A NEW MECHANICS' LIEN ACT.

Many suggestions have been made towards simplifying the working of the present Mechanics' Lien Act so far as it affects sub-contractors.

It is plain sailing for all parties when there are only an owner and one or more direct contractors with him. But when there are added one or more mortgagees and numerous sub-contractors, the difficulty of dealing with them equitably becomes very great. Class legislation always bears hardly in some direction, and is especially aggravating when it invades the right of free contract.

In a statute designed to give security to workmen and retail traders, simplicity of procedure is essential to success. But in the Mechanics' Lien legislation the attempt to avoid the direct consequence of extending its benefits to sub-contractors has had a tendency to hamper the owner and mortgagee, while it has made the remedy it intended to provide slow and complicated.

Knowledge of these facts prompted the alteration of the Act which was passed during the last session of the Legislature, but the amending clauses left untouched what is really the weak spot in the statute as a whole. What is required is that sub-contractors should in some way be able to ascertain at the outset their contractor's position, and the time when payments will be made to him, so that they can assert their right to be paid promptly and effectively. The difficulty they labour under is not that the Act does not give them a lien and the right to be paid, but that they have no way in which they can at once bring that right before the owner and insist on sharing his advances. Contractors frequently take work at too low a figure and their supplies cost them more than they can afford to pay. A business man who can see the contract can estimate for himself whether he is opening a safe account or not, and if

an easy way is provided by which he can require his share of every draw he will not lose much. Workmen who depend on their day's wages cannot pay the expense of registering a lien, nor do they care to incur the enmity of their employer by putting him and the owner to the cost of one. They also want an inexpensive way of letting the owner know who they are and what is due them.

The present Act, it is true, provides in sec. 2 for a notice which would appear to answer their requirements, but to make that notice effectual an arbitration or a suit is required. Nor is there any provision for allowing inspection of the owner's contract, of ascertaining the dates of payment, or the owner's address, which is usually unknown to the workman.

To provide an adequate remedy a Mechanics' Lien Act should require the registration of the contract where it can be easily and cheaply inspected, a fixed and regular time for payments thereunder, and a simple way of notifying an owner or contractor of a claim, and inexpensive procedure for enforcing a lien or claim.

There are two other serious impediments to the just working of this legislation. One is the inversion by the Courts of sec. 19 of the Act. The application of the Registry Act to liens was intended to confer the status of a purchaser pro tanto upon a lien holder who registered his lien, and to enable him to delay his proceedings for sixty days after registration. But although that section expressly limits the relevancy of that Act, the Courts have held it to apply in every case and under all circumstances. The result is that mortgages and conveyances, unless actual notice is proved, cut out unregistered though existing liens. The supplier of material or the workman may find in the end that the property upon which his goods or labour have been put is encumbered or sold, and that he has in fact no enforceable lien against it. This is unquestionably a violation of the spirit of the Act and though the draughtsman of the Act may be more to blame than the Courts for the construction put upon it, it is undeniable that injustice is being done daily in this respect, and that

the Act requires speedy amendment. The other evil is a decidedly practical one. In enforcing liens it is necessary that some time should be consumed in settling the amounts due and the many questions arising in administering the involved estate. If there is a mortgagee, it is always found that there are two proceedings, with two sets of costs, going on at the same time having but one end in view, namely, the sale of the property. This is unnecessary. A mortgagee can be protected just as he can be in an administration suit, if he comes in and submits to the jurisdiction of the Court, and he should be compelled to do so if it will save expense.

The few sections following are intended as a suggestion looking towards an amendment of the present Act. They only deal with the few phases discussed in this article, and are put forth in the hope that a perusal of them (if anyone can be found self-sacrificing enough to spare them a glance) will lead to a better appreciation of the confusion. which the present legislation has brought down upon itself. It is hardly necessary to say that while reforms are expedient, care must be taken not to embarrass owners and mortgagees so as to make building a more serious affair than at present. Anything that prevents rapid dealing with land or discourages building operations will inevitably injure the labourer and those engaged in the building trade. But all are equally interested in having their position and rights clearly defined, and any step which may be taken that will render cheaper, speedier, and more certain the action of the Courts in enforcing Mechanics' Liens, will be hailed with universal satisfaction.

It should be stated too, that, in criticising these provisions, allowance must be made for the fact that they must be read in connection with the present acts but are not intended to form a perfect amalgamation with them. To construe them as if they were purely added sections or in some cases substituted sections would lead to some absurdities. They are only intended to outline a general scheme leaving the rest of the Act to be moulded around them. Nor are they designed to touch the case of sub

contractors of a sub-contractor, a ramification of the present Act which is of doubtful expediency, but which can, if necessary, be easily grafted on these sections.

Proposed Sections.

1. In case the lien is claimed by a sub-contractor the amount which may be claimed in respect thereof shall, unless such sub-contractor shall deliver to the owner his claim as provided in this Act, be limited to the amount payable to the contractor or sub-contractor (as the case may be) for whom the work has been done or the material or machinery have been furnished or placed.

2. All payments up to eighty per centum of the value of the work, machinery or materials, made in good faith by the owner to the contractor, or by the contractor to the sub-contractor, at the times and in the manner mentioned in the contract, or the doing of the work, or the furnishing or placing of the material or machinery, before registration of a lien or before notice of a claim given in the manner provided for in this Act, shall operate to discharge the owner or contractor from any liability as to such payment, and shall operate as a discharge pro tanto of the lien created by this Act, but this section shall not apply to any payment made for the purpose of defeating or impairing a claim to a lien existing or arising under this Act.

3. All contracts made by an owner for doing work or supplying material or machinery upon any building, erection, or mine, shall be made in duplicate and in writing, and shall be signed by the owner or his agent duly authorized and by the contractor, and shall state the times when payments shall be made, whether weekly, fortnightly or monthly, or how otherwise, and one duplicate thereof shall be filed in the office of the clerk of the city, town, or village in which the land upon or to which the said building, erection, or mine is or is to be erected, furnished or placed, is situate, and unless and until such contract is so filed a lien shall attach upon such building, erection, or mine, and upon the land usually occupied or enjoyed therewith, for all work done and material and

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machinery furnished by any contractor or sub-contractor for the full price or value thereof, and upon the filing thereof the lien shall only attach in favour of a contractor or a sub-contractor to the extent in section 1 of this Act provided.

4. All such contracts shall be open to inspection and perusal without the payment of a fee, but if any copy thereof is required the clerk with whom the contract is filed shall make such copy and shall be entitled to charge for the same five cents per folio.

5. Such contract shall contain an address for service of the owner and contractor respectively within the said municipality, and any claim delivered at such address shall be deemed to be served upon the owner and contractor within the meaning of the Act.

6. When the first payment on account of a contract shall be made the owner shall, in case the date thereof shall differ from the date mentioned in said contract, or in case the month and day for making such first payment shall not be mentioned therein, endorse the date of the making of the same upon the contract filed, or shall give notice thereof to the clerk with whom said contract is filed, who shall forthwith endorse the said date upon such contract, and thereafter the owner shall be bound to make payments at the times and in the manner mentioned in his contract, taking the said date of said first payment as a starting point.

7. Any sub-contractor having a claim for a lien for any work, materials, or machinery under this Act may serve upon the owner a notice specifying his name and address, and the name and address of his employer or contractor, and the amount of his said claim, with dates and particulars, and that the same is correct, and that the amount thereof is due and unpaid to him, and such sub-contractor shall also serve a similar notice upon the contractor with the owner under whom he claims.

8. Upon such notice being so served the owner, after the expiration of one week from the date of such service, shall be entitled to pay the same, or if there be more than