Registering liens in relation to mines in Ontario can be an extremely confusing subject.[1] Even the title of this paper is a misnomer as mines are not actually liened. Rather, the proper characterization of the issue is that liens are registered as against the lands on which the mine is located. In this regard, the type of property interest a mining company has in the lands dictates the manner in which liens are preserved and perfected. Consequently, when liening lands on which a mine is located the paramount consideration is determining the nature of the owner’s interest in the mining claim.
Different provinces have enacted legislation which permits the registration of liens. Specifically in Ontario, the Mining Act[2] governs the regulation of liens in the province.
Section 171(1) of the Mining Act expressly states that the Construction Act[3] applies to mining claims, mining lands and connected works.[4]
A mining claim is a parcel of land, including land under water, that is registered in accordance with section 38 of the Mining Act.[5]
Mining claims can be characterized into three (3) different categories:
1. patented mining claims
2. unpatented mining claims
3. licenses of occupation
Each of the aforementioned categories of mining claims requires a different method of preserving and perfecting a claim for lien. The different manners in which a lien is registered are set out below.
Patented Mining Claims
A “patent”, pursuant to section 1 of the Mining Act, “means a grant from the Crown in fee simple or a less estate made under the Great Seal, and includes leasehold patents and freehold patents.”
Accordingly, a patent is a grant from the Crown, which can be conveyed as either as a freehold or leasehold interest. Such interests are recorded in the local registry office under the Land Titles Act[6] or Registry Act[7], depending on the subject land in question.
Steps to Lien
Liens in relation to patented lands are to be registered in the same fashion as with any lien under the Construction Act, whereby:
- The lien claimant must conduct a search in the local registry office to confirm certain information, including (a) the legal description of the subject lands, (b) the owner and (c) any other charges, encumbrance, or interest on title to the subject lands.
If the legal description is unknown, contact the Provincial Recording Office, which is required pursuant to section 7 of the Mining Act, to maintain a mining claims registry which contains, inter alia, (a) records for all mining claims, (b) maps showing the locations of all mining claims, (c) information about each claim hold as may be prescribed and (d) for each list of patented mining claims various prescribed information.
- Preservation is achieved by registering a claim for lien against title to the mining claim at the local registry office online through Teraview/e-registration system.
- Perfection is achieved by registering against title to the mining claim the issuing the statement of claim and certificate of action at the local registry office online through Teraview/e-registration system.
Unpatented Mining Claims
“Unpatented”, pursuant to section 1 of the Mining Act, “means land or mining rights for which a patent, lease, license of occupation or any other form of Crown grant is not in effect.”
An interest in “unpatented” mining land is created pursuant to the Mining Act – a person who holds a prospector license must first stake and then record the mining claim with the Provincial Recording Office. Thereafter, that person must perform certain assessment work in relation to the lands and file assessment work reports with the Provincial Recording Office. The failure to do so will result in a forfeiture of the unpatented mining claim.
Pursuant to section 50(1) of the Mining Act, the holder of an unpatented mining claim is a licensee of the Crown until the performance, filing, and approval of assessment work, and thereafter becomes a tenant at will of the Crown in respect of the Mining claim.
Notice and priorities are determined pursuant to sections 62 and 63 of the Mining Act. Pursuant to section 62, the recording of an instrument constitutes a notice of the instrument to all persons claiming an interest in the mining claim after such recording. Moreover, pursuant to section 63, priority of the recording will prevail unless before the prior recording there has been actual notice of the prior instrument by the party claiming under the recording.
Steps to Lien
Pursuant to section 171(2) of the Mining Act, liens on unpatented lands are to be registered in the Provincial Recording Office, whereby:
- The lien claimant must conduct a search of the Provincial Recording Office via its Mining Lands Administrative System (MLAS[8]) to determine whether the mining claim is unpatented and obtain the requisite information to describe the unpatented mining claim, including the mining claim number. This can be inserted into the Schedule “A” of the claim for lien.
- Preservation is achieved by registering the claim for lien in the Provincial Recording Office.
- Perfection is achieved by registering the issued statement of claim and certificate of action in the Provincial Recording Office.
Licenses of Occupation
“Licenses of Occupation” is a license from the Crown which permits the right to use the land up to 20 years (for a rental fee), but does not provide ownership of the land.[9]
Licences of occupation can include:
- Mining Licenses of Occupation (MLO), which are licenses that allow for the extraction of minerals located under beds of water;
- Exploratory Licenses of Occupation (ELO), which are licenses to allow for the exploration of tracts or lands and/or land under water.
The Ministry of Energy, Northern Development, and Mines held a consultation between April 15, 2021 and May 25, 2021 regarding whether to establish a public registry for licences of occupation. While the Provincial Recording Office maintains a mining claim registry that includes records, maps, and information about mining claims, no such similar registry existed for licenses of occupation. Accordingly, the public was required to make written requests of the Provincial Recording Office or physical attend at an office.
Ultimately, the decision stemming from the consultation was that the Provincial Recording Office would create and maintain a registry for licences of occupation.
It was further stated that “a licence of occupation is a form of mining tenure issued under the Mining Act. While the authority to issue licences of occupation still exists, they are generally no longer issued and are considered legacy forms of tenure.”[10]
Pursuant to section 7.1 of the Mining Act, the Provincial Recording Office shall maintain a licence of occupation registration, which includes, inter alia, (a) records of all licences of occupation, (b) maps showing the locations of all lands to which a licence of occupation applies, (c) information about each licence holder as may be prescribed and for each for each list of licence of occupation various prescribed information.
Steps to Lien
Liens in relation to licenses of occupation on unpatented lands are registered with the Provincial Recording Office, whereby:
- A lien claimant must conduct a search of the Provincial Recording Office via its Mining Lands Administrative System (MLAS[11]) to obtain the requisite information to describe the license of occupation, which can be inserted into the Schedule “A” of the claim for lien.
- Preservation is achieved by registering the claim for lien in the Provincial Recording Office.
- Perfection is achieved by registering the issued statement of claim and certificate of action in the Provincial Recording Office.
Other Considerations
In addition to the aforementioned, the following information should be borne in mind as a relevant considerations when seeking to lien a mine.
Pursuant to section 171(3) of the Mining Act, when the claim is for wages in connection with a mine, mining claim, mining lands or works connected therewith, in addition to the rights and remedies that exist under the Construction Act, a claimant has a lien upon any other property of the owner in or on such a mine, mining claim, mining land, or works for a sum not exceeding 30 days. This claim for wages can be enforced under the Construction Act.
Furthermore, pursuant to section 171(4) of the Mining Act, the “Tribunal”, which is the Ontario Land Tribunal, is given the jurisdiction to cancel a section 171(3) lien, upon terms providing for security or where the Tribunal deems proper, in the circumstances where the Tribunal is satisfied that the lien is (a) not made in good faith, (b) the lien is made for an improper purpose and (c) the owner is unduly embarrassed.
Finally, pursuant to section 171(5) of the Mining Act, a lien upon patented land does not affect the rights of the Crown.
There exists very little case law which discusses liens in the context of mines. One interesting example is the decision of Lake of the Woods Electric (Kenora) Ltd. v. Kenora Prospectors & Miners Ltd.[12] wherein the lien claimants claimed a lien in relation to the supply and delivery of equipment to both the mining site as well as a camp site approximately five (5) kilometers away, which served as the headquarters for the mining program and to board workers for the project. Relying upon the fact that the camp site had been an independent tourist site, held that the mine site and the camp site were separate and severable from each other, and therefore, could not be considered “lands enjoyed therewith” under the Construction Lien Act, being the predecessor to the Construction Act.
Importantly, in preparing this paper, counsel for the Ontario Ministry of Northern Development, Mines, Natural Resources and Forestry, wished to communicate that there is a routine practice of lien claimants attempting to establish a lien against the Crown’s interest in mining leases. Unfortunately, attempting to do so is inappropriate and results in costly and time-consuming steps by the Ministry to respond to such claims. The Crown is not an “owner” within the meaning of section 1 of the Construction Act where a lessee has contracted with a third party to perform work in relation to the mining lands. In such circumstances, the work performed is not done so on behalf of or at the request of the Crown, or for the Crown’s benefit. In addition, pursuant to section 16 of the Construction Act, where the Crown is an “Owner” in the premises, the lien does not attach to the Crown’s interest, but rather constitutes a charge on the holdback pursuant to section 21 of the Construction Act.
In light of the different categories of mining claims requiring different methods of preserving and perfecting a claim for lien, counsel are encouraged to take the time to undertake the proper due diligence when registering liens in relation to mining lands and should reach out to the Provincial Recording Office for guidance and assistance to ensure no missteps well before the deadline to preserve or perfect a claim for lien.[13]
About the authors
Edward W. Lynde, H.B.A., J.D., LL.M, Q. Arb is a Partner with Fasken Martineau DuMoulin LLP and practices all aspects of construction and infrastructure law. He holds a H.B.A. from Trinity College, University of Toronto, a J.D. from the University of Windsor, a LL.M. from Northwestern University and was called to the Ontario Bar in 2008. He is also designated as a Qualified Arbitrator (Q. Arb) with the ADR Institute of Canada.
Paul Hancock, is a Partner with Daoust Vukovich LLP and a member of their Construction Group. Paul was selected by his peers as one of the Best Construction Lawyers since 2022 for his work litigating and resolving complex construction litigation matters. Paul has appeared at various levels of the Ontario courts. Paul represents owners, general contractors/subcontractor, construction managers, and engineers.
[1] The authors would like to thank Michael Mercer, Senior Legal Counsel at the Ministry of Northern Development, Mines, Natural Resources and Forestry, for his invaluable information, guidance, and assistance, on this topic Moreover, the authors would like to acknowledge the work prepared by Lori Roth entitled “Liening Mining Claims: Avoiding the Pitfalls” (1998), 39 C.L.R. (2d) 33. This is a fantastic paper that has been relied upon by the authors in the preparation of the present paper.
[2] Mining Act, R.S.O. 1990, c. M.14. [“Mining Act”]
[3] Construction Act, R.S.O. c. C.30 [“Construction Act”]
[4] Section 171(1), Mining Act.
[5] Section 1(1), Mining Act.
[6] Land Titles Act, R.S.O. 1990, c. L.5
[7] Registry Act, R.S.O., 1990, c. R.20.
[10] Province of Ontario, Mining Lands Administration System (MLAS) Fact Sheet, dated February 2022.
[12] Lake of the Woods Electric (Kenora) Ltd. v. Kenora Prospectors & Miners (1996), 27 C.L.R. (2d) 184 [“Lake of the Woods”]
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