Bethshan Holding Ltd. v. Nueva Era Design & Construction Management Inc. et al., (2015) 479 Sask.R. 274 (QB)

• Judge: Barrington-Foote, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: August 04, 2015
• Jurisdiction: Saskatchewan
• Citations: (2015), 479 Sask.R. 274 (QB);2015 SKQB 231

Bethshan Holding v. Nueva Era Design (2015), 479 Sask.R. 274 (QB)

MLB headnote and full text

Temp. Cite: [2015] Sask.R. TBEd. AU.030

Bethshan Holding Ltd. (applicant) v. Nueva Era Design & Construction Management Inc., Young Shin Construction Ltd., Warman Home Centre Inc., Nixon Electrical Service Ltd., Yorkton Concrete 2012 Ltd., Yorkton Plumbing & Heating Ltd., Atlas Concrete Ltd., James Gordon William Young, Magnus Insulation Ltd., and Premium Spray Products Canada LP (respondents)

(2015 Q.B.G. No. 2; 2015 SKQB 231)

Indexed As: Bethshan Holding Ltd. v. Nueva Era Design & Construction Management Inc. et al.

Saskatchewan Court of Queen's Bench

Judicial Centre of Yorkton

Barrington-Foote, J.

August 4, 2015.

Summary:

Bethshan Holdings Ltd. contracted Nueva Era Design & Construction Management Inc. to build a building on Bethshan's land. Work stopped on the project and the contract was terminated before the project was completed. Nueva filed a builders' lien in the amount of $478,000. Subcontractors filed seven builders' liens against the land totalling $496,247.29. Bethshan applied under s. 57 of the Builders' Lien Act for an order that (1) the amount of the holdback to be retained pursuant to s. 34(1) of the Act in relation to Bethshan's contract with Nueva was $153,500; (2) Bethshan pay the holdback into court; and (3) the registration of the claims of lien and written notices of lien of all the Nueva and the subcontractors be vacated. At the hearing, Bethshan also asserted that its lien should be vacated pursuant to s. 60 of the Act.

The Saskatchewan Court of Queen's Bench dismissed the application.

Mechanics Liens - Topic 5051

Obtaining a lien - Vacating registered liens - General - The Saskatchewan Court of Queen's Bench reviewed the case law dealing with s. 60 of the Builders' Lien Act and stated that "These cases confirm that the power to vacate a lien pursuant to s. 60 should be exercised only in extraordinary circumstances. If, as in this case, the owner leads evidence that would, absent evidence to the contrary, demonstrate that there is no basis for a claim of lien, the lien claimant must provide evidence. However that is sufficient. The lien should not be vacated merely because the evidence is not clear, complete, demonstrably accurate and unequivocal, or raises questions as to the credibility or reliability of the evidence in support of the claim. The question is a matter of degree, and turns on the facts." - See paragraph 37.

Mechanics Liens - Topic 5052

Obtaining a lien - Vacating registered lien - Procedure - Bethshan Holdings Ltd. contracted Nueva Era Design & Construction Management Inc. to build a building on Bethshan's land for $1.8 million - Work stopped and the contract was terminated before the project was completed - Nueva and the subcontractors filed builders' liens - Bethshan applied under s. 57 of the Builders' Lien Act to vacate all liens filed against the lands on payment into court of the holdback - The Saskatchewan Court of Queen's Bench stated that "There are relatively few decisions relating to this section. However, both the language of the section and the case law confirm that it has limited scope. In particular, it deals only with the holdback. It enables the owner to clear title, and vacate the lien, by paying in the holdback amount, together with security for costs. It does not require or authorize an order that the owner pay in an amount in addition to the holdback, other than for costs. It accordingly authorizes me to make an order only if I am able to determine that Bethshan does not owe any amount to Nueva in addition to the holdback amount. An owner that seeks to vacate a lien in circumstances where there is an additional amount owing to the owner in excess of the holdback should apply for relief pursuant to ss. 56(2) of the Act." - See paragraph 27.

Mechanics Liens - Topic 5052

Obtaining a lien - Vacating registered lien - Procedure - Bethshan Holdings Ltd. contracted Nueva Era Design & Construction Management Inc. to build a building on Bethshan's land for $1.8 million - Work stopped and the contract was terminated before the project was completed - Nueva and the subcontractors filed builders' liens - Bethshan applied under s. 57 of the Builders' Lien Act for an order that (1) the amount of the holdback to be retained pursuant to s. 34(1) of the Act in relation to Bethshan's contract with Nueva was $153,500; (2) Bethshan pay the holdback into court; and (3) the registration of the claims of lien and written notices of lien of Nueva and the subcontractors be vacated - Bethshan also requested that the lien be vacated pursuant to s. 60 - Bethshan asserted that there was enough evidence to summarily determine that the contract price was $1.8 million, as the evidence was insufficient to prove that there was any agreement to increase that price - It noted that Nueva's president acknowledged that the cost to complete the project was at least $300,000 and asserted that the maximum amount payable by Bethshan was accordingly 1.8 million, less at least $300,000, or $1.5 million - Bethshan had already paid $1.535 million - The Saskatchewan Court of Queen's Bench stated that Nueva's evidence as to the contract price and the value of the materials and services supplied, and thus as to whether Bethshan owed any further amount to Nueva, left a great deal to be desired - However, there was evidence that the parties had agreed to change the scope of the work, and thus the price - It was possible that Nueva would be able to provide further details - Credibility was also at issue - In the result, the court refused to summarily determine the contract price, or that Nueva would be unable to prove a material increase from the original contract price - Accordingly, the court was not satisfied that Nueva's claim of lien was spurious, grossly inaccurate or grossly exaggerated - As such, the court refused to vacate Nueva's lien claim pursuant to s. 60 - The court was also unable to grant the relief sought under s. 57 - The court was unable to conclude that the contract price was less than $1.535 million and that Bethshan did not owe Nueva more money - Bethshan should have applied under s. 56(2) of the Act, at least in the alternative - It did not do so and it was inappropriate for the court to order payment pursuant to that section or to determine the amount to be paid into court if such an application was made - See paragraphs 38 to 44.

Mechanics' Liens - Topic 5055

Obtaining a lien - Vacating registered liens - Grounds for - [See second Mechanics' Liens - Topic 5052 ].

Mechanics' Liens - Topic 5056

Obtaining a lien - Vacating registered lien - Burden of proof - [See Mechanics' Liens - Topic 5051 ].

Mechanics' Liens - Topic 6943

Loss or discharge of lien - Discharge by payment into court - Payment of holdback into court - [See both Mechanics' Liens - Topic 5052 ].

Mechanics' Liens - Topic 7004

Loss or discharge of lien - Order vacating lien - Entitlement - General principles - [See second Mechanics' Liens - Topic 5052 ].

Counsel:

Christopher Boychuk, Q.C., for the applicant;

Brent Gough (by telephone, for Jenny English), for Nueva Era Design;

Trent Adamus (by telephone), for Warman Home Centre;

David Rusnak, for Yorkton Plumbing, Atlas Concrete and A. Myrowich Building Materials;

Rick Van Beselaere (by telephone), for Nixon Electrical;

Bernard Stephaniuk, for James Young.

This application was heard by Barrington-Foote, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Yorkton, who delivered the following fiat on August 4, 2015.