RGR Enterprises Ltd. v. Allsteel Builders (2) Ltd. et al., (2012) 400 Sask.R. 150 (QB)

• Judge: Scherman, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: June 25, 2012
• Jurisdiction: Saskatchewan
• Citations: (2012), 400 Sask.R. 150 (QB);2012 SKQB 254

RGR Ent. Ltd. v. Allsteel Builders Ltd. (2012), 400 Sask.R. 150 (QB)

MLB headnote and full text

Temp. Cite: [2012] Sask.R. TBEd. JL.024

RGR Enterprises Ltd. (applicant) v. Allsteel Builders (2) Limited, Feldspar Excavating & Redi Mix, Signs 'N More Ltd., Hardes Fencing Ltd., Harris Electric, Webb Surveys, Nodgram Holdings Ltd. o/a Quick Pick Waste Disposal (respondents)

(2012 Q.B.G. No. 166)

Alpine Drywall and Plastering (Lloydminster) Ltd. (plaintiff) v. Summer Capital Inc. (defendant)

(2009 Q.B.G. No. 69)

RGR Enterprises Ltd. (plaintiff) v. Summer Capital Inc., City of Lloydminster, Ian Williamson, Erna Harder, Tim's Concrete & Finishing Inc., Allsteel Builders (2) Limited, Feldspar Excavating & Redi Mix, Signs 'N More Ltd., Hardes Fencing Ltd., Harris Electric Company Ltd. and Alpine Drywall and Plastering (Lloydminster) Ltd. (defendants)

(2009 Q.B.G. No. 45; 2012 SKQB 254)

Indexed As: RGR Enterprises Ltd. v. Allsteel Builders (2) Ltd. et al.

Saskatchewan Court of Queen's Bench

Judicial Centre of Battleford

Scherman, J.

June 25, 2012.

Summary:

RGR Enterprises Ltd. was foreclosing on two mortgages it held over property subject to subsequently registered builders' liens. The lien registrants, as defendants in RGR's foreclosure action, disputed the extent to which RGR's mortgage advances were secured by its mortgages and its claimed priority over their builders' liens. They sought judicial sale of the property to realize on their liens. RGR applied to have various lien registrations discharged on the basis that the registrants failed to either commence their own actions or to become parties to existing lien actions within the two-year limitation period required by s. 55 of the Builders' Lien Act. In response, the builders' lien claimant "Alpine Drywall" applied to add various lien claimants as parties to its existing builders' lien action. Alpine Drywall failed to set its action down for trial within two years, and requested leave extending the time.

The Saskatchewan Court of Queen's Bench dismissed RGR's application; granted leave to Alpine Drywall to add parties to its action; and granted leave extending the time to set the action down for trial for six months from the date of the court's order upon the application of any party.

Limitation of Actions - Topic 8

General principles - Interpretation of limitation provisions - [See second Mechanics' Liens - Topic 5540 ].

Limitation of Actions - Topic 15

General principles - Discoverability rule - Application of - [See first Mechanics' Liens - Topic 5540 ].

Limitation of Actions - Topic 207

Practice - Limitation period - Commencement of - [See first Mechanics' Liens - Topic 5540 ].

Limitation of Actions - Topic 1902

Actions - General - When time begins to run - [See first Mechanics' Liens - Topic 5540 ].

Limitation of Actions - Topic 9408

Bars - Disallowance of defence - General - Scope of discretionary power - [See seventh Mechanics' Liens - Topic 5540 ].

Limitation of Actions - Topic 9409

Bars - Disallowance of defence - General - Claim added to a proceeding previously commenced - [See sixth Mechanics' Liens - Topic 5540 ].

Limitation of Actions - Topic 9424

Bars - Disallowance of defence - Considerations - Delay - [See seventh Mechanics' Liens - Topic 5540 ].

Limitation of Actions - Topic 9426

Bars - Disallowance of defence - Considerations - Prejudice to parties - [See sixth Mechanics' Liens - Topic 5540 ].

Limitation of Actions - Topic 9427

Bars - Disallowance of defence - Considerations - Alternative actions - [See first Mechanics' Liens - Topic 5540 ].

Limitation of Actions - Topic 9603

Enlargement of time period - General - Power to grant - [See seventh Mechanics' Liens - Topic 5540 ].

Limitation of Actions - Topic 9614

Enlargement of time period - Application for - Considerations (incl. evidence) - [See seventh Mechanics' Liens - Topic 5540 ].

Limitation of Actions - Topic 9618

Enlargement of time period - Application for - Explanation for delay - [See seventh Mechanics' Liens - Topic 5540 ].

Mechanics' Liens - Topic 3

General principles and definitions - General principles - Purpose of mechanics' lien legislation - [See fifth Mechanics' Liens - Topic 5540 ].

Mechanics' Liens - Topic 5532

Obtaining a lien - Commencement of action - Time for - Extension of - [See fourth Mechanics' Liens - Topic 5540 ].

Mechanics' Liens - Topic 5540

Obtaining a lien - Commencement of action - Preservation of lien by action commenced by another lien claimant - A builder's lien claimant applied to add lien claimants as parties to its existing builders' lien action - An issue to be decided was whether the Limitations Act (Sask.) operated so as to prevent builders' lien registrants from commencing their own actions to enforce their lien after expiry of two years from the discovery of their claim - The Saskatchewan Court of Queen's Bench stated that the claims with respect to the liens were discoverable, at the latest, at the time of their respective registration - The time for commencement of an action to enforce each such lien began to run no later than the date of such registrations - "The narrow answer to the question posed is that ss. 3 and 5 of the Limitations Act do operate so as to prevent builders' lien registrants from commencing their own proceedings to enforce their liens after expiry of two years from the discovery of their claims. But, the language used in ss. 3 and 5 only prohibits the commencement of a proceeding. This leads to the question of whether the underlying obligation can be pursued or enforced in some other manner, such as by exercising a right of offset, by seeking judicial sale within a foreclosure action or by amendment to an existing builder's lien action that was limitation period compliant when commenced. The Limitations Act expressly provides for the latter of these possibilities in s. 20." - See paragraphs 22 and 23.

Mechanics' Liens - Topic 5540

Obtaining a lien - Commencement of action - Preservation of lien by action commenced by another lien claimant - The applicant requested a declaration that those builders' liens whose claimants had not commenced actions were of no further force and effect and that they be ordered discharged - In response, a builders' lien claimant sought to add the lien claimants as parties to its existing builders' lien action, and argued that the applicant's request was an attempt to use limitation legislation as a sword - The Saskatchewan Court of Queen's Bench stated that "Limitation periods, being restrictive provisions circumscribing the rights of the subject, have been held to attract strict interpretation and any ambiguity, found upon proper principles of statutory interpretation, should be resolved in favour of the person whose rights are truncated ... Provisions extending a limitation period are to be interpreted in a way that furthers the legislation's goals, and modern interpretation has become more balanced so as to take in the plaintiff's interests by favouring a contextual view of the parties' actual circumstances. ... Related to this approach is the principle that a limitation defence can only be used as a shield and not a sword" - See paragraphs 24 and 25.

Mechanics' Liens - Topic 5540

Obtaining a lien - Commencement of action - Preservation of lien by action commenced by another lien claimant - The applicant requested a declaration that those builders' liens whose claimants had not commenced actions were of no further force and effect and that they be ordered discharged - In response, a builders' lien claimant sought to add the lien claimants as parties to its existing builders' lien action - The Saskatchewan Court of Queen's Bench held that if the builders' lien claimants were able to enforce their liens in some manner other than by now commencing their own builders' lien actions, then the applicant was not entitled to the relief it sought - It was only the commencement of a proceeding after two years that was prohibited by s. 3 of the Limitations Act - Section 20 of the Limitations Act identified circumstances in which amendments to existing pleadings might incorporate new claims or substitute parties after the expiry of limitation periods - See paragraphs 26 and 27.

Mechanics' Liens - Topic 5540

Obtaining a lien - Commencement of action - Preservation of lien by action commenced by another lien claimant - The applicant requested a declaration that those builders' liens whose claimants had not commenced actions were of no further force and effect and that they be ordered discharged - In response, a builders' lien claimant sought to add the lien claimants as parties to its existing builders' lien action - An issue to be decided was whether the builders' lien registrants could be joined as parties to the existing builders' lien action after their own two-year period to commence proceedings had expired, and if so, should they be added in this case - Section 88 of the Builders' Lien Act (BLA) directed that when a lien claimant commenced an action to enforce its lien, each registered lien claimant who did not join in as a plaintiff "shall be" added as a defendant - The Saskatchewan Court of Queen's Bench stated that the provisions of the BLA had to be read in conjunction with ss. 20 and 23 of the Limitations Act, which expressly contemplated amendments to existing claims to add new claims for which limitations periods had expired - See paragraph 28.

Mechanics' Liens - Topic 5540

Obtaining a lien - Commencement of action - Preservation of lien by action commenced by another lien claimant - It was argued that to prevent becoming limitation period barred, a lienholder needed to take the step of advancing its own claim by way of crossclaim within an existing action before the limitation period to commence its own proceeding expired - The Saskatchewan Court of Queen's Bench disagreed - "Given the direction of the legislation [the Builders' Lien Act] that liens are to be enforced in summary proceedings with the objective of minimizing expense, the broad powers of the Court under s. 96 and the class-based entitlement of lien claimants, it is clear that a lien claimant named as a party defendant should be able to prove its claim in the summary proceedings without the necessity and cost associated with filing a crossclaim. A lien claimant who is party to the action as a defendant is entitled to be recognised in the adjusting of rights, liabilities and the giving of necessary relief without filing a crossclaim." - See paragraphs 30 and 31.

Mechanics' Liens - Topic 5540

Obtaining a lien - Commencement of action - Preservation of lien by action commenced by another lien claimant - RGR Enterprises Ltd. was foreclosing on two mortgages it held over property subject to subsequently registered builders' liens - The lien registrants, as defendants in RGR's foreclosure action, disputed RGR's claimed priority over their builders' liens - They sought judicial sale of the property to realize on their liens - RGR applied to have various lien registrations discharged on the basis that the registrants failed to either commence their own actions or to become parties to existing lien actions within the two-year limitation period required by s. 55 of the Builders' Lien Act - In response, the builders' lien claimant "Alpine Drywall" sought to add various lien claimants as parties to its existing builders' lien action - The Saskatchewan Court of Queen's Bench granted the amendment sought, having regard to the criteria established in s. 20 of the Limitations Act and the jurisprudence in respect of rules 37 and 38 of the Queen's Bench Rules - That conclusion was reinforced by s. 88(4) of the Builders' Lien Act which provided that any person might be added as a party at any stage of the action - RGR had not demonstrated that it would suffer actual prejudice as a result of adding the remaining builders' lien claimants - See paragraphs 34 to 47.

Mechanics' Liens - Topic 5540

Obtaining a lien - Commencement of action - Preservation of lien by action commenced by another lien claimant - RGR Enterprises Ltd. was foreclosing on two mortgages it held over property subject to subsequently registered builders' liens - The lien registrants, as defendants in RGR's foreclosure action, disputed RGR's claimed priority over their builders' liens - They sought judicial sale of the property to realize on their liens - RGR applied to have various lien registrations discharged on the basis that the registrants failed to either commence their own actions or to become parties to existing lien actions within the two-year limitation period required by s. 55(1) of the Builders' Lien Act - In response, the builders' lien claimant "Alpine Drywall" applied to extend the time for it to set its action down for trial (s. 55(2)) - The Saskatchewan Court of Queen's Bench granted the extension - Section 55 of the BLA provided the court with a discretion - While a delay of some 14 months beyond the date by which Alpine Drywall should have set its action down for trial was "significant", Alpine Drywall provided an explanation for the delay that showed it was not unreasonable or unjustified - Given that RGR was not challenging the validity of the liens in its foreclosure proceeding, and negotiations were ongoing that would address the interests of the affected parties, it was reasonable to not pursue builders' lien claims contemporaneously - There was a sense of "lying in wait" to how RGR proceeded - There was no prejudice to RGR in the circumstances - See paragraphs 48 to 57.

Mechanics' Liens - Topic 6922

Loss or discharge of lien - Discontinuance of action - Expiry of limitation period - [See seventh Mechanics' Liens - Topic 5540 ].

Mechanics' Liens - Topic 6983

Loss or discharge of lien - Loss by operation of statute - Expiration of time period - [See sixth and seventh Mechanics' Liens - Topic 5540 ].

Mechanics' Liens - Topic 8007

Practice - General - Setting case down for trial - [See seventh Mechanics' Liens - Topic 5540 ].

Mechanics' Liens - Topic 8123

Practice - Parties - Adding plaintiffs - [See sixth Mechanics' Liens - Topic 5540 ].

Statutes - Topic 510

Interpretation - Strict interpretation - [See second Mechanics' Liens - Topic 5540 ].

Cases Noticed:

Berardinelli v. Ontario Housing Corp. et al., [1979] 1 S.C.R. 275; 23 N.R. 298, refd to. [para. 24].

Novak et al. v. Bond, [1999] 1 S.C.R. 808; 239 N.R. 134; 122 B.C.A.C. 161; 200 W.A.C. 161; 172 D.L.R.(4th) 385, refd to. [para. 24].

4-J Holding Co. et al. v. A & W (Prince Albert) Ltd. et al., [2011] Sask.R. Uned. 171; 2011 SKQB 426, refd to. [para. 25].

Reho Holdings Ltd. v. Saskatchewan Housing Corp. (No. 1) (1986), 47 Sask.R. 161 (Q.B.), refd to. [para. 36].

101050094 Saskatchewan Ltd. v. Terramax Sitework Ltd. et al. (2007), 304 Sask.R. 179; 413 W.A.C. 179; 2007 SKCA 123, refd to. [para. 49].

Woodland Home & Building Products Ltd. v. Chessall et al. (2009), 339 Sask.R. 310; 2009 SKQB 221, refd to. [para. 50].

Prairie Panels Ltd. v. McCaw et al. (2010), 372 Sask.R. 17; 2010 SKQB 450, refd to. [para. 50].

Statutes Noticed:

Builders' Lien Act, S.S. 1984-85-86, c. B-7.1, sect. 54, sect. 55, sect. 69, sect. 72, sect. 73, sect. 86(1), sect. 88, sect. 89 [para. 21].

Limitations Act, S.S. 2004, c. L-16.1, sect. 3(1), sect. 3(4), sect. 5, sect. 20, sect. 23 [para. 20].

Queen's Bench Rules (Sask.) - see Rules of Court (Sask.), Queen's Bench Rules.

Rules of Court (Sask.), Queen's Bench Rules, rule 37, rule 38 [para. 36].

Counsel:

Clayton B. Barry, for RGR Enterprises Ltd.;

Michael S.J. Hall, for Feldspar Excavating & Redi Mix, Harris Electric Company, and Alpine Drywall and Plastering (Lloydminster) Ltd.

This application was heard before Scherman, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Battleford, who delivered the following fiat, dated June 25, 2012.