Parties in a Lien Action: Payment Certifiers

One of the most important elements of a construction project (or any project for that matter) is that all parties providing work receive payment. Accordingly, one of the most important parties present in construction projects – and often referenced in Lien Actions – are Payment Certifiers.

Under section 1(1) of the Construction Act (“CLA”), a “payment certifier” means,

an architect, engineer or any other person upon whose certificate payments are made under a contract or subcontract.[1]

Practically, a payment certifier is the party that decides who gets paid and when such payment may occur. A payment certifier’s work is incredibly important, not only because owners and/or general contractors are reluctant to provide payment until work is certified, but more importantly due to the importance in determining substantial performance and/or completion of a project.

Although section 2 of the CLA speaks to the specifics of when a contract is deemed substantially performed and/or completed[2], which will be discussed in subsequent weeks, the payment certifier is ultimately the party to determine the quantum of necessary and outstanding work. As such, you might just catch a payment certifier relying on the infamous words of Breaking Bad’s Walter White: “we’re done….when I say we’re done.”[3]

Finally, payment certifiers are important parties in ongoing lien disputes, as payment certificates are often relied upon as evidence in Construction Lien and/or Payment Bond proceedings to quantify the holdback obligations that payors may have. As mentioned in previous weeks, when a Claimant brings a Lien Action, it will usually name any party it had a direct contractual relationship with, as well as any payors, including but not limited to the general contractor and any owners of the property to which the alleged services and/or materials were provided.

In such cases, the liability alleged against such parties, in addition to funds held by way of trust, concerns the amount of monies statutorily held back from the Claimant. Accordingly, a payment certificate aids in determining how much money, to date, was statutorily required to be held back and, potentially, paid out to the Claimant.

Moving Forward

Although the various parties present in the Construction Industry are numerous, we will move away from identifying each of these parties and look at another basic concept and vital feature of CLA Actions, namely the concept of Holdback.

Until then!

The foregoing is for informational purposes only and should in no way be relied upon as legal advice. For legal advice tailored to your circumstances and business, please contact any of Sutherland Law's lawyers by email or telephone.

 [1] Construction Act, R.S.O. 1990, c. C.30, as amended, s. 1(1).

[2] Ibid, s. 2.

[3] Breaking Bad: Live Free or Die, TV Series (New York City, New York: AMC Network Entertainment LLC, broadcast 15 July 2012).