A.G. Clark Holdings Ltd v, 2023 ABQB 219

Court of King’s Bench of Alberta Citation: A.G. Clark Holdings Ltd v 1352986 Alberta Ltd , 2023 ABQB 219 Date: 20230414 Docket: 1103 14128 Registry: Edmonton Between: A.G. Clark Holdings Ltd, Giebelhaus Developments Ltd and CB Partners Corporation Plaintiffs - and - 1352986 Alberta Ltd, Redleaf Properties Corporation, 1354178 Alberta Ltd and 1352992 Alberta Ltd Defendants _______________________________________________________ Reasons for Decision of the Honourable Applications Judge L.R.

Birkett _______________________________________________________ Introduction [ 1 ] This is one of likely a decreasing number of decisions under s 53 of the former Builders’ Lien Act , RSA 2000, c B-7 [ BLA ]. [ 2 ] The Prompt Payment and Construction Lien Act , RSA 2000, c P-26.4 [ PPCLA ] came into force on August 29, 2022 and will apply to construction contracts and subcontracts entered into on that date or later.

Contracts entered into before August 29, 2022 will have two years to become compliant with the new legislation. [ 3 ] The new PPCLA incorporated most of the BLA , with some changes to lien filing deadlines and other provisions.

Section 53, which provides for pre-trial applications, was not changed. However, to reduce delayed payments in the construction industry, Alberta followed other Canadian jurisdictions in adopting prompt payment and early adjudication legislation. [ 4 ] The most significant overhaul of the BLA is the addition of a mandatory prompt payment requirement with strict timelines for payment of “proper invoices” unless a notice of dispute is provided. The new legislation also introduces an optional expedited adjudication process to resolve construction contract and payment disputes outside of court.

[ 5 ] The construction contract and payment dispute in this action has been in litigation for more than a decade. It is now the subject of a s 53 BLA pre-trial application brought by the contractor for a judgment declaring its liens valid in the amount of its outstanding invoices. [ 6 ] The question is whether the affidavits, transcripts of questioning, and other records allow for a

summary determination of the liens or is a trial is required? Having regard to the state of the record and the issues, I find it is possible to fairly resolve this dispute on a

summary basis, with no genuine issue requiring a trial.

Background facts [ 7 ] The defendant, 1352986 Alberta Ltd, as Owner, and the plaintiffs, collectively Clark Builders, as Construction Manager, entered into a Construction Management Contract on July 29, 2009 for the renovation of an existing historical building on Jasper Avenue at 92 Street in Edmonton, to be known as the Redleaf Canada Presentation Centre. [ 8 ] The other defendants, Redleaf Properties Corporation, 1354178 Alberta Ltd and 1352992 Alberta Ltd, collectively referred to as the Lessees, have a caveat registered with respect to a leasehold interest on the lands owned by 1352986 Alberta Ltd. [ 9 ] Clark Builders provided services starting in July 2009, initially with a concept budget of $1,655,236, which was revised early in the process to $1,808,900.

In accordance with the terms of the Construction Management Contract, Clark Builders issued monthly invoices from August 31, 2009 to June 30, 2011. [ 10 ] The Owner paid for all amounts due in the invoices that were issued up to and including October 31, 2010. However, invoices from November 30, 2010 to June 30, 2011 for the total amount of $475,350.80 plus GST and interest remain outstanding. [ 11 ] Clark Builders registered a builders’ lien on March 22, 2011 against both the fee simple estate of the Owner and the leasehold interest of the Lessees.

Procedural history [ 12 ] Clark Builders filed a statement of claim on September 7, 2011. The Redleaf defendants filed a statement of defence and a counterclaim on November 2, 2011. [ 13 ] The plaintiffs claim that the Construction Manager’s Services were provided at the request of, and for the benefit of, the Owner or the Lessees or both, and are valued at, and have improved the lands, in the sum of at least $475,350.80.

Clark Builders also claims for quantum meruit and unjust enrichment. [ 14 ] The Redleaf defendants say there were problems with Clark Builders’ management and coordination of the project resulting in delay, unnecessary expense and cost to 1352986 Alberta Ltd, and poor-quality construction, with the result that no monies are owing.

The amount claimed by Clark Builders is excessive and unreasonable for the work performed; the liens registered against the lands are similarly improper and excessive. [ 15 ] The Lessees further state they are not liable to Clark Builders as they are not parties to the Construction Management Contract and did not benefit from the work allegedly done. [ 16 ] The Redleaf defendants counterclaim for wrongful registration of the builders’ liens against their respective interests in the lands.

The Owner 1352986 Alberta Ltd claims $100,000 for its expenses, losses, and damages resulting from Clark Builders’ breaches and negligence. [ 17 ] In September 2015, Clark Builders brought an application pursuant to r 7.3 Alberta Rules of Court for

summary judgment against the Redleaf defendants for the outstanding invoices. The Redleaf defendants filed the affidavit of Ming Ying, a corporate representative of 1352986 Alberta Ltd involved in the project, sworn March 2, 2016 in opposition to the application for

summary judgment. [ 18 ] The matter was adjourned to Special Chambers and heard on May 2, 2016. Master Breitkreuz dismissed the application finding: “… I am not satisfied that this is an appropriate case for

Summary Judgment, even under the more relaxed test set out by the Supreme Court of Canada in Hryniak v Mauldin , 2014 SCC 7 .” [ 19 ] Clark Builders did not appeal that decision, nor did they proceed with their application filed May 4, 2016 for

summary dismissal of the Owner’s counterclaim. [ 20 ] On November 20, 2020, Clark Builders brought this application pursuant to s 53 BLA for judgment against the Redleaf defendants to declare its liens valid in the amount of the outstanding invoices. The application is supported by the Affidavit Proving Lien of Greg Asselin, sworn December 3, 2018. Mr. Asselin was the project manager for Clark Builders on this project from about January 1, 2010 to June 30, 2011. Mr.

Asselin has not been questioned on his affidavit. [ 21 ] In response, the Redleaf defendants rely again on the March 2, 2016 affidavit of Ming Ying, which has not been questioned on. They further provide the Affidavits of Curtis Cameron, sworn April 1, 2021 and May 26, 2021. Mr. Cameron is a Professional Quantity Surveyor and the Associate Director, Cost & Project Management of Altus Group Limited. Altus was retained to provide a Cost in Place Estimate Report related to the renovations done by Clark Builders to convert the existing building into the Redleaf Presentation Centre.

The final Altus Report dated December 1, 2020 is an exhibit to the May 26, 2021 affidavit. Mr. Cameron was questioned on his affidavits on June 1, 2021. The transcript has been filed for this application.

[ 22 ] Clark Builders retained LCVM Consultants Inc to provide an opinion in respect of the affidavits and reports filed by Altus. Norman Lux swore an affidavit June 14, 2021 attaching the LCVM Report entitled “Cost in Place Estimate Report in Review of Altus estimations”. Mr. Lux was questioned on his affidavit on June 23, 2021. The transcript and his answers to undertakings have been filed for this application. Position of the parties [ 23 ] Clark Builders submits that there is sufficient evidence to declare its builders’ liens valid in the amount of the outstanding invoices.

The relevant facts are straightforward. There is no dispute that monies are owing by the Redleaf defendants to Clark Builders or that the costs incurred by Clark Builders on the project were in fact incurred. The procedure in adjudicating on builders’ liens claims is to be of a

summary character.

Section 53 BLA allows for

summary determination of the validity of the liens on the affidavit evidence and transcripts of questioning. [ 24 ] The Redleaf defendants submit that the record reflects significant material conflicts in the evidence related to the actual cost of the project and the alleged outstanding invoices. They argue here, as they did successfully on the

summary judgment application before Master Breitkreuz, that there are serious and genuine issues requiring a trial. Clark Builders has failed to meet the requisite burden to obtain

summary disposition pursuant to s 53 BLA . [ 25 ] Having considered the record before me, including the expert reports, and the written and oral arguments of counsel for the parties, I find Clark Builders is entitled to a

summary disposition of its s 53 BLA application and declare the liens valid in the amount of the outstanding invoices. I will briefly outline the law, then elaborate on the facts in evidence and the expert reports, provide the legal analysis, and explain my conclusions. The Builders’ Lien Act Affidavit proving lien [ 26 ] Section 49(6) BLA provides, with respect to enforcement of a builders’ lien: “The procedure in adjudicating on the claims shall be of a

summary character, so far as is possible, having regard to the amount and nature of the liens in question and the enforcement of them at the least expense.” [ 27 ] Sections 48 and 52 BLA allow for a lienholder to file an affidavit providing detailed particulars of the lienholder’s lien.

Section 52(4) provides: “A lienholder served with a notice to prove lien shall, within 15 days from the day of the service of the notice on the lienholder, file with the court in which the proceedings were commenced and affidavit providing detailed particulars of the lienholder’s lien.” [ 28 ] This affidavit is often referred to by the parties as “an affidavit proving lien”. The legislation does not use words that suggest the lienholder must “prove” the lien but rather provide detailed particulars of the lien.

See Krupp Canada Inc v JV Driver Projects Inc , 2014 ABQB 259 at para 63 . [ 29 ] The nature of the detailed particulars expected in the affidavit and the use of that affidavit are set out by Applications Judge Schlosser in Northern Dynasty Ventures Inc v Japan Canada Oil Sands Limited , 2014 ABQB 727 at paragraph 16 and 18 : In my view, this would consist of (at the very least):

(1) A statement that the lien claimant did the work or supplied the materials;

(2) Disclosure of who requested the work and materials (which would be especially important if the owner did not make the request directly);

(3) Sufficient particulars about the work or materials to allow the owner to make a reasoned judgment about payment;

(4) Finally, if there are pleadings, the affidavit should, ideally, address the issues raised in the defence. … Once the time for defence has passed, the lien claimant may make a pretrial application. The Affidavits in response to a Notice to Prove Lien might be enough for the court to make a determination.

Section 53 is striking. It is intended to be comprehensive. There is a wide latitude for directions, including oral evidence (s. 53(1)(c)(2)). [ 30 ] As noted, the affidavit providing the detailed particulars of the lien may be relied upon by the court when adjudicating on the lien claims on a

summary basis.

Section 53 pretrial application [ 31 ] Section 53(1) BLA provides that: “… the plaintiff may, and before setting the action down for trial the plaintiff shall, make a pretrial application.” Section 53(3) (

c) BLA allows the court, on the hearing of the pretrial application, to consider the affidavit filed on service of notice to prove lien and the transcript of any questioning on the affidavit, and to determine the validity of the liens concerned or direct that at the trial of the action any particular issues be determined. [ 32 ] Applications Judge Robertson described the

summary process in the Builders Lien Act in paragraphs 94 and 99 of the Krupp decision as follows:

The Act nonetheless requires a claimant to do something that is generally not required at the outset of the dispute – to provide, under oath, detailed particulars of its claim, often before it has even delivered a statement of claim.… I return to the importance of the unusual process set out in the Act . The procedure in adjudicating on lien claims is supposed to be of a

summary character: section 49(6). Long before case management was the practice in Alberta, long before the Alberta Rs of Court contained a provision for

summary trial, the Act contained a

section (now

section 53 ) that was intended to deal (conclusively) with many issues by way of pretrial application.… [ 33 ] Applications Judge Robertson reviewed several cases where an analogy has been drawn between an application for judgment under the Builders’ Lien Act and an application for

summary judgment under r 7.3 of the Alberta Rules of Court . See paragraphs 74 to 77 of the Krupp decision and paragraph 29 of his decision in Equinox Electric Ltd v Progress Construction & Development Ltd , 2014 ABQB 552 . [ 34 ] Equinox Electric was a s 53 BLA pretrial application. Equinox asked that its liens be declared valid; the work was done, the lands were improved, invoices were sent, and money was owing. The landowner said that although work was done, there were deficiencies (“but provides precious little evidence of that”) and claimed damages resulting from the deficiencies. See para 10.

Applications Judge Robertson deferred the decision as to the amount owed and adjourned the s 53 application for further affidavit evidence. The action was not set for trial. See paragraphs 30 to 35, with this quote from para 34: In light of the fact that there is at least some slight evidence of damages set out in the affidavit of Mr.

Wasserman, and in light of the timing of the proceedings, it is my decision that the balance of the application to declare the lien valid (that is, the determination of the amount of the lien), in particular whether judgment should be granted for the full amount or there should be a set-off, should be deferred until evidence from Progress, and perhaps Elma, has been heard.… [ 35 ] Justice Kenny took a similar approach in Rancher Construction Ltd v Scott Construction (Alberta) Ltd , 2019 ABQB 775 .

Rancher brought a pretrial application, as required under s 53 BLA , the determine the validity of its lien and to have the lien fund paid out to them. Scott claimed set-off for funds expended by them for deficiencies in the work performed by Rancher. As there were no details about deficiencies or what costs were incurred in the response affidavit, Justice Kenny directed questioning take place and that the matter be returned to her. Scott refused to proceed with questioning until security for costs were posted.

The matter returned as both a security for costs application by Scott and a renewed application by Rancher for judgment on the liens or to set the matter for trial. [ 36 ] Justice Kenny noted that no further documentation had been produced to substantiate the set-off claim and concluded the Court was not in a position to determine the merits of the case. The applications for judgment and security for costs were denied. [ 37 ] The matter was set for trial, anticipated to require 2 days.

Scott had claimed costs for a five-day trial to which Kenny J commented at para 30: “There is no substantiation for this other than Scott’s assertion that construction trials are complicated. That may be, but this is a builder’s lien action, which the legislation anticipates will be dealt with expeditiously.” [ 38 ] The Court of Appeal refused to restore Scott’s appeal related to its security for costs application and the chambers judge’s decision to set the matter for trial without questioning.

In the Reasons for Decision at Rancher Construction Ltd v Scott Construction (Alberta) Ltd , 2020 ABCA 112 , Justice Veldhuis stated at para 21: “The chambers judge was effectively case managing the dispute, and her decision to set the matter for trial and not award security for costs will be owed a strong measure of deference on appeal…”. Veldhuis JA concluded that Scott had not shown that its appeal had any arguable merit. The application to restore the appeal was denied with this comment at para 30: “The Court strongly encourages the parties to have settlement discussions.

The amount at issue is relatively modest in the steps taken thus far are not meeting the spirit and intent of the enforcement provisions of the BLA .” Analogy to a

summary judgment application [ 39 ] Where the relief sought on a s 53 BLA pretrial application is final in nature, it is analogous to a

summary judgment application. Although the specific requirements of r 7.3 of the Alberta Rules of Court may not apply, the principles for

summary judgment do. See Krupp at para 107. [ 40 ] The application of these principles is summarized in para 47 of Weir-Jones Technical Services Incorporated v Purolator Courier Ltd , 2019 ABCA 49 . The test for the appropriateness of the

summary judgment procedure is found at para 21: Hryniak v Mauldin at para 49 sets out the three-part test for when

summary judgment is an appropriate procedure: There will be no genuine issue requiring the trial when the judge is able to reach a fair and just determination on the merits on a motion for

summary judgment. This will be the case with the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. [ 41 ] In JK Engineering v Red Quest , 2019 ABCA 263 , the Court of Appeal used

summary judgment language in dismissing an appeal of a s 53 BLA pretrial application to declare a lien invalid, stating at paragraph 18: The chambers judge noted that “there appears to be a significant dispute as to the facts” on the material before her and that there was “limited evidence”.

We are satisfied that, given the nature of the application and having regard to the record before the chambers judge, she did not err in concluding that Aqua had not demonstrated that the lien was invalid and should be discharged. [ 42 ] Courts have consistently recognized “The validity and amount of the lien claims should be determined summarily, where it is fair to do so. If there is a genuine issue for trial, a

summary determination is not appropriate.” See para 19 of UPA Construction Group Limited Partnership v Lake Placid Properties (Park) Inc , 2010 ABQB 675 . [ 43 ] However, caution must be exercised when relying on previously decided cases as precedent for deciding s 53 BLA pretrial

applications. The principles for

summary judgment have developed considerably in Alberta with Weir-Jones , as emphasized in Hannam v Medicine Hat School District No. 76 , 2020 ABCA 343 at paragraphs 146-171 . [ 44 ] Observations made in earlier decades such as found in UPA Construction at para 11 “A lien claim will not be dismissed or adjudicated before a proper trial of the action except in the clearest of cases…”; at para 12 “The question to be considered when determining if the matter can be decided summarily is whether there are triable issues between the parties…”; and at para 42 “This court cannot weigh the evidence and make final determinations.

That is to be done by a trial judge.”; are no longer the proper approach to

summary dispositions. [ 45 ] Taking the proper approach to

summary dispositions, the court must determine on a s 53 BLA pretrial application if it is possible to fairly resolve a builders’ lien dispute on a

summary basis, or “do uncertainties in the facts, the record or the law reveal a genuine issue requiring a trial?” and “In any event, the presiding judge must be left with sufficient confidence in the state of the record such that he or she is prepared to exercise the judicial discretion to summarily resolve the dispute.” See para 47 Weir-Jones . Facts in evidence Affidavit Proving Lien [ 46 ] The Affidavit Proving Lien sworn by Greg Asselin on December 3, 2018 has not been challenged on questioning. Mr.

Asselin has personal knowledge of the matter and information from review of documents in his role of project manager on this project for Clark Builders. [ 47 ] The Construction Management Contract dated July 29, 2009 between 1352986 Alberta Ltd, as owner and Clark Builders as Construction Manager is attached as exhibit A to Mr. Asselin’s affidavit. Mr. Asselin deposes in paragraph 6 of his affidavit to the terms of the Contract related to the contract fee and reimbursable expenses, as follows: (

a) Pursuant to

Section A-5 of the Contract, 1352986 agreed to pay to Clark Builders compensation for Clark Builders’ services a fee of five percent (5%) of the total cost of the work performed (the “Contract Fee”). (

b) Pursuant to

Section A-6 and Appendix A to the Contract, 1352986 agreed to pay Clark Builders for certain Reimbursable Expenses with respect to the work and services (the “Reimbursable Expenses”), including the following: (

i) salaries, wages and benefits for Clark Builders’ personnel in whatever capacity employed, including wages and benefits paid for labour in the direct employ of Clark Builders (Sections (

a) and (

b) of Appendix (A); … (

v) the cost of materials, products, supplies, equipment, temporary services, utilities and facilities and hand tools, including transportation and maintenance thereof; rental costs of all tools, machinery and equipment used in the performance of [the] Contract (Section (

f) of Appendix A); … (xi) legal costs incurred by Clark Builders arising out of the performance of the Contract (Section (

t) of Appendix A); (xii) costs incurred by Clark Builders in correcting defects or deficiencies in the work undertaken by Clark Builders’ own forces and repairing damages resulting therefrom either during the course of construction or the warranty. Except those arising from a negligent or wilful act of Clark Builders (Section (

u) of Appendix A); … (

c) Pursuant to

Section A-8(

a) of the Contract, 1352986 to make monthly payments on account of Reimbursable Expenses incurred to date, the applicable portion of the Contract Fee, [for] any work performed directly by Clark Builders. (

d) Pursuant to

Section A-8(

b) of the Contract, if 1352986 failed to make payments as such payments became due, 1352986 agreed to pay interest on all unpaid amounts at the rate of interest at two percent (2%) per annum above the prime interest rate of the Royal Bank of Canada (the “Interest Rate”) from the date that such payments became due until that payment in full is received by Clark Builders. [ 48 ] Appendix A sets out the Labour Rate

Schedule of hourly rates for the project manager, coordinators, superintendents, foremen, carpenters, and labourers, etc and the Equipment Rental Rates based on a 28-day period for all anticipated equipment, tools, scaffolding, heavy equipment, and the site office, etc. [ 49 ] Mr. Asselin deposes in paragraphs 8 and 9 of his affidavit that the invoices from the date of November 30, 2010 to June 30, 2011 for the total amount of $475,350.80, exclusive of GST and interest, remain owing by 1352986 Alberta Ltd to Clark Builders.

Copies of each outstanding invoice and the supporting spreadsheets showing the breakdown of project costs are attached as exhibit D to Mr. Asselin’s affidavit. [ 50 ] A copy of the Contract Status Report by Journal Date-Detail dated October 29, 2018 is attached as exhibit E to Mr. Asselin’s affidavit confirming the amount receivable. The total amount invoiced by Clark Builders was $2,420,892.16; the total amount paid by 135986 Alberta Ltd was $1,945,541.36, with an outstanding balance of $475,350.80 owing. These numbers are exclusive of GST. [ 51 ] Mr.

Asselin deposes in paragraph 11 of his affidavit that a Certificate of Substantial Performance of Prime Contract was issued on December 20, 2010 for the project. The certificate is attached as exhibit G to the affidavit. [ 52 ] Mr. Asselin deposes in paragraph 12, that there are no outstanding deficiencies or warranty items for the project and he attaches as exhibit H a copy of the document entitled “Redleaf Work to Complete, Deficiencies and General Comments” dated May 10, 2011.

[ 53 ] Attached to Mr. Asselin’s affidavit and marked as exhibits I and J are copies of correspondence related to the costs of the project. These records include a letter dated October 26, 2010 from Mr. Asselin to Redleaf Enterprises with an updated cost report and budget forecast of $2,358,773 plus GST, with supporting details. Exhibit J is a letter dated June 14, 2011 from Mr. Asselin to Redleaf Enterprises with a descriptive explanation of why the costs escalated over the original concept budget provided in July 2009 of $1,670,469.

The letter attaches a breakdown of the costs added to complete the project less the scopes removed, for a total of $2,239,632. With the 5% contractor fee, the total cost is $2,351,613.60. GST is not included. [ 54 ] A copy of title to the lands dated October 25, 2018 is attached as exhibit B to Mr. Asselin’s affidavit. It shows the lease interest caveat registered December 15, 2010 by the Lessees and the two builders’ liens registered March 22, 2011. The builders’ liens are attached as Exhibit F to Mr.

Asselin’s affidavit being the Statement of Lien claimed upon the fee simple estate of 1352986 Alberta Ltd and the Statement of Lien claimed upon the leasehold interest of 1352986 Alberta Ltd, 1352992 Alberta Ltd, 1354178 Alberta Ltd and Redleaf Properties Corporation. [ 55 ] I find Craig Asselin’s Affidavit Proving Lien to be comprehensive and sufficient to satisfy the onus of proof on Clark Builders as lienholder to establish its liens are valid in the amount of the outstanding invoices. [ 56 ] However, I must consider the other material before me on this application.

That includes the affidavit of Ming Ying and the Cost in Place Estimate Report of Altus Group prepared by Curtis Cameron and the review of that report prepared by Norman Lux of LCVM Consultants Inc. Ying affidavit [ 57 ] Ming Ying swore an affidavit March 2, 2016 as a representative of the Owner, 1352986 Alberta Ltd, with personal knowledge of the matters deposed to, including being involved in the negotiations leading up to the agreement with Clark Builders. The affidavit was made in opposition to the earlier application of Clark Builders for

summary judgment and in support of an application for an order directing Clark Builders to produce a further and better affidavit of records. [ 58 ] Although Mr.

Ying does not further specify his involvement, a review of the correspondence attached as exhibit I to Greg Asselin’s December 3, 2018 affidavit shows Ming Ying was involved in communication from July 23, 2009 to January 4, 2010 between the project manager for Clark Builders, Yuan Zhang P.Eng., and Joe Martins, the primary Redleaf contact involved in design and implementation of the renovation project. [ 59 ] The correspondence further indicates that Ming Ying was involved in arranging financing to allow the project to continue, including being advised of the October 26, 2010 budget update prepared by Mr.

Asselin and the Certificate of Substantial Performance of Prime Contract issued by Clark Builders on December 20, 2010. [ 60 ] At the request of Joe Martins, Greg Asselin wrote to Redleaf Enterprises January 25, 2011 to explain the escalation of costs over the original budget.

A copy was sent by Clark Builders’ CFO to Ming Ying. [ 61 ] On March 17, 2011, Clark Builders wrote to Joe Martins and Ming Ying informing them of the intention to register a lien on the property to preserve the expiration of their builders’ lien rights if the outstanding balance at January 31, 2011 in the amount of $464,631.43 was not paid by March 21. The liens were filed March 22, 2011.

The invoices issued since November 30, 2010 remained unpaid. [ 62 ] A follow-up letter dated June 14, 2011 was prepared by Greg Asselin with further descriptive explanation of why the costs escalated over the original concept budget of $1,670,469 provided in July 2009. A copy was provided to Ming Ying. [ 63 ] Accordingly, I conclude that Ming Ying was directly involved in most if not all aspects of the renovation of the historic building to construct the Redleaf Presentation Centre and would have personal knowledge of the matters deposed to in the March 2, 2016 affidavit.

Analysis of the facts in evidence [ 64 ] Ming Ying made this affidavit to oppose the

summary judgment application heard May 2, 2016 and dismissed by Master Breitkreuz. It is tendered again in response to this s 53 BLA pretrial application. Notwithstanding the obligation to put their best foot forward, Redleaf did not supplement this affidavit. [ 65 ] I find that the March 2, 2016 affidavit does not contain sufficient evidence to successfully challenge the Affidavit Proving Lien sworn by Greg Asselin. Notwithstanding Ming Ying has personal knowledge of the matters deposed to, there is insufficient detail of facts and records to tip the balance of probabilities in favour of a trial.

I will give some examples. [ 66 ] Ming Ying deposes in paragraph 4 that 1352986 Alberta Ltd took issue with the construction billings and did not accept them as being reasonable or proper: “These billings included amounts charged for Clark Builders’ own personnel to supervise and perform certain aspects of the work done.” However, the Construction Management Contract provides for those charges and Mr.

Asselin has deposed to the amounts charged with supporting documentation. [ 67 ] In paragraph 5 of the affidavit, Ming Ying takes the original anticipated cost of the project, subtracts credit for the granite for the exterior walls supplied by Redleaf and a further reduction from other scopes of work to conclude: “Between these reductions the original projected budget should have went to just over $1,000,000.00 but the project billings rendered by Clark Builders eventually amounted to about $2,351,613.60 which we consider to be unjustified, excessive and unreasonable.

To date Clark Builders has been paid $2,042,818.45.” No reference is made by Ming Ying to the detailed rationale and justification for the escalated costs provided in the October 26, 2010 budget update or June 14, 2011 letter of explanation.

[ 68 ] Ming Ying deposes in paragraph 6 regarding completion of the interior office space: “Significant costs to complete that work were incurred ($55,268.00) which 1352986 Alberta Ltd regards as improper since these were to be included in the original budget amount.” Notwithstanding the exact number stated, no records are provided to show what those costs were for. On the other hand, Mr.

Asselin’s evidence on the updated scope of work and budget set out in his June 14, 2011 letter attached as exhibit J to his affidavit confirms that the Owner “would supply flooring, interior doors, frames and hardware, PVC windows, millwork …”. [ 69 ] Ming Ying takes issue with the costs of the project manager and superintendent in paragraph 9 of his affidavit by pointing out the difference between the original project budget and the final amount billed. I find that Mr.

Asselin has put forward evidence that adequately explains why the costs billed by Clark Builders were significantly higher the original concept budget. [ 70 ] Ming Ying asserts in paragraph 11 that after Mr.

Zhang ceased to be involved as project manager: “we were no longer being provided competitive quotes/bids resulting, we believe in higher and improper costs.” As an example, attached to paragraph 12 of the Ying affidavit is a photograph of the stuccoing of a small portion of the building’s exterior wall with the statement: “The billings received for this work were about $21,300 which was from our point of view excessive and unreasonable.” No further evidence is offered to substantiate the assertion. [ 71 ] Ming Ying raises issues in paragraph 13 with the completeness and propriety of the work done and provides examples, including incomplete landscaping, improper completion of roof work, and a sidewalk near one of the building entrances having a negative slope resulting in water travelling into the building.

However, under the general conditions of the Construction Management Contract, GC 4.8, the Owner shall promptly notify the Construction Manager in writing of any defective, faulty or nonconforming work of which he becomes aware. The allegations set out in this affidavit are not sufficiently detailed to show that the contractual requirement to provide timely notice of such nonconforming work was met. In addition, Greg Asselin deposes at paragraph 12 of his affidavit that as of December 6, 2018 there are no outstanding deficiencies or warranty items for the project.

Attached as exhibit H to the Asselin affidavit is the May 10, 2011 report entitled Redleaf Work to Complete, Deficiencies & General Comments which confirms all outstanding work was done. [ 72 ] There is no evidence of the costs which may have been incurred by the Owner to remedy these concerns or to justify why no further money is owed to Clark Builders. 1352986 Alberta Ltd has a counterclaim for $100,000 in relation to negligence or breaches of the Construction Management Contract which will not be dismissed by the decision on this s 53 BLA application. [ 73 ] Ming Ying’s assertion in paragraph 15 of the affidavit that the project was not administered efficiently or properly by Clark Builders resulting in unnecessary delays and improper costs being charged is without substantiation and provides no support for the position of 1352986 Alberta Ltd that it does not owe Clark Builders the amount claimed. [ 74 ] The March 2, 2016 affidavit of Ming Ying does not demonstrate that there are significant and material conflicts in the evidence relating to the actual cost of the project or the outstanding invoices . [ 75 ] Since the filing of this s 53 BLA application to declare the liens valid, the parties have exchanged expert reports prepared by professional quantity surveyors related to the value of the work provided by Clark Builders. [ 76 ] The Redleaf defendants rely on the report of Curtis Cameron of Altus Group Limited, dated December 1, 2020 which concludes that the value of the work is $2,017,000. [ 77 ] Clark Builders rely on the report of Norman Lux of LCVM Consultants Inc, dated June 14, 2021 which concludes that the value of the work is $2,638,338. [ 78 ] The Redleaf defendants submit that there are a number of irreconcilable differences and issues between the two reports which cannot be summarily determined.

Clark Builders argues that both reports confirm they are owed money and, after adjusting for the errors identified by Mr. Lux in the Altus report, the amount of the outstanding invoices is a proper and just debt. Expert reports [ 79 ] The Redleaf defendants retained Altus Group Limited to prepare a cost in place estimate. The Redleaf Canada Presentation Centre Cost in Place Estimate prepared by Altus Group dated December 1, 2020 and is attached as exhibit A to the affidavit of Curtis Cameron sworn May 26, 2021.

This is referred to as the Altus Report. [ 80 ] Clark Builders retained LCVM Consultants Inc to review the Altus report and provide an opinion regarding the value of the work. The Cost in Place Estimate Report and Review of Altus estimations report dated June 14, 2021 is attached as an exhibit A to the affidavit of Norman Lux sworn June 14, 2021. This is referred to as the LCVM Report. The Altus Report [ 81 ] The Altus Report describes the scope of the report in

section 1.1 as an “estimate for the renovation of the existing building and converting it to the Redleaf Presentation Centre, which was done by Clark Builders 10 years ago. As such the current estimate has been adjusted for the time difference to represent costs as they would have been in 2011.… The estimate includes all direct and indirect construction costs consistent with the information available.” [ 82 ] In describing the project details, the Altus Report states in

section 2.1: “From the information provided, we have measured quantities where possible and applied unit rates considered competitive for a project of this nature, based on historical and current cost data for this type of project.”; In

section 2.3: “The rates used and developed for this estimate where applicable include labour and material, equipment, and subcontractors’ overheads and profit. Pricing is based on our experience with similar projects, or quotes

provided by subcontractors as noted within the estimate. We have assumed that non-union contractors would perform the work.”; And in

section 2.8: “… The unit rates in our estimate are based on construction activities occurring during normal working hours and proceeding within a non-accelerated schedule.” [ 83 ] The Altus Report describes the use of contingencies in

section 4 generally as “dependent on the amount of information available, knowledge of the design teams methods and philosophy, the timing of the estimate preparation relative to the project design and construction schedule, and the anticipated complexity of the construction work.” Three specific contingencies are identified and excluded, being

section 4.2 design and pricing evolution during the design stages of the project;

section 4.3 escalation or changes in construction costs due to market fluctuations: and

section 4.4 a construction contingency to cover post-contract change orders. [ 84 ] However, this statement is made in

section 5.1: “Altus Group Limited does not guarantee that tenders or actual construction costs will not vary from this estimate. Acute market conditions, proprietary specifications, or competition/collaboration among contractors may cause tenders to vary from reasonable estimates based on normal and abnormal competitive conditions.” [ 85 ]

Section 6 of the Altus Report lists the estimate documentation reviewed; the cost in place estimate is contained in

section 7.1. There is an executive

summary showing the total construction cost for the Redleaf Presentation Centre and site development as $2,017,000, without GST. The cost estimates for the various elements are provided in

summary and in detail between pages 14 and 39 of the Altus Report. [ 86 ] A cost reconciliation is provided in the table entitled “Breakdown Cost Estimate” at page 41 of the Altus Report comparing the estimate of costs prepared by Clark Builders at $2,235,233 to the Altus estimate of $2,016,744. Areas of variance are identified showing a difference in estimated construction cost of $218,489, with the Altus estimate being overall 10% lower than the Clark Builders’ estimate. GST is not included in these numbers. [ 87 ] The Altus Report does not review the actual invoices submitted by Clark Builders.

Comparing the Altus estimate of $2,016,744 for the cost of the work to the $1,945,541 paid to Clark Builders, a minimum outstanding payment of $71,203 plus GST is evident. The LCVM Report [ 88 ] Norman Lux confirms that he was retained by the solicitors for Clark Builders to provide his opinion regarding the value of the Redleaf Properties Corporation Development based on the documents provided, his own observations and his expertise as a Professional Quantity Surveyor. [ 89 ] By way of introduction, in

section 1 of the LCVM Report, Mr. Lux states this is his report formalizing the observations made reviewing the Altus submission and his expert opinion and review of the project scope, the conditions of contract, the valuations by Altus, and the cost of the work. [ 90 ] Mr. Lux notes that this project initially consisted of an envelope replacement with new roof structure and cladding to an existing historical building. The site was basically demolished and replaced.

Major elements, that is mechanical and electrical trades, were added to the scope during the course of construction, extending the construction. “For this project, unknowns certainly compromised initial costs at an exponential level.” [ 91 ] The executive

summary in

section 2 sets out Mr. Lux’ opinion of construction cost at $2.8 million (rounded) based on a review of the documentation, initial measurement checks, a site visit, and applying rates normally used for a budget to advise for a lender. [ 92 ] Further, Mr. Lux provides a detailed assessment of value at $2.6 million (rounded) based on a thorough review of the Altus calculations.

Starting with the Altus Report estimate of $2,016,744, adjustments are made for added schedule, soft costs, change orders, mechanical and electrical bids, unreasonable pricing and a 15% market contingency to calculate an adjusted Altus comparison total of $2,638,338. Mr. Lux notes that this is well above the Clark final billing amount of $2,346,995. [ 93 ] Commentary on the Altus Report is found in

section 3 of the LCVM Report to explain the adjustments made. Altus included no costs for design and pricing, whereas Clark Builders provided invoices for document printing and material testing in the amount of $18,092. Altus did not include a contract contingency, whereas approved changes to the original documents provided after the final drawing sets were $141,876. Altus did not include an escalation contingency in its estimate provided for 2011, whereas a minimal escalation amount of $37,920 was added by LCVM to recognize that the work was started in 2009 and completed in 2010. Mr.

Lux notes that prices were more competitive in the 2011 timeframe whereas 2009 was a busy time in Alberta, with reasonable bids for renovation work of this type very difficult to obtain. These three adjustments total a minimal increase of $197,888 to the Altus estimate. [ 94 ] The LCVM Report provides specific comparisons between the Altus estimate and the Clark Builders actual costs. Altus did not use quotes provided by Clark, especially for sub- trade work added to the project scope, nor did they use the contractually agreed upon hourly rates for the project manager and other Clark employees.

The contractual equipment rental rates were in large part not acknowledged in the Altus Report. The actual documented construction timeline was 64 weeks compared to 48 weeks used by Altus. [ 95 ] Mr. Lux provides commentary on his review of the detailed cost estimates for the various elements provided in the Altus Report. With respect to the substructure pricing by Altus, at the top of page 10 of the LCVM Report, Mr. Lux states: “This is a small commercial project. It is a renovation. This work occurs in the winter. Repairs are going one column or peer or footing at a time.

The pricing is obviously based on a new large-scale project. It bears no resemblance to this project, there are many examples of this.” Mr. Lux points out where the Altus price exceeds Clark’s costs for the mechanical and electrical pricing, not only to arrive at an accurate comparison, but to provide examples where Altus omitted to compare competitive quotes from the project. [ 96 ] On page 13 of the LCVM Report, Mr. Lux notes that the Canadian Construction Association expects the level of estimate

accuracy to be within 5 to 10% of the median of competitive bids for new construction projects. He notes this project scope is arenovation with historical remediation portions and expects “their accuracy would be reasonably within 15% at best." Adding a 15%contingency of $323,793 to the Altus Report estimate, with the change orders and adjustments for mechanical and electrical, the adjustedAltus comparison total is $2,503,219. Mr.

Lux opines that: “Compared to the Clark billing of $2,420,892.16, this case should not be alitigation issue.” [97] Appendix A to the LCVM Report is a comparison of Clark Builders final invoice with the Altus Report estimate. Mr. Luxexplains on page 15 that he translated Altus’ elemental

summary to compare with Clark’s line items, acknowledging there can be someminor discrepancies in preparing this translation. Appendix A shows the difference between Clark invoicing of $2,346,995 billed and the$2,016,745 Altus estimate is $329,995. The areas of variance are identified. [98] Mr. Cameron and Mr. Lux were questioned on their affidavits and attached cost in place estimate reports.

The focus on Mr.Cameron was that he relied solely on documents provided by Redleaf; he was not aware that construction started in 2009 and wascompleted in 2010 when applying 2011 rates to the estimate; and he did not attend the physical site and location of the RedleafPresentation Centre. Mr. Cameron was adamant that there is no reason to have a post-contract contingency when the job is completed. [99] Mr. Lux explained that he had access to more drawings than Mr. Cameron including drawings that had markups with changeson them, as-builts.

He further explained “I don’t know if I have the final set, and this is the thing with construction management. Theystart to work without having IFC drawings.” Mr. Lux did not agree that there should be no assumptions at all where the project wascompleted and all the information should be available. He explained: “… If you’re doing an estimate on a set of drawings on somethingthat’s not been built, you make a lot of assumptions. Just because it has been built, you’re still making an estimate on a set of drawings.”Mr.

Lux referred to his report, where he pointed out that the mechanical and electrical estimated by Altus was higher than the bidsshown, as an example of the risk of doing an estimate on a project “even if it’s already built”. [100] Mr. Lux further justifies his 15% contingency for market in providing his July 12, 2012 answer to undertaking #5 by criticizingAltus not applying any contingencies: “Altus advised 0% on ALL contingencies for a reason I cannot fathom.

They did not use real costsor timeframe, they did not use competitive prices received, and they did not recognize an estimate done in 2020 may not compare to adetailed Class 1 cost accounted for in 2011, upon completion of the project.” Use of expert reports [101] As with all other evidence, relevance is a threshold requirement for the admission of expert evidence. Relevance is to bedecided by the judge. Evidence that is so related to a fact in issue that it tends to establish it may be admissible as having logicalrelevance, however other considerations enter into the decision as to admissibility.

See R v Mohan, (SCC): Evidence that is otherwise logically relevant may be excluded on this basis, if its probative value is overborne by its prejudicial effect, ifit involves an inordinate amount of time which is not commensurate with its value or if it is misleading in the sense that its effect on thetrier of fact, particularly a jury, is out of proportion to its reliability.… There is a danger that expert evidence will be misused and will distort the fact-finding process.

Dressed up in scientific language whichthe jury does not easily understand and submitted through a witness of impressive antecedents, this evidence is apt to be accepted by thejury as being virtually infallible and is having more weight than it deserves. [102] The admissibility of expert evidence also depends on its necessity in assisting the trier of fact.

The evidence must be more thanhelpful; the opinion must be necessary in the sense that it provides information of an expert, scientific or technical nature without whichthe trier of fact would be unlikely to form a correct judgment about subject matter of the inquiry if unassisted by an expert with specialknowledge.

R v Mohan. [103] See also White Burgess Langille Inman v Abbott and Haliburton Co, 2015 SCC 23 where the Court notes: “The unmistakableoverall trend of the jurisprudence, however, has been to tighten the admissibility requirements and to enhance the judge’s gatekeepingrole.” [104] Justice Whitling recently considered the legal principles which govern the admissibility of expert evidence in Ziolkoski vUnger, 2023 ABKB 110.

At para 8, Whitling J recognized the foundational Canadian decision on the admissibility of expert evidence in R v Mohan, as revisited in White Burgess and at para 9 quoted Sopinka, Lederman & Bryant, The Law of Evidence in Canada, (5th ed,2018) at p. 845: “… opinion evidence that is merely helpful or might reasonably assist the jury did not satisfy the necessity threshold.His Honour held that expert evidence is necessary when the fact-finder is apt to come to a wrong conclusion without expert assistance orwhere important information is unavailable without the assistance of experts.…” [105] Given the procedure in adjudicating on builders’ lien claims is to be of a

summary character, so far as is possible, and theenforcement of them at the least expense pursuant to s 49(6) BLA, the use of expert reports on a pretrial application to determine thevalidity of the liens is unusual. [106] In Rancher Construction, on the application for security for costs, Justice Kenny was not prepared to allow the costs for expertreports and evidence where no evidence had been produced on which to base an expert opinion and no descriptions of deficienciesprovided on which to base an expert report, concluding at para 35: “I would not allow an expert fee at this stage because it is purespeculation as to need and quantum on the evidence produced so far.” [107] In Universal Properties Inc v TRG Developments Corp, 2023 ABKB 151, Applications Judge Schlosser granted

summaryjudgment on the lien claim advanced by Kee against the landowner TRG. Schlosser AJ touched on the use of expert opinion evidence,the affidavit in response to a notice to prove lien and the nature of the application, concluding at paras15-17: TRG suggests that Kee has not provided any appraisal, or expert opinion evidence to determine the actual value of the work done or the

materials furnished. They point out that some of the subs hired by Kee were non arms-length. TRG asks for an adjournment to provide evidence to support this argument. Alternately, they argue that Kee has failed to satisfy its burden of proof. This case has a number of extraordinary features, including the length of time that it took to get to this point and the nature of the claims. All of the arguments marshaled by TRG thus far have been purely technical arguments under the Act . This is a

summary judgment application in a builders’ lien context. There was a notice to prove the lien early on, an affidavit in response, and cross examinations. Given the nature of this application, the context and history of this action, and the timing (roughly 10 years after the fact), my view is that the onus falls squarely upon TRG to refute the claim with some contrary evidence. It is too late for speculative arguments.

It is time for closure, or for proof. [ 108 ] Neither Justice Kenny nor Applications Judge Schlosser found it necessary to have expert opinion evidence available for adjudication of the builders’ liens claims before them. Neither jurist granted an adjournment for further evidence or questioning. Kenny J and Schlosser AJ each considered the nature of the application, the context and history of the action, and the timing, with both finding it was time the matter came to conclusion.

Analysis of the expert reports [ 109 ] Expert reports have already been obtained by both parties on the s 53 BLA pretrial application before me. Redleaf relies on the Altus Report to oppose the

summary disposition of the builders’ liens. Clark Builders submits the LCVM Report to substantiate their invoicing and to provide a critique of the Altus Report. [ 110 ] Counsel for Redleaf argues that this is a battle of the experts with unresolved factual issues to be determined at a trial where questions can be put to the experts in a live setting. I disagree. The qualifications of each professional quantity surveyor have been provided; the expert reports are comprehensive; and there has been extensive questioning, with transcripts and answers to undertakings made available.

I find there is no need to hear from the expert witnesses. [ 111 ] This is an application to determine a builders’ lien claim in a

summary proceeding. The Altus Report and the LCVM Report are part of the materials. These cost in place estimates are logically relevant to the value of the work done. The admissibility of the expert reports was not challenged by the parties.

However, considering the other evidence before the Court, I do not find the existence of the expert reports or differences in the experts’ opinions sufficient to create a genuine issue for trial. [ 112 ] Notwithstanding the logical relevance, this is not a situation where expert evidence is necessary because “the fact-finder is apt to come to a wrong conclusion without expert assistance or where important information is unavailable without the assistance of experts” (Sopinka, Lederman & Bryant, The Law of Evidence in Canada ).

Nor is there “a danger that expert evidence will be misused and will distort the fact-finding process” ( R v Mohan ).

There is no reason to exclude the expert reports obtained by the parties and submitted with their materials on this pretrial application or direct that they be properly assessed at a trial. [ 113 ] I have already found Craig Asselin’s Affidavit Proving Lien to be sufficient to satisfy the onus of proof on Clark Builders as lienholder to establish its liens are valid in the amount of the outstanding invoices. [ 114 ] I have already found the March 2, 2016 affidavit of Ming Ying does not demonstrate that there are significant and material conflicts in the evidence relating to the actual cost of the project or the outstanding invoices. [ 115 ] I find the Cost in Place Estimate Report of Altus Group prepared by Curtis Cameron and the review of that report prepared by Norman Lux of LCVM Consultants Inc to be helpful, but not necessary to determine the outcome of this s 53 BLA application. [ 116 ] I agree with counsel for Clark Builders that considering the adjustments made by Mr.

Lux to the Altus Report, the amounts invoiced by Clark Builders were reasonable and proper amounts and the balance outstanding is a just and proper debt. Conclusion [ 117 ] Having considered the record before me, including the expert reports, and the written and oral arguments of counsel for the parties, I find Clark Builders is entitled to a

summary disposition of its s 53 BLA application and declare the builders’ liens registered against title valid in the amount of the outstanding invoices. [ 118 ] Applying the three-part test in Hryniak v Mauldin at para 49 , I find

summary judgment is an appropriate procedure; there is no genuine issue requiring the trial. I am able to reach a fair and just determination on the merits on this s 53 BLA pretrial application as the process allows me to make the necessary findings of fact, allows me to apply the law to the facts, and is a proportionate, more expeditious and less expensive means to achieve a just result. [ 119 ] I find it is possible to fairly resolve this builders’ lien dispute on a

summary basis; uncertainties in the facts, the record or the law do not reveal a genuine issue requiring a trial. I am left with sufficient confidence in the state of the record such that I am prepared to exercise the judicial discretion to summarily resolve this dispute. Para 47 Weir-Jones . [ 120 ] The Lessees state they are not liable to Clark Builders as they are not parties to the Construction Management Contract and did not benefit from the work allegedly done.

In the context of this s 53 BLA pretrial application, and on the evidence, I find the builders’ lien registered against the leasehold interest on title valid in the amount of the outstanding invoices. [ 121 ] Redleaf has filed a counterclaim for their expenses, losses, and damages resulting from Clark Builders’ breaches and negligence, including a counterclaim by 1352986 Alberta Ltd for $100,000 in relation to the Construction Management Contract.

Although there was insufficient evidence before me of the costs which may have been incurred to remedy the concerns or to justify why no further money is owed to Clark Builders, the counterclaim is not dismissed by this decision on the s 53 BLA application. [ 122 ] The Clark Builders’ liens are valid in the amount of the outstanding invoices, being $475,350.80 plus GST in the amount of $23,767.54 for a total amount of $499,118.34, plus interest at the Interest Rate defined in the Construction Management Contract from the date that such payments became due until the date that payment in full is received by Clark Builders. [ 123 ] Clark Builders shall have judgment against the defendant, 1352986 Alberta Ltd, as Owner, in the amount of the outstanding invoices plus GST and interest as set out above.

The invoices were rendered pursuant to the Construction Management Contract between these parties and are to be paid in accordance with the contractual terms. [ 124 ] The other defendants, Redleaf Properties Corporation, 1354178 Alberta Ltd and 1352992 Alberta Ltd, collectively referred to as the Lessees, have a caveat registered with respect to a leasehold interest on the lands owned by 1352986 Alberta Ltd. They are not party to the Construction Management Contract.

Their liability here is for the lien registered against their leasehold interest in the amount of the outstanding invoices plus GST and interest as set out above. [ 125 ] Clark Builders is entitled to the costs of this application and the action. Costs are claimed on a solicitor-client full indemnity basis pursuant to

Section (

t) of Appendix A of the Construction Management Contract, as a Reimbursable Expense, or in the alternative, costs. If the parties are unable to agree on costs, an application may be made before me in morning chambers. Heard on the 23 rd day of March, 2022. Dated at the City of Edmonton, Alberta this 14 th day of April, 2023. L.R. Birkett A.J.C.K.B.A. Appearances: Alexandra C. Bochinski DLA Piper (Canada) LLP for the Plaintiffs Brent Mielke MLT Aikins LLP for the Defendants