Team Members ()

Publications ()

News ()

Pages ()

Services ()

  • Our Team

    Our Team

    • Lawyers & Clerks
    • Leadership Team
    • Board of Directors
    • Human Resources
    • Marketing & Business Development
    • Paraprofessional Services
  • Our Services

    Our Services

    • Service Areas
      • Aboriginal and Indigenous Law
      • Administrative Law
      • Agribusiness
      • Banking and Financial Services
      • Bankruptcy and Insolvency
      • Business Disputes
      • Business Immigration
      • Class Actions
      • Construction Law
      • Corporate and Business
      • Corporate Finance and Securities
      • Corporate Governance and Compliance
      • Cross-Border Law
      • Education Law
      • ESG (Environmental, Social, & Governance)
      • Estates and Trusts
      • Environmental Law
      • Foreign Direct Investment
      • Franchise Law
      • Health Law
      • Insurance
      • Intellectual Property
      • Labour and Employment
      • Litigation
      • Maritime Law
      • Media & Entertainment
      • Municipal Law
      • P3 and Infrastructure
      • Pensions and Benefits
      • Privacy, Data Protection and Cyber Security
      • Public Law
      • Real Estate
      • Regulation of Professions
      • SISIP LTD Allowances Class Action
      • Tax
      • Technology
      • View All
    • Industries
      • Cannabis
      • Construction & Property Development
      • Emerging & High Growth Companies
      • Energy & Natural Resources
      • Financial Services
      • Government & Institutions
      • Insurance
      • Manufacturing, Processing & Sales
      • Mining
      • Ocean Economy
      • Private Clients
      • Technology
      • View All
    • More Services
      • MC Advisory
      • MC Legal Lab
  • Our Insights
  • Our Firm

    Our Firm

    • Our Values
    • Our History
    • Our Representative Work
    • Our Global Reach
    • Our News
    • Diversity & Inclusion
    • Collective Social Responsibility
    • Pro Bono Program
  • Our Careers

    Our Careers

    • Lawyer Opportunities
    • Business Professional Opportunities
    • Paralegal & Legal Assistant Opportunities
    • Summer Student & Articling Opportunities
    • Diversity & Inclusion
    • Collective Social Responsibility
  • 1.866.439.6246
  • Contact
  • Search
  • Stay Updated
  • Contact Us
  • LexMundi World Ready
  • Privacy Policy
  • http://linkedin.com
  • http://facebook.com
  • http://twitter.com
  • 1.866.439.6246
Home > Our Insights > This Bridge is not for (Lien) Sale: N.S. Court decides Macdonald Bridge Cannot be Liened in Certification Coating Specialists v. Cherubini et.al.
Publication

This Bridge is not for (Lien) Sale: N.S. Court decides Macdonald Bridge Cannot be Liened in Certification Coating Specialists v. Cherubini et.al.

Published:

November 22, 2016

Author(s):

  • John Kulik, KC

Share

Print

There is an old expression about “selling the Brooklyn Bridge”. Recently, a bankrupt subcontractor attempted to register a lien against the Macdonald Bridge spanning Halifax Harbour. If it succeeded and the lien were not then paid out, the subcontractor’s ultimate remedy would be to sell the Bridge to satisfy its lien. Fortunately (and not too surprisingly) the N.S. Supreme Court decided the Macdonald Bridge cannot be liened nor sold to satisfy a lien. McInnes Cooper’s Douglas Tupper QC represented the successful contractor.

The decision is a good reminder of against what and whom a lien can be registered and how it can quickly be challenged.

THE LIEN

The Angus L. Macdonald Bridge between Halifax and Dartmouth, N.S. is being renovated in “The Big Lift” project. The Halifax Dartmouth Bridge Commission owns and operates the Bridge and is the registered owner of various properties at both ends of its span. The Bridge Commission hired American Bridge to perform the renovations. American Bridge hired Cherubini Metal Works to fabricate replacement deck panels for the Bridge, and Cherubini in turn hired Certified Coating Specialists to put certain coatings on the panels. Certified Coating performed all its work at Cherubini’s workshop, then transported, raised and inserted the panels into the Bridge’s span. Certified Coating did not perform any work on any properties the Bridge Commission owned, excepting the Bridge span itself. After it performed its work, Certified Coating Specialists declared bankruptcy. Its receiver and trustee, The Bowra Group Inc., registered a lien against various properties that the Bridge Commission owned to secure a claim for approximately $400,000.00 against Cherubini. Cherubini denied it had any obligation to pay the claim and applied to the N.S. Supreme Court under the summary procedures available under Section 29(4) of the N.S. Builders’ Lien Act to vacate the lien on the basis the lien was legally invalid.

THE DECISION

 

On September 22, 2016, the Nova Scotia Supreme Court in Certification Coating Specialists v. Cherubini et.al. decided that while Bowra is entitled to pursue its claim against Cherubini (which claim Cherubini is entitled to defend), it is not entitled to register a lien against the Bridge or any related properties as security for its claim.

THREE LIEN REMINDERS

The court’s decision offers a good reminder of against what and whom a lien can be registered, and how it can quickly be challenged. Construction industry participants in other Canadian provinces and territories, however, should check their own lien legislation since if could differ from that of N.S.

  1. Public Streets and Highways Cannot be Liened. Section 3(1) of the N.S. Builders’ Lien Act says it does not apply to work performed with respect to public streets or highways. However, the Act does not define a public street or highway. There are other statutes that define those terms, but since the Act does not specifically refer to them, their definitions do not apply. The court decided it was entitled to look at the common usage of the words “public streets or highways” as well as dictionary definitions to determine the meanings of those words, and concluded the MacDonald Bridge is indeed a public street or highway:
  • Traffic enters directly into the street systems of Halifax and Dartmouth from the Bridge.
  • Both private and public vehicles, including scheduled transit buses, use the Bridge.
  • There are posted speed limits and traffic signals on the Bridge.
  • Although a toll is required, it is automated and the Bridge is available to all drivers.

Since Certified Coatings’ work was done solely on the deck panels, the Bridge itself was the only property owned by the Bridge Commission that Certified Coatings could possibly have the right to lien. But since the Bridge span itself was a public street or highway, the lien was invalid.  Bowra Group (as Certified Coatings’ Trustee) could still advance a claim against Cherubini, but it could not be secured by a builders’ lien against any of the Bridge Commission’s properties.

  1. There is a quick way to challenge liens. Under Section 29(4) of the Act, the N.S. Supreme Court has jurisdiction to vacate a lien upon the posting of security or “upon any other proper ground”. Frequently a party that is subject to a lien but disputes the amount owed wants to have the lien vacated as quickly as possible so project funding can flow. This involves the posting of security with the court in the form of a bond, a letter of credit or even cash, usually in the amount of 1.25 times the face value of the lien claim. This security takes the place of the land subject to the lien and the court then vacates the lien from the land. But if the validity of the lien itself is questionable (for example, it was filed out of time or the Act does not cover the work in question), a party can apply to the court for a quick ruling whether the lien is valid in law. There is a heavy onus on the applicant because the court will not lightly dispose of the security the Act grants a contractor, but it will vacate an improper lien where the facts and the law are clear. This process can be of great benefit to the party subject to a lien as they can avoid either paying bond premiums or interest on a letter of credit, or tying up cash.
  2. Provincial Crown property cannot be liened. Section 3(2) of the Act specifically says liens cannot be registered against Provincial Crown property. However, under section 3(4) an unpaid contractor can give notice of a potential claim to the Provincial Crown and thus is entitled to a secured claim against the lien holdback that the Act requires the Provincial Crown to maintain. Although the contractor has no security against the project on which it was working, it at least has security against that holdback fund. The Provincial Government sought leave to intervene and argue the Bridge Commission is part of the Provincial Crown, so the Bridge cannot be subject to a lien. Although the issue was argued in full, the court declined to rule on the point since it already decided the Bridge is a public street or highway and not subject to the Act. So the question of whether the Bridge Commission is a Provincial Crown entity, such that its property is Crown property and cannot be liened, remains to be answered another day.

Please contact your McInnes Cooper lawyer or any member of the Construction Law Team @ McInnes Cooper to discuss this topic or any other legal issue.


McInnes Cooper has prepared this document for information only; it is not intended to be legal advice.  You should consult McInnes Cooper about your unique circumstances before acting on this information. McInnes Cooper excludes all liability for anything contained in this document and any use you make of it.

© McInnes Cooper, 2016.  All rights reserved.  McInnes Cooper owns the copyright in this document. You may reproduce and distribute this document in its entirety as long as you do not alter the form or the content and you give McInnes Cooper credit for it. You must obtain McInnes Cooper’s consent for any other form of reproduction or distribution. Email us at [email protected] to request our consent.

Share

Print
View Related Content

Related Lawyers

  • John Kulik, QC

    John Kulik, KC

    Partner

Related Services

  • Construction Law
  • Real Estate

Related Industries

  • Construction & Property Development

Related Publications

View All Publications
  • Underused Housing Tax Act: Non-Resident Non-Canadian Reporting Obligations

    Jan 19, 2023

    By April 30, 2023, some non-resident non-Canadians are required to report and pay taxes owed under the Canada’s new Underused Housing Tax Act,…

    Read More
    Publication
  • Mortgage Deficiencies: NB Appeal Court Clarifies Use of “Market Value” & More

    May 2, 2022

    On April 14, 2022, the New Brunswick Court of Appeal released its decision in Royal Bank of Canada v. Estate of Susan Lynn Williams, revisiting…

    Read More
    Publication
  • 10 Key Realtor FAQs About N.B. Real Estate Law

    Nov 19, 2021

    To help realtors better prepare their clients to ensure smooth real estate transactions with timely closings, here are the answers to the 10…

    Read More
    Publication
  • Commercial Real Estate Investing in Atlantic Canada: 10 Key Legal Considerations

    Nov 5, 2021

    Purchasing commercial real estate as an investment, as a component of a business startup or as one asset in the share purchase of an existing…

    Read More
    Publication
  • N.B. Construction Remedies Act: 7 Key Changes from the Mechanics’ Lien Act

    Sep 9, 2021

    This publication has been updated as at March 7, 2022. The New Brunswick Construction Remedies Act, substantially came into effect on…

    Read More
    Publication
  • CCDC 2 (2020): 8 Key Changes to the Stipulated Price Contract

    Jan 20, 2021

    In the first update to the CCDC 2 since 2008, in December 2020 the Canadian Construction Documents Committee (CCDC) published the CCDC 2 (2020).…

    Read More
    Publication
  • Prompt Payment Coming Down the Pike in NS: What Owners & Contractors Must Know

    Feb 4, 2020

    Canada’s construction industry is abuzz with the latest innovation in lien legislation. Prompt payment requirements are being added to…

    Read More
    Publication
  • No Matter the Chatter, the Bid is the Bottom Line: N.S. Supreme Court Issues a Reminder in CF Construction v. Town of Westville

    Jun 21, 2018

    Lawyers regularly encourage clients to be proactive and discuss potential issues with third parties before they become real problems. But in the…

    Read More
    Publication
  • Do Something: General Contractor Liable for Failing to Disclose the Existence of Labour & Materials Bond in Valard Construction Ltd. v. Bird Construction Co.

    Feb 21, 2018

    On February 15, 2018, the Supreme Court of Canada decided a trustee’s fiduciary duty includes an obligation to inform beneficiaries of the…

    Read More
    Publication
  • Denis Mahoney & Brittany Keating in the NLCA 2018 Construction Journal | Testing 1-2-3: The latest on drug & alcohol testing in safety-sensitive workplaces

    Dec 18, 2017

    The answer to the question, “What’s employers’ rationale for implementing workplace drug and alcohol testing?” is pretty…

    Read More
    Publication
  • “Facilitation Payments” to Foreign Public Officials Violates Canada’s Corruption of Foreign Public Officials Act

    Nov 17, 2017

    It’s official: as of October 31, 2017, “facilitation payments” contravene Canada’s Corruption of Foreign Public Officials Act (CFPOA).…

    Read More
    Publication
  • 5 Anti-Corruption Law Compliance Program Tips

    Aug 16, 2017

    In the not-so-distant past, Canadian enforcement of its anti-corruption and anti-bribery legal regime has been relatively laid-back. But the…

    Read More
    Publication
  • Better Late than Never: N.S. Government Enacts Early Release of Holdback Regulations

    Apr 28, 2017

    On April 24, 2017, the N.S. Government issued regulations that will finally allow the Builders’ Lien Act amendments permitting early release…

    Read More
    Publication
  • Nip it in the Bud: A 5 Step Plan for Employers to Prepare for Cannabis Legalization in Canada

    Apr 17, 2017

    Recreational cannabis isn’t legal yet - but much of the associated stigma is already gone, usage is up and employers are feeling the workplace…

    Read More
    Publication
  • Register Before You Lobby in N.B. under Lobbyists’ Registration Act

    Apr 5, 2017

    NOTE: Consultants who were already lobbying and in-house lobbyists already employed by an organization when the new Act took effect were…

    Read More
    Publication
  • Confidentiality Risks of Doing Business With the Public Sector Just Got Riskier: Completed NS Access to Information Requests Go Online

    Jan 25, 2017

    Doing business with the public sector creates an often overlooked – but very real – risk that the confidential information a business…

    Read More
    Publication
  • Don’t Sell Yet: How Principal Residence Exemption (PRE) Changes Affect Trusts

    Dec 22, 2016

    Effective January 1, 2017, the kinds of trusts that can claim the Principal Residence Exemption (PRE) will be limited. Now, the PRE allows…

    Read More
    Publication
  • Newfoundland & Labrador’s New Public Procurement Act

    Dec 19, 2016

    On December 14, 2016, Bill 46 and the Newfoundland and Labrador Public Procurement Act became law. The new Act isn’t yet in effect, however,…

    Read More
    Publication
  • Newfoundland & Labrador: A New Public Procurement Act for 2017

    Dec 5, 2016

    It’s been a long time coming, but Newfoundland and Labrador is finally getting new public procurement legislation. On November 29, 2016, Bill…

    Read More
    Publication
  • NB Court Clarifies Mortgage Lenders’ Rights on Default: 5 Steps for NB Mortgage Lenders to Consider

    Sep 23, 2016

    On September 15, 2016, the New Brunswick Court of Appeal clarified the province’s statutory regime governing both the exercise of a lender’s…

    Read More
    Publication
  • Supreme Court of Canada Gives a Lesson in Insurance Contract Interpretation in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co.

    Sep 19, 2016

    On September 15, 2016, the Supreme Court of Canada decided certain damage to a building under construction was covered under the relevant…

    Read More
    Publication
  • Supreme Court of Canada Decides Indian Bands Assessing Leased Reserve Lands for Property Tax Purposes Can’t Have it Both Ways in Musqueam Indian Band v. Musqueam Indian Band (Board of Review)

    Sep 12, 2016

    On September 9, 2016, the Supreme Court of Canada decided in Musqueam Indian Band v. Musqueam Indian Band (Board of Review) that an Indian band…

    Read More
    Publication
  • Common Ground: Retail & Commercial Condominium Financing

    Jun 30, 2016

    The condo real estate market, both retail and commercial, is hot. But condo developers and unit buyers need funding. Here’s the legal…

    Read More
    Publication
  • Realtor Risk Management: 10 Practical Tips to Help Realtors Manage Litigation Risk

    Jun 20, 2016

    Real estate vendors and purchasers have high expectations of their realtors – and they don’t often hesitate to pursue legal action against…

    Read More
    Publication
  • The Parameters of Municipal Power: Supreme Court of Canada Decides Municipality Can’t Block Radiocommunication Tower Construction

    Jun 17, 2016

    In its June 16, 2016 decision in Rogers Communications Inc. v. Châteauguay (City), the Supreme Court of Canada decided a municipality’s…

    Read More
    Publication
  • Newfoundland & Labrador Crown Immunity for Mechanics’ Lien Holdbacks: 3 Key Risks for Subcontractors in Brook Construction (2007) v. Blackwood Contractors Ltd.

    May 24, 2016

    It’s now certain: in Newfoundland & Labrador, liens can’t be placed on Crown land or holdbacks with the possible exemption allowing for…

    Read More
    Publication
  • A Red Flag for Municipalities & Developers: Supreme Court of Canada Decides Not Every Positive Covenant Under a Development Agreement Runs With the Land in Heritage Capital Corp. v. Equitable Trust Co.

    May 10, 2016

    On May 6, 2016, the Supreme Court of Canada generally affirmed the common law rule that positive covenants do not run with the land. More…

    Read More
    Publication
  • The Legal Defence of Due Diligence: Top 5 FAQs

    May 2, 2016

    “Due diligence” is a legal defence to many charges under occupational health and safety (OHS) laws. Here are five of the most…

    Read More
    Publication
  • Doing Business With the Public Sector: Key Confidentiality Risks & 3 Risk Management Strategies

    Mar 24, 2016

    When a business responds to a public sector Request for Proposal or Expression of Interest (both of which we’ll refer to as an RFP for these…

    Read More
    Publication
  • Construction Project Manager Sentenced to 3½ Years for Workplace Accident in R. v. Vadim Kazenelson (aka “Metron”)

    Mar 9, 2016

    In what appears to be the first case of the conviction of a front line supervisor under section 217.1 of the Criminal Code and sentencing to a…

    Read More
    Publication
  • 3 Reasons for Directors, Officers and Supervisors To Take Occupational Health and Safety Personally

    Jun 25, 2015

    Most people know that a company itself has OHS obligations, and that it risks corporate liability if it violates those obligations. However, not…

    Read More
    Publication
  • Tread Carefully: 10 Considerations for Right of Way Agreements

    May 25, 2015

    This publication has been updated as at July 21, 2022. Every party to a Right of Way has some idea of what that Right of Way is – but many…

    Read More
    Publication
  • More than a Mere Nuisance – 5 Snow Loading FAQs

    Mar 3, 2015

    Snow can be a big nuisance at this time of year, but snow load - the weight of the snow, usually measured in pounds per square foot - can be…

    Read More
    Publication
  • Complying with Canada’s Anti-Spam Legislation (CASL): A blueprint for the construction industry

    Dec 1, 2014

    The construction industry - project owners, contractors, subcontractors and trades - might be relaxing, ignoring the hype around Canada’s…

    Read More
    Publication
  • Egg Films Epilogue: 5 Key Implications of NS Union Certification Based on “Industry” Dependence

    Nov 27, 2014

    Recently, the NS Court of Appeal confirmed that a union can be certified as the bargaining agent of employees based merely on their dependence…

    Read More
    Publication

Stay Updated

Subscribe to McInnes Cooper to stay current with our leading insights on legal updates, trends, news, events, and services.

Connect With Us:
  • Follow us on Twitter @mcinnescooper
  • Like us on Facebook @mcinnescooperlaw
  • Join us on LinkedIn @mcinnes-cooper
  • 1.866.439.6246
  • Privacy Policy
  • Copyright © 2023 — McInnes Cooper
Lex Mundi Logo MC Advisory Logo