Regina Bypass Design Builders v Supreme Steel LP, 2021 SKCA 82

Court of Appeal for Saskatchewan Docket: CACV3501 Citation: Regina Bypass Design Builders v Supreme Steel LP , 2021 SKCA 82 Date: 2021-05-26 Between: Regina Bypass Design Builders Appellant (Applicant) And Supreme Steel LP by its general partner Supreme Steel GP Corp., SGTP Highway Bypass Limited Partnership by its general partner SGTP Highway Bypass GP Inc., and Government of Saskatchewan (Ministry of Highways and Infrastructure) Respondents (Respondents) Before: Ottenbreit, Barrington-Foote and Kalmakoff JJ.A. Disposition: Appeal dismissed Written reasons by: The Honourable Mr.

Justice Barrington-Foote and The Honourable Mr. Justice Kalmakoff In dissent: The Honourable Mr. Justice Ottenbreit On appeal from: 2019 SKQB 256 , Regina Appeal heard: September 10, 2020 Counsel: Jared D. Epp for Regina Bypass Design Builders T. Josh Morrison and Turner Ralston for Supreme Steel LP by its general partner Supreme Steel GP Corp. Jared G. Biden for the Government of Saskatchewan (Ministry of Highways and Infrastructure) No one appearing for SGTP Highway Bypass Limited Partnership by its general partner SGTP Highway Bypass GP Inc. Barrington-Foote and Kalmakoff JJ.A. I.

INTRODUCTION [ 1 ] This appeal concerns the

interpretation of s. 5(2) of The Builders’ Lien Act , SS 1984-85-86, c. B-7.1 [ Act ].

Specifically, it addresses the question of whether the exemption provisions therein apply to all parties who provide work and materials in connection with construction and improvement projects on public highways, or only to the Crown and those parties who contract directly with the Crown. [ 2 ] In Regina Bypass Design Builders v Supreme Steel LP , 2019 SKQB 256 , 6 CLR (5th) 67 [ Chambers Decision ], a Court of Queen’s Bench judge held that the exemption provisions in s. 5(2) of the Act apply only to those parties who contract directly with the Crown and, as such, do not limit the application of the Act as between non-government contractors and their subcontractors, even where the work is performed in relation to a public improvement or government-owned highway project. [ 3 ] Regina Bypass Design Builders [RBDB] appeals from the Chambers Decision .

For the reasons that follow, we would dismiss the appeal. II. BACKGROUND A. The Legislative Provisions in Question [ 4 ] At the centre of this appeal is s. 5 of the Act . It reads as follows: Application of Act to Crown

5( 1) Except as otherwise provided, the Crown is bound by this Act .

(2) This Act does not apply where services or materials are provided: (

a) in connection with a contract entered into under or pursuant to The Highways and Transportation Act; or (

b) in connection with the construction or improvement of a street or highway owned by the Crown.

(3) Notwithstanding subsection (2), this Act applies where services or materials are provided in connection with the construction or improvement of a bridge owned by the Crown other than a bridge constructed or improved under or pursuant to The Highways and Transportation Act . B. The Project [ 5 ] All of the parties to this appeal were involved in the Regina Bypass Project [Project].

The Project was a major infrastructure undertaking that entailed the construction of 12 overpasses, 40 kilometers of new four-lane highway and 55 kilometers of new service roads, the resurfacing of 20 kilometers of four-lane highway, and the twinning of 5 kilometers of Highway 6. [ 6 ] The Government of Saskatchewan owns the Project. In July of 2015, the Saskatchewan Ministry of Highways and Infrastructure [Ministry] entered into a contract [Prime Contract] with SGTP Highway Bypass Limited Partnership [SGTP] for the design and construction of the Project.

Under the terms of the Prime Contract, SGTP was required to construct and manage the Project and is responsible for maintaining the Project for 30 years post-completion. At the end of those 30 years, SGTP will transfer management of the Regina Bypass back to the Government of Saskatchewan. [ 7 ] Immediately after executing the Prime Contract with the Ministry, SGTP entered into a contract with RBDB, the legal entity tasked with the actual construction of the Project. SGTP effectively passed all the obligations it undertook in the Prime Contract to RBDB.

The flow of monies for the Project was to be from the Ministry to SGTP, and then from SGTP to RBDB. C. Supreme’s Notice of Lien [ 8 ] In March of 2016, RBDB retained Supreme Steel LP [Supreme] to fabricate, supply, deliver and install the structural steel girders for the Project’s bridges. Supreme performed its work under the subcontract and, in late October of 2018, served RBDB with a Written Notice of Lien in the amount of $7,529,809.94 in relation to that work.

RBDB took the position that the Act did not apply to its subcontract with Supreme because the nature of the Project fell within the scope of s. 5(2) of the Act and demanded that Supreme vacate the lien. Supreme refused. D. The Chambers Application [ 9 ] RBDB applied to a Court of Queen’s Bench judge for a declaration that the Act did not apply to any work performed by or on behalf of it in respect of the Project or, alternatively, a declaration that the Act did not apply to any work performed by Supreme under the subcontract.

It also sought an order declaring the Written Notice of Lien to be of no force and effect, an order returning the lien bond to RBDB, and an order granting judgment against Supreme for the costs RBDB incurred in posting the lien bond and applying to have it declared invalid. RBDB argued that it was not subject to the operation of the Act because the services and materials Supreme supplied under the subcontract were provided (

i) in connection with a contract entered into under The Highways and Transportation Act, 1997 , SS 1997, c H-3.01 [ HTA ] and/or (ii) in connection with the construction or improvement of a highway owned by the Crown and, as such, the exemptions in s. 5(2) of the Act applied. E. The Chambers Decision [ 10 ] The Chambers judge dismissed RBDB’s application.

He determined that the exemption provisions in s. 5(2) of the Act applied only to the Prime Contract between the Ministry and SGTP. [ 11 ] The Chambers judge began his analysis by citing the provisions of s. 5 of the Act and orienting himself to the arguments advanced by the parties. He observed that the question before him involved an exercise in statutory

interpretation and turned his mind to the governing principles, citing such decisions as Ballantyne v Saskatchewan Government Insurance , 2015 SKCA 38 at paras 19–21 , 457 Sask R 254 [ Ballantyne ] and Holt v Saskatchewan Government Insurance , 2018 SKCA 7 at para 37 , 75 CCLI (5th) 175, for guidance. He also referred to the relevant portions of The Legislation Act , SS 2019, c L-10.2 . [ 12 ] The Chambers judge then canvassed some of the legislative history that led up to the enactment of the Act .

In particular, he observed the transition from the former provision in s. 2.1 of The Mechanics’ Lien Act , RSS 1978, c M-7 [ MLA-1978 ] to the current s. 5 of the Act : [32] When The Mechanics’ Lien Act, RSS 1978, c M-7 was repealed and replaced by The Builders’ Lien Act , SS 1984-85-86, c B-71, the former s. 2.1 became s. 5 of the BLA and the former s. 62 became s. 26 of the BLA . There were some changes in the wording of s. 5 . For example, the former s. 2.1 stated twice that “the provisions of this Act … bind the Crown”.

In s. 5(1) the statement that the Crown is bound by this Act is now a stand-alone provision. Subsection 5(2) particularizes those situations where “this Act does not apply”, namely, where the services or materials are provided either in connection with a contract entered into under or pursuant to the HTA or in connection with the construction or improvement of a street or highway owned by the Crown. Subsection 5(3) provides that the Act does apply to bridges owned by the Crown if they were not constructed or improved under or pursuant to the HTA .

The difference is that The Mechanics’ Lien Act stated that the Act binds the Crown except in certain circumstances, whereas the BLA now states that while the Crown is generally bound by the Act , the Act does not apply in certain circumstances. As was pointed out by counsel for Supreme Steel

the wording of s. 2.1 placed an emphasis on the fact that the Act bound the Crown except for contracts entered into under or pursuant tothe HTA.

Counsel for Supreme Steel suggests that s. 2.1 of The Mechanics’ Lien Act did not purport to regulate any aspects of contractsentered into by parties other than with the Crown—such as contracts between the contractor and its subcontractors, or betweensubcontractors and sub-subcontractors as in this case. [33] In his brief, counsel for Supreme Steel argues that the report of the Special Advisory Committee to the Minister of Justice onBuilders’ Liens entitled Liens in the Construction Industry: A Report Prepared for The Hon. J.

Gary Lane, Q.C., Minister of Justice byThe Special Advisory Committee to the Minister of Justice on Builders’ Liens (Regina: Saskatchewan Justice, August 1984) [SemenchukReport] did not purport to change the intent of s. 2.1 of The Mechanics’ Lien Act when it redrafted the

section as s. 5 of the BLA. Anexplanation of the changes in the Semenchuk Report states: … The Act continues to bind the Crown except with respect to contracts governed by The Highways and Transportation Act and highwayor street construction. The construction of bridges not under The Highways and Transportation Act continues to be governed by the Act. (Emphasis in original) [13] The Chambers judge also adverted to the purpose and scheme of the Act. In that respect, he quoted the following passage fromTown-N-Country Plumbing & Heating

(1985) Ltd. v Schmidt (1991), (SK CA), 93 Sask R 278 at paras 26–27 (CA)[Town-N-Country], where Cameron J.A. wrote: [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, includingthe owner and the financier, if any, of the improvement.

In their interests, as well as in the interests of the contractor and thesubcontractors, extensive provision was made allowing for monies to flow down the contractual chain without risk of liability to thoseproviding the materials or services. The purpose of these provisions -- and hence the secondary purpose of the Act -- is to ensure businessefficacy. [14] The Chambers judge then determined that, in enacting s. 5, the Legislature intended only to provide that the Act would notapply to those parties who contract directly with the Crown.

He said: [40] … I am of the opinion that in enacting this provision, the Legislature only intended to state that the BLA does not apply to theprimary contract between the Ministry of Highways and the contractor. Subsection 5(1) states unequivocally that the Crown is bound bythe BLA. Subsection 5(3) thereafter states that the BLA does not apply where services and materials are provided in connection with acontract entered into under or pursuant to the HTA or in connection with construction or improvements of a street or highway owned by theCrown. A reasonable

interpretation of ss. 5(2)(

a) is that the BLA does not apply to a contract between the Crown and the contractor. TheMinistry of Highways is authorized to enter into such contracts pursuant to the HTA. When a contractor enters into a contract with asubcontractor, that is not a contract entered into under or pursuant to the HTA. The subcontract is between two private individuals orcompanies even if the purpose is to assist the contractor to fulfil its contract with the Crown. The purpose of ss. 5(2)(

b) is to extend theexemption in ss. 5(2)(

a) to other Crown entities that build and maintain streets and highways, such as municipal corporations, and againonly in respect of the prime contract between the municipality and the contractor. [41] Applying the rules of statutory

interpretation referred to above, I am of the opinion that if the Legislature had intended that theexemption from the application of the BLA was to include subcontractors who provide materials and services to the contractor to assist thecontractor in the fulfillment of its contract with the Ministry of Highways or another Crown entity, then the statute should have been morespecific. It would have been quite simple for ss. 5(2)(

a) to include “or subcontracts” so that the phrase would have read: “(

a) in connectionwith a contract or subcontract entered into under or pursuant to” the HTA. Taking into consideration that the rules of statutoryinterpretation require that the words of

an act are to be read in their context and in their grammatical and ordinary sense harmoniously withthe scheme of the act, its objects, and the intention of the Legislature, I find nothing in s. 5 that leads me to think that the Legislatureintended to deprive all of the subcontractors who provide materials and services—valued at times in the millions of dollars—for theimprovement and construction of streets, highways and bridges owned by the Crown from the benefits of the BLA as described byCameron J.A. in Town-N-Country. [42] In coming to this conclusion, I have also taken into consideration the effect ofs. 26 of the BLA which excludes the right to lien the interest of the Crown in any land, but specifically states that while a lien does notattach to Crown land, it does constitute a charge as provided in s. 33, which is a charge on the holdback and upon any additional amountowed in relation to the improvement by a payer to the contractor or subcontractor.

Section 26 addresses the mischief noted inthe McAvity decision as public works will not be sold to secure the payment of a private debt. Even though s. 5 of the BLA exempts certainCrown projects, namely the improvement or construction of streets, highways and bridges built under the auspices of the Ministry ofHighways or another Crown entity, there is no logical reason to prevent the other charging provisions of the BLA relating to holdbacks andmonies payable in the contractual chain other than the primary contract with the Crown to continue to be in full force and effect.

This, inmy view, leads to fulfillment of the primary purpose of the BLA, ensuring that those persons or entities that provide materials and servicewill get paid, and fulfillment of the secondary, namely, ensuring business efficacy. In this regard, this Court is applying the secondprinciple of statutory

interpretation mentioned in Re Rizzo & Rizzo Shoes Ltd., (SCC), [1998] 1 SCR 27 [RizzoShoes] which is that the legislature does not intend to produce absurd consequences. To accept the

interpretation suggested by RBDB thatthe BLA has no application to a multimillion dollar highway project would be extremely unreasonable and inequitable and incompatiblewith the object of the legislative enactment.

[43] The third principle mentioned in Rizzo Shoes is that if a statute can be characterized as conferring benefits, it must be interpreted in a broad and generous manner. This principle is also enshrined in s. 2 - 10 of The Legislation Act . The BLA is without a doubt a statute that confers benefits on persons who provide materials and services for an improvement to land. A broad and generous

interpretation which will retain the benefit of the BLA for subcontractors and sub-subcontractors is to limit the application of the exemption from the BLA in s. 5 to the contract between the Crown and the primary contractor.

In this manner, the Crown gets the benefit of the exemption (a benefit of which this Court has not been apprised) and the providers of material and services for the improvement or construction of the streets, highways and bridges retain the benefits of an orderly system of checks and balances ensuring security of payments and business efficacy while working within a scheme that every contractor and material provider in this Province would be fully familiar with. (Emphasis added) [ 15 ] The Chambers judge summed up by stating: [47] …s. 5 of the BLA spells out that the Crown is bound by the BLA and that s. 5 was not enacted with the intention of affecting any contracts entered into by parties other than the party that contracted directly with the Crown.

Section 5 does not limit the application of the BLA as between non-government contractors and their subcontractors. [ 16 ] It is from this decision that RBDB appeals. It requests that this court overturn the Chambers Decision and grant the relief it sought in the Court below. III. POSITION OF THE PARTIES [ 17 ] RBDB alleges that the Chambers judge made the following legal errors: (

a) Failing to interpret s. 5(2) of the Act in its entire context, in its grammatical and ordinary sense and in a manner that was harmonious with the scheme of the Act and the intent of the legislature; (

b) Interpreting s. 5(2)(

a) of the Act as being limited to contracts entered into between the Crown and a contractor, as opposed to any situation where services or materials are provided in connection with a contract entered into, under or pursuant to the Act as the

section requires; and (

c) Interpreting s. 5(2)(

b) to mean an extension of the exemption in s. 5(2)(

a) to “other Crown entities” such as municipal corporations, as opposed to any situation where services or materials are provided in connection with the construction or improvement of a street or highway owned by the Crown as the

section requires. [ 18 ] RBDB argues that the plain language of s. 5(2) is clear and should drive the

interpretation. There is nothing in the language of s. 5(2), says RBDB, that restricts the scope of the exemption to only those parties who contract directly with the government. The use of the words “in connection with”, it says, connote a broad application which captures all parties who provide work or materials that are part and parcel of public improvement or public highway projects. RBDB says this

interpretation squares with the Act ’s “two-fold” purpose of protecting the financial interests of parties who supply work or materials on credit, while concurrently protecting the commercial interests of others in the supply chain or construction pyramid by providing certainty with respect to when payment will occur. [ 19 ] RBDB contends that the

interpretation favoured by the Chambers judge runs contrary to the principles of statutory

interpretation, because it effectively creates a “private contract” exception to the operation of s. 5(2) that undermines or renders redundant other provisions of the Act . This, argues RBDB, does not square with the purposes of the Act , and cannot be what the Legislature intended. [ 20 ] The Ministry, while taking no position on the underlying dispute between RBDB and Supreme, supports RBDB’s

interpretation of s. 5(2). The Ministry says s. 5(2) carves out two distinct exemptions: (

i) services or materials provided for public improvements made under the HTA ; and (ii) services or materials provided for Crown streets and highways. These exemptions, says the Ministry, apply broadly to all parties in the supply chain or construction pyramid for such projects – including contractors and subcontractors. The Ministry argues there is nothing in the plain language of s. 5(2), the statutory context of the Act , or the legislative history, that suggests an intention to restrict the operation of that exemption only to the Crown and those parties who contract directly with the Crown. [ 21 ] Supreme, on the other hand, says the Chambers judge settled on the correct

interpretation of s. 5(2). Citing, among other authorities, Axcess Capital Partners Inc. v Allsteel Builders(2) Limited. , 2015 SKCA 33 at para 58 , 457 Sask R 131 [ Axcess Capital ], Supreme argues that the principal object of the Act “is to better ensure that those who contribute work and material to the improvement of real estate are paid for doing so”. Interpreting s. 5(2) so as to give effect to the broad exemption advocated by RBDB and the Ministry, says Supreme, would defeat that purpose.

Supreme also relies on this Court’s decision in PCL Construction Management Inc. v Saskatoon (City) , 2020 SKCA 12 , 444 DLR (4th) 433 [ PCL Construction CA ] as authority for the proposition that ss. 5(1)–(3) of the Act all relate to the underlying question of whether the Crown is bound by the legislation and, as such, the exemption extends only to those parties who could lien against the Crown. This means, according to Supreme, only parties who contract directly with the Crown, because the exemption in s. 5(2) was not intended to remove lien security from those further down the construction pyramid. IV.

ANALYSIS A. The Standard of Review [ 22 ] Questions of statutory

interpretation are questions of law. The decision of the Chambers judge, in that respect, is reviewable on a correctness standard: Smith v Smith , 2008 SKCA 141 at para 17 , [2009] 5 WWR 632; Lorencz v Talukdar , 2020 SKCA 28 at para 51 , [2020] 8 WWR 252 [ Lorencz ].

B. Statutory

Interpretation – The Governing Principles [23] The proper approach to any issue of statutory

interpretation is the so-called modern principle articulated in Rizzo & Rizzo ShoesLtd., (Re), (SCC), [1998] 1 SCR 27 [Rizzo Shoes], which “recognizes that statutory

interpretation cannot be founded onthe wording of the legislation alone” (at para 21). The modern principle has been codified in s. 2-10(1) of The Legislation Act, which readsas follows: 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. [24] In s. 2-10(2), The Legislation Act also requires every enactment to be interpreted in a remedial fashion and to be given a “fair,large and liberal

interpretation” that best attains the objects of the statute. [25] The language of the statutory provision in question is always the starting point, but not the end point, of an exercise ininterpretation. As noted in Hess v Thomas Estate, 2019 SKCA 26, 433 DLR (4th) 60 [Hess]: [50] The modern principle and s. 10 demand a contextual and purposive approach. However, that does not mean the court can ignorethe ordinary meaning of the words chosen by the legislature. As noted in Ruth Sullivan, Sullivan on the Construction of Statutes, 6th ed,(Markham, Ont: LexisNexis, 2014) at 29 [Sullivan]: …

interpretation properly begins with the ordinary meaning — with reading words in their grammatical and ordinary sense — but does notstop there. Interpreters are obliged to consider the total context of the words to be interpreted in every case, no matter how plain thosewords may seem upon initial reading. [51] The ordinary meaning prevails unless there is a reason to reject it based on contextual considerations. Such considerations – one ofwhich is the avoidance of absurdities – may result in the adoption of an

interpretation that differs from the ordinary meaning, but only ifthat

interpretation is plausible (Sullivan at 28–29). The plausible meaning rule requires that the

interpretation is one that the words of thetext can reasonably bear (Sullivan at 191). As LeBel J. said in Re: Sound v Motion Picture Theatre Associations of Canada, 2012 SCC38, [2012] 2 SCR 376: “Although statutes may be interpreted purposively, the

interpretation must nevertheless be consistent with thewords chosen by Parliament” (at para 33). [26] In Ballantyne, Ryan-Froslie J.A., also citing Ruth Sullivan in Sullivan on the Construction of Statutes, 6th ed, (Markham, Ont:LexisNexis, 2014) [Sullivan], wrote: [20] … 2. Even if the ordinary meaning is plain, courts must take into account the full range of relevant contextual considerations includingpurpose, related provisions in the same and other Acts, legislative drafting conventions, presumptions of legislative intent, absurdities tobe avoided and the like. 3. …the court may adopt an

interpretation that modifies or departs from the ordinary meaning, provided the

interpretation adopted isplausible and the reasons for adopting it are sufficient to justify the departure from ordinary meaning. [27] The modern principle emphasizes the importance of purposive analysis in statutory

interpretation. All legislation is presumed tohave a purpose which courts should strive to discover and give effect to through the interpretive process. Legislative purpose must betaken into account at every stage of the

interpretation exercise and, so far as the language of the text permits,

interpretations that areconsistent with or promote legislative purpose should be adopted, while those that defeat or undermine legislative purpose should beavoided (Sullivan at §9.3; Farm Credit Canada v Gustafson, 2021 SKCA 38 at para 58). [28] Context must also be taken into account. As Sullivan observes, at §2.19, “in hard cases the contextual factors point in differentdirections” and “[i]n such cases, reading the text harmoniously with the scheme and object of the Act and the intention of the legislaturerequires a balancing act”.

All of this means that in some instances, the plain meaning of the words used will receive greater weight in theanalysis and, in other cases, less. As Sullivan describes, at §2.37: The factors that justify outcomes in statutory

interpretation are multiple, involving inferences about meaning and intention derived fromthe text, non-textual evidence of legislative intent, specialized knowledge, “common sense” and legal norms. These factors interact incomplex ways. It is never enough to say the words made me do it. C. The Principles Applied 1. The grammatical and ordinary sense of the words [29] Subsection 5(2) says that the “Act does not apply” where services or materials are provided “in connection with” certain typesof contracts and projects. The meaning of these phrases, read in accordance with the modern principle, is central to this appeal. Paragraph(

a) deals with contracts entered into under or pursuant to the HTA [HTA Contracts], while paragraph (

b) deals with construction orimprovement of Crown-owned streets or highways. [30] Relevant to the analysis here, the Chambers judge found as a fact that the Prime Contract in this case was a HTA Contract andthat the work done by Supreme on the overpasses was part and parcel of the highways that were being constructed and improved pursuantto that contract (Chambers Decision, at para 14). Accordingly, both ss. 5(2)(

a) and (

b) were potentially engaged. [31] The HTA authorizes the Ministry to construct and maintain not only public highways, but other public improvements such asairports, ferries, railways and transit systems (see HTA, ss. 2(r), 3, 4(1)(a), 4(1)(c), 4(1)(

g) and 5, even where those public improvements

are privately owned. HTA Contracts as referenced in s. 5(2)(

a) of the Act, therefore, involve situations in which a party contracts with theMinistry of Highways and Infrastructure to provide services and materials for a public improvement as defined in the HTA, whether or notthe public improvement is a highway. Subsection (

b) refers to construction or improvement projects on publicly-owned streets orhighways, regardless of whether such project is undertaken pursuant to a HTA Contract. [32] The grammatical and ordinary sense of the words “in connection with” in ss. 5(2)(

a) and (

b) speaks of a broad application.

Inthe jurisprudence, the phrase “in connection with” has been equated with phrases like “in relation to” and “in respect of” and referred to as“words of the widest possible scope” (see, for example, Sarvanis v Canada, 2002 SCC 28 at para 20, [2002] 1 SCR 921; R v Nowegijick,(SCC), [1983] 1 SCR 29 at para 39; CanadianOxy Chemicals Ltd. v Canada (Attorney General), (SCC),[1999] 1 SCR 743 at paras 15–16; and Lawrence v Toronto Humane Society (2006), (ON CA), 271 DLR (4th) 329(Ont CA) at paras 83–85). [33] There is nothing in the plain wording of s. 5(2) that explicitly limits the scope of the exemption to the Crown or those partieswho contract directly with the Crown.

The introductory words of that subsection do not say “the Act does not apply to the Crown” or “theCrown is not bound”. They say only that “This Act does not apply”. Nor is there anything in the plain wording that explicitly declareswhether the exemption applies or does not apply to subcontractors.

Subsection (2) simply provides that the Act does not apply when theservices or materials are provided “in connection with” a certain type of contract or certain type of project. [34] RBDB argues that the presence of a phrase of such broad reach as “in connection with”, and the absence of any specific scope-limiting language means that s. 5(2) can only be read as exempting all contractors and subcontractors from the operation of the Act wherethose parties contribute work or materials to a public improvement project carried out under a HTA Contract or to a publicly-owned streetor highway project.

RBDB contends that the grammatical and ordinary meaning of the words in s. 5(2) dictates that the question ofwhether the Act applies in the circumstances listed is determined by the fact that the project itself is a public improvement that falls withinthe scope of either paragraph (

a) or (

b) of that subsection, and not by the nature of the contractual relationship – if any – between theCrown and the provider of services or materials. This is the only

interpretation, says RBDB, that is consistent with the ordinary meaningof the words used in the statutory provision. [35] While the words of s. 5(2), when read in isolation, may appear to be clear, they must be read harmoniously with the entirestatute, including the immediately preceding subsection, which says that “Except as otherwise provided, the Crown is bound by this Act”(emphasis added). [36] In our view, s. 5(2), especially when read in the conjunction with s. 5(1), is reasonably capable of supporting more than oneinterpretation.

As such, the other factors specified by the modern principle must play a more prominent role in the interpretive exercise. [37] With that, we turn to consideration of those other factors that are relevant in this case. 2. Context and Purpose a. The scheme and object of the Act [38] The modern principle requires reading statutory text in context and in harmony with the scheme and object of the Act. In AxcessCapital, Jackson J.A. explained the purpose of the Act: [57] Two factors dictate the Legislature’s approach to construction lien legislation.

The first factor is that, unlike any othercommercial endeavour, the work, services and materials supplied to an improvement are provided on credit. The second factor is that theordinary law of contract does not provide sufficient remedies to ensure that (

i) funds flow from the top of the construction pyramid; and(ii) work, services and materials flow from the bottom. The statute supplements the law of contract and fosters the provision of credit in acomplex piece of legislation designed to assist and facilitate construction. (See Gary G.W. Semenchuck Q.C. et. al, Liens in theConstruction Industry: A Report Prepared for The Hon. J. Gary Lane, Q.C., Minister of Justice by The Special Advisory Committee to theMinister of Justice on Builders’ Liens (Regina: Saskatchewan Justice, August 1984) at i-ii.) [58] With respect to purpose, the statute has two concerns: (

i) the protection of those who provide services and materials on credit, and(ii) the protection of the commercial interests of others, including the owner and the financier of the improvement. This Court has,however, consistently emphasized that “the principal object of this Act is to better ensure that those who contribute work and material tothe improvement of real estate are paid for doing so” (see Hansen v Canadian National Railway Co. (1983), (SK CA),22 Sask R 126 at para 30). See also, for example, Grey Owl Engineering Ltd. v Propak Systems Ltd., 2015 SKCA 108 at paras 26–32, 392 DLR (4th) 64; and D & KHorizontal Drilling

(1998) Ltd. (Trustee of) v Alliance Pipeline Ltd., 2002 SKCA 145 at para 14, 227 Sask R 250. [39] In PCL Construction CA, after noting that the Act contains a “comprehensive regime of rights and obligations, includingprovisions relating to trusts, liens, charges and holdbacks” to achieve the primary purpose and “extensive provision for money to flowdown the contractual chain without risk of liability to those providing materials and services” to achieve the secondary purpose (at para48), Schwann J.A. observed: [49] In light of these primary and secondary objectives, any

interpretation of the BLA should operate in a way that respects the “balancestruck by the Legislature between an owner’s commercial interests and the commercial interests of those who contribute materials andservices to the owner’s improvement” (Prestige Commercial Interiors

(1992) Ltd. v Suderman, 2018 SKCA 95 at para 18, 431 DLR (4th)216 (Sask. C.A.)). [40] Here, however, the balance struck by this comprehensive regime is not engaged in the usual way. Regardless of whether the Actapplies to contractors and subcontractors that provided goods or services to the Project, it is clear it does not apply to the Crown. TheCrown owns the land on which the Project is located and there is no evidence of any other interest in land that may be affected. For thatreason, no lien may arise. Accordingly, the holdback provisions do not apply. That is so because the obligation to retain a holdback

imposed by s. 34(1) on contractors and subcontractors does not arise where there can be no lien. That subsection is as follows: 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 thegreater of: (

a) the value of the services or materials as they are actually provided under the contract or subcontract; or (

b) the amount of any payment made on account of the contract or subcontract price. (Emphasis added) [41] While it is clear that neither the lien nor the holdback provisions can apply, that is not true of the trust provisions.

Section 6provides that the Crown is not subject to the trust obligations imposed on owners. However, the lack of an owner’s trust does not mean noother trust obligation can arise.

Section 7 provides that amounts received by the contractor constitute a trust fund for the benefit ofsubcontractors and labourers.

Section 8 provides that amounts owing to or received by subcontractors constitute a trust fund for thosebelow the subcontractor in the pyramid. The trust provisions are for the benefit of the beneficiaries of those trusts, and, to that extent,would tend to benefit the Crown and the other owners by ensuring that moneys paid for goods and services are used for Project purposes. [42] While it is true, as RBDB and the Ministry suggest, that there may be other legislative provisions to address those concerns (forexample, s. 14.2 of the HTA and s. 18 of The Proceedings Against the Crown Act, 2019, SS 2019, c P-27.01), we are not persuaded thattheir existence is particularly consequential to the

interpretation of s. 5(2) of the Act. The existence of sympathetic provisions in otherlegislation does not serve to alter or narrow the purpose and scheme of the Act as it relates to the protection of the commercial interests ofthose who provide services and materials on credit. [43] For these reasons, it is our view that the scheme and object of the Act support the Chambers judge’s conclusion that s. 5(2) doesnot preclude, but rather favours, the application of the Act to contractors and subcontractors. b. The legislative history [44] As set out above, the modern principle emphasizes the importance of purposive analysis in statutory

interpretation. Whilelegislative purpose is not necessarily synonymous with legislative intention, the two are closely connected. [45] Legislative history can provide useful clues in uncovering legislative intent. However, the intent revealed by the history must beone which can be reasonably supported by the text of the statute: R v Daoust, 2004 SCC 6 at para 44, [2004] 1 SCR 217. [46] In this case, the legislative history provides helpful guidance in discerning the legislative intent behind s. 5(2) of the Act.

InPCL Construction CA, Schwann J.A. reviewed the genesis of what is now s. 5 of the Act: [32] The equivalent to what is now s. 5 originated in s. 2.1 of The Mechanics’ Lien Act, RSS 1978, c M-7 [MLA-1978]. The genesis ofthis provision is as follows. In 1973, the Legislature repealed The Mechanics’ Lien Act, RSS 1965, c 277, and replaced it with twostatutes: The Mechanics’ Lien Act, 1973, SS 1973, c 62 [MLA-1973], and The Public Works Creditors’ Payment Act, RSS 1978, c P-47 [PW Payment Act].

The impetus for legislative change arose from the anomaly wherein a claimant could register a lien for work doneand materials supplied for the construction of schools, hospitals and public buildings, but had little chance of enforcing the in rem remedybecause it offended the public interest against recovery from publicly owned buildings: see Western Caissons (Sask.) Ltd. v BuildallConstruction Ltd., (1977), (SK CA), 81 DLR (3d) 664 (Sask QB) (aff’d (1978), 89 DLR (3d) 718 (Sask CA)). [33] The MLA-1973 removed the ability to register a lien against a public work constructed on Crown property but, pursuant to s. 3(1)of the PW Payment Act, a mechanism was introduced whereby monies owed by the Crown to a contractor or subcontractor wouldconstitute a trust for the benefit of those who had contributed materials and services to the public work.

Section 4(1) of the PW PaymentAct established a lien upon the trust for the value of the work, materials or services contributed to the project. [34] In 1977, the Saskatchewan Construction Association submitted a brief to the Legislative Assembly requesting the repeal ofthe PW Payment Act, coupled with proposed amendments to the MLA-1973. In response, the Legislature enacted The Mechanics’ LienAmendment Act, 1979, SS 1979, c 38 [Amending Act]. It was through this amendment that s. 2.1 was introduced: 2.1(1) All of the provisions of this Act, except

section 61, bind the Crown except in respect of work done, services rendered or materialsfurnished: (

a) in connection with a contract entered into under or pursuant to The Highway Act; (

b) in connection with the construction or improvement of a street or highway owned by the Crown; or (

c) under a contract entered into prior to the day this

section comes into force or under any subcontract entered into, directly or indirectly,under such a contract.

(2) Notwithstanding clauses (1)(

a) and (b), all of the provisions of this Act, except

section 61, bind the Crown in respect of work done,services rendered or materials furnished in connection with the construction or improvement of a bridge owned by the Crown other than abridge constructed or improved under or pursuant to The Highways Act. [35] The Amending Act also introduced a new provision applicable to Crown land.

Section 62 placed a lien on the funds payable underthe contract, although the lien did not attach to the land itself… [36] In 1979, the Attorney General, the Honourable R.J. Romanow (as he then was), moved the second reading of Bill No. 70 – An Actto amend The Mechanics’ Lien Act on April 19, 1979, and, in so doing, offered the following commentary with respect to the protection ofsubcontractors (Saskatchewan, Legislative Assembly, Debates and Proceedings (Hansard), 19th Leg, 1st Sess (19 April 1979) at 1824

[Hansard Debates]): After reviewing the matter raised in the submission it was decided by the government that subject to the exception recognized by theassociation that no lien could be allowed against public lands, there is no reason for distinguishing between the statutory protection thatshould be afforded the subcontractors, material men and laborers under contracts, whether they be in the private or the public sector.

Accordingly, this legislation, together with the companion bill to follow, which repeals The Public Works Creditors’ Payment Act willmake the provisions of The Mechanics’ Lien Act applicable to the provincial Crown, school boards and other similar public bodies. Theact will then generally apply to construction contracts entered into with such public bodies after the amendments come into force, subjectto the main basis exemption, as I say, that no liens will be allowed as charges against Crown lands.

These amendments will expand the protection provided to subcontractors, material men and laborers involved in public works projects.They do not only continue the applicability of trust provisions similar to those presently contained in The Public Works Creditors’Payment Act, but also will make applicable to public works contracts the statutory holdback requirements of The Mechanics’ Lien Act andthe right of claimants to recourse against such holdbacks and certain other amounts which may be owing to the contractor.

Theseamendments also provide an easy means of giving notice of claim of lien in respect of public works against the present provisions of theact requiring registration of the liens against the land occupied by the improvement would not be applicable.

In addition to providing additional protection to subcontractors, material men and laborers on public works projects, the amendmentsshould standardize and simplify the procedure for such persons to make claims in respect of public works projects by making it moreconsistent with the practice applicable to the private sector. (Emphasis in original) [47] After reviewing these comments regarding the repeal of The Public Works Creditors’ Payment Act, RSS 1978, c P-47 and thesimultaneous amendments to The Mechanics Lien Act, 1973, SS 1973, c 62, Schwann J.A. went on to observe that, even though there wasnothing in the Hansard Debates to explain why work undertaken pursuant to what is now the HTA was exempt, “the Legislature’soverarching purpose was clear: to prohibit the registration of liens against Crown lands while, at the same time, ensure protection to thosewho contribute services and materials to public works projects”.

She also noted that there was nothing in the Hansard Debates “thatsupports a scenario where contractors and subcontractors on a public works project are left without any form of security” (at para 37). [48] In 1984, the MLA-1978 was referred to the Special Advisory Committee to the Minister of Justice on Builders’ Liens[Committee]. The Committee, comprised of Gary G.W. Semenchuk, Q.C., T.C. Zarzeczny, W. Kirk Banadyga and Georgina R.

Jackson,Master of Titles (as she then was), submitted a report that proposed a new builders’ lien act to replace the existing MLA-1978 (Liens in theConstruction Industry: A Report Prepared for The Hon. J. Gary Lane, Q.C., Minister of Justice (Regina: Saskatchewan Justice, August1984) (Chair: Gary G.W. Semenchuck, Q.C.) [Liens Report].

In PCL Construction, Schwann J.A. summarized what the Liens Report saidregarding liens against Crown land and s. 2.1 of the MLA-1978: [39] In the Liens Report, the Committee offered the following commentary on how Crown land was dealt with in the MLA-1978,which was in force at the time (at 91): The Committee accepted the philosophy which is the basis of subsection 62(1) that, where the Crown is an owner within the meaning ofthe Act, the land of the Crown should not be subject to liens.

It can be expected that if the Crown has failed to maintain the holdback thatit will have sufficient funds to remedy any deficiency. Furthermore, it would be against public policy and public convenience to allow thelien claimant to enforce his ultimate remedy of sale. The Committee also reviewed s. 2.1 of MLA-1978 (at 92): In addition to the above provisions dealing with the Crown,

section 2.1, added in 1979, provides that the Act does not apply to contractsentered into pursuant to The Highways and Transportation Act or streets or highways owned by the Crown. This would clearly eliminatethe application of the lien and holdback provisions and, one would also think, the trust provisions. With respect to the later, the caseof Canadian Bank of Commerce v T.

McAvity & Sons Ltd., (SCC), [1959] SCR 478 held that although the Act expresslyprovided that it did not apply to public streets or highways, the trust provisions did apply. [40] In spite of the uncertainty surrounding the application of the trust provisions to the Crown in relation to public streets andhighways, the Committee did not recommend any changes to s. 2.1 (at 93): The Committee received no briefs as to whether the requirement to maintain a holdback and the creation of the lien on holdbackprovisions should apply to highway projects.

Without any submissions on this point, the Committee was reluctant to extend the operationof the Act and accordingly, it was resolved to make no changes to the Act in this regard. [41] The Committee then made the following recommendations regarding Crown lands (at 93–94): Recommendations: 1. The provisions dealing with Crown liens should be drafted to specifically state that a lien cannot attach [to] Crown lands and that onlythe holdback is charged with the lien when the Crown is an owner within the meaning of the Act. 2.

The Municipal Public Works Act should be deleted from the definition of Crown and The Northern Municipalities Act should be added. 3. Contracts under The Highways and Transportation Act and streets or highways owned by the Crown should continue to be eliminatedfrom the Act but no special provisions should be added with respect to the application of the trust provisions. [49] In the Liens Report, the Committee set out a Draft Proposal for a Builders’ Lien Act [Draft Proposal].

This included a changein the wording that related to exemption from the operation of the legislation in projects in which the Crown was involved. Whereas s.

2.1(1) of the MLA-1978 provided: 2.1(1) All of the provisions of this Act , except

section 61 , bind the Crown except in respect of work done, services rendered or materials furnished: (

a) in connection with a contract entered into or pursuant to The Highways Act; [or] (

b) in connection with the construction or improvement of a street or highway owned by the Crown… The Draft Proposal proposed that the new

section would read: 4(1) Except as otherwise provided, the Crown is bound by this Act .

(2) This Act does not apply where services or material are provided: (

a) in connection with a contract entered into or pursuant to The Highways and Transportation Act; [or] (

b) in connection with the construction or improvement of a street or highway owned by the Crown [ 50 ] Notably, the exact wording used in s. 4 of the Draft Proposal became the wording of s. 5 of the current Act . [ 51 ] Two points bear emphasis in relation to this change. First, it is important to note the statement in the Liens Report that “section 2.1, added in 1979, provides that the Act does not apply to contracts entered into pursuant to The Highways and Transportation Act or streets or highways owned by the Crown” is incorrect. That is the language of the draft proposal and thus of s. 5 of the Act .

However, s. 2.1 did not speak to the application of the Act to all participants in the project. Rather, it provided that “[a] ll of the provisions of this Act … bind the Crown , except in respect of work done, services rendered or materials furnished” in connection with such contracts and streets or highways. [ 52 ] Second, the Draft Proposal provided explanatory notes to assist in understanding the proposed new provisions, as they related to the provisions of the then-existing MLA-1978 . The explanatory notes accompanying this

section read as follows: 4(1), 4(2), 4(3) The Act continues to bind the Crown except with respect to contracts governed by The Highways and Transportation Act and highway or street construction. The construction of bridges not under The Highways and Transportation Act continues to be governed by The Builders’ Lien Act. (Emphasis added) [ 53 ] This explanation does not suggest that the change in language was intended to change the law.

To the contrary, it suggests it was not. [ 54 ] The record discloses that there was no discussion in the Legislative Assembly about the proposed change from the wording used in s. 2.1(1) of the MLA-1978 to that used in s. 5 of the Act . The Bill that was based on the Draft Proposal , and which eventually became the Act , was introduced before the Standing Committee on Non-Controversial Bills by the Hon. J.

Gary Lane, Minister of Justice (as he then was) on June 18, 1985 (Saskatchewan Legislative Assembly, Report of Standing Committee on Non-Controversial Bills , 20th Leg, 4th Sess (18 June 1985) at 107 [ Standing Committee Report ]): HON. MR. LANE – The Bill updates the Mechanics’ Lien Ac, which was enacted in 1973, and it’s based on the report of the special advisory committee to the Minister of Justice on Liens in the construction industry.

The final report of that committee was released in August of 1984, and the report has received the support of the construction industry, including the Saskatchewan Construction Association and the Saskatchewan Homebuilders Association. The principal object of the legislation is to provide a measure of security to persons who, providing services or materials to construction projects, increase the value of the real estate. The Bill recognizes that there are many diverse and often competing interests in the construction industry.

Accordingly, the Act reflects the judicious balancing of the interests of all those affected, including land owners, builders, lenders, small contractors, subtrades, labourers and others. [ 55 ] The Honourable Minister then proceeded to review what he described as the “major changes made by the Bill to the existing legislation” ( Standing Committee Report at 107). Notably, he did not include the change in wording in the “Crown exemption” provision in this list.

As the Standing Committee proceeded through the bill, on a section-by-section basis, this discussion took place regarding the new s. 5 ( Standing Committee Report at 113): MR. CHAIRMAN – Okay. Now with respect to 5, to what extent have we changed the provisions with respect to the Crown? MRS. JACKSON – In these sections, very little, except that the position of the Crown is now as assimilated as it could possibly be without a lien being registered against the land. The position with respect to bridges and highways remain the same.

When I say that the provisions with respect to the Crown – the Crown is assimilated as much as possible – is that the claim of lien form will now be the same form.

The written notice of lien form will be the same form, so that a lien claimant won’t have to decide, do I use this form, do I use that form, in order to register it in the land titles office. (Emphasis added) [ 56 ] While neither the wording of the Committee’s Draft Proposal nor the explanatory notes are, by themselves, conclusive of legislative purpose, they are factors that point in the direction of a legislative intention that s. 5(2) would spell out the situations in which

the Act did not apply to the Crown.

Section 2.1(1) of the MLA-1978 delineated the circumstances under which the Crown was not bound by the MLA-1978. The Committee recommended no change in the operation of this

section and, despite the fact that it recommended a change in wording, which was adopted, took the view that the change in wording did not change the operation of the section, i.e. that Act “continues to bind the Crown except with respect to contracts governed by The Highways and Transportation Act and highway or street construction.” There is nothing in the legislative record that speaks to a contrary intention. c.

Treatment in the jurisprudence [ 57 ] The treatment of s. 5(2) of the Act in the jurisprudence, limited as it is, also supports the conclusion that s. 5 of the Act relates to the applicability of the Act , as a whole, to the Crown, and not to its applicability to private contractors and subcontractors who work on certain projects. [ 58 ] We say this notwithstanding the decisions that RBDB suggests support the opposite conclusion.

RBDB contends that two decisions from the New Brunswick Court of Appeal, which held that provincial construction lien legislation in that province did not apply to work performed on government-owned highway projects (see Western Surety Co. v National Bank of Canada , 2001 NBCA 15 , 237 NBR (2d) 346 [ Western Surety ] and Enbridge Gas New Brunswick Inc. v Modern Construction

(1983) Ltd. , 2003 NBCA 78 , 264 NBR (2d) 145 [ Enbridge ]), should drive this Court’s

interpretation of s. 5(2) . We do not accept this argument. [ 59 ] In those decisions, the question of whether lien interests could be maintained turned on the

interpretation of s. 2 of New Brunswick’s Mechanics’ Lien Act , RSNB 1973, c M-6 , which reads: Application of Act 2. This Act does not apply in respect of a highway or any work done or caused to be done thereon by a local government, or in respect of material furnished therefor. [ 60 ] As is readily apparent, the legislative provision at issue in Western Surety and Enbridge , was qualitatively different than s. 5(2) of the Act .

Accordingly, we find the analysis in those decisions unhelpful. [ 61 ] In our view, this Court’s decision in PCL Construction CA strongly supports the conclusion that s. 5(2) of the Act speaks to the question of whether or not the Crown is subject to the Act , not to the question of whether or not the project is subject to the Act . [ 62 ] PCL Construction [PCL] was the general contractor for a major roadway and overpass construction project in Saskatoon. One of its subcontractors, Pavement Scientific International Inc. [PSI] performed work that did not meet PCL’s standards. PCL withheld payment.

PSI then served PCL with notice of a lien claim. A number of PSI’s sub-subcontractors also filed notices of liens against it. PCL applied to the Court of Queen’s Bench for a declaration that the Act did not apply to its prime contract with the City of Saskatoon, or to any of the sub-contracts.

PCL argued that, because the bridges it was constructing as part of the interchange project were, in turn, part of improvements to publicly-owned streets or highways and, thus exempt from the operation of the Act under s. 5(2) (b), the bridge exception in s. 5(3) should not apply to bring the project back into the fold of the Act .

The Queen’s Bench judge concluded that the “bridge exception” in s. 5(3) of the Act did not operate and, as such, the Act applied to PCL and all its subcontractors ( PCL Construction Management Inc. v Saskatoon (City) , 2018 SKQB 119 , 88 CLR (4th) 87 [ PCL Construction QB ]). [ 63 ] PCL appealed. This Court dismissed the appeal and upheld the decision of the Queen’s Bench judge. Although the question before the Court in PCL Construction CA was not the scope of the exemption in s. 5(2) of the Act , the proper

interpretation of s. 5, as a whole, was front and centre. As is the case in this appeal, application of principles of statutory

interpretation was crucial to the determination . [ 64 ] In the end, this Court held that, by interpreting s. 5(3) in a way that gave broad and generous protection to the interests of subcontractors, rather than in the restrictive fashion advocated by PCL, the Queen’s Bench judge had given proper effect to the legislative intent behind the Act . In that vein, Schwann J.A. wrote: [110] In any event, I find the broad and generous

interpretation given to s. 5(3) of the BLA by the Chambers judge is consistent with the legislative intent expressed at the time the amendment was introduced, which was to “expand the protection provided to subcontractors, material men and laborers involved in public works projects” ( Hansard Debates at 1824) and, at the same time, provide some measure of security and predictability for owners. At the time of the Liens Report , the Committee considered liens against Crown-owned land to be unnecessary because the Crown was expected to have sufficient funds to remedy any deficiency.

Yet, even with those limited exclusions in mind, the Legislature did not intend for those who had provided services and materials for a Crown improvement to have no security whatsoever in the event of a default ( Liens Report at vii). (Emphasis added) [ 65 ] Justice Schwann went on to further explain why a broader and more generous

interpretation of the applicability of the provisions of the Act is consistent with its scheme and purpose. Referring specifically to s. 5 , she wrote: [125] In my view, there are a number of reasons why a broader

interpretation of s. 5 should be adopted over the narrower approach advocated by PCL. [126] First and most fundamentally, it accords with a plain reading of s. 5 read harmoniously as a whole. The purpose of s. 5 is to define if and under what circumstances the Crown is bound by the BLA . The general premise, as stated at the outset of s. 5(1) is that, unless otherwise provided, the Crown is bound by the BLA . As the Chambers judge appropriately characterized it, this is the presumptive starting point. [127] I find s. 5(2) equally clear.

The opening words to this provision – “This Act does not apply ” – means what it says: the Crown is not bound by the BLA if the services or material are provided for the sorts of projects or improvements described in s. 5(2) (

a) or s. 5(2) (b).

This meaning signals that, when a project’s activities fall within either subsection, the Crown is not bound by the statute. [128] Read in its ordinary and grammatical sense, it is clear that the Crown is bound to the whole of the BLA pursuant to s. 5(1), but notbound in the circumstances described in s. 5(2). In other words, the Crown is either bound or it is not bound by the BLA as a whole. [129] This brings me to s. 5(3). The opening words to this subsection – “Notwithstanding subsection (2)”–conveys the need forsomething of a connection between s. 5(2) and s. 5(3).

That is to say, even if the Crown is not bound by the BLA pursuant to s. 5(2)(a)or s. 5(2)(b), it will be drawn back under the BLA regime pursuant to s. 5(3). The words that follow the opening phrase – “this Act applies”– supports the notion of an interrelationship of the provisions to the underlying question of whether the Crown is bound by the legislation. [130] What does one make of all of this? First, a plain reading of s. 5 leads me to conclude that the overall purpose of that

section is toestablish when the Crown is bound by the BLA and when it is not. Section 5(1) and s. 5(3) bind the Crown to the whole of the BLA subjectto s. 5(2) and the second part of s. 5(3), which describes when the BLA does not apply to a Crown bridge project. … [132] Neither, in my view, is a restrictive or narrow

interpretation consonant with the purposes of the BLA. As explained above, theprimary purpose of builders’ lien legislation is to afford protection to persons who supply labour and materials on credit and to prevent theowner or contractor from obtaining the benefit of such labour and capital without compensation. A restrictive approach would underminethat purpose.

Application of PCL’s position would mean that those who provide services and materials for a bridge component of a projectcould resort to the rights and remedies of the BLA whereas those who provide services and materials for the non-bridge component of thesame project would have no statutory protection whatsoever. There is no logical explanation for such arbitrary treatment. [133] This brings me to the acknowledged secondary purpose of the BLA, which concerns itself with the commercial interests of ownersand financiers. In my view, this purpose could also be undermined by a narrow

interpretation. As pointed out in Grey Owl in the context ofa lien on land used for mineral extraction (i.e., s. 22 of the BLA), “a restrictive reading of s. 22 does not serve the commercial interests ofthe owner and financier of an improvement either in that uncertainty as to who is or who is not entitled to a lien can only increase costs,either in fixing of the contract price or in the litigation that will inevitably arise” (at para 31). (Italic emphasis in original, underline emphasis added) [66] In this portion, Schwann J.A. makes it clear that s. 5 must be read as a whole, and that the focus of the

section is on determiningwhen the Crown is, or is not, bound by the Act. This also supports an

interpretation of s. 5 that is broad and generous, i.e., one that sees theAct as a whole, applying widely across the construction pyramid and with only narrow exemptions, as this broad and generousinterpretation serves both the primary and secondary purposes of the Act. [67] Even though Schwann J.A.’s statements in this portion of PCL Construction CA may be seen as obiter dicta because the scopeof s. 5(2) was not the main issue in that case, it is clear that her reasoning was the product of reading and interpreting s. 5 as a whole,harmoniously with the scheme and object of the Act and in light of the relevant legislative history. As such, we read the decision asauthority that supports the

interpretation of s. 5(2) favoured by the Chambers judge in this case. d. Drafting convention and textual analysis [68] A number of legislative drafting conventions also support the conclusion that the exemptions in s. 5(2) are properly focused onthe question of whether the Crown is bound by the Act. One such convention is the presumption of orderly and meaningful arrangement.As Sullivan notes, at §8.21: It is presumed that in preparing the material that is to be enacted into law the legislature seeks an orderly and economical arrangement.Each provision expresses a distinct idea.

Related concepts and provisions are grouped together in a meaningful way. The sequencing ofwords, phrases, clauses and larger units reflects a rational plan. [69] In that respect, the fact that the exemption provision in s. 5(2) is situated between ss. 5(1) and (3) is significant. Subsection 5(1)says “Except as otherwise provided, the Crown is bound by this Act”. Subsection (2) then identifies two specific circumstances where theAct does not apply, and (3) creates an exception from the s. 5(2) exemptions specific to Crown-owned bridges other than those improvedunder or pursuant to the HTA.

Applying the presumption of orderly and meaningful arrangement to these provisions supports the inferencethat they all refer to the question of whether the Crown is bound by the Act. It is reasonable to conclude that ss. 5(2) and (3) are groupedwith s. 5(1) in that arrangement and sequence because it reflects a rational plan in that respect. [70] There is also a marginal note to s. 5, which reads “Application of Act to Crown”. While marginal notes are not technically partof the legislation, they can assist in ascertaining its meaning.

Of marginal notes, Sullivan writes, at §14.60, that “…in fact they arephysically present and may well constitute the most frequently read component of many Acts and regulations. To ignore whatever lightthey shed on the meaning of legislation seems artificial and inappropriate.” There is also considerable support in the jurisprudence for theproposition that marginal notes can assist in statutory

interpretation (see, for example, R v Wigglesworth, (SCC), [1987] 2SCR 541 at 558; Bradley v Insurance Corp. of B.C. (1989), 42 BCLR (2d) 323 at 326; R v Moore, (SCC), [1988] 1 SCR1097; and R v A.D.H., 2013 SCC 28 at para 71, [2013] 2 SCR 269), although they are generally to be assigned less weight than, forexample, headings in resolving interpretive questions. [71] In the result, the marginal note also supports the conclusion that s. 5, as a whole, speaks to the question of whether or not theCrown is bound by the Act. V. CONCLUSION [72] For these reasons, we conclude that the Chambers judge was correct to determine that s. 5(2) of the Act renders the Act

inapplicable only to the Crown, and those parties who contract directly with the Crown, in the prescribed circumstances. That is, we would read s. 5 as follows: 5(1) Except as otherwise provided, the Crown is bound by this Act .

(2) This Act does not apply to the Crown where services or materials are provided: (

a) in connection with a contract entered into under or pursuant to The Highways and Transportation Act ; or (

b) in connection with the construction or improvement of a street or highway owned by the Crown. (Underlined words added) [ 73 ] This

interpretation is one that the legislative text of the provision can reasonably bear. It is a plausible meaning that is harmonious with the scheme and purpose of the Act . The Chambers judge gave s. 5(2) a broad and generous

interpretation, one that preserves the benefit of the exemption for the Crown in appropriate circumstances, while retaining certain benefits that the Act provides for contractors and subcontractors further down the construction pyramid, and enhancing business efficacy. In our view, such an

interpretation is the fair, large and liberal

interpretation required by The Legislation Act , and fully consistent with the legislative intent expressed at the time the amendment that became s. 5(2) was introduced. VI. DISPOSITION [ 74 ] For the foregoing reasons, the appeal is dismissed. [ 75 ] Supreme is entitled to the costs of the appeal, as against RBDB, in the usual fashion. We make no order as to costs for or against the Ministry. “Barrington-Foote J.A.” Barrington-Foote J.A. “Kalmakoff J.A.” Kalmakoff J.A. Ottenbreit J.A. (in dissent) I.

INTRODUCTION [ 76 ] Regina Bypass Design Builders [RBDB] appeals against the decision of a Court of Queen’s Bench Chambers judge in Regina Bypass Design Builders v Supreme Steel LP , 2019 SKQB 256 , 6 CLR (5th) 67 [ Chambers Decision ], which held that The Builders’ Lien Act, SS 1984-85-86, c B–7.1 [ Act ] applied to its subcontract with Supreme Steel LP by its general partner Supreme Steel GP Corp. [Supreme].

The Government of Saskatchewan (Ministry of Highways and Infrastructure) [Ministry] intervenes in this appeal and, while taking no position on the underlying dispute between RBDB and Supreme, supports RBDB’s

interpretation of the relevant provision of the Act . [ 77 ] I have had the benefit of reading the reasons of my colleagues in this matter and must respectfully disagree with their

interpretation of the provision of the Act in issue, as well as their decision. [ 78 ] For the reasons that follow, I would allow the appeal. II. FACTS AND BACKGROUND [ 79 ] I generally adopt the recitation of the facts and background, the

summary of the Chambers Decision and the position of the parties on appeal in this matter as set forth by my colleagues. Nevertheless, a short

summary of the facts and background germane to my reasons is in order. [ 80 ] The parties in this appeal were involved in the Regina Bypass Project [Project], which was a major provincial transportation infrastructure undertaking that involved the construction of highways, service roads, overpasses and bridges. [ 81 ] The Government of Saskatchewan owns the Project. In 2015, the Ministry entered into a contract [Prime Contract] with SGTP Highway Bypass Limited Partnership by its general partner SGTP Highway Bypass GP Inc. [SGTP] for the design and construction of the Project.

Under the terms of the Prime Contract, SGTP was required to construct and manage the Project and is responsible for maintaining it for 30 years post-completion. [ 82 ] After entering into the Prime Contract with the Ministry, SGTP entered into a contract with RBDB for the actual construction of the Project. SGTP effectively passed all of its obligations in the Prime Contract to RBDB. Monies for the Project flowed from the Ministry to SGTP and then from SGTP to RBDB.

[83] In March of 2016, RBDB subcontracted with Supreme to fabricate, supply, deliver and install the structural steel girders for theProject’s bridges. Supreme performed its work under the subcontract and, in late October of 2018, served RBDB with a Written Notice ofLien in the amount of $7,529,809.94 in relation to that work. It is common ground that the services and material supplied by Supremeformed part of the Project and the original work contracted by SGTP. [84] RBDB took the position that Supreme was not entitled to file a lien because the Act did not apply to its subcontract withSupreme.

It maintained the nature of the Project fell within the scope of the exemptions set out in s. 5(2) of the Act, specifically that thesubcontract was entered into under or pursuant to The Highways and Transportation Act, 1997, SS 1997, c H-3.01 [HTA].

When Supremerefused to vacate the lien, RBDB applied for a declaration that the Act did not apply to any services or materials provided by or on behalfof RBDB in respect of the Project or, alternatively, any services or materials provided by Supreme under the subcontract. [85] The Chambers judge held that the exemption provisions in s. 5(2) of the Act apply only to those parties who contract directlywith the Crown and, as such, do not exempt the application of the Act as between non-government contractors and their subcontractors,even where the work is performed in relation to a public improvement or government-owned highway project. [86] The Chambers judge found as a fact that the Prime Contract was entered into under or pursuant to the HTA and that the work,services and materials supplied by Supreme to the Project was “part and parcel of the highways that were being constructed andimproved” pursuant to that contract (Chambers Decision at para 14).

III. ANALYSIS [87] I again adopt the analysis of my colleagues respecting the standard of review. Where I depart from my colleagues’ decision isin the

interpretation of s. 5(2) and their conclusion that the Chambers judge did not err on that issue and that Supreme was entitled to file alien. [88] I turn first to the principles governing statutory

interpretation. A. The principles of statutory

interpretation [89] The modern principle of statutory

interpretation articulated in Rizzo & Rizzo Shoes Ltd. (Re), (SCC), [1998] 1SCR 27, has been codified in s. 2-10(1) of The Legislation Act, SS 2019, c L-10.2 [Legislation Act], which reads as follows: Acts and regulations remedial 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. [90] This

section requires a court to harmonize the ordinary and grammatical meaning of the text with the other indicators oflegislative intent gleaned from reading the text in the entire context. [91] Also germane to my analysis is s. 2-10(2) of the Legislation Act, which requires every enactment to be interpreted in a remedialfashion and to be given a “fair, large and liberal

interpretation” that best attains the objects of the statute. [92] The plain language of the statutory provision is always the starting point, but not the end point, of an exercise in

interpretation.In Ballantyne v Saskatchewan Government Insurance, 2015 SKCA 38 at para 20, 457 Sask R 254, this Court quoted the following fromSullivan on the Construction of Statutes, 6th ed, (Markham, Ont: LexisNexis, 2014) at §3.6 [Sullivan]: 1. It is presumed that the ordinary meaning of a legislative text is the meaning intended by the legislature. In the absence of a reason toreject it, the ordinary meaning prevails. 2.

Even if the ordinary meaning is plain, courts must take into account the full range of relevant contextual considerations includingpurpose, related provisions in the same and other Acts, legislative drafting conventions, presumptions of legislative intent, absurdities tobe avoided and the like. 3. In light of these considerations, the court may adopt an

interpretation that modifies or departs from the ordinary meaning, provided theinterpretation adopted is plausible and the reasons for adopting it are sufficient to justify the departure from ordinary meaning. (Footnotes omitted) [93] There is therefore a presumption in favour of the grammatical and ordinary meaning of the text unless there is a reason to rejectit.

This presumption may be rebutted by evidence that another meaning was intended or is more appropriate in the circumstances (seeSullivan at §3.60). [94] In Thomas Estate v Hess, 2019 SKCA 26, 433 DLR (4th) 60, this Court said the following about the interplay of the ordinaryand grammatical meaning and the other interpretive criteria: [50] The modern principle and s. 10 demand a contextual and purposive approach. However, that does not mean the court can ignorethe ordinary meaning of the words chosen by the legislature.

As noted in Ruth Sullivan, Sullivan on the Construction of Statutes, 6th ed,(Markham, Ont: LexisNexis, 2014) at 29 [Sullivan]: ...

interpretation properly begins with the ordinary meaning – with reading words in their grammatical and ordinary sense – but does notstop there. Interpreters are obliged to consider the total context of the words to be interpreted in every case, no matter how plain thosewords may seem upon initial reading. [51] The ordinary meaning prevails unless there is a reason to reject it based on contextual considerations. Such considerations – one of

which is the avoidance of absurdities – may result in the adoption of an

interpretation that differs from the ordinary meaning, but only ifthat

interpretation is plausible (Sullivan at 28–29). The plausible meaning rule requires that the

interpretation is one that the words of thetext can reasonably bear (Sullivan at 191). As LeBel J. said in Re: Sound v Motion Picture Theatre Associations of Canada, 2012 SCC 38,[2012] 2 SCR 376: “Although statutes may be interpreted purposively, the

interpretation must nevertheless be consistent with the wordschosen by Parliament” (at para 33). [95] In National Bank of Canada v KNC Holdings Ltd., 2017 SKCA 57, [2017] 1 WWR 598 [KNC], this Court, in relation to aninterpretation involving s. 22 of the Act, commented on the place of legislative history in the interpretive process: [49] I am not persuaded that, on the basis of the thin and ambiguous legislative record relating to the enactment of s. 22(2), theLegislature should be taken to have endorsed [Canada Trust Co. v Cenex Ltd. (1982), (SK CA), 131 DLR (3d) 479(Sask CA)] and carried its

interpretation of s. 12(2) of The Mechanics’ Lien Act [RSS 1978, c M-7 (repealed)] forward into The Builders’Lien Act. As explained above, it is not possible to reconcile the plain meaning of the words of s. 22(2) with the result in Cenex.

As aconsequence, in the absence of a very clear indication that the Legislature intended otherwise, s. 22(2) should be read as meaning what itsays, i.e., it should be read as clarifying the nature of the assets to which builders’ liens attach, not as establishing priorities betweenbuilders’ liens and other kinds of security. [96] The ordinary meaning of a text may also be ambiguous in the sense that it is reasonably capable of supporting more than oneinterpretation. Where ambiguity exists, contextual factors take on more weight in arriving at the proper

interpretation. [97] Although a court is to harmonize the grammatical meaning of the text with the other indicators of legislative intent gleanedfrom reading the text in the entire context, as explained in Sullivan, there are limits to this approach: §7.4 Formulation of the rule. Under Driedger’s modern principle, a court’s primary duty is to harmonize the grammatical meaning of thetext with the other indicators of legislative intent gleaned from reading the text in the entire context. However, reliance on these otherindicators is subject to the following constraint: the

interpretation ultimately adopted must be one that the words of the text can reasonablybear. This is the plausible meaning rule. [98] The Supreme Court of Canada has acknowledged these limits. In Re:Sound v Motion Picture Theatre Associations of Canada,2012 SCC 38 at para 33, [2012] 2 SCR 376, LeBel J. wrote: “Although statutes may be interpreted purposively, the

interpretation mustnevertheless be consistent with the words chosen by Parliament.” In Canada (Information Commissioner) v Canada (Minister of NationalDefence), 2011 SCC 25 at para 40, [2011] 2 SCR 306, Charron J. wrote: “The Court cannot disregard the actual words chosen byParliament and rewrite the legislation to accord with its own view of how the legislative purpose could be better promoted.” In Saulnier vRoyal Bank of Canada, 2008 SCC 58 at para 15, [2008] 3 SCR 166, Binnie J. wrote: “We cannot wish away the statutory language,however, much practical sense is reflected in the result reached by the courts below.” These excerpts are all expressions of the plausiblemeaning rule. [99] Moreover, no court is at liberty to rewrite legislation simply because it does not manifest the policy choices that it would havemade.

See Barrette v Crabtree Estate, (SCC), [1993] 1 SCR 1027 at 1051–1052. [100] This rule must be kept in mind when a portion of an enactment appears to provide for an exemption that runs counter to thegeneral objects and purpose of that enactment. I say this because not necessarily every provision of

an Act must be congruent with itsgeneral purpose. Some provisions are geared to a limited purpose or may attenuate the general purpose. That is the nature of exemptions. [101] Sometimes exemptions are appropriately read down to match their purpose. However, the language of the text must not bedistorted in doing so. The Supreme Court of Canada affirmed this line of thinking in Macdonell v Quebec (Commission d’accès àl’information), 2002 SCC 71 at para 18, [2002] 3 SCR 661, when it quoted the following from Rubin v Canada (Minister of Transport),(FCA), [1998] 2 FC 430: [24] … A court must always work within the language it has been given. If the meaning is plain, it is not for this Court,

[…]