Glasswall Ltd. et al. v. 2009861 Nova Scotia Ltd. et al., (1994) 134 N.S.R.(2d) 356 (CA)

• Judge: Freeman, Jones and Pugsley, JJ.A.
• Court: Court of Appeal of Nova Scotia (Canada)
• Case Date: October 20, 1994
• Jurisdiction: Nova Scotia
• Citations: (1994), 134 N.S.R.(2d) 356 (CA)

Glasswall Ltd. v. 2009861 N.S. (1994), 134 N.S.R.(2d) 356 (CA);

  383 A.P.R. 356

MLB headnote and full text

Glasswall Limited, A.E.A.D. Management Limited (McConnell Construction Services), Metro Foundation Specialists Limited and David Vaughan, carrying on business as Action Plumbing & Heating (appellants) v. 2009861 Nova Scotia Limited and Independent Capital Incorporated (respondents)

(C.A. No. 104447)

Indexed As: Glasswall Ltd. et al. v. 2009861 Nova Scotia Ltd. et al.

Nova Scotia Court of Appeal

Freeman, Jones and Pugsley, JJ.A.

October 20, 1994.

Summary:

A mortgagee loaned money to 2083763, which in turn transferred part of the money to 2009861, which applied the money to­wards the acquisition of certain property. 2009861 contracted to have units built on the property. An issue of priority arose between the lienholders and the mortgagee.

The Nova Scotia Supreme Court, in a decision reported 130 N.S.R.(2d) 241; 367 A.P.R. 241, held that the mortgagee had priority. The lienholders appealed.

The Nova Scotia Court of Appeal dis­missed the appeal.

Mechanics' Liens - Topic 6305

Priorities - Between lienholder and mort­gagees - Mortgage advances prior to construction - A mortgage was registered before the deed to land - The lienholders claimed that the mortgage was void and that they, as registered lienholders, had priority over the unregistered mortgage - The Nova Scotia Court of Appeal affirmed that a prior mortgage does not have to be registered under the Mechanics' Lien Act and a registered lienholder does not have priority over a prior unregistered mortgage - See paragraphs 8 to 24.

Mechanics' Liens - Topic 6305

Priorities - Between lienholder and mort­gagees - Mortgage advances prior to construction - A mortgagee loaned money to 2083763, which transferred part of the money to 2009861, which applied the money towards the acquisition of certain property - Construction was later done on the property - The lienholders claimed that because the funds were not advanced directly to 2009861 it did not qualify as a "prior mortgage or other charge" - The Nova Scotia Court of Appeal affirmed that s. 8(3) of the Mechanics' Lien Act did not prevent a collateral mortgage from being a "prior mortgage", even if provided as collateral security for the debts of a differ­ent corporate entity - There was no re­quirement that the money be advanced for construction on the liened lands - See paragraph 7.

Mechanics' Liens - Topic 6312

Priorities - Between lienholder and mort­gagees - Consent by mortgagee to per­formance of work - Lienholders claimed that the mortgagee consented to the per­formance of work and as a result surren­dered its priority on a prior mortgage pursuant to s. 8(3) of the Mechanics' Lien Act - The lienholders claimed that the mortgagee knew there would be construc­tion and that was sufficient to establish consent - The trial judge held that there was no direct dealing between the mort­gagee and the lienholders to constitute consent - The court also held that mere knowledge by the mortgagee that work would be carried on by someone was not sufficient to establish consent - The Nova Scotia Court of Appeal held that the trial judge committed no reviewable error - See paragraphs 25 to 27.

Mortgages - Topic 988

Priorities - Mechanics' liens - Registered subsequent to mortgage - [See first Mechanics' Liens - Topic 6305 ].

Cases Noticed:

Dorbern Investments Ltd. v. Provincial Bank of Canada, Lentini and Caparello, [1981] 1 S.C.R. 459; 37 N.R. 74, refd to. [para. 7].

Riviera, The Home of Siding et al. v. Chalker Properties Ltd. (1982), 55 N.S.R.(2d) 424; 114 A.P.R. 424 (Co. Ct.), consd. [para. 11].

Cook v. Belshaw (1893), 23 O.R. 545 (C.A.), refd to. [para. 18].

Marshall (John A.) Brick Co. v. York Farmers Colonization Co. (1916), 54 S.C.R. 569, refd to. [para. 18].

Burns and Mauger v. Zelco Enterprises Ltd. (1983), 58 N.S.R.(2d) 387; 123 A.P.R. 387 (C.A.), consd. [para. 19].

Royal Bank of Canada v. Madill (1981), 43 N.S.R.(2d) 574; 81 A.P.R. 574 (C.A.), dist. [para. 21].

Burns v. Zelco Enterprises Ltd. and EAC International Ltd. (1982), 54 N.S.R.(2d) 573; 112 A.P.R. 573 (Co. Ct.), refd to. [para. 26].

Saccary v. Toronto Dominion Bank and Jackson (1977), 23 N.S.R.(2d) 181; 32 A.P.R. 181 (C.A.), refd to. [para. 26].

Statutes Noticed:

Mechanics' Lien Act, R.S.N.S. 1989, c. 277, sect. 2(d), sect. 8(1), sect. 8(2), sect. 8(3), sect. 9, sect. 15(1), sect. 15(2), sect. 23(1), sect. 23(2) [para. 9].

Registry Act, R.S.N.S. 1989, c. 392, sect. 18 [para. 4].

Authors and Works Noticed:

Macklem and Bristow, Construction Builders and Mechanics Liens in Canada (6th Ed. 1990), p. 5-1 [para. 18].

Counsel:

Michael J. O'Hara, for the appellants;

A. James Musgrave, for the respondents.

This appeal was heard on September 27, 1994, by Freeman, Jones and Pugsley, JJ.A., of the Nova Scotia Court of Appeal.

The decision of the Court of Appeal was delivered on October 20, 1994, by Freeman, J.A.