Trotter v. Morton Building Technologies Inc., 2017 ABQB 262

Court of Queen’s Bench of Alberta Citation: Trotter and Morton Building Technologies Inc v Stealth Acoustical & Emission Control Inc (Stealth Energy Services), 2017 ABQB 262 Date: 20170411 Docket: 1601 07220, 1601 08559 Registry: Calgary Between: Trotter and Morton Building Technologies Inc. Plaintiff - and - Stealth Acoustical & Emission Control Inc. operating under the firm name and style of Stealth Energy Services, Stealth Acoustical & Emission Control Inc. and Canadian Natural Resources Limited Defendants And Between: Action No. 1601 08559 Hamil Contracting Corp. Plaintiffs - and - Canadian Natural Resources Limited and Stealth Acoustical E Emission Control Inc. Defendants

Corrected judgment: A corrigendum was issued on November 8, 2017; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Reasons for Judgment of J.T.

Prowse , Q.C., Master in Chambers _______________________________________________________ [ 1 ] These two actions concern the validity of two liens filed under the Builders’ Lien Act , RSA 2000, c B-7, (the “BLA”) [ 2 ] One lien was filed by Trotter and Morton Building Technologies Inc. (“Trotter”) and the other lien was filed by Hamil Contracting Corp. (“Hamil”). [ 3 ] Trotter and Hamil were subcontracted to Stealth Acoustical & Emission Control Inc. (“Stealth”).

Stealth is now in bankruptcy and receivership, leaving Trotter and Hamil unpaid. [ 4 ] Stealth in turn had a contract with Canadian Natural Resources Limited (“CNRL”), who hired Stealth under an “Offsite Fabrication Agreement” to build four pumphouse buildings at Stealth’s Calgary facility for use, ultimately, on CNRL’s Horizon oilsands project. [ 5 ] Since they were unpaid, Trotter and Hamil filed liens against the Horizon project.

The key issue [ 6 ] The applications which I heard are for declarations that the liens of Trotter and Hamil are valid. [ 7 ] CNRL asserts that the work and materials provided by Trotter and Hamil do not relate to an ‘improvement’ as defined by the BLA , and therefore cannot form the basis for builders’ liens. [ 8 ] Trotter and Hamil counter that the work and materials do relate to an improvement. [ 9 ] For the reasons which follow, I have concluded that both the pumphouse buildings and the Horizon oilsands project are ‘improvements’ under the BLA , and therefore the liens of Trotter and Hamil are valid (subject to another objection to the Trotter lien – that materials supplied by Trotter were never ‘furnished’, within the meaning of the BLA – that I will deal with later in these reasons).

The pumphouse buildings as ‘improvements’ [ 10 ] The pumphouse buildings were very large and heavy buildings, designed to be firmly affixed to the land and designed to be fully integrated into the larger Horizon oilsands project.

Without more they would appear to be an ‘improvement’ to the Horizon site. [ 11 ] However, the buildings were also designed so that, after they were affixed to the land, they could later be moved without damaging them, and there were contingencies which could lead to them being moved in the future. [ 12 ] Accordingly, CNRL argues that the liens are invalid because the pumphouse buildings were not an “improvement” to the Horizon project. [ 13 ] The BLA defines improvement as follows: “improvement” means anything constructed, erected, built, placed, dug or drilled, or intended to be constructed, erected, built, placed, dug or drilled, on or in land except a thing that is neither affixed to the land nor intended to be or become part of the land. [ 14 ] While CNRL concedes that it was intended that the pumphouse buildings would initially be affixed to the site, CNRL says they were not ‘improvements’ because they were part of an experimental Mature Fine Tailings De-Watering Project (“MFT Project”) which was of uncertain tenure.

[ 15 ] CNRL notes that, if the MFT Project failed, or if another technology was discovered which proved superior to the technology used in the MFT Project, then the MFT Project would be shut down and the pumphouse buildings would, if they proved not suitable to be repurposed where they were, either be moved and repurposed for use elsewhere on the Horizon site, or even scrapped if they could not be repurposed. [ 16 ] While CNRL referred in argument to the MFT Project as a “prototype”, the MFT Project was built to commercial scale and, if successful (and not overtaken by another technology) it, and the pumphouse buildings, would have formed part of the Horizon oilsands project and provided tailings dewatering for years to come.

Tailings management [ 17 ] The following quote taken from a CNRL document confirms that tailings management is an integral part of the production of oil from oilsands plants, such as the Horizon project. It also provides a description of mature fine tailings: The continuous improvement of tailings management is an integral component of successful oil sands mining operations. Reducing the size and need for tailings ponds, and increasing the speed with which they can be reclaimed are ongoing challenges being addressed by the industry.

Canadian Natural has invested more than $1.6 billion in tailings management research and technologies to date. Our investments in tailings management technologies demonstrate our approach to research and development and how we take technologies from pilot project to commercialization. Canadian Natural is using and also researching new processes to reduce the footprint of the Horizon tailings pond and the amount of fresh water required for bitumen processing. These innovative methods will accelerate the process of reclamation, increase water recycling and reduce carbon dioxide (CO2) emissions.

Tailings are the sand, silt, clay and water found naturally in oil sands that remain following the mining and bitumen extraction process. Tailings are transported by pipeline and deposited in ponds where the majority of the solids - mostly sand - settle to the bottom. The remaining fluid - mostly clay, silt and water - flow to the middle of the pond. This mixture is called Fluid Fine Tailings (FFT).

As the solids in the FFT begin to settle it becomes thicker, turning into a mixture called Mature Fine Tailings (MFT). [ 18 ] Some insight into the issues involving mature fine tailings can be found in the following testimony of CNRL’s deponent: Q. Can you confirm that the four pump houses were intended to be used to recover oil under the leases listed in [the Hamil deponent’s] affidavit? A. These pump houses weren't specifically for recovering oil. They were for the recovery and treatment of the mature fine tailings. … Q. And how do you deal with that mature fine tailings layer? A.

The -- the industry was -- is currently struggling with how to deal with that. No one has a solution for it. And most of the operators are trying something a little bit different to try and find a solution. In our case, we were looking to reclaim that MFT layer from the pond, screen it, screen out the debris, and produce a consistent density of -- of slurry of mature fine tailings, and then pump that back to the plant for recirculation and reprocessing. Q. Sorry, to clarify, how do you currently deal with it? I know that the industry is looking for a way, but how do you currently deal with the MFTs? A.

It's just -- it's continuing to build up in the ponds right now. Q. It just builds up in the pond, okay. A. Correct. Q. And so if it continues to build up in the pond, is the current industry standard -- is the plan to kind of turn that into reclaimed land, like dump it underneath something or leave it there or -- like what does the government want you to do with all this stuff? What do they demand that you do with the MFTs? A. My understanding is that ultimately, at the end of mine life, there will be a residual volume of MFT that resides on the site. Q. Okay.

What's your understanding of the government's regulations dealing with the reclamation of these tailings ponds? Like what do they require you to do? A. So my previous answer, at the end of mine life, there will be a residual volume there that currently is being proposed as what's called an end pit lake. So that MFT layer stays within that end pit lake. The balance of the land around is actually reclaimed, revegetated, reforested, but some -- some magnitude of fluid tailings, as it's now called, remains in the end pit lake.

The location and function of the pumphouse buildings [ 19 ] The pumphouse buildings were to be transported (by CNRL) from Stealth’s Calgary yard to the Horizon site and placed at known and specifically designated and prepared locations. [ 20 ] A large physical site was specifically prepared for the MFT Buffer Facility (including the pumphouse buildings) which

included grading of the land, building access roads and drilling holes for pilings. [ 21 ] Once delivered, the pumphouse buildings would be integrated into the larger Horizon MFT Buffer Facility and tailings ponds through the use of pipelines and electrical lines. [ 22 ] The pumphouse buildings would pump and recirculate MFTs to and from tailings ponds and throughout the MFT Buffer Facility, with one of the buildings injecting gland water throughout the process. [ 23 ] The pumphouse buildings were to be an integral part of the MFT Buffer Facility.

The MFT Buffer Facility could not function as designed without the pumphouse buildings in operation. [ 24 ] Furthermore, the entire MFT Buffer Facility, including the pumphouse buildings, were designed to be fully integrated into the larger Horizon project, and would be operated and controlled remotely from Horizon’s main control centre.

The size and degree of affixation of the pumphouse buildings [ 25 ] As an example of the size of the pumphouse buildings, one of them was 24 feet wide, 89 feet long and 21 feet high. [ 26 ] Their weight ranged from 200,000 pounds to 260,000 pounds. [ 27 ] There were 12 - 14 piles concrete piles for each of the pumphouse buildings, with a minimum pile depth of 72 feet. [ 28 ] There was a structural steel base for each of the pumphouse buildings. The building and its structural base were then anchored to the piles by having a metal plate attached by bolts to the piles.

The structural steel base for each building was to be "stitch welded" to the metal plates which were bolted to the top of the piles. [ 29 ] As the metal plates were bolted to the top of the piles, the bolts could be undone and the pumphouse buildings moved without damaging them. The likelihood of the pumphouse buildings staying on the liened Horizon site [ 30 ] There is no way of assigning a percentage to the likelihood that the pumphouse buildings would stay where first placed or elsewhere on the Horizon site. [ 31 ] They are very large and heavy structures and firmly affixed to the land.

They were intended to be put in place, pumps inserted, and operated as part of the overall Horizon site. [ 32 ] However, if the MFT project proved unsuccessful, or if another superior technology was developed, they might be moved. How likely one of these two contingencies might arise is unknowable. [ 33 ] If the pumphouse buildings were moved, it was quite possible that they would simply be moved to another part of the Horizon site, repurposed, and affixed to another portion of the site. CNRL’s deponent discussed that possibility briefly as follows: Q. We were talking earlier about the piles.

With respect to each one of the buildings, you've got specific designated locations where those buildings are going to be placed and to which they are going to be affixed to the land, correct? A. Yeah. Attached to these pilings, that's correct, yes, a somewhat temporary nature so we can remove them, reconfigure them -- Q. Well, sir -- A. -- later -- Q. -- you're speculating. You're just speculating now as to if you need to do it. Right now, the project is that the buildings are going to be placed in specific locations and are going to be affixed to the land, correct? A.

It's where they're going to start with, but these buildings, like many others that we have on site, we relocate them quite frequently.

Case authority on the ‘improvement’ issue – the pumphouses as ‘improvments’ [ 34 ] Counsel for CNRL submits that the facts of this case are similar to the facts considered in Re: Gauntlet Energy Corp. , 2003 CarswellAlta 1885, 49 C.B.R. (4th) 219 , which held that the supplier of sour gas line heater separator packages was not entitled to a lien as the separator packages in question did not constitute an improvement under the BLA . [ 35 ] Gauntlet can be distinguished for the following reasons: (

i) the reasons in Gauntlet do not provide a physical description of the separator packages, or their dimensions or weight. I cannot assume that they were of the size and weight of the pumphouse buildings. (ii) Picture obtained from the pleadings file in Gauntlet seem to show a building and exterior piping and/or equipment mounted on a structural steel skid. It appears that the building portion was much smaller than the pumphouse buildings in question, but more precise dimensions are not available.

(iii) While we are told that the separator packages were designed to be mounted to skids that were to be welded to metal piles driven in the muskeg, due to a lack of particulars we cannot tell how that degree of annexation compares to the 12 to 15 piles, 72 feet deep that we are dealing with here. (iv) The separator packages were designed to be moved, from well site to well site, not to other contiguous lands on the same project lands. [ 36 ] Most importantly, while we are dealing with pumphouse buildings which would have been installed and put into service, with the contingent possibility that they might be moved later on, the tenure of the separator packages was so tenuous that drilling at the initial sites to which they were delivered (and against which, I assume, the liens were filed) did not result in producing wells, and the separator packages were never installed.

They were moved to new well sites where they were then installed. In other words, it appears that they were never installed on the lands which were liened. [ 37 ] In my view, the pumphouse buildings being constructed under the Stealth contract were ‘improvements’ under the BLA .

They were very large buildings, to be securely affixed to the land, and dedicated to tailings management, which was ‘an integral component of successful oil sands mining operations’ (to quote CNRL’s own literature). [ 38 ] The only factor which points to a different conclusion is the contingency that, after being put into operation, the pumphouse buildings would be moved, likely to another place on the liened Horizon project. In my opinion, that possibility is not sufficient to overcome their status as improvements.

The alternative argument advanced by Trotter and Hamil as to ‘improvements’ [ 39 ] Trotter and Hamil argue, in the alternative, that even if the pumphouses are not improvements themselves (because of the contingency that they might in the future be removed) then the Horizon oilsands project is the improvement to which their liens attach.

For the reasons which follow I accept that alternative argument. [ 40 ] While the provision of unpaid production equipment was held not to be lienable in Gauntlet , supra, leave to appeal refused 2004 CarswellAlta 40, 2004 ABCA 20 , and in Rahco International Inc. v Laird Electric , 2006 CarswellAlta 1005, 2006 ABQB 592 , Trotter and Hamil note that the rulings in those cases was based on the premise that equipment itself was not an improvement.

It was not argued in those cases that the well, mine or oilsands plant itself was the ‘improvement’. [ 41 ] Their alternative argument is based on the premise that it is the Horizon oilsands project, to which pumphouse buildings were to be supplied, that is the improvement. [ 42 ] This argument relies on the specific provisions, found in section 6(2) of the BLA , under which the pumphouses are said to be “materials ... furnished ... in connection with ... the recovery of a mineral”.

I note this because some of the cases cited in the Rahco decision deal with equipment not involved in the recovery of a mineral (such as a crop irrigation system). [ 43 ] With respect to the submission that it is the well, mine or oilsands plant which should be considered the ‘improvement’, support can be found in the decision of the Saskatchewan Court of Appeal in Grey Owl Engineering Ltd. v Propak Systems Ltd. , 2015 CarswellSask 612, 2015 SKCA 108 , 392 D.L.R. (4th) 64.

I note that the wording of Saskatchewan’s builders’ lien legislation is almost identical to the wording of the BLA . [ 44 ] In Grey Owl , the Onion Lake Cree Nation leased its mineral rights in a parcel of land to BlackPearl Resources Inc. (“BlackPearl”). BlackPearl contracted with Propak Systems Ltd. (“Propak”) for engineering, procurement, and fabrication services connected to a modular oil extraction system that was to be provided by Propak for use on BlackPearl's leased land.

Propak entered into a subcontract with Advanced Metal Concepts and Fabrication Ltd. (“Advanced”) for the construction of three storage tanks to be used on the land as part of the modular oil extraction facility. In its turn, Advanced entered into a subcontract with Grey Owl Engineering Ltd. (“Grey Owl”) to provide engineering design services relating to those storage tanks. Grey Owl, the lien claimant, filed its lien against the mineral parcel. [ 45 ] Each storage tank was designed to be 24 to 38 feet tall and to weigh between 34,000 and 43,500 pounds. Each tank was to sit on an engineered gravel pad.

Piles would run through the gravel pad and extend about 20 feet into the ground. An anchor chair would be welded to the base of the tank and then bolted to the piles. The three tanks would then be connected to the entire oil extraction facility through steel and fiberglass piping that would be bolted to the tanks. [ 46 ] In the Court below, Propak argued successfully that the ‘improvement’ to be considered was the storage tanks, which in Propak’s submission were not sufficiently affixed to the land to meet the definition of improvement in the Saskatchewan legislation.

Propak cited in support of its argument both the Gauntlet and Rahco decisions. [ 47 ] The Saskatchewan Court of Appeal summarized the decision of the Court below as follows: The Chambers judge concluded that the storage tanks were capable of being moved, which he took as indicative of the parties’ intention. The tanks were part of a modular system that could be relocated to any other heavy oil field in Saskatchewan once they were no longer needed on the proposed site. They were not designed to be moved around the site, but they were capable of being moved beyond that site once the project was finished.

Since they were capable of being moved, the Chambers judge held that they were not an improvement. Since they were not an improvement, Grey Owl’s claim of lien was not valid. [ 48 ] In overturning the decision below, the Saskatchewan Court of Appeal made the following observations: 18 In short, it is a mistake to begin and end the inquiry with whether the storage tanks are the improvement. The issue is whether Grey Owl provided "services" "on or in respect of an improvement for an owner, contractor or subcontractor" within the meaning of s. 22 and, as part of this analysis, identify the improvement in question.

36 As can be seen from the Stauth affidavit, Grey Owl was retained to provide engineering drawings with respect to storage tanks thatwere to be used by the contractor or principal subcontractor "as part of their oil extraction system." In such circumstances, it is an error toask whether the claimant claims a lien in the storage tanks as an "improvement." Applying Hansen, the "improvement" with respect towhich the legislation is concerned is the project that will lead to the extraction of oil. (emphasis added) [49] The Grey Owl decision was approved and applied by the Court of Queen’s Bench of Alberta in Davidson Well Drilling Ltd.(Receiver of) v Bank of Montreal, 2016 CarswellAlta 1401, 2016 ABQB 416. [50] In Davidson the lien claimants had done work, as subcontractors to Davidson Well Drilling Ltd. (“Davidson””) on twoSyncrude Canada Ltd (“Syncrude”) sites known as the Aurora Mine Site and the Base Mine Site.

The Syncrude sites were open pit minesites on lands subject to oil sands leases. In the case I am considering, the Horizon project is likewise an open pit mine on lands subjectto oil sands leases. [51] The work provided by the lien claimants consisted of resource coring, drilling, geotechnical testing, sonic/auger rig drilling,dewatering/depressurizing and exploration work. [52] The particular lien, relevant to the issue of what was the ‘improvement’, was filed by 72619 Alberta Ltd o/a RoughriderInternational.

Roughrider filed a lien relating to repair and maintenance of Davidson's rigs and support equipment. [53] Roughrider’s lien was challenged on the basis that its work did not relate to an improvement because equipment thatRoughrider provided maintenance services to was not affixed to the lands or intended to become part of the lands. Gauntlet and therefusal of a leave to appeal the Gauntlet decision were cited in support of the challenge to Roughrider’s lien. [54] The Court in Davidson rejected the challenge and relied on and approved Grey Owl as follows: 77.

Further, the approach in Grey Owl is fully in accord with the approach in a number of Alberta Court of Appeal cases, includingSchlumberger, discussed above, and PTI Group Inc. v ANG Gathering & Processing Ltd., 2002 ABCA 89 (Alta. C.A.) at para 11, citingAlberta Gas Ethylene Co. v. Noyle, (1979), 1979 ABCA 334 , 20 A.R. 459, 1 A.C.W.S. (2d) 344 (Alta. C.A.). 78. In paragraphs 8 - 10 of Alberta Gas Ethylene, the Court of Appeal held: [8] It is apparent that the work done by Burmac was done directly upon the portable buildings and the propane supplied by Cigas wasused in those buildings.

This in itself does not create the basis for a lien against the land, as there is no evidence that the portablebuildings were improvements. Their description as "mobile" makes it apparent that they were "neither affixed to the land nor intended tobe or become part of the land". Further, the respondents do not contend that the portables were improvements. [9] The improvement involved in this case was the construction of a gas extraction plant. The issue is whether Burmac's work and Cigas'materials were work and materials done or used “upon or in respect of” that improvement.

In essence this amounts to a determination ofwhether work done and materials used to provide sleeping accommodation and food services for persons who labour upon animprovement are work done and materials used “in respect of an improvement”. [10] As I see the problem, the respondents’ work and materials must be examined in relation to the overall project, rather than in relationto the rented chattels on which they were directly expended .... 79. I conclude that both the Alberta Court of Appeal and the Saskatchewan Court of Appeal consider "improvement" from theperspective of the “overall project” involved.

In other words: (

i) the “overall project” is the “improvement”; (ii) the “overall project” constitutes the “thing constructed, erected, built, placed, altered, repaired, improved, added to, dug or drilled orintended to be constructed, erected, built, placed, altered, repaired, improved, added to, dug or drilled on or into, land”; and (iii) the “overall project” would also be the thing that is “affixed to the land or intended to become part of the land.” 80.

To the extent that [the decision refusing to grant leave to appeal the Gauntlet decision] is inconsistent with this approach, and I amnot sure that it is inconsistent, it has less weight as the decision of a single Justice, while the other decisions cited were by full panels ofthe Court of Appeal. [55] The decision in Davidson, and the Court of Appeal decisions cited therein, fully support the arguments of Trotter and Hamilthat their liens are valid on the basis that the relevant ‘improvement’ was the Horizon oilsands project. [56] Further indirect support for the proposition that it is the well, mine or oilsands plant which should be considered to be theimprovement is the line of Alberta cases which have validated builders’ liens filed on the ‘wrong’ land (not the land to which the workor materials were supplied) so long as the ‘right’ land is adjacent to or in close proximity to the liened land, and provided that they arepart of a common purpose. [57] In other words, even where the lien is filed on the ‘wrong’ land, it is the “overall project” (to use the language found in theDavidson decision) which is considered, and thus work may be considered to have been done on an ‘improvement’ even where the workwas done on another parcel of land and not the parcel that was liened.

That line of cases is cited in MJ Ltd. v Prairie MountainConstruction

(2010) Inc., 2016 CarswellAlta 1816, 2016 ABQB 395. [58] I agree with and am bound by the decision in Davidson, and consequently accept the alternative argument of Trotter andHamil that their liens are valid, even if the pumphouses themselves are not considered to be an ‘improvement’ but rather where theHorizon oilsands project is considered to be the ‘improvement’.

Other arguments as to lien invalidity – materials not delivered to site [59] Both CNRL and Hamil submit that some portions of Trotter’s lien are invalid insofar as it relates to materials to be suppliedby Trotter. CNRL and Hamil argue that these materials were never ‘furnished’, within the meaning of the BLA, to the Horizon site. [60] Before proceeding, it should be noted that someone who furnishes materials potentially has two types of liens available to it.See J.

Wood Co. v Canadian Credit Men’s Trust Ass’n, (AB CA), 1962 CarswellAlta 1, 35 D.L.R. (2d) 245, 39W.W.R. 593, 4 C.B.R. (N.S.) 149. [61] One type of lien (provided for by section 17(2) of the BLA) contemplates that an unpaid vendor of materials, who hasdelivered materials, and thus has lost its possessory lien for the purchase price, nevertheless has a charge over those materials providedthat they have not been incorporated into the improvement. Effectively, it extends the possessory lien even though possession has beensurrendered. [62] This type of lien is not under consideration here.

Trotter (or its subcontractor) still has possession of the materials in questionand thus still has a possessory lien for the purchase price. [63] The second type of lien, which is at stake here, is a lien which a supplier of a material asserts over the real property againstwhich the lien has been registered. This lien is established under

section 6 of the BLA which provides: 6(1) Subject to subsection (2), a person who (

a) does or causes to be done any work on or in respect of an improvement, or (

b) furnishes any materials to be used in or in respect of an improvement, for an owner, contractor or subcontractor has, for so much of the price of the work or material as remains due to the person, a lien on theestate or interest of the owner in the land in respect of which the improvement is being made.

(2) When work is done or materials are furnished (

a) preparatory to, (

b) in connection with, or (

c) for an abandonment operation in connection with, the recovery of a mineral, then ... (emphasis added) [64] While part of Trotter’s lien relates to work done by Trotter, as a sub-contractor to Stealth, as the designer of the HVAC systemfor the pumphouse buildings, some of Trotter’s lien relates to the supply of materials, namely air-conditioning and heating units. [65] These units were to be delivered to the Stealth assembly site in Calgary.

From there CNRL would arrange for theirtransportation to the Horizon site and their subsequent installation in the pumphouse buildings. [66] Trotter engaged ICE Western Sales (“ICE Western”) to provide air-conditioning and heating units. [67] ICE Western invoiced Trotter for the air-conditioning units in the amount of $190,851.15. Trotter has paid ICE Western theamount of these invoices. Part of Trotter’s lien includes this amount. These units remain in the possession of ICE Western. [68] Ice Western also invoiced Trotter for heating units in the amount of $97,590.15.

Trotter paid for and obtained possession ofthe heating units.

They were never delivered to Stealth’s yard but remain in the possession of Trotter. [69] CNRL and Hamil argue that the air-conditioning and heating units are materials never actually ‘furnished’ within themeaning of the BLA, and therefore Trotter is not entitled to a lien upon the Horizon lands for the amount of the ICE Invoices. [70] CNRL and Hamil point to section 9(1) of the BLA which states: 9(1) Material is considered to be furnished to be used within the meaning of this Act when it is delivered either on the land on which it isto be used or on such land or in such place in the immediate vicinity of that land as is designated by the owner or the owner’s agent or bythe contractor or the subcontractor. [71] Unless Trotter can establish that section 6(1)(

b) and

section 9 apply only to a materialman, namely someone who exclusivelysupplies materials, then Trotter’s lien (insofar as it pertains to materials such as the air-conditioning and heating units) will be invalid,because delivery under

section 9 (to the site or some designated place in the immediate vicinity of the site) is a condition precedent to avalid lien regarding materials supplied. See Nelson Lumber Co. v Integrated Building Corp., (SCC), [1973] S.C.R.456, 1973 CarswellAlta 50 at para 7, and Creative Door Services Ltd. v Peat Marwick Limited, (AB KB), 1988CarswellAlta 300, [1988] A.W.L.D. 1530, 61 Alta. L.R. (2d) 368, at para 36. [72] Counsel could find no Alberta case precedent on whether section 6(1)(

b) and

section 9 of the BLA apply only to someonewho exclusively supplies materials. [73] In the Ontario case of 1508270 Ontario Ltd. v Laudervest Developments Limited, (ON SC), 2007CarswellOnt 10017, 186 A.C.W.S. (3d) 909 the plaintiff lienholder had a contract to manufacture, deliver and install all kitchen andbathroom cabinets for a high-rise condominium building. The liens had been discharged pursuant to a payment of security into court, and

the defendant was applying to reduce the amount paid into court on the basis that it was more than the maximum lienable amount. [ 74 ] The lienholder (Arya) claimed that the cabinets for the 8th, 9th and 10th floors were manufactured and stored in Arya's factory on the defendant’s instructions, and Arya has not been paid for the manufacture, delivery and installation of cabinetry on floors 2 through 7. [ 75 ] The relevant provision of Ontario’s Construction Lien Act provided:

Section 14: A person who supplies services or materials to an improvement for an owner, contractor or subcontractor has a lien upon the interest of the owner in the premises improved for the purpose of those services or materials. Section 1(2): For the purposes of this Act, materials are supplied to an improvement when they are,

a) placed on the land on which the improvement is made;

b) placed upon land designated by the owner or an agent of the owner that is in the immediate vicinity of the premises , but placing materials on the lands so designated does not, of itself, make the land subject to a lien; ( emphasis added)

c) in any event, incorporated into or used in making or facilitating directly the making of the improvement. [ 76 ] I note that these provisions are quite similar to the provisions in Alberta’s BLA . [ 77 ] The Ontario Court then considered a number of authorities, including Nelson Lumber and ruled: Applying the reasoning of the courts in these cases, I find that Arya is not entitled to a lien over the portion of the claim that is for the cabinetry for the 8th, 9th and 10th floors ... because the cabinetry was not delivered to the site or to the immediate vicinity. [ 78 ] In other words, in 1508270 Ontario the Court applied the requirement for delivery of materials to a lienholder who was both providing materials and providing services (i.e. installation). [ 79 ] I am in agreement.

I can see no logic for requiring a material supplier to deliver materials in order to obtain a lien, but to allow Trotter a lien for undelivered materials, just because Trotter was also providing work. [ 80 ] Therefore, as the materials being furnished by Trotter never reached the Horizon site, the portion of Trotter’s lien for the supply of materials is invalid. Costs [ 81 ] If the parties cannot agree on costs of this application, then they may seek a ruling from me in that regard. Heard on the 01 st day and 31 st day of March, 2017. Dated at the City of Calgary, Alberta thi s 11 th day of April, 2017. J.T.

Prowse, Q.C. M.C.C.Q.B.A. Appearances: J. Gary Greenan Greenan Law for the plaintiff Trotter Robert H. Anderson

Warnock, Rathgeber & Company for the plaintiff Hamil Brent W. Mescall G. Scott Watson Parlee McLaws LLP for the defendant CNRL _______________________________________________________ Corrigendum of the Reasons for Judgment of J.T. Prowse, Q.C., Master in Chambers _______________________________________________________ The action number has been changed from 0801 09808 to 1601 08559 on page one