The Bowra Group Inc. as Receiver v. Trustee in, 2016 NSSC 250

Supreme Court of Nova Scotia Citation: Certification Coating Specialists Inc. v. Halifax-Dartmouth Bridge Commission , 2016 NSSC 250 Date: 20160922 Docket: HFX450768 Registry: Halifax Between: The Bowra Group Inc. as Receiver and Trustee in Bankruptcy for Certified Coating Specialists Inc. Plaintiff v. Halifax-Dartmouth Bridge Commission operating as Halifax Harbour Bridges, Cherubini Metal Works Limited Defendants Library Heading Judge: The Honourable Justice Michael J. Wood Heard: September 6, 2016, in Halifax, Nova Scotia Written Decision: September 22, 2016 Subject: Builders’ Liens – lienable property – public streets and highways

Summary: The plaintiff is the bankruptcy trustee of CSS Inc, a subcontractor on the “Big Lift” project involving the MacDonald bridge over Halifax harbour. Liens were filed against the bridge and other lands of the bridge commission. Application to vacate liens on basis that bridge is public street or highway and therefor exempt from the Builders’ Lien Act . Issues: Is the bridge exempt from provisions of Builders’ Lien Act because it is a public street or highway? Result: S. 3(1) of the Act exempts public streets and highways from the application of the legislation.

Those terms are not defined and court agreed they should be interpreted based upon their normal usage. The nature of the bridge commission and the use of the roadway on the bridge both support the characterization of it as a public street as opposed to a private structure. S. 3(1) applies and the liens are vacated. THIS INFORMATION SHEET DOES NOT FORM PART OF THE COURT'S DECISION. QUOTES MUST BE FROM THE DECISION, NOT THIS LIBRARY SHEET. Supreme Court of Nova Scotia Citation: Certification Coating Specialists Inc. v.

Halifax-Dartmouth Bridge Commission , 2016 NSSC 250 Date: 20160922 Docket: HFX450768 Registry: Halifax Between: The Bowra Group Inc. as Receiver and Trustee in Bankruptcy for Certified Coating Specialists Inc. Plaintiff

v. Halifax-Dartmouth Bridge Commission operating as Halifax Harbour Bridges, and Cherubini Metal Works Limited Defendants DECISION Judge: The Honourable Justice Michael J. Wood Heard: September 6, 2016, in Halifax, Nova Scotia Counsel: John Shanks, for the Plaintiff The Bowra Group Inc. as Receiver and Trustee in Bankruptcy for Certified Coating Specialists Inc.

Christopher Robinson, QC, and Kevin Gibson for the Defendant Halifax-Dartmouth Bridge Commission operating as Halifax Harbour Bridges Doug Tupper, QC, for the Defendant Cherubini Metal Works Limited Michael Pugsley, QC, for the Attorney General of Nova Scotia Intervenor Counsel By the Court: [ 1 ] The Builders’ Lien Act , R.S.N.S., 1989, c.277, provides protection to contractors to ensure they are paid for services and materials provided to a construction project. If they satisfy the conditions set out in the Act the property which benefited from their work may be sold and the proceeds applied to the debt.

This application raises the question of whether a subcontractor working on the “Big Lift” is entitled to a builders’ lien on the Angus L. MacDonald bridge with the potential to sell the bridge should their claim remain unpaid. In my view they are not. Background [ 2 ] The Big Lift is the name given to the project whereby the road deck, beams, stiffening trusses, and suspender ropes on the MacDonald bridge are being replaced. It is one of two bridges which span Halifax harbour. American Bridge is the primary contractor hired by the Halifax-Dartmouth Bridge Commission which owns and operates the MacDonald bridge.

American Bridge hired Cherubini Metal Works Limited to fabricate and supply 46 separate road deck panels to be incorporated in the project. Certified Coating Specialists Inc. (“CCS Inc.”) was a subcontractor retained by Cherubini to paint the deck panels at their facility in Dartmouth. [ 3 ] In January 2016 CCS Inc. was placed into bankruptcy and the plaintiff Bowra Group Inc. was appointed receiver and trustee in bankruptcy. CCS Inc. stopped work under its contract with Cherubini and at that time had painted only 11 of the 46 deck panels.

A dispute arose between Cherubini and Bowra as to whether CCS Inc. was owed any further payment pursuant to its subcontract. [ 4 ] On March 16, 2016, Bowra filed a builders’ lien against 13 parcels of land owned by the Bridge Commission. Some were the lands on which the MacDonald bridge supports are located and other were lots adjoining the area of the bridge toll plaza in Dartmouth. [ 5 ] This proceeding was commenced by statement of claim on April 29, 2016, and a certificate of lis pendens was registered against the properties as required by the Act .

Nature of the Application [ 6 ] Cherubini has brought an application to vacate the registration of the Bowra builders’ lien pursuant to s. 29(4) of the Act which provides as follows: Upon application, the court or judge having jurisdiction to try an action to realize a lien, may allow security for or payment into court of

the amount of the claim, and may thereupon order that the registration of the lien be vacated or may vacate the registration upon any other proper ground and a certificate of the order may be registered. [ 7 ] Although this

section refers to an application, once a proceeding is commenced the request is dealt with as a motion under the Civil Procedure Rules . It is

summary in nature with evidence presented by way of affidavit. Contrary to the argument by counsel for Cherubini the motion is not similar to a request for

summary judgment but rather a procedure unique to the builders’ lien regime. [ 8 ] When a lien is filed it can have significant repercussions for all parties involved in the construction project, particularly if the work has yet to be completed. It can interrupt the flow of money from lenders or through the chain of subcontracts. If there are issues about the validity of the lien there must be a mechanism to have them resolved in a timely fashion provided the issue can be dealt with summarily.

That is the purpose of s. 29(4). [ 9 ] The party making an application to vacate the registration of a lien must satisfy the court that it is entitled to that remedy. As in any civil case the burden of proof is on the balance of probabilities. Sometimes the evidence with respect to the validity of the lien may be unclear and require consideration of witness credibility and expert evidence. Such cases would not lend themselves to

summary disposition and may require trial. In those circumstances a judge hearing an application under s. 29(4) of the Act may refuse to decide the question of validity. Position of the Parties Cherubini [ 10 ] The applicant Cherubini says the MacDonald bridge is a public street or highway and as a result the Builders’ Lien Act has no application. They rely on s. 3(1) of the Act which provides: Nothing in this Act extends to any public street or highway or to any work or improvement done or caused to be done thereon.

Halifax-Dartmouth Bridge Commission [ 11 ] The Bridge Commission filed a letter indicating it supported the position of Cherubini but otherwise made no submissions at the hearing. Attorney General of Nova Scotia [ 12 ] The Attorney General became an intervenor by consent. They filed affidavits and a brief in which they supported the position of Cherubini. In addition they argued that the Bridge Commission was a provincially controlled public sector entity and therefore fell within s. 3(2) of the Act prohibiting liens against the provincial crown.

Bowra [ 13 ] Bowra argued that the issue of the validity of its lien should not be dealt with on a

summary application. Before something could be considered a public street or highway it was necessary to have evidence that it was owned by a public agency. They disagreed that the Bridge Commission fell into that category and pointed out provisions in their constituting legislation which illustrated its independence from the province. [ 14 ] Bowra also argued that the five lots adjacent to the toll plaza were covered by the lien but not part of any street or highway and therefore not caught by s. 3(1) of the Act .

Analysis and Disposition [ 15 ] The Act does not include a definition of the phrase “any public street or highway” which is central to determining the application of s. 3(1). In the absence of a statutory definition counsel for Cherubini suggest those words be interpreted based upon their normal usage. I agree. [ 16 ] Counsel provided a number of dictionary

definitions of “public”, “highway”, and “street”. These suggest that by using the word public in the Act the legislature has indicated that use must be open or available to all members of the community. A highway or street is usually a designated route for travel by vehicle as part of a transportation system. [ 17 ] Counsel for Bowra argued that the issue of ownership was also relevant to determining whether a street was public. He said that a thoroughfare across a shopping mall parking lot should not be considered a public street for purposes of the Act .

I agree with that submission however I note that it is not necessary that title be vested in the crown in order for the road to be public. If that were so, s. 3(1) would be unnecessary because of the prohibition against liens on crown land found in s. 3(2). [ 18 ] A consideration of the policy reasons why roads and highways are excluded from builders’ liens will assist in determining the scope of s. 3(1). In Turf Masters Landscaping Ltd. v. T.A.G. Developments Ltd. , [1994] N.S.J. 421 , the court commented as follows: 36 I do not think this argument is particularly persuasive.

The Ac t refers only to public streets and highways. The city submits that the spirit of the legislation was meant to cover the present situation. I am not satisfied that is so. The problem allowing liens on public streets and highways is that it is almost inevitable that members of the general public will have to use them. To allow some individual a right of claim with regard to such a structure is to restrict the rights of others who rely on their ability to use them.

Although I do not suggest that public parks are of no value to the general population, the use of a specific park area is not a necessity to an individual. In a practical context, however, there may be no realistic alternative to the use of certain roadways. Similarly, hospitals owned by a public authority

may be exempted from lien on the basis that the public's access to such institutions should not have a potential for restriction. It could bedetrimental to the health of the general public, in a very real sense (see Westeel-Rosco Ltd. v. South Saskatchewan Hospital Centre(1977) (SCC), 2 S.C.R. 238). Allowing the imposition of a lien on the park land in question does not prohibit the cityfrom constructing a similar park in another nearby area. Furthermore, there have been a number of decisions allowing liens on municipalproperty other than that enumerated in s.3 of the Act (see Prairie Roadbuilders Ltd. v.

Settler (Country No. 23) (1983), (AB KB), 27 Alta. L.R. (2d) 289 (Master)). I feel therefore that s. 3 of the Mechanics' Lien Act does not exempt the lands inquestion from lien. [19] For purposes of this application I need to determine whether the road deck on the MacDonald bridge is a public street orhighway.

If it is, then the incorporation of the panels painted by CCS Inc. does not create any rights under the Act. [20] In deciding whether s. 3(1) applies I need to consider the extent to which the MacDonald bridge is a road used by members ofthe community and whether there is some restricted or private aspect to it.

I take judicial notice of the following facts: • It is one of two bridges providing vehicle access across Halifax harbour between the former cities of Halifax andDartmouth. • Traffic enters directly into the street systems of the two communities from the bridge. • It is used by both public and private vehicles including scheduled transit bus routes. • There are posted speed limits and electronic traffic signals. • Although users are required to pay a toll the process is essentially automated and available to all drivers. [21] I agree with counsel for Bowra that I should also consider the nature of the Bridge Commission itself in order to determinewhether it is analogous to a municipality or the province as opposed to a private owner, such as a commercial landlord.

I do not have todecide whether the Bridge Commission is a provincially controlled public sector entity as argued by the Attorney General. While thatmight be the case if the issue was the applicability of s. 3(2) of the Act this application has been brought under s. 3(1). [22] There is a significant public aspect to the Bridge Commission and its operation. I say this primarily based upon an examinationof the Halifax-Dartmouth Bridge Commission Act, S.N.S. 2005, c.7.

According to that legislation the Bridge Commission has thefollowing attributes: • It is a public utility within the meaning of the Public Utilities Act (s. 19). • All members of the commission are appointed by either the Province of Nova Scotia or Halifax Regional Municipality (s.3). • It has the power to expropriate land for purposes of the bridges (s. 12). • It has the authority to construct, maintain, and operate transportation projects across Halifax harbour which includes abridge, tunnel, fixed crossing or similar structure (s. 27(1)). [23] For the above reasons I am satisfied that the road which crosses the MacDonald bridge is a “public street or highway” withinthe meaning of s. 3(1) and therefore any work on it is exempt from application of the Act.

CCS Inc. painted the deck panels which wereincorporated in the new road deck. No builders’ lien rights arose under the Act in favour of CCS Inc. This means they are not entitled toregister liens against the lands on which the bridge sits nor any other property used or enjoyed in conjunction with the operation of thebridge. This includes the five parcels located adjacent to the toll plaza in Dartmouth. [24] As a result of my conclusion I will grant Cherubini’s application that the builders’ liens and certificates of lis pendens filed byBowra against lands of the Bridge Commission be vacated.

It is unnecessary to deal with the arguments raised by the Attorney Generalwith respect to s. 3(2) of the Act. [25] My decision with respect to the validity of the builders’ lien does not mean the dispute between Bowra and Cherubini has beenresolved. This proceeding will continue as an action by Bowra against Cherubini in which CSS Inc.’s entitlement to payment will bedetermined in the usual fashion. [26] If the parties are unable to agree on the question of costs I will receive written submissions within 30 days of the date of thisdecision. Wood, J.