PTL Bobcat and Landscape Services Ltd. v., 2013 ABQB 158

Court of Queen's Bench of Alberta Citation: PTL Bobcat and Landscape Services Ltd. v. 1149218 Alberta Ltd., 2013 ABQB 158 Date: 20130313 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 _______________________________________________________ Oral Reasons for Judgment of the Honourable Mr. Justice A.W. Germain _______________________________________________________ 1. Introduction [ 1 ] I have decided in this case to deliver an oral judgment.

I have several reasons for doing so: 1. the procedural aspects to this litigation have delayed the advancement of the action and the resolution of the real dispute between the parties, contrary to the intention of the new Alberta Rules of Court, Alta. Reg. 124/2010 [the "New

Rules"], and 2. both counsel provided comprehensive briefs, which they amplified in oral argument, giving me the tools to make the necessary decision. Page: 2 Although my decision is delivered orally, the procedural issue raised by this case is interesting and has not been reviewed in the province of Alberta for some time. Additionally, one or more of the parties may wish to take further appellate review. Therefore I have decided to have my oral remarks placed on the judicial judgment database. 2.

Nature of the application [ 2 ] This is an appeal from PTL Bobcat and Landscape Services Ltd. v. 149218 Alberta Ltd., 2012 ABQB 316 ["PTL Bobcat"] , a decision of the Master of the Court of Queen's Bench that involves the Builders' Lien Act, R.S.A. 2000, c. B-7 [the "Act"]. In that reported decision, the Master dismissed the defendant's application for a

summary judgement dismissal of the claim, but allowed the application to strike the Lis Pendens. In result, the plaintiff was left with a law suit, but not one to enforce his builders' lien. [ 3 ] The plaintiff appeals; there is no cross appeal. 3. Background Facts [ 4 ] The background facts are not greatly in dispute so I will start there. The plaintiff performed work for the defendant on the defendant's land. A billing and payment dispute arose causing the plaintiff to file a builders' lien [the "Lien"] registered against the defendant's lands.

Subsequently, the plaintiff issued a statement of claim, and the Clerk of the Court issued a Lis Pendens which was registered at the Land Titles office. [ 5 ] For the purpose of my ruling, only, I will assume that the plaintiff was entitled to file a builders' lien: that he improved the defendants lands, and as he indicated in the filed Lien "the work was not yet fully completed". I will also assume the Lis Pendens was filed within 180 days of the filing of the builders' lien and registered within the allowable time at the Land Titles office. 4. The Master's Decision

[6] The key issue before the Master was whether the Statement of Claim, which did not claim specific builders' lien relief in the manner that has become the custom of builders' lien litigation in Alberta, is so deficient that the action must fail as an action "commenced under this Act": the Act, s. 43(1)(a). Stating the case alternatively, is enough plead in the Statement of Claim (with or without an amendment application) that the Lis Pendens should not have been summarily removed. [7] The Master concluded that the claim as drafted amounted to a debt action and not a builders' lien action.

In result, the Master felt that although he could not strike the claim (ie summarily dismiss it), he was bound by a decision of our Superior Court from 1912, Horne v. Page: 3 Jenkyn, (AB KB), 1912 Carswell Alberta 76, 2 W.W.R. 929 (Alta. S.C.), and directed that the Lis Pendens, and subsequently the Lien, be struck: PTL Bobcat, at para. 11. 5. The Position of the Parties [8] The plaintiff's argument is the same before me as it was before the Master.

The plaintiff (appellant) takes the position that its pleading is adequate as it identifies the lands, a lien was filed and a debt alleged: See PTL Bobcat, at paras 7-8. [9] Likewise, the defendant (respondent) reasserts the position it took before the Master that the Lis Pendens cannot be saved. The defendant asserts that the Lis Pendens was issued improperly as, although the once amended Statement of Claim is an action, it does not meet the statutory requirement of being an action "commenced under the Act". The defendant urges that the Horne v.

Jenkyn decision be considered good law in Alberta: PTL Bobcat, at paras 5-6. 6. Legal analysis The Lis Pendens A. Black's Law Dictionary, 9th ed., defines a `lis pendens' as: [10] A notice, recorded in the chain of title to real property, required or permitted in some jurisdictions to warn all persons that certain property is the subject matter of litigation, and that any interests acquired during the pendency of the suit are

subject to its outcome. [ 11 ] The Lis Pendens remains important in Alberta law, due to its common-sense function to notify parties who may be interested in land. The failure to file a Lis Pendens in a timely way is often fatal to a land claim in builders' lien litigation. The document goes hand in hand with the basic legal emphasis of registration under the Torrens Land Titles system. A Lis Pendens is provided for, including the prescribed forms, in both the Land Titles Act, R.S.A. 2000, c.

L-4 [the "LTA"] and the Act . [ 12 ] Lis Pendens registration is contemplated in LTA, s. 148(2), which indicates that a person claiming an interest in any land may register and their claim with a certificate of Lis Pendens in the prescribed form. 148(2) A person who has proceeded by way of action to call into question some title or interest in any land may register a certificate of lis pendens in the prescribed form These prescribed forms are Form 6 under the Act and form 30 under the LTA. Page: 4 [ 13 ] The Act provides no further definition.

The Land Titles' procedures manual indicates that the concept of a Lis Pendens is a practical one in a Torrens Land Titles system, to provide notice that cannot be assumed simply by the commencement of litigation. From this one can conclude that if the proper Lis Pendens form prescribed by the Act was used, that fact alone may augment the argument that an action under the Act had commenced. It seems to me that the certificate of Lis Pendens is a companion document to the Statement of Claim. Filing a Lis Pendens provides reasonable additional information to inform a defendant of the case he has to meet. 7.

Reliance on 100-Year-Old Cases [ 14 ] The Master felt bound by the Horne v. Jenkyn decision of the Alberta Superior Court, which related to the Mechanics Lien Act of the day. That legislation had some resemblance to the current Act , particularly in the provisions relating to commencement of actions. Like many decisions of its time, Horne v. Jenkyn draws conclusions but does not explain or amplify them. It is one thing to say that a Lis Pendens issued by a clerk in relation to a statement of claim is invalid and must be removed from title, where the Statement of Claim is later found to be deficient.

It is yet another to explain why, particularly after admitting of the possibility of a favourable pleading amendment.

[ 15 ] Legal jurisprudence, like wine, may improve with age. However, practice and procedural cases that are over 100 years of age should be used cautiously in contemporary litigation. It is clear that the way in which the legal profession and society approach litigation has changed over the years, and has evolved from careful and ritualistic drafting with extreme penalties on failure, to a more benign plain-language approach.

Rules and procedures are now designed to be the servants, not the masters, of litigation. [ 16 ] The New Rules forgive many defects, if forgiveness can be without prejudice, and facilitates getting at and resolving the real issue between the litigants. This is captured in the general principles that set the purpose and intention of the New Rules. 1.2(1) The purpose of these rules is to provide a means by which claims can be fairly and justly resolved in or by a court process in a timely and cost effective way.

Even more relevant for this case is Rule 1.2(4): [ 17 ] 1.2(4) The intention of these rules is that the Court, when exercising a discretion to grant a remedy or impose a sanction, will grant or impose a remedy or sanction proportional to the reason for granting or imposing it. [Emphasis added.] Rule 1.2(4) makes explicit why long gone are the days when a person could lose their right of action by forgetting to put the name of the court on the front page of a statement of claim, and instead putting it only on the document backer. Indeed even backers are now gone.

Page: 5 [ 18 ] Our day-to-day experience reminds us that we are less formalistic and less wedded to the form and wording of documents then the court was historically. A recent Alberta Court of Appeal decision is instructional. Most lawyers practicing today have always accepted the requirement that some things, such as fraud by example, should be specifically pled and with significant detail. [ 19 ] However in 581257 Alberta Ltd v. Augla, 2013 ABCA 16 , the Court of Appeal again reminded trial judges that atypical pleadings do not necessarily mean fatal ones. The 581257 Alberta Ltd v.

Augla case was a civil lawsuit by a former employer to collect monies allegedly taken by two employees. The Court of Appeal had occasion to review the pleadings of the

plaintiff in the context of fraud. In sum, the Court concluded that it is not absolutely necessary that fraud be pled specifically and particularly. The Court of Appeal reviewed the statement of claim and found more than one paragraph that asserted fraudulent conduct though those passaged never used the word "fraud". Nevertheless, the appeal court found that the pleadings were sufficient to advance a case for fraud: 581257 Alberta Ltd v.

Augla, at paras. 32-38. [20] At para. 38, the Court of Appeal indicates that the pleadings can still be sound as long as the statement of claim sets out allegations which, if proven, amount to fraud. Likewise, a statement of claim does not necessarily have to say it is brought pursuant to the "Builders' Lien Act" to allege sufficient facts that would give rise to a builders' lien claim, provided that is otherwise still clear from what is pled. [21] The Horne v. Jenkyn case was referred to in 1972 in New Brunswick, CL Francis & Co Ltd v. Lunney (1972), (NB KB), 6 N.B.R. (2d) 728 (N.B.Q.B.).

Although the processes under the New Brunswick Mechanics' Lien Act were and remain slightly different than those followed in Alberta, including an important affidavit confirming the lien action, counsel cited Horne v. Jenkyn to the learned chambers judge when asked to consider whether a statement of claim was so deficient that it failed to describe a lien action. Although the New Brunswick Court referred to the Horne v. Jenkyn decision there was no discussion of the case. The end result however, was that the mechanics' lien in CL Francis & Co Ltd v. Lunney was preserved.

Counsel did not refer the CL Francis & Co Ltd v. Lunney case to the Master in this case as an alternate approach. [22] Nor was the master referred to the Northwest Territories case, Nelson v. Brewster (1906), 3 W.L.R. 362 (Alta. S.C.), an even older case than Horne v. Jenkyn . In Nelson v. Brewster a plaintiff attempted to amend a statement of claim to add particulars about the case to convert it from a debt action to a lien claim. In a general way the court opined that such amendment only changes the relief claimed and not the cause of action.

If so, it supports the view that a defective lien action that can still be amended should not be procedurally adversely prejudiced by striking the Lis Pendens. [23] In Bristow et. al., Construction Builders' and Mechanics Liens in Canada, 7th. ed., Vol. 2, (Toronto: Carswell, 2005), at p .11-36 ["Bristow"], the authors opine that several courts have found that: Page: 6 A statement of claim that generally complies with the Act, and that sets forth sufficient facts or particulars to disclose the issues to be tried, will be considered adequate, subject to any necessary amendments that may be made before or at

trial. [24] I am mindful that Alberta continues even in its most modern jurisprudence to be universally inflexible on the time limits contained in the Act: Knox v Stagecoach Homes Inc, 2006 ABQB 640, 406 A.R. 337. This is understandable, as these are arguably a type of limitation period which, once missed, cannot be recovered.

This rigidity is no different than the same rigidity that the courts give to missed limitations periods. [25] In my view, cases that interpret time limits strictly under the Act should not set the legal precedent or the tone to evaluate whether a defective pleading amounts to a complete failure to constitute an action under the Act. Allowing relief on a missed limitation does create prejudice to a property owner. However, here, the owner faces no additional prejudice than he would have faced with a more conventionally drafted statement of claim.

The owner's risk was always the same: defending a builders' lien claim. [26] In regards to the statement of claim, although the draughtmanship was poor, the following facts are discernible from it: 1. the legal description of the lands to which the lien presumably relates (para 5); 2. a description of the work done (para 7); 3. that the defendant allegedly failed to pay outstanding invoices (para 13); and 4. that the plaintiff filed a "builders' lien" (para 14). [27] I therefore conclude that although the Statement of Claim in this case is quite atypical for a builders' lien action, it did contain within its body of facts pled sufficient particulars that made it inappropriate to discharge the Lis Pendens on a

summary basis. It is a triable issue because it would be for a trial judge to determine whether the Statement of Claim as worded, or as subsequently amended, contained enough appropriate allegations to qualify as an action commenced under the Act. There is at least an argument there. [28] Before leaving this point I also observe that although it is advisable that the pleadings state the relief requested, an omission of that is not fatal is the relief can be inferred from the pleadings. In Paragon West Developments Ltd v.

Chan (1997), (BC SC), 45 B.C.L.R. (3d) 386, 41 C.L.R. (2d) 46 (B.C.S.C.), the court held that the failure of a writ to request the proper prayer for relief was not significant, as the nature of the claim was obvious from the pleadings. Further, the court

considered that amendments could be made to the prayer for relief in a lien action before or at trial, and that the owners would not suffer any prejudice. They would not be caught unaware of Page: 7 the nature of the claim. This suggests that a Lis Pendens can "ride along" while a claim is amended. [ 29 ] Further, the intended but perhaps misdescribed

summary nature of the Act , and the social policy behind it to protect tradesman, suggest that pleadings should be viewed with a light hand. As noted in Bristow at p 11-34-35, "it was never intended that the benefits of the Acts should be frittered away by requiring the skill of a special pleader to secure them": R. Bickerton & Co. v. Dakin (1891), 20 O.R. 695 (Ont. H.C.J. (Chanc. Div.)). 8.

The Interplay Between a Potential Application to Amend and the Lis Pendens [ 30 ] With respect to learned counsel for the plaintiff, I am puzzled by the plaintiff's reticence not to apply concurrently when faced with the defendant's application before the Master, for the opposing relief to amend the pleadings to incorporate a more traditional lien drafting approach. As this case has now illustrated, bickering about the wording of the Statement of Claim is costly and inefficient and does not get to the true dispute between the parties.

That latter objective is the goal for participants in civil litigation under the New Rules: Rule 1.2(3)(a). [ 31 ] Even today before me there is not a formal application to amend. Nor did I permit an informal oral request at this hearing. Notice would be required. It must have become obvious to the plaintiff's counsel that there were deficiencies in the Statement of Claim, most notable, but not restricted to the fact that the lien registration number, a required particular in the approved Lis Pendens form, was missing in the claim.

Secondly, prudence would have distinguished between the actual lien claim and the more expansive claim for breach of contract, as the lien remedy can only be enforced against the land to the economic level by which the claimant improved the land. [ 32 ] The Master was sympathetic to the plaintiff. He indicated in the body of his reasons that were an application to amend before him, "I would have been inclined to grant it": PTL Bobcat, at para 12. The Master also accepted that if an amendment were made to the pleading, it would be as if the amendment was in the original commencement document.

To me that would mean that the Lis Pendens would take its authority from the amended document. The Master instead accepted the conclusion of Mr. Justice Walsh in Horne v. Jenkyn , and took a technically narrower approach and concluded that at the time the Lis Pendens was issued there was no appropriate legal action.

[ 33 ] With respect I must also disagree. I am simply unable to reconcile Mr. Justice Walsh's decision with the accepted legal concept that the new pleading, as amended, effectively replaces the old. Nor am I able to accept that the clerk of the court was presumptively without authority in issuing the Lis Pendens. In my respectful view, judicial decisions should support the administrative approach taken by the clerks, unless to do so would constitute a miscarriage of justice. Here there is no miscarriage of justice. The defendant knew throughout what type of issue he was facing in the lawsuit.

He knew that he was going to defend against a builders' lien. I regret that I am unable to adopt the decision of Mr. Justice Walsh, as it flies in the face of common sense. I can only attribute the different approach in that case to the time and the Page: 8 circumstance in which that litigation occurred: a time where form prevailed over substance. That time has passed. [ 34 ] Finally, it is not a foregone conclusion that this Statement of Claim could not be successfully amended to provide more of the usual pleadings now routinely found in builders' lien litigation in Alberta.

In any event, the litigant should not lose his lien by choosing to plead in a different way than that which has become standard. In my view, applying a more modern and purposive 21st century approach, which enables parties to utilize the courts to resolve their problems rather than create others, seems a more appropriate way to handle this issue. 9. Conclusion [ 35 ] For all of these reasons I find myself either disagreeing with the Horne v. Jenkyn decision or willing to distinguish it in this particular case. The Act is silent on any essential ingredients of the statement of claim pleading.

We have a Statement of Claim that makes explicit reference to the land involved, the work undertaken, and the builders' lien. Secondly, we have a court enabled function where the clerks can issue a certificate of Lis Pendens. Here that document was issued in Act-compliant format.

To strike the Lis Pendens, while conceding that a debt action remains, does not structure the case in a way that will best resolve the legal issues as contemplated by our New Rules of Court. [ 36 ] For that reason I have concluded that the appropriate thing to do here is to reverse the Master and direct that the Lis Pendens will remain on title until further order of the Court. Alternatively, if the Lis Pendens has been removed from title it will be restored by virtue of this ruling.

However, if there are intervening title registrations that were registered by bona fide claimants for value and without notice, the re-registration cannot prejudice those and the Lis

Pendens will be deemed to be postponed in their favour. Page: 9 [ 37 ] I also wish to conclude by pointing out that the counsel who argued this case before the Master and in part before me is the same counsel who drafted the Statement of Claim. This puts counsel and the court in a very awkward and difficult position. Where an attack is made in the courts about the nature and quality of legal drafting, the draughtsman should not be the advocate supporting the document in the proceedings.

Had the plaintiff in this case through his counsel sought independent legal advice about the quality and nature of the Statement of Claim, it might have been immediately apparent that the Statement of Claim was a significant departure from the usual drafting practice in Alberta for builders' lien litigation. This likely would have resulted in an earlier attempt to improve the wording of the Statement of Claim, which may have gone a long way to getting the parties energies focused on the dispute earlier in time and at reduced cost. Heard on the 7th day of March, 2013.

Dated at the City of Edmonton, Alberta this 13th day of March, 2013. A.W. Germain J.C.Q.B.A. Appearances: Christopher Bataluk Elvis Iginla Iginla & Company for the Plaintiff James Odishaw Odishaw and Guido for the Defendants