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LIENS - Lienable interests - Roads, highways, streets

Wednesday, March 25, 2020 @ 9:17 AM  

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Appeal by PLC Construction from a decision finding that the Builders’ Lien Act applied to the contract between PCL and the respondent City and to any sub-subcontracts flowing from it. PLC was the general contractor in connection with the design and construction of two roadway and overpass projects located in the City. One interchange was on land that was either owned or controlled by the City or Saskatchewan. The other interchange land was also owned or controlled by the City. PCL entered into a subcontract with PSI which in turn entered into a series of subcontracts. PCL became dissatisfied with the work being performed by PSI and eventually withheld payment. PSI served PCL with a claim of lien. In addition to the PSI lien, PCL began to receive notices from the various sub-subcontractors of PSI for unpaid work on the Interchange Project. PCL argued the project was exempt from the operation of the Act by virtue of the bridge exemption in s. 5(3) and, even if the Crown was bound by the Act, a lien claimant was only entitled to the rights and remedies under the Act in relation to services or materials provided for the bridge or overpass components of the project. The chambers judge found that although the project was exempt from the Act under s. 5(2) because the primary contract was for the improvement of a street or highway owned by the Crown, the project was brought back into the regime under the Act pursuant to s. 5(3) because both interchanges incorporated bridges that belonged to the City qua Crown and that were not constructed or improved under or pursuant to the Highways and Transportation Act

HELD: Appeal dismissed. A plain reading of s. 5(3) made it clear that any Crown exemption to the Act arising from s. 5(2) only applied where the services or materials were provided in connection with the construction or improvement of a bridge owned by the Crown. The exception to the bridge exception envisioned by s. 5(3) would seem to arise only where the provincial Crown constructed or improved a bridge under the authority of the Highways and Transportation Act. The exception to the bridge exception in the latter part of s. 5(3) did no more than express a limited situation where services or materials were provided in connection with the construction or improvement of a Crown-owned bridge. The mere fact of a funding contribution from the provincial government to the City for a City project did not satisfy the exception to the bridge exception envisioned by s. 5(3). The chambers judge did not err in concluding that the Interchange Project was conceived, constructed and carried out by the City, and that it was the City that was administering and controlling this project. This conclusion was supported by the evidence that was before him. The terms of the prime contract made it clear that the City assumed full responsibility for carrying out the Interchange Project. The broad and generous interpretation given to s. 5(3) by the chambers judge was consistent with the legislative intent expressed at the time the amendment was introduced, which was to expand the protection provided to subcontractors, material men and labourers involved in public works projects and, at the same time, provide some measure of security and predictability for owners. The restrictive approach advocated by PCL was overly technical in nature and ignored the long-standing, recognized intent and purpose of the Act.

PCL Construction Management Inc. v. Saskatoon, [2020] S.J. No. 37, Saskatchewan Court of Appeal, P.A. Whitmore, J.A. Ryan-Froslie and L.M. Schwann JJ.A., February 6, 2020. Digest No. TLD-March232020005