Olson (Stuart) Dominion Construction Ltd. v. Structal Heavy Steel, 2016 MBQB 56

• Judge: McKelvey, J.
• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: March 14, 2016
• Jurisdiction: Manitoba
• Citations: 2016 MBQB 56;(2016), 328 Man.R.(2d) 291 (QB)

Olson Dominion Constr. v. Structal (2016), 328 Man.R.(2d) 291 (QB)

MLB headnote and full text

Temp. Cite: [2016] Man.R.(2d) TBEd. MR.029

Stuart Olson Construction Ltd., formerly known as Stuart Olson Dominion Construction Ltd. and Dominion Construction Company Inc. (applicant) v. Structal Heavy Steel, a division of Canam Group Inc. (respondent)

(CI 15-01-98312; 2016 MBQB 56)

Indexed As: Olson (Stuart) Dominion Construction Ltd. v. Structal Heavy Steel

Manitoba Court of Queen's Bench

Winnipeg Centre

McKelvey, J.

March 14, 2016.

Summary:

A general contractor (Stuart Olson) applied for an order that the $15,570,974.53 lien bond it had filed in order to obtain removal of a builder's lien, filed by a sub-contractor (Structal), satisfied Stuart Olson's trust obligation under the Builders' Liens Act (Act). Structal opposed Stuart Olson's application and brought a motion for an order that Stuart Olson or the owner pay to it all or part of a progress payment to which Stuart Olson appeared to be entitled.

The Manitoba Court of Queen's Bench, in a decision reported at (2013), 289 Man.R.(2d) 194, allowed Stuart Olson's application and dismissed Structal's motion. Structal appealed.

The Manitoba Court of Appeal, in a decision reported at (2014), 303 Man.R.(2d) 122; 600 W.A.C. 122, allowed the appeal in part. The court set aside the motion judge's declaration that the filing of the lien bond by Stuart Olson satisfied its trust obligations relating to Structal and that, upon receipt of the progress payments in question, it could disburse the funds without being in breach of the Act's trust provisions. Stuart Olson appealed.

The Supreme Court of Canada, in a decision reported at (2015), 475 N.R. 117; 323 Man.R.(2d) 1; 657 W.A.C. 1, dismissed the appeal. By Notice of Application, Stuart Olson sought an order that it pay into court $4,171,915.25, and that the funds be declared to be trust funds for the sole benefit of Structal, pursuant to the Act's trust provisions (s. 4). The funds were to remain in court until the dispute between the parties was heard and finally determined. By Notice of Motion, Structal applied for a declaration that Stuart Olson had breached the Act's trust provisions in the amount of $4,171,915.25, and such further amounts as might be determined by the court; and an order for immediate payment of $4,171,915.25 by Stuart Olson to Structal.

The Manitoba Court of Queen's Bench allowed Stuart Olson's application and dismissed Structal's motion. Substantive litigation remained to be determined between the parties.

Mechanics' Liens - Topic 7502.9

Trust fund - General - Breach of trust - [See Trusts - Topic 2761 ].

Mechanics' Liens - Topic 7601

Trust fund - The fund - General - [See Trusts - Topic 2761 ].

Trusts - Topic 2761

The beneficiary - Remedies on breach - General - A general contractor (Stuart Olson) utilized trust funds under the Builders' Liens Act for other (improper) purposes - By Notice of Application, Stuart Olson sought an order that it pay into court $4,171,915.25, and that the funds be declared to be trust funds for the sole benefit of a sub-contractor (Structal), pursuant to the Act's trust provisions - The funds were to remain in court until the dispute between the parties was heard and finally determined - By Notice of Motion, Structal applied for a declaration that Stuart Olson had breached the Act's trust provisions in the amount of $4,171,915.25, and such further amounts as might be determined by the court; and an order for immediate payment of $4,171,915.25 by Stuart Olson to Structal - Structal submitted that Stuart Olson could not remedy its breach by substituting other monies in an amount equal to the trust monies that were inappropriately and improperly utilized - The Manitoba Court of Queen's Bench allowed Stuart Olson's application and dismissed Structal's motion - Substantive litigation remained to be determined between the parties.

Trusts - Topic 6141

The trustee - Breach of trust - General - The Manitoba Court of Queen's Bench stated that "A breach of trust transpires whenever a trustee fails to fulfill its proper obligations with respect to the administration of a trust or fails to properly dispose of trust property. ...  A trustee's liability for a breach arises whether the breach was innocent, by mistake, by negligence, or even by fraudulent means." - See paragraph 22.

Counsel:

Dave G. Hill and Michael J. Weinstein, for the applicant;

Kevin T. Williams and Kyle L. Dear, for the respondent.

This application and motion were heard by McKelvey, J., of the Manitoba Court of Queen's Bench, Winnipeg Centre, who delivered the following decision on March 14, 2016.