Supreme Court of Canada Clarifies Builders’ Lien Legislation

A third option exists By Kirk A. Vilks, Fillmore Riley In the Q3 2014 edition of Piling Canada, Sven Hombach wrote an article titled, “Paying Once, Paying Twice.” The article discussed a decision by the Manitoba Court of Appeal in Olson (Stuart) Dominion Construction Ltd. v. Structal Heavy Steel. That decision has now been reviewed and upheld by the Supreme Court of Canada in Stuart Olson Dominion Construction Ltd. v. Structal Heavy Steel. While the Supreme Court upheld the Manitoba Court of Appeal's decision, they also provided some additional comments that will help guide contractors who wish to avoid providing double security for a subcontractor's lien. The decision deals with the remedies in builders' lien legislation. Each province has their own such legislation, but the effect of the various statutes is similar. Builders' lien legislation provides two remedies to trades to ensure they are paid for their services: statutory liens and statutory trusts. A lien creates an encumbrance on the land. To remove the lien, money can be paid or security can be provided by the owner or general contractor. The security provided is usually in the form of a lien bond. The payment or security stands in place of the land, so that the land itself is no longer encumbered while the merits of the lien claim are decided. Under either scenario, the purpose is to ensure the subcontractor gets paid, either from the value in the land or from the value of the security posted to discharge the lien. In addition to the lien remedy, builders' lien legislation provides for a statutory trust. The legislation provides that subcontractors, workers employed by the contractor, and other beneficiaries are to be paid before an owner or general contractor can use trust funds for their own use. All funds received by the general contractor for the general contract are trust funds held for subcontractors, the Workers Compensation Board, employees of the contractor and the owner for any counterclaim related to the performance of the contract. If a general contractor uses funds that are held in trust for a subtrade for his or her own purposes, the result can be stiff fines or jail time for breaching the trust. Olson (Stuart) Dominion Construction Ltd. v. Structal Heavy Steel involved a lien claim by a steel subcontractor totalling approximately $15.5 million to construct the roof of Winnipeg's new football stadium. The general contractor deposited a lien bond into court for the full amount of the lien claim to discharge the lien. The subcontractor then demanded payment under the trust provisions of the statute. The contractor sought a declaration from the court that the lien bond satisfied its trust obligations under the builders' lien legislation. Like the Manitoba Court of Appeal, the Supreme Court of Canada made it clear that liens and statutory trusts are separate and distinct remedies. If a contractor files a lien bond to vacate a sub-contractor's lien, that will discharge the lien, but not satisfy the contractor's trust obligations under the legislation. The contractor will still need to hold funds they receive from the owner under the contract in trust for the sub-contractor. The implication here is that the contractor will need to provide double security; both the lien bond and monies received from the owner held in trust. After the Court of Appeal's decision, many were left thinking that the contractor had two options: either provide double security or choose not to vacate the lien. The Supreme Court explained that contractors have another option: if a contractor wants to avoid posting double security but still wants to vacate the lien, he or she can pay money into court to vacate the lien rather than posting a lien bond. 46. There may be circumstances where a contractor will choose to maintain double security where there are lien and trust claims for the same work, services, or materials, by acquiring a lien bond while still holding trust funds. However, a contractor can avoid double security by paying cash into court pursuant to s. 55(2) instead of depositing a lien bond. Money paid into court will remove the lien and still be considered to be held in trust for the subcontractor. Therefore, paying money into court rather than a lien bond satisfies both the lien and trust obligations. Payment of the trust funds into court to vacate a lien, for the amount of the lien claim implicated by the trust claim, does not constitute an appropriation or conversion of the trust funds. The contractor is doing exactly what the Act requires - ensuring the monies are held in trust for the beneficiary. If the contractor pays funds into court and the lien claim later fails, the monies paid into court will be returned to the contractor, but will still be held in trust for the subcontractor. These funds remain impressed with the trust; should the lien claim fail while the trust claim is outstanding, the cash would continue to be trust funds when returned to the owner, contractor, or subcontractor. So long as the trust funds themselves are deposited with the court, the funds are secure and the trust has not been breached. The takeaway for contractors is that there are three options when a subcontractor places a lien on property. First, they could allow the lien to remain on the property, second, remove the lien with a lien bond while simultaneously holding funds paid for the contract in trust, or third, pay money into court to remove the lien. The circumstances will dictate which option the contractor selects, and unfortunately, there may be times when none of the options appear to be a desirable option for the contractor. Subcontractors will know this and use it to leverage a more favourable settlement in litigation with the contractor. Even with the additional option given to contractors by the Supreme Court of Canada, the remedies offered by builders' lien legislation remain powerful tools that, in the hands of savvy subcontractors, can be used to apply tremendous pressure on general contractors.  Kirk A. Vilks is an associate with Fillmore Riley LLP who practises primarily in the area of civil litigation, with a focus on construction and insurance litigation. You may reach him at 204-957-8358 or kvilks@fillmoreriley.com. {fastsocialshare}

Building on a Legacy

ROC Equipment

Ticket to Ride

ADSC, NAIT preparing drill rig operator certification By Heather Hudson Some call it a safety blind spot in the drilling industry. Others accept the status quo. Kevin Sharp is more blunt. “To operate a fork lift, zoom boom or skid steer, you need a safety ticket. But when it comes to using a $2-million drill rig, there's no ticket required. The fact that you don't need a ticket to run a 200-ton piece of equipment doesn't make sense,” he said. The owner of Sharp's Construction and president of the Western Canadian Chapter of the International Associ-ation of Foundation Drilling (ADSC - IAFD) is doing something about it. “There has been significant damage to equipment and people severely hurt in our industry,” said Sharp. “I think with proper education and guidance we can get better operators.”

Dealing with Vibration and Noise from Pile Driving

Addressing and alleviating negative public perceptions of pile driving By W. Allen Marr, P.E., GEOCOMP Corporation Pile driving produces vibrations and noise that may extend thousands of feet away from the driving activity. People have become increasingly intolerant of these effects. They complain to government agencies and oppose developments that use pile elements. Their opposition is beginning to seriously affect the pile driving industry in the developed countries. Governmental agencies and owners are choosing alternatives to pile driving to avoid the vibrations and noise. This is an unfortunate and uninformed reaction for three reasons:

Alberta Makes Peace with Highway Landslides

On Judah Hill Road, tied-back tangent pile walls stabilized the landslide mass and anchored the remaining strata By Tyler Wilbur, Doublestar Drilling, and Craig Berninger, Champion Equipment Sales and Soilmec North America Two-lane Highway 744, known locally as Judah Hill Road, traverses along the southwest face of a hogback ridge separating the Peace River and Heart River valleys. Since it was built in 1984, active landslides have plagued this ill-fated, 2.5-km stretch of highway that rests above the town of Peace River, about 500 km northwest of Edmonton.

UP Express Airport Rail Link Spur Elevated Guideway

Completing Toronto's Union-Pearson Airport rail link in time for the Toronto 2015 Pan Am/Parapan Am Games By Barb Feldman Toronto's $456-million new Union-Pearson (UP) Express rail link is part of the most ambitious transportation strategy in the history of Ontario - a plan to deliver multi-directional high-order transit connectivity to the Greater Toronto and Hamilton Area, a region of more than six million people, and one that is projected to grow to more than 8.6 million by 2031. The UP Express, which connects the two busiest transportation hubs of Canada's biggest city from downtown Union Station to Toronto Pearson Airport, was funded through Infrastructure Ontario, which represents Metrolinx, an agency of the Government of Ontario created to improve the coordination and integration of all modes of transportation in the Greater Toronto and Hamilton Area.

Pile Driving Solutions

Looking for a solution to the stress that vibratory hammers can place on a crane, one company owner discovered the superior benefits of a German-made damper

PCL named one of Canada’s Top 100 Employers

Seventh time in eight years that PCL has made the prestigious list

Liebherr piling rig in major infrastructure project in Denmark

A Liebherr piling rig was recently used for foundation works for the construction of future apartment buildings in the Danish capital of Copenhagen.

One in 13 Canadian workers make their living in construction

The construction industry is recognizing the contributions of 1.3 million Canadians who build, repair and maintain a whopping $2.1 trillion worth of infrastructure each year. “We're very proud of our one million strong construction workforce,” said Rosemary Sparks, executive director of BuildForce Canada. Canada's construction industry is undergoing the most dramatic demographic shift in its history. Over the next decade, up to 250,000 workers, who make up one-quarter of Canada's construction workforce, are retiring. They're making way for a new wave of younger workers who will fill new positions as baby boomers retire over the next 10 years. “Right now the average age of a construction worker is 41,” said Sparks. “A decade from now, the workforce will look much different, as the industry promotes construction careers in more than 50 trades and occupations to a younger generation.” BuildForce has been reaching out to the next generation of construction workers where they live - online. Using YouTube, Facebook and other social media platforms, BuildForce has reached more than 3 million Canadians aged 15 to 25 who visited its redesigned Careers in Construction website at www.careersinconstruction.ca. BuildForce Canada is a national industry-led organization that represents all sectors of Canada's construction industry. Its mandate is to provide accurate and timely labour market data and analysis, as well as programs and initiatives to help manage workforce requirements and build the capacity and the capability of Canada's construction and maintenance workforce. {fastsocialshare}

Total Package Performance

From below ground to roof cap, Graham is a company that does it all By Kelly Gray Not all construction companies are created equal. In construction and project management, the smart money goes with a firm that can manage and self-perform all challenges from below ground to rooftop. For nearly a century, Calgary-based Graham has been such a player. Indeed, with revenues exceeding $2 billion, Graham has become an industry leader by earning its place at the top as a complete one-stop-shop where clients get the benefit of substantial expertise and experience that extends from commercial projects to industrial sites to massive infrastructure undertakings. It all comes down to a simple equation, says construction manager, Earthworks, Underground & Piling, Andrew Sneddon.

A Passion for Piling

When it comes to complicated projects, Doublestar Drilling rises to the challenge By Judy Penz Sheluk When Ian Hunt, president of Doublestar Drilling, purchased the company eight years ago, he believed there was a solid opportunity to grow the business. His vision was bang on. Since that time, Hunt has tripled revenues, gone from four drill rigs to more than 20 drill rigs, and in October 2014, expanded the Edmonton headquarters to a 16,000-square foot state-of-the-art facility. But the growth doesn't stop there. In 2011, Doublestar Drilling established a location in Regina to cover the Saskatchewan market, in a move Hunt calls, “very successful.” On May 1, 2015, they opened a third location in Calgary, complete with ten acres of property, after “aggressively pursuing the Calgary market.” That sort of growth isn't fostered by being satisfied with the status quo. To Hunt, this translated to significantly adding to the company's scope of services, which now include large diameter bored piles, every type of shoring, secant and tangent piling, in-house engineering, static load testing, segmental casing, mini-piling to get into tight spaces, vibratory hammer work, crane work and CFA drilling. In 2012, Doublestar expended its fleet into micropiling and anchor installation. The company currently has a fleet of nine micro-piling machines and a fleet of 10 mobile grouting operations.

Eliminating the Blind Spots

Operators can now put "eyes" wherever they need them By Barb Feldman In 2012, a potential customer presented Chris Machut's company with a problem: “How can tugs or towboats see what's in front of them if they have a giant barge in front? They're literally piloting that vessel blind,” and radar might not be able to pick up kayakers or small vessels, for example. Netarus met the customer's challenge with the “TugCam,” a portable camera system designed to improve safety, increase situational awareness and eliminate blind spots on towboats and tugboats, even in complete darkness. It was soon recognized that crane operators were having similar problems. “They were relying on someone else's eyes or other operating procedures to perform crane lifts,” said Machut. “They'd move the hook block behind a building and couldn't see what was going on with that load.”

Construction Project Failures Weigh on Industry Despite Advances in Planning and Controls

Over half of construction project owners experienced one or more underperforming projects in the previous year, despite confidence in project planning and controls, according to KPMG International's 2015 Global Construction Project Owner's Survey: Climbing the Curve. Further, project owners said only 31 per cent of their projects came within 10 per cent of budget, and just 25 per cent within 10 per cent of original deadlines in the past three years. “As engineering and construction projects get bigger, the complexity grows exponentially,” said Geno Armstrong, global chair, Engineering & Construction and a principal with KPMG in the U.S. “The improvements by owners in planning and risk management have been significant, yet there is further work to be done to reduce the number of project failures, and bring more projects in on time and on budget.”

Equipment Corporation of America Hires Gordian Ulrich as Engineering Sales Manager

Equipment Corporation of America (ECA) has hired Gordian Ulrich as engineering sales manager. He will be responsible for BAUER technical applications and advancement of its available technology in the Eastern United States and Canada.

Aki Sand Appointed Junttan’s New Manager of Customer Services

Aki Sand, M.Sc., BBA has been appointed Junttan's new manager of customer services. Sand will begin his post April 20, 2015. He previously served as the director of customer service process management at Konecranes Plc. Sand has in-depth and extensive experience regarding the service and spare parts operations of a mechanical engineering company operating in the global market. He takes up his post as Junttan with an open mind and ready for the new challenges of further developing Junttan's customer services.

Hercules Machinery Revolutionizing Worksites Since 1998

Hercules Machinery introduced the first side-grip in the industry 17 years ago and since then has perfected the Movax® Sonic SideGrip®, placing more than 500 units at worksites throughout the U.S. and Canada. An excavator-mounted attachment, this vibratory pile driver features an articulating side-grip with two unique side-gripping jaws and one bottom jaw that deliver unmatched dexterity when handling, driving or extracting nearly any style of piling.

Into the Arctic

Battling Arctic temperatures, 24-hour darkness and shipping delays, the Ruskin team constructed an iron ore loading dock with great precision By Lisa KopochinskiRuskin Construction is currently completing work on an iron ore dock at Canada's northernmost producing mine - the Mary River site on the northern end of Baffin Island - for Baffinland Iron Mines Corporation. This is quite a feat since this remote location is 500 kilometres north of the Arctic Circle in Nunavut, and has an average winter temperature of -30 degrees Celsius with several months of 24-hour darkness.