IN THE SUPREME COURT OF NOVA SCOTIA
Citation: Trax v. United Gulf Developments Ltd., 2003 NSSC 178
Date: 20030822
Docket: SH 196606
Registry: Halifax
IN THE MATTER OF The Mechanics’ Lien Act, R.S.N.S., 1989, c. 277
Between:
Trax Construction Ltd., a body corporate
Plaintiff
and
United Gulf Developments Ltd., a body corporate and Navid Saberi
Defendants
and
SH 200020
IN THE SUPREME COURT OF NOVA SCOTIA
Between:
Strescon Limited
Plaintiff
and
Trax Construction Limited, United Gulf Developments Limited and Navid Saberi
Defendants
and
SH 200045
IN THE SUPREME COURT OF NOVA SCOTIA
Between:
Gallant Aggregates Limited, a body corporate
Plaintiff
and
United Gulf Developments Limited, a body corporate and Trax Construction Limited, a body corporate
Defendants
and
SH 200687
IN THE SUPREME COURT OF NOVA SCOTIA
IN THE MATTER OF The Mechanics’ Lien Act, R.S.N.S., 1989, c. 277, as amended
and
IN THE MATTER OF the Claim of Lien of ATLANTIC TRACTORS & EQUIPMENT LIMITED, a body corporate, against lands know as Stoneridge on the Park, Phase 2, Halifax, Nova Scotia as described in Schedule “A” attached hereto and owned by UNITED Gulf DEVELOPMENTS LIMITED, a body corporate
and
SH 201301
IN THE SUPREME COURT OF NOVA SCOTIA
IN THE MATTER OF The Mechanics’ Lien Act, R.S.N.S., 1989, c. 277
Between:
Trax Construction Ltd., a body corporate
Plaintiff
and
United Gulf Developments Ltd., a body corporate and Greater Homes Limited, a body corporate
Defendants
and
SH 201375
IN THE SUPREME COURT OF NOVA SCOTIA
IN THE MATTER OF The Mechanics’ Lien Act, R.S.N.S., 1989, c. 277, as amended
and
IN THE MATTER OF the Claim of Lien of ROCKWORK CONSTRUCTION LIMITED, a body corporate, against lands known as Parcel PSC-18, Lands of Northwest Arm Drive, Halifax, Nova Scotia as described in Schedule “A” attached hereto and owned by UNITED GULF DEVELOPMENTS LIMITED, a body corporate
and
SH 201506
IN THE SUPREME COURT OF NOVA SCOTIA
IN THE MATTER OF The Mechanics’ Lien Act, R.S.N.S., 1989, c. 277, as amended
and
IN THE MATTER OF the Claim of Lien of GATEWAY MATERIALS LIMITED, a body corporate, against lands known as Parcel PSC-18, Lands of Northwest Arm Drive, Halifax, Nova Scotia as described in Schedule “A” attached hereto and owned by UNITED GULF DEVELOPMENTS LIMITED, a body corporate
and
SH 202411
IN THE SUPREME COURT OF NOVA SCOTIA
IN THE MATTER OF: The Mechanics Lien Act, being Chapter 277 of the Revised Statutes of Nova Scotia, 1989, and amendments thereto
Between:
Irving Oil Limited
Plaintiff
and
Trax Construction Limited and United Gulf Developments Limited
Defendants
Before: The Honourable Justice Glen G. McDougall
Heard: July 29, 2003
Counsel: Blair H. Mitchell, on behalf of Trax Construction
A. William Moreira, Q.C., on behalf of United Gulf Developments Ltd.
Alan G. Hayman, Q.C., and Cory Withrow (articled clerk) on behalf of Gallant Aggregates Limited
Douglas B. Skinner, on behalf of Irving Oil Limited
McDougall, J.:
[1] This matter came before me in Chambers on Tuesday, July 29, 2003. It involves two applications: the first made by United Gulf Developments Limited (“United Gulf”) on July 18, 2003 for:
(a) An order pursuant to s. 37 of the Mechanics’ Lien Act and Civil Procedure Rule 39.02(c), consolidating all of the above entitled actions into one action, and giving conduct of that action to such one of the plaintiffs as shall seem appropriate to the Court on the hearing of the Application; and
(b) An Order, to be granted in the consolidated action, pursuant to s. 29(4) of the Mechanics’ Lien Act, allowing, and fixing the amount of, security to be provided for the amount of the claims represented by the liens which have been filed against the lands of United Gulf Development Limited, and providing that upon provision of such security by United Gulf Developments Limited the registration of all such liens shall be vacated.
the second, made by Trax Construction Limited (“TRAX”), on July 21, 2003:
1. for an order pursuant to Rule 3.03 for an order abridging time within which to bring the within application; and, if granted
2. for an order pursuant to Rule 37.10(c) adjourning an application Defendant United Gulf Developments Limited filed July 18 for hearing on July 29, 2003;
3. for an order pursuant to Rule 15.02(1) amending the Plaintiff’s statement of claim herein.
[2] The second application initially came before the Honourable Justice Arthur D. Pickup on July 22, 2003. Justice Pickup denied the request for the adjournment of “United Gulf’s” application and ordered that the application for amendment of “TRAX’s” statement of claim be decided at the same time as “United Gulf’s” application.
[3] Obviously the issue of whether or not “TRAX” has the right to amend its statement of claim must be decided prior to fixing the amount of security to be paid by “United Gulf” to have the liens vacated.
[4] The sequence of issues then that must be decided are:
(1) Should “TRAX” be granted leave to amend either its claim of lien dated March 18, 2003 or its statement of claim in S.H. No. 196606 filed April 1, 2003?
(2) Should all eight actions for mechanics’ liens be consolidated into one action pursuant to s. 37 of the Mechanics’ Lien Act and Civil Procedure Rule 39.02(c) and one plaintiff given conduct of the consolidated action?
(3) What amount of security should “United Gulf” be ordered to pay as security for all the liens claimed by the various lien claimants in order to have the liens vacated?
FACTS
[5] “United Gulf” (owner) entered into a contract with “TRAX” (prime contractor) for the performance of work in Phase 2 of Stoneridge on the Park. The contract was for $1,000,000. Approved extras amounted to $148,347. “TRAX” claims payment for other additional work which “United Gulf” disputes. Five instalment payments were made by “United Gulf” to “TRAX” totalling $325,000 prior to the termination of the contract on or about March 17, 2003.
[6] Mechanics liens totalling $1,236,551.74 were filed against the property as follows: TRAX - $697,535; Subcontractors - $539,016.74.
[7] There would appear to be an overlap of claims. At the hearing of the application “TRAX” claimed an amount of $1,366,000 as the total amount owed to cover its claims and those of the subcontractors. “United Gulf” argued that one of two lesser amounts was appropriate: (1) $697,535 (the amount of “TRAX’s original claim of lien); or (2) $823,347 (i.e. the original contract amount of $1,000,000 plus approved extras of $148,347 less instalment payments of $325,000).
[8] At the same time that these issues were being argued in front of me, the parties were also making final submissions before an arbitrator. Subsequent to the hearing of the application, supplementary written submissions were received confirming that “TRAX” had claimed an amount of $974,636 at arbitration instead of the $1,366,438 advanced before me. The decision of the arbitrator is not expected until near the end of August, 2003. “United Gulf” is anxious to have the liens vacated to enable it to carry on the business of property development and so seeks a decision from this court to have the liens vacated prior to the arbitrator’s decision.
ISSUE #1
[9] Should “TRAX” be granted leave to amend either its claim of lien dated March 18, 2003 or its statement of claim in S.H. No. 196606 filed April 1, 2003?
[10] Counsel for “TRAX” argued that s. 21(1) of the Mechanics’ Lien Act (the “Act”), known as the curative section, (see MacKlem and Bristour, Construction Builders’ and Mechanics’ Liens in Canada, Sixth Edition, s. 6-18 to 6-21) provides that a lien should not be invalidated if there has been substantial compliance with sections 19 and 20 of the “Act” unless, in the opinion of the court or judge, there is prejudice to the owner, contractor, subcontractor, mortgagee or other person, and then only to the extent to which he is thereby prejudiced. Sections 19(1) and 21(1) of the “Act” are reproduced as follows:
Contents of claim
19 (1) A claim for lien shall state
(a) the name and residence of the person claiming the lien, and of the owner of the property to be charged, or of the person whom the person claiming the lien, or his agent, believes to be the owner of the property proposed to be charged, and of the person for whom and on whose credit the work or service was, or is to be, done, or materials furnished or placed, and the time within which the same was, or is to be done, or furnished or placed;
(b) a short description of the work or service done, or to be done, or materials furnished or placed, or to be furnished or placed;
(c) the sum claimed as due or to become due;
(d) a description of the land or property to be charged; and
(e) the date of expiry of the period of credit, if any, agreed upon by the lien holder for payment for his work or service or materials, where credit has been given.
Substantial compliance with Sections 19 and 20
21 (1) Substantial compliance only with Sections 19 and 20 shall be required, and no lien shall be invalidated by reason of the failure to comply with any of the requisites of such Sections, unless, in the opinion of the court or judge who has the power to try the action under this Act, the owner, contractor, subcontractor, mortgagee or other person, as the case may be, is prejudiced thereby, and then only to the extent to which he is thereby prejudiced.
[11] As support for its position that the claim of lien may be amended, counsel for “TRAX” cited the decision of W. Eric Whebby Ltd. v. Garden Crest Developments Ltd., [2003] N.S.J. No. 182, 2003 N.S.C.A. 59, Docket C.A. 190601. In dismissing the appeal and upholding the decision of the chambers judge allowing the amendment, Roscoe, J.A., speaking for the panel comprised of herself, Glube, C.J.N.S. and Saunders, J.A., said at paragraph 6:
6 The effect of these sections is that in order to be valid, a lien must be registered within 45 days of the last work, the claim for lien should state, among other things, the date of the last work, and the action should be commenced and the certificate registered within 90 days of the last work. Section 21, known as the curative section, (see Macklem and Bristow, Construction Builders and Mechanics' Liens in Canada (6th), (looseleaf edition updated to April 2003) s. 67-s. 68) allows a lien claimant to be relieved of irregularities in the claim for lien if a judge finds that there has been no prejudice to the owner.
[12] I am satisfied despite conflicting decisions mentioned by “United Gulf’s” counsel taken from other jurisdictions that the amendment to the claim of lien is permitted under the “Act” provided there is no prejudice to the owner (amongst others). I am satisfied that there has been substantial compliance with section 19 of the “Act” and there is no prejudice to “...the owner, contractor, subcontractor, mortgagee or other person, ...” as stated in s. 21(1) thereof. Indeed, should the amendment not be allowed, there could possibly be prejudice to the prime contractor and the sub-contractors.
[13] Counsel for “TRAX” further relies on section 34 of the “Act” and Civil Procedure Rule 15.02 as authority to apply for permission to amend the statement of claim. Counsel for “United Gulf” did not argue against “TRAX’s” right to amend the statement of claim but he did suggest that any additional amount allowed in the claim over and above the amount originally set out therein be treated not in rem but rather only in personam. I do not agree with this suggestion and order that the amount claimed by the lien claimant be amended both in the claim of lien and the statement of claim and proceed as an in rem claim against the defendants.
[14] This will, therefore, affect the amount that I will hereinafter order to be paid into Court to vacate the various liens. The proper amount should be the figure advanced by “TRAX” at arbitration, that being $974,636 plus 10% to cover costs.
[15] If harmonized sales tax is not included in this amount it should be added. This figure is sufficient in my opinion to cover the claims of all lien claimants. The arbitration will no doubt deal with what extras should be allowed and added to the main contract. That is not for me to decide in this application. In setting the claim at this amount I am not making a determination or in any way trying to influence the decision of the arbitrator. I am simply setting it at an amount that provides the lien claimants with security in the highest amount for which the owner might reasonably be liable to its contractor. See HMW Industries Ltd. v. E.E. McCoy Co., [1980] N.S.J. No. 24, S.C.A. 00646 (N.S.C.A.) at paragraph 15.
ISSUE #2
[16] Should all eight actions for mechanics’ liens be consolidated into one action pursuant to s. 37 of the Mechanics’ Lien Act and Civil Procedure Rule 39.02(c) and one plaintiff given conduct of the consolidated action?
[17] I believe that this is an appropriate case in which to order a consolidation of the eight separate actions into one.
[18] I further order that “TRAX” shall be responsible for the conduct of the action on behalf of itself and all the other lien claimants.
[19] I have, in the course of deciding the first issue, also decided the appropriate amount of security and costs to be paid into court in order to have all the liens vacated. This does not include the claim of lien filed by “TRAX” against “United Gulf” and Greater Homes Inc. on April 3, 2003 in the amount of $24,500 plus interest plus harmonized sales tax. This is a separate claim for work performed by “TRAX” in an area identified by Mr. Kevin Riles, Vice-President of “United Gulf” as part of another phase of the development. If “United Gulf” and Greater Homes Inc. wish to have that lien vacated they will have to apply to do so separately.
[20] The arbitrator’s decision should dispose of the matter, however, if the parties cannot agree on costs of this application, I will hear from them on this issue. I would ask counsel to prepare the order reflecting this decision.
J.