act is largely unchanged from its passage in 1891 as the Woodsmen’s Lien for Wages Act.[44] This causes significant problems in the implementation of the Act, as its terminology and processes do not mesh well with the modern logging industry or the modern legal system. Perhaps due to its obsolete drafting, the Act is rarely used, with most of the activity in recent years arising out of one insolvency event.[45] 

The key features of the Act are discussed below.

1.                   Persons entitled to a lien

Any person performing “labour” on logs or timber is entitled to a lien on those logs or timber for the amount owing for such “labour”.[46] “Labour” is broadly defined to mean “cutting, skidding, felling, hauling, scaling, banking, driving, running, rafting or booming any logs or timber and includes any work done by cooks, blacksmiths, artisans and others usually employed in connection therewith”.[47] Contractors who have “cut, removed, taken out or driven logs or timber” are also entitled to a lien.[48] 

2.                   Property that is subject to a lien

Liens can be placed on “logs, cordwood, timber, cedar posts, telegraph poles, railroad ties, tan bark, pulpwood, shingle bolts, and staves….”[49] Recent court decisions have clarified that woodchips are also included in the type of wood products upon which liens can be placed.[50] The Act specifically states that sale of the logs or lumber does not extinguish a lien.[51] Once wood has been processed at a mill, however (into lumber, veneer or paper, for example), it is no longer able to be liened, and any existing liens are lost.[52]  

3.                   Filing requirements

Liens are claimed by filling out the form required by the Act and verifying its details in an accompanying affidavit.[53] The form and affidavit are then filed at the Superior Court of Justice for the area in which the work for which a lien is being claimed was carried out.[54] The time allowed for filing depends on exactly when work was carried out, with a firm deadline of filing by the 30th of the next April applying to work done in the autumn or winter, and a 30 day deadline after work is completed applying to spring or summer.[55]

4.                   Enforcement

The Act sets out a comprehensive though confusing mechanism for enforcing the lien.[56]  Depending on the monetary value, enforcement actions can be taken in either the Small Claims Court or Superior Court of Justice.[57] However, even if the claim is filed in the Superior Court of Justice, the bulk of the process is required to follow, as closely as possible, the procedures of the Small Claims Court.[58] 

Of particular note in the enforcement process is the ability to apply to the Court for a sheriff or bailiff to seize the logs or timber where the claimant is in danger of losing his or her claim.[59] Regardless of whether the logs have been seized or not, ultimately they can be sold to pay the money owing once a lien claim is proved in court.[60]

5.                   Priority

The Act gives extremely high priority to the liens it creates.  It states that “the lien has precedence over all other claims or liens thereon”, except for Crown liens for stumpage fees and the like and a very narrow priority given to the owners of timber slides or booms used in the transport of logs (this method of log transport is no longer used).[61]

 

C.            Problems with the Act

As noted above, the Act is outdated and has had very little attention paid to it for a century. Since expanding lien rights to contractors in 1901 and a cosmetic restructure in 1907, almost nothing has been changed.  This has led to an Act that is both legally and practically obsolete. It suffers from confusing and outdated processes for proving and enforcing liens, and has ineffective costs provisions. The biggest problem with the Act, however, is that it rests on assumptions about the logging industry that have not been true for decades.  

As was discussed in more detail in Chapter II, when the Act was passed in 1891, logging crews would trek into the forest to semi-permanent logging camps at the start of the winter and stay there, cutting and doing some preparatory work on the logs, until the spring thaw. The camps would have everything that was needed for a long stay in the forest, including cooks to prepare food for the woodsmen and blacksmiths to repair equipment.[62] The logs would then be driven out down the river to be processed at a mill downstream. This is no longer the case at all, with most logs now being trucked out of the forest along private bush roads and then along public roads to the mill.   

This section discusses the most problematic parts of the Act, both in terms of the processes used and its disconnection from the modern logging industry.

1.                   Process for enforcement

The Act sets out a relatively comprehensive process for how liens should be filed and enforced. This process is confusing and is not appropriate for the sometimes very large liens being filed today. Lien claims of up to $25,000 are enforced by making an originating application in the Small Claims Court.[63] Lien claims over that amount must be enforced in the Superior Court of Justice.[64] However, regardless of the court in which the application is filed, the procedure must follow as closely as possible the procedures of the Small Claims Court.[65] Where the person in possession of the wood products[66] is not the wood owner,[67] notice of the originating application must be given to the owner, who may also apply to be joined as a defendant (or be directed to be so by the judge).[68] 

To complicate the picture, if there is an imminent threat of the lien being defeated before an originating application has been filed (for example if it looks as if the wood is about to be processed or taken out of province), the lien claimant can start the process by obtaining a writ of attachment from the court and having the wood seized by a sheriff.[69] A writ of attachment can also be obtained after an originating application has been filed if it looks as if the lien will be defeated.[70] Wood cannot be seized while it is in transit, seemingly because interrupting a log drive would leave a river blocked and all the logs involved (as opposed to just those subject to a lien claim) tied up.[71] An owner or other defendant can have possession of seized logs restored and the liens discharged upon the payment of a bond, or deflect seizure and have the liens discharged by paying the amount claimed into court upon being served with a writ of attachment.[72] If the defendant does not accept the amount claimed, the defendant has up to 14 days from the date of being notified of the seizure to file a notice of dispute.[73] After this, the judge sets a date for a hearing to resolve all disputes and claims relating to the liened logs.[74]  This hearing must be widely advertised.[75] Once all claims and disputes are resolved, the judge orders the payment of the amounts owing to the relevant parties and, if necessary, orders the sale of the logs to meet the amounts owed.[76]

This process is cumbersome, slow, and complicated, especially for a regime that was originally intended to be largely summary in nature and navigable without legal assistance.

 

2.                   Costs provisions

The costs provisions of the Act have not been updated in a century. As they stand, they prevent a successful lien claimant from fairly recovering the costs they incur in proving a lien claim. In particular, costs associated with proving a non-contentious lien are capped at $5 in the Superior Court of Justice and $2 in the Small Claims Court.[77]  Where a claim is contested, costs are capped at $10 in the Superior Court of Justice and $5 in the Small Claims Court.   

These limits were much more reasonable at the time the Act was passed, but are now patently absurd. As noted above in chapter III(C)(1) of this paper, even though the hearing for proving claims is a summary one, designed to proceed without lawyers, the Act is complicated enough that the assistance of a lawyer in preparing and filing the lien and preparing for the hearing is all but essential. To illustrate the absurdity of the costs provisions, $10 would pay for six minutes of a lawyer’s time at the rate of a very junior legal aid lawyer(if legal aid were available).[78] The costs provisions therefore sto