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THE PROBLEMS WITH THE WOODWORKER LIEN ACTI have written previously about the Woodworker Lien Act and how to use it. Regrettably, the Woodworker Lien Act is plagued with difficulties. In fact, it is easier to talk about the problems associated with the Act than it is to put the Act to use on a day-to-day basis. The greatest problem with the legislation is that it was written more than 100 years ago, and has not enjoyed any significant updating since then. As you may appreciate, both the forest industry and the legal system have gone through considerable changes in the last 100 years, and yet the Woodworker Lien Act has not kept pace. As a practitioner in the field, here are some of the problems I encounter with these types of claims. First and foremost, a woodworker lien claim can only arise out of a claim for unpaid wages. The Courts have been quite liberal in their interpretation of what constitutes wages. The Courts have, for example, allowed claims by heavy equipment operators who have provided services, as independent contractors, using both their labour and their machinery. (Merely supplying machinery, without labour, would not constitute a wage claim.) The Courts have even gone so far as to say that a one man company may assert a woodworker lien claim, in spite of the fact that a company is not usually considered a wage earner - only individuals can be wage earners. That said, the Courts have not been prepared to expand the scope of the legislation so as to apply to logging contractors. I am referring, for example, to a full phase contractor who might employ one or more workers as employees, and who also might engage subcontractors to perform some of the logging components. (If the individual employees and subcontractors are unpaid, then they can assert their own woodworker lien claims, and can even pursue those as a group. But, if the logging contractor pays its employees and subcontractors in spite of the fact that it has not been paid by its licencee or log purchaser, then the right to lien for wages is lost as there are no longer any unpaid wages.) The second problem is a timing problem. A claim of lien must be filed in the Supreme Court within 30 days after the worker last performed work in connection with the timber. It would not be unusual for those subcontractors performing initial harvesting services, such as falling or skidding, to expect to be paid several weeks after their work was performed. They would wait until the wood that they worked on was delivered to the mill, and wait further until the mill's pay date following the cut off period when the timber was delivered. In those circumstances, it is not unusual for more than 30 days to pass between the time the work was last performed and the time that the subcontractor realizes that he will not be paid. By then it is too late. A third problem in practice has to do with the speed by which logs, once in the mill, get sawn into lumber. Liens can attach only to logs, not to lumber. Once logs are sawn up and their identifying timber marks are gone, the right to assert a lien is lost. So, a claimant filing his lien claim 30 days after last performing work may find that the logs that he wishes to lien are no longer in existence. The claimant's lien can only attach to logs having the same timber mark as the ones that he worked on. I often find, when a licencee is insolvent, that its yard is virtually empty of unprocessed timber. A fourth problem arises from the fact that our federal and provincial governments have written the laws to give themselves, in some cases, a priority over woodworker liens. The federal government has done this through the "deemed trust" provisions of the Income Tax Act. The provincial government has given its claim to stumpage priority over woodworker liens. In a case that I was involved with, a lien claimant successfully overcame the first three problems set out above, only to find that the liened timber was sold and the proceeds of sale went to the federal government. In 1994 the Law Reform Commission of British Columbia issued a report on the Woodworker Lien Act. It reached the conclusions that the Act was obscurely drafted, that its enforcement procedures were out of date, that some of its procedures were unworkable, and that the Act was based on an obsolete economic model. It called the statute "a legal relic". The Law Reform Commission concluded that "the Woodworker Lien Act is beyond repair and no amount of revision or redrafting can save it. A wholly new and modern Act is required." It proposed something in substitution, which it called the Forest Work Security Act. One of the intents of that proposed legislation was to allow full-phase contractors to assert lien claims, but to limit those lien claims to $20,000. Also, the claim would not be lost if a short-fuse filing date was not met. Regrettably, in spite of the urgings by the Law Reform Commission to replace the Act, no progress has been made in that regard. The old, archaic Act remains in place. Occasionally, when mills are forced into receivership or bankruptcy and their unpaid logging contractors face the prospect of lining up with all of the other unsecured creditors, there is talk of reform. On the whole, however, there appears to be little interest in changing this area of the law. John Drayton is a lawyer with Gibraltar Law Group who practices in the areas of forestry and motor transport law. Back to Articles Index
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