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LIENS - Owner - Requirement of privity and consent

Tuesday, January 22, 2019 @ 8:31 AM  

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Appeal by the plaintiff from the dismissal of its claim for breach of trust against the directors of Prairie Green. The plaintiff’s claim sought to engage the directors’ personal liability under s. 16 of The Builders’ Lien Act for breach of the owner’s trust established under s. 6 of the Act. The plaintiff had been subcontracted by Abacus Design, who itself had a contract with Prairie Green. The chambers judge found there was no privity of contract between the plaintiff and Prairie Green and that the plaintiff had failed to put forward evidence that the directors committed a breach of trust.

HELD: Appeal dismissed. The chambers judge did not err in her interpretation of The Builders’ Lien Act. Based on the provisions themselves and the statutory definitions, sections 6, 7 and 8 of the Act were drafted in unambiguous language that indicated an intention to create three distinct and separate trusts, which adopted the principles of privity of contract and privity of trust. Privity of contract fit within the scheme of The Builders’ Lien Act because it promoted the flow of trust funds down the construction pyramid.

Prestige Commercial Interiors (1992) Ltd. v. Suderman, [2018] S.J. No. 466, Saskatchewan Court of Appeal, R.K. Ottenbreit, N.W. Caldwell and P.A. Whitmore JJ.A., December 6, 2018. Digest No. TLD-January212019004