May 4, 2017

Building A Good Claim: What’s ‘In’ Nowadays In Construction Litigation?

Collecting in a challenging market: How do you reel in your cash from an unmotivated owner, engineer, or general contractor?

Construction claims in western Canada require care and attention to detail, to maximise your recovery and to avoid leaving money on the table.

Specific considerations apply, for Alberta and Saskatchewan construction lien claims in particular.

Oil & Gas Projects and Oil Sands Projects – 90 days may be the magic moment. But, it is always wise to claim within 45.

Walsh LLP’s construction litigation lawyers have previously updated you on the specific period of time within which builders’ liens must be filed, for oil & gas exploration projects (including in the oil sands), in the Re Davidson Well Drilling case achieved by our team.

In the 2016 Re Davidson case, the Alberta Court of Queen’s Bench accepted our legal arguments that a 90 day registration period can apply to such work, material, and services supplied in connection with such oil & gas projects, even on oil sands lands. See that article here: Construction Lien Rights Won for the Oil and Gas Industry.

The Alberta Court of Queen’s Bench has again confirmed that the Re Davidson case is the correct state of the law. The April 11, 2017 decision in Trotter and Morton Building Tech. v. Stealth Acoustical followed our arguments in the Re Davidson case, and applied them to a specific set of further claims where a company supplied pump house stations to a construction project on the oil sands.

Increasing your haul: what items are secured by the lien claim?

In addition to Walsh LLP’s arguments in Re Davidson that secured broader protection, in more time to file a lien, our construction litigation lawyers also argued that the items covered are also quite broad.

Construction lawyers used to feel required to argue, as a primary claim, that their client’s construction services or goods physically “improved” the lands in the sense of increasing its monetary value directly and calculably.

It is no longer absolutely necessary to show that those items increased the land’s value whatsoever, to claim a lien. This applies in Alberta and Saskatchewan.

As Walsh LLP argued in Re Davidson, the “improvement” required by the lien legislation is simply a contribution to the overall project for which you or your client have supplied work, goods, or services for which you have not yet been fully paid.

The lien rights are not restricted to claiming items that “improved” the lands in a restrictive sense of increasing its monetary value or build-up (though that is still a viable further argument).

Without intending to be an exhaustive list, items covered can include these contributions to a project generally:

  • Storage facilities or services.
  • Transport services.
  • Road construction or service.
  • Equipment rental.
  • Equipment maintenance.
  • Preparation work.
  • Support services or materials (depending on their connection with the project).
  • Certain consumables required for the above (e.g. fuel and similar consumables to run project equipment).

How close is ‘close enough?’ What lands can you secure, to claim payment?

In addition to now recognising the above breadth of claims, and that they do not need to monetarily increase the value of lands to be secured by a lien, the law also recognises that the work, materials, or services need not always be supplied to the specific parcel of land or “site” claimed. On oil sands leases, claiming against the mineral lease may be sufficient.

If there is a sufficient collateral benefit to a neighbouring parcel or site of land, a lien may also potentially secure the parcel adjacent to, or connected with, the parcel on which the “overall project” was underway. These aspects were specifically confirmed in the Re Davidson case argued by Walsh LLP, and also followed in the latest case in Trotter and Morton.

To build your construction claim properly, seek experienced legal advice, to keep current and to avoid rusting your claim away…