Diavik Diamond Mines Inc. et al. v. Tahera Diamond Corp. et al., (2009) 460 A.R. 380 (CA)

• Judge: Kilpatrick, Paperny and McDonald, JJ.A.
• Court: Nunavut Court of Appeal (Canada)
• Case Date: September 22, 2009
• Jurisdiction: Nunavut
• Citations: (2009), 460 A.R. 380 (CA);2009 NUCA 3

Diavik Diamond Mines v. Tahera Diamond (2009), 460 A.R. 380 (CA);

      462 W.A.C. 380

MLB headnote and full text

Temp. Cite: [2009] A.R. TBEd. SE.121

Diavik Diamond Mines Inc. and BHP Billiton Diamonds Inc. as Joint Venturers of the "Tibbitt To Contwoyto Winter Road Joint Venture" (appellants) v. Tahera Diamond Corporation, Benachee Resources Inc., Dyno Nobel Nunavut Ltd., Nuna Logistics Ltd. and McCaw's Drilling and Blasting Ltd. (respondents)

(08-09-002-CAP; 2009 NUCA 3)

Indexed As: Diavik Diamond Mines Inc. et al. v. Tahera Diamond Corp. et al.

Nunavut Court of Appeal

Kilpatrick, Paperny and McDonald, JJ.A.

September 23, 2009.

Summary:

The two appellants and three of the respondents were all lien claimants in relation to a diamond mine known as the Jericho Mine. The miners' liens totalled almost $21 million. A "Lien Claimants' Fund" created by court order contained just $2 million. The Miners Lien Act lacked an express provision setting out how lien claimants under the Act were to rank in priority among themselves. The chambers judge concluded that it would be inconsistent with the legislative intent to treat the lien holders differently or unequally. He therefore ordered that, subject to a further determination on the quantum, timeliness and lienability of the claims, the appellants and the other lien claimants shared pro rata in the Lien Claimants' Fund. The appellants appealed. They argued that the common law priority rule of "first in time, first in right" should apply and that those liens first registered under the Act should be first in priority.

The Nunavut Court of Appeal dismissed the appeal. The court agreed with the chambers judge that, subject to a further determination on the quantum, timeliness and lienability of the claims, the lien holders shared pro rata in the Lien Claimants' Fund.

Liens - Topic 8502

Miners' lien - General - Legislation - Interpretation - At issue on an appeal was how priority among lien claimants who provided work and services to the same mine or mineral claims was to be determined under the Miners Lien Act - The appellants argued that the provisions of construction and mechanics lien legislation in other jurisdictions had no relevance to the interpretation of the territorial miners lien legislation - The Nunavut Court of Appeal stated "We cannot agree. Lien legislation shares a common purpose and, often, a similar scheme for the attainment of that purpose. Territorial courts have often looked to the principles applicable to other lien legislation for assistance in interpreting the territorial miners lien acts" - See paragraph 15.

Liens - Topic 8563

Miners' lien - Enforcement - Priorities - The two appellants and three of the respondents were all lien claimants in relation to a diamond mine known as the Jericho Mine - The miners' liens totalled almost $21 million - A "Lien Claimants' Fund" created by court order contained just $2 million - The Miners Lien Act lacked an express provision setting out how lien claimants under the Act were to rank in priority among themselves - The chambers judge concluded that it would be inconsistent with the legislative intent to treat the lien holders differently or unequally - He therefore ordered that, subject to a further determination on the quantum, timeliness and lienability of the claims, the appellants and the other lien claimants share pro rata in the Lien Claimants' Fund - The appellants appealed - They argued that the common law priority rule of "first in time, first in right" should apply and that those liens first registered under the Act should be first in priority - The Nunavut Court of Appeal dismissed the appeal - The "pari passu" rule was consistent with the general scheme of the Act and the intention that the Act existed to better enable suppliers of work and materials to recover the amounts owing to them - The court therefore agreed with the chambers judge that the lien holders shared pro rata in the Lien Claimants' Fund.

Cases Noticed:

Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re, [1998] 1 S.C.R. 27; 221 N.R. 241; 106 O.A.C. 1, refd to. [para. 10].

Clarkson Co. v. Ace Lumber Ltd., [1963] S.C.R. 110, refd to. [para. 12].

Access Mining Consultants Ltd. v. United Keno Hill Mines Ltd. (2000), 17 C.L.R.(3d) 126; 2000 YTSC 541, refd to. [para. 13].

Curtis v. Richardson (1909), 18 Man. R. 519 (K.B.), refd to. [para. 14].

Wyo-Ben Inc. v. Wilson Mud Canada Ltd. (1985), 23 D.L.R.(4th) 760 (Alta. C.A.), refd to. [para. 14].

Town-N-Country Plumbing & Heating (1985) Ltd. et al. v. Schmidt et al. (1991), 93 Sask.R. 278; 4 W.A.C. 278; 86 D.L.R.(4th) 716 (C.A.), refd to. [para. 14].

Byer's Transport Ltd. v. Terra Mining and Exploration Ltd., [1972] 2 W.W.R. 719; 24 D.L.R.(3d) 447 (N.W.T.T.C.), refd to. [para. 15].

Polson v. Thomson (1916), 26 Man. R. 410; 29 D.L.R 395 (C.A.), refd to. [para. 15].

McPherson v. Gedge (1883), 4 O.R. 246 (H.C.), refd to. [para. 16].

Charles White Co. v. Percy Galbreath & Sons Inc. (1978), 563 S.W.2d 478 (Ky. App.), refd to. [para. 17].

Statutes Noticed:

Miners Lien Act, R.S.N.W.T. 1997, c. M-12, generally [para. 1].

Authors and Works Noticed:

Bristow, David I. Glaholt, Duncan W., Reynolds, R. Bruce, and Wise, Howard M., Construction Builders' and Mechanics' Liens in Canada (7th Ed. 2005) (2009 Looseleaf Update, Release 4), vol. 1, p. 1-1 [para. 11].

Driedger, Elmer A., Construction of Statutes (2nd Ed. 1983), p. 87 [para. 10].

Counsel:

Gordon C. Weatherill, Q.C., for the appellants;

R.M. Slattery, for the respondents, Nuna Logistics Limited;

S. Molgat, for the respondents, Dyno Nobel Nunavut Inc.;

A.J. Hladyshevsky, for the respondents, McCaw's Drilling and Blasting Ltd.

This appeal was heard on September 22, 2009, before Kilpatrick, Paperny and McDonald, JJ.A., of the Nunavut Court of Appeal. The following memorandum of judgment of the Court of Appeal was filed on September 23, 2009.