Fundy Ventilation Ltd. v. Brunswick Construction Ltd., Fraser Co. and Minister of National Revenue (N.B.), (1982) 40 N.B.R.(2d) 484 (CA)

• Judge: Ryan, Stratton and La Forest, JJ.A.
• Court: Court of Appeal (New Brunswick)
• Case Date: May 11, 1982
• Jurisdiction: New Brunswick
• Citations: (1982), 40 N.B.R.(2d) 484 (CA)

Fundy Vent. v. Brunswick Constr. (1982), 40 N.B.R.(2d) 484 (CA);

    40 R.N.-B.(2e) 484; 105 A.P.R. 484

MLB headnote and full text

Sommaire et texte intégral

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

.........................

Fundy Ventilation Limited v. Brunswick Construction Ltd., Fraser Companies Limited and Minister of National Revenue

(165/81/CA)

Indexed As: Fundy Ventilation Ltd. v. Brunswick Construction Ltd., Fraser Co. and Minister of National Revenue (N.B.)

Répertorié: Fundy Ventilation Ltd. v. Brunswick Construction Ltd., Fraser Co. and Minister of National Revenue (N.B.)

New Brunswick Court of Appeal

Ryan, Stratton and La Forest, JJ.A.

May 11, 1982.

Summary:

Résumé:

The plaintiff subcontractor brought a mechanics' lien action against the defendant owner, general contractor and another subcontractor of a building project. The owner released the holdback prematurely and the other subcontractor was paid, but became insolvent without paying the plaintiff subcontractor.

The New Brunswick Court of Queen's Bench, Trial Division, in a judgment reported 35 N.B.R.(2d) 482; 88 A.P.R. 482, allowed the action against all three defendants, but held that the owner was entitled to be reimbursed by the general contractor and that both the owner and the general contractor were entitled to be reimbursed by the insolvent subcontractor. The general contractor appealed.

The New Brunswick Court of Appeal dismissed the appeal.

Interest - Topic 4004

Statutory interest - Mechanics' liens - The New Brunswick Court of Appeal held that under s. 4(1)(b) of the Mechanics' Lien Act, R.S.N.B. 1973, c. M-6, a mechanics' lien extends to interest, provided that interest is expressly or impliedly part of the contract price - See paragraph 44.

Mechanics' Liens - Topic 2921

The holdback - Subcontractors - Position of - The owner of a building project and the general contractor agreed to delete work, which was the subject of the subcontract, from the general contract - Further, an engineer's completion certificate was submitted to the owner before the work on the subcontract was done - The New Brunswick Court of Appeal affirmed that the deletion of the subcontract work from the general contract and the premature issuance of the engineer's completion certificate had no effect on the position of the subcontractor - See paragraphs 10 to 11.

Mechanics' Liens - Topic 5019

Obtaining a lien - Registration or filing of claim for lien - Time for filing - Completion or substantial completion - The New Brunswick Court of Appeal held that the heating, ventilating, air conditioning and process air systems for a pulp mill were not substantially complete until they had been tested and balanced - See paragraphs 8 to 21.

Mechanics' Liens - Topic 7544

Trust fund - Administration of fund - Duties of trustee - Distribution of trust fund - The New Brunswick Court of Appeal discussed and set out the duties of the trustee in distributing a mechanics' lien trust fund - The court held that the trustee need not distribute the fund pro rata to subcontractors, but has a discretion to choose among beneficiaries - See paragraphs 22 to 39.

Mechanics' Liens - Topic 7546

Trust fund - Administration of fund - Burden of proof - Section 3(3) of the Mechanics' Lien Act, R.S.N.B. 1973, c. M-6, provided that payments made by a contractor to materialmen, workmen or subcontractors under the contract were not an appropriation or conversion of the payment to the contractor's own use contrary to the trust - The New Brunswick Court of Appeal held that a contractor had the burden of proving that such payments were made in order to take advantage of the exception to the trust in s. 3(3) - See paragraph 42.

Mechanics' Liens - Topic 7625

Trust fund - Priorities - Lien holders v. income tax garnishment - The New Brunswick Court of Appeal stated that the garnishment of a subcontractor's income tax from another party to a building contract by the Minister of National Revenue under s. 224 of the Income Tax Act could not be made in priority to the rights of lien holders - See paragraphs 2, 33-41.

Practice - Topic 8800

Appeals - Duty of appeal court regarding fact findings by trial judge - The New Brunswick Court of Appeal refused to disturb a trial judge's fact findings, where they were not shown to be palpably wrong - See paragraph 12.

Statutes - Topic 1624

Interpretation - Extrinsic aids - Other statutes - Prior statutes respecting same subject matter - The New Brunswick Court of Appeal considered a prior version of a section of the Mechanics' Lien Act, R.S.N.B. 1973, c. M-6, in construing the current version - See paragraph 23.

Cases Noticed:

Minto Hospital Ltd. v. Cassidy (1957), 41 M.P.R. 203, appld. [para. 13].

Otis Elevator Ltd. v. Commonwealth Holiday Inns (1972), 57 D.L.R.(3d) 681, consd. [para. 15].

Union Electric Supply Co. v. Joyce Sweanor Electric Ltd. (1975), 54 D.L.R.(3d) 683, consd. [para. 15].

County of Lambton v. Canadian Comstock Co., [1960] S.C.R. 86, consd. [para. 16].

Day v. Crown Grain Co. (1908), 39 S.C.R. 258, consd. [para. 16].

Wagg v. Boudreau Sheet Metal Workers Ltd. (1959), 43 M.P.R. 154, consd. [para. 16].

Weathermakers Ltd. v. County of Wetaskiwin No. 10 (1966), 56 W.W.R.(N.S.) 271, folld. [para. 19].

Minneapolis-Honeywell Regulator Co. Ltd. v. Empire Brass Manufacturing Co. Ltd., [1955] S.C.R. 694, appld. [para. 27].

Royal Bank of Canada v. Blick, Wilson et al. (1963), 39 D.L.R.(2d) 36, consd. [para. 29].

Re Putherbough Construction Co. Ltd. (1958), 37 C.B.R. 6, dist. [para. 30].

Guaranty Trust Co. of Canada v. Beaumont et al., [1967] 1 O.R. 479, dist. [para. 30].

Crane Canada Ltd. v. McBeath Plumbing and Heating Co. (1966), 54 W.W.R.(N.S.) 119, dist. [para. 30].

Clarkson Co. Ltd. v. Canadian Bank of Commerce and Gels General Contractors Ltd., [1966] S.C.R. 513, appld. [paras. 31, 42].

Modular Products Ltd. v. Aristocratic Plywoods Ltd. (1974), 42 D.L.R.(3d) 617, consd. [paras. 34, 36].

Shoquist Construction Co. Ltd. v. Norfolk Retailers Trust and Savings Co. Ltd. et al., [1974] 5 W.W.R. 513, consd. [para. 34].

Rasmussens' v. Melville County Club (1978), 86 D.L.R.(3d) 509, consd. [para. 34].

Jamison v. Federal Business Development Bank et al. (1978), 32 D.T.C. 6482, consd. [para. 36].

Logger Lumber & Building Supplies and Arpi's Heating Ltd. v. Department of National Revenue, [1976] 2 W.W.R. 174, consd. [para. 36].

National Trustees Company of Australia v. General Finance Company of Australia, [1905] A.C. 373, refd to. [para. 36].

R. v. Cyrus J. Moulton Ltd., [1975] F.C. 109, appld. [paras. 38, 41].

Royal Trust Co. v. Trustee, Universal Sheet Metals Ltd., [1970] 1 O.R. 374, dist. [para. 38].

Brunswick Construction Ltee v. Villa des Jardins Inc. (1977), 17 N.B.R.(2d) 107; 23 A.P.R. 107, appld. [para. 44].

Statutes Noticed:

British North America Act, 1867, sect. 92(13) [para. 35].

Federal Court Act, R.S.C. 1970, 2nd Supp., c. 10, sect. 17(1) [para. 35].

Income Tax Act, R.S.C. 1970, c. R-5, sect. 224 [paras. 36, 40].

Mechanics' Lien Act, R.S.N.B. 1973, c. M-6, sect. 3(1) [para. 22]; sect. 3(3) [para. 29]; sect. 4(1)(b) [para. 44]; sect. 24(4), sect. 25 [para. 15].

Counsel:

Robert C. Rice, Q.C., for the appellant;

A.G. Warwick Gilbert, for Fundy Ventilation;

John M. Hanson, for Fraser Companies.

This case was heard on December 9, 1981, at Fredericton, N.B., before RYAN, STRATTON and La FOREST, JJ.A., of the New Brunswick Court of Appeal.

On May 11, 1982, La FOREST, J.A., delivered the following judgment in English for the Court of Appeal followed by its French language translation: