Issue link: https://digital.canadianlawyermag.com/i/79498
STATUTORY DECLARATIONS and others would be wrong to assume that payment of their outstanding accounts is secured on projects where the presentation of a statutory declaration is a condition precedent to payment by the owner to the general contractor. First, the conviction of an unscrupulous contractor will do little to get outstanding accounts paid. Even where restitution is ordered, the likelihood of ever recovering payment, particularly from someone who has been incarcerated or is under house arrest is not good. Second, all statutory declarations are not equal. Owners tend to use forms of declaration which are custom-fi tted to their particular purposes. Even industry standard declarations no longer go so far as to state that the general contractor has paid everyone what they are owed. For example the frequently used Canadian Constructions Document Committee (CCDC) form of declaration only certifi es that subcontractors and other suppliers have been paid up until the last progress payment received and excepts, "amounts withheld by reason of legitimate disputes which have been identifi ed to the party or parties, from whom payment has been withheld." Whether or not a dispute is legitimate can depend upon the perception of the person making the declaration. The requirement that the general contractor provide a statutory declaration to the owner before being paid will be of little practical benefi t either to the owner or to subcontractors and suppliers in the event that a contractor feels driven to make a false statutory declaration to obtain a payment to satisfy cash fl ow demands. Owners, subcontractors and suppliers alike should continue to rely upon the protections established expressly for their benefi t under provincial lien legislation, labour and material payment bonding and, where applicable, Crown construction contract legislation. In summary, the pressures of keeping a cash- strapped business going never justify the making of a false statutory declaration, something likely to lead to a criminal prosecution and conviction. Statutory declarations play an important role in assuring the orderly fl ow of funding to those who provide the labour and materials necessary for the prosecution of a construction project. They also provide a degree of assurance to the owner that the project and schedule will not be affected by non- payment issues. However, they provide at best only imperfect security for payment to subcontractors, laborers and suppliers who must rely on such other devices as lien rights and bonding for protection. Ken McCullough, Q.C. Saint John, NB 506.632.2781 kmccullogh@stewartmckelvey.com Stewart McKelvey proudly celebrates over twenty years of innovative leadership as Atlantic Canada's fi rst and largest regional law fi rm. With a distinguished heritage reaching back to Canada's confederation, our law fi rm has established an international reputation for generating results. More than 220 lawyers and 350 staff in our six locations have a single objective: the best results for our clients. Charlottetown, Prince Edward Island 65 Grafton Street, P.O. Box 2140 Charlottetown, P.E.I., C1A 8B9 Telephone: 902.892.2485 Fax: 902.566.5283 charlottetown@stewartmckelvey.com Fredericton, New Brunswick Suite 600, Frederick Square, 77 Westmorland Street P.O. Box 730, Fredericton, N.B., E3B 5B4 Telephone: 506.458.1970 Fax: 506.444.8974 fredericton@stewartmckelvey.com Halifax, Nova Scotia Suite 900, Purdy's Wharf Tower One 1959 Upper Water Street, P.O. Box 997, Halifax, N.S. B3J 2X2 Telephone: 902.420.3200 Fax: 902.420.1417 halifax@stewartmckelvey.com Moncton, New Brunswick Suite 601, Blue Cross Centre, 644 Main Street P.O. Box 28051, Moncton, N.B., E1C 9N4 Telephone: 506.853.1970 Fax: 506.858.8454 moncton@stewartmckelvey.com Saint John, New Brunswick Suite 1000, Brunswick House, 44 Chipman Hill P.O. Box 7289, Postal Station A, Saint John, N.B., E2L 4S6 Telephone: 506.632.1970 Fax: 506.652.1989 saint-john@stewartmckelvey.com St. John's, Newfoundland and Labrador Suite 1100, Cabot Place, 100 New Gower Street P.O. Box 5038, St. John's, N.L., A1C 5V3 Telephone: 709.722.4270 Fax: 709.722.4565 st-johns@stewartmckelvey.com