Access to information in the construction pyramid

Section 58 of the Builders’ Liens Act, CCSM c B91 (the “BLA”) grants considerable rights to information to parties at all levels of the construction pyramid who are entitled to a lien in respect of work done, services provided or materials supplied for a project. This potentially includes rights to, among other things, copies of prime and sub-contracts, information regarding the holdback and where it is maintained and a statement of the state of accounts between project parties.

At times the information a party may seek would not ordinarily be available due to a lack of contractual privity, absent the statutory entitlement created by the BLA. Moreover, section 58 contemplates a right to information before a party commences an action to realize a lien. Meaning parties may not have to wait for disclosure in the context of court proceedings.

The information available to parties under section 58 may be helpful to a lien claimant (or potential lien claimant) who may be considering whether to advance a lien claim, or to provide a party the financial data necessary for a proper cost-benefit analysis of enforcing potential lien rights.

In practice, information requests are not often used by lien claimants, and many owners and other parties may be unaware such information rights exist. As the right is only occasionally used, there is very little legal guidance in Manitoba or elsewhere delineating the extent of information available under section 58 of the BLA (and similar provisions in other jurisdictions), or consideration of the obligations placed on parties presented with such demands.

While we await a judicial clarification of the full extent of rights and obligations created by section 58 of the BLA, this article provides a high-level overview of the section.

Subsection 58(1) – Information relating to the prime contract

Subsection 58(1) provides that “any person entitled to a lien” regarding work done, services provided or materials supplied, may demand in writing from the owner or the contractor (and their respective agents):

• A copy of the prime contract
• A statement of the state of accounts for the prime contract
• Particulars regarding the holdback, including the balance, credits and payments and the account number and institution where the holdback account is maintained

Subsections 58(2)-(3) Information relating to sub-contracts and mortgages

Subsection 58(2) provides rights to information relating to particulars of a sub-contract. Namely, a person entitled to a lien may demand a copy of a project sub-contract with the prime contractor or another sub-contractor. Similarly, a demand may be made for a statement of the state of accounts between the parties to project sub-contracts.

Subsection 58(3) provides that a person entitled to a lien may demand from the mortgagee or unpaid vendor of the land (or their respective agents):

• The terms of the mortgage on the land or the agreement for the purchase of the land
• A statement showing amounts advanced under the mortgage or amounts owing on the agreement

Subsection 58(6) – Court order to produce

If a party is unable to obtain the information voluntarily from the recipient of the demand for information, the BLA further provides that a person who may be entitled to a lien may bring an application to court to compel disclosure.

Specifically, pursuant to section 58(6), at any time before or after an action is commenced on a lien, a party may seek an order directing an owner, prime contractor, mortgagee, unpaid vendor or sub-contractor (or any of their respective agents) to permit such party to inspect:

• The prime contract
• A sub-contract
• Mortgage
• Agreement for sale of land
• Accounts
• The holdback account pass book
• “Any other relevant documents”

A judge may also make an order for costs of the application as deemed just.

Caselaw

While few Canadian courts have considered the impact of statutory rights to information under lien legislation, a handful of noteworthy principles can be drawn from Ontario caselaw.

• The Ontario Court of Appeal has held that lien legislation necessitates a “spirit of disclosure” between parties to the construction pyramid (Sunview Doors Limited v Pappas, 2010 ONCA 198).
• In line with this spirit of disclosure, the Ontario Superior Court of Justice has cautioned parties against treating statutory demands for information “cavalierly” at the risk of substantial court costs awards (Epoxy Flooring & Painting Inc v Gillam Group Inc, 2019 ONSC 4726).
• Finally, the Ontario Superior Court of Justice has also held that confidentiality provisions and claims of settlement privilege over desired information cannot displace statutory disclosure obligations provided for by lien legislation (Comstock Canada Ltd v Durr Systems Inc, 85 OR (3d) 355 (ONSC)).

Ultimately, demands for information under the BLA should be considered when such information may prove useful, and taken seriously when received.

For more information, contact one of the authors or a member of the MLT Aikins construction and infrastructure group.

This article originally appeared in the Winter 2025 edition of Build Manitoba, a publication of the Winnipeg Construction Association.

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