Canadian Pacific Railway Company Appellant (Defendant/Plaintiff) v. Kelly Panteluk, 2020 SKCA 123

Court of Appeal for Saskatchewan Docket: CACV3372 Citation: Canadian Pacific Railway Company v Kelly Panteluk Construction Ltd. , 2020 SKCA 123 Date: 2020-10-28 Between: Canadian Pacific Railway Company Appellant (Defendant/Plaintiff) And Kelly Panteluk Construction Ltd. Respondent (Plaintiff/Defendant) Before: Ottenbreit, Caldwell and Barrington-Foote JJ.A. Disposition: Appeal allowed in part Written reasons by: The Honourable Mr. Justice Ottenbreit Concurring reasons by: The Honourable Mr. Justice Caldwell and The Honourable Mr.

Justice Barrington-Foote On appeal from: QBG 2177 of 2017, Regina QBG 655 of 2018, Regina Appeal heard: October 28, 2019 Counsel: Munaf Mohamed, Q.C. and Christine Viney for the Appellant James S. Ehmann, Q.C., and Jason M. Clayards for the Respondent Ottenbreit J.A. I. Introduction [ 1 ] Canadian Pacific Railway Company [CP] appeals an unreported Court of Queen’s Bench Chambers decision dated January 31, 2019, concerning two actions between it and Kelly Panteluk Construction Ltd. [KPCL]: Kelly Panteluk Construction Ltd. v Canadian Pacific Railway Company [ Decision ].

The Decision concerned QBG 2177 of 2017, with KPCL as plaintiff and CP as defendant [Saskatchewan Action], and QBG 655 of 2018, with KPCL as applicant and CP as respondent [Holdback Action]. [ 2 ] In the Decision, the Chambers judge dismissed CP’s application to stay the Saskatchewan Action and ordered CP to file a statement of defence or apply to challenge the jurisdiction of the court in accordance with Rule 3-14 of The Queen’s Bench Rules [ Rules ] within 15 days.

As I will explain below, this part of the Decision , although originally appealed by CP, is now moot and I need not address it. [ 3 ] The Chambers judge also dismissed CP’s application to stay the Holdback Action with the proviso that, should it wish to challenge the jurisdiction of the court with respect to that action, it must, within 15 days, serve and file an affidavit in reply in accordance with Rule 3-52 or apply to have the benefit of some or all of the processes applicable to actions commenced by statement of claim in accordance with Rules 3-53 and 3-54.

The portion of the Decision that deals with jurisdiction over the Holdback Action is similarly moot and will not be dealt with, as I will explain. The balance of the Decision as it pertains to the Holdback Action is the subject matter of this appeal. [ 4 ] For the reasons hereinafter set forth, the appeal of CP is allowed in part. II. Facts and Background [ 5 ] KPCL entered into a contract dated March 12, 2015, with CP [Contract] to provide construction services with regard to a railway spur line CP was building near Belle Plaine, Saskatchewan [Project].

KPCL was responsible for construction of the Project earthworks, including the embankments, as well as overseeing the work of other construction contractors working on the Project. [ 6 ] A significant part of the earthwork embankment collapsed. As a result, CP was required to redesign the affected segment of the Project and reconstruct the damaged earthworks. Various actions between the parties eventually ensued from this collapse and reconstruction.

The Holdback Action is one of them. [ 7 ] The germane terms of the Contract concern liens and the creation of and payment of holdback monies and are contained in schedules attached to the Contract.

Schedule B describes the services that KPCL was to provide to CP and contains a clause that establishes a ten percent holdback on monies payable to KPCL under the Contract. [ 8 ] Clause 44.1 of

Schedule A - General Terms and General Conditions [Schedule A] provides that holdback monies will be retained from progress payments. [ 9 ] Also found in

Schedule A are the following clauses: 44.2 Applications for release of holdback monies following Completion of the Work shall be made at the time and in the manner set forth in GC45-Certificates and Payments.

GC45 CERTIFICATES AND PAYMENT … 45.9 Immediately following the issuance of the certificate of Completion of the Work, the Engineer will issue a certificate for payment of holdback monies.

The holdback monies authorized by this certificate shall become due and payable after forty-five (45) days of the date of the certificate of Completion of the Work, providing that CP may retain out of such hold back monies any sums in accordance with the terms of this Agreement, or required by law or otherwise to satisfy any claims against CP or the Work or other monetary claims against the Contractor and enforceable against CP and that the Contractor has submitted to CP a Statutory Declaration and/or other evidence satisfactory to CP, that all accounts for labour, Workers’ Compensation, subcontracts, Materials, Equipment and other indebtedness which may have been incurred by the Contractor in the Completion of the Work and for which CP might in any way be held responsible have been paid in full except holdback monies properly retained. [ 10 ] Although clause 37.1 of

Schedule A deals with waiver of liens, the Contract is silent about the applicability of The Builders’ Lien Act , SS 1984-85-86, c B-7.1 [ BLA ], or the right of CP to set-off any claim for damages against KPCL against monies owing under the Contract or any holdback thereunder. [ 11 ] CP issued a Certificate of Completion of Work dated December 20, 2017, in accordance with clause 45.9 of the Contract, certifying the work had been completed as of December 15, 2017. On the same day, CP advised KPCL by letter that it was reviewing the status of the holdback monies.

KPCL forwarded to CP a Certificate of Substantial Performance of Contract signed by the payment certifier under the Contract verifying substantial performance. CP acknowledged it retained a holdback of $12,708,731.96 under the Contract, calculated as of the completion of the Project [Holdback Monies]. Calculated on the basis of clause 45.9, the Holdback Monies became due and owing no later than February 5, 2018. III.

Procedural History [ 12 ] In order to provide some context to this appeal, it is necessary to summarize the procedural history and background of the litigation between the parties that resulted from the collapse of the earthworks mentioned earlier. [ 13 ] In August of 2017, KPCL filed the Saskatchewan Action in the Court of Queen’s Bench for Saskatchewan against CP. It was an action for damages based in contract, quantum meruit and unjust enrichment, claiming that CP’s delays in performing its duties under the Contract and the redesign of the earthworks by CP had caused KPCL loss.

Although this action referenced the Contract, no part of it claimed payment of the construction price agreed to be paid by CP to KPCL. The claim specifically noted that as of the date of issue of the claim, the work of KPCL under the Contract had not yet been completed but that completion was anticipated by the end of October 2017. Germane to this appeal is the salient fact that the Holdback Monies were not due and payable when the Saskatchewan Action was issued and no claim for those monies was made in the action.

KPCL did not serve this claim on CP until February 2018. [ 14 ] On December 1, 2017, CP commenced action 1701-16216 in the Court of Queen’s Bench of Alberta [Alberta Action] against KPCL and four corporations or partnerships that provided engineering and consulting services to CP for the Project, seeking to recover damages resulting from the earthworks collapse. CP claimed both in contract and in negligence. It also claimed against Intact Insurance Company [Intact] for breach of contract with respect to a performance bond that Intact had issued with respect to KPCL’s work on the Project.

The claim of CP for damages was joint and several against KPCL and the four consulting parties in addition to the claim against Intact. [ 15 ] Of significance to this appeal is that, at paragraph 113 of its statement of claim, CP claimed the right to set-off damages it would prove against any sums still owing to KPCL under the Contract.

It first advised KPCL that it would be retaining the Holdback Monies in accordance with this claim on February 16, 2018. [ 16 ] In February and March 2018, KPCL, along with three of the consultants and Intact, applied to challenge the jurisdiction of the Alberta court to hear the Alberta Action [Alberta Jurisdiction Challenge]. [ 17 ] In early March 2018, CP applied in Saskatchewan to extend the time to file a statement of defence to the Saskatchewan Action and to stay that action pending the determination of the Alberta Jurisdiction Challenge. [ 18 ] On March 5, 2018, 17 days after CP advised it would be retaining the Holdback Monies, KPCL initiated the Holdback Action.

It applied by way of originating application [O/A] for an order under ss. 17 and 38 of the BLA , directing CP to pay out the Holdback Monies to it immediately. Alternatively, KPCL requested an order pursuant to Rule 3-49(1)(d)(

i) determining that the Holdback Monies were immediately due and payable, and directing CP to pay them to KPCL. [ 19 ] In response, on March 12, 2018, CP filed an application in the Holdback Action seeking an order that it had not attorned to the jurisdiction of the Saskatchewan court in either the Holdback Action or the Saskatchewan Action. It also sought an order striking the Holdback Action on the basis that it was an inappropriate second action against CP, the subject matter of which could be properly addressed as part of the Alberta Action.

Alternatively, it sought an order striking the Holdback Action on the basis it could not be commenced by O/A pursuant to the terms of the BLA and, even if it could, the matter could be properly addressed as part of the Saskatchewan Action. [ 20 ] Although the application of CP was in the form of an application to strike, before the Chambers judge, CP argued instead that the Holdback Action should be stayed. Argument on CP’s application was heard near the end of March 2018, and the matter was reserved.

The Chambers judge rendered the Decision on January 31, 2019. [ 21 ] In the meantime, the Alberta Jurisdiction Challenge was heard by a Master in Chambers who rendered a decision dated July 25, 2018: Canadian Pacific Railway Company v Hatch Corporation , 2018 ABQB 558 , 86 BLR (5th) 97 [ Alberta Jurisdiction Challenge

Decision ]. The Master determined that although the Court of Queen’s Bench of Alberta had territorial jurisdiction, Saskatchewan was the appropriate forum based on the principle of forum non conveniens . He found that two of the defendant parties had attorned to the jurisdiction of the Alberta court.

He conditionally stayed the Alberta Action against the other four parties that had brought the Alberta Jurisdiction Challenge, namely, Clifton Associates Ltd. [Clifton], Hatch Corporation [Hatch], Intact, and KPCL, so that CP could commence similar proceedings in Saskatchewan or counterclaim against KPCL in the Saskatchewan Action.

A condition of the stay was that the defendants were to file an undertaking not to raise limitation periods as against CP in Saskatchewan other than those that they could raise in the Alberta Action as at December 1, 2017. [ 22 ] All of the parties quickly appealed the Alberta Jurisdiction Challenge Decision . KPCL, Hatch, Clifton, and Intact each appealed the order on different grounds. Some challenged the Master’s finding that Alberta had territorial jurisdiction. All challenged the Master’s failure to stay the action against the other two consultants.

All challenged the imposition of the condition with respect to limitation periods. At the same time, KPCL, Hatch, Clifton, and Intact each sought an order transferring the Alberta Action to Saskatchewan. CP challenged the Master’s order that Saskatchewan was the preferable jurisdiction for matters to proceed.

It also challenged the stay of the action against four of the six defendants on the basis that it would result in a multiplicity of actions and the possibility of conflicting outcomes. [ 23 ] In March 2019, CP applied for and was granted leave to appeal the Decision based on grounds that included jurisdictional issues as well as issues related to the provisions of the BLA and the Rules . In due course, this Court issued a stay of proceedings of both the Saskatchewan Action and the Holdback Action pending the hearing of the appeal.

The appeal was set for June 2019, but it was adjourned to await the decision on the appeal of the Alberta Jurisdiction Challenge Decision . [ 24 ] Madam Justice Kirker of the Court of Queen’s Bench of Alberta heard the appeal of the Alberta Jurisdiction Challenge Decision and rendered her decision on June 3, 2019: Canadian Pacific Railway Company v Hatch Corporation , 2019 ABQB 392 , 89 CLR (4th) 64 .

She agreed with the Master that the Alberta court had territorial jurisdictional competence to adjudicate the claims asserted by CP against all of the defendants, but that Saskatchewan was the best forum to determine the issues in the dispute. However, she disagreed with the Master in granting only a stay of the action in favour of some of the defendants, saying this created a circumstance in which they faced unnecessary and duplicitous proceedings and the potential injustice of inconsistent findings on the same evidence in different jurisdictions.

She determined that fairness and efficiency could only be achieved if all the issues in dispute between the parties were adjudicated in one forum or the other. She concluded that the whole of the Alberta Action should be transferred to Saskatchewan pursuant to The Court Jurisdiction and Proceedings Transfer Act , SS 1997, c C-41.1 [ CJPTA ], on the same limitation periods condition imposed by the Master.

She also determined that if the Saskatchewan court found it could not accept a transfer of the proceedings because the limitation period condition had not been met, then the action would proceed in Alberta. [ 25 ] The appeal of this matter was adjourned again to await the decision of the Court of Queen’s Bench for Saskatchewan as to whether or not it would accept the transfer of the Alberta Action.

On September 23, 2019, the Saskatchewan Court of Queen’s Bench, pursuant to the CJPTA , accepted the transfer of the Alberta Action in its entirety with respect to all defendants and on the basis that none of the defendants would be permitted to raise limitation defences that would not have been available to them in Alberta. [ 26 ] This appeal was heard in October 2019, after the limitation period condition in the Alberta Jurisdiction Challenge Decision had been met by the parties. As a result of the transfer of the Alberta Action, the jurisdictional issues raised by CP at the outset of this appeal became moot.

IV.

THE DECISION [ 27 ] The germane portions of the Chambers judge’s reasons deal with whether the Holdback Action should be stayed to avoid a multiplicity of proceedings in respect of either the transferred Alberta Action or the Saskatchewan Action, and whether the Holdback Action was properly commenced by way of O/A under the BLA . [ 28 ] The Chambers judge determined that KPCL’s initiation of the Holdback Action did not create a multiplicity of proceedings: [36] While the two Saskatchewan actions arise out of the same relationship and set of circumstances, QBG 2177 /17 [the Saskatchewan Action] and QBG 655/18 [the Holdback Action] do not engage identical issues, nor do they request identical relief.

The issues raised in QBG 655/18 turn not only on the

interpretation of the parties’ contract but also the application of relevant legislation, and may be decided summarily, and independently of the claims raised in QBG 2177 /17. I find in this case, as did McMurty J. in P. W.

Lorch & Associates Ltd v Saskatchewan , 2012 SKQB 170 , 396 Sask R 256 , that while there may be some factual overlap between the two, the relief sought in the originating application is much narrower than and distinct from that claimed in statement of claim QBG 2177 /17. [37] In the circumstances, I am not persuaded that the originating application constitutes a multiplicity of proceedings or otherwise represents an abuse of process. [ 29 ] He noted that although it may have been open to KPCL to amend its statement of claim in the Saskatchewan Action to include the substance of the Holdback Action, its decision to proceed by O/A was consistent with the object and purpose of the BLA , especially s. 91 .

He observed the subject matter of the Holdback Action was within the scope of claims that might be brought by way of O/A. He noted that Rule 3-2 allows an O/A to be used where an enactment authorizes an application not part of an action that had already been commenced and Rule 3-49(1)(d)(

i) allows the use of an O/A where there may be a determination of rights that depend solely on the

interpretation of a deed, will, contract or other instrument. [ 30 ] After reviewing ss. 17 and 38(6) and (7) of the BLA , he concluded that those sections provided the statutory authority to commence a proceeding by way of O/A in the circumstances of this case. [ 31 ] The Chambers judge determined as follows: [48] Subsection 38(2) of The Builders’ Lien Act requires that every owner (in this case CP) establish a holdback trust account and

administer the account jointly with the contractor (in this case KPCL) as a trustee. This provision, in conjunction with s. 27, whichprovides that a lien arises and takes effect when the contractor first provides their services or materials, suggest that KPCL is arguablyboth a trustee and lien claimant, contrary to CP’s assertion at para. 43 of its brief of law. As such, ss. (6) and (7) of s. 38 of The Builders’Lien Act would appear to contemplate KPCL commencing its application to the court for directions respecting the holdback funds by wayof originating application. [49] CP also argues, at para. 45 of its brief of law, that the “significant disagreement on the facts” mitigates against the

summaryproceedings contemplated by an originating application. [50] In Dyck v JCL Property Management Ltd., 2014 SKQB 274, 454 Sask R 238 [Dyck], this Court held that where the facts are notcontentious, all necessary parties are before the court, and no credibility issues arise, an originating application may be appropriate. [51] According to clause 45.9 of the contract between the parties, filed as Exhibit A to Kelly Panteluk’s affidavit filed March 6, 2018,at p. 24 of

Schedule “A”, “... the holdback monies authorized by [the Completion of Work] certificate shall become due and payable afterforty-five (45) days of the date of the certificate of Completion of Work ... “subject to the exception where CP is permitted to retainholdback funds to satisfy claims against CP or against the contractor and enforceable against CP.

As noted at para. 52 of KPCL’ s brief oflaw, this clause does not allow CP to retain the holdback funds in satisfaction of its own alleged claims against KPCL. [52] Contrary to CP’s assertion that the facts concerning liability for CP’s claims for damages must be analyzed, the legislation and theterms of the terms of the parties’ contract appear to provide sufficient evidence to adjudicate the relief requested by KPCL in QBG 655/18[the Holdback Action], With regards to the holdback funds at issue in QBG 655/18, “the full battery of procedures associated with astatement of claim” appear unnecessary: Dyck at para 28. [32] The Chambers judge concluded: [63] CP’s application to stay or strike QBG 655/18 is similarly dismissed.

Should CP wish to challenge the jurisdiction of this Court, toserve and file an affidavit in reply in accordance with Rule 3-52, or to apply to have the benefit of some or all of the process applicable toactions commenced by statement of claim in accordance with Rules 3-53 and 3-54, or to identify those specific portions of Mr. Panteluk’saffidavit to which it objects and the basis for that objection, it shall do so on or before February 15. Thereafter, the matter may be returnedto the chambers list by either party, upon seven days’ notice. V.

Issues [33] With the acceptance by the Court of Queen’s Bench of the transfer of the Alberta Action, the issues on this appeal are reducedto those dealing with the application of provisions of the BLA and the Rules. They may be fairly stated as follows: (

a) Did the Chambers judge err by finding that the Holdback Action was not multiplicitous and not an abuse of process? (

b) Was the Holdback Action properly commenced by O/A? (

c) Did the Chambers judge err in allowing only 15 days for CP to file further material? VI. Analysis [34] I start with the standard of review. [35] CP submits that the decision of the Chambers judge is, for the most part, discretionary, but insofar as it contains extricablequestions of law, it attracts the correctness standard. KPCL submits that the only issue to be reviewed on the correctness standard iswhether the Holdback Action may proceed by way of O/A.

It argues the remaining decisions of the Chambers judge are reviewable onthe discretionary standard. [36] A stay of proceedings is a discretionary remedy: Canada (Minister of Citizenship and Immigration) v Tobiass, (SCC), [1997] 3 SCR 391 at para 87. In Onion Lake Cree Nation v Stick, 2018 SKCA 20, [2018] 5 WWR 111 [Stick], this Court said: [49] It is clear the discretion to grant a stay of proceedings is not governed by rigid principles or criteria. Instead it is to be guided bythe particular circumstances of each case. Its exercise must not be arbitrary or capricious but rather based on admissible evidence.

Therecan be no exhaustive list of factors a judge should consider when determining whether to grant a stay of proceedings as the relevantfactors will, of necessity, be determined by the context in which the request for a stay arises. Finally, judges should bear in mind whenexercising their discretion that the ultimate effect of the stay will always be either to forestall or postpone access to the courts and, thus,justice. [37] The standard of review applicable to discretionary decisions was stated in Rimmer v Adshead, 2002 SKCA 12 at para 58,[2002] 4 WWR 119.

This Court must determine if the judge erred in principle, misapprehended or disregarded a material matter of fact orfailed to act judicially, or if the result was so plainly wrong that it amounts to an injustice and invites intervention on that basis.

See also:Saskatchewan Crop Insurance Corporation v McVeigh, 2018 SKCA 76 at para 26, 428 DLR (4th) 122; Abrametz v Law Society ofSaskatchewan, 2020 SKCA 81 at para 74; and Strom v Saskatchewan Registered Nurses Association, 2020 SKCA 112 at para 60–63. [38] Underlying the Chambers judge’s decision not to grant a stay is the issue of whether the Holdback Action is multiplicitous andan abuse of process.

A good description of the concept of abuse of process can be found in Sagon v Royal Bank of Canada (1992), (SK CA), 105 Sask R 133 (CA) [Sagon], as follows: [19] Finally, a separate mention should be made of the power of the court to prevent abuse of its process, a power which is inherent as

well as conferred under Rule 173. Bullen and Leake[’s Precedents of Pleadings ] defines the power as follows at pp. 148-149: The term ‘abuse of the process of the court’ is a term of great significance. It connotes that the process of the court must be carried out properly, honestly and in good faith; and it means that the court will not allow its function as a court of law to be misused but will in a proper case, prevent its machinery from being used as a means of vexation or oppression in the process of litigation.

It follows that where an abuse of process has taken place, the intervention of the court by the stay or even dismissal of proceedings, ‘although it should not be lightly done, yet it may often be required by the very essence of justice to be done.’ The term ‘abuse of process’ is often used interchangeably with the terms ‘frivolous’ or ‘vexatious’ either separately or more usually in conjunction. (footnotes omitted) This description informs my analysis and conclusion as to the applicable standard of review. [ 39 ] The jurisprudence on the standard of review applicable to findings of abuse of process is divergent.

The issue has been treated as a question of law reviewable on a standard of correctness: Toronto (City) v CUPE, Local 79 , 2003 SCC 63 at para 15 , [2003] 3 SCR 77 [ CUPE ]; McPherson v Campbell , 2019 NSCA 23 at para 18 ; and Reece v Edmonton (City) , 2011 ABCA 238 at para 13 , 335 DLR (4th) 600. [ 40 ] This Court has dealt with the issue of abuse of process almost exclusively in the context of an application to strike a pleading under the Court of Queen’s Bench Rule 7-9 (old Rule 173). Some cases explicitly or impliedly apply a correctness standard: Bigstone v St.

Pierre , 2011 SKCA 34 , [2011] 5 WWR 594 ; Mann v Hawkins , 2011 SKCA 146 , 385 Sask R 59 ; Kocsi v Muskeg Lake Cree Nation No. 102 , 2014 SKCA 39 at para 23 , 438 Sask R 5 ; Markwart v Prince Albert (City) , 2011 SKCA 104 at para 2 , 385 Sask R 39 ; Bear v Merck Frosst Canada & Co. , 2011 SKCA 152 at para 22 , 345 DLR (4th) 152 ; and Canada (Attorney General) v Merchant Law Group LLP , 2017 SKCA 62 at para 55 , [2017] 10 WWR 664 . [ 41 ] Other more recent cases from this Court suggest that the discretionary standard of review applies: Saskatchewan Power Corp. v Alberici Western Constructors, Ltd. , 2016 SKCA 46 at para 40 , 476 Sask R 225 ; Newell v Saskatchewan (Director, Community Operations) , 2013 SKCA 110 at para 15 , 368 DLR (4th) 731 ; Huerto v Salte , 2015 SKCA 21 at paras 2–3 , 457 Sask R 14 ; Ammazzini v Anglo American PLC , 2019 SKCA 142 at para 39 , 48 CPC (8th) 1 ; and Stick at para 70 . [ 42 ] Other courts of appeal, Ontario for example, have adopted the discretionary standard of review: The Catalyst Capital Group Inc. v VimpelCom Ltd. , 2019 ONCA 354 at para 24 , 145 OR (3d) 759 ; and Khan v Law Society of Ontario , 2020 ONCA 320 at para 10 , 446 DLR (4th) 575 . [ 43 ] Considering all of the foregoing, I conclude that a finding of abuse of process is a decision reviewable on the discretionary standard.

I say this because, as pointed out in the above excerpt from Sagon , an examination of whether it can be said that the process of the court was invoked properly, honestly and in good faith, or whether the court’s function has been misused as a means of vexation or oppression in the process of litigation, requires the court to look at the circumstances and facts as a whole and exercise its judgment in determining whether in each case an abuse exists. Much will depend on the context. As observed by this Court in Stick , “ the doctrine of abuse of process is also a flexible one.

There is no set test or rules for determining what amounts to an abuse of process” (at para 52). [ 44 ] The appropriate number of days allowed by the Chambers judge for CP to file further material is a quintessential discretionary decision and is reviewable on that basis. Last, in respect of the BLA and of the Rules , it is common ground that the

interpretation of the provisions thereof are questions of law. [ 45 ] I turn now to the issues. A. Did the Chambers judge err by finding that the Holdback Action was not multiplicitous and not an abuse of process? [ 46 ] CP notes there are three separate actions dealing with the same Project and the embankment failure. It submits the Holdback Action, given there are two other related actions, is multiplicitous, an abuse of process and should be stayed.

To assess these arguments, I turn first to the governing law. [ 47 ] CP correctly points out the Court of Queen’s Bench may grant a remedy under The Queen’s Bench Act, 1998 , SS 1998, c Q- 1.01 , to avoid a multiplicity of proceedings: Multiplicity of proceedings avoided 29

(1) The court shall grant to the parties to an action or matter all remedies to which the parties appear to be entitled with respect to any legal or equitable claims that they have properly brought forward so that: (

a) all issues in controversy between the parties are determined as completely and finally as possible; and (

b) a multiplicity of legal proceedings concerning the issues is avoided.

(2) Relief pursuant to subsection (1) may be granted either absolutely or on any terms and conditions that a judge considers appropriate. [ 48 ] The remedies that can be granted to avoid a multiplicity of proceedings include a stay if the circumstances warrant it. The source of the court’s power to stay an action was explained in Stick : [46] The Court of Queen’s Bench has inherent jurisdiction to control its own process. This includes the power to direct a stay of proceedings where appropriate: Boehringer Ingelheim [ (Canada) Ltd. v Englund , 2007 SKCA 62 , 284 DLR (4th) 94 )] at paras 33–35. That inherent jurisdiction is reaffirmed by s. 37 of The Queen’s Bench Act, 1998 , which reads:

37(1) Nothing in this Act prevents a judge from directing a stay of proceedings in any action or matter before the court if the judgeconsiders it appropriate.

(2) Any person, whether a party or not to an action or matter, may apply to the court for a stay of proceedings, either generally or to theextent that may be necessary for the purposes of justice, if the person may be entitled to enforce a judgment, rule or order, and theproceedings in the action or matter or a part of the proceedings may have been taken contrary to that judgment, rule or order.

(3) On an application pursuant to subsection (2), a judge shall make any order that the judge considers appropriate. [49] An action may also be stayed to remedy an abuse of process. [50] In CUPE, the Supreme Court of Canada described the concept of abuse of process as follows: [35] Judges have an inherent and residual discretion to prevent an abuse of the court’s process. This concept of abuse of process wasdescribed at common law as proceedings “unfair to the point that they are contrary to the interest of justice” (R. v. Power, (SCC), [1994] 1 S.C.R. 601, at p. 616), and as “oppressive treatment” (R. v.

Conway, (SCC), [1989] 1 S.C.R. 1659, atp. 1667). McLachlin J. (as she then was) expressed it this way in R. v. Scott, (SCC), [1990] 3 S.C.R. 979, at p. 1007: … abuse of process may be established where: (1) the proceedings are oppressive or vexatious; and, (2) violate the fundamental principlesof justice underlying the community’s sense of fair play and decency. The concepts of oppressiveness and vexatiousness underline theinterest of the accused in a fair trial.

But the doctrine evokes as well the public interest in a fair and just trial process and the properadministration of justice. … [37] In the context that interests us here, the doctrine of abuse of process engages “the inherent power of the court to prevent the misuseof its procedure, in a way that would ... bring the administration of justice into disrepute” (Canam Enterprises Inc. v. Coles (2000), (ON CA), 51 O.R. (3d) 481 (C.A.), at para. 55, per Goudge J.A., dissenting (approved [2002] 3 S.C.R. 307, 2002 SCC 63)).… [51] This Court in Stick has noted the flexibility of the concept of abuse of process.

It has also made clear that it is an abuse ofprocess to commence two lawsuits between the same parties that effectively deal with the same subject matter: [51] It is uncontroverted that one basis upon which a stay of proceedings may be granted is where the proceedings constitute an abuseof process. [52] The doctrine of abuse of process is also a flexible one. There is no set test or rules for determining what amounts to an abuse ofprocess. Rather, the doctrine engages a court’s inherent power to prevent the misuse of its judicial proceedings.

As Arbour J. stated inToronto (City) v CUPE, Local 79, 2003 SCC 63, [2003] 3 SCR 77, the doctrine of abuse of process focusses on the integrity of theadjudicative process: [43] ... In all of its applications, the primary focus of the doctrine of abuse of process is the integrity of the adjudicative functions ofcourts.

Whether it serves to disentitle the Crown from proceeding because of undue delays ... or whether it prevents a civil party fromusing the courts for an improper purpose ... the focus is less on the interest of parties and more on the integrity of judicial decision makingas a branch of the administration of justice. ... … [54] As this Court stated in Boehringer Ingelheim, it is an abuse of process to commence two lawsuits between the same parties thateffectively deal with the same subject matter.

The commencement of such actions in two or more jurisdictions may also constitute anabuse of process (Boehringer Ingelheim at para 36). This is so because the doctrine of abuse of process covers a wide variety ofcircumstances including those where the requirements of issue estoppel and res judicata may not apply, and where the doctrine of forumnon conveniens may apply.

The ultimate question for the court must always be whether the circumstances giving rise to the actions bringthe administration of justice into disrepute or result in unacceptable unfairness to one of the parties. [52] In Boehringer Ingelheim (Canada) Ltd. v Englund, 2007 SKCA 62, 284 DLR (4th) 94, this Court also said: [34] It is well established that the commencement by a plaintiff of more than one action in the same jurisdiction against a defendant inrelation to the same dispute or matter is an abuse of process.

As Sir George Jessel observed over one hundred years ago, “It is prima facievexatious to bring two actions where one will do”. See: McHenry v. Lewis, [1883] 22 Ch. D. 397. [53] The foregoing excerpts are reminders that the common law has long frowned on multiplicitous actions. The rule againstmultiple proceedings is one of the more basic common law principles.

It is based on concerns that multiple proceedings will increase thecost and complexity of litigation, and can or may lead to inconsistent results that undermine the credibility of the system and create apotential for injustice. [54] However, the rule against multiplicity has never been an absolute bar to the commencement and prosecution of multipleactions.

In Ross v Scottish Union and National Insurance Co. (1920), (ON CA), 53 DLR 415 (Ont Sup Ct (Div Ct)) at418, Magee J.A. stated: It may be admitted that it is in the public interest that there should be an end to litigation, and under the Judicature Act, sec. 16, it is theduty of the Court to grant all such remedies as the parties may be entitled to in respect of every legal and equitable claim properly broughtforward, so that all matters so in controversy may be completely and finally determined and all multiplicity of legal proceedingsconcerning any of such matters avoided.

But the matters must be in controversy and must be properly brought forward; and, while it is theduty of the Court to dispose of such matters so brought forward, the parties are not always bound to avail themselves of all their rights in

one action. A plaintiff need not join several existing causes of action, though he may do so. A defendant may, but need not, avail himselfof a right of set-off, nor need he always counterclaim, but may bring separate actions. (Emphasis added) [55] Likewise, although multiplicity of actions is often an indicator of abusive litigation, it is not necessarily so. In Home MortgageLtd. v Robertson (1984), (SK CA), 35 Sask R 84 (CA), a foreclosure action had been commenced that also named theguarantor but claimed no relief against him.

In a later, second action that started before the final order for foreclosure in the first actionwas granted, relief was claimed against the guarantor. The question posed to this Court was whether the second action was vexatious andan abuse of process. The Court stated: [2] The answer to that question is no. The issues and the cause of actions in the two actions (the present case is a good example) arenot the same. Moreover, the first action does not so much as raise an issue or a cause of action against the guarantor.

He is named solelyfor the purpose of giving him notice and not for the purpose of raising an issue against him. There is no question of res judicata orestoppel. There may be a departure from the spirit (or even the letter) of the multiplicity-of-actions principle (this is not without doubt) butthat does not automatically make the second action vexatious and an abuse of the Court's process. Some of the cases collected inHolmested and Gale illustrate this point. Additionally, in the present case, the defendant applicant has not shown any prejudice arisingfrom the commencement of the second action.

All of these factors add up to a lack of vexatiousness contemplated by Rule 173. (Citations omitted; emphasis added) [56] The Chambers judge in this case determined that while the Saskatchewan Action and the Holdback Action arose out of thesame set of circumstances and relationship, they did not engage identical issues or request identical relief.

He determined that while therewas some factual overlap, the relief requested in the Holdback Action was much narrower and distinct from that claimed in theSaskatchewan Action and the Holdback Action could be decided summarily and independently of the claims in the Saskatchewan Action.He declined to exercise his discretion to stay the Holdback Action on the basis that it was multiplicitous and an abuse of process. [57] If the Chambers judge was applying a test of identity of issues or relief to determine multiplicity, then he put the test toonarrowly.

Certainly, identical issues and relief claimed in two actions where one will do, in the words of Sir George Jessel cited above, isprima facie a misuse of the court’s process. On the other hand, mere similarity and, in my view, even substantial similarity in someaspects, does not compel a finding of abuse of process in all cases. [58] The doctrine of abuse of process is a flexible one, as was noted above. What amounts to an abuse is case specific and requires acontextual approach. It is important to remember the core of the doctrine engages a court’s inherent power to prevent the misuse of itsjudicial proceedings.

Any examination of whether an abuse exists must be sensitive to whether, on the whole, it can be said a party’s useof the court’s process amounts to such a misuse. [59] Based on the foregoing jurisprudence, the initial task of the court in each case of an allegation of multiplicity is to determinewhether the multiple actions relate to the same dispute or matter and the extent of that relationship.

The ultimate task is to determine,given any multiplicity, whether on the whole the process of the court has not been invoked properly, honestly and in good faith, orwhether the court’s function has been misused as a means of vexation or oppression in the process of litigation.

In short, an allegation ofmultiplicitous litigation must be measured against the criteria indicative of abuse. [60] CP argues, citing paragraph 54 of Stick, that the Holdback Action is an abuse of process because it effectively deals with thesame subject matter and parties as the Alberta Action and the Saskatchewan Action, especially with regard to the issue of the holdback. Italso submits the question of multiplicity and abuse of process must be analyzed through the lens that all three actions will, if all proceed,be adjudicated by the Court of Queen’s Bench for Saskatchewan. [61] I agree with this approach.

However, I am not satisfied that, in the circumstances of this case, the commencement andcontinuation of the Holdback Action taken in the context of the other two proceedings constitutes an abuse of process. The background ofthe three actions and their sequence is important in coming to this conclusion. [62] KPCL commenced the Saskatchewan Action for damages in August 2017. The claim was for losses arising from delays that itsaid CP caused.

It was not suing for any contractual monies owing for the construction cost, but rather for losses for having its equipmenttied up, added fuel costs, added maintenance costs, lost productivity and the loss of an early completion bonus. The Holdback Monieswere, at the time the action was commenced, not yet payable and KPCL could not have sued for them at that time. Put another way, KPCLcould not, at that time, have claimed the relief of immediate payment using the provisions of the BLA nor claimed that clause 45.9 of theContract entitled it to immediate payment.

There was no mention of the holdback, Holdback Monies or liens in the action. [63] On December 1, 2017, CP commenced the Alberta Action in contract and negligence for damages against multiple defendants– one of which was KPCL. The allegations against KPCL contain no mention of any holdback, statutory or contractual, or of the HoldbackMonies specifically. There is, however, a reference in paragraph 113 of the claim to the right of set-off of damages against the contractualmonies owing. This was an inchoate and conditional pleading because whether it came into play depended on proof of damages by CPagainst KPCL.

The amount of the damages that could theoretically be set off also depended on the allocation of responsibility for CP’sloss between KPCL and the four other consultant entities being sued, as well as the liability of Intact on the performance bond. [64] In December 2017, CP certified the Contract was complete. KPCL issued its Certificate of Substantial Performance and thatperformance was certified by the payment certifier under the Contract. CP served the Alberta Action on January 8, 2018. On February 7,2018, KPCL served the Saskatchewan Action.

On February 16, 2018, KPCL received notice in a letter from CP that it was retaining theHoldback Monies in pursuance of its claim of set-off under paragraph 113 of the Alberta Action. [65] At this point, neither the Alberta Action nor the Saskatchewan Action as pleaded explicitly mentioned the Holdback Monies.Neither action really concerned a claim for the contractually owing monies for the construction costs except insofar as CP claimed thecontractual damages it might prove as a set-off against what was left owing on the Contract. What was owing was in fact the HoldbackMonies.

Notably, CP did not, with respect to those monies, claim that any provision of the BLA (e.g., s. 28(3)) putatively applied to set-off.

[ 66 ] Likewise, neither action could be said in substance to deal with the provisions of the BLA as they related to the Holdback Monies. Neither action claimed relief under the BLA nor on the basis the monies were characterized as a “holdback”. [ 67 ] The Holdback Action was commenced March 5, 2018. It directly and squarely claimed immediate payment of the Holdback Monies under the BLA or, alternatively, under the provisions of the Contract. In my view, it raised legal claims and issues that were not addressed by the other two actions.

In that sense, it was not multiplicitous even if it did concern the pool of money conditionally claimed by CP in paragraph 113 of the Alberta Action. [ 68 ] CP argues that the issue of who is entitled to the Holdback Monies can be decided within the confines of the Alberta and Saskatchewan Actions. CP argues that if KPCL had amended the Saskatchewan Action to include a claim for the Holdback Monies, there would be no multiplicity.

Section 89 of the BLA does provide that a lien or trust claim can be joined with a claim for breach of contract. However, the Saskatchewan Action never was a claim for breach of payment of the construction price under the Contract. [ 69 ] While it may be possible for KPCL to add a claim for payment of the balance of the construction price to the Saskatchewan Action and, in addition, claim the relief in the Holdback Action, I am not satisfied the Chambers judge erred in deciding not to restrain KPCL from proceeding with its claim for payment of the Holdback Monies in the focused fashion it did.

Where the BLA applies on the facts, parties have access to all the procedural tools it provides for pursuing a claim recognized by that Act. This includes

summary procedural mechanisms to determine issues with respect to both a holdback and trust monies. Indeed, s. 91(1) gives preference to

summary procedures to resolve issues related to enforcement of liens. There is nothing in these circumstances that compels me to conclude that the decision by KPCL to commence the Holdback Action rather than amend the Saskatchewan Action is a misuse of the court’s process. [ 70 ] Contextually, CP submits the set-off pleaded in the Alberta Action engages the same issue as in the Holdback Action, i.e., whether the holdback, characterized as statutory or contractual, is payable at all. However, that is only partly true. KPCL seeks immediate payment of the Holdback Monies under the Holdback Action.

It submits that the monies are a liquidated sum. CP’s claim of set-off in the Alberta Action is at the moment unproven and inchoate. KPCL submits that whether under the provisions of the BLA or under the Contract, CP can have no right of set-off. [ 71 ] The question of whether CP is precluded from claiming a set-off can be decided outside of the confines of the Alberta Action, if necessary. It is essentially a question to be resolved under the BLA and its governing principles and case law or, alternatively, pursuant to

interpretation of the payment terms of the Contract. If CP is precluded, then immediate payment is due. If it is not precluded, then KPCL only awaits CP proving the nature and extent of its damages against KPCL in the Alberta Action.

To the extent there is this convergence on the issue of set-off, that does not compel a finding that the Holdback Action is an abuse of process and must be stayed. [ 72 ] Procedurally, the reference in paragraph 54 of Stick to the potential abuse created by the commencement of two or more actions proffered by CP in support of its argument of multiplicity and abuse of process loses much of its force now that the Alberta Action will proceed in Saskatchewan.

I am confident that the contextual relationship between all three matters will be well managed by the Court of Queen’s Bench for Saskatchewan to procedurally promote the efficiency of the litigation as a whole and to avoid duplication and the risk of inconsistency, which are usually the dangers of multiple actions. [ 73 ] Last, there will be no prejudice to CP by allowing the Holdback Action to proceed. CP submitted that if the Holdback Action proceeded, it could not avail itself of the procedures normally available to actions commenced by statement of claim. CP doth protest too much.

The Chambers judge clearly recognized that CP may want to avail itself of Rules 3-53 and 3-54 that provide just such procedures. [ 74 ] Given all of the foregoing and based on the discretionary standard of review set forth above,, I am not satisfied the Chambers judge erred in concluding that if the Holdback Action is allowed to proceed, the prosecution of all three actions would bring the administration of justice into disrepute or result in unacceptable unfairness to one of the parties or otherwise result in an abuse as described in the excerpt from CUPE above.

In my view, this is not a circumstance where it is necessary to engage the court’s inherent power to prevent the misuse of its judicial proceedings. The decision of the Chambers judge declining to stay the Holdback Action for the reason it was not multiplicitous or an abuse of process must be sustained. B. Was the Holdback Action properly commenced by O/A? [ 75 ] CP argues that KPCL could not legally commence its Holdback Action by O/A.

To assess whether KPCL is precluded from using an O/A, it is necessary to first review the relief that KPCL claimed. [ 76 ] KPCL claimed payment of the Holdback Monies on three different bases. First, it characterized the money as a statutory holdback on which it has a charge by virtue of s. 33 of the BLA and requested relief under s. 38 thereof. Second, KPCL claimed the Holdback Monies could be dealt with pursuant to s. 17 of the BLA . Last, it characterized the money as purely contractual and asked the court to make a determination pursuant to Rule 3-49(1)(d)(

i) that the Holdback Monies were immediately due and payable to it. [ 77 ] I turn to the arguments of the parties. KPCL submits that no matter how the Holdback Monies are characterized, it is entitled to seek a

summary determination under an O/A that it is entitled to immediate payment of those monies. It submits that if the monies are a statutory holdback or trust monies, CP is prevented by the BLA from claiming a set-off. If they are merely contractual, CP’s claim of a set- off of its damages against the monies is not permitted by clause 45.9 of the Contract.

It argues that clause properly interpreted obligates CP to pay the monies, notwithstanding the outcome of the Alberta Action. [ 78 ] CP submits that KPCL is neither a trustee in respect of a holdback account nor a lien claimant and, as such, cannot by using an O/A avail itself of either s. 17 or s. 38 of the BLA . There are several branches to CP’s arguments with respect to this issue.

CP first submits that because KPCL cannot lien CP’s lands, there is no statutory holdback or charge on that holdback under s. 33 of the BLA . [ 79 ] Second, it argues that even if the Holdback Monies are properly subject to a charge under s. 33, KPCL failed to commence its claim under s. 86 of the BLA and it should be struck. It submits that ss. 17 and 38 of the BLA concern applications for directions, not a direct attempt to enforce payment of the Holdback Monies as KPCL is attempting to do.

[80] Third, CP argues that s. 17 applies only where the trust funds are due and payable. It submits that because it has claimed a set-off against the Holdback Monies in the Alberta Action, the trust monies under the Contract are not due and payable and, even if themonies were trust funds, s. 17 cannot be used to determine the matter of entitlement and payment out. [81] Last, CP argues that KPCL cannot avail itself of Rule 3-49 for a

summary determination based on clause 45.9 of the Contractin view of the dicta in Sattva Capital Corp. v Creston Moly Corp., 2014 SCC 53 at paras 50–55, [2014] 2 SCR 633 [Sattva], which statesthat contractual intention is a question of mixed fact and law absent an extricable question of law. [82] KPCL’s response to CP’s submissions with respect to its status as a lien claimant is that, although it is not entitled to assert alien on CP’s railway right-of-way because CP is a federal undertaking, the BLA still applies in other respects and allows it to assert a lienor charge against the Holdback Monies, if not CP’s land. [83] The relevant remedy provisions of the BLA necessary to address these arguments are as follows:

Summary disposition of dispute concerning trust money 17(1) An application for directions may be made to the court where a dispute arises: (

a) respecting the claim of a person for whose benefit a trust is constituted under this Part; or (

b) respecting the administration of the trust fund.

(2) An application under subsection (1) may be made by: (

a) the person with respect to whose claim the dispute has arisen; (

b) any person for whose benefit the trust fund is created by this Part; or (

c) the trustee. … 38(2) Subject to subsection (11), every owner shall: (

a) establish at a chartered bank, credit union or trust and loan corporation, a holdback trust account; (

b) pay the holdback into the holdback trust account; and (

c) administer the holdback trust account jointly with the contractor, as trustees. …

(6) A trustee under this

section may apply to the court for directions respecting administration of the trust, and the court may order thatthe owner may establish and maintain a holdback trust account as sole trustee or make any other order it deems appropriate.

(7) Any lien claimant may apply to the court for an order removing a trustee, and the court may make an order removing the trustee andreplacing the trustee with another person as trustee, or make any other order required to ensure that the holdback trust account ismaintained for the benefit of the lien claimants. … Commencement of action 86(1) An action to enforce a claim of lien or trust arising under this Act is to be commenced by a statement of claim and except asotherwise provided The Queen’s Bench Rules apply to the proceedings. 1.

Can an O/A be used to claim the Holdback Monies as a statutory holdback? [84] Before assessing the first branch of CP’s argument that KPCL cannot avail itself of ss. 17 and 38, it is necessary to turn toKPCL’s submission that the BLA applies and that it has a charge on the Holdback Monies, notwithstanding that it cannot lien CP’s lands. Iagree with this general submission but conclude in the circumstances the Holdback Monies cannot be a statutory holdback. I will explain. [85] In some jurisdictions, builders’ lien legislation includes specific provisions for railways.

The Alberta, New Brunswick, NovaScotia, Prince Edward Island, and Newfoundland Acts explicitly allow for the registration of liens against lands of a railway company:Builders’ Lien Act, RSA 2000, c B-7, s. 34(5); Mechanics’ Lien Act, RSNB 1973, c M-6, s. 20(7); Builders’ Lien Act, RSNS 1989, c 277,s. 6(1); Mechanics’ Lien Act, RSPEI 1988, c M-4, s. 19(7); and Mechanics’ Lien Act, RSNL 1990, c M-3, s. 17(3). Section 16(3)(

b) ofOntario’s Construction Act, RSO 1990, c C.30 [Ontario Construction Act], treats railways the same as Crown-owned land. The BLA, onthe other hand, is silent respecting railways. To determine the applicability of the BLA to railways operating in Saskatchewan, it isnecessary to turn to the jurisprudence. [86] Generally speaking, liens arising under provincial statutes cannot be enforced against railways because railways are subject tothe exclusive legislative authority of the federal government: Crawford v Tilden (1907), 14 OLR 572 (Ont CA); and Johnson & Carey Co.v Canadian Northern R.

Co. (1918), (ON CA), 47 DLR 75 (Ont Sup Ct) [Johnson]. [87] However, the weight of authority suggests federal undertakings are not completely immune from builders’ lien legislation. InCanadian National Railway Company v Nor-Min Supplies Ltd., (SCC), [1977] 1 SCR 322 [Nor-Min], the Supreme Court

considered whether mechanics’ lien legislation could apply to a quarry owned by Canadian National Railways [CNR] adjacent to itsrailway line. Liens were filed against the quarrying area as well as the CNR right-of-way. Although the trial judge had amended the lienclaims to exclude the railway right-of-way from the land subject to the lien, one of CNR’s arguments on appeal was that the land onwhich the quarrying was carried out could not be subject to provincial mechanics’ lien legislation because the lien would interfere with theoperation of a federally authorized transportation undertaking.

Chief Justice Laskin dismissed this argument (at 331 and 332–333): I turn to the C.N.R.’s second submission. It invokes the definition of “railway” as an aid to its contention that the quarry was an integralpart of the railway system and hence to be viewed qua the application of provincial legislation as in no different position from the railwayline itself. Of course, there is no principle of absolute immunity from provincial legislation of railways that are under exclusive federalregulatory control. The principle is as old as C.P.R. v.

Notre-Dame de Bonsecours [1899 AC 367], where it is expressed by Lord Watsonat p. 372. Provincial legislation may, to some extent, apply to interprovincial and international railway systems even in respect of therailway lines themselves and a fortiori may apply in respect of operations which are not integral to the transportation facility. … … We are not concerned here with any competent federal legislation which purports to exclude the application of provincial legislation likeThe Mechanics’ Lien Act of Ontario.

Nor, apart from such federal legislation, do we even reach any issue of immunity from provinciallegislation unless the quarry is shown to be more than a convenience, more than a source of supply for railway purposes but, indeed, anessential part of the transportation operation in its day-to-day functioning. In the circumstances of the present case I cannot arrive at such aconclusion. … (Emphasis added; footnotes omitted) [88] Nor-Min was applied by this Court in Hansen v Canadian National Railway (1983), (SK CA), 22 Sask R126 at paras 6–7 [Hansen].

In Hansen, Cameron J.A. agreed with the Chambers judge’s determination that although liens cannot beenforced against railroad beds or integral parts of the operation of a railway, railway undertakings are not entirely exempt from mechanics’lien legislation. [89] In Perini Ltd. v Can-Met Explorations Ltd. (1958), (ON SC), 15 DLR (2d) 375 at 381 (Ont H Ct J), citingA.G. for Ontario v Winner, (UK JCPC), [1954] 4 DLR 657 (PC), builders’ lien legislation was found inapplicable onlyto the extent that it sterilized a federal undertaking in its function and activity or impaired its status and essential capacities to a substantialdegree.

This formulation of the applicability of this kind of legislation is consistent with the dicta in Nor-Min. [90] W. Brent Gough, Q.C., and Collin K. Hirschfeld, Q.C., summarized the jurisprudence regarding federal undertakings andbuilders’ lien legislation in Saskatchewan Builders’ Lien Manual, 2d ed (Regina: Law Society of Saskatchewan Library, 2014) at 10 [LienManual], as follows: In projects that are not specifically federal Crown projects but are clearly a federal work or undertaking, the issue of lienability will bedetermined on the basis of public policy.

If the particular project that would be the subject of the lien is essential to the purpose of thefederal undertaking, it is not lienable. … [91] Based on the foregoing, builders’ lien legislation can apply to railways with the qualification that a lien cannot be registeredagainst the land of the railway if that land is essential to the operation of the railway as a federal undertaking. In this case, it is commonground we are dealing with such land. [92] Therefore, the question becomes how does the BLA otherwise apply when a lien cannot be registered against the land inquestion?

KPCL submits that, despite the fact it cannot register a lien, s. 33 still applies and provides a charge against Holdback Monies. [93] A builders’ lien is a creature of statute. The statute has supplanted any relevant liens that may have existed at common law.KPCL can only be considered a lien claimant if a lien can be found to exist under the statute: Johnson at 79; and Arthur Andersen Inc. vMerit Energy Ltd., 2002 SKCA 105 at para 47, 227 Sask R 44.

I turn now to address that issue. [94] To determine whether a lien and a charge on the Holdback Monies arises in the circumstances of this case, it is necessary toreview the object, purposes and germane provisions of the BLA. In this regard, the modern principle of statutory

interpretation asarticulated by the Supreme Court of Canada in Rizzo & Rizzo Shoes Ltd. (Re), (SCC), [1998] 1 SCR 27 at para 21, whichhas been codified in Saskatchewan in The Legislation Act, SS 2019, c L-10.2, as follows, applies: 2-10(1) The words of

an Act and regulations authorized pursuant to

an Act are to be read in their entire context, and in their grammaticaland ordinary sense, harmoniously with the scheme of the Act, the object of the Act and the intention of the Legislature. [95] The objects and purposes of the BLA were explained by this Court in Town-N-Country Plumbing & Heating

(1985) Ltd. vSchmidt (1991), (SK CA), 93 Sask R 278 [Town-N-Country], as follows: (

i) The purposes and scheme of the Act. [26] The statute is primarily concerned with the commercial interests of persons who, under contract and on credit, contribute serviceor material to the improvement of real property, whether under contract to the owner, to the contractor engaged by the owner, or to anysubcontractor. According to the law of contract, such persons have no recourse against the property should they go unpaid, and norecourse against anyone except the party with whom they have contracted.

Limited as they are in those ways, the rights and remediesafforded by contract law were seen by the legislature as inadequate in this context, and so an elaborate scheme of supplementary rights andremedies was enacted, all with the purpose of better enabling such persons to recover the amounts owing to them.

This is the primarypurpose of the Act, and to the end of achieving that purpose, trusts were constituted in relation to amounts payable in connection with theimprovement; liens and charges of various kinds were created; holdbacks and retentions of monies payable were provided for, and so on. [27] This, however, is not the only concern or purpose of the Act. It is also concerned with the commercial interests of others, including

the owner and the financier, if any, of the improvement. In their interests, as well as in the interests of the contractor and the subcontractors, extensive provision was made allowing for monies to flow down the contractual chain without risk of liability to those providing the materials or services. The purpose of these provisions -- and hence the secondary purpose of the Act -- is to ensure business efficacy. See also: Axcess Capital Partners Inc. v Allsteel Builders

(2) Limited , 2015 SKCA 33 at paras 57-60 , 383 DLR (4th) 334; BWV Investments Ltd. v Saskferco Products Inc. (1994), Sask R 286 (CA) at paras 31 and 33; and D & K Horizontal Drilling

(1998) Ltd. (Trustee of) v Alliance Pipeline Ltd. , 2002 SKCA 145 at para 14 , [2003] 4 WWR 29. [ 96 ] The Court in Town-N-Country summarized the two parts of the BLA which, in my view, are at play in this case with respect to the Holdback Monies: [29]

Part III of the Act , entitled “The Lien” and containing ss. 22 to 33, houses the central aspect of the scheme. Unlike the ordinary law, these provisions afford builders’ liens to persons who supply services or materials. I shall have more to say of this in a moment. [30]

Part IV, entitled “The Holdback” and containing ss. 34 to 48, embraces key aspects of the scheme. Property owners who contract to have their property improved must withhold from the contractor, for the benefit of his subcontractors, 10% of either the value of the improvements or the amount of any payment, whichever is greater, and must do so whether the contract calls for periodic payment or payment on completion (s. 34). Beyond that, however, an owner is free to make payment to the contractor, subject only to s. 40, and if he makes payments in conformity with that section, he is relieved, to that extent, of further liability to subcontractors. [ 97 ]

Section 22 indicates when a lien may arise under the BLA : 22

(1) A person who provides services or materials on or in respect of an improvement for an owner, contractor or subcontractor, has, except as otherwise provided in this Act, a lien on the estate or interest of the owner in the land occupied by the improvement, or enjoyed therewith , and on the materials provided to the improvement for as much of the price of the services or materials as remains owing to him. (Emphasis added) [ 98 ] A lien is therefore intimately tied to the estate or interest of the owner in the land occupied by the improvement giving rise to the lien.

Pursuant to s. 27 of the BLA , a lien takes effect when a person first provides his or her services or materials to the improvement. [ 99 ] The bundle of lien rights created by the BLA was explained in Town-N-Country by Cameron J.A. as follows: [32] The lien emerges when the subcontractor first supplies the service or material contracted for (s. 27).

It is multi-faceted and emerges as a floating charge (a) “on the estate or interest of the owner of the land occupied by the improvement”, in the language of s. 22; (b) “on the holdback required to be retained under s. 34”, in the words of s. 33; and (c) ”upon any additional amounts owed in relation to the improvement”, in the words again of s. 33. And to being with, the lien extends in amount to “as much of the price of the service or material as is owing” by the contractor to the subcontractor (s. 22). [33] As such, the lien confers upon the subcontractor a set of substantive and remedial rights.

As a charge on the interest of the owner in the land, the lien confers on the subcontractor a substantive, in rem right in the property, together with the remedial right to have the property sold to satisfy the amount secured by the lien (s. 96(3)). As a charge on the holdback, the lien affords the subcontractor the substantive right, as against the owner in personam, to be paid the proportionate share of the holdback to which the subcontractor is by law entitled (s. 37(1)). The associated remedial right is, of course, the generally derived right to obtain judgment against the owner personally for such amount.

And as a charge on any additional amount owed by the owner to the contractor, the lien accords its holder the right, as against the land but not as against the owner personally, to realize the amount secured by the lien. [ 100 ] In the case of a railway, it cannot be said that a lien is created pursuant to s. 22 by the provision of services or materials in the sense described in Town-N-Country , i.e., that it is a floating charge on the estate or interest of the owner. KPCL acknowledges this. [ 101 ] The relationship between a lien and a holdback is set out in ss. 33 and 34(1).

The obligation to retain a holdback applies to payers on a contract or subcontract under which a lien may arise under the BLA : Holdback 34

(1) Each payer on a contract or subcontract under which a lien may arise under this Act shall retain a holdback equal to 10% of the greater of … (Emphasis added) [ 102 ] When a lien arises, it is a charge on the holdback: Lien a charge 33 Every lien is a charge on the holdback required to be retained by

section 34, and subject to subsection 28(3), is a charge upon any additional amount owed in relation to the improvement by a payer to the contractor or to any subcontractor whose contract or subcontract was in whole or in part performed by the provision of services or materials giving rise to the lien. [ 103 ] Section 38(2) mandates that every owner create a trust account for the holdback and pay the holdback monies into that account. The contractor and owner are joint trustees. The money is, by virtue of s. 38(3), to be deposited for the benefit of all those persons who have a lien : 38

(2) Subject to subsection (11), every owner shall:

(

a) establish at a chartered bank, credit union or trust and loan corporation, a holdback trust account; (

b) pay the holdback into the holdback trust account; and (

c) administer the holdback trust account jointly with the contractor, as trustees.

(3) All amounts deposited into the holdback trust account shall be held in trust for all of those persons who have a lien. [ 104 ] Based on the wording of these sections, the requirements to retain a holdback, and create a holdback trust account, and the creation of a charge on the holdback, are all congruent with the existence of a lien. The question is whether they are dependent on the existence of a lien. [ 105 ] KPCL submits its inability to lien CP’s land under the BLA does not preclude the creation of a charge on the holdback under s. 33 of that Act.

In the early case of Johnson , Sutherland J.A. addressed this issue. He concluded that a lien must exist against the land before any charge on the monies can exist (at 81): In the present case, under no circumstances could the claimant, or any other claimant, establish under this Act a valid lien against the property in question. … A further argument advanced on behalf of the plaintiffs was that a charge attached to the percentage required to be retained by the owner under sec. 12 of the Act. But, when sub-sec. 3 of the said

section is referred to, it is plain that it is the lien which is to be a charge upon the amount so directed to be retained, and if no lien is established, the

section cannot apply so as to aid the claimant. [ 106 ] The relationship between the existence of a lien and charge on a holdback was explained in Brook Construction

(2007) Inc. v Blackwood Contractors Ltd. , 2015 NLCA 18 , 385 DLR (4th) 270 [ Brook ] . There, the Court held that where the provision that creates the charge upon the holdback is dependent on the existence of a lien against property, “the right to the lien on the holdback is parasitic upon the existence of a lien on the benefitted land” (at para 20); that is to say, if there is no lien, there can be no charge on the holdback. [ 107 ] The relationship between a lien and a holdback explained in Brook is mirrored by

Part IV of the BLA dealing with holdbacks. Subject to my comments regarding s. 26 that follow, there appears to be no other provision in the BLA that creates a charge on the holdback other than through the existence of a lien on land. [ 108 ] In response to Brook , KPCL submits Hansen stands for the proposition that a lien on the holdback arises even where there is no lien available against the land.

KPCL submits that although the lien could not be enforced against the right-of-way in Hansen , the Court nevertheless held “the claimants are entitled to maintain a lien on the trust money so long as they otherwise fit within the confines of the Act” (at para 6). However, the Court’s reference to a lien on the trust monies does not assist KPCL. It is not a reference to the holdback trust account at all.

The “trust money” referred to in Hansen relates to the trust provisions under s. 5(1) of The Mechanics’ Lien Act , RSS 1978, M-7 (repealed), rather than the holdback and holdback trust account under the modern BLA . The germane portions of the repealed

section read: “Every person for whose benefit a trust is created by ss. 3 or 4 has, subject to the provisions of that section, a lien upon the trust fund for the value of the work done” (as quoted in Hansen at para 11 ). The BLA no longer contains a provision equivalent to s. 5(1) . [ 109 ] What is clear is that KPCL’s reliance on Hansen is misplaced.

It is not authority for the proposition that there can be a lien or charge on the holdback absent a lien on the land. [ 110 ] KPCL also refers to Bzdel v Canadian Pacific Railway , 2016 SKQB 158 , 60 CLR (4th) 210 , as an illustration of CP itself relying on the BLA as a basis to pay the holdback into court to discharge liens claimed by subcontractors.

However, as neither party in that case raised the issue of whether the holdback provisions apply against a federal undertaking, the case is of limited assistance. [ 111 ] That the charge on the holdback under s. 33 is dependent on a registrable lien against land is made clearer by the absence in the BLA of any provision to extend the benefits of s. 33 to federal undertakings as the Legislature has done in the case of Crown-owned land. In such a case, s. 26 of the BLA provides for such a charge on a holdback in the absence of a lien: Liens respecting interest of Crown in land 26

(1) A lien does not attach to and cannot be registered against the estate or interest in land of the Crown.

(2) Where an improvement is made to land in which the Crown has an estate or interest but the Crown is not an owner, the lien may attach to the estate or interest of any other person in that land.

(3) Where the Crown is an owner, the lien does not attach to the land but constitutes a charge as provided in

section 33, and this Act applies without requiring the registration pursuant to

section 50 of a claim of lien against the land. [ 112 ] The fact that the Legislature has gone the extra step of establishing a charge on the holdback in a case where there was no lien against the land suggests that a lien on land is normally a condition precedent for such a charge. Unlike Crown-owned land, there is nothing in the BLA which grants a freestanding charge on any holdback in respect of federal undertakings. [ 113 ] Other legislatures have made provision for charges on the holdback in the case of federal undertakings.

For example, s. 16(3) of the Ontario Construction Act expressly treats railway rights-of-way the same fashion as Crown-owned land: Where lien does not attach to premises 16

(3) A lien does not attach to a premises, but constitutes a charge under

section 21 , if, (

a) the owner of the premises is the Crown or a municipality; or (

b) the premises is a railway right-of-way.

[ 114 ] The Ontario Construction Act creates a charge against the holdback ( s. 21 ), putting a provider of services or materials to a railway in the same position as a person that could register a lien against the land. Saskatchewan has not passed a similar provision. [ 115 ] Based on the foregoing analysis, the retention of a statutory holdback, the creation of a holdback trust account and the charge on the holdback are all dependent on the existence of a lien against land. In the absence of such a lien, KPCL’s argument that it has a lien or a charge against the Holdback Monies must fail.

Such a lien cannot exist in the circumstances of this case. On this basis, KPCL cannot, using an O/A, avail itself of s. 38(6) and (7) because there is no charge created under s. 33 of the BLA . [ 116 ] Given this conclusion, the ultimate result of CP’s argument that there is no lien and, therefore, no charge on the Holdback Monies, is that KPCL also cannot avail itself of s. 86 as CP suggests it was required to do. If there is no lien for the purposes of s. 38 , there is also no lien for the purposes of s. 86.

That point, and that s. 54 requires a lien to be registered before an action to enforce the lien under s. 86 is commenced, seems to have eluded CP. In the circumstances of this case, KPCL could not commence an action for a lien under s. 86 as an alternative to bringing an application under s. 38 . [ 117 ] Based on the above analysis, the Chambers judge erred in concluding that KPCL was both a lien claimant and a trustee of the holdback account. Although CP’s written argument before him on those points consisted of one sentence, the Chambers judge did make reference to it and was obviously alive to its import.

Unfortunately, he did little analysis, assuming that a lien arose pursuant to s. 27 of the BLA and that KPCL was a trustee of the holdback account pursuant to s. 38 . He failed to address whether the absence of a lien against the land had an impact on whether there was a statutory holdback and a charge thereon. 2.

Can an O/A be used to claim the Holdback Monies as trust monies? [ 118 ] I turn now to KPCL’s claim under s. 17 and CP’s submission that the Holdback Monies are not trust monies. [ 119 ] In the court below, KPCL requested an order under s. 17 for a determination of entitlement to and payment out of the Holdback Monies. Although its argument that the monies were trust monies under

Part II of the BLA was sparse, CP squarely addressed the propriety of using that

section for those purposes. It argued that the trust provisions in

Part II of the BLA were inapplicable because it had a right to set-off its damages claim against any trust monies and, in any event, s. 86 governed the procedure to determine entitlement, not s. 17. [ 120 ] As a preliminary point, it is necessary to determine the extent to which the trust provisions of the BLA apply to federal undertakings and if the inability of KPCL to lien CP’s property is significant in terms of the remedies provided under

Part II. A review of the BLA reveals that there is no provision in

Part II or other parts of the BLA that links the creation of the trust and trust monies to the existence of a lien as earlier explained in respect to holdback monies.

Section 20 of the BLA states that the trust is not affected by the expiration of the time for registering a lien. Likewise, s. 86(1) of the BLA , which states “[a]n action to enforce a claim of lien or trust” is to be commenced by way of statement of claim, distinguishes between the two types of claims.

Section 89 does as well. Finally, unlike Crown-owned land (see s. 5(2)), the BLA does not preclude the application of the Act to federal undertakings. [ 121 ] That the claims are distinct is also clear from the following excerpt from Gary G.W. Semenchuck, et al, Liens in the Construction Industry , a report prepared for The Hon. J.

Gary Lane, Q.C., Minister of Justice (Regina: Saskatchewan Justice, August 1984) [ Liens Report ], where the Special Advisory Committee to the Minister of Justice on Builders’ Liens said (at 2): A number of briefs received by the Committee indicated confusion in the industry as to how the trust and the lien interact. The Committee concluded that the trust and the lien are alternative remedies.

To speak of a lien claimant asserting a claim to trust funds is theoretically incorrect. … The remedy to enforce the trust is to bring an action for breach of trust and, as will be seen, it is only those persons in direct contractual relationship with the trustee who can bring such an action. The lien is distinct from the trust. It is really a misnomer to speak of registering a lien to claim on the trust funds. … This excerpt was relied on in Prestige Commercial Interiors

(1992) Ltd. v Suderman, 2018 SKCA 95 at para 19 , 431 DLR (4th) 216 . [ 122 ] As well, the case law suggests the trust and lien remedies operate independently of one another and that the trust provisions apply to federal undertakings. [ 123 ] In Stuart Olson Dominion Construction Ltd. v Structal Heavy Steel , 2015 SCC 43 at para 36 , [2015] 3 SCR 127 , the Supreme Court recognized the distinct operation of lien and trust provisions. The issue before the Court was whether security in the form of a lien bond would extinguish the trust obligations pursuant to the Manitoba Builders’ Liens Act , CCSM, c B91 .

The Court concluded that the lien and trust provisions are two separate remedies: [37] Moreover, the BLA itself contemplates that the lien and trust remedies may be pursued concurrently.

Section 66 provides that “a claim related to a trust fund … may be brought or joined with an action to realize a lien”. If the trust provisions only protected those without a lien claim, there would never be concurrent claims and s. 66 would have no application. The legislature cannot be presumed to enact superfluous or meaningless provisions (R. Sullivan, Sullivan on the Construction of Statutes (6th ed. 2014), at pp. 211-12). [38] Nothing in the BLA suggests that the lien and trust provisions do not remain as two separate remedies.

This is not to deny that a contractor or subcontractor may have both a lien and trust claim and that the funds sought under each remedy may be the same. But this does not change the fact that the claimant has access to both of these remedies. [ 124 ] Similarly, in Sunview Doors Limited v Academy Doors & Windows Ltd. , 2010 ONCA 198 at paras 74 and 76 , 101 OR (3d) 285 , Weiler J.A. concluded that there is no requirement for a right to lien to exist as a prerequisite for access to the trust provisions. Rather, to qualify as a beneficiary of the trus

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