SUPREME COURT OF NOVA SCOTIA
Citation: APM Construction Services Inc. v. Caribou Island Electric Ltd.,
2012 NSSC 277
Date: 20120719
Docket: Hfx. No. 389863
Registry: Halifax
Between:
APM Construction Services Inc., Travelers Guarantee Company of Canada
Applicants
v.
Caribou Island Electric Limited, 3104607 Nova Scotia Limited c.o.b. Advanced Cabling Systems, Canada Revenue Agency, Her Majesty The Queen in Right of The Province of Nova Scotia as represented by the Minister of Transportation and Infrastructure Renewal
Respondents
LIBRARY HEADING
Judge: The Honourable Justice Peter P. Rosinski
Heard: July 3, 2012 in Halifax, Nova Scotia
Subject: Builders’ Lien Act and Federal Income Tax Act - conflicting claims to money owed - Civil Procedure Rule 76 - interpleader.
Summary: General contractor APM entered into a bond with the Provincial government and Travelers Guarantee as surety. APM contracted Caribou, which subcontracted to ACS. APM was served by the Canada Revenue Agency with a enhanced requirement to pay pursuant to s. 224(1.2) of the Federal Income Tax Act regarding taxes owing by Caribou. APM Had not paid Caribou for work done on the project. Caribou had not paid ACS for work done on the project. APM made application to the Court for interpleader regarding the conflicting claims of ACS and CRA to the monies in APM’s possession. APM also requested that the Court determine the issue of whether ACS could claim under the bond for the monies unpaid by Caribou.
Issue: Should the Court grant an interpleader order? If so, should the Court adjourn the determination of resolving the conflicting claims to the monies in APM’s possession? Should the Court make a declaration respecting the liability of the surety under the bond to ACS?
Result: Motion denied in part; the Court found that CRA had super priority to the monies APM owed to Caribou, to the extent that they were no greater than the tax liability of Caribou to CRA. There was no need for an interpleader order as the monies in possession of APM were payable to CRA by operation of law. ACS was a proper “claimant” under the bond and should be paid by the surety those amounts it was owed by Caribou.
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