Jones Masonry Ltd. v. Defence Construction (1951) Ltd., (2009) 349 N.B.R.(2d) 359 (TD)

• Judge: Garnett, J.
• Court: Court of Queen's Bench of New Brunswick (Canada)
• Case Date: February 06, 2009
• Jurisdiction: New Brunswick
• Citations: (2009), 349 N.B.R.(2d) 359 (TD);2009 NBQB 178

Jones Masonry v. Defence Constr. (2009), 349 N.B.R.(2d) 359 (TD);

    349 R.N.-B.(2e) 359; 899 A.P.R. 359

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[French language version follows English language version]

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

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Temp. Cite: [2009] N.B.R.(2d) TBEd. JN.043

Renvoi temp.: [2009] N.B.R.(2d) TBEd. JN.043

Jones Masonry Ltd., a Body Corporate (plaintiff) v. Defence Construction (1951) Limited, a Body Corporate (defendant)

(F-C-280-08; 2009 NBQB 178; 2009 NBBR 178)

Indexed As: Jones Masonry Ltd. v. Defence Construction (1951) Ltd.

Répertorié: Jones Masonry Ltd. v. Defence Construction (1951) Ltd.

New Brunswick Court of Queen's Bench

Trial Division

Judicial District of Fredericton

Garnett, J.

June 29, 2009.

Summary:

Résumé:

Defence Construction (1951) Limited (DCC), a Crown corporation, contracted with Toryn Corporation for the construction of a building. Toryn posted a cash security deposit of $79,824.35. Toryn subcontracted with Jones Masonry Ltd. (Masonry) to supply masonry services and materials for $148,611.54. In March 2008, Toryn requested payment of the balance of the contract price from DCC and certified that the work was 100% complete and all of its obligations to subcontractors were fully discharged. DCC issued an interim certificate stating that the work was substantially complete and requested released of the security deposit. The security deposit was returned to Toryn. Masonry completed its work in May 2008, but $90,630.23 remained owing. Toryn was insolvent. Masonry sued DCC, asserting that (1) all the funds in DCC's possession and control constituted a trust fund for the benefit of Masonry pursuant to s. 3 of the Mechanics Lien Act and that DCC breached the trust by making the payments to Toryn; (2) DCC breached its duties under the Financial Administration Act; and (3) DCC was negligent. DCC moved to strike the statement of claim and sought an order for judgment.

The New Brunswick Court of Queen's Bench, Trial Division, struck the statement of claim and granted DCC judgment.

Crown - Topic 1563

Torts by and against Crown - Negligence by Crown - Breach of statutory duty - A federal Crown corporation (DCC) contracted with Toryn Corporation for the construction of a building - Toryn posted a security deposit - Toryn subcontracted with Jones Masonry (Masonry) to supply masonry services and materials - In March 2008, DCC issued an interim certificate stating that the work was substantially complete and requested release of the security deposit - The security deposit was returned to Toryn - Masonry completed its work in May 2008, but money remained owing under its contract with Toryn - Toryn was insolvent - Masonry sued DCC alleging, inter alia, negligence - DCC applied to strike the statement of claim - Masonry asserted that a failure by DCC to comply with the Financial Administration Act constituted evidence of its negligence - Further, the circumstances fitted into the recognized excepted category of "the independent liability of statutory public authorities" and therefore no further inquiry respecting the duty of care was required - The New Brunswick Court of Queen's Bench, Trial Division, stated that whether DCC owed Masonry a duty of care was a question which could be properly addressed on a motion to strike - The court rejected Masonry's assertion respecting the case fitting into a recognized category - This was not a case where the public authority had a duty to the general public or the parties in Masonry's position - Section 34 of the Act, which was relied on by Masonry, regulated "internal" government conduct - It did not give rise to a statutory duty to the public or Masonry - DCC was not a government regulator - Further, Masonry was attempting to recover a pure economic loss in tort - Even if a prima facie duty could be found at the first stage of the Anns test, policy considerations would negate the duty in the second stage of the test - Accordingly, the court allowed the application to strike - See paragraphs 12 to 32.

Crown - Topic 1701

Torts by and against Crown - Actions against Crown for breach of statutory duty - General - [See Crown - Topic 1563 ].

Damages - Topic 531

Limits of compensatory damages - Remoteness - Torts - Recoverable damages - Purely economic loss - [See Crown - Topic 1563 ].

Mechanics' Liens - Topic 2

General principles and definitions - Application of legislation - A federal Crown corporation (DCC) contracted with Toryn Corporation for the construction of a building - Toryn posted a security deposit of $79,824.35 - Toryn subcontracted with Jones Masonry (Masonry) to supply masonry services and materials for $148,611.54 - In March 2008, Tory requested payment of the balance of the contract price from DCC and certified that the work was 100% complete and all of its obligations to subcontractors were fully discharged - DCC issued an interim certificate stating that the work was substantially complete and requested release of the security deposit - The security deposit was returned to Toryn - Masonry completed its work in May 2008, but $90,630.23 remained owing - Toryn was insolvent - Masonry sued DCC, asserting that, inter alia, all the funds in DCC's possession and control constituted a trust fund for the benefit of Masonry pursuant to s. 3 of the Mechanics Lien Act and that DCC breached the trust by making the payments to Toryn - The New Brunswick Court of Queen's Bench, Trial Division, allowed an application to strike the statement of claim - Section 3 of the Act did not apply to the Federal Crown - Further, DCC was the agent of the "owner", not a "builder, or contractor or subcontractor" within the meaning of s. 3 - See paragraph 11.

Mechanics' Liens - Topic 53

General principles and definitions - Builder - [See Mechanics' Liens - Topic 2 ].

Mechanics' Liens - Topic 55

General principles and definitions - Contractor - [See Mechanics' Liens - Topic 2 ].

Mechanics' Liens - Topic 7508

Trust fund - General - Persons obligated to holdback trust funds - [See Mechanics' Liens - Topic 2 ].

Practice - Topic 2230

Pleadings - Striking out pleadings - Grounds - Failure to disclose a cause of action or defence - [See Crown - Topic 1563 ].

Torts - Topic 77

Negligence - Duty of care - Relationship required to raise duty of care - [See Crown - Topic 1563 ].

Torts - Topic 79

Negligence - Duty of care - Factors limiting or reducing scope of duty of care - [See Crown - Topic 1563 ].

Couronne - Cote 1563

Délits civils par et contre la Couronne - Négligence par la Couronne - Violation d'une obligation légale - [Voir Crown - Topic 1563 ].

Couronne - Cote 1701

Délits civils par et contre la Couronne - Actions contre la Couronne pour violation d'une obligation légale - Généralités - [Voir Crown - Topic 1701 ].

Délits civils - Cote 77

Négligence - Devoir de diligence - Conditions d'existence - [Voir Torts - Topic 77 ].

Délits civils - Cote 79

Négligence - Devoir de diligence - Facteurs limitant ou diminuant l'étendue du devoir de diligence - [Voir Torts - Topic 79 ].

Dommages-intérêts - Cote 531

Limites aux dommages-intérêts compensatoires - Éloignement - Délits civils - Dommages donnant lieu à indemnisation - Perte purement économique - [Voir Damages - Topic 531 ].

Procédure - Cote 2230

Plaidoiries - Radiation des plaidoiries - Motifs - Défaut de révéler une cause d'action ou un moyen de défense - [Voir Practice - Topic 2230 ].

Privilège de constructeur - Cote 2

Principes généraux et définitions - Applicabilité de la loi - [Voir Mechanics' Liens - Topic 2 ].

Privilège de constructeur - Cote 53

Principes généraux et définitions - Constructeur - [Voir Mechanics' Liens - Topic 53 ].

Privilège de constructeur - Cote 55

Principes généraux et définitions - Entrepreneur - [Voir Mechanics' Liens - Topic 55 ].

Privilège de constructeur - Cote 7508

Fonds en fiducie - Généralités - Personnes tenues d'être fiduciaires des funds de retenue - [Voir Mechanics' Liens - Topic 7508 ].

Cases Noticed:

Hunt v. T & N plc et al., [1990] 2 S.C.R. 959; 117 N.R. 321, refd to. [para. 10].

Hunt v. Carey Canada Inc. - see Hunt v. T & N plc et al.

Caissie v. Sénéchal Estate et al. (2001), 237 N.B.R.(2d) 232; 612 A.P.R. 232 (C.A.), refd to. [para. 10].

Sewell v. Sewell (2007), 314 N.B.R.(2d) 330; 812 A.P.R. 330 (C.A.), refd to. [para. 10].

Sewell v. Ing Insurance Co. of Canada - see Sewell v. Sewell.

Hazmasters Environmental Equipment Inc. v. London Guarantee (1998), 171 N.S.R.(2d) 176; 519 A.P.R. 176 (S.C.), refd to. [para. 11].

Johnson Controls Ltd. et al. v. Dineen Construction (Atlantic) Inc. et al. (1996), 157 N.S.R.(2d) 350; 462 A.P.R. 350 (S.C.), refd to. [para. 11].

Birmingham (M. Robert) Ltd. v. Perth-Andover (Village) (1981), 38 N.B.R.(2d) 14; 100 A.P.R. 14 (C.A.), refd to. [para. 11].

CIBC Mortgage Corp. v. Wiseman et al. (1989), 101 N.B.R.(2d) 195; 254 A.P.R. 195 (T.D.), refd to. [para. 11].

Fowler Brothers Ltd. v. Morrison (2007), 332 N.B.R.(2d) 386; 852 A.P.R. 386 (T.D.), refd to. [para. 11].

Saskatchewan Wheat Pool v. Canada, [1983] 1 S.C.R. 205; 45 N.R. 425, refd to. [para. 12].

Holland v. Saskatchewan et al. (2008), 376 N.R. 316; 311 Sask.R. 197; 428 W.A.C. 197; 2008 SCC 42, refd to. [para. 12].

Cooper v. Registrar of Mortgage Brokers (B.C.) et al. (2001), 277 N.R. 113; 160 B.C.A.C. 268; 261 W.A.C. 268; 2001 SCC 79, dist. [para. 13].

Cooper v. Hobart - see Cooper v. Registrar of Mortgage Brokers (B.C.) et al.

Edwards et al. v. Law Society of Upper Canada et al. (2001), 277 N.R. 145; 153 O.A.C. 388; 2001 SCC 80, dist. [para. 13].

Hearn (F.W.)/Actes v. University of British Columbia et al., [2000] B.C.T.C. 972; 2000 BCSC 1827, refd to. [para. 20].

Martel Building Ltd. v. Canada, [2000] 2 S.C.R. 860; 262 N.R. 285; 2000 SCC 60, refd to. [para. 20].

Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.), appld. [para. 21].

Nielsen v. Kamloops (City) and Hughes, [1984] 2 S.C.R. 2; 54 N.R. 1, appld. [para. 22].

Canadian National Railway Co. et al. v. Norsk Pacific Steamship Co. and Tug Jervis Crown et al., [1992] 1 S.C.R. 1021; 137 N.R. 241, refd to. [para. 23].

Winnipeg Condominium Corp. No. 36 v. Bird Construction Co. et al., [1995] 1 S.C.R. 85; 176 N.R. 321; 100 Man.R.(2d) 241; 91 W.A.C. 241, refd to. [para. 23].

Hercules Management Ltd. et al. v. Ernst & Young et al., [1997] 2 S.C.R. 165; 211 N.R. 352; 115 Man.R.(2d) 241; 139 W.A.C. 241, refd to. [para. 23].

Bow Valley Husky (Bermuda) Ltd. et al. v. Saint John Shipbuilding Ltd. et al., [1997] 3 S.C.R. 1210; 221 N.R. 1; 158 Nfld. & P.E.I.R. 269; 490 A.P.R. 269, refd to. [para. 23].

Design Services Ltd. et al. v. Canada (2008), 374 N.R. 77; 2008 SCC 22, refd to. [para. 27].

Des Champs v. Conseil des écoles séparées catholiques de langue fançaise de Prescott-Russell, [1999] 3 S.C.R. 281; 245 N.R. 201; 125 O.A.C. 279, refd to. [para. 29].

Authors and Works Noticed:

Linden, Allen M., and Feldthusen, Bruce, Canadian Tort Law (8th Ed. 2006), generally [para. 16].

Counsel:

Avocats:

J. William Cabel (Cabel Peters), for the plaintiff;

Angela J. Green (Office of the Attorney General of Canada), for the defendant.

This motion was heard on February 6, 2009, by Garnett, J., of the New Brunswick Court of Queen's Bench, Trial Division, Judicial District of Fredericton, who delivered the following decision on June 29, 2009.