Bonnyville (Municipal District No 87) v RPC Group Inc, 2023 ABKB 484

Court of King’s Bench of Alberta Citation: Bonnyville (Municipal District No 87) v RPC Group Inc, 2023 ABKB 484 Date: 20230823 Docket: 2203 09395 Registry: Edmonton Between: The Municipal District of Bonnyville No 87 Plaintiff - and - RPC Group Inc, Nova Mechanical Systems Ltd, 1147796 Alberta Ltd operating as Rydayce Construction, Lakeland Flooring & Design Ltd, Top Gun Interiors Inc, Scramm's Woodcraft Ltd, JB Steel Buildings Ltd, Best in the West Concrete Ltd, 925646 Alberta Ltd, 1124495 Alberta Ltd operating as Alta North Paving, Electric Services Grand Centre Ltd and 307086 Alberta Ltd Defendants _______________________________________________________ Endorsement of Applications Judge W.S.

Schlosser _______________________________________________________ [ 1 ] This is an application to set the lien fund under s 18(3) of the Prompt Payment and Construction Lien Act , RSA 2000, c P- 26.4 . In my view, the lien fund should be set at $1,180,649.41, substantially for the reasons set out in the respondents’ brief. [ 2 ] Part A of the lien fund: ‘10% of the value of the work done or materials furnished’ is not in dispute. This number, as certified by the consultant, is $477,105.45.

[3] Part B is in dispute: ‘any additional sum due on owing but unpaid...’ (earned but unpaid). [4] The Respondents argue that the MD of Bonnyville has improperly deducted the following amounts from its calculation ofthe lien fund: A) $598,229.43 paid to RPC Group Inc after the liens were registered, and

B) Set-offs in the following amounts; i) $15,570.48 to repair deficiencies ii) $9,124.00 for additional work iii) $54,538.80 for legal fees. Cases or Authorities Cited by the Parties Prompt Payment and Construction Lien Act, RSA 2000, c P-26.4; Maple Reinders Inc v Eagle Sheet Metal Inc, 2006 ABQB 150;Maple Reinders Inc v Eagle Sheet Metal Inc, [2006] AWLD 1864; Lloydminster Roman Catholic Separate School District No 34 vBorder City Transit Mix

(1980) Ltd, (AB KB), [1988] 57 Alta LR(2d) 146; Neptune Coring (Western) Ltd vSprague-Rosser Contracting Co Ltd, 2020 ABQB 277; Avli BRC Developments Inc v BMP Construction Management Ltd, 2021ABQB 412; Belanger v Pointer Construction Group Ltd, (AB KB), [1984] 31 Alta LR (2d) 320; Factors WesternInc v DCR Inc, 2021 ABCA 433; MCAP Service Corporation v Anthony Plaza II, ULC, 2013 ABQB 41; David I.

Bristow et al,Construction, Builders, Mechanic Liens in Canada, 8th ed (Toronto, ON: Carswell, 2005) at §4.23; Maple Reinders Inc v W DaltonEnergy Corp, 2007 ABCA 247; Canadian Western Bank v 702348 Alberta Ltd, 2012 ABQB 89. Analysis I. $598,229.43 [5] The Act requires an owner to retain payments while a lien is registered. Factors Western at paras 68 and MCAP ServiceCorporation at para 22. [6] $598,229.43 was paid to RPC while the liens were registered, in breach of the Act.

The calculation of the lien fund is toinclude this amount. [7] The present lien bond is not full security for the liens of Rydayce, JB, 925, Nova, Best, and Alta North. There is only onelien fund and the rights of the lien holders are the same. Maple Reinders at paras 30-40 and CWB at paras 15-37. Set-off and Deductions [8] The law of set-off, or deduction is described in Neptune Coring (Western) Ltd, 2020 ABQB 277 and 2018 ABQB 883. I. $15,570.48 to Repair Deficiencies [9] An owner is entitled to set-off as against part B of the lien fund, amounts specifically authorized by the contract.

While GC7.1.5.3 of the contract permits setting off the cost of finishing the work, the Court is unable to assess the claim of $15,570.48 for‘deficiency repairs’ on the materials now before Court. Without particulars it cannot be deducted. II. $9,124.00 [10] This figure consists of $1,755.00 to haul away asphalt after RPC’s default and termination and $7,369.00 for a Telus conduit.There is no evidence that these items were part of the original scope of work. III.

Legal Fees $54,538.80 [11] 7.1.5.3 does not permit setting-off legal fees against part B of the lien fund (as opposed to the costs of the services of theconsultant defined in the contract as an architect or engineer). Disposition [12] The lien fund is set at $1,180,649.41.

Heard on the 11 th day of May, 2023. Dated at the City of Edmonton, Alberta this 23 rd day of August, 2023. W.S. Schlosser A.J.C.K.B.A. Appearances: Paul Stocco and Elizabeth Robert Brownlee LLP for the Municipal District of Bonnyville No 87 Michael Whiting Carscallen LLP for the RPC Group Inc Brian G. Wood Wood & Munday LLP for Nova Mechanical Systems Ltd Kristin Kress Kristen Kress Professional Corporation for 1147796 Alberta Ltd operating as Rydayce Construction John Hagg and Shannon J. Kinsella Stillman LLP for Top Gun Interiors Inc Michael A. Murray SB LLP for Scramm’s Woodcraft Ltd Christopher M. Young Swainson Miki Peskett LLP for JB Steel Buildings Ltd

Emma Johnston Miller Thomson LLP for Best in the West Concrete Ltd Brian G. Wood Wood & Munday LLP for 925646 Alberta Ltd Tim Mavko Reynolds Mirth Richards & Farmer LLP for 1124495 Alberta Ltd. operating as Alta North Paving Edward Feehan, KC Duncan Craig LLP for Electric Services Grand Centre Ltd Teri Lynn Bougie Ahlstrom Wright for 307086 Alberta Ltd