Provision is made by the Mechanics and Wage-Earners Lien Act, R.S.O. 1914, c. 140, for the registration of a claim of lien upon land for work or services performed or materials furnished in connection with any building or erection upon such land, and it is provided that the lien, shall cease to exist unless the claim is registered within thirty days after the completion of the work or services or the furnishing or placing of the last material furnished or placed upon the land, and unless within the further time limited by the statute an action is brought and a certificate thereof is registered (w).

It is further provided by Sec. 21, as follows:

21. Where a claim is so registered, the person entitled to the lien shall be deemed a purchaser pro tanto and within the provisions of The Registry Act and The Land Titles Act, but except as herein otherwise provided those acts shall not apply to any lien arising under this Act.

The concluding words of the section just quoted have not the effect of taking a lien out of the operation of the Registry Act or Land Titles Act so far as the preservation of priority is concerned. As in other cases under the Registry Act, priority of registration prevails in the absence of actual notice, and mere knowledge that building is going on upon the land does not amount to actual notice to a purchaser or mortgagee of the existence of a lien or liens (x). If a lienholder delays registration of his lien he does so at the risk of being charge, cannot keep such charge alive as against a mesne encumbrancer whose encumbrance he is also expressly or impliedly bound to discharge. Blake v. Beaty, 1855, 5 Gr. 359. See chapter 21, Merger, Sec. 201.

(w) For the details and qualifications of these provisions, see especially ss. 6, 17, 22-25 of the statute.

(x) Sterling Lumber Co. v. Jones, 1916, 36 O.L.R. 153, 29 D.L.R. 288, and cases there cited.

The lienholder has, however, priority over a mortgagee in respect of subsequent advances made by the latter to the extent provided for by s. 14, as follows:

14.- (1) The lien shall have priority over all judgments, executions, assignments, attachments, garnishments, and receiving orders recovered, issued or made after such lien arises, and over all payments or advances made on account of any conveyance or mortgage after notice in writing of such lien to the person making such payments or after registration of a claim for such lien as hereinafter provided.

(2) [Save as herein otherwise provided] where there is an agreement for the purchase of land, and the purchase money or part thereof is unpaid, and no conveyance has been made to the purchaser, he shall, for the purposes of this Act, be deemed a mortgagor and the seller a mortgagee (a).

(3) Except where it is otherwise provided by this Act, no person entitled to a lien on any property or money shall be entitled to any priority or preference over another person of the same class entitled to a lien on such property or money, and each class of lien holders shall rank pari passu for their several amounts, and the proceeds of any sale shall be distributed among them pro rata according to their several classes and rights.

The lienholder also has priority over a prior mortgagee to the extent provided by s. 8, as follows:

8.- (3) Where the land upon or in respect of which any work or service is performed, or materials are placed or furnished to be used, is encumbered by a prior mortgage or other charge, and the selling value of the land is increased by the work or service, or by the furnishing or placing of the materials, the lien shall attach upon such increased value in priority to the mortgage or other charge. (4) The selling value of land encumbered by a prior mortgage or other charge, shall be deemed to be increased by the value of the work or service performed upon and of the material furnished or placed thereon or adjacent thereto (6).

(y) Charters v. McCracken, 1916, 36 O.L.R. 153, 29 D.L.R. 756; Warwick v. Sheppard, 1917, 39 O.L.R. 99, 35 D.L.R. 98. Under the special provisions of the corresponding Manitoba statute it has been held that a lien holder who registers his claim of lien within the time limited has priority from the date of the commencement of the work or from the placing of the materials, not from the date of registration of the lien, but only to the extent of the materials placed on the land or work done before the mortgage money was advanced. Robock v. Peters, 1900, 13 M.R. 124.

(z) Reinhardt v. Shutt, 1888, 15 O.R. 325; Wanty v. Robins, 1888, 15 O. R. 474.

(a) The words enclosed in square brackets were added in 1918 by 8 G. 7 c. 29, s. 5.

It is further provided by s. 9, as follows:

9. Where any of the-property upon which a lien attaches is wholly or partly destroyed by fire any money received by reason of any insurance thereon by an owner or prior mortgagee or chargee shall take the place of the property so destroyed, and shall be subject to the claims of all persons for liens to the same extent as if such money was realized by a sale of such property in an action to enforce the lien (c).

Under s. 8, prior to the enactment of sub-s. 4, it was held that the priority of the lienholder depended upon his proving that the selling value of the land had been increased by the performance of the work or service or by the furnishing or placing of the materials, and that if there was no increased value, there was no prior lien (d). Under sub-s. 4 there appears to be a conclusive presumption of the increase of value to the extent of the work or service performed or the materials placed or furnished.

(b) Sub- s. 4 was added to the statute in 1918 by 8 G. 5, c. 29, s. 4. The words "the land" must be supplied after the word "upon," or the word "upon" must be read "thereupon."

(c) This section was first enacted in 1896 by 59 V. c. 35, s. 7. Apart from this provision it had been held that the Claim of a lien holder came to an end so far as the mortgagee was concerned if the building in respect of which the lien was claimed was destroyed. Patrick v. Walbourne, 1896, 27 O.R. 221.

(d) As to the evidence of increased value, see Cut-Rate Plate Glass Co. v. Solodinski, 1915, 34 O.L.R. 604, 25 D.L.R. 533; Champion & White v. World Building, 1916, 22 B.C.R. 596,27 D.L.R. 506; Cook v. Koldoffsky, 1916, 35 O.L.R. 555, 28 D.L.R. 346; Whaley v. Linnenbank, 1916, 36 O.L.R. 361, 29 D.L.R. 51; Northern Trusts Co. v. Battell, 1916, 9 S.L.R. 103, 29 D.L.R. 515; Security Lumber Co. v. Duplat, 1916, 9 S.L.R. 318, 29 D.L.R. 460; Warwick v. Sheppard,

Where a lienholder is added as a party in the master's office in a foreclosure action (e), the priority of the lienholder under s. 8, sub-s. 3, as stated in the master's report, should be expressly limited to the increased value. The statute does not cast upon the mortgagee the duty of realising the lien-holder's claim. If the lienholder desires to realise, he must take the necessary steps to do so either by asking for a direction authorising himself to conduct a sale or by making the usual deposit and asking for a sale by the mortgagee. The costs incurred in such a sale ought not to be charged against the mortgagor's interest but should come out of the sum admitted or proved as the increased value (f).

The meaning of s. 8, sub- s. 3, and of s. 14 has been explained by Hodgins, J.A. (g) as follows:

"The provisions of sec. 8 (3) and those of sec. 14 are not necessarily in conflict. Section 8, sub-sec. (3), deals with the land itself, or with an estate or interest in it which may be possessed by persons to whom the description of 'owner' is applied under sec. 2 (c); and prior mortgages or charges, under the decisions, mean those mortgages or charges which existed upon the land or those interests before the work began, because by sec. 6 the lien attaches then, and it may then be at once registered (sec. 22) (h). The lien given as against the prior mortgagee or chargee is not, however, given upon the land, but upon the value which has been produced by way of increase, over that which the land previously had, by the subsequent doing of the work or the placing of the materials; and this value is not that which represents the actual value or cost of the work, etc., in itself, but the amount which it adds to the selling value.

1917, 39 O.L.R. 99, 35 D.L.R. 98; Marshall Brick Co. v. York Farmers' Colonization Co., 1917, 54 Can. S.C.R. 569, 36 D.L.R. 420, affirming 35 O.L.R. 542, 28 D.L.R. 464, sub nom. Marshall Brick Co. v. Irving.

(e) See chapter 24, Action for Foreclosure or Sale, Sec. 238.

(f) Henderson v. Morris, 1916, 10 O.W.N. 34.

(g) Delivering the judgment of the Court in Cook v. Koldoffsky, 1916, 35 O.L.R. 555, at pp. 559, 560, 28 D.L.R. 346, at pp. 349, 350; cf. Warwick v. Sheppard, 1917, 39 O.L.R. 99, 35 D.L.R. 98.

(h) Kennedy v. Haddow, 1890, 19 O.R. 240; Cook v. Belshaw, 1893, 23 O.R. 545.

"Under sec. 14, the lien has priority over mortgage advances made after the lien-holder has notified the mortgagee in writing of his lien or has registered it, and in the latter case the lien-holder is deemed a purchaser pro tanto and within the provisions of the Registry Act and the Land Titles Act, the application of which is, however, limited (sec. 21).

"Under sec. 14, the priority gained is on the estate of the owner or mortgagee in the land itself, and is positive, and is irrespective of any increased value given to the selling value by the work done, and so it is not within the provisions of sec. 8, although the mortgage has priority by virtue of the Registry Act (i).

" 'Prior' in sec. 8 means before the work, etc., commences, because the land dealt with is described as incumbered land, and the nature of the incumbrance as a prior mortgage or charge. The reason why the increased value is not an element under sec. 14 is well explained by the Chancellor in Cook v. Belshaw (j). It is paid for by the mortgagee by the periodical payments which are supposed to reach the lien-holders until they, by the registration of their lien, give notice that they are unpaid. It would be impossible to hold that a mortgage or charge or part of it which became 'prior by virtue of the Registry Act, under sec. 14, was a 'prior' mortgage or charge' in whole or pro tanto under sec. 8. To do so would present the curious spectacle of a mortgage or charge, prior in whole or in part as an incumbrance upon the lands and buildings, as against the lien, and yet subsequent to it in whole or in part as to the increased selling value. The priority acquired under sec. 14 over the lien is upon the land, including the buildings and erections thereon. Both the lien and the mortgage are, therefore, charges upon the same thing; and, as increased selling value is derived from the buildings or erections, it cannot exist as a separate element under the conditions of that section. The true principle is to treat sec. 8 as confined to those mortgages and charges which existed before work began, by reason of which increased selling value may arise, and sec. 14 as dealing with priorities among competing claims, all arising after work has commenced, and upon land and buildings together."

(i) McVean v. Tiffin, 13 O.A.R. 1. (j) 1893, 23 O.R. 545.