PTL Bobcat and Landscape Services Ltd. v., 2012 ABQB 316

Court of Queen ’ s Bench of Alberta Citation: PTL Bobcat and Landscape Services Ltd. v. 1149218 Alberta Ltd., 2012 ABQB 316 Date: 20120514 Docket: 1003 20501 Registry: Edmonton Between: PTL Bobcat and Landscape Services Ltd. Plaintiff - and - 1149218 Alberta Ltd. and Alberta Beach Estates Ltd. and Romesh Mohan Defendants Between: Alberta Beach Estates Ltd. Plaintiff by Counterclaim - and - PTL Bobcat and Landscape Services Ltd. Defendant by Counterclaim Corrected judgment: A corrigendum was issued on May 24, 2012; the corrections have been made to the text and the corrigendum is appended to this judgment.

_______________________________________________________ Memorandum of Decision of L. A. Smart, Master in Chambers _______________________________________________________ Background [1] The Defendants apply for

summary dismissal of the Plaintiff’s (PTL) claim or alternatively for an order to remove theBuilders Liens and Certificates of Lis Pendens filed on lands where work was performed by PTL at the request of the Defendants. Thereare conflicting facts in evidence as to the claim and defence over work performed, payments made and allegations of misrepresentationleading to damages which make it clear that there are genuine issues for trial. The application with respect to

summary dismissal of theaction is dismissed. [2] There remains, however, the question of whether or not the Certificates of Lis Pendens were properly issued by the clerk andregistered against the lands. The Statement of Claim of PTL identifies the lands where the work was done, that invoices were issued andunpaid, and builders liens were registered. There are also allegations that additional work had been guaranteed of at least $800,000 in2010 and $8 million of work for the entire project.

PTL in its relief seeks general damages of $1,200,000, interest, GST, costs and suchfurther and other relief as the court deems fit to grant. [3] Nowhere in the Statement of Claim is what might be described as the usual relief sought or allegations made by Plaintiffs aslien holders, that is, for example no request for a declaration as to validity of the lien or for sale of the lands. Indeed the Statement ofClaim gives no particulars on the amount of the liens, what amount remains due or when they registered, and says nothing aboutenforcing of the liens.

Based on those pleadings, the Clerk of the Court issued Certificates of Lis Pendens certifying that proceedingshave been taken to enforce the liens and the certificates were registered at the Land Titles Office. [4] Evidence filed in relation to the application identifies the amount of the liens at $220,000, that PTL issued invoices of$435,393.01 and received payments totaling $245,147.18. Arithmetically the difference is $190,245.83 which presumably would be thedebt claimed by PTL and the amount claimed pursuant to the liens.

The Defendants say that in fact they have overpaid PTL in theamount of $73,618.86 which it seeks to recover among other things in a counterclaim. Argument [5] The Defendants point to the deficiencies in the pleadings described above and also note that the Statement of Claim does noteven mention the Builders’ Lien Act. In

summary they argue that the action commenced was not a proper “Builders Lien action” and itdoes not support the issuance of the Certificates of Lis Pendens by the clerk. They rely upon the decision of Justice Walsh in Horne v.Jenkyn, (AB KB), 1912 CarswellAlta 76, 2 W.W.R. 929 (Alta S.C.) where he considered similar provisions undersection 35 of the Mechanics’ Lien Act, c.21, 1906. The Statement of Claim had remarkably similar deficiencies and the Defendant in thatcase sought to set aside the Certificate as no proceedings have been instituted by the Plaintiff “to realize his lien”.

Argument initiallycentered around the procedure followed by the Defendant to amend and the amendments to the Statement of Claim per se which clarifiedthe intention of the Plaintiff to bring a “lien action”. Justice Walsh would have allowed the amendments saying that this was one ofthese very peculiar circumstances where the court might allow an amendment even though it could be prejudicial to the other party.

Hestated as follows: “Here the plaintiff plainly intended that his action should be, and he thought that it was, brought to realize his lien, else he would nothave issued and registered the certificate of lis pendens practically at the very instant that he issued his writ. Everything was done thatshould have been done to preserve his lien, except in the one essential of setting out in his statement of claim the allegations and theclaim for relief necessary to entitle him to the usual judgment in a mechanics’ lien action.”

[6] Notwithstanding, he was of the opinion that the amendments did not validate what was in its origin an invalid Certificate ofLis Pendens. Justice Walsh concluded that the certificate was made without authority and although amendment was made to theStatement of Claim it does not create a lis pendens from the time of filing the original but only from the filing of the amended Statementof Claim. [7] PTL takes the position that its pleading is adequate as it identifies the lands and that liens were filed. The Defendants cannotclaim surprise or lack of knowledge of the matter being advanced. An analogy is drawn to

section 38 of the Builders’ Lien Act whichprovides for only the necessity of “substantial compliance” when registering a lien and generally to Mraiche v. Sander, 2010 ABCA 195which states at paragraph 11 that “Equity has always looked to substance over form.” There are no actual formal requirements within thelegislation as to how matters are to be pled or how relief is to be requested. Furthermore, the prayer for relief does not determine whatcause of action a plaintiff advances. “A prayer for relief is only a statement by the plaintiff as to what relief it thinks is appropriate forthe cause of action advanced.

Judgments are based on the cause of action advanced, not on prayers for relief” ( Master Funduk - K.V.R.Electric Ltd. v. Edgar, (AB QB). [8] As for the decision in Horne, it predates the initial Builders’ Lien Act by some 68 years, also predating the 1955 Mechanics’Lien Act. As such it is argued that the court is being asked to create requirements not found in statute or regulation on the basis of adecision given 99 years ago under a different statute.

The sheer absence of case law that has arisen since the actual passage of theBuilders’ Lien Act is a fair inference that there is no other case law to support the Defendants’ position. Discussion and Decision [9] Counsel for PTL has provided the whole of the 1906 Mechanics’ Lien Act. Its scheme to protect workers and those whofurnished materials is remarkably similar to the current Builders’ Lien Act.

Section 35 of the 1906 Act reads as follows: 35. Every lien shall absolutely cease to exist after the expiration of thirty days after the filing of the affidavit mentioned in

section 13 ofthis Act unless the claimant in the meantime shall have instituted proceedings to realize his lien under the provisions of this Act and acertificate thereof, (which may be granted by the court or judge in which or before whom the proceedings are instituted) is duly filed inThe Land Titles Office of the Land Registration District wherein the property in respect of which the lien is claimed is situated. [10] The current legislation has the requirement under Section 43 (1) which reads as follows: 43(1) A lien that has been registered ceases to exist unless, within 180 days from the date it is registered, (

a) an action is commenced under this Act (

i) to realize on the lien, or (ii) in which the lien may be realized, and (

b) the lien claimant registers a certificate of lis pendens in respect of the claimant’s lien in the appropriate land titles office. [11] Following the reasoning of Justice Walsh in Horne, the first question is whether or not the original Statement of Claimconstitutes an action commenced under the Act to realize on the liens or in which the liens may be realized. Although there are

averments touching on the lands and liens, the cause advanced in the pleadings falls well short of even the basic requirements one might expect in an action for recovery on liens. I agree with the reasoning in K.V.R. Electric that a prayer for relief is only a statement as to what relief a plaintiff thinks is appropriate for the cause of action advanced. Had the prayer for relief set out some of the remedies ordinarily associated with recovery on liens, perhaps the vague averments could have been adequate when given that contextual assistance.

But that is not the case here as the remedy sought merely sounded in damages well in excess of any amount that might be recovered under the liens. Regardless, the fundamental difficulty is not with the relief sought but with the failure to advance the appropriate cause of action. As for s.38 of the Builders’ Lien Act , it relates only to relief from formal requirements when filing a lien and provides no assistance to PTL to perfect defective pleadings. [ 12 ] Were there an application before me to amend the Statement of Claim, I would have been inclined to grant it.

But even though the amendments would effectively date back to the original date the claim issued that would not save PTL’s action pertaining to its liens. The difficulty for PTL which it cannot overcome is that the Certificates of Lis Pendens were issued by the Clerk in error as there was no action as required by s. 43(1) and therefore must be set aside. It follows that the registration at the Land Titles Office must fall. Although the amended claim would support the issuance of the appropriate Certificates of Lis Pendens they would not relate back but take effect from the date of their issuance by the Clerk.

At that point in time the liens would have already ceased to exist under s. 43(1). [ 13 ] Admittedly, Justice Walsh took what one might describe as a narrow technical approach in Horne . Regardless, although the language of the legislation has been modernized, I do not see a substantive difference that would allow me to distinguish his reasoning. Even though Horne was decided some 99 years ago, it is a decision of the Alberta Supreme Court which is nonetheless binding upon me.

The “sheer absence” of subsequent case law on this issue leads me to infer not that there are no cases to support the Defendants’ position but that the reasoning in Horne remains sound. Horne is the authority. [ 14 ] Accordingly, the Certificate of Lis Pendens and the Builders Liens shall be discharged from the lands. As noted above I have dismissed the

summary dismissal application. The net result is one of mixed success and in my view the costs are appropriately determinable in the cause. Dated at the City of Edmonton, Alberta this 14 th day of May, 2012. L. A. Smart M.C.C.Q.B.A. Appearances: James Odishaw Odishaw & Guido for the Plaintiff Christopher Bataluk

Iginla & Company for the Defendants _______________________________________________________ Corrigendum of the Memorandum of Decision of L. A. Smart, Master in Chambers _______________________________________________________ The style of cause showing the Plaintiff and Defendant by Counterclaim is hereby amended to read PTL Bobcat and Landscape Services Ltd. instead of PTL Bobcat and Landscape Service Ltd.