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This Act is current to January 17, 2018
See the Tables of Legislative Changes for this Act’s legislative history, including any changes not in force.

Forestry Service Providers Protection Act

[SBC 2010] CHAPTER 16

Assented to June 3, 2010

Contents
1Definitions and application
Part 1 — Liens and Charges
2Contractor's lien
3Discharge of contractor's lien
4Registration of contractor's lien
5Priority of contractor's lien
6Contractor's charge
7Discharge of contractor's charge
8Registration of contractor's charge
9Priority of contractor's charge
10Payment by account debtor of forest products owner
11Subcontractor's charge
12Discharge of subcontractor's charge
13Registration of subcontractor's charge
14Priority of subcontractor's charge
15Payment by account debtor of contractor
16Discharge of invalid registration
17Seizure and sale of forest products
18Distribution of lien fund
19Distribution of charge fund
20Registration
21Court orders
22Certain agreements or undertakings void
23Notice of lien or charge
24Service of notices and demands
Part 2 — Forestry Service Providers Compensation Fund
25Definitions
26Forestry Service Providers Compensation Fund
27Payments to fund
28Applications for compensation
29Payments from fund
30Decision is final
31Designation of authority
32Administrative agreement
33Authority not an agent of government
Part 3 — General
33.1Personal Property Security Act
34Section 5 of Offence Act
35Regulations
36 Consequential Amendment
37Commencement

Definitions and application

1  (1) In this Act:

"account debtor" means a person who is obligated to make payment of money to a forest products owner or contractor, whether the payment is to be made immediately or in the future;

"amount due" means money due to a contractor or subcontractor under a contract for the provision of services, or as provided in this Act;

"amount payable" means money payable under a contract for the provision of services;

"charge" means a charge under section 6 (1) or 11 (1);

"chargeholder" means

(a) a contractor or subcontractor who has a charge, and

(b) a person identified as a chargeholder in a registration;

"contractor" means a person who has entered into a contract with a forest products owner under which services are provided to the forest products owner;

"contractor's charge" means a charge under section 6 (1);

"contractor's lien" means a lien under section 2 (1);

"court" means the Supreme Court;

"forest products" means

(a) timber, whether limbed, bucked or peeled, and

(b) prescribed products manufactured from timber

owned by a forest products owner, or in which a forest products owner has given a security or has transferred ownership for security purposes;

"forest products owner" means a person who has entered into a contract with a contractor under which services are provided by the contractor or subcontractor;

"lienholder" means

(a) a person who has a contractor's lien, and

(b) a person identified as a lienholder in a registration;

"registrar" has the same meaning as in section 1 (1) of the Personal Property Security Act;

"registration", when used in relation to

(a) a contractor's lien or a charge, means registration in the registry, and

(b) any other security interest, means registration in the registry or under a law providing for the registration of a security interest;

"registry" has the same meaning as in section 1 (1) of the Personal Property Security Act;

"security" includes a security referred to in section 427 of the Bank Act (Canada);

"security interest" means an interest in forest products that secures payment or performance of an obligation, and includes a security;

"services", in respect of forest products, means felling, bucking, yarding, skidding, processing, chipping, grinding, decking, loading, hauling, unloading, dryland sorting, logging road construction and maintenance, and any other prescribed activity;

"subcontractor" means a person who has entered into a contract with a contractor under which services are provided to or on behalf of the contractor;

"subcontractor's charge" means a charge under section 11 (1).

(2) A person who enters into a contract for services with another person is deemed to be a contractor for the purposes of this Act if the other person is not dealing at arm's length with the forest products owner.

(3) A person who enters into a contract for services with another person is deemed to be a subcontractor for the purposes of this Act if the other person is not dealing at arm's length with the contractor.

Part 1 — Liens and Charges

Contractor's lien

2  (1) A contractor who has a contract for the provision of services with a forest products owner has a lien on the forest products owner's forest products, including forest products acquired by the forest products owner after the services are provided, securing an amount due.

(2) A contractor's lien attaches to forest products when the services begin and secures the fair value of the services provided.

(3) A contractor's lien attaches and is enforceable as provided in this Act whether or not a registration relating to it has been effected.

(4) A contractor's lien and the amount due it secures may be assigned.

(5) A contractor's lien may not be enforced before the forest products owner is in default in paying an amount payable.

Discharge of contractor's lien

3  A contractor's lien is discharged on payment to a sheriff of the amount payable.

Registration of contractor's lien

4  (1) A contractor's lien may not be registered before the forest products owner is in default in paying an amount payable.

(2) Registration of a contractor's lien contrary to subsection (1) is not valid for the purposes of this Act.

Priority of contractor's lien

5  (1) A contractor's lien has priority over any other interest in the forest products subject to the lien except as otherwise provided in this or any other Act.

(2) A contractor's lien is subordinate to a security interest in the forest products subject to the lien

(a) if

(i) the agreement under which the security interest arises is entered into, and

(ii) the security interest is registered

before the contractor's lien is validly registered, or

(b) if the security interest has been enforced through seizure and sale of the forest products before the contractor's lien is validly registered.

(3) The priority of security interest under subsection (2) (a) applies to all advances or obligations secured under the agreement or an amendment to the agreement providing for additional advances, including advances made or obligations incurred after the contractor's lien is validly registered.

(4) A buyer of forest products from a forest products owner takes free from a contractor's lien if the sale is in the ordinary course of business of the forest products owner.

(5) Except as provided in this Act, there is no priority among two or more contractor's liens on the same forest products.

Contractor's charge

6  (1) A contractor has a charge on all accounts due to a forest products owner securing an amount due.

(2) A contractor's charge attaches and is enforceable as provided in this Act whether or not a registration relating to it has been effected.

(3) A contractor's charge and the amount due it secures may be assigned.

(4) A contractors' charge may not be enforced before the forest products owner is in default in paying an amount payable.

Discharge of contractor's charge

7  A contractor's charge is discharged on payment to a sheriff of the amount payable.

Registration of contractor's charge

8  (1) A contractor's charge may not be registered before the forest products owner is in default in paying the amount payable.

(2) Registration of a contractor's charge contrary to subsection (1) is not valid for the purposes of this Act.

Priority of contractor's charge

9  (1) A contractor's charge has priority over any other interest in the accounts due to a forest products owner, except as otherwise provided in this or any other Act.

(2) A contractor's charge is subordinate to an interest, including a security interest, in the accounts due to the forest products owner if

(a) the agreement under which the interest arises is entered into, and

(b) the interest is registered

before the contractor's charge is validly registered.

(3) The priority of a security interest under subsection (2) applies to all advances or obligations secured under the agreement or an amendment to the agreement providing for additional advances, including advances made or obligations incurred after the contractor's charge is validly registered.

(4) Except as provided in this Act, there is no priority among two or more contractor's charges on an account.

Payment by account debtor of forest products owner

10  (1) If a forest products owner's accounts are subject to a contractor's charge, an account debtor of the forest products owner may make payments on an account to the forest products owner before the account debtor receives a written notice from the contractor stating

(a) that the forest products owner's accounts are subject to a contractor's charge,

(b) that the forest products owner has defaulted in paying an amount payable, and

(c) the amount of amount payable.

(2) If an account debtor of a forest products owner receives a notice referred to in subsection (1),

(a) the account debtor may pay to a sheriff amounts owing to the forest product owner not exceeding the amount referred to in subsection (1) (c), and

(b) payment under paragraph (a) of this subsection discharges the obligation of the account debtor to the forest products owner to the extent of the payment.

(3) If an account debtor of a forest products owner makes a payment on an account to the forest products owner after the account debtor receives a notice referred to in subsection (1), the payment discharges the account only to the extent that the payment exceeds the amount referred to in subsection (1) (c).

Subcontractor's charge

11  (1) A subcontractor has a charge on all accounts due to a contractor securing an amount due.

(2) A subcontractor's charge attaches and is enforceable as provided in this Act whether or not a registration relating to it has been effected.

(3) A subcontractor's charge and the amount due it secures may be assigned.

(4) A subcontractor's charge may not be enforced before the contractor is in default in paying an amount payable.

Discharge of subcontractor's charge

12  A subcontractor's charge is discharged on payment to a sheriff of the amount payable.

Registration of subcontractor's charge

13  (1) A subcontractor's charge may not be registered before the contractor is in default in paying the amount payable.

(2) Registration of a subcontractor's charge contrary to subsection (1) is not valid for the purposes of this Act.

Priority of subcontractor's charge

14  (1) A subcontractor's charge has priority over any other interest in accounts due to a contractor, except as otherwise provided in this or any other Act.

(2) A subcontractor's charge is subordinate to an interest, including a security interest, in the accounts due to the contractor if

(a) the agreement under which the interest arises is entered into, and

(b) the interest is registered

before the subcontractor's charge is validly registered.

(3) The priority of a security interest under subsection (2) applies to all advances or obligations secured under the agreement or an amendment to the agreement providing for additional advances, including advances made or obligations incurred after the subcontractor's charge is validly registered.

(4) Except as provided in this Act, there is no priority among two or more subcontractor's charges on an account.

Payment by account debtor of contractor

15  (1) If a contractor's accounts are subject to a subcontractor's charge, an account debtor of the contractor may make payments on an account to the contractor before the account debtor receives a written notice from the subcontractor stating

(a) that the contractor's accounts are subject to a subcontractor's charge,

(b) that the contractor has defaulted in paying an amount payable, and

(c) the amount of amount payable.

(2) If an account debtor of a contractor receives a notice referred to in subsection (1),

(a) the account debtor may pay to a sheriff amounts owing to the contractor not exceeding the amount referred to in subsection (1) (c), and

(b) payment under paragraph (a) of this subsection discharges the obligation of the account debtor to the contractor to the extent of the payment.

(3) If an account debtor of a contractor makes a payment on an account to the contractor after the account debtor receives a notice referred to in subsection (1), the payment discharges the account only to the extent that the payment exceeds the amount referred to in subsection (1) (c).

Discharge of invalid registration

16  (1) If a registration relating to a contractor's lien or a charge has been effected and

(a) the lien or charge has been discharged as provided in section 3, 7, 10 (2), 12 or 15 (2), or

(b) the contractor or subcontractor is not entitled to maintain the registration relating to the lien or charge,

the contractor or subcontractor must discharge, or if the registration relates to more than one lien or charge, partially discharge, the registration.

(2) If a registration relating to a contractor's lien or a charge has been effected contrary to section 4 (1), 8 (1) or 13 (1), or if a lien or charge has been discharged as provided in section 3, 7, 10 (2), 12 or 15 (2), any person with an interest in the forest products or accounts referred to in the registration may deliver a written demand to the lienholder or chargeholder requiring the lienholder or chargeholder to discharge the registration, and the lienholder or chargeholder must discharge the registration not later than 20 days after delivery of the demand.

(3) If the lienholder or chargeholder fails to discharge the registration as required in subsection (1), a person who has made a demand under subsection (2) may, on giving the registrar proof satisfactory to the registrar that the demand has been delivered to the lienholder or chargeholder, register a notice of discharge that discharges the registration in accordance with the demand, unless in the meantime the lienholder or chargeholder gives to the registrar an order of a court maintaining the registration.

(4) On application to a court by the lienholder or chargeholder, the court may order that the registration

(a) be maintained unconditionally or on any conditions for any period of time, or

(b) be discharged.

(5) The demand referred to in subsection (2) may be given as set out in section 24 or by mailing the demand by registered mail addressed to the address of the lienholder or chargeholder as it appears in the registration.

(6) No fee may be charged by a lienholder or chargeholder for compliance with a demand made under subsection (2).

Seizure and sale of forest products

17  (1) On application of one or more lienholders, the court, by order, may instruct a sheriff to seize and sell forest products subject to a contractor's lien.

(2) On an application referred to in subsection (1), a court may do one or more of the following:

(a) determine the persons who are to receive notice of the application;

(b) take evidence on, hear and summarily dispose of any question as to the validity of the lien or the priority of a third party claim to the forest products subject to the lien;

(c) direct a trial of an issue;

(d) make an order as to costs of the application, including an order for payment of costs out of the fund.

(3) When enforcing a lien under a court order,

(a) a sheriff must seize and sell the forest products in the same manner as property is seized and sold by a sheriff under a writ of execution,

(b) a sheriff has the powers and immunities of an officer of the court, and

(c) the sale must have the same effect as a sale of the property under the authority of a writ of execution.

Distribution of lien fund

18  (1) On receipt of money from the sale of the forest products subject to a contractor's lien under section 17, the sheriff must deduct the sheriff's costs and create a fund by depositing the balance in a separate, designated account.

(2) On receipt of money paid to the sheriff under section 3, the sheriff must deduct the sheriff's costs and include the balance in the fund referred to in subsection (1) of this section or, if a fund has not been created under subsection (1), in a fund created for the purposes of this subsection.

(3) On application of one or more persons claiming entitlement to money in a fund created under subsection (1) or (2), the court, by order, may designate the lienholders entitled to share in the applicable fund.

(4) On an application referred to in subsection (3), a court may do one or more of the following:

(a) determine the persons who are to receive notice of the application;

(b) take evidence on, hear and summarily dispose of any question as to the validity of the lien or the priority of a third party claim to the forest products subject to the lien;

(c) direct a trial of an issue;

(d) make an order as to costs of the application, including an order for payment of costs out of the fund.

(5) Subject to subsection (7), on the expiry of 30 days following the date an order under subsection (3) is issued, the sheriff must pay out of the fund an amount not exceeding

(a) the amount secured by the lien or liens, and

(b) the amount of the costs ordered by the court

to the lienholders or third parties referred to in subsection (4) (b) specified in the order or orders directing payment of the fund.

(6) If, before the expiry of the period referred to in subsection (5), the sheriff is given notice that one or more additional lienholders have made an application to the court respecting the fund, the sheriff must not distribute the amount of the fund as provided by subsection (5) or (7) unless ordered to do so by the court.

(7) If, after allocating an amount in the fund for third party claims referred to in subsection (4) (b) that have priority over the lien or liens, the amount in the fund is not sufficient to discharge the amount owing to the lienholders referred to in subsection (5) and to pay the costs referred to in subsection (4) (d), the amount in the fund must be distributed to the lienholders in the proportion that each obligation bears to the amount of the fund or as otherwise ordered by the court.

Distribution of charge fund

19  (1) On receipt of money under section 10 or 15, a sheriff must deduct sheriff costs and create a fund by depositing the balance in a separate, designated account.

(2) On receipt of money paid to the sheriff under section 7 or 12, the sheriff must deduct the sheriff's costs and include the balance in the fund referred to in subsection (1) of this section or, if a fund has not been created under subsection (1), in a fund created for the purposes of this section.

(3) On application of one or more persons claiming entitlement to money in a fund created under subsection (1), the court, by order, may designate the chargeholders entitled to share in the fund.

(4) On an application referred to in subsection (3), a court may do one or more of the following:

(a) determine the persons who are to receive notice of the application;

(b) take evidence on, hear and summarily dispose of any question as to the validity of the charge or the priority of a third party claim to the accounts subject to the charge;

(c) direct a trial of an issue;

(d) make an order as to costs of the application, including an order for payment of costs out of the fund.

(5) Subject to subsection (7), on the expiry of 30 days following the date an order under subsection (3) is issued, the sheriff must pay out of the fund an amount not exceeding

(a) the amount secured by the charges of the chargeholders, and

(b) the amount of the costs ordered by the court

to the chargeholders or third parties referred to in subsection (4) (b) specified in an order or orders directing payment out of the fund.

(6) If, before the expiry of the period referred to in subsection (5), the sheriff is given notice that one or more additional chargeholders have made an application to the court respecting the fund, the sheriff must not distribute the amount of the fund as provided by subsection (5) or (7) unless ordered to do so by the court.

(7) If, after allocating an amount in the fund for third party claims referred to in subsection (4) (b) that have priority over the lien or liens, the amount in the fund is not sufficient to discharge the amount owing to the chargeholders referred to in subsection (5) and to pay the costs referred to in subsection (4) (d), the amount in the fund must be distributed to the chargeholders in the proportion that each obligation bears to the amount of the fund or as otherwise ordered by the court.

Registration

20  (1) A registration relating to a contractor's lien or a charge may be effected in the registry as prescribed.

(2) The registrar has no obligation to determine

(a) if registration information transmitted to the registry to effect a registration relates to a valid contractor's lien or a charge, or

(b) if a registration relating to a contractor's lien or a charge relates to a valid contractor's lien or a charge.

Court orders

21  On application to the court by a sheriff, lienholder, chargeholder, forest products owner or person with an interest in forest products affected by a lien or in accounts subject to a charge under this Act, the court may make an order, including a binding declaration of right and injunctive relief, doing one or more of the following:

(a) determining the validity of a claim to a lien of a contractor or a charge of a chargeholder;

(b) determining questions of priority or entitlement to forest products affected by a lien or to accounts affected by a charge under this Act;

(c) instructing a sheriff with respect to seizure and sale of forest products subject to a lien under this Act;

(d) determining the amount to be paid to each lienholder or chargeholder;

(e) directing the sheriff with respect to distribution of the fund referred to in section 18 or 19.

Certain agreements or undertakings void

22  An agreement or undertaking, express or implied, to waive, surrender or modify any rights of a contractor or subcontractor provided in this Act is void.

Notice of lien or charge

23  (1) A contractor who registers a lien or charge must give a notice of the registration to the forest products owner promptly after the registration is effected.

(2) A subcontractor who registers a charge must give a notice of the registration to the contractor promptly after the registration is effected.

(3) A failure to comply with subsection (1) or (2) does not invalidate a registration referred to in those subsections.

Service of notices and demands

24  (1) A notice or a demand under this Act may be given to

(a) an individual by leaving it with the individual or by sending it by registered mail addressed to

(i) the individual by name at the individual's residence, or

(ii) if the individual is the sole proprietor of a business, the name of the individual at the address of the business,

(b) a partnership

(i) by leaving it with

(A) one or more of the general partners, or

(B) a person who, at the time the notice is given, has control or management of the partnership business, or

(ii) by registered mail addressed to

(A) the partnership,

(B) any one or more of the general partners, or

(C) any person who, at the time the notice is given, has control or management of the partnership business,

at the address of a partnership business,

(c) a corporation

(i) by leaving it with an officer or director of the corporation or a person in charge of any office or place of business of the corporation,

(ii) by leaving it with or by sending it by registered mail addressed to the registered or head office of the corporation, or

(iii) if the corporation has its registered or head office outside British Columbia, by leaving it with, or by sending it by registered mail addressed to, the attorney for service for the corporation,

(d) a municipal corporation by leaving it with, or by sending it by registered mail addressed to, the municipal corporate officer,

(e) an association

(i) by leaving it with an officer of the association, or

(ii) by sending it by registered mail addressed to an officer of the association at the address of the officer, and

(f) the government in the manner provided by the Crown Proceeding Act.

(2) A notice or demand sent by registered mail is deemed to be given on the earlier of

(a) the date the addressee actually receives the notice, and

(b) except when postal services are not functioning, the expiry of 10 days after the date of registration.

Part 2 — Forestry Service Providers Compensation Fund

Definitions

25  In this Part:

"administrative agreement" means the agreement referred to in section 32;

"authority" means the authority designated under section 31;

"contributor" means a person in a class of persons designated by regulation to make payments to the fund;

"forestry service provider" means a person in a class of persons designated by regulation as forestry service providers;

"fund" means the Forestry Service Providers Compensation Fund established under section 26 (1).

Forestry Service Providers Compensation Fund

26  (1) The Lieutenant Governor in Council, by regulation, may establish a fund for compensating forestry service providers for financial losses resulting from the insolvency of companies or other legal entities to which forestry service providers have provided services.

(2) The authority must hold the fund in trust.

(3) Money paid into the fund, or received by the authority for the fund, is not subject to any process of garnishment, attachment, execution or seizure under any legal process by any creditor of the authority.

(4) The authority may invest the fund only as permitted under the provisions of the Trustee Act respecting the investment of trust property by a trustee.

Payments to fund

27  (1) to (4) [Not in force.]

(5) All of the following must be credited to the fund:

(a) investment earnings of the fund;

(b) money recovered by the authority in respect of an assignment under section 29 (3);

(c) payments referred to in section 29 (4).

(6) [Not in force.]

Applications for compensation

28  A forestry service provider may apply for compensation from the fund in accordance with the administrative agreement.

Payments from fund

29  (1) The authority may make payments from the fund, in accordance with the administrative agreement,

(a) on applications for compensation made under section 28, and

(b) for costs of administering the fund.

(2) The authority must not make a payment from the fund to an applicant unless the applicant has assigned to the authority all the applicant's rights in respect of the loss that gave rise to the application.

(3) If the authority makes a payment under subsection (1) (a), all the applicant's rights are deemed to have been assigned to the authority with respect to the loss that gave rise to the payment.

(4) If money is paid from the fund to an applicant, the applicant must pay to the fund any money, or the value of any other thing, received by the applicant from another source on account of the loss that gave rise to the application, up to the amount paid from the fund to the applicant.

(5) If the applicant fails to comply with subsection (4), the authority has a cause of action against the applicant for the amount unpaid.

Decision is final

30  A decision, order or ruling of the authority made under this Act in respect of a matter that relates to the fund and that is within the authority's jurisdiction is final and conclusive and is not open to question or review in a court except on a question of law or excess of jurisdiction.

Designation of authority

31  The minister may designate an authority for the purpose of this Part.

Administrative agreement

32  (1) Subject to the approval of the Lieutenant Governor in Council, the minister may enter into an administrative agreement with the authority for the purposes of this Part.

(2) The administrative agreement must include provisions specified by regulation.

(3) The authority must comply with the terms of the administrative agreement, and may not carry out the powers, functions and duties under this Part except in accordance with that agreement.

(4) Subject to the approval of the Lieutenant Governor in Council, the minister, after giving prior written notice to the authority, may amend or revoke the administrative agreement without the consent of the authority.

Authority not an agent of government

33  The authority is not an agent of the government for the purposes of the administration of any provisions of this Part or the regulations under this Part.

Part 3 — General

Personal Property Security Act

33.1  The following sections of the Personal Property Security Act apply to this Act:

(a) sections 42, 43 (1) to (3), (6), (8), (12) and (13), 44, 45 (1), (2), (5) and (6), 46 to 48, 52, 54 and 76.1;

(b) the prescribed sections, if any.

Section 5 of Offence Act

34  Section 5 of the Offence Act does not apply to this Act.

Regulations

35  (1) The Lieutenant Governor in Council may make regulations referred to in section 41 of the Interpretation Act.

(2) In making a regulation under this Act, the Lieutenant Governor in Council may make different regulations for different persons, places, things, decisions, transactions or activities.

(3) Without limiting subsection (1), the Lieutenant Governor in Council may make regulations as follows:

(a) prescribing products manufactured from timber for the purposes of the definition of "forest products" in section 1 (1) and prescribing the circumstances under which a product manufactured from timber is to be considered a forest product;

(b) prescribing activities for the purposes of the definition of "services" in section 1 (1);

(c) respecting the matters set out in section 76 of the Personal Property Security Act as they relate to this Act;

(d) respecting the creation and administration of funds referred to in sections 18 and 19;

(e) establishing the fund, as defined in section 25, for the purposes of section 26 (1);

(f) designating classes of persons as contributors for the purposes of the fund, as defined in section 25;

(g) designating classes of persons as forestry service providers for the purposes of the fund, as defined in section 25;

(h) prescribing amounts, manners of payment and times for the purposes of section 27 (1);

(i) imposing a levy for the purposes of section 27 (2);

(j) specifying provisions for the purposes of section 32 (2);

(j.1) specifying one or more sections of the Personal Property Security Act for the purposes of section 33.1 of this Act;

(k) defining a word or expression used but not defined in this Act;

(l) respecting any other matter for which regulations are contemplated by this Act.

Consequential Amendment

[Note: See Table of Legislative Changes for the status of section 36.]

Section(s) Affected Act
36 Tugboat Worker Lien Act

Commencement

37  This Act comes into force by regulation of the Lieutenant Governor in Council.