County Court

Cite as: J.W. Bird and Company v. Newell Electric Ltd., 1991 NSCO 10 PROVINCE OF NOVA SCOTIA C.H. No. 66738 COUNTY OF HALIFAX I NTH E C 0 U N T Y C 0 U R T OF DISTRICT NUMBER ONE BETWEEN: J. W. BIRD AND COMPANY LIMITED PLAINTIFF - and ­ NEWELL ELECTRIC LIMITED, CYNTHIA SLADE AND THOMAS NEWELL DEFENDANTS David G. Coles, Esq., Cousel for the Plaintiff. William J. Chisholm, Esq., Counsel for the Defendants. AMENDMENT AS TO COSTS 1991, January 31st, Bateman, J.C.C.:- I decline to award the Plaintiff's costs on the judgment against Newell Electric Limited, as the amount owing was not disputed by the company. I award the Defendants, Cynthia Slade and Thomas Newell, costs on their successful defence of the action. Consistent with Section 41(2) of the Act, the costs shall be in the amount of 25% of the judgment entered, together with disbursements. A Judge of the County Court of District Number One

PROVINCE OF NOVA SCOTIA COUNTY OF HALIFAX I NTH E C 0 U N T Y OF DISTRICT NUMBER ONE BETWEEN: J. W. BIRD AND - and - NEWELL ELECTRIC LIMITED, CYNTHIA SLADE AND David G. Coles, Esq., Cousel for the Plaintiff. William J. Chisholm, Esq., Counsel for the Defendants. 1991, January 30th, an action under the Mechanics c. 178 as amended. The Plaintiff, J. Limited ("Bird") claim Ten Thousand Three Hundred Sixty-Seven Dollars and Two Cents ($10,367.02) being the balance due for materials to the construction of the home Slade. The property in question is Crescent, Dartmouth, Nova Scotia. BACKGROUND The Defendants, Cynthia are husband and wife. Thomas Newell is the sole shareholder of the company, Newell Electric is not an officer or a shareholder of that company. C.H. No. 66738 C 0 U R T COMPANY LIMITED PLAINTIFF THOMAS NEWELL DEFENDANTS Bateman, J.C.C.: This is Lien Act, R.S.N.S. 1967, W. Bird & and Company together with interest, supplied in relation of the Defendant, Cynthia located at 22 Lawlor Slade and Thomas Newell, Limited. Cynthia Slade

- 2 In February, 1989, lot located at 22 Lawlor Crescent. Ravenwood Developments Limited the lot for approximately One Hundred and Forty-Two Thousand Dollars ($142,000.00). The contract Thomas Newell is the sole Developments Limited. Ravenwood Newell Electric Limited ("Newell") a subcontractor. Newell Electric Limited purchased materials f rom Bird. Bird allege that they were not paid by Newell· for the materials. Newell Electric Limited is now bankrupt. Bird claims reimbursement for Slade or Thomas Newell and, Limited. ANALYSIS Originally included the matter of a personal guarantee to Bird, signed by Thomas Newell, on behalf of Newell Electric, before Newell Electric became a Limited Company. At both counsel agreed that they did not wish me to deal with effect of the guarantee. In resolving the primary liability of Cynthia Slade, the claim by Bird, a number considered. Firstly, to whom did it advanced the materials? Thomas Newell gave he commenced operating Newell ­ Cynthia Slade purchased a She subsequently hired to construct a house on was not in writing. shareholder of Ravenwood Developments Limited hired to perform work as the materials from Cynthia nominally, Newell Electric in the issues before me was the outset of the hearing issue, which is the or Tom Newell, or both, to of included issues must be Bird extend credit when uncontradicted evidence that Electric as a sole

- 3 proprietorship around November arranged credit from a number of suppliers, including Bird. At the time of making arrangement~ for the credit he filled out a credit application form with Bird and signed a personal guarantee. In March of 1988, and Mr. Newell so advised all of his suppliers by letters, which he delivered in person. delivered the letter to Keith in charge of his account. Mr. Newell tendered two other suppliers confirming that his status was f rom a sole proprietorship to for billing purposes, as was "Limi ted" to the business name two suppliers. Bird did not Electric on their invoices and matter with Keith Butte. Keith it was not a problem of any paid no more attention to it. that none of his other suppliers out additional credit application forms once he incorporated. He assumed, having had six with Bird prior to incorporating, extend credi t on his record credit application form would be necessary. There being no evidence that of Mr. Newell as to notice Newell's evidence that he made reasonable efforts to notify Bird as to the change of status of the business. his evidence on this matter and it was supported by incorporation to other suppliers. ­ of 1987, at which time he "Newell" was incorporated In the case of Bird he Butte who was the salesman into evidence documents from changed a limited company, at least indicted by the addition of on the invoices f rom the change the name of Newell Mr. Newell discussed the Butte assured him that significance and Mr. Newell Mr. Newell gave evidence had asked him to fill months trouble free operation Bird was prepared to and he did not think a new called to contradict to Bird, I accept Mr. He gave in a straightforward manner the evidence of notice of

- 4 ­ The fact that Bird incorporation, if that is indeed the case, is attributable to problems with Bird's internal not related to any lack of reasonable efforts on Mr. Newell's part to advise Bird. There was on behalf of Bird as to their lack of knowledge of Electric's incorporation. Both Pope gave evidence on behalf of Bird but neither had dealings directly with Mr. Newell on the issue of the incorporation. Keith Butte was not called. I am satisfied, therefore, members of the Bird operation impression that they continued to deal with Newell Electric, sole proprietorship, their understanding was not rationally based, as Mr. Newell had given appropriate notice. In particular, I find materials to Newell Electric Limited. The next matter for the lien was filed in time. gave uncontradicted evidence April 21st, 1989 and, indeed, date. In support of that contention they provided an invoice from a moving company confirming of some household goods from their prior residence to the new residence on that date. of itself, absolute confirmation that all of the household effects were moved on that date, contradict theirs' as to the date of completion and I accept it to be April 21st, 1989. ------- -_.- --_._--------------------------_._-----_. was unaware of the business practices and no direct evidence called Newell Mark McGrath and Sandra that while certain may have been under the in that regard that Bird supplied the consideration is whether Cynthia Slade and Tom Newell that the house was complete that they moved in on that that there was a move While that evidence is not there is no evidence to

- Bird asserts in its Statement last materials were supplied The lien was filed on the 7th day of June, 1989. In support of its invoices, one dated April 28th, 1989 (the "later invoices") allegedly for materials supplied for the subject property, or for materials which Bird thought were to be applied to the subject property. Section 24(2) of the Mechanics' Lien Act, 1990, c. 277 provides that a registered within forty-five material was furnished or placed. There is no evidence date of completion being April which might be drawn from the two above invoices. Mr. Newell gave none of the materials in the in the house. Indeed, a number a kind used in new construction, be used in renovation of existing structures. certain of the i terns on the in the inventory of Newell the inventory filed for purposes of bankruptcy. I accept the evidence of Cynthia Slade and Newell as to the date of completion, that none of the materials were used, nor intended by "Newell" to be used in the house. 5 ­ of Claim that the on the 30th of April, 1989. contention Bird tendered two 1989 and another May 5th, R.S.N.S. claim for materials must be (45) days after the last offered to contradict the 21st, save any inference uncontradicted evidence that "later invoices" were used of the items are not of but rather the type to Additionally, two "later invoices" remained Electric Limited and show on Thomas and as to the fact in the two "later invoices"

- 6 ­ The relevance of intention is dealt with by Macklem and Bristow - ·Construction in Canada·, (6th Ed.) at page 3-29: "The intention and the expectation the purpose for which the materials were delivered is the test applied by the courts ••• ". expectation of the supplier At page 3-35 of Macklem and Bristow, supra: "In order for have a claim for been intended by the parties that material sold was to be used for purposes set out in the Acts, to be used on some known to the lien it is not necessary the immediate intention lien when he sells the contractor, the a contract more specific than the mere sale of materials in the ordinary course of business. If the materialman sells his materials without the purpose for which to be used, or the are going to be used, be selling on the alone and without regard to any security that he might have Two questions are then involved, this material for the specific at least, with a reasonably based belief that the material was intended for that property supply the materials on a contract more specific than simply the supply of materials on credit? To substantiate the were supplied for a specific Builders and Mechanics' Liens of the supplier as to Clearly, however, the must be reasonably based. the materialman to lien, it must have the and that it was particular lands claimant. While for him to have of filing a the materials to Acts contemplate any regard for they are going land on which they then he will credit of the buyer under the Acts." did Bird supply property in question or, and, secondly, did Bird claim, that the materials purpose, Bird relied upon

- the invoices relating to the materials. were tendered. One set totalling Four Thousand Nine Hundred and Twelve Dollars and Twelve dispute as referable to the invoices totalling Five Thousand Four Dollars and Ninety Centre Specifically, Newell and Slade were not intended for, nor used in, the property. In relation to the disputed invoices the material was, in every case, picked by employees of Newell Electric Limited or Newell At the time the goods are ordered completed by Bird and the receipt by the signature of the person collecting the actual invoice for the material of the goods. The sales order form business address of the purchaser designated "shipped to", presumably the destination of the goods. Mark McGrath, Division gave evidence that the "shipped materials picked up, would be filled in by Bird in accordance with what the told them was the destination. The office of Newell Electric Limited located at the home of Thomas to Lawlor Crescent the address was On all of the invoices the business address is recited the "shipped to" designation save on one invoice which is On the l.nV01Ces ln dispute 7 ­ Two sets of invoices Cents ($4,912.12)is not in property. The second set of Four Hundred and Fifty ($5,454.90) are in dispute. say that those materials up at the Bird establishment himself. a sales order form is of goods acknowledged goods. The is mailed after receipt contains the name and and a further space intended to represent Manager of J. W. Bird, to" box, in the case of employees person picking up the goods was always Newell. Prior to" the move 99 Appian Way, Dartmouth. which are not in dispute as "99 Appian Way" and is typed in as "own house" , typed in "99 Appian Way" . the "shipped to" designation

- is left blank on all but one invoice where the word appears. Presumably, the designation to represent that the destination address is the the address of the purchaser, Way. On each of the forms where the "shipped to" designation is blank, there is written, in pen, the words "own house". Mr. McGrath gave evidence designation "own house" indicated material for the specific purpose of building Tom personal residence. He was uncertain as to who the writing on the forms and when the writing had occurred. He concluded, however, from the pricing and, in particular, the discount extended on the items included in those invoices that, as is the custom, Newell the price, as a courtesy, because premi ses. Mr. McGrath had no direct discount arrangements but drew pricing. Thomas Newell testified any special discount being extended. that if he had been aware of a special discount on materials for his house he would have purchased all of his materials through Bird rather than from uncontradicted evidence that he made no special arrangements with the Bird salesman, Keith materials for his own home. that Butte was probably aware, conversation, that he was building a I am not satisfied that it has that the designation "shipped to" provides any confirmation of the understanding of Bird 8 ­ "same" "same" is intended same as in other words, 99 Appian that the handwriting that Bird supplied the Newell's had placed had been given a break on he was building his own knowledge as to any his conclusions from the that he was unaware of He went on to indicate other suppliers. He gave Butte, for a discount on Thomas Newell does acknowledge throtigh their general home. been establi shed as to the intended use of

- 9 ­ the disputed materials. I conclude , under "shipped to" was, because the materials up by Newell Electric Limited employees, and that it why it was left blank in most instances. the Newell Electric Limited Newell's personal r~sidence, "own house" could equally mean the material was inventory with Newell Electric a project or purpose not specif ically do not find the "shipped conclusive evidence of Bird's understanding that the material was to be used in Newell's of the order forms contains thermostats. It would hardly be Bird was under any assumption thermostats were for a private gave evidence that the destination "shipped to" was intended to purposes, I am not persuaded that that was the case. Newell gave evidence that he was on the form for the convenience It is probable that the "shipped to" designation was simply intended to delineate the delivery destination but irrelevant where goods are picked up. Thomas Newell gave not arrange any special line of creditor account for the purposes of building his home. account which was already in place. Both Newell Electric Developments were companies for some time and performed contacting and electrical work that the designation were pi eked somewhat irrelevant Because office was located in Mr. the designation "same" or going into Limited or being used for known to Bird. I to" designation "own house" own residence. Indeed, one a shipment of fifty ( 50) logical to conclude that that these fifty ( 50) home. While Mr. McGrath to be filled in under be used by Bird for lien Thomas understood the destination of the purchaser. further evidence that he did He simply used the "Newell" Limited and Ravenwood which had been in operation

- 10 ­ for other consumers. There companies were set up simply Newell's personal residence. purchasing materials from Bird including but not limited to residence. Accordingly, and terms that the arrangements between Bird and Newell Electric Limi ted do not support the registration of it was not intended by the parties that the material was to be used f or a specific project known to Bird. I find, as well, that between Bird and Newell been the appropriate subject matter of a lien, the lien was clearly filed out of two later invoices did not for the purpose of the construction I do not accept that Bird was the materials were supplied for the purposes of the subject property, nor is there any direct evidence to that effect. The plaintiff requests, a personal judgment be entered against the Defendants should a valid lien not be established. a personal judgment is contained Mechanics' Lien Act, R.S.N.S. as follows: "Personal judgment established 46. When, in under this Act, any for any reason to lien, he may nevertheless recover therein a personal judgment or parties to the action or sums of money as him from such party which he might recover is no suggestion that these for the purpose of building Newell Electric Limited was for a variety of purposes the building of the Slade for clarity, I find that the a lien in that sold on particular lands even had the arrangements time as the relate to materials supplied of this property. of the genuine belief that in the al ternative, that The authority to grant in Section 46 of the 1989, c. 277 which reads if lien not any action brought claimant fails establish a valid against the party for such sum appear to be due or parties, and in an action

- 11 ­ on the contract against or parties." The interpretation " •.• fails for any reason to have received some judicial the claimant to have the benef it of is it necessary that he demonstrate have been valid but for some purely technical or procedural deficiency or, on the other hand, is the claimant entitled to a personal judgment notwithstanding that the not, for example, the proper subject matter of a lien claim? In Halliday Craftsmen, Division of Sumner Holdings Limited v. Dewar and Dewar McLellan, C.C.J., held that constitute a valid lienable personal judgment under the Act. the Learned County Court Judge restrictive view to the effect related to a subject matter for have been granted. In ThomEson and Purcell Surveying Limited v. Burke, (1977), 39 N.S.R. held that notwithstanding the surveyor was not properly the a judgment would enter, "because al though there never any lien the monetary claim of this court, and it would be quite contrary to the spirit of the Civil Procedure Rules, 2.02, 9.01 and 37.10 to dismiss it." judgment against the Defendant In Lee v. Hill and Hill [197816 Walker D.C.J. considered, jurisdiction to enter personal that the claim was not properly lien. Generally, he found that such party of the words of the section establish a valid lien .•• " consideration. In order for a personal judgment, that his lien would claim was (1977), 34 N.S.R. (2d) 94, a claim for costs did not claim upon which to grant a At page 99 of that decision appeared to adopt the that the claim must have which a valid lien could (2d) 181, 0 Hearn, J.C.C. fact that the claim of the subject matter of a lien, was is within the jurisdiction especially Rules 1.02, 2.01, He awarded personal who had hired the surveyor. W.W.R. 522 (Sask. D.C.), at length, the court's judgment where it was found the subject matter of a a personal judgment could