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Manseau & Perron Inc v ThyssenKrupp Industrial Solutions (Canada) Inc, 2018 ABQB 949

Does a subcontractor have any recourse if it fails to perfect a lien in accordance with a court order?

Appellant: Manseau & Perron Inc. 
Respondent: ThyssenKrupp Industrial Solutions (Canada) Inc.

Pacer Promec Energy Corporation (“PPEC“) was a construction company that engaged in two oil sands projects: one for Canadian Natural Resources (the “C Project”), and the other for Imperial Oil (the “K Project”). The Respondent was the general contractor for both projects. The Appellant was a subcontractor to PPEC with respect to both projects. RNS Scaffolding Inc. (“RNS“) was a subcontractor of PPEC only with respect to the K Project. The Appellant, RNS and PPEC all registered liens with respect to the K Project.

PPEC was placed into receivership pursuant to an order made on March 10, 2015 (the “Receivership Order”). RNS, the Appellant and the Respondent all received notice of the receivership. Following the Respondent’s application for an order under s. 48 of the Builders’ Lien Act (“BLA”) to permit it to pay monies in court in order to discharge the liens of RNS, the Appellant and PPEC, the court granted that the liens of RNS and the Appellant would be discharged upon payment by the Respondent of $43,584,848.12 (the “Hanebury Order”). The Hanebury Order required lien claimants to file statements of claim within 180 days of their lien’s registration. The Appellant did not file a statement of claim with respect to its K Project lien but did file a statement of claim to perfect its C Project lien.

On May 7, 2015, Nixon J. issued an order in the PPEC receivership that provided a procedure for lien management (the “Nixon Order”). The Respondent sought a declaration that the Appellant’s K Project lien had ceased to exist and that the Respondent be permitted to reduce the amount of its lien bond by the face amount of the Appellant’s K Project lien. The court granted the Respondent’s application in respect of the declaration, and the Appellant now appeals from that decision.

The Appellant argued that the requirement for it to file a statement of claim within 180 days was vitiated by the claims procedure established by the Nixon Order, which specifically stayed all requirements for lienholders to file statements of claim. Requiring the Appellant or RNS to file statements of claim in respect of their liens would create a sub-class of creditors who would have to engage in duplicative proceedings. In the alternative, if the Court found that the Appellant was required to file its statement of claim in respect of its lien, the Appellant should be permitted to file and re-instate its lien because no party has suffered any prejudice as a consequence of the Appellant not having done so.

The Respondent argued that the Nixon Order did not apply in this case because the Appellant’s lien did not come within the definitions of liens as set out in that order. The Appellant’s lien had already been discharged by the Hanebury Order by the time the Nixon Order was made. The Respondent also argued that it would suffer prejudice if the Appellant were permitted to file its statement of claim now.

The Court confirmed that the correct approach for interpreting the provisions of a court order involves examining the pleadings of the action in which it is made, the language of the order itself, and the circumstances in which the order was granted. However, this was not a case where a phrase or word in an order required interpretation, as the Appellant, in an attempt to justify its failure to file a statement of claim, was actually arguing that the Hanebury Order should not have been made.

The Court rejected the Appellant’s argument that the Receivership Order prevented it from complying with the requirement to file a statement of claim in the Hanebury Order. The language of the Receivership Order was broad enough to permit the Appellant to file a statement of claim to protect its K Project lien, which would otherwise become barred by the Hanebury Order. The Appellant could have either sought leave of the court to file its statement of claim or it could have sought the Receiver’s consent to do so. It did neither. More importantly, the Appellant’s own actions contradicted its position because the Appellant did file a statement of claim against PPEC in relation to its lien in the C Project. That claim was filed in the face of the provision of the Receivership Order that the Appellant was now attempting to rely on.

Further, the Appellant’s lien fell outside the provisions of the Nixon Order and was not discharged pursuant to it. The provisions in the Nixon Order that dispensed with the requirement of filing a statement of claim to secure a lien only applied to liens that had been discharged by “operation of [that] Order”. The liens that came under the provisions of the Nixon Order (which was made in the insolvency proceedings of PPEC) were separate and distinct from the liens dealt with and discharged by the Hanebury Order (which was made pursuant to the BLA). The Court therefore rejected the Appellant’s argument that these processes would be duplicative and prejudicial.

Finally, the Court found that there would be prejudice if it permitted the Appellant to file its statement of claim now. When the Respondent’s application for a declaration that the Appellant’s K Project lien had ceased to exist was granted, the Respondent was allowed to reduce the amount of the premium that the Respondent was obliged to pay into court. To re-instate the Appellant’s lien now would subject the Respondent to increased premium costs and additional litigation costs with respect to the Appellant’s new statement of claim.
 
The Court dismissed the appeal with costs. 

CounselScott Chimuk of Burstall LLP for the Appellant, Shaun Hohman of Rose LLP for the Respondent and David LeGeyt of Burnet, Duckworth & Palmer LLP and John Regush of Dentons  for the Third Party.