Edmonton Gold ’ s Gym Corp. Applicant - v. -, 2012 ABQB 638

Court of Queen ’ s Bench of Alberta Citation: Edmonton Gold ’ s Gym Corp. v. Complete Concrete Cutting Ltd., 2012 ABQB 638 Date: 20121017 Docket: 0903 16337 Registry: Edmonton Between: Edmonton Gold ’ s Gym Corp. Applicant - and - Complete Concrete Cutting Ltd Respondent _______________________________________________________ Memorandum of Decision of W. S.

Schlosser, Master in Chambers _______________________________________________________ [ 1 ] This is an application for the return of lien funds that have been paid into Court. [ 2 ] Complete Concrete Cutting Ltd. did some work for Edmonton Gold ’ s Gym Corp. but said that it was not paid in full. It filed a lien. Then an individual (not a lawyer) took out an application on behalf of Gold ’ s Gym to have the lien removed or, alternately, to have the lien amount paid into court under old

section 28 (now

section 48). The materials served on the Respondent included a Notice to Prove Lien.

[3] The Respondent filed an Affidavit in response to the Notice to Prove Lien within the time prescribed by the Act. Thelearned Master ordered that funds be paid into Court. Funds were paid in on November 2, 2009. [4] The Applicant applied, in February 2010, to have the lien claim dismissed and the funds paid back. That application wasdismissed with costs. Nothing happened until now. [5] Gold’s Gym has retained counsel and has renewed its bid to get the money back. Only now it is relying on the passage oftime.

It says it should have the money back because over two years have passed and the Respondent hasn’t done anything to get thefunds. [6] The October 30, 2009, Order discharging the Lien and directing payment into Court, was very brief. The individualrepresenting the Applicant had obviously not read Driden Industries Ltd. v. Sieber, 1974 ALTASCAD 14 , [1974] 3 WWR 368(CA). As a result the Order was silent about what was to happen next. [7]

Section 48 allows for payment in. The wording of the current

section and its predecessor are the same, except that the olderversion referred to an application by “Originating Notice”. The current

section is as follows: Lien removed 48(1) The court may, on application, order that the registration of a lien be removed from the title to the land concerned (

a) where security is given or payment is made into court for (

i) the amount of the claim, (ii) the maximum amount for which the lien may properly attach under section 18(3) or (4) or 23(3) or (4), or (iii) such lesser amount as the court determines, and any costs that the court may fix, (

b) where the relevant lien fund has been paid out under this Act, or (

c) on any ground not referred to in clause (

a) or (

b) as the court considers proper.

(2) Money paid into court or any security given under subsection (1) (

a) stands in place of the land, (

b) is subject to the claims of the person whose lien has been removed, and (

c) shall not affect the amount required to be retained under section 18(1) or (1.1) or 23(1) or (1.1).

(3) At any time following service of an application, a party may file with the court and serve on the registered lienholder a notice toprove the lien.

(4) A registered lienholder served with a notice to prove lien shall, within 15 days from the day of the service of the notice on thelineholder, file with the court in which the proceedings were commenced an affidavit proving detailed particulars of the lienholder’s lien.

(5) A registered lienholder on whom a notice to prove lien is served and who does not file the lienholder’s affidavit (

a) within 15 days from the day of the service of the notice, or (

b) within any further period that the court may order on application, loses the lienholder’s lien.

(6) Any party to the application may question the registered lienholder on the lienholder’s affidavit filed pursuant to this section.

[ 8 ] The Court of Appeal dealt with a fact situation similar to this one in Driden. The issue in that case was whether the lienholder ’ s claim had lapsed as a result of the failure to issue a Statement of Claim within the time limited by the Builders Lien Act . The Court held that the requirement to commence an action applied only to liens that continued to be registered against the title and not to a situation in which a lien was discharged on payment into court. The Court held that the procedure should be set at the time of the application to pay in, saying: 13 I think an analogous procedure should be followed in connection with a payment into court under s. 35[now

section 48], and the proper procedure to be followed is for the applicant, at the same time as the money is paid into court, to ask the court to settle the issue to be decided and direct who should be the plaintiff and who should be the defendant . Although s. 36(6) does not apply to s. 35 yet, it does show the general intention of the Legislature for it provides that proceedings are to be of a

summary character and the enforcement thereof is to be at the least expense. 14 It would have been better if the Legislature had spelled out the procedure to be followed when moneys were paid into court under s. 35, but since it has not done so the procedure to be followed must be decided by reference to analogous provisions of the Act. Therefore, there should be a direction by the court as to procedure when the application to pay the moneys into court is made.

Section 39 [now 53] which provides for a pre-trial application would apply after there has been a direction as to the issue and who is to be plaintiff and who is the defendant. It might even if that all these matters could be settled in the same application . (Emphasis added) [ 9 ] The

section governing pre-trial procedure is: Pre-trial applications 53(1) At any time following the expiry of the time limited for defence, the plaintiff may, and before setting the action down for trial the plaintiff shall, make a pre-trial application.

(2) The plaintiff shall serve notice of the pre-trial application on all other parties to the proceedings, at least 10 days before the date of the application.

(3) On the hearing of the pre-trial application, (

a) if no defence has been filed and no notice to prove lien has been filed and served, the court may declare the liens valid and make any further judgment or order that it considers appropriate. (

b) if defence has been filed, the court may give judgment declaring valid any liens in respect of which no notice to prove lien has been filed (

c) the court may consider the affidavits filed on service of notice to prove lien and the transcript of any questioning on them, and may (

i) determine the validity of the liens concerned (ii) hear oral evidence, and (iii) direct that at the trial of the action any particular issue or issues arising on the application be determined, (

d) the court may make any further order or direction that it considers necessary or desirable including, among other things, an order that the property be sold pursuant to this Act and an order that the action be entered for trial. (

e) the court may order that any lienholder or other party be given the carriage of the proceedings, and (

f) the court may order the questioning under

Part 5 of the Alberta Rules of Court be conducted in the action, but no questioning may be conducted without an order of the court. [ 10 ] If we combine Driden with the Builders Lien Act ’ s preference for

summary procedure (section 48(6)), the Applicant in the

section 48 payment-in application should have dealt with the procedure to follow at the time when the application to pay money into

court was made. The overall onus is on the Applicant to set the procedure at the time of the payment-in, rather than on the lienholder to commence an action, though either side could apply for directions if necessary. [ 11 ] Unless the Court so directs, a Statement of Claim and Statement of Defence might not add anything. The issue may already be clear. The Lis Pendens contemplated by

section 43 would be contrary to the purpose of a

section 48 payment. [ 12 ] The Applicant in this case cannot point to the Limitations Act and now say that now that because two years has passed they should have the money back. It goes without saying that the Limitations Act does not automatically extinguish claims. Even if a limitation defence were properly before the Court in this case, which it is not, and quite aside from the various burdens imposed by the Limitations Act, the mere existence of the Act does not have the effect of shifting the onus to a lienholder to have the claim determined. Both sides want the money.

Both sides have an equal interest in having the matter determined. [ 13 ] The Plaintiff ’ s application is dismissed. If the parties cannot agree on a procedure to bring this matter to conclusion, they can return to Court for directions. The only real question appears to be whether further evidence is necessary or permissible at this stage and whether this matter can be determined summarily. Heard on the 31 st day of August, 2012. Dated at the City of Edmonton, Alberta this 17 th day of October, 2012. W. S. Schlosser M.C.C.Q.B.A.

Appearances: Sherry Simons - Student at Law Wheatley Sadownik Counsel for Edmonton Gold ’ s Gym Corp. Gregory Bentz Stillman LLP Counsel for Complete Concrete Cutting Ltd.