Graham Construction and Engineering Inc v Alberta (Infrastructure), 2021 ABQB 184

Court of Queen’s Bench of Alberta Citation: Graham Construction and Engineering Inc v Alberta (Infrastructure), 2021 ABQB 184 Date: 20210308 Docket: 1803 24031 Registry: Edmonton Between: Graham Construction and Engineering Inc., Jardeg Construction Services Ltd., a JV, Graham Construction and Engineering LP Applicants - and - Her Majesty the Queen in Right of Alberta as represented by the Minister of Infrastructure, Travelers Guarantee Company of Canada, All-West Northern Glass Ltd., Antex Western Ltd., Camino Modular Building Systems, Exel Systems Inc., Fraser Valley Industries Ltd., Jensen Contract Flooring Ltd., Lambert Radiation Shielding, Liberty Mutual Insurance Company and Liberty International Underwriters as assignee of ACR Services, Claude Anderson, Kent Anderson, Gregory Barber, Joyce Belcourt, Toby Burns, Bruce Cain, Doreen Cardinal, Leo Casey, Coastal Safety Consulting, Brittany Cook, Mike Dean, Chris Deschenes, Patricia Dewsbery, Michael Doyle, Reginald Duguay, Jacob Fors, Jeanna Gamblin, Mike Gilles, Gregg Distributors (Grand Prairie) Ltd., Diego Guerrero, Levinson Guerrero, Shawn Gunnlaugson, Valentine Gyorfi, Dwayne Hamilton, Hugo Lavoie, IK Construction Inc., Jary Interiors Ltd., Werieth Kuel, Gabriel Lanteinge, Sylvaine Lanteinge, Michel Larrivee, Stephane Leblanc, Ryan Lehbauer, Geatan Letourneau, Lyle L’Hirondelle, Jerry Mack, Eugene Mageau, Analiza Manguiat, Nathan Marchbank, Tracey McDonald, Heather McKay, Monsalve Construction, Joe Moreiera, Jamie Moreno, Don Mudford, Cathy Palmer, Gladimir Perez, Marcel Porier, Dusty Pollard, Proline 100 Inc., Gary Ribbers, Paul Roantree, Sarah Russell, Safohhen Kwansemah Taping Ltd., Matt Stowe, Stretch Penny Industries Ltd., Tehilla Construction Ltd., Svitlana Tkach, Tony Van Dyke, and Andre Verreault, LSM Lee’s Sheet Metal

(2007) Ltd., McGregor & Thompson Hardware Ltd., McMurray Store Fixtures

(1981) Ltd., Norfab MFG

(1993) Inc., Northern Lights Drywall Ltd., Otis Canada Inc., Plan Group Inc., Schendel Mechanical Ltd., Serv-All Mechanical Services Ltd., Shanahan’s LP, Sure Seal Contracting Limited, Thermal Systems KWC Ltd., Tyco Integrated Fire and Security Canada Inc., Wapiti Gravel Suppliers, and RBK Millworks Ltd. Respondents Corrected judgment: A corrigendum was issued on March 9, 2021; the corrections have been made to the text and the corrigendum is appended to this judgment. The following is an appeal decision of the decision Graham Construction and Engineering Inc v Alberta (Infrastructure) 2019 ABQB 769 . _______________________________________________________ Decision

of the Honourable Madam Justice Avril B. Inglis _______________________________________________________ Introduction [ 1 ] The appellant, Graham Construction and Engineering Inc (et al), appeals the Order of Master Schlosser of October 2, 2019. [ 2 ] The action involving all parties originates from the construction of the Grande Prairie Hospital. Graham’s role was general contractor. The relationship between Graham and the Ministry of Infrastructure ended in September 2018. Graham sent their invoices for its subcontractors as it always had.

The Ministry passed those invoices on to Altus, who acted as a cost consultant throughout the project to confirm them. The amounts unpaid from those invoices total approximately $30 million. [ 3 ] Claims from other parties were sent to the Ministry for the project totaling over $60 million. The Ministry subsequently paid $30 million interpleader funds into court. Two significant payments from those funds were made in April and July 2019, representing 17 claimants, following orders from the Masters.

Those claimants had all submitted forms stating their claim pursuant to the Public Works Act , RSA 2000, c P-46 (the Act ). [ 4 ] Thirty-two other parties who did not follow that same claim process, including Graham, hold outstanding invoices that are certified by the cost consultant. Graham’s application before the Master was to receive the remaining funds, totaling almost $8 million. [ 5 ] No other parties agree with Graham’s suggested application of the Act.

They argue that Graham did not qualify themselves for distribution pursuant to that provision, and that Graham’s legal position favors contractors over subcontractors. The Ministry argues that a categorization of priority claimants directed by the Master is wrong in law. [ 6 ] For the reasons that follow, Graham’s appeal is dismissed. A party cannot issue an invoice in the regular course of business and then rely on it, rather than a specific claim pursuant to the Act , to qualify for the remedial payments available from the Act .

Not only does that procedure fail to meet the requirements and purpose of the Act , it would be prejudicial to subcontractors who do not have that option. [ 7 ] The Master’s decision is incorrect by suggesting that some parties that did not fully qualify themselves as claimants may be payable after the original qualifying group has been paid. The Act does not allow for a hierarchy of those that qualify and those that almost qualify. Background Facts [ 8 ] In July 2011, Graham contracted with the Ministry to be the Hospital’s construction manager.

As required by their contract, Graham consistently provided monthly progress invoices to the Ministry – both for Graham and their subcontractors. Altus’s role was to certify the progress invoices. [ 9 ] On August 17, 2018, Graham issued a notice of termination to the Ministry terminating their contract. On September 10, 2018, the Ministry terminated Graham’s right to continue work pursuant to the contract. Nine days later the Ministry demanded a list of creditors from Graham pursuant to

section 16 of the Act : The Crown may, in writing, require a contractor or any of the contractor’s subcontractors to send to it by registered mail within 15 days from the date of the mailing of the demand, a list of the names of and the amounts owing to the contractor’s or subcontractor’s creditors for labour, equipment, materials or services used or reasonably required for use in the performance of a contract or the subcontract, as the case may be. [ 10 ] Graham complied with the demand on October 3, listing the names and amounts owing to their subcontractors for labour, equipment, materials and services used for the performance of the contract up to and including October 2.

In argument, Graham refers to this as the “inclusive PWA claim.” [ 11 ] Following dismissal of Graham from their role as general contractor, claims were filed with the Ministry by various vendors. Many of those claims specifically were “notices” pursuant to the Act (see below). Graham and some others did not submit notices of their claims in a form or on a timeline that is required by the Act . The Crown paid over $30 million into court pursuant to the provisions of the Act , subsequent to a Master’s order in February 2019. [ 12 ] On March 25, 2019, Graham filed an application to distribute those funds.

The application accounted for all of the money held by the court, including an attribution to Graham for $3.5 million. Some parties opposed the distribution proposed by Graham, claiming only they held priority from s 15(5) of the Act . Specifically, they argued that Graham (and others) had not filed a s 14 claim and those parties that did had priority for distribution. [ 13 ]

Section 14 of the Act reads:

(1) When

(

a) a person provides labour, equipment, material or services used or reasonably required for use in the performance of a contract with theCrown for the construction, alteration, demolition, repair or maintenance of a public work, and (

b) that person is not paid by the party who is legally obliged to pay that person, that person may send a notice of that person’s claim to the Minister, or agent of the Crown that is responsible for the public work. …

(3) The notice of claim, other than for a claim referred to in subsection (2), must (

a) be sent by registered mail not later than 45 days after the last day on which the labour, equipment, material or services were provided,and (

b) set out the nature and amount of the claim in a form satisfactory to the Crown. [14]

Section 15 of the Act reads: In this section, “surety” means a person who guarantees to the Crown the payment of creditors.

(1) Thirty days after giving notice in writing to the contractor and surety, the Crown may pay the claimant the amount the Crownconsiders proper and deduct the amount so paid from any money due and payable to the contractor on any account or from the money orsecurity, if any, deposited by the contractor with the Crown.

(2) If there is insufficient money due and payable to the contractor to permit the deduction, the surety, if any, shall to the extent of thesecurity, pay to the Crown on demand an amount equal to the amount paid to the claimant by the Crown.

(3) In paying a claim under subsection (1), the Crown may act on any evidence that it considers sufficient and may compromise anydisputed liability, and as against the Crown payment is not open to dispute or question by the contractor or the surety, if any, but is finaland binding on them.

(4) Instead of paying the claimant as provided in this section, the Crown may apply to the Court of Queen’s Bench to pay the money intoCourt on the terms and conditions, if any, determined by the Court and, on the money being paid into Court, the Court may determinethe persons who are entitled to the money and direct payment of the money in accordance with that determination.

(5) Notwithstanding anything to the contrary in any other Act, a person having a claim under

section 14 with respect to a public work haspriority over any other claimant with respect to any money payable under the contract with the Crown for the construction, alteration,demolition, repair or maintenance of that public work. [15] Many claimants who filed notices pursuant to the Act have received payment for their certified progress claims. Theremaining funds, almost $8 million, were the subject of the second, October 2, 2019 decision.

Master’s decision and issue on appeal [16] That second decision, now under appeal, determined that any contractors and sub-contractors whose claims had“substantially” complied with the Act could be assessed on a case-by-case basis for payment. Graham contests that process, claimingthat the remaining funds should be paid to them and that their claim is sufficiently made to qualify them as claimants.

The Ministry (andother parties) also disagree with that process, arguing that the Act does not allow for a layering of priorities in that fashion. [17] Specifically, the Master noted that some claims that did not exactly meet the requirements of the Act could still qualify forpayment, at para 10 of the decision: The cases of Cookshaw and Alberta v Stuart Olson Construction Ltd (at para 9) indicate that there may be some latitude in the noticegiven under the Public Works Act.

At a minimum, the notice must indicate that it is ‘in form and substance a claim under the Act’ and, aswell, detail the nature of the claim against the contractor (Jamison v Alberta (1992), 1991 ABCA 239 , 120 AR 398 (Alta CA)). [18] Relying on the flexibility he found in that statement, the Master then determined that there was a priority for distribution toAct claimants whose claims had been perfected and verified.

Then, if there were still funds with the court, other subcontractors withclaims that were not “perfected” could be assessed on a case-by-case basis to determine if their claims had complied sufficiently with theAct to trigger payment. [19] The primary issue argued on appeal is whether or not the Master erred in holding that there are two different classes ofclaimants as defined by the Act – those who “complied” and those who “substantially complied” with the notice requirements under s14. [20] If so, Graham seeks a subsequent order of this court that Graham is

an Act claimant that is entitled to a share in thedistribution of the interpleader funds in accordance with the amounts set out in the allocation of their initial application, and a directionthat the distribution be made. If not, then no interpleader funds should flow to parties that did not meet the requirements of the Act asclaimants. Standard of Review

[21] The standard of review for an appeal under Rule 6.14 of the Alberta Rules of Court, Alta Reg 124/2010 is correctness for allissues. See Clark Builders and Stantec Consulting Ltd v GO Community Centre, 2019 ABQB 706 at para 30: The parties acknowledged that the standard of review for an appeal under rule 6.14 is, on all issues, correctness. … McGowan v Lang,2015 ABCA 217 (Alta CA) at para 32 ("it is trite law that an appeal from a master is de novo and on such appeals no deference is owed .. . Therefore, the chambers judge was not bound by any finding, fact or otherwise, made by the master") ...

Analysis Issue 1- Is section 15(5) enforceable? [22] Graham argues that s 15(5) is unenforceable because of its ambiguity and uncertainty. Section 15(5) of the Act createspriorities to claims where notice is given under s 14(3). Priority is limited to “any money payable under the contract with the Crown.”There is no mechanism in the Act that identifies the fund to which the priority attaches.

As well, they argue that interpreting the Act torequire strict adherence to the notice provisions would allow parties to claim money that is earned and payable to other claimants simplybecause a particular form was used. [23] Graham cites those cases relied on by the Master to argue that compliance can take many forms, specifically Alberta vCookshaw Electric

(1975) Ltd (1981), (AB KB), 30 AR 426 (QB) at para 14 and Alberta v Stuart OlsonConstruction Ltd (1982), 42 AR 334 (QB) at paras 3 & 8. [24] Graham asks this court to articulate with clarity the scope and content of s 15(5) as it defines the priority of claimants. Relyingon Lawrence Customs Brokers

(1970) Ltd v Alberta (1985), 1985 ABCA 200 , 63 AR 364 (CA), they argue that caselaw hasdescribed the purpose of the

section is to maintain the Crown’s discretion to determine, compromise and pay claims under the Act that itdeems proper and without challenge. [25] Cookshaw says that the Act’s purpose is also to protect those persons who provide labour, equipment, material or servicesused or reasonably required for use in the performance of a contract with the Crown for the construction, alteration, demolition, repair ormaintenance of a public work. [26] The Act allows the Crown discretion under the

section to determine and pay claimants. Graham argues that the application ofthe Act will allow parties to claim money that was potentially earned and payable to other claimants simply because the other claimantssent in a form. They suggest that result is clearly wrong, relying on Royal Bank v Sparrow Electric Corp, (SCC),[1997] 1 SCR 411 at para 109, where the Supreme Court of Canada cited from an

article by Professor Roderick J Wood: ... there is little controversy with the proposition that a priority rule should be capable of producing reasonably predictable results. Anunclear priority rule imposes a number of social costs. It means that creditors must plan their affairs against less certain outcomes.Uncertain rules generate more litigation than clear rules. Over time an uncertain rule is sometimes transformed into a clear rule throughthe process of judicial

interpretation. However, this is a piecemeal approach which often occurs at a glacial pace. [27] Graham submits that the ambiguities inherent in the Act, including the uncertainties that plague the payment of progressclaims, and the unpredictable nature of the withholding under the Prime Contract, are fatal to the enforcement of the priority allegedlygranted by s 15(5) of the Act. Essentially, they argue, an unenforceable priority is no priority at all. [28] This argument exhibits a failure to recognize a key purpose of the

section as it relates to Graham’s claim. Section 15(5)ultimately creates more certainty to how the Crown will determine who can be paid pursuant to the Act. Any source of uncertainty in theoutcome of that application is the discretion allowed the Crown, not the Act’s process which creates the priority (which, factually, is theissue for Graham in this matter). [29] The Act creates a scheme for claimants to follow to participate in a payment process which is specific (see below) anddiscretion for the Crown’s response to those that follow the process. The process is not unclear.

The application of the Crown’sdiscretion may not always be predictable, but identifying who may be paid. As respondent Plan Group summarized in response toGraham’s argument: “To so allow would result in a perverse state of affairs under which every single invoice received by the Minister onevery public work undertaken would trigger the “claim” process under the Act.” [30] Section 15(5) is enforceable. Issue 2 – Does a claim need to be “submitted” in a specific form to trigger s 15? [31] For the purposes of this

section of the appeal, it is presumed that Graham does “have a claim” as defined in s

Section 14 ofthe Act, they argue, dictates that a claim exists necessarily before it is submitted. As such, those that have claims – regardless of theirsubmission status – cannot be barred from relying on s 15. [32] A case on point provided by the appellants is Alberta v Gall (First Steel Fabricating Ltd) (1983), (ABKB), 45 AR 384 (QB). At para 18 the Court noted: Fifth, does a person who fails to send his claim to the Crown within the time provided by s 14(3)(

a) lose the priority referred to in s15(5)? That subsection speaks of “a claim under

section 14 with respect to a public work”. Does this mean a claim for a debt owed to theperson by a contractor or subcontractor that falls within s 14(1), or such a claim of which notice has been given within the requirementsof s 14(3)? In my view, the wording of s 15(5) standing alone favours the former. Otherwise it would have referred to “a person havinggiven notice of a claim under

section 14”, or, better, “a person having a claim under

section 14 and having given notice thereof pursuant

to

section 14”. However, I prefer the view that the second

interpretation is correct, because one must read s 15(5) in its context. Althoughs 15(5) was enacted in 1976, it must be read together with the first four subsections and indeed ss 14 and 15 together. The first foursubsections of s 15 can be interpreted only as referring to persons who have given notice of a claim.

Subsection (5) must be interpreted inthe same manner, in the absence of language which clearly requires an alternative construction. (emphasis added) [33] Graham disagrees with this conclusion in Gall, and argues that the first option - a claim as defined by s 14(1) maintainspriority regardless of notice - is the correct application of the Act.

They allege that a person who seeks protection from this Act wouldread s 14 as it defines the priority, note that they “may” send notice, but see no positive obligation on them to act in a way to preservetheir priority status. [34] Specifically, Graham argues that the proper approach to statutory

interpretation to be applied is that affirmed by the SupremeCourt of Canada in 2004 in AUPE v Lethbridge Community College, 2004 SCC 28, at para 25 where the Court stated as follows: The prevailing approach to statutory

interpretation is that proposed by Elmer A. Driedger, wherein “the words of

an Act are to be read intheir entire context, in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and theintention of Parliament… [35] Applying that principle Graham argues that having a claim entitles them to share in the distribution of any funds paid intocourt regardless of their claim submission status. [36] Graham cites Encana Corp v ARC Resources Ltd, 2011 ABQB 431 at para 30 to support their reading of s 14, suggestingthat to require notice defeats a right to a claim: There is an interpretive presumption that the legislature does not intend to abolish, limit, or otherwise interfere with private property orcommon law rights, unless the intention to do so is expressly stated or necessarily implied.

Therefore, legislation that curtails privaterights is strictly construed. [37] Graham asks for a contrary conclusion than this court’s earlier decision of Moonview Builders Ltd v Alberta Housing Corp(1983), (AB KB), 24 Alta LR (2d) 66 (QB) at paras 10-11:

Section 15 then permits the Crown, after receipt of notice of the claim, to deduct the amount from any balance owing to its contractorand to remit it directly to the claimant. Alternatively, if there appears to be a dispute, it can pay the money into court and let the courtdecide who is entitled to the funds. Since the decision in AG Alta v Indust Rel Bd the legislature has seen fit to amend the Act by addings 15(5) [1976, c 46, s 2, which amended the Public Works Act, RSA 1970, c 303], which reads as follows:

(5) Notwithstanding anything to the contrary in any other Act, a person having a claim under

section 14 with respect to a public work haspriority over any other claimant with respect to any money payable under the contract with the Crown for the construction, alteration,demolition, repair or maintenance of that public work. I am satisfied that this amendment does, indeed, grant a priority to a claimant as against all other creditors of a defaulting contractor orsubcontractor, secured or otherwise, to the moneys payable under s 14 of the Act.

However, this amendment does not appear to deal withthe question of priority to any moneys payable under ss 14 and 15 if one or more claimants have properly filed under s 14 and there areinsufficient funds available to satisfy the claims of all valid claimants. [38] Finally, the appellant cites Cookshaw. The issue before the court in that case was method of notice. The claimant, who had aclaim and prepared a notice pursuant to the Act, had not used registered mail as required but regular mail. The notice was received withinthe dictated time frame.

This Court held at para 14: ...The main thrust of s 14, in my view, is to provide for the giving of notice to the Crown of the claim or claims in question in theprescribed detail and within the time limit set forth in the Act, and thus it should not matter by what means the notice or notices reachedthe appropriate governmental authority. … To hold that the department is entitled to ignore notices of claims in proper form and clearlygiven within the 35 days stipulated would, in my view, lead to an absurdity.

In addition, the entire purpose of the material sections of theAct would be defeated, in that claimants would be unable to file under the Act in the event of a postal strike at or during the critical time.Thus, on the basis of the authorities quoted above, I find that the word “shall” in s. 14(2.1) does no (sic) preclude methods or means otherthan by registered mail of sending notices under the section. (emphasis added) [39] Graham provided invoices to the Ministry. Those invoices were provided within the time period the Act requires notice ofclaims be filed.

Graham asks this court to apply Cookshaw’s reasoning and extend the lenience for the method of delivery to theinformation provided. That is, if regular mail is sufficient delivery (despite the explicit requirement of the Act), then an invoice issufficient “notice”. [40] Graham argues that the Minister requires only substantive notice of the amounts that remain unpaid so that the Minister canmake informed decisions when exercising the Act’s discretion to determine who shall be paid.

Further, they suggest that Moonview is nolonger correct, and that it failed to analyse the language of the Act to determine if it is precise enough to prioritize claims of one creditorover another. They argue that the Act and statutory

interpretation has changed sufficient that the Court ought not to apply Moonview tothe modern Act and modern construction projects. [41] The responding Ministry disagrees with the conclusion that Graham asks this court to draw. They argue that requirements ofthe Act are straightforward and create obligations on a party with a claim to pursue that claim relying on the Act in order to receive thebenefit of the avenue of payment created by the Act. It is clear that only a party who gives actual notice of a claim, specifically according

to the Act , is entitled to the Act ’s protections. There is a significant difference between how a notice is delivered to the Ministry and what is provided to the Ministry. [ 42 ] The Ministry points out that the Act requires notice “in a form satisfactory to the Crown.” The Act requires that contractors post the provisions of the Act on the project site. The contract between Graham and the Ministry included a requirement that Graham inform their subcontractors about the provisions of the Act , including their right to file a claim and the procedure of doing so.

That includes the form for a Public Works Act claim, available on the Ministry’s website. Factually, it is clear what constitutes a “form satisfactory to the Crown.” [ 43 ] Finally, the Ministry argues that the purpose of the Act is to protect entities that provide for a public work project. The claim process is detailed in the Act . Here, some parties made a claim as defined and some did not. The clear answer is that the entities that made a statutory claim may access these funds and those that did not provide a claim as detailed by the Act may n ot.

The proper determination is not one of priority between Act claimants – the Act creates a benefit for claimants only . There is no priority amongst claimants created. Either a party is a claimant and has access to the security provided by the Act , or one is not a claimant and has no access. This respondent argues that the determination of levels of priority by the Master amongst claimants was incorrect. Further, they argue that Graham (and others) are not claimants. [ 44 ] The respondent’s argument is correct, and flows naturally from the determinations above.

Notice, as detailed by the Act , is required to have a claim. Those that have a claim and follow the notice provisions have a priority claim and there is no subsequent, secondary, priority. While the Master’s decision is attractive by creating a fallback access to the funds in court, it is incorrect in law. There is no latitude within the Act to allow for the directed assessment “on a case-by-case basis to see whether or not those claims might have substantially complied with the Act ” as set out in the Master’s decision. [ 45 ] The appellant’s argument is incorrect, and conflicts with the existing case law.

It strains logic and practicality to suggest that modern statutory

interpretation results in the conclusion Graham asks this court to reach. A formal notice requirement is sensible and necessary. Obviously, the Act ’s remedies do not extend to every party that has filed an invoice. There must be a triggering event, and serving an actual notice that the party holding the claim as described in s 14 is what triggers the application of s 15. [ 46 ] Further, the concern that reading the legislation in this way curtails private rights has a false premise. Without the legislation, Graham’s claim against the Ministry exists in common law.

The Act simply creates a process to simplify pursuing remedies to a claim; no private rights available to a claimant in common law are affected. It is illogical to complain that the statute that creates a benefit (here, a claim process) also limits that advantage by dictating how it must be pursued.

Issue 3 –Which parties have valid claims under the Act? [ 47 ] Graham’s third argument asks this court to determine, if there is a priority created by s 15(5), which parties have complied with the notice requirements and have valid claims to the interpleader funds. [ 48 ] As noted above, formal notice must comply explicitly with the Act . It is a reasonable requirement as it notifies the Crown which claimants plan to rely on the protections of the Act .

There is no buffer, creating an unknown group of partially-compliant claimants that the respondent Ministry must then filter in some way. [ 49 ] The decision of this court is ultimately the same that was arrived at in Gall at para 18: ...The first four subsections of s 15 can be interpreted only as referring to persons who have given notice of a claim. Subsection (5) must be interpreted in the same manner, in the absence of language which clearly requires an alternative construction. [ 50 ] Through reading the entire Act in context, it is clear that Gall and Moonview are still correct.

Claims exist before notice is given. However only claims that exist and have met the notice requirements of s 15 of the Act have priority and access to the remedies of the Act . Any claims that exist outside of the

definitions in both sections 14 and 15 cannot rely on the Act and remedies must be pursued elsewhere. [ 51 ] From Gall at para 20: It is true that there is not a provision in these sections declaring invalid any claim of which notice is not given within the specified requirements as to time and form. That does not militate against my conclusion.

Rather, it means that such persons continue to have claims against any money payable under the contract with the Crown to the extent that they may assert such claims according to law... [ 52 ] Similarly, Moonview comes to the same conclusion at para 14: The question of strict compliance by a claimant with the statute is well established under the Builders’ Lien Act , RSA 1980, c B-12 .

As the Public Works Act gives similar special rights and protections to claimants under it, as against other possible creditors of the defaulting party, it seems equally appropriate to insist that a potential claimant under this Act be similarly compelled to follow the requirements strictly before receiving the benefits of the same. [ 53 ] No issue was taken with the list of parties that did and those that did not have proper claims under the Act from the Master. The parties listed in paragraph six of the October 2, 2019 decision are not Act claimants and have no access to the funds currently with the court.

Issue 4 – Verification of claims [ 54 ] Graham argues that the Minister does not have the unilateral ability to determine what funds are payable under the Prime

Contract, but rather a trial or arbitration hearing will need to be ordered whereby a process can be undertaken to determine not only what claims under the Act are verifiable, but also to determine what amounts are actually payable by the Minister to Graham under the terms of the Prime Contract. [ 55 ] Graham extends this argument in their reply memorandum, noting that “it is abundantly clear that the Court has the overarching discretion under section 15(4) of the PWA to determine the persons (not only PWA claimants) who are entitled to “the money” and to direct payment in accordance with that determination.” That is a misapplication of the Act , which (as Graham has argued correctly) must be read as a whole.

The interpleader funds are to be distributed according to the Act (see above), which would not include “any” entity. [ 56 ] Ultimately the point from Cookshaw remains : It is clear that the purpose of the part of the Public Works Act including the

section in question is to protect those persons who deal with a contractor of the Crown, having in mind particularly that, in construction contracts relating to Crown lands, a supplier of materials or labour to the public lands in question cannot charge the Crown lands by filing a builder’s lien... (para 14) [ 57 ] The Act does not contemplate the remedy sought by Graham. The Act does not apply to Graham or the other parties that did not file claims according to the Act .

The Master’s decision was correct when it determined that parties listed in paragraph 4 were Act claimants (he referred to them as “perfected”) and thus s 15(4) has been correctly applied in that respect: Instead of paying the claimant as provided in this section, the Crown may apply to the Court of Queen’s Bench to pay the money into Court on the terms and conditions, if any, determined by the Court and, on the money being paid into Court, the Court may determine the persons who are entitled to the money and direct payment of the money in accordance with that determination. [ 58 ] Since this decision has determined that the Act ’s remedial mechanisms have been exhausted, further claims against the Minister for this project must now be sought through other remedies.

Issue 5 - Costs claim by Liberty Mutual Insurance et al. [ 59 ] Liberty is the surety of Northern Lights Drywall. Northern Lights was a subcontractor of Graham’s. When several parties were unpaid for the Northern Lights portion of the project, Liberty paid those parties and took assignment of their claims pursuant to the Act . Liberty argues that despite knowledge of this, Graham’s original application for disbursement of the interpleader funds listed the payee as Northern Lights. As such, Liberty argues this forced them to prepare for and attend the original hearing before the Master.

They were wholly successful and were paid $175,262. They seek indemnity costs of $23,360.09 to be paid by Graham or from the interpleader funds. In the alternative, they seek double column 5 costs – arguing that while their particular claim was small the overall interpleader amount brings this matter into column 5. [ 60 ] Graham argues that they held no responsibility to Liberty.

They had no direct business relationship with Liberty and were not in a position to verify the accuracy of Liberty’s claims and as such did not list them in their original application for payment to themselves and their subcontractors. [ 61 ] Graham also argues that this costs application is not properly before this court. They say it should be considered by the Master who made the order. It appears that the request for costs from the April 9 motion at which Liberty was successful was not addressed by the Master.

When Liberty wrote the Master asking for such a decision, the Master informed them to raise the issue at this appeal. [ 62 ] Graham is correct that the costs issue is not a subject of appeal having never been decided by the lower court. The Master should hear and decide the costs application; it is returned to him. [ 63 ] If that is incorrect, this court would determine that there is no conduct here to warrant an order of indemnity against Graham. Further, Liberty’s specific claim amount and not the total interpleader amount should dictate the appropriate costs column.

Finally, there is no basis on which to double the costs. The matter was not complex (except for the number of parties, which should not have particularly exacerbated Liberty’s efforts) nor is there conduct established that warrant a double costs order. Column 3 costs of $3,569.16 would be fitting if costs were appropriate here. [ 64 ] However, if this application were before this court, neither Graham nor the Minister would pay costs to Liberty. The initial application was triggered by Graham. They filed their, and their direct subcontractor, claims to the interpleader funds; that was their reasonable obligation.

Liberty would still have had to participate in the hearing as a claimant based on their assignment from Northern Lights, having no direct connection to Graham. Conclusion [ 65 ] The Act and subsequent caselaw do not support the remedies sought by the appellant Graham and do support the Ministry’s positions. [ 66 ] This court partially grants and partially dismisses the appeal: 1. The Master’s decision where it creates a category of claimants who substantially complied with the Act , and thus have a secondary priority to claims pursuant to the statute is incorrect in law.

Section 15 of the Act is enforceable. Only parties that have complied with the requirements of s 14(3) qualify for s 15 relief. The requirements of s 14(3) are not satisfied by providing invoices.

3. Only parties that have met the Act ’s deadline and content requirements for giving the Ministry notice of their claim – specifically stating in writing that the amount sought is pursued as a claim subject to the Act or some other form satisfactory to the Crown – have access to the reserved funds held by this court pursuant to the Act . Graham and the other “invoice claimants” do not meet that definition and have no claim to the remaining interpleader funds that are currently held by the court. 4.

The “perfected” claims list set out by the Master is correct and only those parties are eligible claimants pursuant to the Act . 5. The basis for the remaining remedies sought by Graham, including its proposed distribution, have not been made out and no order directing further distribution or required litigation steps is made. [ 67 ] If the parties cannot agree on other costs, they may provide brief written submissions to this court within 45 days from the date of this judgment. Heard on the 6 th day of November, 2020. Dated at the City of Edmonton, Alberta this 8 th day of March, 2021. Avril B. Inglis J.C.Q.B.A.

Appearances: Kevin Barr, and Erin Cutts Borden Ladner Gervais LLP for the Applicants Graham Construction and Engineering Inc. Jordan Crone and Thomas Brookes Gowling WLG for the Respondent Alberta Infrastructure Darren J. Reed Fasken Martineau DeMoulin LLP for the Respondent Plan Group Inc. Robert Riddle Robert S. Riddle Professional Corporation for the Respondent Schendel Mechanical Ltd. Tom Wagner Blakes, Cassels & Graydon LLP for the Respondent McGregor & Thompson Hardware Ltd. And Shanahan’s LP Kyle Kawanami

Emery Jamieson LLP for the Respondent Serv-All Mechanical Services Ltd. Rod Wasylyshyn Ogilvie LLP for the Respondent McMurray Store Fixtures Mathew James Chapman Riebeek LLP for the Respondent Jensen Contract Flooring Ltd. Patrice Brideau Stringam LLP for the Respondent LSM Lee’s Sheet Metal

(2007) Ltd. Preet Saini and Andrew Stead McMillan LLP for the Respondent Tyco Integrated Fire and Security Canada Inc. Dana Nowak MLT Aikins LLP for the Respondent Grant Thornton, Proposal Trustee Sid Kobewka Kobewka Stark LLP for the Respondent Liquid Diamond Art Tralenberg Art Tralenberg Law for the Respondent Lambert Radiation Shielding Jesse Wilde Huckvale LLP for the Respondent Northern Lights Drywall Ltd. Bryan Kwan McLennan Ross LLP for the Respondent Exel Systems Inc.

Stephanie Wanke Miller Thomson LLP for the Respondent Price Waterhouse Coopers Inc., Proposed Receiver _______________________________________________________ Corrigendum of the Decision of The Honourable Madam Justice Avril B. Inglis _______________________________________________________ Counsel Appearing for the Respondent Plan Group Inc. changed to: Darren J. Reed Fasken Martineau DeMoulin LLP for the Respondent Plan Group Inc.