Docket: CACV2534 Meridian Special Projects Corp. Prospective Appellant (Prospective Respondent by Counterclaim) - v. -, 2014 SKCA 62

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2014 SKCA 62 Date: 2014-06-02 Between: Docket: CACV2534 Meridian Special Projects Corp. Prospective Appellant (Prospective Respondent by Counterclaim) - and - Empire Drywall Ltd. Prospective Respondent (Prospective Appellant by Counterclaim) - and - The University of Saskatchewan Prospective Respondent Before: Whitmore J.A. (in Chambers) Counsel: Naheed Bardai , for Meridian Special Projects Corp. Adam Hnatyshyn , for Empire Drywall Ltd. Application:

From: QB 1820 of 2011, J.C. of Saskatoon Heard: May 26, 2014 Disposition: Leave to appeal granted Written Reasons: June 2, 2014 By: The Honourable Mr. Justice Whitmore Whitmore J.A. I. Introduction [ 1 ] Meridian Special Projects Corp. (“Meridian”) applies for leave to appeal the decision of the Court of Queen’ Bench Chamber judge denying Meridian’s application to dismiss the builder’s lien action of Empire Drywall Ltd. (“Empire”) and granting Empire an extension of time to set its lien action down for trial. II.

Background [ 2 ] Meridian subcontracted work out to Empire on a project at the University of Saskatchewan (University). On September 21, 2011, Empire served a written notice of lien on Meridian and served notice of the lien upon the University of Saskatchewan, which withheld $465,330.88 from Meridian. [ 3 ] On December, 22 2011, Empire commenced proceedings in the Court of Queen’s Bench.

Questioning was set for March 4–8, 2013 and on November 21, 2013 Meridian applied to the Court of Queen’s Bench for an order compelling Empire to deliver its responses to undertakings, which were ultimately delivered on December 9, 2013. [ 4 ] In late January 2014, the action had not been set down for trial and Meridian brought an application to dismiss the portion of Empire’s claim related to the builder’s lien. In response, Empire brought an application for an extension of time to set the matter down for trial.

The Chamber judge dismissed Meridian’s application and granted Empire’s application for an extension of time to commence the action. III. The Decision Below [ 5 ] Meridian argued before the Chamber judge that the Court of Queen’s Bench did not have jurisdiction to grant the extension of time requested by Empire because the two-year time limitation set out in s. 55 of The Builders’ Lien Act , S.S. 1986, c. B-7.1 had expired.

Section 55 is as follows: Lien expires unless action set down for trial 55

(1) Subject to subsection (2), a lien, for which an action has been commenced, expires where an action in which that lien may be realized is not set down for trial within two years of the day the action was commenced.

(2) The court may extend the time mentioned in subsection (1).

(2.1) An order pursuant to subsection (2) extending the time for commencing an action may be registered as an interest in the Land Titles Registry.

(3) Where a lien has expired under subsection (1), the court shall, on application, make an order dismissing the action if there is no other registered claim of lien at the time of the application, otherwise the court shall make whatever order it deems appropriate for continuation of the action. [ 6 ] The Chamber judge referred to Prairie Panels Ltd. v. McCaw , 2010 SKQB 450 , 372 Sask. R. 17 ( Prairie Panels ) and Woodland Home & Building Products Ltd. v. Chessall , 2009 SKQB 221 , 339 Sask.

R. 310 ( Woodland ) and concluded he did have jurisdiction. [ 7 ] The Chamber judge then proceeded to analyse the issue of whether the application for an extension of time should be granted and referred to Terramax Sitework Ltd. v. 101050094 Saskatchewan Ltd. , 2007 SKCA 123 , 304 Sask. R. 179 ( Terramax ) where this Court held that for a plaintiff to be successful on such an application

a) the plaintiff must provide an explanation of the delay to show that the delay was not unreasonable or unjustified; and

b) if the plaintiff does so, the judge must consider the prejudice to each party that would result from granting or refusing the extension. [ 8 ] The Chamber judge accepted Empire’s explanation for the delay, accepted that Empire was not simply letting the matter languish and was working towards getting the matter sent to trial.

Overall the Chamber judge held that the delay was not unreasonable or unjustified. [ 9 ] In considering the issue of prejudice, the Chamber judge considered that Empire would be prejudiced by expiry of the lien in that it would no longer have the University hold back of $465,330.88 as security in the event it was successful at trial. Both parties claimed entitlement to the funds that were held back. The Chamber judge noted that he was not in a position to determine who was entitled to the funds and therefore if and how either party would be prejudiced by the continued holding back of the funds.

[10] The Chamber judge then held that the evidence did not establish that Meridian would be prejudiced by the continuation of the lien.He concluded, therefore, that Empire would be prejudiced by the expiry of the lien to a greater extent than Meridian would be prejudicedif it continued. He thereupon granted the extension. It is from this decision that Meridian seeks leave to appeal. IV. Jurisdiction and Standard of Review [11] The decision to grant leave is a matter for the discretion of a judge of this Court.

The criteria for granting leave are set out in adecision of this Court in Rothmans, Benson & Hedges Inc. v. Saskatchewan, 2002 SKCA 119, 227 Sask. R. 121 at para. 6, where thefollowing is stated: 6 The power to grant leave has been taken to be a discretionary power exercisable upon a set of criteria which, on balance, must beshown by the applicant to weigh decisively in favour of leave being granted: Steier v. University Hospital, (SK CA),[1988] 4 W.W.R. 303 (Sask. C.A., per Tallis J.A. in chambers).

The governing criteria may be reduced to two-each of which features asubset of considerations-provided it be understood that they constitute conventional considerations rather than fixed rules, that they arecase sensitive, and that their point by point reduction is not exhaustive.

Generally, leave is granted or withheld on considerations of meritand importance, as follows: First: Is the proposed appeal of sufficient merit to warrant the attention of the Court of Appeal? • Is it prima facie frivolous or vexations? • Is it prima facie destined to fail in any event, having regard to the nature of the issue and the scope of the right of appeal, forinstance, or the nature of the adjudicative framework, such as that pertaining to the exercise of discretionary power? • Is it apt to unduly delay the proceedings or be overcome by them and rendered moot? • Is it apt to add unduly or disproportionately to the cost of the proceedings?

Second: Is the proposed appeal of sufficient importance to the proceedings before the court, or to the field of practice or the state of thelaw, or to the administration of justice generally, to warrant determination by the Court of Appeal? • does the decision bear heavily and potentially prejudicially upon the course or outcome of the particular proceedings? • does it raise a new or controversial or unusual issue of practice? • does it raise a new or uncertain or unsettled point of law? • does it transcend the particular in its implications? [emphasis in original] [12] I will deal with each of these points in turn.

A. First, is the proposed appeal of sufficient merit to warrant the attention of the Court of Appeal? [13] This Court in Terramax examined whether or not the lien timeframe could be extended after it is expired and stated that it was“highly debatable” whether the two-year period could be extended in light of the language of s. 55(3) of The Act. In that decision,however, the Court held that it was not necessary to decide this point. [14] In light of those comments, the proposed appeal is not prima facie frivolous or predestined to fail.

The appeal is unlikely to undulydelay the proceedings, as the action will continue in any event. For the same reason it is not likely that granting leave on this issue willadd unduly or disproportionately to the cost of the proceedings. B.

Second, is the proposed appeal of sufficient importance to the proceedings before the Court or the field of practice or the stateof the law or the administration of justice generally to warrant determination by the Court of Appeal? [15] The issue of whether the two-year time period set out in s. 55 of The Act can be extended after that period has expired appears to bean unsettled question. In Terramax, as indicated above, this Court stated that it was highly unlikely that the time period could beextended. [16] Prior to the Terramax decision, the Court of Queen’s Bench in Roy Howden Construction Ltd. v.

Dewitt, (SKKB), [1994] 1 W. W. R. 617, 114 Sask. R. 263 (Howden) granted an extension of time under s. 55(3) of The Act after the expiry of thetwo-year time limit.

Thereafter, the Court of Queen’s Bench in Woodland acknowledged the comments of the Court of Appeal inTerramax and voiced concerns about the Howden decision but nevertheless felt bound by the earlier decision in Howden. [17] A similar conclusion was reached by the Chamber judge in Prairie Panels, who also expressed reservations about the approach inHowden, but felt it was not appropriate to disregard the two previous decisions of the Court of Queen’s Bench. [18] There is, therefore, uncertainty in the law on this issue and a decision of this Court will help clarify the law. [19] It is my view that the prospective appellant has met the required test and therefore leave to appeal should be granted.

Costs of the

application shall be costs in the cause. DATED at the City of Regina, in the Province of Saskatchewan, this 2nd day of June, A.D. 2014. “Whitmore J.A.” Whitmore J.A.