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Lien Act reform top of mind for TCA members

Don Wall
Lien Act reform top of mind for TCA members

An estimated 250 members and supporters of the Toronto Construction Association (TCA) showed up for Members’ Day on May 11 but what was more notable was who couldn’t attend, and why.

Bruce Reynolds, the construction law expert appointed in February 2015 to lead a review of Ontario’s Construction Lien Act, was invited to give the keynote speech at this year’s Members’ Day with the expectation that his highly anticipated report would have been processed by the Ministry of the Attorney General and the Ministry of Economic Development, Employment and Infrastructure and published for comment.

Reynolds and co-counsel Sharon Vogel submitted the report by the latest deadline, first thing  May 2, TCA president and CEO John Mollenhauer told a packed meeting room at the TCA offices in Richmond Hill, Ont., but it’s so complex that digesting it, translating it and communicating with key stakeholders was not yet complete, he added.

"Bruce Reynolds, his report is much anticipated and it will have a profound effect on the industry," Mollenhauer commented later in the day.

"Bruce said, I would be happy to be here, but the report hasn’t been released. Bruce will be back when the report is released and he’ll help people better understand the recommendations and the context of what’s in his report."

Meanwhile, with a TCA audience on hand eager to learn more about the review, the association opted to let its previously scheduled panel of Lien Act experts speak for an extended period, offering a sort of ‘Super Bowl-type’ pregame preview, Mollenhauer said in introduction.

Former TCA chair Glenn Ackerley of WeirFoulds LLP moderated the industry forum panel that featured Howard Krupat, a lawyer with DLA Piper, Yonni Fushman, vice-president and general deputy counsel with Aecon Group and Gerard Boyle, vice-president with Revay and Associates.

The foursome reviewed the history of the 33-year-old Construction Lien Act and discussed aspects in which it had become outdated and how the rise of the prompt payment movement had made the need for reform more urgent.

Mollenhauer said the report Reynolds had submitted was "very complicated," 299 pages long, there are dozens of pages of appendices, it was broken into 14 chapters and there are about 100 recommendations.

"When I was talking to Bruce Reynolds yesterday, he was telling me how he begins each section with important context, the context is often missing," Mollenhauer explained. "One of the reasons we’ve had two failed attempts is that it is infinitely more complex than it seems."

The panellists identified three distinct policy fields that could either be dealt with in one piece of comprehensive reform legislation or in separate bills — updating the Lien Act, dealing with prompt payment and incorporating a dispute-resolution mechanism.

Boyle told TCA members that the British system of dispute adjudication, where parties submit arguments to an independent adjudicator in real time as disputes occur, as opposed to waiting until the end of a contract that might be three years down the road, was viewed favourably by Reynolds and his advisory team.

It worked very effectively in minimizing drawn-out confrontation when the job is done, he said.

"Only in one per cent of cases do they actually pursue anything in the courts or in arbitration (after the build)," he said. "Not surprisingly, the words you hear to describe this over there are ‘quick and dirty,’ and ‘pay now and argue later.’"

Ackerley summed up, "In all likelihood these three concepts will be woven together in some fashion where at the moment we only have one. So we will have prompt payment in some form or another, which is new to Canada, it in all likelihood will be part of the process, as well as an adjudication regime that we have never had. We have those two ideas married with the existing lien legislation. So how those fit together will be interesting."

Reynolds won’t prescribe a legislative process, Mollenhauer said.

"I can’t see any reason why we won’t see legislation in the next two years, other than it’s very complex," he said.

Ontario General Contractors Association president Clive Thurston added, "We know there are people fishing for independent legislation, it just doesn’t work. You cannot have three competing pieces of legislation, think of the time it would take to create three separate pieces of legislation. We’d be at this another 25 years.

"The reality is these three things are all interrelated. The effort has to be made to build it all into one piece of legislation."

Members’ Day consisted of the morning panel, a trade show that filled the TCA headquarters and spilled outside, a safety-awareness presentation featuring speeches by TCA chair Craig Lesurf and MySafeWork activist Rob Ellis. But the Lien Act seemed top of mind throughout.

Asked what he was hearing at his booth, Council of Ontario Construction Associations (COCA) operations and member services manager Martin Benson said, "What we’re hearing from the ones we’ve spoken to so far is the Construction Lien Act and prompt payment. COCA is very active with those.

"They’re expressing their concerns and we are trying to let them know what we are doing on behalf of their association."

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