courtpractice under thebuilders'lienact:...

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COURT PRACTICE UNDERTHE BUILDERS' LIENACT:

COMMENTS AND PRECEDENTS

.These materials were prepared by James Ehmann, of Kanuka Thuringer law firm Regina, Saskatchewan(' for the Saskatchewan Legal Education Society Inc. seminar, Builders' Liens & Suppliers' Remedies;.) September 2000.

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TABLE OF CONTENTS

L INTRODUCTION 3

II. LIEN/TRUST ENFORCEMENT OPTIONS1. The Range of Judicial Remedies 32. Tactics 43. Related Contractual Issues or Claims 5

IlL SPECIFIC APPLICATIONS1. Vacating Liens Pursuant to s. 56

(a) Purpose and Effect ofs. 56 5(b) Ex Parte or Notice ofMotion 6(c) Motions to Reduce Amount of Security 7(d) Which Judicial Centre 8(e) Precedents 8

2. Vacating Lien Registrations by Payment ofHoldback into Court Under s. 57(a) Purpose and Effect of s. 57 9(b) Availability of s. 57 10(c) Selected Concerns on s. 57 Applications

(i) Deficiencies, the Holdback and Setoff 11(ii) Deficiencies and Substantial Performance 13(iii) Who to Serve and Which Liens are Vacated 13(iv). SetoffAgainst the Holdback 14

(d) Precedents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

3. Multiple Claims to Trust Funds and s. 17(a) "Interpleading" under s. 17 15(b) Precedents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

4. Applications Under s. 60(a) Purpose 15(b) Precedents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

5. Appointing a Trustee Under s. 84(a) When to Apply for the Appointment of a Trustee 16(b) Practical Suggestions 17(c) Precedents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

IV. ACTIONS UNDER THE BUILDERS' LIENACT1. Proceedings by the Plaintiff

) (a) The Statement of Claim 18

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(b) Arbitration Clauses 19(c) Limitation Periods 19(d) Concurrent Debt Claims and Garnishment 20(e) Precedents 21

2. Defendants Pleadings 21

V. ARBITRATION AND MEDIATION 21

VI. APPENDICES

A.B.

C.D.E.F.G.H.I.J.K.L.

M.

N.

Subsection 5(d)Subsection 56(4)

Section 57Section 57Section 27

Section 60Section 84

Section 96

Subsection 82(6)

Memorandum to Judge, Affidavit & Order 23Notice ofMotion, Minutes of Settlementand Order 35Order (Minimum Holdback Amount) 43Notice ofMotion, Affidavit and Order 53Notice ofMotion, Affidavit and Order 59Notice ofMotion, Affidavit and Order 71Affidavit and Order 79Statement of Claim 96Statement of Claim 108Statement of Claim 113Notice ofMotion 118CCDC 2 - 1994 Rules ofMediation andArbitration of Construction Disputes 131Motion and Order Confirming Sale andDistributing Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147Motion and Affidavit 162

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I. INTRODUCTION

This paper reviews judicial remedies available under The Builders' Lien Act, S.S. 1984-85 c.B-7.1.

Precedents are included as appendices and are identified in the Table of Contents.

Questions ofsubstantive law in this area are being addressed by other presenters at this seminar and,

by and large, are not addressed in this paper.

In part, the material which follows is a repetition and updating of"Queen 's Bench Chamber Practice

Under The Builders' Lien Act", published by the Continuing Legal Education division of the Law

Society of Saskatchewan in December, 1991, as part of a seminar on Queen's Bench Chamber

Applications.

II. LIEN/TRUST ENFORCEMENT OPTIONS

1. The Range of Judicial Remedies

The Act provides a shopping list ofjudicial and non-judicial remedies. The range ofenforcement

tools includes:

• demanding information under s. 82(1)(a) [from the owner] or (b) [from a mortgagee or

unpaid vendor];

• applying for production of contracts and related records under s. 82(6);

• applying under s. 38(7) for removal ofa trustee or for other relief(for example requiring that

the holdback trust account be established and maintained);

• referring, unilaterally, a dispute regarding a failure or refusal to certify substantial

performance, or a dispute regarding payment to a contractor or subcontractor who has

obtained such a certificate, to arbitration, pursuant to s. 85(1.1);

• applying for an order that a contract or subcontract has been substantially performed, where

there has been a failure or refusal to issue a certificate;

• applying under s. 17 for an order for directions as to the appropriate disposition ofcontract

funds where there are competing claims;

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• applying under s. 57 for an order determining the amount of the statutory holdback and

requiring that it be paid into court and distributed;

• applying under s. 84 for the appointment of a trustee of the improvement and the related

funds and choses in action;

• commencing an action for enforcement of the lien and/or trust;

• applying under s. 95 for carriage of the action where the lien claim and who started it

proceeds improvidently or not at all;

• cross examining, without order, the deponent on the verifying affidavit in a claim oflien [so

83(1)].

2. Tactics

By their nature, builders lien actions can be prolonged and expensive affairs. Minimizing the time

and expense required for results calls for a careful analysis of the problem and design of a strategy

or game plan, at the outset. Commencement of an action should be generally regarded as a step of

last resort.

Many ofthe applications authorized by the Act are a major annoyance to the owner and can lead to

substantial pressure being brought to bear by the owner on the general contractor to deal with the

claim ofthe subcontractor. Examples ofmanoeuvres to bring about suchpressure include a demand

for information under s. 82, an application for production of documents under s. 82(6) and

applications under s. 38(7) regarding the joint holdback trust account. Each ofthese steps can be

taken quickly with relatively little expense.

Where substantial performance has been achieved, it is sometimes effective for a subcontractor to

proceed with a demand for information under s. 82(1), an order for payment into court under s. 57

and/or 60 and, in tum, a motion under ss. 57(5) and/or 60 for an order for distribution to lien

claimants.

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In every case, the first order ofbusiness is to identify the primary problem or dispute and then design

a strategy which focuses on addressing that problem or dispute.

3. Related Contractual Issues or Claims

When preparing affidavits or pleadings under The Builders' Lien Act one must be alert to possible

prejudice with respect to a related contractual issue or claim. For example, an allegation by an owner

ofsubstantial performance (defined in subsection 3 (l) ) or completion (defined in section 4) , made

in order to come within section 57, might prejudice the owner in subsequently asserting against the

contractor a deficiency claim, ascertainable at the time the owner's affidavit was made, for an amount

which, pursuant to the formulas in subsection 3(1) or section 4, would mean that substantial

performance or completion had not been achieved.

Whenever there is the spectre ofa dispute concerning scope or value ofwork, care must be taken in

the preparation ofaffidavit evidence which covers these subjects for the purpose ofobtaining relief

under the Act. For example, if a contractor or subcontractor alleges that there have been orally

agreed upon changes to its written contract or subcontract, the written contract or subcontract should

not be exhibited to an affidavit without clarification that the document is only part ofthe agreement

or has been amended.

III. SPECIFIC APPLICATIONS

1. Vacating Liens Pursuant to s. 56

(a) Purpose and Effect of Section 56

The purpose of section 56 is to enable expeditious cancellation of lien registrations and/or written

notices oflien where appropriate security is deposited with the court. Once an order is made, the lien

registration and/or notice is vacated, but the rights of the parties are not determined. The person

furnishing the security will have to sub~equently litigate or reach a settlement with the lien claimant

in order to obtain the release of the security. Therefore, where the facts and time permit, an

application under section 57 or section 60 (where rights can be determined) should be preferred over

a section 56 application.

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The effect ofan order under section 56 is summarized in subsection 56(6). In briefand simple terms,

the security furnished to the court stands in the place and stead of the contract money and land

otherwise attached or charged, if at all, by the lien.

Subsection 56(5) provides that payment into court or the posting ofsecurity pursuant to section 56,

does not reduce the statutory holdback required to be retained by the owner. It follows that an owner

who pays all or part of the statutory holdback into court pursuant to a section 56 order will be

exposed to liability to pay that amount again to other lien claimants. Although subsection 56(5)

refers only to the owner's holdback, it is submitted that a contractor may be in the same. position and

should not use the statutory holdback to fund payment into court under section 56.

(b) Ex Parte or Notice ofMotion

An application vacating written notices or registrations of lien may be made ex parte under

subsection 56(1). Where the application is made exparte, the payment into court or security must be

for the face value ofthe lien plus 25% as security for costs. Where the lien notice or registration to

be vacated is proved and adequate payment made or security posted, the court is required to grant

the order.

This is a simple ex parte application which can be made very quickly. It can be a real client pleaser

to obtain the order on the same day that instructions are received, and this is possible in many

instances.

Subsection 56(2) differs from subsection 56(1) in that it empowers the judge to grant an order for

the vacating of lien registrations and/or notices upon payment into court or posting of security in

an amount"...that the court considers reasonable in the circumstances...". An application under

subsection 56(2) must be made by Notice ofNotion.

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In those circumstances where sections 57 or 60 are not available (because of missing or disputed

facts which make a final determination ofrights impractical) but a payer is nonetheless able to prove:

• that its liability under the Act will be less than the face value of the lien registrations or

notices in question; and/or

• that it will not in any circumstances be liable for costs in an action to enforce the liens,

there may be a substantial advantage in applying on notice for an order vacating the lien registration

or notice upon payment into court of an amount less than the full value of the liens plus 25%. In

cases where the lien in question is not likely to be quickly settled, the advantage of such an order

may be considerable, as the security is likely to be in Court for a long time.

(c) Motions to Reduce the Amount of Security

Section 56(4) authorizes an application, on notice to such persons as may be directed by the Court,

for an order reducing the amount paid into court as security, or substituting or cancelling security

posted pursuant to a s. 56 order. The order may provide for payment ofthe amount paid into court

to the person entitled, or return of the money or security to the initial applicant.

Where an applicant shows, by affidavit evidence, that a lien claim has been overstated or includes

non-lienable items, the security will be reduced by an appropriate amount, unless the lien claimant

files affidavit evidence showing that it is not plain and obvious that its claim is overstated or not

lienable. See: Majestic Contractors Limited v. NC.L. Contracting Ltd., [1994] 2 W.W.R. 619

(Q.B.). Where a lien is asserted for "extras" the moving party should consider whether it can be

shown that the claim consists, in whole or in part, of a claim for loss of profits (not lienable),

damages in tort (not lienable), or damages for delay (arguably not lienable). See: Majestic, supra.

In addition, consideration should be given to whether a lien claim for extras can be defeated based

on a failure to give a contractually required notice of a claim for extras. See: UHDE/GmbH v.

Ecodyne Limited (1992), 107 Sask. R. 161 (Q.B.).

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(d) Which Judicial Centre?

It is suggested that the application should be made at the judicial centre nearest the land in question.

This would seem to follow from the fact that actions to enforce the lien are required to be brought

at that judicial centre. However, the Act does not specifically so require and orders have been

granted in a number ofinstances at judicial centres other than the judicial centre nearest to the land

in question. It is suggested that where the application is made at a judicial centre which is not the

judicial centre nearest to the land, the material should establish the urgency of the application.

(e) Precedents

Attached as Appendix "A" are a Memorandum to the Judge, Affidavit and Order used in an exparte

application under subsection 56(1). Some comments on this material which practitioners may find

useful are as follows:

• proving the existence ofa specific lien, identified by lien claimant, land and amount against

an "improvement" within the meaning of the Act is essential;

• as the application is not final, affidavits based on information and belief are acceptable;

• where time does not permit the filing of a certified copy of title, use an affidavit of search,

exhibiting an uncertified copy;

• because the applicant may not be aware of all written notices issued in relation to the lien

claim in question, seek an order vacating all written notices based on that lien claim;

• draw the order so that the furnishing ofsecurity is the final condition for the granting of the

order. In this way, you will have an opportunity to react to a change of circumstances

between the filing of an application and the granting of the order (for example, the

registration of a further lien, the settlement of the lien claim in question or the imposition

ofan undesirable change to your draft order by the Judge);

• include provision in the order clarifying that neither the order nor the provision of security

improves the entitlement of lien claimants under the Act; and

• provide service directions in the order, as subsection 56(1) so requires.

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Attached as Appendix "B" are a Notice of Motion, Minutes of Settlement and Order used in an

application for the return of a bond for cancellation. Query whether the order should be granted

absent proof that there are no other liens (see: subsection 56(8)). It appears that where the lien

claimant whose registration or notice was vacated is not receiving the full amount paid into Court

or secured, proof that there are no other liens is a prerequisite to return of the money or security

deposited with the Court. It may therefore be desirable for the payer to make any settlement

conditional on the absence of any further lien notice or registration at the time of the return of the

money or security deposited with the Court.

2. Vacating Lien Registrations by Payment of Holdback into Court Under Section 57

(a) Purpose and Effect of Section 57

The purpose and effect of section 57, as manifest by its terms, is to facilitate determination and

payment into court of the holdback, whereupon the registered liens secured by that holdback are

vacated. Notwithstanding its broad terms, it is available only in relation to the holdback on the

contract between the owner and the contractor. See: Western Surety Company v. PCL-Maxam

(1988),70 Sask. R. 58 affirmed 71 Sask. R. 192 (C.A.).

The order fixing the amount ofthe holdback and authorizing or directing its payment into court must

be accompanied by an order vacating all existing lien registrations arising under the contract in

question, except the lien of the person from whom the holdback has been retained. To vacate that

lien, the applicant probably needs to establish that the payment into Court consists not only ofthe

holdback, but the final balance due on the contract.

For an owner, the utility of section 57 can be tremendous. In those cases where lien disputes

proliferate beneath the general contractor and the owner can establish that it has the proper holdback

amount, the owner can use section 57 to clear its title and extricate itself from further involvement.

Section 57 can also be a helpful tool for lien claimants. For example, where the only thing standing

in the way of payment of the holdback for the benefit of subcontractors is a dispute between the

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contractor and owner as to the amount due and therefore as to the amount of the holdback, a

lienholder might wish to force the issue by bringing a section 57 application. Where substantial

performance can be proved and a copy of the contract is available to the subcontractor to put into

evidence, the subcontractor can make a strong prima facie case that notwithstanding any dispute

between the contractor and owner, the holdback to be paid into Court must be 10% ofat least 97%

of the price shown in the agreement. See: subsection 3(1). Alternatively, the lien claimant might

obtain an order for paYment into Court ofso much of the holdback amount as can be established, at

a minimum, with provision for renewal of the application with respect to the balance of the

holdback, once the issue has been determined, by settlement or further order. See: Order -attached

as Appendix "C". Lien claimants should be cautious in disputing the amount of the holdback, in

light ofthe provision in subsection 57 (3) for awarding costs against a lien claimant at trial, should

it appear that he unreasonably withheld his agreement as to the amount of the holdback.

Pursuant to subsection 57 (4) once the order is made, the liens vacated no longer attach the unpaid

contract price or the land, but instead become a charge on the holdback paid into court. Curiously,

subsection 57(4)(iii) refers to "...the amount paid into court or security posted...". Query whether

security may be posted in lieu of the holdback on a section 57 application.

(b) Availability of Section 57

Where the conditions contemplated by subsection 57(1) are established on an application, which may

be made by "any person", the court is required to:

• determine the amount of the holdback;

• authorize or direct that the holdback be paid into court; and

• order that the registration ofall existing claims oflien relating to the contract or subcontract

in question be discharged.

The conditions which must be established for such an order to be granted are described in subsection

57(1):

• there must be at least one registered claim of lien; and

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• the owner must, but for the lien registration or registrations, be entitled under the Act to pay

out the holdback.

The first requirement is simple enough. The second requirement takes one directly to sections 43 to

46 ofthe Act, as these are the only provisions under which the Act authorizes a payment ofholdback

funds. Accordingly, a section 57 application is available only where the holdback funds in question

could be paid under one of sections 43 to 46, if there was no registered lien.

Section 43 speaks to payment of the holdback 40 days after a certificate ofsubstantial performance

has been issued and given in the manner required by the Act. If no certificate of substantial

performance has been issued and given as required by the Act, section 43 is ofno assistance. Section

44 authorizes payment of the holdback in cases of completion, or alternatively, abandonment.

Section 45 authorizes a partial release of holdback where there is a certificate of substantial

performance issued and posted with respect to a particular subcontract. Section 46 authorizes the

partial release of the statutory holdback, on an annual basis, where the contract price exceeds $25

million and the contract schedule is longer than one year.

To come within section 57, it is essential that the supporting affidavit establish facts which bring the

payer on the contract in question within one ofsections 43 to 46. It is unclear whether a section 57

order may be made where the operative holdback release section is 45 or 46 and only a portion of

the main holdback is available.

(c) Selected Concerns on Section 57 Applications

(i) Deficiencies, the Holdback and Setoff

The effect of subsection 34(3), section 35 and related case law is that:

• the cost of correcting defects or completing abandoned work cannot be taken into account

in determining the amount of the holdback;

• the holdback is "inviolable".

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An owner who has retained more than the holdback but who can establish a right of setoff which,

ifaccounted for fully, would encroach on the holdback, is therefore limited to setting offonly to the

extent of the funds retained over and above the holdback. Even this limited setoffis negated where

it would reduce recovery by subcontractors. See: Thunderbrickv. Yorkton (1993), 112 Sask. R. 192

(C.A.).

In bringing a section 57 application on behalfofan owner who has retained more than the statutory

holdback and who has a right of setoff for an amount which would encroach on the holdback, it is

suggested that it is prudent to pro"e by way. of the supporting affidavit or affidavits the full extent

ofthe setoff, but to recognize by an appropriately drawn order that the setoffcannot encroach on the

holdback. Two advantages are achieved by proceeding in this way:

• a challenge to some elements of the setoffwi11 leave you in a position to argue for the full

setoff allowable on the basis of the other elements; and

• it may be desirable to show that your client, like the lien claimants, is taking a loss.

In light of subsection 57 (4) (a) (i) and section 33, it may be appropriate, perhaps necessary, for an

owner on a section 57application to establish that there is no money due on the contract except the

holdback. Where the evidence of that state of accounts consists of payments directly to the

contractor, the affidavit should establish that such payments were made prior to the receipt by the

owner ofany written notice of lien. This may be accomplished by a single sentence in the affidavit

stating the total amount paid and stating that no written notice oflien was received at any time prior

to payment of that amount or any portion of it. Where payment of the 90% portion consists of

payment to creditors of the contractor (for example, The Workers' Compensation Board or other

creditors of the contractor) , the owner's affidavit should establish:

• that the payment was for an obligation related to the contract in question (section 28(3»; and

• that no written notice of lien was received and outstanding at the time of the payment.

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(ii) Deficiencies and Substantial Performance

Subsection 3(1) ofthe Act stipulates when a contract or subcontract is substantially performed"..for

the purpose"s of this Act...". The subsection goes on to provide that the cost of correcting known

defects is a factor determining whether substantial performance has been achieved. Subsection41 (6)

also stipulates when "... for the purposes of the Act..." a contract or subcontract is substantially

performed. Under subsection 41 (6), substantial performance is deemed to have been achieved on the

day the certificate is signed or the court or arbitrator renders its decision, unless the certificate or the

court or arbitrator indicate a different date.

The full import ofthese subsections is unclear, particularly in light ofthe fact that pursuant to s. 43,

the date ofthe giving ofthe certificate is more important than the date of substantial performance.

The terms ofsubsection 41 (6) may render the existence ofthe certificate ofsubstantial performance

an extremely important piece of evidence for a lien claimant on a section 57 application. The lien

claimant may wish to counter the owner's resistance with respect to determination of the holdback

or payment of the same into court on the basis of subsection 41(6) which appears to make the

certificate conclusive, for the purposes ofthe Act. For its part, the owner might argue that the extent

of deficiencies means that substantial performance has not been achieved and that the holdback is

therefore not payable. It is beyond the scope ofthis paper to entertain the merits ofthese competing

positions. Reference to these arguments and provisions highlights the significance of evidence of

deficiencies and of a certificate of substantial performance on an application under section 57.

(iii) Who to Serve and Which Liens are Vacated

Which liens are to be vacated upon payment into Court? Section 57 speaks of "the holdback",

simpliciter and "the claim of lien", simpliciter. The Court of Appeal (in Western Surety Company

v. PeL-Maxam, supra) has dictated that "the holdback" is referable exclusively to the holdback

between the owner and contractor (although, arguably, the question remains open whether a portion

of that holdback can be the subject ofa section 57 order).

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It is suggested that the scheme ofthe Act makes it clear that the liens to be vacated are those which

arise directly or indirectly under the person from whom the holdback to be paid into Court has been

retained. Where that person is the contractor, proof that other liens on the title arise under the

contractor may be obtained by filing certified copies of their claims of lien, which will include a

statement as to the person for whom they have performed. Caution must be exercised, however,

where more than one contract has been let to the same person with respect to the same land. In those

cases, additional evidence may be required. Proof that the lien of a sub-subcontractor relates to a

particular contract cannot be furnished by the sub-subcontractor's claim oflien itself. In those cases,

the applicant in a section 57 application will have to file evidence which permits a determination,

with respect to the lien registration by every person claiming to have performed work for someone

other than the contractor, as to whether or not the work giving rise to that lien was performed for a

subcontractor of the contractor.

Where the liens which arise directly or indirectly under the contractor can be clearly proved by an

owner on a section 57 application, it is suggested that only those parties need be served with the

application, and other lien claimants, if any, may be ignored. However, where the evidence which

can be filed is not conclusive, it is suggested that all persons who have registered a claim of lien

should be served with the motion.

(iv) SetoffAgainst the Holdback

Where a payee has no unpaid Subcontractors, section 35 (providing for the inviolability of the

holdback) is likely inapplicable and an owner is likely entitled to setoff against the holdback. See:

Westridge Construction Ltd. v. Henderson (1995), 136 Sask. R. 268 (Q.B.). Arguably, the same

holds true in cases where the 40 day period for registration of a lien has expired and no liens have

been registered. Accordingly, where the facts permit, it may be advantageous for an owner to

respond to a s. 57 application with affidavit evidence that there are no unpaid subcontractors

(exhibiting statutory declarations provided by the contractor may serve that purpose) or that more

than 40 days have expired since the giving of a certificate ofsubstantial performance and there are

no liens registered, other than the lien of the general contractor moving for the order. It may even

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be worthwhile for an owner to purchase a number of liens of subcontractors, in order to create this

scenario.

(d) Precedents

Attached as Appendix "D" are a Notice ofMotion, Affidavit and Order used in an application by an

owner under section 57.

3. Multiple Claims to Trust Funds and Section 17

(a) "Interpleading" under Section 17

Section 17 might be a useful tool in a wide range of circumstances. It is particularly useful for

trustees under the Act who face the competing claims to contract funds oflien claimants and other

creditors of the contractor or subcontractor. As a trustee, an owner or contractor facing such

competing claims is probably not a mere stakeholder; therefore, relief by way of interpleader may

not be available. This is certainly the case where there is a claim by The Workers' Compensation

Board, because section 133 ofThe Workers I Compensation Act creates a direct liability on the payer

(principal). It is suggested that in these situations, section 17 is the preferred ifnot the only avenue

for summary relief in Chambers.

(b) Precedents

Attached as Appendix "E" are a Notice ofMotion, Affidavit and Order used in an application under

section 17 by a payer to extinguish its responsibility as trustee under The Builders I Lien Act and with

respect to the competing claims ofcertain statutory creditors of a defaulting subcontractor.

4. Applications Under Section 60

(a) Purpose

The brevity of section 60 makes it convenient to reproduce it here:

"60. The court may, on application:(a) order that the registration of;

(i) a claim oflien; or(ii) a certificate of action;

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or both, be vacated;(b) declare that a written notice of a lien no longer bindsthe person to whom it was given; or(c) dismiss an action;

on any terms and conditions that the court may order."

Despite its very broad terms, it is suggested that an application under the section 60 is inappropriate

where the relief sought is covered by sections 56 or 57. Accordingly, where the purpose of the

application is to vacate a lien upon the provision of security without determining rights, the

application should be made under section 56 and the requirements ofthat section will have to be met.

Similarly, where the objective is to vacate liens upon ascertaining and securing the holdback, that

application will have to be made under section 57 and the requirements of that section satisfied.

Section 60 is useful where an owner or other interested person can establish that a given registration

or written notice of lien is invalid. Possible bases for invalidity are numerous and include:

• the provision ofmaterial or services in question is not lienable; and

• the lien has expired and is not saved by subsection 49(5).

(b) Precedents

Attached as Appendix "F" are a Notice ofMotion, Affidavit and Order used in an application under

section 60.

5. Appointing a Trustee Under Section 84

(a) When to Apply for the Appointment of a Trustee

The appointment of a trustee under section 84 is sometimes the best possible remedy for a lien

claimant. Once the order is made, the Court appointed trustee is placed in a position ofcontrol over

the assets covered by the appointment. The administration ofthe trusteeship is in most ways similar

to a receivership. The key is that the appointment covers only those assets attached or charged by

the lien. The cost ofadministration can thus be confined to property which can be administered and

liquidated for the benefit of the lien claimant. On a practical basis, this is the most significant

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distinguishing feature between a builder's lien trusteeship and a receivership under The Queen's

Bench Act or The Business Corporations Act. It is precisely the desirability of confining the

administration to such assets which makes appointment of a section 84 trustee an important

alternative to conventional receivership.

Factors relevant to whether an application under section 84 should be pursued include:

• are there realizable assets attached by the lien? The assets to be considered may include land,

proceeds ofpetroleum and natural gas production, insurance proceeds and contract money;

• does the lien have priority against known and possiQle secured and statutory claims against

the assets (would a parallel bankruptcy petition be useful);

• can wasteful or illegal use, neglect or disposition ofthe assets by their owner be established

by affidavit evidence?

• might there be an environmental liability which would make the exercise uneconomic (for

example, a statutory duty to complete an abandonment operation on an oil well or removal

of storage tanks at a gas station)?

• can the lien claimant indemnify the trustee or will the trustee agree to act without an

indemnity? .

(b) Practical Suggestions

The insolvency of the operator of an oil well may give rise to a situation ideally suited to the

appointment of a trustee under section 84 ofThe Builders' Lien Act. It is not unusual that such an

operator has interests in and operates numerous wells, only some of which are producers or have

economic value. The funding of general operations from a profitable well sometimes occurs to the

detriment of unpaid contractors who have improved the profitable well. A contractor with a lien

against that well might advance his interests substantially by obtaining an order for the appointment

of a trustee of that particular producing property.

Similarly, a housing developer who is funding obligations on some projects with revenue from

others is likely to leave unpaid those who furnish materials or services for the houses under

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construction at the time when he can no longer survive. Ifthe application is made while that process

is underway, further breaches of trust might be avoided. Even if the trusteeship cannot serve that

purpose, it may be that completionofthe partially built houses by the trustee will generate funds for

the lien claimants. In such instances, a conventional receivership might be uneconomic, as the cost

of administering all property and assets of the debtor might negate any net realization. The

appointment ofa trustee with respect to selected properties and contracts might be the only recourse

for the lien claimant.

In at least one instance, a group oflienholders ofthe same class have themselves been appointed as

trustees, for the purpose of completing construction and selling a number ofresidential dwellings.

Selection of the trustee should be governed by the nature of the task at hand.

(c) Precedents

Attached as Appendix "G" are copies of an Affidavit and Order used in an ex parte application to

appoint a trustee under section 84 of The Builders Lien Act.

IV. ACTIONS UNDER THE BUILDERS' LIENACT

1. Proceedings by Plaintiffs

(a) The Statement of Claim

Actions to enforce a lien or trust under the Act are commenced by Statement ofClaim at the judicial

centre nearest to which the land is situated (s. 86). The Statement ofClaim must be served within

30 days, or such further time as maybe ordered (the extension application may be made ex parte,

before or after expiry of the 30 days - s.87).

Section 88(2) lists the persons who must be joined as defendants in the action. Wherever sale ofthe

land is included in the reliefsought, the holders ofregistered interests in the land, including interests

ranking in priority to liens, should be included as defendants.

- 19 -

Substantial savings of time and money can be achieved by joining as many lien claimants of the

same class as possible together as plaintiffs in the action. Therefore, where multiple parties are

involved, it is worthwhile, at the outset, to seek agreement among lien claimants of the same class

to common representation.

The Statement of Claim must aver facts giving rise to the lien and/or trust claim (which may be

joined in the same action - s. 89(1)).

At the time ofcommencement, consideration should be given to possible defendants in addition to

those required by s. 88(2). In particular, consideration should be given to whether it would be useful

and appropriate to name as defendants financial institutions, corporate officers and directors (s. 16)

and others who may have personal liability for breach of trust or to account for trust funds.

(b) Arbitration Clauses

Where the main contract or subcontract involved in the dispute contains a clause providing that

disputes as to the amount owed are to be referred to arbitration, it has been held that lien enforcement

actions by the payee on that contract or subcontract and all subcontractors beneath that payee should

be stayed pending the outcome of the arbitration. See: B. W. V Investments Ltd. v. Sasliferco

Products Inc., [1995] 2 W.W.R. 1 (C.A.).

(c) Limitation Periods

It has been held that an action to enforce a lien, even where combined with a claim for debt or

damages in contract, is an action to enforce an interest in land and thus subject to a limitation period

of 10 years from the time ofcause ofaction arose. See: Howard Penner v. James Daniel Hupka et

aI, [1995] Sask. D. 2590-01.

Pursuant to s. 19 ofthe Act, the limitation period for commencement ofan action against a statutory

trustee or any other action to enforce a statutory trust, is one year from the completion or

abandonment ofthe contract between the owner and the contractor. Accordingly, one ofthe initial

- 20-

tasks ofthe lawyer receiving instructions with respect to a lienable claim is to determine whether the

contract has been completed or abandoned and ensure that the client is appropriately advised.

Section 55 requires that the action must be set down for trial within 2 years from commencement

or such further time as may be ordered. In Roy Howden Construction Ltd. v. Dewitt (1993), 114

Sask. R. 263 (Q.B.) it was held thatthe extension application could be made after the expiration of

the 2 year period. Section 55 does not specifically authorize the granting ofthe extension after the

expiry of the period, unlike s. 87, which expressly authorizes an extension of the 30 day service

period on application after the expiry of that period. Roy Howden may not be the last word on the

subject. The better practice is to apply before the expiry ofthe two year period. It is a good practice

to set up the two year period, at the time of commencement, on a tickler system, to serve as a

reminder of the possible need for an extension.

The fact of a prior payment into court under s. 56 will not prevent dismissal ofthe action under s.

55. See: Weinrich v. Bouskill (1996), 140 Sask. R. 263 (Q.B.).

(d) Concurrent Debt Claims and Garnishment

Section 68 specifically provides that a lien is not merged or prejudiced by a number of specified

steps, including the taking of proceedings for the recovery of personal judgment, unless the lien

claimant otherwise agrees in writing. Based on this provision, it has been held that the debt

component ofa builders' lien action may properly ground a prejudgment garnishee summons. See:

Edco Plumbing & Heating Ltd. v. Fennell Holdings Ltd. (1990),91 Sask. R. 214 (Q.B.). However,

the Affidavit for the Garnishee Summons must establish not only a contractual debt, but also that

the funds are payable under The Builders' Lien Act. Hence, where the debt, or part of it, is the

statutory holdback, the supporting affidavit must establish that the holdback is due and payable (e.g.,

a Certificate ofSubstantial Performance has issued, 40 days have expired and there are no other lien

registrations). See: Central Fire Protection Ltd. v. Ron's Plumbing & Heating (1980) Ltd., [1997]

9 W.W;R. 158 (Sask. Q.B.).

- 21 -

(e) Precedents

The following are attached:

Statement of Clam by subcontractor to enforce lien and trust claims Appendix "H"

Statement of Claim by contractor against owner Appendix "I"

Statement of Claim by Wellsite Geological Firm to enforce lien Appendix "J"against estate in mines and minerals

Notice of Motion and supporting material to extend the time for Appendix "K"setting down for trial

2. Defendants Pleadings

A party named as a defendant may, within the time limited by the Queen's Bench Rules for delivery

of a defence, serve and file a Statement of Defence, a Crossclaim, a Counterclaim, a Third Party

Claim or a Demand for Notice (s. 89).

A lien claimant who is served with a Statement of Claim must ascertain by reading the claim

whether there are any allegations which must be defended. Where the plaintiff is another lien

claimant ofthe same class the appropriate pleading for a lien claimant is generally a crossclaim, in

which the lien claimant asserts against his payor, the owner and other appropriate parties such

contractual, lien and trust enforcement relief as may be appropriate.

A person named as a defendant by reason only of having an interest in the land may wish to serve

a demand for notice, in order to be kept abreast ofenforcement proceedings which could ultimately

include sale.

V. ARBITRATION AND MEDIATION

Pursuant to subsection 85(1) of the Act, where the "parties to the dispute" agree, a dispute with

respect to the payment ofmoney may be referred to a single arbitrator. It is unclear whether "parties

to the dispute" in this context means only the payer and payee between whom the dispute has arisen,

or whether the consent of subcontractors who would be affected by the outcome is also required.

- 22-

The arbitrator may be a lawyer, an architect, an engineer, a chartered accountant or any person with

experience in the construction industry (s. 85(2)).

Pursuant to section 85(1.1), disputes during construction regarding a failure or refusal to certify

substantial performance or disputes regarding payment of money to a payee who has obtained a

certificate of substantial performance with respect to the contract or subcontract pay be referred to

arbitration by the person requesting the payment or certificate.

The arbitration option should be seriously considered. Selecting an arbitrator with expertise in the

subject matter of the dispute may be preferable to having the adjudicator randomly assigned by

virtue of routine administration in the Court of Queen's Bench. Arbitration also affords the

possibility of a more prompt resolution.

One ofthe most commonly used standard form construction contracts, the CCDC 2 - 1994, provides,

in GC8.2, for mandatory mediation, followed by a right on the part ofeither party to refer a dispute

to arbitration. Subcontractors may be bound by such a clause, where the terms of the subcontract

adopt the terms ofthe main contract. The arbitration clause ofthis agreement would bar an action,

where an arbitration notice is given within the required time frame, but does not prevent the assertion

(by written notice, registration or judicial proceedings) of a lien under the Act.

A copy of the CCDC 2-1994 Rules for Mediation and Arbitration of Construction Disputes is

attached as Appendix "L".

- 23 - APPENDIX "A"

Q.B.M. NO. of 1991.--IN TIlE QUEEN'S BENCH

JUDICIAL CENTRE OF REGINA

IN TIlE MATIER OF AN APPUCATION "PURSUANT TOSECTION 56 OF THE BUILDERS' UEN ACT

BETWEEN:

PCL CONSTRUcroRS WESTERN INC. andMAXAM CONTRACI1NG LTD.·

APPUCANTS

• and •

ANLIN \VELDING & STEEL FABRICATION LTD.

RESPONDENT

MEMORANDUM TO mE JUDGE

This is an ex pane application for an Order pursuant to Subsection

_ 56(1) of The Builders' Lien Act vacating the Claim of Lien registered by the

Respondent in the Land Titles Office for the Swift Current Land Registration

District on January 28, 1991 as Instrument No. 91SCOI044 and vacating any

written notice given by the said Respondent in relation to the said lien, upon the

filing by the Applicants of the bond of Western Surety Company for the face

amount of the said lien plus twenty-five (25%) percent.

In suppon of this application the following material is filed:

(a) This Memorandum;

- 24-·2·

(b) The Affidavit of A.Re Olson;

(c) A cenified copy of the Cenificate of Title to the land against which

the said Oaim of Uen has been registered; and

(d) A draft Order.

DATED at the City of Regina, in the Province of Saskatchewan, this

day of February, 1991.-HLECK KANUKA 1HURINGER

Per:Soli:-Clt-ito-rs--,rfo-r-th~e~Ap~p"T'llil'-can-ts-, --PCL Constructors Western Inc.and Maxam Contracting Ltd.

TO: The Local Registrar

This Memorandum to the Judge was delivered by:

Hleek Kanuka ThuringerBarristers and Solicitors1500 ·2500 Victoria AvenueRegina, SaskatchewanS4P 3X2

Whose address for services is same as aboveLawyer in charge of file: James S. EhmannTelephone (306) 525·6751~>98

UnitS

- 25-

Q.B.M. NO. of 1991--IN 1HE QUEEN'S BENCH


IN nm MATrER OF AN APPUCATION PURSUANT TOSECTION 56 OF THE BUILDERS' UEN .ACT

BETWEEN:

PCL CONSTRUCfORS WESTERN INC. udMAXAM CONTRACI1NG LTD.

APPUCANTS

• and •

ANLIN WELDING & STEEL FABRICATION LTD.

RESPONDENT

AFFIDAVIT OF A.R. OLSON

I, AR. OlSON, of the City of Regina, in the Province of

Saskatchewan, Construction Administrator, MAKE OATIl AND SAY:

1. That I am an agent of and for the Applicants, PCL Constructors

Western Inc. and Maxam Contracting Ltd., a Joint Venture carrying on business

under the name and style PCL • MAXAM, a Joint Venture (hereinafter called

"PCL • MAXAM") and as such have personal knowledge of the facts and matters

deposed to herein, except where otherwise stated.

- 26-

·2·

2. That PCL • MAXAM is the general contractor for Saskatchewan

Wheat Pool in relation to an improvement being constructed by PCL • MAXAM

for Saskatchewan Wheat Pool upon the following land:

The North East Quarter of Section 29, Township 15,

Range 14, West of, the Third Meridian, Saskatchewan,

167 acres, except firstly: 11.21 acres, for Canadian

Pacific Railway Right of Way, on Plan 22980, secondly:

25.34 acres for Roadway, on Plan 68SCOO18S, thirdly:

0.48 acre, for Roadway, on Plan 72SC03749

MINERALS IN TIiE CROWN, Project: Sask. Wheat

Pool Pen Slabs, Swift Current, Saskatchewan.

3. That PCL • MAXAM subcontracted with the Respondent, Anlin

Welding & Steel Fabrication Ltd. (hereinafter called "Anlin") for performance of

certain aspects of the construction undertaken by PCL • MAXAM for

Saskatchewan Wheat Pool in relation to the aforesaid improvement.

4. That annexed hereto and marked as Exhibit "A" to this my Affidavit

is a true copy of the Written Notice of Uen of the Respondent dated January 25,

1991, which has been served on PCL • MAXAM and, which I am advised by

- 27-

• 3 •

Saskatchewan Wheat Pool and do verily believe, has been served on Saskatchewan

Wheat Pool.

5. That PCL • MAXAM disputes the alleged entitlement of the

Respondent to the sum of $16,880.00, referred to in its registration and Notice of

Lien and have therefore not paid the same.

6. That the said Notice and said Registration of Uen have caused

Saskatchewan Wheat Pool, as owner of the aforesaid improvement, to withhold a

substantial contract payment otherwise due and payable to the PCL • MAXAM

and I verily believe that continuation of the said Written Notice of Lien and

Registration of Lien by the Respondent will result in the retention by

Saskatchewan Wheat Pool of subsequent substantial amounts which will become

due and payable to PCL • MAXAM in relation to the construction of the

aforesaid improvement. That annexed hereto and marked as Exhibit "B" is aform of bond, which PCL· MAXAM proposes to file as security for the claim of

the Respondent, in the event that the within application is allowed. The amount

of the said bond, namely $21,100.00 is calculated as follows:

Amount of Respondent Uen

25% as security for costs (pursuantto Section 56(1)(a)

Total

$ 16,880.00

S 4,220.00

$ 21,100.00

- 28 - • 4 •

7. That I make this Affidavit in support or an application for an Order

vacating the aforesaid Caim of lJen and Written Notice or Lien, upon the

posting of security by way or a bond in the form of the bond annexed hereto.

SWORN BEFORE ME at the Cityof Regina, in the Provinceof Saskatchewan, this _ dayof February, 1991.

)))) ARO OLSON

A COMMlSSIONER~OR OArnS-in andfor the Province of Saskatchewan.My Commission expires: _Being a Solicitor

This Affidavit was delivered by:

Hleck Kanuka ThuringerBarristers and Solicitors1500 • 2500 Victoria AvenueRegina, SaskatchewanS4P 3X2

Whose address for services is same as aboveLawyer in charge of file: James S. EhmannTelephone (306) 525-6751 .'60~98

UnItS

,- 29'I'OU A

WRJn'EN I«)TJCE OF A LIEN(SVJSEC1JON J(l)(v) OF ~KE .UJ~EaS' Lt~ ACT)

)lUI. of %-1en Cla111\&nt.

Addre•• of L1en Cl.1m~tl

ANLtN WEt:>INO • StEEL rABTUCA'l'% ON t'l'~.

195 Bodeman loadJ%OINA, I ••katcbtvan"N 5W5

lue •• Uov.

lox 187MEGlNA, 'a.katchtwan14P 311

'vpply and delivery of ~1.cellan.o~.

metale and anchor ~elte

·2625 Victoria Avenvtllqina, laakatchtwan14': ,:ePCL .. MAXAM It JOUn VEh7t7U

Aclc!r••• fer Serviee.

~UI' of Owntr or p.rlon~elleY.c! ~o ~e owntr.

Addrt•• of o~~er or ,tr.on~.lieved to ~t owner.

NLme of per.o= tor whem.e~lce. or ma~.ri&l.

"'.re prov1clecl.

Ae!dre•• of per.on for wbom~•••rvlee. or ~a~.r1al.

~ave ~.en provided tor;

Ihor~ delcription of lervlci.or Inlterial. t.hat have b.enprc:W1c!ecl.

~,o~t clalme~ 1n r ••pect of.ervic•• or material. that ~.ve

~eer. prov1c!.Q; 'lE,8eO.OO

!he North Ea.t Quarttr of Section 29fown.b1p 15, R&ni' 14, Wist cf ~b~!h1rd Mer1d1&n, la.~atchtw&n, 167acre., except t1r.tlYI 11.21 .cr.~,

tor C~ld1an 'ac1t!c ~a11way Ri;btof Way, on Plan 22'08, ••condly, 25.34acrt., tor Roadway, on 'lan 6tSC0018S,th1rdlJ' 0.41 acrt, tor Ro.~way, en'l~ .'50037" MIND.ALS IN 'rHE CP.O~~rojtctl la.k. Wheat Pool 'en Sl~.

Switt Currta»t, ~.I.. akatchewan,.,:!.

~_. .'. ,., . _.... . ... ,. . ...-.... ..:..:... :. ,. -:." . .,' ... .. .. . r,ANt%tf .WEIJ)INO • 'UEt FA!JUCA'rl0N LttJ.

'. . . . .'(: . ( ..:~, , -. ...."",--.; .... ••... .',J......... ".

ler,' 0:."·. -; L."·~f!:":.;..JI' : ....o ".'1icilnt •

De.cr1pt1o~ of ~e Lane!:

• to" Ir for Oaths,,,.t.,, ",It...lad tor th Pro,inl.l of Sutateh....~ C•••tinlor. u,ln....-~ ..,••• $011.:1101. ------

L/

~n~lry 2~tb, 1991(cate)

.\ ..." .'.•

.. ....~ .

.' ......~

.,1. ;...

WESTEl~~~~HoLS~~PANYP. 0 ~I 12'7. NGNA. ~TC>iEWANIo'P Joa

McCAU~ I'CI.L I,II\AITED--.LIEN BOND

BOND NO. 0'.).101, ", AMOUNT: $1'. '00.00

kNOW AU. MEN BY THESE PRESENTS that Po. - .-uAN, A .101"'" VE"'TURE

hereinafte' call'd the "Principal") and WESTERN SURETY COMPANY (he,einaher calledthe ·Suret)''') are jointly and IIYerall)' bound unto the Clerk of th, Queen'l Bench Court10' SukaICheV.'Ul (hc ..inah.. wled tbe ItObli,,,tt), his alce....ors in office and assiln5tD Lbe sum of ~NTY-ONE FHOUSAND, ONE HUND~D---------------------------OO/'OO

(S 21, 100. oc. ) DOllARS of lood and lawlul money 01 Canada, lor _hich pa)'mentwell and tNI)' to be made _e bind ours,'ves and each of us lor the ,.,hol., ou, and eachof ou, IUcc,ssors and &ali,ns, firml)' b)' these pt.l.nts.

THE CONDITION of this obli,uion is alch that this bond srUld in lieu ofand in place of all and ain,ular that certain parcel or tract of land ahUlle, ')'in. andbeinl desc ribed as lollows:

The North •••t Quart.r of ••ct~on 2P. ~own.h~p '5...n,. ". W••t of the ~h~rd

N.r~di.n••••k.tche~.n, 'I' acr•••••cept fir.tJ~: ".2' acr••• for C.n.di.n'.cifJC It.jJw.V #ti,ht of ...V' on 'Jan 21POI• • econdJ.,: 25." aer•• for lto.d..·.V.on 'J.n "seoo"s. th~rdJv: 0." acr•• for lto.d~.V' on 'J.n 7Z.eDJ"~

"1~EAA~S IN THE CItOWN. 'roject: •••k...h•• t 'ooJ '.n $J.b., ~~ft Current ..s••k.tch.",.n

al.inst which the 'ollowin, claims fo, Builders' Liens haye been ",illered in the Landiulu Office for the """j/t Current Land Reeisuation District:

ReEistrationNumbe, Filed Br Amount

Relist rationDate

ilSC010H

.. To the i~lenl and condition thai if lhe .aid Principal shall payor cause 10be paid Into the .Queen s ~enc~ Court~o, Sukatchewan as may be directed or p,ovidedbylhe Judlmenl In any actlon In the sa,d Coun an)' amount or amounts not ellceedini inthe aiE,eiate ~lNTr-O~E ~HOUSAND. ONE HU~DRED------_. __._._---- DOIIOO

DO RS ' I d' " ($ 21,JDO.00 )I..LA inC U Ine cosu or whIch lhe said CLAIMANTS as pr.cedin, or an)' person

who had on the due of the applic.ation in respecr of ...hich this Bond is filed ".-jth thesaid Court, a lubsistin, claim fo,. lien or liyen notice of his claim under The Builden'Lien A.cr Ihall by the said Judement be found to be .nthled to a 'ien upon all 0' an)' ofthe s~,d lands 0' to a charee unde, The Builders' Lien Acr upon the IIcurit)' furnishedby this Bond, then this obli,uion to be void and of no eUecr or else to remain in fullfOlce and Yirtue subject to funher order of the aaid Coun.

'. .. tIhll il h.,M rtfwtCl to II I"A'floatll 01 2bOil a,fort M. tAil /I CIt, ot~""c. "y.~

~~FN"~

lila tOI ll:l '"..n~'l'.t....~! coe' OSISi l'~."""1. ~ ..".II~I. -------

BONO NO. '''.).10'. '67

- 31 -

Amount: 'Z'.'OO.oo

PROVIDED THAT in no event .h,lIthe Surety be liable 'or a c,eater.um than the ,l.p&nalty of this Bond alit) any paylll'lIt under this Bund shall .educe theSurety's liaLlillly by the amount of .uch payments. An~ provided 'unhe. 'h'l lhe1iJinl of lhis bond .hall Dot operate to entille lhe Claimants named herein. Dr any ofthem, 10 recoyer a .um I'aater than lhty would hu. betn enthled to under TheBwldlrs' Weri ACl. bad this bond DOl be.n pasted.

IN WITNESS WHEREOF these prestllts have betn eaecuted by th. Principalunder lu hands and ..ab and by lh. SUfttv by hi ...1 and by lh••ilnllure of its.uthor~ld oUicer thi, Uth day of 'ebruul/. ,tt,.

PCl • MAXAM, A JOIN'r VENl'UJ~E

PCl CONSTRUCTOnS WES'l"EltN INC.

II~r~ .£ f)4,J'Per.

MAXAM CONTRACTJNC LTO.

Per: /)~per:~' I(.

WESTERN SUREIT COMPANY

N.i1 """.r.A••t . .se~r.t.rj,'.

- 32 - Q.B.M. No. ./oS :~- of 1991

IN TIrE QUEEN'S BENCH


IN THE MATTER OF AN APPUCATION PURSUANT TOSEmON S6 OF THE BUILDERS' LIEN ACT

BETWEEN:

PCL CONSTRUcroRS \\'ESTERN INC. andr.lAXAM CONTRACI1NG LTD.

APPUCAA'TS

• and·

DAY OF FEBRUARY. 1991

)))))

ANLIN \\'ELDING & STEEL FABRJCATJON LTD.

- RESPOt\"OEt\7~ &'1'01':>-91'" ~",... /10;..c.~ ,.

WEDUESDAY, TIiE '26ffi /\BEFORE THE HONOURABLE

MR. JUSTICE C.R. \VIMMER

II" CHMfBERS

ORDER

UPON TIiE APPUCATION of the Applicants and upon having read

the Memorandum to the Judge and Affidavit of AR. Olson, both dated February

15, 1991, and the Draft Order;

IT IS HEREBY ORDERED:

- 33 ·2·

1. That this Order sball be effective and sbalJ be issued by the Local

Registrar of this Honourable Court, upon the filing with the said

Local Registrar of a Bond issued by Western Surety Company for

the sum of S21,1oo.oo, such Bond being in the tenns of the form of

Bond annexed as Exhibit "C' to the Affidavit of AR. Olson sworn

February 18, 1991;

2. That the Registrar of Titles at the Land Titles Office for the Sv.ift

Current Land Registration District be and the said Registrar is

hereby directed to cancel and vacate the registration of Claim of

Lien made by the Respondent on January 28, 1991. as Instrument

No. 91SC01044. in the amount of S16.880.oo;

3. That the Written Notice of Lien of the Respondent dated January

25. 1991 for the sum of S16.880.00. in relation to the supply and

delivery of miscellaneous metals and anchor bolts at the request of

the Applicants. in relation to an improvement upon the aforesaid

land. be and the same is bereby cancelJed and vacated;

4. That neither the terms of the within Order nor the filing of the

aforesaid Bond shall operate to entitle the Respondent or any other

lien claimant to recover a sum greater than they would have been

• -3:32J -

entitled to recover under The Builders' Lien Act, had the within

Order not been granted or the said Bond not filed;

5. That the Applicants sball cause a true copy of the within Order to

be served upon the Respondent within 10 days of the issuance

hereof.

ISSUED at the City of Regina, in the Province of Saskatchewan, this

~--...day of February, 1991.

~~.e: ..~#y/'-' -----

TAKE NOTICE that every Order made without notice to theRespondent or a person affected by the Order, except where such Order isconsented to by the Respondent or a person affected by the Order, or is otherv.iseauthorized by law, may be set aside or varied on application to the Court. Youshould consult your solicitor as to your rights.

This Order was delivered by:

HLECK KANUKA TIiURINGERBarristers and Solicitors1500 - 2500 Victoria AvenueRegina, SaskatchewanS4P 3X2

\\l1ose address for services is same as aboveLav,)'er in charge of file: James S. EhmannTelephone (306) 525-6751460~%

L'nit5

- 35 - APPENDIX "B"

Q.B. No. 3200 of 1991

IN TIlE QUEEN'S BENCH


BETWEEN:

ANUN WELDING &. STEEL FABRICATION LID.

PLAINTIFF

- and -

SASKATCHEWAN WHEAT POOL, PCL CONSTRUCTIONMANAGEMENT INC., PCL CONSTRUcrORS WESTERNINC., MAXAM CONTRACTING LTD. andPCL-MAXAM, A JOINT VENTURE

DEFENDANTS

NOTICE OF MOTION

TAKE NOTICE that an application will be made to the presiding

Judge in Chambers at the Coun House at 2425 Victoria Avenue, Regina,

Saskatchewan, on Thursday, the 7th day of November, 1991 at ten o'clock in the

forenoon or so soon thereafter as counsel may be heard on behalf of the

Defendants, PCL Construction Management Inc., PCL Constructors Western Inc.,

Maxam Contracting Ltd. and PCL-Maxam, A Joint Venture, for an Order directing

the Local Registrar to return to the Defendant, PCL Construction Management

Inc., Western Surety Bond No. 01-3-204,467, filed herein pursuant to the Order

of the Honourable Mr. Justice C.R. Wimmer dated February 18, 1991.

- 36-

·2·

AND TAKE NonCE that. the said application is made on the

ground that the Claim of Uen for which the said Bond was filed as security has

been settled and paid.

AND FURTIiER TAKE NOnCE that in support of the said

application shall be read this Notice of Motion with proof of service thereof, the

Minutes of Settlement in the action commenced by Anlin Welding & Steel

Fabrication Ltd., as O.B. No. 3200 of 1991, Judicial Centre of Regina, and a draft

consent Order.

DAlEO at the City of Regina, in the Province of Saskatchewan, this

30th day of October, 1991.

~~~::rHURINGER

It r the Defendants, PCL'''---'ruction Management Inc., PCLConstructors Western Inc., MaxamContracting Ltd. and PCL-Maxam,A Joint Venture

TO: Local Registrar • Judicial Centre of Regina

- 37-

·3·

AND TO: Willows, Howe, Goudie & McLarenBarristers and Solicitors300 • 533 Victoria AvenueRegina, SaskatchewanS4N OP8Solicitors for the Plaintiff,Anlin Welding &. Steel Fabrication Ltd.

This Notice of MotiQn was delivered by:

HLECK KANUKA THURINGERBarristers and Solicitors1500 - 2500 Victoria AvenueRegina, SaskatchewanS4P 3X2

Address for service: Same as aboveTelephone: (306) 525-6751Lawyer in Charge of File: James S. Ehmann~~98

t:nlLS

Senice of a true copy hereofadmitted this I day orl' t-k/I:....I.;A , 1991.

WILLOWS, HOWE, GOUDIE& McLAREN

Per. 12~«.4t&Solicitors' for the PlaintifT,Anlin Welding & Steel FabricationUd.

- 38 - Q.B. No. 3200 of 1991

IN TIiE QUEEN'S BENCH

JUDICIAL CENlRE OF REGINA

BETWEEN:

ANUN WELDING & STEEL FABRICATION LTD.

PlAINTIFF

• and •

SASKATCHEWAN WHEAT POOL, PCL CONSTRUCTIONMANAGEMENT INC., PCL CONSTRUCTORS WESTERNINC., MAXAM CONTRACTING LTD. andPCL-MAXAM, A JOINT VENTURE

DEFENDANTS

Mll'vrES OF SEITLEMENI

The Plaintiff, Anlin Welding & Steel Fabrication Ltd., and the

Defendants, peL Construction Management Inc., PCL Constructors Western Inc.,

Maxam Contracting Ltd. and PCL-Maxam, A Joint Venture, hereby agree to the

settlement of the within action on the following terms and conditions:

L The Defendant, PCL Construction Management Inc. shall pay to the

Plaintiff, $11,500.00 plus GST of $805.00, receipt of which sum is hereby

acknowledged by the Plaintiff.

- 39

·2·

2. The aforesaid payment shaJl be accepted by the Plaintiff in fuJI and

final settlement of its claims in the within action and any related or other claims

which it may have based on the subcontract referred to in the Statement of Claim.

3.

4.

The Plaintiff shall:

(a) consent to the granting of an Order for the return to the

Defendant, PCL Construction Management Inc., for

cancellation, of Western Surety Company Bond No. 01·3·

204,467, filed at the Judicial Centre of Regina, pursuant to the

Order of the Honourable Mr. Justice C.R. Wimmer dated

February 18, 1991; and

(b) serve and file a Notice of Discontinuance, wholly discontinuing

the within action.

All parties shall bear their own costs.


- 40 - - 3 .

30th day of October, 1991.

Per:Soli""C1:-to-r-h~thfit'-e"" r=:-"'ll"""en-d";'"an~ts-, ~C,..;'L--

Construction Management Inc., PCLConstructors Western Inc., MaxamContracting Ltd. and PCL-Maxam,A Joint Venture

DATED at the City of Regina, in the Province of Saskatchewan,

this --l.- day of lit ~·£...I~A, 1991.

WILLOWS, HOWE, GOUDIE& MclAREN

These Min\,; .•5 of Settlement were delivered by:

HLECK KANUKA lHURINGERBarristers and Solicitors1500 - 2500 Victoria AvenueRegina, SaskatchewanS4P 3X2

Address for service: Same as aboveTelephone: (306) 525·6751Lawyer in Charge of File: James S. Ehmann4603-98 .UnitS

- 41 -O.B. No. 3200 of 1991

IN 1HE QUEEN'S BENCH


BETWEEN:

ANUN WELDING & STEEL FABRICATION LTD.

PlAINTIFF

• and·

SASKATCHEWAN WHEAT POOL, PCL CONSTRUCTIONMANAGEMENT INC., PCL CONSTRUCTORS WESTERNINC., MAXAM CONTRACTING LTD. andPCL-MAXAM, A JOINT VENTURE

. DEFENDANTS

BEFORE THE HONOURABLE

MR. JUSTICE _

IN CHAMBERS

)))))

ORDER

DAY, TIlE DAY---OF NOVEMBER, 1991.

UPON THE APPUCAnON of the Defendants, PCL Construction

Management Inc., PCL Constructors Western Inc., Maxam Contracting Ltd. and

PCL-Maxam, A Joint Venture, and upon having read the Notice of Motion dated

October 30, 1991, the Minutes of Settlement in the within action and the draft

Consent Order;

- 42-

- 2 -

IT IS HEREBY ORDERED that the Local Registrar of this

Honourable Court be and he is hereby directed to deliver to the Defendant, PCL

Construction Management Inc., Western Surety Company Bond No. 01-3·204,467,

filed herein pursuant to the Order of the Honourable Mr. Justice C.~. Wimmer

dated February 18, 1991, for cancellation.


day of November, 1991.--

LOCAL REGISTRAR


HLECK KANUKA TIillRINGERBarristers and Solicitors1500 • 2500 Victoria AvenueRegina, SaskatchewanS4P 3X2Address for service: Same as aboveTelephone: (306) 525-6751Lawyer in Charge of File: James S. Ehmann460>'98UftIl5

We hereby consent to the rorm andcontent or the within Order this

/ day or .tt~t'fi".f~r... ,1991.

WILLOWS, HOWE, COUDIE& McLAREN

Per. ~ f4kfL;-Solicitoi'k for the PlaintifT, i

Anlin Welding & Steel Fabrication Ltd.

- 43 - APPENDIX "C"

O.B. No. 3SS of 1991

IN 1HE·QUEEN'S BENCH

JUDICIAL CENTRE OF BA1TLEFORD

IN nm MA1TER OF AN APPLICATION PURSUANTTO 5EcrIONS 17, 57 ud Q) OF THE BUILDERS' LIEN

ACT, 5.S. 1984-85 c.B-7.1 ud PART35 or THE QUEEN'S BENCH RULES

BETWEEN:HUSKY OIL OPERATIONS LTD.

APPUCANT• aDd •

FROCAN INDUSTRIAL CONTRAC70RS LTD..330098 ALBERTA LID.• 319606 ALBERTALID.• RAYDON RENTALS LTD.. RUSWAYCONSTRUcnON LID., VICTOR BRAZDIL,EUNlCE BRAZDa, PROCRANE INC..HARVEY lliOMPSON, BORDER CITYTRANSIT MIX (1980) LID., DALTONGRAVEL PRODUCTS LID., ROC-eoN SUPPLIERSLID., ALBRlCO SERVICES (1982) LTD.•GLORON ADVERTISING LID. andHARDY BET UMIIED

• and·

HER MAJESTY THE QUEEN IN RIGHT OF 1HEPROVINCE OF SASKATCHEWAN as represented bythe MINISTER OF FINANCE

RESPONDENTS

ORDER

BEFORE TIiE HONOURABLE

MR. JUSTICEf.t:f1~r

IN CHAMBERS

)))))

~ DAY,'THE ~SDAY OF JULY, 1991.

- 44-

·2·

ORDER

UPON 1HE APPUCAnON OF Husky Oil Operations Ltd.

("Husky") and upon reading the Notice of Motion on behalf of Husky dated June

5, 1991, the Affidavit of Stan Bobrow swom May 29, 1991, the certified copies of

titles to the lands descn"bed in the said Affidavit, the certified copies of Cairns

of lien of the Respondents, the Fiat of the Honourable Mr. Justice Grotzky dated

June 27, 1991 and the Affidavit of John Thomas Basinger swom July 16, 1991,

and upon being satisfied as to proof of service on all Respondents and hearing

counsel for Husky and those of the Respondents who appeared;

IT IS HEREBY ORDERED, ADJUDGED AND DEClARED

TIiAT:

1. Hardy BBT Limited is hereby added as a Respondent herein and the

style of cause is amended accordingly.

2. Pursuant to clause 57(2)(a) of The Buildm' Lien Act, the statutory

holdback on the contract between Husky and the Respondent, Frocan Industrial

Contractors Ltd. ("Frocan") dated July 23, 1990 (the ·Contract") providing for

foundations and undergrounds in relation to plants 10 and 41, forming part of the

- 45-

• 3 •

Husky BiproviDcial Upgrader Dear Uoydminster. Saskatchewan'is detennined to

be Dot less than 5383.617.19.

3. . No c:ertificate or IUbstantial?.!!ormance bas been issued or pen~Y~~~2&'.&e·MI'4~~'" .. ~c.

in relation to~e Contract. However. more than 40 days bas expired since either

the abandonment or completion of the Contract. Husky alleges abandonment by

Frocan as of February 21. 1991 and Frocan alleges completion as of the said date,

or earlier. On the basis of the fact that more than 40 days have expired from the

abandonment. or alternatively, completion of the Contract. Husky would be, but

for the registration of liens arising under Frocan in relation to the Contract,

entitled to release the said statutory holdback pursuant to section 44 of The

Builders I Lien Act.

4. Pursuant to clause S7(2)(b) of The Builder.s' Uen .Act. Husky is

hereby directed to pay into Court to the credit of this proceeding the lesser of the

said mjnjmum statutory holdback of 5383.617.19 or the total amount of liens

registered at the Land Titles Office for the Battleford Land Registration District

against the lands occupied by the said upgrader in respect of services or materials

provided at the request of Frocan in relation to the Contract as at the date of

payment into Court; Husky shall determine the amount of such liens by searching

the records at the said Land Titles Office on the date of its payment into Court.

- 46- ....The payment into Court by Husky shall be accompanied by a letter from Husky

or its counsel identifying the liens covered by the payment

S. Should the amount paid into Court by Husky in accordance with the

within Order be Jess than the aforesaid amount of $383,617.19 then, having regard

to the fact that the amount of the registered liens arising under Frocan as at the

date of payment into Court is Jess than the said statutoI)' holdback amount, in

that event, the payment into Court by Husky of a sum less than 5383,617.19 shall,

for the purpose of determining any and all issues under The Builders' Lien Act

between Husky and any subcontractor, employee or supplier of Frocan, be deemed

to have been a payment into Court of the full 5383,617.19.

6. The Registrar of Titles for the Battleford Land Registration Distrilr1

be and the said Registrar is hereby directed to cancel and vacate each of the

following lien registrations:

Uen Claimant Amount Realstratlon No.

Raydon Rentals Ltd. 5 21,062.07 91B03119

Rusway Construction Ltd. 5122,049.41 91803243

Procrane Inc. 5 10,094.19 91B04889

)

- 47-

·5·

UeD o,lmut Amount IteIIstrattoD No.

330098 Alberta Ltd. and319606 Alberta Ltd., apartnership operating underthe firm and style ofFeldspar ucavating &.Redi-Mix S44,238.59 91B02S6S

(reduced by S2,340.86 to $41,897.73 byPartial Discharge No. 91B08146)

Vietor Brazdil andEunice Brazdil

Harvey Thompson

Border City TransitMix (1980) Ltd. andDalton Gravel ProductsLtd.

Roc-COn Suppliers Ltd.

Hardy BBT Limited

S 7,357.82

S 5,516.92

S 24,409.64

S 5,062.23

S 15,690.83

91B04117

91B04988

91B06474

91B06191

91B08296

7. The said Registrar shall also cancel and vacate such funher

registrations of liens, if any, as may be covered by the payment into Court by

Husky pursuant to paragraph 4 hereof. The said Registrar shall accept, as

adequate identification of such further liens, a copy of the letter to be prepared

and filed herein by Husky or its counsel pursuant to paragraph 4 hereof.

- 48-• 6 •

I

8. Husky shall, forthwith after payment into Court, lerve • copy of tbu

Order and its letter &led pursuant to paragraph 4 bereof on each lien claimant

referred to in paragraph 7 bereof whereupon each such lien claimant shall be

added as a Respondent herein and the style of cause shall be further amended

accordingly.

9. Upon payment into Court as aforesaid, any and all liabilities of

Husky to the Respondents. and each of them, and to any other subcontractor or

material supplier of Froc:an, in relation to the Contract, shall be fully satisfied and

extinguished, to the extent of the amount paid into Court by Husky.

10. The following issues be and the same are hereby directed to be

tried:

(a) What is the amount of the Contract price. as between Husky

and Frocan?

(b) What is the amount, if any, due by Husky to Frocan,. or

alternatively, Frocan to Husky, pursuant or in relation to the

Contract, after properly accounting for any and all deficiencies,

claims of setoff and additional compensation and all payments

by Husky, including the payment into Court pursuant to this

Order?

- 49-

• 7 •

(c) Does the value of performance of the Contract by Frocan, for

the purposes of subsection 34(1) of The Buildm' Lien Act,

exceed the amount paid by Husky to Frocan of $3,836,171.907

(d) Has Frocan completed performance of the contract or has

Frocan abandoned the contract?

11. For the purposes of proceedings in the issues hereby directed to be

tried:

(a) Frocan shall be in the position of a Plaintiff and Husky shall

be in the position of a Defendant;

"-(b) Frocan shall, within 30 days from the date hereof, or such

)further time as a Judge of this Honourable Court may, upon

application of Frocan made before the expiration of the said

30 days allow, serve and file a Statement of Claim setting

fonh its claims against Husky with respect to the issues hereby

directed to be tried and any and all additional or related

claims which Frocan has or may have against Husky in

relation to either the Contract or the agreement between

Husky and Frocan referred to in the Affidavit of John Thomas

Basinger (and hereinafter) as the -Module Contract";

(c) should Frocan fail to serve and file a Statement of Claim

within the time limited by paragraph 11(b) hereof, Frocan

- 50 - 8. .

aha1l be deemed to have abandoned any and aU claims which

it has or may have llainst Husky in relation to ·either the

Contract or the Module Contract; and

(d) further proceedinp in the issues hereby directed to be Uied,

including all daims which might be raised in the said

Statement of Oaim, shall be 1000med by the Oueen's Bench

Rules and Husky shall be at b"berty to respond, defend and

counterclaim as provided by the said Rules.

12. Unless otherwise ordered, Deither Husky Dor Procan shall be

required to serve DOtice of proceedings taken or copies of documents filed with

respect to the issues hereby directed to be tried on anyone other than each other,

provided that as soon as a date or dates are fixed for the trial of the issues on

any of them, Frocan shall notify each Respondent herein of the same and all

Respondents shall be bound by the determination herein of the said issues.

13. Husky may serve upon any person wbo,after the date of payment

into Court as aforesaid, registers a lien appearing to arise under the Contract, 8

copy of the within Order whereupon:

(8) such lien claimant may apply to be added as a pany

Respondent herein; and

- 51

·9·

(b) such lien dajmant, wbether or Dot the lien daimant applies

to be added as herein provided, Iba1l be bound by the

determination of the foregoing issues.

14. Husky, Frocan and eaeh of the lien daimants to be named in the

letter to be prepared and filed by Husky or its counse~ant to paragraph 4~~p l

hereof are hereby granted leave to apply, upon~days Dotice to the others, for

an Order for payment out of Court of the funds paid into Court by Husky,

pursuant to the within Order.

15. Husky, Froean, each of the Respondent lien claimants wbose liens

arise under Frocan and such additional lien clajmants, if any, as may become

parties pursuant to paragraph 13 hereof, are hereby granted leave to apply, upon

3 days notice to the others, for sueb further directions or relief as they might

deem appropriate and this Honourable Court might allow.

16. Upon the final determinatiQn (by Judgment of this Honourable Court

or agreement between Husky and Frocan) of sueb of the issues hereby directed

to be tried as must be determined in order to finally determine the applieati~n

of Husky pursuant to section 57 of The Builders' Lim Act, by its Notice of Motion

dated June 5, 1991, Husky may apply for an Order finally determining the said

- 52-• 10·

application; in. th~.JDterim, the laid application ItaDds adjourned 8Ine die,Vto ........:

returnable ODea-"days DDtice at the iDstaDce of Husky. ~c v

ISSUED at the Cty of Battleford, in the Province of Saskatchewan,

this 2-5day of July, 1991.

rell'Ibis Order was delivered by:

JaECK KANUKA 1HURINGERBarristers &. Solicitors1500 • 2500 Victoria AvenueRegina, SaskatchewanS4P 3X2

Whose address for service is same IS above.Lawyer in Charge of File: James S. EhmannTelephone: (306) 525-6751104~36

\lllitS

- 53 - APPENDIX "D"

Q.B. No. of 1991


JUDICIAL CENlRE OF REGINA

IN 1HE MATrER OF AN APPLICATION PURSUANT TOSEcrJON 57 OF THE BUILDERS' LIEN .A.C1', S.S. 1984-85, CoB-7.!

BETWEEN:JOE OWNER

APPUCANT• and -

GENERAL CONTRAcroR CO. andSUBCONTRAcrOR CO.

RESPONDENTS

NOTICE OF MOTION


Judge in Chambers at the Court House 2425 Victoria. Avenue, Regina,

Saskatchewan, on Thursday, the 14th day of November, 1991 at 10 o'clock in the

forenoon or so soon thereafter as counsel can be heard on behalf of the

Applicant, Joe Owner, for an Order pursuant to section 57 of The Builders' Lien

Act:

(a) determining the statutory holdback on the contract between the

Applicant, Joe Owner and the Respondent, General Contractor Co.

to be the sum of $500.00;

(b) directing that the Applicant, Joe Owner pay into Court the sum of

$500.00; and

HLECK KANUKA THURINGER

- 54-

·2·

(c) providing for the vacating of the registration of the Claim of lien

of the Respondent, Subcontractor Co., registered at the Land Titles

Office for the Regina Land Registration District as instrument no.

91R46792.

AND TAKE NOTICE that the said application is made on the·

ground that the holdback can now be ascenained and, but for the registration of

a lien payable.

AND FURTIlER TAKE NOTICE that in support of the said

application shall be read this Notice of Motion with proof of service thereof, the

Affidavit of Joe Owner, a certified copy of title and a certified copy of the

registered Oairn of lien of the Respondent, Subcontractor Co.


__ day of November, 1991.

Per:SoliC1-r't-o-rs-~To-r~th;-e---:"A-p--:pli~'can--t,----Joe Owner

TO: Local RegistrarJudicial Centre of Regina

AND TO: General Contractor Co.

AND TO: Subcontractor Co.

This Notice of Motion was delivered by:

- 55 -

Q.B. No. of 1991-IN THE QUEEN'S BENCH


IN 1liE MAITER OF AN APPLICATION PURSUANT TOSECTiON 57 OF THE BUIWERS' LIEN ACT, 5.5. 1984-85. c.B-7.1

BETWEEN:JOE O'WNER

APPliCANT• and •

GENERAL CONTRACTOR CO. andSUBCONTRACTOR CO.

RESPONDENTS

AmDAVIT OF JOE OWNER

I, JOE OWNER, civil servant, of the Oty of Regina, in the Province

of Saskatchewan, MAKE OAlli AND SAY:

1. I am the registered owner of the land and building situated at 13

Trouble Road, Regina, Saskatchewan and legally described as follows:

2. I entered into an agreement with General Contractor Co. for the

construction of a garage on the said land for the fixed lump sum price of

S5,OOO.00.

SWORN BEFORE ME at the Cityof Regina, in the Province ofSaskatchewan, this _ day of_____, 1991.

- 56-

·2·

3. General Contractor Co. completed construction of the said garage

on August 31, 1991.

continue to retain.

5. At no time prior to any payment made by me to General Contractor

Co. had I received any Written Notice of Lien by or on behalf of anyone claiming

a lien for services or materials provided to General Contractor Co.

6. I make this Affidavit in support of an application for an Order

pursuant to section 57 of The Builders' Lien Act.

)))))))

A COMMISSIONER FOR OATHS inand for the Province of Saskatchewan.Being a Solicitor.My Commission expires:

This' Affidavit was delivered by:

- 57-

Q.B. No. _ of 1991


JUDICIAL CEN"IRE OF REGINA

IN nIE MATl'ER OF AN APPLICATION PURSUANT TOSECI'lON 57 OF THE BUILDERS' LIEN ACT, 5.5. 1984-85, c.B·7.1

BETWEEN:JOE OWNER

• and •

GENERAL CONTRACTOR CO. andSUBCONTRACTOR CO.

APPUCANT

RESPONDENTS

BEFORE TIlE HONOURABLE

MR. JUSTICE _

IN CHAMBERS

) ·1HURSDAY, TIlE 141H)) DAY OF NOVEMBER, 1991.))

OBDER

UPON TIlE APPUCATION of the Applicant, Joe Owner, and upon

reading the Notice of Motion, the Affidavit of Joe Owner, the certified copies of

the title and the Oairn of Lien of the Respondent, Subcontractor Co., and upon

hearing counsel for the Applicant and the Respondents;

IT IS HEREBY ORDERED that the statutory holdback on the

contract between the Applicant, Joe Owner, and the Respondent, General

- 58 -

• 2·

Contractor Co. for the construction of a garage at the property municipally

described as 13 Trouble Road, Regina, Saskatchewan, is the sum of S500.00.

IT IS HEREBY FURlHER ORDERED that the Applicant, Joe

Owner, shall fonhwith pay into Court the said statutory holdback of S500.00.

IT IS HEREBY FUR1HER ORDERED that the Registrar of Titles

for the Regina Land Registration District is hereby directed to cancel and vacate

the registration of the Claim of Uen, by the Respondent, Subcontractor Co., which

Claim of Uen is registered as instrument DO. 91R46792.

ISSUED at the Oty of Regina, in the Province of Saskatchewan, this

__ day of November, 1991.

WeAL REGISTRAR


HLECK KANUKA 1HURINGERBarristers & Solicitors1500 • 2500 Victoria AvenueRegina, SaskatchewanS4P 3X2

'Whose address for service is same as above.Lawyer in Charge of File: James S. EhmannTelephone: (306) 525·6751UnitS

- 59 -



APPENDIX "E"

Q.B.M. No. of 1989

IN TIlE MATTER OF AN APPUCATION PURSUANT TO SECTION17 OF DiE BUILDERS' LIEN ACT, S.S. 1984-85, c. B-7.1

AND PART 35 OF 1HE QUEEN'S BENCH RULES

BElWEEN:PCL CONSTRUcrORS WESTERN INC. andMAXAM CONTRACIlNG LID.

APPUCANTS• and·

HEmDL'S DECORATING (1985) LID., ATIORNEYGENERAL FOR CANADA AS REPRESENTED BY nlEMINISTER OF NATIONAL REVENUE, HER MAJESTYmE QUEEN IN RIGHT OF 1HE PROVINCE OFSASKATCHEWAN, AS REPRESENTED BY nlEMINISTER OF lABOUR and nlE SASKATCHEWANWORKERS' COMPENSATION BOARD

RESPONDENTS

NOTICE OF MOTION


Judge in Chambers at the Court House at 2425 Victoria Avenue, Regina,

Saskatchewan, on Tuesday, the 21st day of November, 1989 at ten o'clock in the

forenoon or so soon thereafter as counsel made be heard on behalf of the

- 60-

·2·

Applicants for an Order for directions and relief, by way of interpleader, as set.

out in the draft Order annexed hereto as Schedule WAft.

AND TAKE NOTICE that you are hereby required, pursuant to

Queen's Bench Rule 415(1) to ap~ar before the presiding Judge in Chambers at

the time and place aforesaid and to then state the nature and particulars of your

claims and either to maintain or relinquish them.

AND FURlHER TAKE NOTICE that in suppon of this application

shall be read this Notice of Motion with proof of service thereof and the Affidavit

of A.R. Olson.


9th day of November, 1989.

~CK, KANUKA, nruRINGER,SEMENCHUCK,SANDOMIRSKY,BOYD&B~~~

~e Applicants,

P nstructors Western Inc.and Maxam Contracting Ltd.

TO: Local Registrar

- 61 -

·3·

AA~ TO: Heindl's Decorating (1985) Ltd.

Attorney General for Canada, asFtepresentedbythe ~ter ofNational Revenue

Her Majesty the Oueen in Rightof the Province of Saskatchewan, asFtepresented by the ~ter of Labour

The Saskatchewan Workers' Compensation Board


1ll..ECK, KANUKA, .1HURINGER, SEMENCHUCK,SANDOMIRSKY, BOYD & BAKER

Barristers and Solicitors1500 • 2500 Victoria AvenueRegina, Saskatchewan .S4P 3X2

Whose address for service is same as above.Lawyer in charge of file: James S. EhmannTelephone: (306) 525-6751

- 62-

Q.B.M. No.



of 1989

IN 1HE MATTER OF AN APPUCA110N PURSUANT TO SECTION17 OF mE BUD..DERS' LIEN ACT. S.S. 1984-85, c. B-7.1

AND PART 35 OF niB QUEEN'S BENCH RULES

BETWEEN:PCL CONSlRUcrORS WES1ERN INC. andMAXAM CONTRACTING LTD.

APPUCANTS• and •

HEINDL'S DECORATING (1985) LTD., ATTORNEYGENERAL FOR CANADA AS REPRESENTED BY THEMINISTER OF NATIONAL REVENUE, HER MAJESTYTHE QUEEN IN RIGHT OF 1HE PROVINCE OFSASKATCHEWAN, AS REPRESENTED BY THEMINISTER OF LABOUR and THE SASKATCHEWANWORKERS' COMPENSATION BOARD

RESPONDENTS

AFFIDAVIT OF A.R. OLSON

I, AR. OLSON, of the City of Regina, in the Province of

Saskatchewan, construction administrator, MAKE OATH AND SAY:

1. THAT I am an agent of and for both of the Applicants, peL

Constructors Western Inc. and Maxam Contracting Ltd., which corporations carry

on business as a joint venture under the name and style "PC~Maxam, A Joint

- 63 -

·2·

Venture". The &aid corporations are hereinafter referred to as "PCI.,Ma.x.am".

2. 1HAT PCLMaxam was engaged as a general contractor by the City

of Regina to construct an addition to the North West Leisure Centre, in the City

of Regina, in the Province of Saskatchewan.

3. 1HAT in connection with construction of the said addition to the

North West Leisure Centre, PCLMaxam entered into a subcontract with the

Responden~ Heindl's Decorating (1985) Ltd. (hereinafter called 'Heindl's") for the

furnishing of all materials and labour required to complete the painting required

for the said addition. Annexed hereto and marked respectively as Exhibits "A",

"13" and "C' to this my Affidavi~ are true copies of the subcontract dated

September 26, 1988 and the revisions thereto dated June 28, 1989 and August 2,

1989, respectively, all duly executed by PCL-Maxam and Heindl's, respectively.

4. 'IliAT the said subcontract has been substantially performed and

pursuant thereto, the amount due and payable to Heindl's is $27,000.00, including

the statutory holdback with respect to the said subcontract of $2,700.00.

5. 'IliAT as indicated by Exhibits "A", "B" and "C' herein, the full

subcontract price was $29,130.00. As deposed above, there is now due under the

subcontract the sum of $27,000.00. The balance, namely, $2,130.00 is not due or

- 64-

• 3 •

payable to Heindl's as a result of damaged eavestroughing which Heindl's is

obliged to repair but has Dot yet repaired.

6. 1HAT more than 40 days have passed since the posting at the site

of the aforesaid improvement of a Certificate of Substantial Performance with

respect to the contract between PCL-Maxam and the City of Regina and PeL

Maxam has not received any Written Notice of lien by any one purporting to be

a subcontractor or supplier of Heindl's.

7. TIiAT I am advised by a representative of the City of Regina and

do verily believe that the City of Regina has not received any Caim of Lien with

respect to the said improvement by anyone purporting to be a subcontractor or

supplier of Heindl's.

8. TIiAT each of the Respondents, The Government of Canada, Her

Majesty the Queen in Right of the Province of Saskatchewan, as represented by

the Minister of Labour and The Saskatchewan Workers' Compensation Board have

notified PeL-Maxam of competing claims to the balance otherwise due and

payable to Heindl's, Under and pursuant to the said subcontract, particulars of

which claims areas follows:

- 65 -

· .. .

a) Government of Canada: This Respondent has demanded payment

of all. sums otherwise due by PeL-Maxam to Heindl's to a maximum

of SS3.990.51. under and pursuant to a Requirement to Pay dated

August 14. 1989, a true copy of which is annexed hereto as Exhibit

"0";

b) Her Majesty the Queen in Right of the Province of Saskatchewan,

as represented by the Minister of Labour: This Respondent claims

payment by PeL-Maxam of sums otherwise due by it to Heindl's. to

a maximum of S14.166.80, as indicated in the letter of this

Respondent to "PCL Construction" dated August 14, 1989. and

received by PeL-Maxam August 18. 1989. A true copy of the said

letter is annexed hereto and marked as Exhibit "E" to this my

Affidavit; and

c) Saskatchewan Workers' Compensation Board: This Respondent

claims payment from PCI"Maxam of the sum of S2,927.13 and bas

advised that PeL-Maxam may deduct the said amount from funds

otherwise due and payable under the aforesaid subcontract. A copy

of the letter of this Respondent to PeL-Maxam dated September 28.

1989. setting forth the said claim, is annexed hereto and marked as

Exhibit "F' to this my Affidavit.

SWORN BEFORE 'ME~at the Otyof Regina, in the Provinceof Saskatchewan, this / Ct/. dayof November, 1989.

- 66-

• 5 •

9. niAT I make this Affidavit in support of an application for

directions pursuant to section 18 of lk.JyDders' Uen Act and for interpleader

relief, pursuant to Pan 35 of the Queen's Bench Rules.

~~L~) AJtl>LSON)

t& L" C'?"-~ ~~MMlSSION6rt:~ S in~ and for the Province of Saskatchewan./~ i,ilig a SeYeitor. CARLENE A. FROt..tCK

ACoIllllissiDner tar Oltlls iIIllIll tar SIIUtcNw.n111~ ...... ...." 10, l19l.


HLECK, KANUKA, THURINGER, SEMENCHUCK,SANDOMIRSKY, BOYD &. BAKER

Barristers and Solidtors1500 • 2500 Victoria AvenueRegina, SaskatchewanS4P 3X2

Whose address for service is same as above.Lawyer in charge of file: James- S. EhmannTelephone: (306) 525-6751

- 67 -

Q.B.M. No. 891 of 1989

IN THE QUEEN'S BENCH


IN 1HE MATTER OF AN APPUCATION PURSUANT TO SECI10N17 OF]HE BUILDERS' LIEN ACT, S.S. 1984·85, c. B-7.1

AND PART 35 OF TIlE QUEEN'S BENCH RULES

BETWEEN:PCL CONSTRUCTORS WESlERN INC. andMAXAM CONTRACTING LID.

APPUCANTS• and·

HEINDL'S DECORATING (1985) LID., AITORNEYGENERAL FOR CANADA AS REPRESENTED BY 1HEMIN1STER OF NATIONAL REVENUE, HER ~STYTIlE QUEEN IN RIGHT OF 1HE PROVINCE OFSASKATCHEWAN, AS REPRESENTED BY 1HEMINISTER OF LABOUR and 1HE SASKATCHEWANWORKERS' COMPENSATION BOARD

RESPONDENTS

BEFORE TIlE HONOURABLE ))

MR. JUSTICE G.H.M. ARMSTRONG ))

IN CHAMBERS )

~

r,('I &A(..'11~ N d . ..f.-;,,; "\

1RITBWA¥, TIiE-Htft DAY

OF JANUARY, 1990.

ORDER

UPON TIlE APPUCAnON of James S. Ehmann, counsel on behalf

of the Applicants, and upon hearing Myra Yuzak, counsel on behalf of the

- 68 -·2·

Respondent, Attorney General for Canada as represented by the Minister of

National Revenue, Timothy K. Epp, counsel on behalf of the Respondent, Her

Majesty the Queen in Right of the Province of Saskatchewan, as represented by

the Minister of Labour, consenting, and Evan Bennett, counsel on behalf of the

Saskatchewan Workers' Compensation Board, consenting, and DO one else

appearing and upon bearing read the Notice of Motion, Draft Order, Affidavit of

AR. 91son and Affidavit of Alfred H. Johnson, all filed:

IT IS HEREBY ORDERED:

1. That the Applicants, PCL Constructors Western Inc. and Maxam

Contracting Ltd. shall pay to the Respondents the sum of 526,550.00 upon issuance

of the within Order, such sum to be paid as follows:

a) to the Respondent Attorney General for Canada as represented by

the Minister of National Revenue, the sum of $12,555.04;

b) to the Respondent Her Majesty the Queen in Right of the Province

of Saskatchewan as represented by the Minister of Labour, the sum

of Sl1,116.61;

c) to the Respondent Saskatchewan Workers' Compensation Board the

sum of S2,878.35.

2. That upon payment as aforesaid, the Applicant PCL Constructors

Western Inc. and Maxam Contracting Ltd. and each of them, shall be fully and

- 69-• 3 •

forever released and discharged of and from:

a) any and all liabilities as trustees of the said funds under Part n of

The Builders' Uen Act;

b) any and all liability in relation to any indebtedness of the

Respondent, Heindl's Decorating (1985) Ltd. to the Government of

Canada in respect of a Requirement to Pay dated August 14, 1989;

c) any and all liability to the Respondent Her Majesty the Queen in

Right of the Province of Saskatchewan as represented by the

Minister of Labour in relation to any outstanding indebtedness of the

Respondent Heindl's Decorating (1985) Ltd. to the Workers'

Compensation Board.

3. The Applicants acknowledge that they have been paid their costs

of the within application in the amount of $450.00.

4. That for the purposes of determining the position of the Applicants,

and the Respondent, Heindl's Decorating (1985) Ltd., along with the position of

any subcontractor or supplier of the Respondent, Heindl's Decorating (1985) Ltd.

it being shown that there had been no Notice of Lien by any supplier or

subcontractor of said Respondent, the aforesaid payments by the Applicants and

the $450.00 retained by the Applicants in satisfaction of their claim for costs

herein shall be deemed· to have been a payment by the said Applicants to the

- 70-·4·

Respondent, Heindl's Decorating (1985) Ltd. on account of the subcontract

between the said Applicants and the said Respondent, relative to the improvement

constructed by the said Applicants for the City of Regina, consisting of an addition

to the ·North West Leisure Centre, in the City of Regina, in the Province of

Saskatchewan.


15th day of January, 1990.


HLECK, KANUKA, 'IHURINGER, SEMENCHUCK,SANDOMIRSKY, BOYD & BAKER

Barristers and Solicitors1500 • 2500 Victoria AvenueRegina, SaskatchewanS4P 3X2


- 71 -

Q.B.M. No.

APPENDIX "F"

of 1989

IN THE MATTER OF AN APPLICATION PURSUANT TO SECTION 60 ,OF THE BUILDERS' LIEN ACT, 5.5. 1984-85 c. B-7.1

IN THE QUEEN°S BENCH


BETWEEN:

CAIRNS DEVELOPMENTS LTD.APPLICANT

- and -

REDI-MIX LIMITEDRESPONDENT

NOTICE OF MOTION

TAKE NOTICE that an application will be made to the

presiding Judge in Chambers on Tuesday, the 21st day of March,

1989 at the Court House, Regina, Saskatchewan at 10 o'clock in

the forenoon or so soon thereafter as counsel may be heard on

behalf of the Applicant, Cairns Developments Ltd., for an

Order pursuant to section 60 of The Builders' Lien Act

vacating the registration of the Claim of Lien registered by

the Respondent against Lot 2, Block 11, Regina; Plan 87R42811,

as Instrument No. 88R64105.

AND TAKE NOTICE that in support of this application

shall be read this Notice of Motion with proof of service

- 2 --72 -

thereof, the Affidavit of Lorne Yagelniski, certified copies

of the Certificate of Title to the said land and the said;

Claim of Lien and a Memorandum of Law and Argument.

AND FURTHER TAKE NOTICE that the said application is

made on the ground that neither the Applicant, nor any

predecessor in title of the Applicant made any request, direct

or indirect, express or implied, that the Respondent or anyone

else make any improvement on the said land.

DATED at the City of Regina, in the Province of

Saskat·chewan, this 13th day of March, 1989.

HLECK, KANUKA, THURINGER,SEMENCHUCK, SANDOMIRSKY,BOYD & BAKER

Per:Sol i'":"c""'i'="t-o~r""s-fP"'o-r--:t~h-e---':A-p-p""l""i-c-a-n t ,Cairns Homes Limited


Hleck, Kanuka, Thuringer, Semenchuck,Sandomirsky, Boyd & Baker

Barristers and Solicitors1500 - 2500 Victoria AvenueREGINA, SaskatchewanS4P 3X2


- 73 -

Q.B.M. No. of 198q

IN THE HATTER OF AN APPLICATION PURSUANT TO SECTION 60OF THE BUILDERS' LIEN ACT, S.S. 1984-85 c. B-7.1



BETWEEN:

CAIRNS DEVELOPMENTS LTD.APPLI CAt-..'T

- aDd -

REDI-MIX LIMITEDRESPONDENT

AFFIDAVIT OF LOIRE YAGELKIS~l

1, LORNE YAGELNISKI, land developer, of the City of

Regina, in the Province of Saskatchewan, HAKE OATH AND SAY:

1. THAT I am employed by the Applicant, Cairns

Developments Ltd., as a land manager. The Applicant also acts

as manager of Wascana View Developers (East) Ltd. (hereinafter

called "Wascana View"). As such 1 have personal knowledge of

the facts and matters deposed herein.

2. THAT until March 3, 1989, Wascana View was the

registered owner of Lot 2, Block 11, Regina, Saskatchewan,

Plan 87R42811, Minerals in the Crown. In January, 1989, title

to the said land was transferred by Wascana View to th~

Appl icant.

4.- 74-

THAT by agreement in writing dated October 29, 1987,

between Wascana View as optionor and Gino Schiazza Homes Ltd.,

as optionee, Gino Schiazza Homes Ltd. (hereinafter called

"Schiazza"J did acquire an option to purchase the.said land.

As provided in the said Option Agreement, the price for the

said option was $5,000.00 and the purchase price pursuant to

the said option was $45,900.00. A true copy of the said

Option Agreement is annexed hereto to this my Affidavit and

marked as Exhibit "A".

5. THAT paragraphs 4 and 5 of the Option Agreement

provided that the option was open for acceptance until May 27,

1988 and further, that should Schiazza fail to exercise the

option within the time for acceptance, the option would lapse

and terminate, as would the interest of Schiazza in the land,

and, the optionor (Wascana View) would be entitled to retain

all monies paid to it by Schiazza.

6. THAT Schiazza paid the option price of S5,000.00.

but subsequently failed to pay any further amount, with the

result that as of May 27, 1988, Schiazza had absolutely no

interest whatsoever in or to the said land.

7.

follows:

THAT paragraph 8 of the Option Agreement provides as

" The Optionee shall not be entitled to possessionof any of the said lots covered by this option untilthe option has been exercised in respect of such lotby payment of the full balance of the purchase pricepayable to such lot and until the service connectionfee hereinafter referred to has been paid. No

- 75 -

- 3 -

excavation or construction on any lot or lotscovered hereby shall be commenced by the Optioneeuntil such lot has been 80 purchased by the exerciseof this option, and the said service connection feehas been paid."

8. THAT without the approval or consent of Wascana View

or the Applicant, Cairns Developments Ltd., Schiazza proceeded

prior to May 27, 1988, with certain construction on the said

land, which consisted, more or less, of the excavation of a

basement and construction of a concrete foundation and

basement walls.

9. THAT 1n January, 1989, the Applicant, having caused

a house to be constructed on the said land, arranged a

transfer of the said land to it from Wascana View, in order to

place a mortgage against the said land, which could be assumed

by a residential purchaser, upon the closing of the sale of

the said land from the Applicant to such purchaser, on

February 28, 1989.

10. THAT the said transfer, mortgage and sale have been

completed, but as a result of the registration of a Claim of

Lien by the Respondent, the mortgagee is Withholding an amount

equal to the amount claimed by the Respondent in its Claim of

Lien and the Applicant is unable to perform its obligation to

the purchaser to deliver clear title to the said land.

.:

- 4 -

- 76-11. THAT neither the Applicant nor Wascana View ever

requested. directly or indirectly, that Schiazza. or the

Respondent provide any lervice or material 1n connection with

an improvement on the said land.

12. . THAT it appears from the Claim of Lien of the

Respondent dated November 9. 1988 that the Respondent

performed the work for which it claims a lien at the request

of Schiazza.

13. THAT 1 make this Affidavit in lupport of an

application for an Order pursuant to lection 60 of The

Builders' Lien Act vacating the said Claim of Lien by the

Respondent.

SWORN BEFORE ME at the City )of Regina. in the Province )of Saskat hewan. this~ )

~y "-of Mar • 1989. !and for the Province of Sa~katchewan.BeiD~ A 50]1; 'tOL. M~I {'.JI!1I1'::.Js,oJ'1 'r;rrl ~c il~;-/73 / """"

This Affidavit was delivered by: ~

Hl eck, Kanuka. Thuringer, ·Semenchuck,Sandomirsky. Boyd & Baker

Barristers and Solicitors#1500 - 2500 Victoria AvenueREGINA. SaskatchewanS4P 3X2

Whose address for service 1s same as above.Lawyer in charge of file: James S. EhmannTelephone: (306) 525-6751

- 77-

Q.B.M. No. 214 of 1989



IN THE MATTER OF AN APPLICATION PURSUANT TOSECTION 60 OF THE BUILDERS' LIEN ACT, S.S.

1984-85, c. 8-7.1

BETWEEN:CAIRNS DEVELOPMENTS LTD.

- and -

REDI-MIX LIMITED

APPLICANT

RESPONDENT

BEFORE THE HONOURABLE ))

MR. JUSTICE E.C. MALONE ))

IN CHAMBERS )

THURSDAY, THE 28TH

DAY OF JUNE, 1989

ORDER

UPON THE APPLICATION of the Applicant, upon reading

the Affidavit of Lome Yagelniaki, the Affidavit of Gino

Schiazza, the Affidavit of Don Galan and the Memoranda of Law

filed by the Applicant and Respondent, respectively, and upon

hearing counsel for the Applicant and Respondent:

IT IS HEREBY ORDERED that the builder's lien of the

Respondent, Redi-Mix Limited, registered at the Land Titles

- 78 -

- 2 -

Off.1ce for the Reg.1na Land Rag.18trat.1on D.1str.1ct as Instrument

No. 88R64l0S be and the aame 18 hereby vacated.

IT IS HEREBY FURTHER ORDERED that upon the f.1l.1ng

of a aealed copy of the v1t:h.1n order w.1th the Reg.1strar of

T.1tles, at the Land T1tles Off1ce ~or the Reg1na Land

Reg.1strat.1on D.18tr1ct, the aa.1d Reg.1strar ahall cancel and

vacate the aa.1d reg.1strat.1on of bu.1lder'a l1en by the

Respondent.

IT IS HEREBY FURTHER ORDERED that the Appl.1cant is

entitled to recover from the Respondent 1ts costs of the

w.1th.1n appl.1cat.1on.

ISSUED at the City -of Reg.1na, 1n the Province of

Saskatchewan, th.1s 29th day of June, 1989.

GORDON K. DAUNCEYDY. LOCAL

LOCAL REGISTRAR

This Order was del.1vered by:

-79 - APPENDIX "G"O.B.M. No. of 1990

IN nIB QUEEN'S BENCH


IN 'I1IE MATl'ER OF AN APPLICATION PURSUANT TOSECTION 84 OF THE BUILDERS' LIEN ACT, S.S. 1984, e.B-'.l

BETWEEN:

DOUG JOHNSTON CONSTRUcnON CO. LTD.APPUCANT

• and·

AVONLEA MINERAL INDUSTRIES LTD.RESPONDENT

AFFIDAVIT OF DOUGlAS JOHNSTON

I,DOUGlAS JOHNSTON, farmer and construction contractor, of

the Town of Bengough, in the Province of Saskatchewan, MAKE OATIl AND

SAY:

1. rnAT I am a director and shareholder of the Applicant, Doug

Johnston Construction Co. Ltd. (hereinafter called "Johnston Construction") and

as such have personal knowledge of the facts and matters deposed to herein,

except where otherwise stated.

- 80-• 2 •

2.I

TIiAT from April, 1989 to July 18, 1989 I did, on behalf of Johnston

Construction. negotiate and conclude a contract between Johnston Construction

and Avonlea Mineral Industries Ltd. (hereinafter called "Avonlea") for the

provision by Johnston Construction 10 Avonlea of equipment and personnel for

strip mining services on cenain ~ds situated near the Town of Avonlea,

Saskatchewan, on which Avonlea held mineral leases from the Province of

Saskatchewan.

3. TIiAT annexed hereto and marked as Exhibit "A" to this my

Affidavit is a true copy of a letter of intent between Avonlea and Johnston

Construction. setting fonh the basic terms of the said agreement (hereinafter

called the "Mining Agreement").

4. TIiAT when I executed the Mining Agreement, Schedule "A" thereto

was, as appears in the copy annexed hereto as Exhibit "Afl, left in blank and I was

advised by a representative of Avonlea that the lands to be mined pursuant to the

Mining Agreement were those lands described in a map then provided to me by

AvonJea, a true copy of which is annexed hereto and marked as Exhibit "B" to this

my Affidavit.

- 81 -

·3 .

S. 1HAT as shown by Schedule wAwto the Mining Agreement, being

the map, a true copy of which is annexed hereto as Exhibit "B", the Mining

Agreement covered the lands demised UDder the following Quarrying Leases:

YS799YS808YS809YS810YS811YS812YS813YS814YS84SYS846YS847YS848YS849

YS8S0YS8S1YS8S2YS8S3YS8S4YS8SSYS867YS868YS869YS870YS871YS872YS873

YS886YS887YS888YS900YS901YS902YS903YS904YS90SY5906Y6038Y6934Y7031

6. niAT on or about August 3, 1989, Johnston Construction entered

into a further contract with Avonlea (hereinafter called the "Reclamatlon

Agreement") for the performance by Johnston Construction of certain reclamation

work on the mined lands, on the terms and conditions set forth in the letter of

intent between Johnston Construction and Avonlea, dated July 19, 1989, a true

copy of which is annexed hereto .and marked as Exhibit wC' to this my Affidavit.

7. niAT Johnston Construction also entered into a trucking agreement

with Avonlea, pursuant to which Johnston Construction hauled material excavated

by Johnston Construction from the mining lands to the processing plant of

Avonlea situated in the town of Wilcox, Saskatchewan upon the following land:

- 82-

·4·

Blocks A and B, in the Town of Wilcox, in the Province ofSaskatchewan, according to a Plan of Record registered in the LandTitles Office for the Regina Land Registration District as Plan77R44064, mines and minerals excepted, in the case of Block A, byCM4062, and in the case of Block B by 78R16539.

8. THAT as at FebJ'llary 8, 1990, the sum due and payable by Avonlea

to Johnston Construction, under and pursuant to the aforesaid Mining Agreement,

Reclamation Agreement and trucking agreement, was the sum of 5330,441.79,

comprised of a principal amount of 5319,315.16 and interest on the said amount.

9. 1liAT Johnston Construction has filed in the Department of Energy

and Mines of the Province of Saskatchewan, 2 Caims of Lien under The Builders'

Lien Act in relation to the aforesaid claim and true copies of the said Claims of

Uen are annexed hereto and marked as Exhibits "0" and "E", respectively, to this

my Affidavit.

10. mAT in addition, Johnston ConstJ'llction has commenced an action

against Avonlea, in the Court of Oueen's Bench, at the Judicial Centre of

Assiniboia, claiming recovery of the aforesaid indebtedness. A true copy of the

Statement of Claim in the said action is annexed hereto and marked as Exhibit

"F' to this my Affidavit.

11. mAT from July 31, 1989 to December 5, 1989 Johnston

Construction sent to Avonlea some 15 invoices total1ing 5319,315.16 particularizing

- 83

·5·

the work done and the amounts due to Johnston Construction under the Mining

Agreement, the Reclamation Agreement and the said trucking agreement.

Avonlea has not disputed the amount so claimed by Johnston Construction and

indeed has not defended the said debt action.

12. TIiAT annexed hereto and marked as ExhIoit -0" to this my

Affidavit is a copy of the letter of Mr. Kim Ford of Lewans &. Associates,

Barristers and Solicitors, confirming to my current solicitors, Bleck, Kanuka,

Thuringer, Semenchuck, Sandomirsky, Boyd &. Baker, that Avonlea has been noted

for default of defence in the said action against it by Johnston Construction.

13. TIiAT the business of Avonlea, as has been made apparent to me

from discussions with various representatives of Avorilea and my observations of

operations at the processing plant of Avonlea situated at Wilcox, Saskatchewan,

involves the recovery of raw material from the aforesaid mining land, the

processing of the same to make a mineral product known as bentonite, at the said

processing plant in Wilcox, Saskatchewan, and the sale to customers of Avonlea

of bentonite derived from the said raw material.

14. TIiAT the payment terms of the Mining Agreement were negotiated

between myself and representatives of Avonlea so as to allow Avonlea to pay

amounts due to Johnston Construction from the proceeds received by Avonlea

- 84-• 6 •

from minerals extracted and severed from the mining lands by Johnston

Construction.

15. 1HAT on the basis of the negotiatioDS referred to in paragraph 14

hereof and further discussions between myself and representatives of Avonlea, I

do verily believe, that Avonlea intended to pay the amoUDts due to Johnston

Construction under the Mining Agreement, the Reclamation Agreement and the

said trucking agreement, from revenue received on the sale of bentonite, extracted

by Johnston Construction from the mining lands and processed at the Wilcox

plant.

16. THAT until on or about March 2, 1990, the processing plant of

Avonlea at Wilcox, Saskatchewan, operated with a plant manager, known to me

as Len Mason, two or three secretaries and a number of employees working in

the yard and in the processing plant, where the ore/raw material was processed.

Since March 2, 1990, the plant appears to have been closed, in that except for

infrequent occasions, there is DO one in attendance at the plant at Wilcox and,

except for the isolated occasion described below, I have observed no business

activity at the said processing plant.

17. THAT during the last three months I have made n1.!merous phone

calls to representatives of Avonlea and travelled to Calgary, Albena, to meet

- 85

·7·

&enior representatives of Avonlea to request payment of the outstanding account

due to Johnston Construction and inquire as to how and wben "vonlea might

attend to such payment.

18. TIlAT annexed bereto and marked as Exhibit "H" to this my

Affidavit is a true copy of a letter from Avonlea to Johnston Construction dated

January 10. 1990, wherein Avonlea refers to the collection of existing and

anticipated accounts receivable as a method by which Avonlea will meet a portion

of its obligation to Johnston Construction, proposes a panial payment to Johnston

Construction of 530.000.00. on or about February 2S, 1990 and offers the prospect

of additional work for Johnston Construction. The said letter was received in

response to a number of my inquiries and requests to Avonlea for payment of the

outstanding account due to Johnston Construction. The payment of 530,000.00

promised to Johnston Construction by the said letter bas not been received.

19. lHAT on the basis of conversations I have had with secretaries and

other representatives of Avonlea, I was able to obtain the names of certain

customers of Avonlea who might be indebted to Avonlea for mineral product

purchased from Avonlea. On the basis of that information, I did cause uwans

& Associates to send letters to such trade creditors. to protect my interest in

such accounts receivable and annexed hereto and marked respectively as Exhibits

"I", "J" and "K" are true copies of the letters in this regard. sent by Lewans &

- 86 -

·8·

Associates to International Minerals and Chemical Corporation (Canada) Umited,

Larocque Geotech, and Neelon Foundry. respectively. I am advised by Lewans

&. Associates and do verily believe that DO payment has been received by them

pursuant to sucb letters.

20. TIiAT during or about the first week of March, 1990, in an effort

to acquire further information concerning the affairs of Avonlea, I did contact by

telepbone one Robert Gotts, of Regina, Saskatcbewan. to inquire about becoming

a sbarebolder of Avonlea and thereby acquire further information concerning the

financial and business affairs of Avonlea as they might pertain to the ability of

Avonlea to satisfy its outstanding obligation to Johnston Construction. The said

Robert Gotts did then inform me, inter alia, that between approximately April,

1989 and February, 1990, a corporation named Ekaton Industries Inc., being the

parent corporation of Avonlea, had received management fees from Avonlea

totalling approximately $360,000.00 and that sucb fees had been funded from the

proceeds of mineral product extracted from the said mining lands.

21. TIiAT I am advised by Edwin Ginther, an employee of the

QJnadian Imperial Bank of Commerce, being the lender of Johnston Construction,

that during the months of January and February, 1990, the Royal Bank of Canada

realized in excess of $500,000.00 on accounts receivable payable by customers of

Avonlea to Avonlea for mineral product supplied by. Avonlea.

- 87

·9·

22. 1HAT annexed hereto and marked as Exhibit -L" is a true copy of

an undated letter which I am advised by Mr. Kim Ford and do verily believe to

have been mailed to the Royal Bank of Canada on or about March 7, 1990. I

am further advised by the said Mr. Kim Ford and do verily believe that he has

received no response to the said letter from the Royal Bank of Canada.

23. 1HAT there is DOW situated on the processing plant premises of

Avonlea at Wilcox, Saskatchewan, stock piled raw material which Johnston

Construction mined on the mining lands and hauled to the said processing plant,

comprising approximately 20,000 dry tonnes of raw material. I do verily believe

that it is precisely such raw material which Avonlea, prior to closing its plant on

or about March 2, 1990, did process and sell, in order to generate revenue.

24. 1HAT at approximately 6:00 p.m. on March 9, 1990, I attended at

the processing plant of Avonlea in Wilcox, Saskatchewan, to see whether there

was any business activity occurring. There were then 2 semi trailer trucks situated

at the premises. Mr. Len Mason, known to me as the plant manager was also

then in attendance at the premises and the said Mr. Mason advised me that one

of the semi trailer trucks had just been loaded with mineral product processed by

Avonlea and the other semi trailer truck was about to be loaded with funher

- 88 -• 10 •

mineral product, and that both truck loads of mineral product were being shipped

for sale to customers of Avonlea.

25. nlAT I am advised by Hleek, Kanuka, Thuringer, Semenchuck,

Sandomirsky, Boyd &. Baker, the current solicitors for Johnston Construction with

respect to this matter, that under The Builders' Uen Act, Johnston Construction

has a lien on:

a) the minerals in situ on the mining lands;

b) extracted raw material, including the stock pile of raw

material placed by Johnston Construction on the premises of

Avonlea at Wilcox, Saskatchewan;

c) the proceeds of the mineral product; and

d) any and all fixtures, macbinery, tools, appliances and other

property in or on the lands demised wider the Quarrying

Leases, referred to in paragraph S hereof, or upon the land

described as Blocks A and B, referred to in paragraph 7

hereof.

26. 1HAT on the basis of the facts and information recorded in the

above paragraphs, I am concerned that ore/raw material, mineral product and

proceeds of mineral product (accounts receivable of Avonlea) against which

Johnston Construction has a valid and subsisting builder's lien is being delivered

- 89 -

• 11 •

and/or paid to other persons. to the serious prejudice and detriment of Johnston

Construction.

27. 1HAT as a result of the apparent diversion of the proceeds of such

mineral products to pay management fees and other debts, the apparent closure

of the processing plant and the removal from the processing plant, on the evening

of Friday, March 9, 1990. of 2 truck loads of mineral product. I do verily believe

that delaying the within application to provide advance notice to Avonlea might

result infunher prejudice to Johnston Construction.

28. TIIAT I make this Affidavit in suppon of an application on behalf

of Johnston Construction for an Order appointing a trustee pursuant to section 84

of The Builders' Lien Act.

SWORN BEFORE ME at theCity of Regina, in theProvince of Saskatchewan,this~ day of March. 1990.


- 90-

Q.B.M. No. ~( of 1990

~ 1HE QUEEN'S BENCH


IN THE MATl'ER OF AN APPUCA110N PURSUANT TOSECI10N 14 OF 'THE BUILDERS' LIEN .ACl', s.s. lJl4, c.B-7.1

BETWEEN:

DOUG JOHNSTON CONSTRUcnON CO. LID.APPUCAA"T

• ad·

AVONLEA MINERAL INDUSTRIES LlD.RESPONDE~"T

BEFORE 1HE HONOURABLE

MR. JUSTICE C;:(~"~eIN. CHAMBERS

~ ~..5 DAY,1HE /3~DAY)) OF MARCH, 1990.)

ORDER

UPON 1HE EX PARTE APPUCATION of the Applicant, and

upon having read the Memorandum to the Judie, the Affidavit of Douglas

Johnston, the Affidavit of Donald Ross Hansen and the draft Order, all filed, IT

15 HEREBY ORDERED THAT:

- 91 -

• 2 •

1. Donald Ross Hansen, Chanered AccoUDtant, of the City of Regina,

in the Province of Saskatchewan be and he is hereby appointed TJUStee of all of

the right, interest, title or estate of the Respondent, Avonlea Mineral Industries

Ltd., in the following property:

a) quarrying leases no.

YS799YS808YS809YS8H>YS811YS812YS813YS814YS845YS846YS847YS848YS849

YS850Y58S1Y58S2YS8S3.YS8S4Y585SYS867YS868YS869YS870Y5871YS872Y5873

Y5886Y5887YS888YS900YS901YS902YS903YS904YS90SY5906Y6038Y6934Y7031

as recorded in the Depanment of Energy and Mines, of the Province

of Saskatchewan (hereinafter called the ·Ouarrying Leases·);

b) all mineral ore or raw material excavated from the Ouanying Leases,

or any of them, which may be in the possession of the Respondent,

Avonlea Minerallndusuies Ltd.;

- 92-

· 3·

e) all accounts receivable of the Respondent, Avonlea Mineral

Industries Lld.. and all other rights of the said Respondent, of any

nature whatsoever. relatina to the sale or other disposition by the

Respondent, Avonlea Mineral Industries Ltd. of any ore. raw

material or processed mineral product emanating from any of the

Quanying Leases;

d) all proceeds, whether in the form of money. Degotiable instruments

or other property of any kind whatsoever. of such ore, raw materials

or processed mineral products; and

e) any and all fixtures, machinery, tools, appliances and other property

in or on the lands demised under. the Quarrying Leases or upon the

land described as Blocks A and B. in the Town of Wilcox, in the

Province of Saskatchewan, according to a Plan of Record registered

in the Land Titles. Office for the Resina Land ReJistration District

as Plan 77R44064. mines and minerals excepted, in tbeease of Block

A, by CM4062, and in the case of Block B by 78Rl6S39

all hereinafter collectively referred to as the ?ropertf.

2. The Respondent, Avonlea MiDeral Industries Ltd., its officers,

servants, agents, contractors and all other persons having DOtice of this Order shall

- 93-

• 4 •

fonhwith deliver to the said Trustee all books. documents, papers and records of

the wd Respondent pen'inina In any manner to the operation of the business of

the wd Respondent in connection with the said quarrying leases and the sale or

other disposition of all raw material. mineral ore or mineral product emanating

therefrom, including. without limitation. all books. documents, papers and records

penaining to all revenues and expenses received, anticipated or incurred in

relation to the mining of the said Ouanying Leases or any of them and the

operation of the processing plant of the Respondent, Avonlea Mineral Industries

Ltd. situated upon the land described in paragraph l(e) hereof, from April 1,

1989.

3. The said Trustee be and be is hereby authorized and empowered to

use such force as may reasonably be necessary in order to enter upon any

premises of the Respondent, Avonlea Mineral Industries Ltd., situated in the

Province of Saskatchewan, for the purpose of seizing and taking possession of the

Property and of the books, documents, papers and records referred to in

paragrapb 2 bereof.

4. The said Trustee be and he is hereby given exclusive authority to

collect any and all outstanding accounts receivable of the Respondent, Avonlea

Mineral Industries Ltd., and no penon having notice of this Order shall pay any

sucb account receivable except by way of payment directly to the said Trustee.

- 94-

5. The Respondent, AvoDJea Mineral Industries Ltd.. shall fonhwith

deliver the Property to the said Trustee and pay over to the said Trustee any and

all proceeds of the said ore, raw materials or mineral produeu which may now be

within its control or which may hereafter come within its control.

6. Neither the Respondent, AvoDJea Mineral Industries Ltd., nor any

other person having notice of this Order shall in any manner interfere with the

exercise by the Trustee of the powers hereby conferred and neither shall the

Respondent nor any other such person take any steps or proceedings whatsoever

to reali.ze upon any of the Propeny, without first obtaining the leave of this

Honourable Court.

7. The said Trustee shall be at liberty and is hereby empowered to

employ such usistant and contractors, including professional advisors, as he may

consider necessary for the purpose of exercising his powers herein and any expense

which may be properly made or incurred by him in so doing shall, together with

the fees of the said Trustee, in such amount as may be approved by this

Honourable Court, be allowed to him the passing of his accounts and shall form

• c:barJe upon the Property in priority to each and every Oaim of Lien DOW or

hereafter registered or assened against the Property, or any of it, and in priority

to any other charge or interest ranking subsequent to any such !Jen.

- 95 -

• 6 •

8. Any proceeds coming into the hands of the said Trustee punuant to

the exercise of his powers under and pursuant to this Order shall be paid by the

Trustee into Court.

9. No security is or shall be required from the said Trustee.

10. Both the Applicant and the said Trustee are hereby given leave to

apply to this Honourable Court to vary- the terms of this Order or for such other

relief as may appear just and reasonable.

11. The costs of and incidental to this application shall be reserved for

determination by further order of this Honourable Coun.

~ ISSUED at ~e City of Regina., in the Province of Saskatchewan, this

@ day of March, 1990.

TAKE NOnCE that nery or er made without Donce to the respondentor a person affected by the order, except where such order is consented to by therespondent or a person affected by the order, or is otherwise authorized by law,mDy be set aside or varied on application to the coun. You should consult yoursolicitor as to your rights.


- 96-

STATEMENT OF CLAIM

APPENDIX "H"

Q.B.G. No. of 1998

CANADA )PROVINCE OF SASKATCHEWAN )

IN THE COURT OF QUEEN'S BENCH


BETWEEN:

ALBERT BOIRE BUILDING MATERIALS LTD.,PLAINTIFF

- and-

DIXIE GRATTON, carrying on business under thename "South Country Contracting", CUSTOMBUILT AG INDUSTRIES LTD., KEITH GEOFFREYBROWN, RICHARD ALBERTSON, GRAVELBOURGSAND & GRAVEL LTD., A & R LUMBER LTD.,PHILLIP LECH, GARY SPARROW, PRAIRIE MECHANICALSERVICES INC., K. T. ELECTRIC LTD., PROFESSIONALDRYWALL LTD., DELTA ROCK & SAND LTD.,WILLIAM BURGESS, ACKLANDS-GRAINGER INC.,BARBER EQUIPMENT LTD., JAKE HEINRICHS,PUMPJACK EQUIPMENT SERVICES LTD., R. M.CONSTRUCTION LTD. ,HEINRICHS BROS. HOLDINGSCO. LTD., AA QUALITY GLASS & ALUMINUM LTD.,and CRAIG CAMPBELL,

DEFENDANTS

NOTICE TO DEFENDANT

(1) The Plaintiff may enter Judgment in accordance with this Statement of Claim orsuch Judgment as may be granted pursuant to the Rules of Court unless

within 20 days if you were served in Saskatchewanwithin 30 days if you were served elsewhere in

Canada or in the United States of Americawithin 40 days if you were served outside Canada

and the United States of America

- 97-

- 2 -

(excluding the day of service) you serve a Statement of Defence on the Plaintiffand file a copy thereof in the office of the Local Registrar of the Court for theJudicial Centre above-named.

(2) In many cases a Defendant may have the trial of the action held at a Judicial Centreother than the one at which the Statement of Claim is issued. Every Defendantshould consult his lawyer as to his rights.

(3) This Statement of Claim is to be served within 6 months from the date on whichit is issued.

(4) This Statement of Claim is issued at the above-named Judicial Centre the __day of November, 1998.

LOCAL REGISTRAR

- 98-

- 1 -

CLAIM

1. The Plaintiff, Albert Boire Building Materials Inc. ("Albert Boire"), is a

corporation registered to carry on business in Saskatchewan. Albert Boire carries on

business under the name "Beaver Lumber".

2. The Defendant, Dixie Gratton ("Ms. Gratton"), resides in Swift Current,

Saskatchewan, and carries on business under the name "South Country Contracting".

3. The Defendant, Custom Built Ag Industries Ltd. ("Custom Built"), is a

corporation registered to carryon business in Saskatchewan.

4. The Defendant, Keith Geoffrey Brown, resides in Gravelbourg,

Saskatchewan and is the President of Custom Built.

5. The Defendant, Richard Albertson ("Mr. Albertson"), resides in Swift

Current, Saskatchewan, and was, at all relevant times, employed by Ms. Gratton as

General Manager.

6. In or about April of 1997, Albert Boire entered into a general supply

contract (the "General Supply Contract") with Ms. Gratton in which Albert Boire agreed

- 99-

- 2 -

to provide certain construction materials to Ms. Gratton. Under the General Supply

Contract, Ms. Gratton agreed to pay Albert Boire the sum of $27,359.78 upon being

invoiced by Albert Boire.

7. In or about October 1997 Albert Boire entered into a second contract (the

"Swift Current Contract") with Ms. Gratton in which Albert Boire agreed to provide

certain construction materials to Ms. Gratton, which were to be incorporated into buildings

located on land owned by the Defendant, Keith Geoffrey Brown, and legally described as

follows:

all that portion of the South West Quarter of Section 27Township 15Range 14West of the Third Meridian, SaskatchewanAs Lot 1Block GOn Plan 98SC03654

MINES AND MINERALS EXCEPTED BY 73SC1312\4

(the "Swift Current Land")

8. Under the Swift Current Contract, Ms. Gratton agreed to pay Albert Boire

the sum of $167,583.59 upon being invoiced by Albert Boire.

9.

- 100-

- 3 -

In or about December 1997, Albert Boire and Ms. Gratton entered into a

third contract (the "Gravelbourg Contract"), in which Albert Boire agreed to provide

certain construction materials to Ms. Gratton which were to be incorporated into buildings

located on land owned by the Defendant, Custom Built, and legally described as follows:

Lots 54, 55, 56, 57, 58, 59 and 60Block 12Gravelbourg, SaskatchewanPlan A 1200

(the "Gravelbourg Land")

10. Under the Gravelbourg Contract, Ms. Gratton agreed to pay Albert Boire

the sum of $47,950.00 upon being invoiced by Albert Boire.

11. As of February 1998, Albert Boire had invoiced Ms. Gratton the following

sums:

(a) $27,359.78 for the General Supply Contract;

(b) $167,583.59 for the Swift Current Contract;

(c) $30.817.47 for the Gravelbourg Contract;

$225,760.84

- 101 -

- 4 -

12. An unpaid balance of $27,359.78, $75,397.59, and $30,817.47 remains

owing by Ms. Gratton to Albert Boire under the General Supply Contract, the Swift

. Current Contract, and the Gravelbourg Contract, respectively. These amounts are

presently due and owing to Albert Boire under the General Supply Contract, the Swift

Current Contract, and the Gravelbourg Contract, but remain unpaid and unsatisfied.

13. In each ofthe General Supply Contract, the Swift Current Contract, and the

Gravelbourg Contract, Ms. Gratton agreed to pay interest to Albert Boire at the rate of 2%

per month, from the date of invoicing, on all amounts owing to Albert Boire but remaining

unpaid.

14. In return for Albert Boire entering into the Swift Current Contract and the

Gravelbourg Contract, Keith Geoffrey Brown agreed to indemnify Albert Boire for all

amounts owing to Albert Boire by Ms. Gratton under the Swift Current Contract and the

Gravelbourg Contract. Keith Geoffrey Brown is therefore presently liable to Albert Boire

for the amounts of $167,583.59 on the Swift Current Contract and $30,817.47 on the

Gravelbourg Contract.

15. Each of Keith Geoffrey Brown and Custom Built is an "owner", as defined

in The Builders' Lien Act, of the Swift Current Land and Gravelbourg Land, respectively.

- 102 -

- 5 -

16. Albert Boire has caused a builders' lien to be registered against the Swift

Current Land and has caused a builders' lien to be registered against the Gravelbourg Land

with respect to the improvements made to the Swift Current .Land and Gravelbourg Land

by the incorporation of Albert Boire's construction materials into those lands. The estate

or interest of each of Keith Geoffrey Brown and Custom Built Ag Industries Ltd. in the

Swift Current Land and Gravelbourg Land, respectively, are subject to the valid and

subsisting builders' liens of Albert Boire.

17. The Defendants, K. T. Electric Ltd. , Professional Drywall Ltd., Delta Rock

& Sand Ltd., William Burgess, Acklands-Grainger Inc., Prairie Mechanical Services Inc.,

Gravelbourg Sand & Gravel Ltd., Barber Equipment Ltd., Jake Heinrichs, Pumpjack

Equipment Services Ltd., R. M. Construction Ltd., Heinrichs Bros. Holdings Co. Ltd.,

AA Quality Glass & Aluminum Ltd., and Craig Campbell, have registered builders' liens

against the Swift Current Land and are named as Defendants pursuant to Section 88 of The

Builders' Lien Act.

18. The Defendants, Gravelbourg Sand & Gravel Ltd., A & R Lumber Ltd.,

Phillip Lech, Gary Sparrow, and Prairie Mechanical Services Inc., have registered

builders I liens against the Gravelbourg Land and are named as Defendants pursuant to

Section 88 of The Builders I Lien Act.

- 103 -

- 6 -

19. Ms. Gratton has received funds from Keith Geoffrey Brown and Custom

Built for the improvements to the Swift Current Land and Gravelbourg Land, respectively.

These funds constitute trust funds for the benefit of Albert Boire, and Albert Boire

specifically pleads and relies upon Section 7 of The Builders' Lien Act.

20. In breach of the said trust and in breach of her obligations to Albert Boire

pursuant to The Builders' lien Act, Ms. Gratton has failed or refused, and continues to fail

or refuse, to pay the trust monies to Albert Boire, and has appropriated or converted the

trust monies to her own use or to uses inconsistent with the trust.

21. Mr. Albertson has received funds from Keith Geoffrey Brown and Custom

Built for the improvements to the Swift Current Land and the Gravelbourg Land,

respectively. These funds constitute trust funds for the benefit of Albert Boire, and Albert

7~('Boire specifically pleads and relies upon Sectionj.:r of The Builders' Lien Act.

Alternatively, Albert Boire states that Mr. Albertson is a trustee de son tort as a result of

his receipt and handling of those trust funds.

22. In breach of the said trust and in breach of his obligations to Albert Boire

pursuant to The Builders' Lien Act and/or at common law, Mr. Albertson has failed or

refused, and continues to fail or refuse, to pay the trust monies to Albert Boire, and has

- 104-

- 7 -

appropriated or converted the trust monies to his own use or to uses inconsistent with the

trust.

23. Albert Boire specifically pleads and relies on the provisions of The

Pre-Judgment Interest Act.

24. Albert Boire's claim against the Defendants exceeds 300 words in length,

particulars of which have been provided to the Defendant.

25. Albert Hoire therefore claims against Ms. Gratton, carrying on business

under the name "South Country Contracting":

(a)· Judgment in the amount of $225,760.84;

(b) Interest on the sum of $225,760.84 calculated at 2 %per month as outlined

in Paragraph 12, or alternatively pre-judgment interest;

(c) A declaration that she is in breach of trust, and an order requiring her to

account for the trust monies received, and an order for payment of the trust

monies to Albert Hoire;

- 105 -

- 8 -

(d) Damages for breach of trust; and

(e) Costs.

26. Albert Boire therefore claims against Keith Geoffrey Brown:

(a) Judgment in the amount of $198,401.06;

(b) Interest on the sum of $198,401.06 calculated at 2%per month as outlined

in Paragraph 12, or, alternatively, pre-judgment interest;

(c) A declaration of the valid and subsisting builders' lien on the Swift Current

Land in the amount of $75,397.59;

(d) An order for the sale of the land to satisfy the said builders' lien; and

(e) Costs.

27.

28.

(a)

(b)

(c)

(a)

(b)

(c)

- 106 -

- 9 -

Albert Boire therefore claims against Custom Built Ag Industries Ltd.:

A declaration of the valid and subsisting builders' lien on the Gravelbourg

Land in the amount of $30,817.47;

An order for the sale of the land to satisfy the said builders' lien; and

Costs.

Albert Boire therefore claims against Mr. Albertson:

A declaration that he is in breach of trust, and an order requiring him to

account for the trust monies received, and an order for payment of the trust

monies to Albert Boire;

Damages for breach of trust; and

Costs.

- 107 -

- 10 -

DATED at the City of Regina, in the Province of Saskatchewan, this 23rd

day of November, 1998.

KANUKA THURINGER

Per:-------------Solicitors for the Plaintiff, Albert BoireBuilding Materials Ltd.

This Statement of Claim was delivered by:

KANUKA THURINGERBarristers & Solicitors1400 - 2500 Victoria AvenueRegina, SaskatchewanS4P 3X2

Address for Service: Same as AboveLawyer in Charge of File: Paul J. Harasen/Gary G. W. Semenchuck, Q.C.Telephone: (306) 525-720022202·0Unit25

- 108 -

STATEMENT OI~ CLAIM


IN THE QUEEN'S BENCHJUDICIAL CENTRE OF REGINA

BETWEEN:

ABTEC CONSTRUCTION LTD.

- and-

APPENDIX "I"

Q.B.G. No.tJ31 of 1997

PLAINTIFF

JANET MARGARET BEATTIE,carl1ing on business under the nameTurn of the Century General Store

DEFENDANT

NOTICE TO DEFENDANT

(1) The Plaintiff may enter Judgment in accordance with this Statement of Claim orsuch Judgment as may be granted pursuant to the Rules of Court unless


Canada or in the United States ofAmericawithin 40 days if you were served outside Canada

and the United States of America

(excluding the day of service) you serve a Statement of Defence on the Plaintiff andfile a copy thereof in the office of the Local Registrar of the Court for the JudicialCentre above-named.

(2)

(3)

(4)

In many cases a Defendant may have the trial of the action held at a Judicial Centreother than the one at which the Statement of Claim is issued. Every Defendantshould consult his lawyer as to his rights.

This Statement of Claim is to be served within 6 months from the date on which itis issued.

This Statement of Claim is issued at the above-named Judicial Centre the I-J. day,q ? " T --L2!..:..of M#ih, 1997.

D, bi.:t1aS~;i En0'1. L.OCJlIL ~'3H.;J"

LOCAL REGISTRAR

- 109 -

- 2 -

CLAIM

1. The Plaintiff, Abtec Construction Ltd. ("Abtec"), is a body corporate

with an office in Regina, Saskatchewan and is registered to carry on business in the

Province of Saskatchewan. Abtec is involved in the construction business.

2. The Defendant, Janet Margaret Beattie, resides in Regina,

Saskatchewan and carries on business in or about Pilot Butte, Saskatchewan, under

the name of Turn of the Century General Store.

3. On or about July 8, 1996, Abtec and the Defendant entered into a

contract in which Abtec agreed to provide all labour and materials for construction

of a 40 by 60 foot, 3 storey store and dwelling building. The Defendant agreed to

pay Abtec the sum of $136,960 for providing those labour and materials.

4. At the request of the Defendant, the labour and materials for

construction of the 40 by 60 foot, 3 storey store and dwelling building were

incorporated into the Defendant's land legally described as follows:

the most southerly 68.58 meters in perpendicular widththroughout of Block K in the North West Quarter of

- 110-

·3·

Section 21, Township 17, Range 18, West of theSecond Meridian, Saskatchewan, Plan 93ROO868Mines and Minerals Excepted by EM 4574.

("the Land").

5. The· Defendant has made partial payment under the contract, but as

of March 24, 1997, the Defendant is indebted to Abtec for the sum of $10,014.15.

The $10,014.15 has been due to Abtec, according to the terms of the contract, since

November 14, 1996, but the Defendant has refused or neglected and continues to

refuse or neglect to pay the balance owing of $10,014.15.

6. Abtec has caused a Builder's Lien in the amount of $10,014.15 to be

registered against the Land with respect to the improvements made on the Land by

the incorporation of Abtec's labour and materials into the Land.

7. The Defendant has received money to finance payment to Abtec for

its labour and materials under the contract. Abtec states that all such monies

constitute a trust fund for the benefit of Abtec and Abtec specifically pleads and

relies upon Section 6 of The Builder's Lien Act (Sask).

- 111 -

- 4 -

8. In breach of the said trust and in breach of its obligations to Abtec

pursuant to The Builder's lien Act (Sask), the Defendant has failed or refused, and

continues to fail or refuse to pay the trust monies to Abtec and has appropriated or

converted the trust monies to its own use or to use inconsistent with the trust.

9. Abtec specifically pleads and relies on the provisions of The Pre-

Judgment Interest Act (Sask).

10. Abtec's claim against the Defendant exceeds 300 words in length,

particulars of which have been provided to the Defendant.

11. Abtec therefore claims against the Defendant:

(a) a declaration of the valid and subsisting

Builder's Lien on the Land legally described

herein in the amount of $10,014.15;

(b) an order for the sale of the Land to satisfy the said Builder's

Lien;

(c) judgment in the amount of $10,014.15;

(d) pre-judgment interest;

- 112 -

·5·

(e) a declaration that the Defendant is in breach of trust and an

order requiring the Defendant to account for trust monies

received and an order for payment of the trust monies to

Abtec;

(f) costs of this action.


I day of April, 1997.

KANUKA THURINGER

Per:~SOiiCitOI'SfOfte Plaintiff,Abtec Construction Ltd.


KANUKA THURINGERBarristers & Solicitors14th Floor· 2500 Victoria AvenueRegina. SaskatchewanS4P 3X2Whose address for service is same as above.Lawyer in Charge of File: Paul J. HarasenTelephone: (306) 525-720016744·9Unil3S

- 113 - APPENDIX "J"

STATEMENT OF CLAIM

Q.B.G. No. of2000




BETWEEN:COMPUTALOG LTD. and GEOSERVICES N.A. LTD.,carrying on business as a joint venture under the nameUNITED GEOCOM DRILLING SERVICES

PLAINTIFFS- and-

SPECTRUM RESOURCE GROUP INC., LEPTICHMINERALS LTD., CHEVRON CANADA RESOURCESLIMITED, JOHN EDWARD SMITH, NICK LAZIC, andRANDALL EDWARD SMITH

DEFENDANTS

NOTICE TO DEFENDANT

(1) The Plaintiffmay enter Judgment in accordance with this Statement ofClaim or suchJudgment as may be granted pursuant to the Rules of Court unless


Canada or in the United States of Americawithin 40 days if you were served outside Canada

and the United States ofAmerica

(excluding the day ofservice) you serve a Statement ofDefence on the Plaintiffandfile a copy thereof in the office of the Local Registrar of the Court for the JudicialCentre above-named.

(2) In many cases a Defendant may have the trial of the action held at a Judicial Centreother than the one at which the Statement of Claim is issued. Every Defendantshould consult his lawyer as to his rights.

(3) This Statement of Claim is to be served within 6 months from the date on which itis issued.

(4) This Statement ofClaim is issued at the above-named Judicial Centre the dayofAugust, 2000. --

LOCAL REGISTRAR

- 114CLAIM

1. The Plaintiffs, Computalog Ltd. and Geoservices N.A. Ltd., carrying on

business as a joint venture under the name United GeoCom Drilling Services, are

corporations registered to carry on business in Saskatchewan.

2. The Defendant, Spectrum Resource Group Inc. C'Spectrum"), is a corporation

registered to carry on business in Saskatchewan.

3. The Defendants, Leptich Minerals Ltd. and Chevron Canada Resources

Limited, are named as Defendants pursuant to the provisions ofSection 88 ofThe Builders'

Lien Act.

4. The Defendants, John Edward Smith, Nick Lazic, and Randall Edward Smith,

were, at all relevant times, directors, officers, or persons in effective control of Spectrum.

5. On or about December 29, 1999, the Plaintiffs entered into a contract ("the

Contract") with Spectrum in which the Plaiptiffs agreed to provide to Spectrum oilfield

directional drilling services preparatory to and in connection with the recovery of the

minerals located within, upon, or under the North West and South West quarters of Section

15, Township 6, Range 5, West ofthe 2nd Meridian, in the Province ofSaskatchewan, in the

Dominion ofCanada, containing together three hundred and twenty (320) acres more or less

according to dominion government survey thereof (the "Mines and Minerals").

6. At all material times, Spectrum had an estate or interest in the Mines and

Minerals as a Lessee under a Saskatchewan Petroleum and Natural Gas Lease dated July 4,

1997 between Leptich Minerals Ltd. as Lessor and Spectrum as Lessee.

7. Under the Contract, Spectrum promised and agreed to pay the Plaintiffs the

sum of$115,541.94 for the oilfield directional drilling services which the Plaintiffs were to

- 115 -- 2 -

provide under the Contract. Spectrum promised and agreed to pay that sum within 30 days

ofbeing invoiced for that sum.

8. The Plaintiffs provided the oilfield directional drilling services to Spectrum,

and on March 1,2000, invoiced Spectrum for those services in the amount of $115,541.94.

9. In breach of its contractual obligations, Spectrum has refused or neglected,

and continues to refuse or neglect, to pay the Plaintiffs the sum of $115,541.94, which is

presently due and owing by Spectrum to the Plaintiffs.

10. The Plaintiffs have caused a builders lien in the amount of$115,541.94 to be

registered against the Mines and Minerals as the Plaintiffs' services were provided

preparatory to and in connection with the recovery ofa mineral. The Plaintiffs plead and rely

on Section 22 of The Builders' Lien Act, and state that they have a valid and subsisting

builders' lien.

11 . Spectrum has received money to finance payment to the Plaintiffs for the

services provided by the Plaintiffs under the Contract. The Plaintiffs state that all such

monies constitute a trust fund for their benefit, and specifically plead and rely on Section 6

of The Builders' Lien Act.

12. In breach of the said trust, and in breach of its obligations to the Plaintiffs

under The Builders' Lien Act, Spectrum has failed or refused and continues to fail or refuse

to pay the trust monies to the Plaintiffs, and has appropriated or converted the trust monies

to its own use or to uses inconsistent with the trust.

13. John Edward Smith, Nick Lazic, and Randall Edward Smith were, at all

relevant times, directors, officers, or persons with effective control of Spectrum who

consented to, or acquiesced in, conduct that each knew or reasonably ought to have known

- 116

·3·

amounted to a breach of trust by Spectrum, and are each therefore liable for the breach of

trust.

14. The Plaintiffs state that Spectrum promised and agreed to pay interest on all

amounts owing to the Plaintiffs under the Contract at the rate of2% per month beginning 30

days from being invoiced by the Plaintiffs. In the alternative, the Plaintiffs specifically plead

and rely on the provisions of The Pre-Judgment Interest Act.

15. The Plaintiffs' claim against Spectrum exceeds 300 words m length,

particulars of which have been provided to Spectrum.

16.

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

The Plaintiffs therefore claim against Spectrum:

Judgment in the amount of$115,541.94;

A declaration of the valid and subsisting builders' lien on all

the estates or interests in the Mines and Minerals;

A declaration of the valid and subsisting builders' lien on the

minerals when severed and recovered from the lands while in

the hands of Spectrum, and to the proceeds of the mineral,

and to the amounts to be paid in lieu of the proceeds of the

mineral to Spectrum;

A declaration of the valid and subsisting builders' lien on the

interests of Spectrum in the fixtures, machinery, tools,

appliances, and other property in or on the lands;

An order for the sale ofthe Mines and Minerals to satisfy the

said builders' lien;

A declaration that Spectrum is in breach oftrust, and a.p. order

requiring Spectrum to account for the trust monies received,

and an order for payment ofthe trust monies to the Plaintiffs;

Interest pursuant to Paragraph 14 above; and

Costs of this action.

- 117--4-

17. The Plaintiff therefore claims against Jolm Edward Smitht Nick Lazict and

Randall Edward Smith on a joint and several basis:

(a) A declaration that Jolm Edward Smitht Nick Lazict and

Randall Edward Smith are in breach of trustt and an order

requiring Jolm Edward Smitht Nick Lazict and Randall

Edward Smith to account for trust monies receivedt and an

order for payment of the trust monies to the Plaintiffs;

(b) Interest pursuant to Paragraph 14 above; and

(c) Costs of this action.

DATED at the City ofReginat in the Province of Saskatchewant this __

day of Augustt 2000.

KANUKA THURINGER

Per:--------------Solicitors for the Plaintiffst Computalog Ltd.and Geoservices N.A. Ltd., carrying onbusiness as a joint venture under the nameUnited GeoCom Drilling Services


KANUKA THURINGERBarristers and Solicitors14th Floor - 2500 Victoria AvenueRegina, SaskatchewanS4P 3X2

Whose address for service is same as above.Lawyer in Charge ofFile: Paul 1. HarasenTelephone: (306) 525-72009451·96 pmUnit25

- 118 - APPENDIX "K"

Q.B.G. No. 2251 of 1995



BETWEEN:

WATERBOY SUPPLY CENTRE (1990) LID.

PLAINTIFF

- and •

GOONIE'S DUGOUT INC., REGINA SLO-PITCH NATIONALASSOCIATION INC., MORSKY FARM INC., DARRELL NAGY,VERN NAGY, CARLYLE COMPANY EDMONTON LID.,HBT AGRA UMITED, GEIGER'S FENCE ERECTORS LID.,INSTAN-TURF GROWERS LTD., ARDEL STEEL LID., SERBUSAND & GRAVEL LID., and W.T. MCGINN & ASSOCIATES(1980) LID.

DEFENDM"TS

NOTICE OF MOTION


Judge in Chambers at the Court House at 2425 Victoria Avenue, Regina,

Saskatchewan, on Thursday, the 26th day of June, 1997 at ten o'clock in the

forenoon or so soon thereafter as counsel can be heard on behalf of Waterboy

Supply Centre (1990) Ltd. for the following order:

1. An Order extending the time in which this action must be set down

for trial by one year from the date of that Order.

- 119-

·2·

AND FURTIlER TAKE NOTICE that the grounds to be argued,

including reference to any statutory provision or role to be relied on, are as

follows:

1. Section 55(2) authorizes the relief sought.

2. One of the Defendants, Goonie's Dugout Inc., against whose estate

the lien has been registered, has been noted in default of defence.

3. Goonie's Dugout Inc.'s estate in the land is pursuant to an

Agreement for Sale with the registered owner, Morsky Farm Inc.

4. Goonie's Dugout Inc. has been making payments under the

Agreement for Sale to Morsky Farm Inc.

5. Morsky Farm Inc. will not be prejudiced by the Order sought as the

passage of time will simply allow it to receive further payments

under the Agreement for Sale from Goonie's Dugout Inc. Once

.full payments are received Morsky Farm Inc. will convey title of the

land to Goonie's Dugout Inc. and thereafter will be unaffected by

the lien registrations against the land.

AND FURTIlER TAKE NOTICE that in support of the said

application will be read the following:

1. This Notice of Motion with proof of Service;

2. The Affidavit of Lester Boey with proof of service;

3. A Brief of Law;

- 120-

·3·

4. A Draft Order.

DATED at the City or Regina, in the Province of Saskatchewan, this

:to day of June, 1997.

KANUKA 1HURINGER

TO: Morsky Farm Inc.W.T. McGinn & Associates (1980) Ltd.Darrell NagySerbu Sand & Gravel Ltd.

AND TO: The Local Registrar


KANUKA TIillRINGERBarristers and Solicitors14th Floor - 2500 Victoria AvenueRegina, SaskatchewanS4P 3X2

whose address for service is: Same as aboveLawyer in charge of file: Paul J. HarasenTelephone: (306) 525-720018293-0UDit9

- 121 -

Q.B.G. No. 2251 of 1995

IN nm QUEEN'S BENCH

JUDICIAL CENTRE OF REGINJ

BETWEEN:

WATERBOY SUPPLY CENTRE (1990) ,TIl

GOONlE'S DUGOUT INC., REGINA SLO-PITCH'NA'1TONALASSOCIATION INC., MORSKY FARM INC., DARRELL NAGY,VERN NAGY, CARLYLE COMPANY EDMONTON LID.,HBT AGRA UMITED, GEIGER'S FENCE EREcroRS LTD.,INSTAN-TURF GROWERS LID., ARDEL STEEL LID., SERBUSAND & GRAVEL LID., and W.T. MCGINN & ASSOCIATES(1980) LID.

AFfIDAVIT OF LESTER BOEY

I, Lester Boey, of the City of Regina, in the Province of

Saskatchewan, MAKE OArn AND SAY:

1. I am the manager and authorized agent of Waterboy Supply Centre

(1990) Ltd. and as such have personal knowledge of the facts and matters of

which I swear. Where I make statements based on information and belief, I verily

believe those statements to be true.

2. I am informed by my lawyers, Kanuka Thuringer, and do verily

believe to be true, that the following parties were Doted in default of defence on

or about July 26, 1995:

....- -

- 122 -

·2·

(a) Goonie's Dugout Inc.

(b) Regina Sio-Pitch National Association Inc.

(c) Geiger's Fence Erectors Ltd.

(d) W.T~ McGinn &. Associates (1980) Ltd.

(e) In.stan-Turf Growers Ltd.

(f) Ardel Steel Ltd.

(g) HBT Agra Limited.

3. Attached as Exhibit "A" to my Affidavit is a true copy of the

registered Builders' Lien of 'Waterboy Supply Centre (1990) Ltd.

4. Attached as Exhibit "B" is the Caveat registered by Goonie's Dugout

Inc. against the land subject to Waterboy's builders' lien along with a true copy

of the Agreement for Sale between Morsky Farm Inc. and GooDie's Dugout Inc.

5. Attached as Exhibit "C' is a copy of a letter dated March 6, 1997

from our lawyers, Kanuka Thuringer, to the lawyers representing Morsley Farm Inc.

6. Attached as Exhibit "D"is a true copy of a letter dated March 25,

1997 from the lawyers for Morsky Farm Inc. to our lawyers, Kanuka Thuringer.

7. Waterboy's plan in this action is to wait and allow Morsley Farm Inc.

to be fully paid by Goonie's Dugout Inc. under the Agreement for Sale, after

- 123 -

·3·

which Morsky Farm Inc. will convey title to Goonie's Dugout Inc. Once title is

conveyed, Waterboy will proceed with enforcement of its Builders' lien against

the land, which would solely be in the name of Goonie'sDugout Inc.

8. Attached as Exhibit "Eft to my Affidavit is a true copy of the

Statement of Claim served on Waterboy in O.B.G. No. 71 of 1996 in which

Morsl..y Farm Inc. seeks cancellation of its Agreement for Sale with Goonie's

Dugout Inc. as well as cancellation of the builders' liens registered against the

land.

9. Q.B.G. No. 71 of 1996 has not proceeded beyond the initial

mediation session. I believe this is due to the efforts of Goonie's Dugout Inc. to

satisfy its obligations to Morsky Farm Inc. under the Agreement for Sale and I

base this belief on the correspondence attached as Exhibit "C' and "nil to my

Affidavit.

1O. I make this Affidavit in support of an application for an Order

extending the time for setting the within action down for trial.

SWORN BEFORE ME at the City )of Regina, in the Province of· )~Saskatchewan, this ~ day )~ .,.-

Of~ ) :?A COM5lONFOR OATIlS in an)forthe Province of Saskatchewan.'My::qmmissiwt:.eKflH=es:

CBeiEz a solici~

- 124-

. .. .This Affidavit was delivered by:

KANUKA 1lflJRINGERBarristers and Solicitors14th Floor· 2500 Victoria AvenueRegina, SaskatchewanS4P 3X2

Whose address for service is: Same as aboveLawyer in charge of file: Paul J. HarasenTelephone: (306) 525·7200lB293-CUDir9

- 125 -

Q.B.G. No. 2251 of 1995



BETWEEN:

WATERBOY SUPPLY CENTRE (1990) LID.

PlAINTIFF

• and-

GOONIE'S DUGOUT INC., REGINA SLO-PITCH NATIONALASSOCIATION INC., MORSKY FARM INC., DARREll. NAGY,VERN NAGY, CARLYLE COMPANY EDMONTON LID.,HBT AGRA liMITED, GEIGER'S FENCE EREcroRS LID.,INSTAN-TURF GROWERS LTD., ARDEL STEEL LID., SERBUSAND & GRAVEL LTD., and W.T. MCGINN & ASSOCIATES(1980) LTD.

BEFORE nIE HONOURABLE

M JUSTICE ----IN CHAMBERS

)))))

ORDER

DEFENDANTS

ON DAY,1HE. -

DAY OF JUNE, 1997.

UPON the application of Waterboy Supply Centre (1990) Ltd., and.'

upon hearing read all material filed:

. IT IS HEREBY ORDERED that the time for setting this action

down for trial is extended by one year from the date of..this .eNder. " 1\ II

- 126-

·2·

IT IS HEREBY FURnIER ORDERED that the costs of this

application be costs in the cause.


___ day of June, 1997.

Local Registrar


KANUKA TI-IURINGERBarristers and Solicitors14th Floor· 2500 Victoria AvenueRegina, SaskatchewanS4P 3X2Whose address for service is same as above.Lawyer in charge of file: Paul J. HarasenTelephone: (306) 525-72001829>0lJnit9

- 127 -

Q.B.G. No. 2251 of 1995

IN 1HE OUEEN'S BENCH

JUDICIAL CENTRE OF REG}

BETWEEN:

WATERBOY SUPPLY CENTRE (1990) LTD

-and- ,J.. ..GOONIE'S DUGOUT INC.. REGINA SLO-PITCH NATIONALASSOCIATION INC.• MORSKY FARM INc., DARRElL NAGY.VERN NAGY. CARLYLE COMPANY EDMONTON LID..HBT AGRA liMITED, GEIGER'S FENCE ERECTORS LID.,INSTAN-T'URF GROWERS LID.• ARDEL STEEL LID., SERBUSAATD & GRAVEL LID.. and W.T. MCGINN &. ASSOCIAlES(1980) LID. .

DEFENDANTS

BRIEF OF LA'" ON BEHALF OF WATERBOY SupPLY CENTRE (1990) LTD.

1. Section 55 of The Builders' Lien Act. S.S. 1984·85·86. c·B-7.1 requires

an action for realization on a builders' lien to be set down for trial within two

years of the date the action was commenced. This action was commenced on.

June 29, 1995.

2. Section 55(2) of The Builders' lien Act allows for an extension of

that time period.

3. The authority on section 55 of The Builders' lien Act is Roy Howden

Construction Ltd. v. Dewitt et oJ (1993), 114 Sask. R. 263 (O.B.).

- 128 -

• 2-

4. In that ease the application was brought more than three years after

the action had been commenced. The Court held that it had the ability to grant

an extension of the two year period even after the expiration of that period. In

the instant ease the application is being brought within the two year period.

s. In Roy Howden Construction Ltd. the Court held that the discretion

to extend the two year time period contemplates:

"•..a balancing of the interest of the lien claimant andthe property owner, in order for their to be a properbalancing of interest, the Court must e~e thereasons for the passage of time, and any prejudice tothe parties that will result from the granting orrefusing of an extension of time."

6. In the within action it is important to note that Goonie's Dugout

Inc. has been noted in default of defence. Goonie's Dugout Inc. is one of two

parties which have an estate or interest in the land, the other being Morsk)' Farm

Inc. The claim against Goonie's Dugout Inc. is not disputed.. Morsky Farm Inc.

has, however, filed a Statement of Defence.

7. Goonie's Dugout Inc.'s estate or interest in the land is under an

Agreement for Sale with the registered owner, Morsky Farm Inc. If Goonie's

Dugout Inc. meets its obligations under that Agreement for Sale, then Morsky

Farm Inc. must convey title to GooDie's Dugout Inc. If that occurs the builders'

liens will attach only to an interest of GooDie's Dugout Inc., Morsk)' Farm Inc.

will no longer have an interest in the land subject to the builders' liens.

)

- 129-

·3·

8. While GooDie's Dugout Inc. has been in arrears of its payments

under the Agreement for Sale, it has made substantial payments in the past and

is apparently·continuing to make some payments. Morsky Farm Inc. has taken DO

further steps to pursue its action in Q.B.G. No. 71 of 1996 for cancellation of that

Agreement for Sale.

9. In granting an extension of the two year time period in which to

have an action set down for trial, the Court in Roy Howden Construction Ltd.

noted:

"It is not suggested that the Plaintiff has tried to aainan advantage by deliberately failini to proceed with itsclaim. or that its failure to proceed promptly Was dueto some improper motive. On the contrary, it appearsthe parties just lost interest in the case after thePlaintiff's solicitor sent the Joint Request for a Pretrial Conference to the Defendant's solicitors. ~Defendant showed no more interest inprocceding withthe case than did the PlaiDtiff." [emphasis added]

10. If the extension is granted, GooDie's Dugout Inc. may make the

further payments required under the Agreement for Sale. MorsleY Farm Inc.

would be paid and would DO longer have any interest in the land against which

the. liens are registered. If that were to occur, then the applicant would retain its

security for a claim which has Dot been disputed by GooDie's Dugout Inc.

11. It is therefore respectfully submitted that a balancing of the interests

of the lien claimant and the property owner in this case dictates that the Court

- 130-

. .. .should exercise its discretion in extending the time for setting this action down for

trial.

AU·OF WInCH IS RESPEC1FUlLY SUBMlTIED.


it day of June, 1997.

This Brief of Law is delivered by:

KMTI(A THURlNGERBarristers and Solicitors14th Floor· 2500 Victoria AvenueRegina, SaskatchewanS4P 3X2

Whose address for service is: Same as aboveLawyer in charge of file: Paul J. HarasenTelephone: (306) 525·7200~

Unir9

BETWEEN:

- 147 -


MORSKY FARM INC.

• and·

APPENDIX "M"

Q.B.G. No. 71 of 1996

PLAINTIFF

BET\\'EEN:

GOONIE'S DUGOUT INC., CARLYLE COMPANY EDMONTON LTD.,HBT AGRA LIMITED, GEIGER'S FENCE ERECTORS LTD., lNSTANTURF GROW'ERS LTD., WATERBOY SUPPLY CENTRE (1990) LTD.,ARDEL STEEL LTD., SERBU SAND & GRAVEL LTD., W.T. MCGIl\TN& ASSOCIATES (1980) LTD., B·A MATERIALS LIMITED and KAY'SCONSTRUCTION INC.

DEFENDANTS

Q.B,G. No. 2251 of1995

IN THE QUEEN'S BENCHJUD] CIAL CENTRE OF REGINA

WATERBOY SUPPLY CE1\TTRE (1990) LTD.

PLAINTIFF

• and·

GOONIE'S DUGOUT INC., REGINA SLO·PITCH NATIONALASSOCIATION INC., MORSKY FARM INC., DARRELL NAGY, VERNNAGY, CARLYLE COMPANY EDMONTON LTD., HBT AGRALIMITED, GEIGER'S FENCE ERECTORS LTD., INSTAN.TURFGROWERS LTD., ARDEL STEEL LTD., SERBU SAND & GRAVELLTD. and W.T. MCGINN & ASSOCIATES (1980) LTD.

DEFENDANTS

NOTICE OF MOTION

- 148 -

-2-

TAKE NOTICE that an application will be made to the presiding Judge in

Chambers at the Court House at 2425 Victoria Avenue, Regina, Saskatchewan, on Thursday,

the 23rd day ofJuly, 1998 at ten o'clock in the forenoon or so soon thereafter as counsel can

be heard on behalf ofWaterboy Supply Centre (1990) Ltd. for the following relief:

1. An Order confirming the sale of the following land to Paul Morsky Ltd.

pursuant to the Judgment and Order for Sale in this action dated June 11,

1998:

Parcel FSWJI. of Section 24Township 17Range 19West of the Second Meridian, SaskatchewanPlan 92R06596Mines and Minerals Excepted .

(the "Land").

2. An Order directing the Registrar of the Regina Area Land Registration

District to cancel the existing Certificate of Title to the Land and to issue a

new Certificate of Title free and clear of all encumbrances.

3. An Order disbursing the proceeds of the sale of the Land in the manner

provided for in pages 7 and 8 ofthe Judgment and Order for Sale as follows

- 149-

- 3 -

(there being insufficient funds to disburse to execution creditors or Goonie's

Dugout Inc.):

(a) Payment of the property tax arrears to appropriate municipal taxing

authority;

(b) Payment to Waterboy Supply Centre (l990) Ltd. for the costs and

expenses of the sale to be taxed on a party and party basis;

(c) Payment to MorskyFann Inc. ofthe sum owing to Morsky Fann Inc.

by Goonie's Dugout Inc. under the October I, 1991 Agreement for

Sale. This amount is to be determined in this application;

(d) Payment to those lien claimants registered against the Land who

prove their lien claims at this application. (It should be noted that the

lien claim of Waterboy Supply Centre (1990) Ltd. in the amount of

$56,392.91 has already been declared valid and subsisting in the

Judgment and Order for Sale dated June II, 1998).

AND FURTHER TAKE NOTICE that the grounds to be relied upon,

including statutory provisions or rules, are as follows:

l. Section 96(3) of The Builders'Lien Act.

2. The Judgment and Order for Sale dated June 11, 1998.

FILED in support of this Application are the following documents:

- 150-

-4-

1. The pleadings and proceedings in Q.B.G. No. 71 of 1996 and Q.B.G. No.

2251 of1995 including the Judgment and Order for Sale dated June 11, 1998.

2. A certified copy ofTitle to the Land.

3. A General Record Certificate for Goonie's Dugout Inc.

4. Affidavit ofPosting.

5. Affidavit of Lester Boey.

6. Affidavit ofPaul 1. Harasen (Sale Officer).

7. A draft Order with attached worksheet for the Chamber Judge.

8. Proof of service.

DATED at the City of Regina, in the Province ofSaskatchewan, this 11...-.day of July. 1998.

~. THURINGR

Per:-:--~~""':::-::...;;.-~----

Solicitors·for the Plaintiff, WaterboySupply Centre (1990) Ltd.

TO: Serbu Sand & Gravel Ltd.c/o Sheppard, Braun Muma & ElliottBarristers and Solicitors204 - 3988 Albert StreetRegina, SaskatchewanS4S 3Rl

- 151 -

Goonie's Dugout Inc.c/oMacPherson, Leslie & TyennanBarristers and Solicitors1500· )874 Scarth StreetRegina, SaskatchewanS4P 4E9

Kay's Construction Inc.c/o McDougall ReadyBarristers and Solicitors#700·2010· 11th AvenueRegina, SaskatchewanS4P DB

B-A Materials Limitedc/o Herle & CompanyBarristers and Solicitors2062 Cornwall StreetRegina, SaskatchewanS4P 2K5

Morsky Fann Inc.c/o Griffin Toews Maddigan BrabantBarristers and Solicitors1530 Angus StreetRegina, SaskatchewanS4P lZ1

W.T. McGinn & Associatesc/o Kowalishen Law Firm1954 Angus StreetRegina, SaskatchewanS4T 126

Ardel Steel Ltd.450 Longman CrescentRegina, SaskatchewanS4N 6J4

- 152 -

- 6-

Geiger's Fence Erectors Ltd.146- 6th Avenue EastRegina, SaskatchewanS4N SAS

HBT Agra Limited, now known asAgra Earth & Environment

608 McLeod StreetRegina, SaskatchewanS4N 4Yl

Instan-Turf Growers Ltd.Box 116, RR #3Saskatoon, SaskatchewanS7K 3J6

AJ'\D TO: The Local Registrar


KAl\ruKA THURlNGERBarristers and Solicitors14th Floor - 2500 Victoria AvenueRegina, SaskatchewanS4P 3X2

Address for Service: Same as aboveTelephone: (306) 525-7200Lawyer in Charge of File: Paul 1. Harasen18293·4Uni125

- 153 -

Q.B.G. No. 71 of 1996IN THE QUEEN'S BENCH


BETWEEN:

MORSKY FARM INC.PLAINTIFF

- and-

GOONIE'S DUGOUT INC., CARLYLE COMPANY EDMONTON LTD., HBTAGRA LIMITED, GEIGER'S FENCE ERECTORS LTD., INSTAN-TURFGROWERS LTD., WATERBOY SUPPLY CENTRE (1990) LTD., ARDELSTEEL LTD., SERBU SAND & GRAVEL LTD.,W.T. McGINN &ASSOCIATES (1980) LTD., B~A MATERIALS LIMITED and KAY'SCONSTRUCTION INC.

DEFENDANTS

Q.B.G. No. 2251 of 1995


BETWEEN:

WATERBOY SUPPLY CENTRE (1990) LTD.

PLAINTIFF- and-

GOONIE'S DUGOUT INC., REGINA SLO-PITCH NATIONAL ASSOCIATIONINC., MORSKY FARM INC., DARRELL NAGY, VERN NAGY, CARLYLECOMPANY EDMONTON LTD., HBT AGRA LIMITED, GEIGER'S FENCEERECTORS LTD., INSTAN-TURF GROWERS LTD., ARDEL STEEL LTD.,SERBU SAND & GRAVEL LTD., and W.T. MCGINN & ASSOCIATES (1980)LTD.

DEFENDANTS

BEFORE THE HONOURABLEMR. JUSTICE G.E. NOBLEIN CHAMBERS

) ON THURSDAY, THE 11TH)) DAY OF JUNE 1998.

JUDGMENT AND ORDER FOR SALE

- 154-

-2-

Upon the application ofWaterboy Supply Centre (1990) Ltd. in Q.B.G. No.

71 of 1996, and upon the Doting in default of Goonie's Dugout Inc. and Regina Slo-Pitch

National Association Inc. by Waterboy Supply Centre (1990) Ltd. in Q.B.G. No. 2251 of

1995, and upon hearing read the consent of all parties interested in the equity of

redemption, certified copy oftitle, the general registration certificate, and adraft Judgment

and Order for Sale.

IT IS HEREBY ADJUDGED that Waterboy Supply Centre (1990) Ltd.

shall have Judgment against Goonie's Dugout Inc. and Regina Slo-Pitch National

Association Inc., jointly and severally, for the sum of $63,673.41, being the principal

amount of its claim in Q.B.G. No. 2251 of 1995 plus pre-judgement interest. In addition,

Waterboy Supply Centre (1990) Ltd. shall be entitled to party and party costs, to be taxed,

from Goonie's Dugout Inc. and Regina Slo-Pitch National Association Inc. in Q.B.G. No.

2251 of 1995.

IT IS HEREBY DECLARED that Waterboy Supply Centre (1990) Ltd. has

a valid and subsisting builders' lien against Parcel F in the SW JA 24-17-19 W2nd

Meridian, Saskatchewan, Plan 92R06596, Mines and Minerals Excepted (the "Liened

Lands") in the amount of $56,392.91.

AND IT IS FURTHER ORDERED that the Liened Land shall be sold at

Regina, Saskatchewan under the direction of Paul J. Harasen, barristers and solicitor, of

- 155 -

83 8

Kanuka Thuringer, Barristers and Solicitors, 1400 - 2500 Victoria Avenue, Regina,

Saskatchewan, S4P 3X2, at the Court House, 2425 Victoria Avenue, Regina,

Saskatchewan within 7 days of the last day the Liened Land is advertised for sale.

Provided however, that upon payment at any time before the sale of the sum of

$63,673.41, being the Judgment amount owing to Waterboy Supply Centre (1990) Ltd.,

together with interest accruing on the Judgment then the sale shall not proceed.

AND IT IS FURTHER ORDERED that at least 3 weeks notice of the time,

place and conditions of the sale shall be given with such notice to be published at least

twice before the date of the sale in the Regina Leader-Post as well as posted in printed

form in one conspicuous place on the Liened Land and in two other conspicuous places

in the City of Regina, in the Province of Saskatchewan at least 3 weeks before the date of

sale.

AND IT IS FURTHER ORDERED that Waterboy Supply Centre (1990)

Ltd., Goonie's Dugout Inc., and Morsky Farm Inc. and any of the lien claimants against

the Liened Land are given leave to bid at the sale.

AND IT IS FURTHER ORDERED that the terms of the sale shall be

$14,500.00 cash or certified cheque at the time of the sale with the balance to be paid

within 5 days from the date of the sale.

- 156 -

-4-

AND IT IS FURTHER ORDERED that the Liened Land shall not be sold

for an amount less than $145.000 plus any applicable GST.

AND IT IS FURTHER ORDERED that the Liened Land shall be sold free

and clear of all encumbrances including property taxes.

AND IT IS FURTHER ORDERED that the following rules and conditions

shall apply to the sale.

1. The sale shall take place at the Court House. 2425 Victoria Avenue,

Regina, Saskatchewan,;

2. The solicitor conducting the sale shall, at the opening of the sale,

advise those in attendance as to the rules which will govern the

conduct of the sale;

3. The sale shall be conducted by auction;

4. In addition, prior to the sale, written bids may be submitted to the

said solicitor at the said law finn by courier, facsimile or registered

mail on the following conditions:

- 157 -

·5·

(a) Each bid shall be received by the said solicitor if deliverednot later than 12:00 noon the day of the sale;

(b) Each bid shall be accompanied by a certified cheque in theamount of at least $14,500; Provided however, that shouldthe bid be unsuccessful, the certified cheque will be returnedto the unsuccessful bidder;

(c) Any written bid shall be treated by the said solicitor as a bidat the sale, if so accompanied by the required certifiedcheque;

(d) The posted newspaper advertisements and posted noticeshall state that bids may be entered in this fashion.

5. If a bid is accepted and the $14,500 deposit paid as aforesaid, but

the prospective purchaser fails to complete the transaction of sale

for any reason, then the said deposit shall be absolutely forfeited

and the funds paid into court to be applied in the same manner as

purchase monies. Thereafter, Morsky Farm Inc. may apply for a

fmal order cancelling the interests of the Defendant, Goonie's

Dugout Inc. under the Agreement for Sale dated October 1, 1991.

AND IT IS FURTHER ORDERED that Goonie's Dugout Inc., Morsky

Farm Inc. or any person or persons claiming through or under them shall give up

possession to the purchaser immediately upon being advised by Paul J. Harasen, Barrister

and Solicitor, of Kanuka Thuringer, that a bid was accepted and requisite deposit paid at

the judicial sale. Should the purchaser fail to complete the transaction of sale for any

- 158 -

-6-

reason then Goonie's Dugout Inc., Morsky Farm Inc. and all persons claiming through or

under them shall be entitled to retain possession of the land.

AND IT IS FURTHER ORDERED that upon confirmation of the sale, the

title to the Liened. Land shall vest in the name of the purchaser, or hislher nominee,

subject to the aforesaid, but free from all right, title and equity of redemption on the part

of Goonie's Dugout Inc., Morsky Farm Inc., or any person or persons claiming through

or under them, and Goonie's Dugout Inc., Morsky Farm Inc. and all persons claiming

through or under them.

AND IT IS FURTHER ORDERED that an application for confirmation of

the sale shall be made to the court within 1 week after the sale.

AND IT IS FURTHER ORDERED that in the event that the sale shall be

abonive or not confirmed then Morsky Farm Inc. may apply for a final order for

cancellation with the title to the Liened Land to vest and remain in Morsky Farm Inc.

absolutely free from all right title and interest of the Defendant, GooDie's Dugout Inc. and

all persons claiming through or under them and the said Defendant, GooDie's Dugout Inc. ,

and all persons claiming through or under them in possession of the Liened Land are to

give up possession thereof to Morsky Farm Inc. immediately after service upon them of

a copy of the final order for foreclosure.

- 159 -

- 7 -

AND IT IS FURTHER ORDERED that a copy of this Order be served

upon:

GooDie's Dugout Inc.Regina Slo-Pitch National Association Inc.Morsky Farm Inc.Carlyle Company Edmonton Ltd.HBT Agra LimitedGeiger's Fence Erectors Ltd.Instan-Turf Growers Ltd.Ardel Steel Ltd.Serbu Sand & Gravel Ltd.W.T. McGinn & Associates (1980) Ltd.Kay's Construction Inc.B-A Materials Limited

with service being permitted by regular mail or, where represented by lawyers, by

facsimile.

AND it is further ordered that Waterboy Supply Centre (1990) Ltd. is

granted the costs of the said sale on a party and party basis.

AND IT IS FURTHER ORDERED that the purchase monies shall be paid

by Paul J. Harasen into court to be paid by the Registrar, pursuant to the order confinning

the sale as follows:

1. Payment of the property tax arrears to appropriate municipal taxing

authority.

- 160 -

- 8-

2. Payment to Waterboy Supply Centre (l990) Ltd. for the costs and

expenses of the sate to be taxed on a party and party basis;

3. PaYment to Morsky Farm Inc. of the sum owing to Morsky Farm

Inc. by Goonie's Dugout Inc. under the October 1, 1991 Agreement

for Sale. This amount is to be determined at the application for

confirmation of the sate;

4. Payment to those tien claimants registered against the Liened Land

who prove their tien claims at the app~ication for confirmation of

the sale;

5. To the Sheriff of the Judicial Centre of Regina for distribution to

execution creditors ofGoonie's Dugout Inc. in accordance with The

Creditor's ReliefAct;

6. Payment to Goonie's Dugout Inc. of any remaining balance.

Issued at the City of Regina, in the Province of Saskatchewan this .Jd±h.

day of June, 1998.

- 161 -

-9-

This Judgment and Order for Sale was delivered by:

KANUKA THURINGERBarristers and Solicitors14th Floor - 2500 Victoria AvenueRegina, SaskatchewanS4P 3X2

Whose address for service is same as above.Lawyer in charge of file: Paul J. HarasenTelephone: (306) 525-720018293-4Unit25

07/18/99 MON 17:27 FAX 308 359 0785 McDOUGALL READY

- 162 -

Q.D. No. IS09 of 1998

APPENDIX "N"

I4l 002

IN TIm QUEEN'S BENCHJUDICIAL CENTRE OF REGINA

BETWEEN:

UNIVERSAL GRAIN SYSTEMS INC. andTOM PETERSON

- and-PLAINTIFFS

CONAGRA LIMITED. RALPHME~and MAYO SCHMIDT

DEFENDANTS

B &. G SERVICE, a business name registered to BERNIE SCHMIDTand GREG SCHMIDT. operating as a par1Dcrship, JENCO LTD.,CAPSTONE CONSTRUCTION LTD., LARSENS' CONSTRUCTIONLTD.• SOUTH END CONCRETE LIMITED. PROCRANE INC.•NATIONAL CRANE LTD.• GOODMAN STEEL AND IRON WORKS(1986) LTD., A-l RENT-ALLS LTD., TNG CONSTRUCTION LTD.•NORD-SEN METAL INDUSTRIES LTD.• DUNDURNCONSTRUCTION LTD., MALBERG AGRO SERVICES INC.• TORLENSUPPLY & SERVICES INC., COMMUNITY ELECTRIC LTD.,CENTRAL CANADIAN STRUCTURES LTD., ANCHORCONSTRUCTION INDUSTRIAL PRODUCTS LTD.• DAYCONMECHANICAL SYSTEMS LTD., GUNNER INDUSTRIES LTD.,WALLACE CONSTRUCTION SPECIALTIES LTD., lANNOCKLIMITED. STATUs-QUO ANTE-BELLUM INC.• SUPERIORWEIGInNG SYSTEMS LTD., MID-CANADA REINFORCING INC.,WESTRUM LUMBER LTD., and wn..cOX CO-OPERATIVEASSOCIATION LIMITED. YORKTON CONCRETE PRODUCTS LTD.•SLATE ENTERPRISES LTD., STEVEN CHERNIPESKI, ATLASCONCRETE LTD.• LOGAN STEVENS CONSTRUCTION (1981) LTD.and SAMENOOK REINFORCING LIMITED

DEFENDANTS

NOTICE OF MOTION ON BEHALF OF JANNOCK LIMITED,STATUS-QUO ANTE-BELLUM INC.

ANCHOR CONSTRUCTION INDUSTRIAL PRODUCTS LTD.

07119/99 HON 17:23 [TX/RX NO 9218) JaJ002

07/111/89 MON 17:28 FAX 3083&9 0785 McDOUGALL READY

-1253 -

aJ003

AND GOODMAN STEEL AND IRON WORKS (1986.) LTD,

TAKE· NOTICE that an· application will be made to the presiding judgc in

Chambers at the Court Housc, 2425 Victoria Avenue. in the City of Regina, in the

Province of Saskatchewan, on Tuesday. the 2~ day of July, 1999 at the hour of

10 o'clock in the forenoon or 10 soon thereafter as counscl may be beard on behalf of

the Applicants. Westeel, a division of Jenisys Engineered Productl, operating as a

pa.rtDership of Jannock Limited and Status-Quo Anti-Bellum 1D.c. ("Westeel"). Anchor

Construction Industrial Products Ltd.("Anc.hor Construction") and Goodman Steel &.

Iron Works (1986) Ltd. ("Goodman Steel") for an Order pur51Wlt to section 82(6) of

The Builders'lien Act (the "Act"), 5.S. 1984-85-86 c. B-7.1 as amended, requiring

the registered owner, Conagra Limited, to produce for inspection all documents. books

or records relating to the contract with Univcrsal Grain Systems Inc. regarding

construction on the three projects subject to the within litigation and in addition. those

documents in relation to;

Ca) The state of the accounts between the Owner. CoDagra Limited, and the

comractor. Universal Grain Systems Inc.;

(b) The particulars of credits to and payments from the holdback trust .

account including the date of the credits and payments and the balance at

the time the information is given;

07/19/99 liON 17: 23 [TX/RX NO 9218] IaJ 003

07/19/88 MON 17:Z8 FAX 308 358 0785 ............

- 364-

(c) Any labour and material payment bonds posted together with any other

lCCurity with respect to the contract between Conagra.Limited and

Universal Grain Systems Inc.:

(d) A response 10 the specific iDquiries made in letters from McDougall.

Ready to Kanuka Tburlnger dated May 21. 1999 and JUDe 2, 1999.

This application is based on the ground that a request for information purswml

to section 82(1) of the Act was made of CODagra Limited by Westeel, Anchor

Construction and Goodman S1=1 by letters datM May ZI. 1999 and June 2, 1999 and

served by facsimile and repstered mail upon counsel for Conagra Limited. To date. no

adequate reply has been received.

In suppon of this application will be read:

1. Notice of motion with proof of service;

2. Affidavit of Murray R. Sawatzky;

3. Draft Order.

DATED at the City of Regina, in the Province of Saskatchewan, this 191b day of

07/19/99 liON 17: 23 [TX/RX NO 9218] IaI 004

07/18/88 liON 17:28 FAX 308 359 0785

1uly, 1999,

IIcDOUGALL READY

- Jt)5 -

McDOUGALL, READYPer:

1Y1.",'~nY AWATSolicitor for the appU'1ca.bt~Westeel. a division of sysEngineered Products, operating as apartnership of lannock Limited andStatus-Quo Anti-Bellum Inc. , AnchorConstruction Industrial Products Ltd., andGoodman Steel & Iron Works (1986) Ltd.

~005

TO: Conagra Limitedclo Kanuka Thuri.DgerBarristers BDd Solicitors1400 - 2500 Victoria AvenueRegina, SaskatchewanS4P 3X2

Attention: James Ehmann

AND TO: Local Registrar

This Notice ofMotion was delivered by:

McDougall, ReadyBarristers and Solicitors700 ·2010· 11th AvenueRegina, SaskatchewanS4POJ3

Address for service:Lawyer in charge of file:Telephone No.:Facsimile:

same as aboveMurray R. Sawatzky(306) 565-5141(306) 359-0785

07119/99 liON 17:23 [TX/RX NO 9218] IgJ005

07/19/88 ION 17:Z8 FAX 308 369 07ao

- 166 -

Q.B. No. 1509 of 1998

IN THE QUEEN'S BENCHIUDICIAL CENTRE OF REGINA

BETWEEN:

UNIVERSAL GRAIN SYSTEMS INC. andTOM PETERSON

PLAINTIFFS-and·

CONAORA LIMITED, RALPH MERRn.L and MAYO SCHMIDT

DEFENDANTS

B &. G SERVICE, a business name registered to BERNIE SCHMIDTand GREG SCHMIDT, operating as a partnership. JENCOLTD.,CAPSTONE CONSTRUCTION LTD., LARSENS· CONSTRUCTIONLTD.• SOUTH END CONCRETE LIMITED. PROCRANE INC.,NATIONAL CRANE LTD.• GOODMAN STEEL AND IRON WORKS(1986) LTD.• A-I RENT-ALLS LTD., TNG CONSTRUCTION LTD.•NORD-SEN METAL INDUSTRIES LTD., DUNDURNCONSTRUCTION LTD., MALBERG AGRO SERVICES INC.• TORLENSUPPLY & SERVICES INC., COMMUNITY ELECTRIC LTD.,CENTRAL CANADIAN STRUCTURES LTD.• ANCHORCONSTRUCTION INDUSTRIAL PRODUCTS LTD., DAYCONMECHANICAL SYSTEMS LTD., GUNNER INDUSTRIES LTD.•WALLACE CONSTRUCTION SPECIALTIES LTD., JANNOCKLIMITED. STATUS-QUO ANTE-BELLUM INC., SUPERIORWEIGHING SYSTEMS LTD.• MID-CANADA REINFORCING INC.,WESTRUM LUMBER LTD" and WILCOX CO-OPERATIVEASSOCIATION LIMITED. YORKTON CONCRETE PRODUCTS LTD.•SLATE ENTERPRISES LTD., STEVEN CHERNIPESKl, ATLASCONCRETE LTD., LOGAN STEVENS CONSTRUCTION (1981) LTD.and SAMENOOK REINFORCING LIMITED

DEFENDANTS

AFFIDAVIT OF MURRAY R. SAWATZKY

07/19/99 MON 17: 23 [TX/RX NO 9218] Igj 006

U I' .1.'." aUl"',&,', 6U "'A.A IIiIIl'VU .,... v r "' ..

2- 167 -

I. MURRAY R. SAWATZKY, of the City of Regina. in the ProviDcc of

Saskatchewan, Solicitor. MAKE OATH AND SAY AS POu.oWS:

1. That I am a parmer with McDougall, Ready, Barristers and Solicitan, of

the City of Regina, in the Province of Saskatchewan, solicitors for Westeel, a division

of Jcnisys Enginccrcd Products, operating as a partnership of Jannock Limited mel

Status-Quo Anti-Bellum Inc. (ltWcsteel"). Anchor Construction Industrial Products

Ltd.e"Am-..hor Construction") and Goodman Steel &. Iron Works (1986) Ltd.

eGoodman Steel"). As such. 1 have a personal knowledgc of the facts and matters

hereinafter deposed to except where otherwise stated to be on information and belief

and where so stated 1 verily believe same to be true.

2. That attached b.c:reto and marked as Exhibit "A" to this my affidavit is a

copy of a letter received from Pitblado & Hoskin dated October 2. 1997.

3. That attached hereto and marked as Exhibit lOB" to this my affidavit is a,

copy of a letter received from Pitblado "Hoskin elated October 29, 1997 with

enclosures.

4. That attached hereto and marked as Exhibit "C" to this my affidavit is a

copy of my letter to James Ehmann of KamJka, Thurlnger. counsel for Conagra Limited

dated May 21, 1999.

07/19/99 ION 17:23 [TX/RX NO 9218] 1lI007

07/19/99 MON 17:Z9 FAX 306 35B U750

3168 -

5. That attached hereto BDd ma.rIcrxl as Exhibit liD" to this my affidavit is a

copy of letter from McDougall. Ready to James Ehmann dated June 2. 1999 requesting

further information.

6. That as at the date of this my affidavit. I have not received a response to

the information requested.

7. That I make this affidavit in suppoIt of an application pursuam to section

12 of 'I'M Buildus' Lien Act to compel production of information from the registered

owner. Conagra Limited.

8. That 1 believe the matters contained in this my affidavit arc

uncontroverted.

SWORN BEFORE ME at the City of )Regina, in the Province of Saskatchewan )this l1.- day of July, 1999. ) .

)/,<)~..~)

~SSIONER FOR OATHS inand for the Province of Saskatchewan;My commission expires: July 31. 2001.


McDougall. ReadyBarristers and Solicitors700 • 2010 - 11th AvenueRegina. SaskatchewanS4P OJ3

07/19199 MON 17: 23 [TX/RX NO 9218] iii 008

07/19/89 MON 17:28 FAX 308 3&8 078& ~009

) Address for &ervice:Lawyer in charge of file:Telephone No.:Facsimile:

..69-

I8DlC as aboveMunay R. Sawatzky(306) 565-5141(306) 359-0785

M:\P.ICHUICH1D\WIlSTIIlL OIIOUI'IAFFIDAVIT Of NURlVoY a.IAWATZIt't.DOC

07118/99 MON 17:23 [TX/RX NO 921B] IgJ009

07/18/89 ION 17:29 FAX 308 359 0785 Icl>OUGALL J(!:;AUx

- 170-

~-.-

I\

This and the following four pages is Exhibit •A •referred to in the Affidavit ofMit R. SawatzkySWOrD to herein before me this day ofJuly. 1999.

~MA'~A CO SIONER FOROATHSiD8Iidfthe Province of Saskatchewan;My commission expires: July 31, 2001.

H:\I'SOfUCtlTIalWiSTnL QIlOUPII:lCHlarr ITAMP.DOC

07/19/99 )ION 17: 23 [TX/RX NO 9218] I4J 010

\

_....", .......~ ----

PITBLADO & HOSKI:N'"-171-

944--2'14957-0272

DlIIICIt Dill (204)

Direct JSp (aM)

If~~~~-~~;~~N~·~WlNNIPEG.MANITOBA

..L _P•.t__.c.;,;;.r..;.r:I..;;t'~·"..;..·A.:.:L::L:.:.•..:.:.L~~~~,:..:.~ :~-=

r.lephone (204) 842-cl391Fa=-lmilli (204) 857-1780

In_met Iawye"OplIbID.mb.al

~c...-..... c.IIONI" ~_All," C.&-WlLLa.......~ .....1lCl~1L_

"dlll.lL ~tlID."""D •.~_.ICI!~

1IUIIIlA'......._GII-.n'T l.~1i

""" -...-..._I.......",..WIll.ft:II_~ ...~~Il.~ueooa.,j. IMIn'IMolIIlI'ln" .. _ Q. ~

lUUoll1'4 50 L_Ill_.l.~

_D.~"&I.,IIa.'ftj.I.__~"'D._

-..&I_IIDI ar....._.l..............

-.ue-.ADC, a.c..~L ~....,......IQIlE_IQII,A.C. cun-~.aj

a«nUIL---,1lA f1-,mt

October 2, 1997

To: Subcontractor or Lawyer for Subcontractor, u set out in Schedule ..A~~h.ercto,. ,.-• ',1

Rc: ConAgra Grain, Canada, A Division or CODAp-. Limited ("ConAl~") '.-and Universal Grain SYstems I"" ("UeS")

'.>

We are counsel for ConAgra. ConAgra entered into a FlXcd Price ConstnJction Contl'ct with uas on the 22ndday ofOctober, 1996 (the 'VGS Contract"). The uas Contract is for a stipulatcd (fixed) price. We understandthat you have entered into a subcontract with vas (or that you arc a subcontractor to a subcontractor ofUGS).

On August 25, 1997. the relationship between ConAsra and VGS was required to be terminated. As a result·.....f the termination, ConAgra has taken possession of the Project and is making arrangements for the Project tobcompleted. ConAgra has paid all monies which are presently due and owing to UGS. We understand that

you have been informed ofthese fac::ts.

Ifyou are a subcontractor to UGS or to a subcontractor of UGS. then you do not have a direct contract withConAgra and, other than as set forth below, ConAgra does not have any direct obligation to make payment toyou. Ifthcre are any monies which are owing by UGS to you for work completed prior to August 25. 1997, youshould pursue payment directly from UGS. Ifyou have not already retained legal counsel you should considerdoing so. You may wish to protect your position by giving notice ofyour claim pursuant to the SaskatchewanBuilder's Liens Act.

If you have any subcontractors or material suppliers then, even if you have not been paid by UGS. it is yourresponsibility to ensure that they are paid in a timely fashion.

To the extent that you and other subcontractors orUGS are not able to recover payment from UGS, you mayhave a claim against the lien holdback which has been maintained by ConAgra. Duc to the provisions of theBuilder's Liens Act of Saskatchew~ConAgra is not allowed to payout the lien holdback at this time. Oncewe have determined when the holciback may be released, we will ad~e you.

In the meantime, in order to assist ConAgra in dctennining the various subcontractors' entitlements, we requestthat you provide us with the following information:

<a) the name, address and telephone number of your lawyer, if yOIJ would prefer that we dealdirectly with your lawyer~

07/19/99 ION 17:23 lTX/RX NO 9218] ~Oll

-, , .. -, -- -_... _... ~ - - ..- - - - - - - -. - -

- 172P!TBLAJ)O ..H~

Page 2

(b) the amount of your subcontract. if you have a stipulated (fixed) price contraa. Ifyou have awritten contract or purchase order from UGS. please provide a copy;

(c) what amount is owed to you by UGS or by a IUbc:ontraaof of UGS for work done prior toAugust 25 (not including any amount ofholdback which may have been deducted from previouspayments);

(d) what payments have already been made to you by UGS or by a subcontractor ofUGS;

(c) w~t amounts have been held back from previous payments to you~

(f) whether or not you have filed a lien or notice ofclaim for lien or intend to do so;

(g) whether or not any subcontractors or supplien to you havc'filed'alien or claim for lien or intendto do so, Ifso, who aR those subcontractors and what amounts do you acknowledge are owingby you to those subcontractors or material suppliers. Ifyou have written contracts or purchaseorders with such subcontractors in material suppliers, please provide copies of the same.

Once all ofthe outstanding claims have been identified, ConAgra intends to take steps to deal with the holdbackas expeditiously as it can, Because ConAgra's contract with UGS was a fixed prier: contra~ it will not be .poSSIble to detennine the state ofaccounts as between ConAgra and UGS until the Project bas been completed.

We look forward to receipt ofthe requested information at your early convenience.

Yours tnlly.

PITBLADO & HOSKlN

Per: ~_,

T.W. TURNER

TWTrlkf

07/19/99 ION 17:23 [TX/RX NO 9218] 111012

07/18/99 MON 17:30 FAX 308 369 0786 McDOUGALL READY

- 173 -

1&1 015

This and the followID& twelve pages is Exhibit -B"referred to in the Affidavit of Murray ll. Sawatzkysworn to herein before me this --/!!- day of

JulY'~ .

.~,~A CO ~ONER FOR OATHS in aDd forthe Province of Saskatchewan;My commission expires; July 31, 2001.

07119199 ION 17:23 [TX/RX NO 9218) ~015

07/18/88 .ON 17:30 FAX 308 358 0785

UJOO COMMOCnY excHANGETO~350 MAIN 8l1Il!ET

WINNIPEG,MANI'TOS4CANADAR:JC3Z3

T.,ephone (204) lN200391Facsimile (204) 857·1780

fntemet .wyers.p1lb1ado.mb.ca

- 174

PITBLADO & HOSKIN

-..-c: .._ .. _ La.

..-.u~~~~

III:aUIn' -....VID __

TIlIDD .. III!'If2TTIlAIlI&ItIOE~--"YW.__,..__ICNf_ .. 1..__IIILA __

October 29, 1997

TO: SUB-CONTRACTORS USTED IN SCHEDULE "A"

Dear Sirs:

944-2512957~272

141-472 TW1'

Be: ConAera Grain. Canada ("ConAera") and UniY~nalGrain Systems Inc. ("UGS'J

We write in furtherance of our letter of October 2, 1997 addressed to all of the then known subcontractors of UGS or the sub-contractors to UGS and their lub-contraetors. To date we have received onlya few replies to our requests for information. We have also received notiees of additional claims for lien,

Titten notices oflicn and requests for wonnation. We enclose an updated mailing list which includes any new...aim.ants that have come to our attention.

For those entities who were not included in the original mailing list, we are enclosing a copy of theOctober 2, 1997 correspondence. We take this opportunity to provide further information to you and to describeour proposed course ofaction.

1. Pursuant to Section 82 of the Buikkrs' Lien Act (Saskatchewan), claimants are entitled to certaininformation and, in that regard, we advise as follows:

a. ConAgra, as owner. mtered into a Construction Agreement (based on the eeoc Form 2-1994)with UGS, as contractor, dated October 22. 1996 for the construction/installation of grainstorage. handling and cleaning facilities located at Yorkton, Nokomis and Corinne,Saskatchewan for a fixed contract price. initially in the amount of $25,132.316.00 (withoutgoods and services tax), subject to change orders. Due to the length ofthis document, we havenot enclosed a copy. A copy will form part ofthe materials (the ··Court Materials") to be filedwith the application to the Court of Queen's Bench of Saskatchewan to vacate the liens andnotices of liens;

b. We enclose a statement prepared by ConAgra which outlines the various progress claims madeby UGS and payments made by ConAgra in respect of the same. The statement shows theaggregate payments for all of the terminals as welJ as segmented versions thereof in respect ofthe individuaJ tenninals. For certain sub-contractors. payments were made by way of directpayment in accordance with the contractual arrangement bctween the parties;

07/19/99 liON 17:23 [TX/RX NO 9218] £lJ016

If&IU~1

- 175 -P%Tu.r..ADO .. HOSKIN

~bct 29,1997

c.

d.

e.

Page 2

We enclose I statement prepared by ConAgra which outlines the amounts maintained 15 aholdback in respect of the three terminal sites. The holdback amount has not been segmentedor paid into separate accounts but, rather. is part of the ongoing banking arrangements ofConAgra. The statement includes details ofthe credits to and payments from the holdback trustaccount. These funds are available to be paid byCo~ if: as and when 50 ordered by theCourt.

There was no labour or material payment bond poSted by UGS with ConAgra in respect of theirc.ontractual arrangements;

Bya letter dated August 25. 1997 the relationship between ConAgra and UGS was terminated.A copy of the letter will be included in the Coun Materials; and

2.

3.

\

4.

ConAgra has incurred and continues to incur significant costs in having the tenninals completed. Weanticipate that it will be some time before the full costs are known. The details of such costs and any setoff which will be claimed by ConAgra will form part of the Court Materials.

ConAgra expects to make an application to the Court ofQueen's Bench for Saskatchewan to vacate theliens and notices of liens and to obtain any declaratory orders necessary to resolve interpretationquestions. It is premature to make the application at this time. Our ability to make the application willdepend, Infe,. aliQ. on when all necessary information is compiled.

We cODtinue to await the information requested by our October 2. 1997 correspondence from a large·portion of the claimants. In particular, we require the infonnation relating to the exact monies owed toeach of the various claimants (which may be a siJigle sum claimed for all three locations or separatesums in respect ofeach location). ConAgra wishes. ofcourse, to proceed with the matter as quickly aspossible but requires the information ftom the various claimants in order to do so. We would, therefore,appreciate your prompt reply to the requests for information herein.

We await your advice concerning the foregoing at your earliest convenience and, in the interim, ifyouhave any questions, please contact the writer.

Yours truly,

PITBLADO &. BOSKIN

Per: ~~~----,,-

T.W. TURNER

TWTlikfEnc!.

07119/99 )fON 17:23 [TX/RX NO 9218] flJ017

e...."~CD

"CDCD

•~~....NW

....~"~zoCDN~

ClD

I§IeN~

tllW!IlSM. COIft'IIIACfACCOlIKl RICOIlCILUll1.1lEl:A' Of ALL l1IU.1NAU

RECAP lEas I'RClIECT PIIOJEClSUICONTAACTOA PAGlECT lNaCEO DePOIfi NET DEI'OfI1' aT OM MtOUNT MIIC IH\IOICE8 Gsr NEt ClP£)f OPE,.

~ MtOI.ItT ~DIW:K REDOCTIOH JMJaD MEREST fAA 'AI( ~YMle ADJ PAD REFlftJ COST -.uotJNT AIIlUfT'lUla~

WES'TEa 1,•.lIl. ' •••122.04 _T1U., till 2,2211••.• D.m l7J."'!l5 22f.OfUS 2,,1I..m. D.• 1.1t'.m.• 1n.1!I.Y t-..... •• .151

CEHtlUt CNWlWf 1.121...... t,Ul.541.m (ISU5«·lGI 110 1,.1,7_10 '.m ".nt.• 0." I."UIIT.• I.m ' ••t.511.15 t7.,.. I.W.MUD •.ntlO Ust.D

Do\TCON~ "'4I.D.• &,511..... (557.-101 e'.-,7OUlJt . UZJ.mlO pt,ll2.331 ..". 2II"UI UQ,IOUt P.....1!lI u...If _411.~_.3lJUt 11••10 I ....

••• !II."UIl .a....... 0.l1li 1JI._4fI

a.ftRIQA WEJGHIfG 1.051.121. 181.35111 I1UU.25) 111.117.4' ... ....1:M.• 55.114"• ".581.l1li 2I'I.•"a ,..!I.I"3I

1......112 '.111 I.""" t21.SlU2 1.131....--.J

NJRARlUNDAllONS '.m.... t.n7,111l111 I.. ••• l.n7.... I.. 121.5IIQ.52 0.l1li 0.111 0'\ ••I

COMMUNIIY flEClRr: 1,....... \1IJ.'33d 1204,113.3•• 0.• 1....a...' • 10 t1l.1I1.42 0.l1li 1•••131.• I • 1.111,5.17.• t21,ll1.a uo.UUI ...._51 21.01.

NOAO-SEN MErAl '.151.537.• UIlI.I- e_.ZIt." (1.11(,115.71) U8.".n ... -,m.24 IZUII.IIZ I,ln.11O." I.IlII l.en.1R." _121M 7.m.....10 45.111.11 unnTORLO.9UPPlY t.tl5....02 11I,31.UI (22.".34, 0.l1li 141,_15 ... SII.1l1. • ••.71 -'175.11 0.l1li -.m.n ",..1.1. DJ,~US 2.....3.11 IJ.ttl t5

tHIIERAL GRAft 3Y81at :Ula,:J5I.00 1.0115.'•.• C1OO.sn.1OI 0.111 U~tlu. ... IIO,4ltU2 U2UII J,tII.•.a eUIUI, 2....." 21".1.51 ,.....110.. 317.115.• v.mlS

.. 21,117,an1l 1(_•.35 P,lJIl'''.!!l p,a,I411.m .,55IID.S' !l3,IIUI t,541,S2t.•• 1,IIS,OII.' m.5!O.15 1!,1I1!!!1 2UG 121. I_52... nm In.• 1,.I!1!4 tIlII,GlII- .UGS CONTRACT COINTEO DOlURS .llJ!!.~H..'

c......lII....IIII

•~..c•~

t

o...............,.......,.,

TOTAL ~.!!':!5.!~.OO_.e~,!513.fm _ .!,DIl.......u ._. @.0!L 2.?Otm,~ ... !'l!,~C!',51 • !t&2..1i~ ,.?.!!M~'·12__ l,1.!I!,!!!I_l.!112f!.1! "'_' _,

OPfN mOll"' OF PROJEct .. '!!.!".OD _ _ J!~

[1,231.10) '.00

DEPOSITHOlDBACK REDUCTION

141.'SO.III (I4,115.0I7)

27,1lM1.11O cuoa·lllIt12,155. (I,ZI!i.!lOt

235,000.110 en.a.oat300,150.. (3O.91UO)

40.001.110 (4,.001.00)

141,.IIUIO ('4.11I1.011)

110,100.11I (11,000.00)

t2l.'25.oo (11.1112.50)

n4,400.111 (l3,440.IlO~

411.411.00 (41.t4UlO)

2111,500.11I (H,7SO.00!

2J1l.9OQ.OO (23,9II.oot

1117.300.011 (1.,730.10)

e

•~........t.N

t.oClII

t.01.,o.....01101

•g

~E...:

CHEOlEDATE

NCW !lI9lI

Ml\V ...,

CHEOlEI'Ut1IlER

11.195.41 AC157137 NOV_

13,041.'1 AC1518&t NOlIIMI

142.1J!I.SO N:1t138O OlC ..

a,'•.ao N:'IJIIII ..,.,11I1

10•••35 IlliCtl4124 JAN "JII7

Z2U50.1O 1'C117411 M\H 2MJ-300,451.50 ACl1nOD FEB 1Mj

4l5."UO AC15411'

COMBN:DINVOICES

PAlO

\"O.DOt \74.154.711 AC11f413

uscAOJ

I

.,". ACtJ3111 RI141t7

1a,lt1... ACtnGOl FE, '''7

101,100.10 AClnm Ft.2Ml

\"-4.1IU5 ACIHlI01 MAR 1""

221,_.110 ACI17_ 1lWt2M"

....n.sa ACt1t1H NOR -4111

251,m.1IO AC11OS71 APR ...1

\I,m.3Ot 231.023.1'0 AC112381 APR 1B1l17

,.',al.llo ACIIDU MAY lIel

:II••.•

15••.50

24,250.00

44.4-45.41

a.Cl5O.OD

~

PAYMllE

0.00

...0

'.10

0.00

I .•

I.. 141.n5.sa

0.00 11.'90.•

a.1III 10••8.35 .

0.00 217,ISO.•

a.oo _.451.5.

0.00 ••100.10

2,S:a,u1 "1,'14.18

O.lIlt 101.700.00

'.10 124,788.25

O.DO Z21,3l!l8.10

0.00 ....t7Ut

0.00 251,475.00

0.00 211.70:'.00

0.110 '11,11111.•

000 115.094.10

UHTAll

GSTTAX

2.2015.10

t.I23.50

1.751.00

3,207.41

4,550.00

10.100..50

1.I!lO.DD

5.1101.15

18,450.11II

U.8lI1.5O

Uoo.1IO

10,49I.JO

7.lOtI.1llI

'.OOUS

It.nUD

----_ ..---'--'-_.

UNIVERSAlG~lN SnTEMSACCOUNT R£CotlCllIATIOHRECAP OF AlL TERMlflALS

11.133.00

14,445.00

2Z,5CIlJ.OO

4',23"'0

51.500.00

181..459.011

NETINVOlC£D

0.110

'.11I

1.00

O.llJ

I.

D." HZ.US.OO

0.00 Z4,3IIQ.OO

0.00 1.,lSi.sa

0.00 211,500.00

0.00 271,715.00

0.00 31.tlOG.OO

'.00 134,nUIO

1.80 ",000.110

O.llO 115.162.50

'.110 21'1,•.00 11,401.01

0.00 -433,2,74.411 31.&91.11

0.00 240,150.00 III,nS.OO

G.OO 215,910.00 . 11.79UO

0.00 1111.510.00 13,111.01

0.00

DEPOSITINTEREST

'.00

0."no

1.00

0.00

'.00

0.00

D.OO

0.00

0.00

0.00

'.00

0.00

D.OII

0.00

D.III

0.00

8.10

0.00

(t,805.00)

(UOCUllI)

C.,SlUO)

CI.!OOJIlJI

(l1.i151.00J'11I,510.110

IHV'OIC!NoIOUNT

3,403,nU'

n.no.1II

K.Osa.1lO

25.0G0.IIO

45.120.00

1S.0000.oo

DEC1MMl

MOVZ1Jl16

DEC 3116

OCTZIiI!Jll

HCN1M6

RECAI'

NOV t/III

OCT 1"

IN\IOICEDATE

PAOJECT~'

FEB IMl7

JAHVl7

.Io\N 13197

fEB 10191

FBI IM7

fEBM7

MAR ....1

APR IMl7

MAR'M1

MAA17197

Nl'R 71117

APR79f97

tMYM7

...

.....N

'"

o...........~

co......coco

II:oz

zo

--~......

~

coN....DC

I§JoNN

§IoNN

0...........CD.....CDCD

•0Z

UNIVERSAL ORA4N sysnMS ...ACCOUNr RECONCILIATION ...

COitINNE TERMINAL..Col

CORINHf NINVOICE If.l\IOICE ftVOICE ItNOICE DEPOSIT HEr OEPOSH GS' all AUOI.H1' MIse AIIOUNl OtEOJE OIEOlE

~(lATE NUMBER DE'AIl. AMOUNT HOlOBllCK REDUCTION INYOICED "TERES' TAll TAll Pl'YABlE IDJ ,MJ NJIIOEA Dl'TE

PRO.ECT AMOUNT UII.I"'.

DC'1MJl1 ». PROGRESS 'I lO.nlO.OO 11.019.001 ,-,110m f55.30 10••.30 c.-oGIl

OCt 26I9Il J1I PROGRESS,! ~3!!O00 e5l511J1 4.815.110 314.50 5,111I.50 15.mlD AC15tr8ll NO'ISIV . c.-Ol

NO'I1I98 PROGRESS IJ O.tID ODO CD

NCP/10f9S J2II PROGRESS •• 45,11011II 14.5lI2.001 .,.neall :UOl.411 ".445." 44.44540 ACt!lfm HOV...0...011

NOY27196 m PROGRESS" l1.lIli6.• (2, 111I11111 11.4119.• t.51111 11,Cl1l fi8 U01fUlI JlCI~ ffl:N_ 01

0£C:w96 310 I'ROOfiESS II J1.D5000 P.llJillll Z1.!M5.m 2.17350 311,11850 31.11150 ACI59l1O IS: 4Itll

DEC 19198 ACIOIeI .wI_

.MIIlS1 D5 MOGRESS •• 4O,lllI5.1lO (4.1J9I.5aI 38._50 Z,l1II915 3!I.me 3!J.fS!I45 AC1I4l14 JAl11OlI'I •MN 13191 J3ll PROGRESS" 1O,000.m P.IIlIl.lIlIJ 0.00011I 4.800 81.!lOOOD ".IIIDOD ACItl74H ~1 g

-...J 0FEB 10191 l4l PROGREss.to 112. 100.00 ClI,2IO.lIlJ lDO.IElIUD U41.lD 1•.131OD •.131ID Ac111'tD FY'lM1 d

I.~

c FEB 10191 000 1100 AClt.1IlO FEB ''''1 1=........ f'EB IM1 :M4 PROGRESS "1 lOUIIO.m (lCI,lZ9.tq 95••100 1.441130 14150 103.9421ll1 un.MIlI . ACI,.I FEB 21111...~

CDFEBMl 0.00 o.m ACinm..... FEtI ZliI!I1

CDCD MAR4f'R J4ll PROGRESS·". 128.m.00 (12.IlSUJ' 115.712.50 9.IDSf5 U4.7.'15 124,7fi815 ACI71lOO1 MAR 11191 to<

iii: MAR 17/f1l HI PROGRESS liS 154.40000 II!I.oMI.llllJ 138._00 10."00 .....7•.1lO 1411.1•• ACtn_ lIAR..'0Z

MAR 27191 JSJ PIlOGRESS'" 1511,311.00 (75.031.1CJ1 t75,27t1lJ 17,$2t11 241....81 200....1 AClmts APR 4ltl......APR 1191 3SJ PROGRESS 1t1 54.0CII.00 IS. «II.ODI 411.11IO.00 3,71000 52,31l11lO ID,BUIO ACllD51J .APR !li91..

Nc.o APR tlll9l J!i4 PROGRESS '"

11I,110.11II 16.61l.1lO1 110.01300 •.I71!D 54.1.911 1451 :J9I 14.•.5' ACIB2:JII H'R IM1

.- APR ?9I91 155 PROGRESS II' 'JO,ooo.110 13.011O·00} 71,011011I J. lllOllO 1I.11lO.00 29. tOO 00 AC'811* ~'f'1197

~MAY 1197 J5fi PROGRESS 120 3O.5J11.m 13,053.00) 27.417.00 2.131 10 a.lSl. to (MJOllJ 21,474 to AC\8641:J MIl, Mr.....

~Z TO'Al _!.~lIlll.6II-J!'!lIlSU!l 000 I,!.!(l,1I1 8!l 000 I1.Ioe I. _ "1.50 1,114,161151 I!!~ I,rM til 14 _. ..,0

CD OPEN AMOUNT OF ,JlOJECl' __~,m.M. __.~_.Q..~:tN...0l:I.....1§10N I§c.o

Cto:Col

COMI'tESUBOCJHTRACTQA PAGET

AMOUNTINVOICEDAMOUNT

0S'0SIf~ REoucnON

tEfIPMJlCED

UJG¥P'~ CONt'MCTACCOUNT IlEc:ONCIUATJQIt

CORINNe TElUiUNAL

D9"OSfT OS,INTEReS1 TAll

EaH1All

AIiOJIfIPAYAfIlE

MlSC~

IlMOUNTPAlO

lESSGST

REAltIJlEtCOST

~OPEN

AMOUHf

c..."....to......toCD

•oz.......ColCol

~ColoClIl

Col01CD

rROJECl 0OPEN ....

AUOUNlooTAll 01

o...."....CD

"CDCD

wesTER .nut8 12),040.• '12.904.41) 0.1llI 14l1.131.Z0 1.00 51,IIU!! 13.411.24 111,1111.211 1.011 111,1•.21 5U1z.15 ",457.11 nil. 1111

CENTRAL~DlAH 54l.320.• 510.141.01 I3Il53UI) a.1llI 415.311.30 1.00 n,41UI '.1llI ••7l1l1.11 D.1Il .,1•.ZI D,47...1 "1.I41.D' J I,411. 2.2111 "

MYCOH 1llECANtCH. UIJ..1GO.• ...\moo U.,t•.1IIl (411S,•.'" t,ttll.I7"1llI .....).4) 111,141.• ••22113D '.411,132.11 0.00 \420,132.11 Ill."". '''',nI.3D 20,300111 1•.0'.211."12 100 21,'21.51 J3,526.t1 'tuns, •aJPERlOA WEIGHING _141m 3IH,1lIO.tt (21,'15.111 a.GO a.. JIt,3ZUI 21,121.51 325,371.• •.192."~ '.02.4SQ,

AGRA FOlltDflONS 4'flIJR1.• ..07ua 0.• 0.l1li 417,011.111 ..00 34,715.3. D.OO 511.111» 0.011 !Dun.• :M,._ .,m.• o.~ o.gCOMMUNITY El.ECTRIC .11..... 12l1.14U:S (12.OIUl) D.III ""'•.11 am 45,"1122 D.OO ".111.31 0.111 ~In. ~4un n"'44.13 I ~

m,IJ5.3l ',35I-t:NORO-SEN METAl t2'!IQ.t7t.2J 1,115,'411.34 (II7,1M.4JJ (511, 13U5J '.521.IIOU2 0.00 111..11115 m.520.75 "I2UllI.n 100 ••m.an 11l!8115 J..4\3,.47Il. ""121.. ....1It

TOAlEN SUI'Ply _.8,ue 114.•.07 ('U4UJJ 0.00 2IJ,ot4e.4D G.OD 111,110125 21.154.31 ne.Oll5.D2 100 m.OlI5.a 18.102.25 !l7.1e.•ot O,I2I.!1' ~,G7UI~UNlVERAlGRAIN srS'JaI U""OlI.OD t.t5ll,1IJ.. (115,"6.771 0.00 1.1M2.'11.• 0.00 It,•. '" MUD 1,1,,,,.51 (8D1.3llt I,114,111.14 11........ I.I!1.521." !III•.Q1.34 ..",.•t<

Ieoz........NtCoJ

-~"~'ZoCDNt....llD

I§IoNt~

fOlAl.

'"

WSOIU7 IM7M30 flIL!'U91 lI.lnHllIO.1'5l Illpun.3I ',piH! 5'1,111.;\1 ;pr,m" tDS3l.!' eqaZ!!l,!30U "UlU! 1111,2'151 -PD J' .11UBI CONfIW:T 00MMfJB) DOllARS ! IN 221, 'z

fct

•

o...,........CD.....CDCD

~......ColIColI

~

WESTEB. m.21'.17 m,l•.• lU."'411 0.01 1<111,1".10

ceNTRAL CMIAOlAN 542.321.• "1,141.10 151,014." 0.111 _.7IU1

DAVOON UECANICAt I,Ift.1•.111 t,.",200.00 (1l5,ua.oot (412,100.00) 1.-'210.111

SUPERIOR WEIOHHO at.7.o.111 241,250.10 C24,225.OIt '.DD 211,025.ft

AGAA FClllNrMl'JOH! 413.0•.111 411,041.00 D.IO 0.00 413.141.00

COIIAUIlYEl£CJRIC "',I1IlUD .3,17t23 cee,3t7·at G.OO _,151.10

NORf).SENUETAL t,2!O.111.23 U:J2,1211.71 C''',-·13J (53I,2O!I.21) U71.G1'.U

lCAl.ENSUPPlY n"'12..17 211,-'12 (11,242.11' G.OO 2I2,~5.'1

UNlVERAlGAAlNSVSTEU U32.I3I.lJD 1,221••.11 1122.140181 0.00 1,_.281.11

ColICI•ColI

.... .cOlb'EN

lD

AIIOUioTAIl 01;:

01

1'-'no..

MOJECTOPEH

AIICQ«

leuAMOU'fJ osr IlET

PAl) AaU«J COST

.".-.It 81,"2.15 111,2ID.1S

412,131.44 D.".1. "',147.00 21.471.GD 1,101.1

1.....7.113.11 "1.111.31 1.......1.15 1O,M.• UU1

254.»UI ",157.11 211,"" 101,82..10, 7,514.'.n- I.(g127,HU2 MoI1U! "'1I4I.DO ••00- ~

l1I,ne.7I 41,171.• "."4n ,,,SOI.T7 '..._.~

1,.324." 11',0".13 1,_.414.31 '''051.'' 1,2t41~

124,741.27 11,51""1 31..4115.... 45,ao4.11 "t5lUE1,1&4,&34.05 IS,_.• 1,221.2"11 10,nUt 711.10<

D••

I.DO

..SCAnI

111....02

m,13U5

MIDUNfPAYAIllE

EIHTA)(

OIlTAX

0.l1li ",m.55 ".354.•0.110 34,5'3031 D.•

0.110 • '.7111.81 D.IO

1.110 11t,011.113 "4.213.11

0.00 U,S2U' 27.158.••

I .• e.491.... MUG

.11."4.'1) "1,IIUS II."US t.4117.113.51 1.1IlI

25...$11.... 1.111

1J1,HU' 0.•

_,"1.1, 0.110

1,'20,324'" o.CID

324,1".J1 D.1II

I.1I5.1llU1 11,011.1')

1.00 81.111.. 14,2''''7

0.00 .12,"•.14 0.00

DEP08ITIHJEREST

UIWI"UL CONfMC'TaccoUNT M'CONCIUAlIDN

NOKOM.. TEftMIIIAL

OEPOIIT NETHDlIJBM:I( AEOUC11ON IMIaCEO

tNOICEAMOUNT

PflO.ECTAUOUtll'

HCKOUlSSUBC~ACTOR

CI...,........CD.....CDCD

Ieoz......,Nc.o

TOTAl l.n.,fJf1.ri1 1,330,.'-70 001,831.1' (1,001.1101.231"'",1'0.33 11,114.171 st•.nut .1,127.'. 7,523,001.31 "t07U1, 7,521,131.0 52",135.• \71UtU4 313,.5.17'· ~l

UGI~Tcouunm ODU.ARS .!J!I,asuz

....~.....~ZoCDN...011

1§1oNCl) §I

oNm

',-- CI............WI.....WIlD

•~.......eo.~

~

',.".57 UK'".• pUJun u.!!!!ue.me,m.!!UI q,""'21502,nuplll,30U2 U'4II!,- PJ01.I!JZJ12•.• g,m.1! 11?!JJ!4.51 lO1,!1l.D r:"',tma CONnua OOMMITEODDI..UM , "',4!1"

eo.oCllI

-eo.-01

.:N lDAMOUN o

TAXOl ....011

'11.101

,.

11••13 ., 1.15:1.1

a .•.• '.4211

....u" '.5114.~.

•.~ 0,3w 0

tn.-.•, 1I.m.~~.t-.. .mf:..,m.n ....1.1~'27.417.33 21.121)0<

fIIIIOJECTOPEN_..CUff

210.•

lESSlAC AIIOlI« GST IEI'.KJJ PAID REf\H) COST

U' "1.flU' 17.112.15 ".457.ft

nH AUOlI'frTAX PAYABLE

0.. 51,112.• 7.1,417.24 111.1...a

1.1IlJ 1I,15U' _,IS4.. 254,,317.47

'.GO Cl2,2l1.1t a.GO 118.'14.71

'.GO "'.124.22 a.. tM.n1.a

I.IIlJ t1l,".31. \11..... \U'.UL.,

'.111 ".1II.n 1I.11US f1G.02U'

••• G.1I4.12 MI.!O _."I.n

'.111 ~314.11 a.1ID 4t1.IIIUI •.• 4f',I11.21 42, 11 .,5 .(7,111.12) '11."17 IS.MU' \4'5,111.11 P.II4.1S) '.413.121.. 117 17 1.157 1.3.

I.. 1M,Ul." _ ••." ".104.•1M 7II,tM.1I lII,2tt.71 ,e"IIJ.•

"II a4,72UI .',IM.22 -.,'tl1

lUll t.U'.1•.11 " ••nu. t,.I3.D2O.2f

alii 21*,12"" 1t.7II.a 1.,131311

(t4ll..lIl' .,171.82 0,114.12 ....3.17

1E1" DEPOIIT OSTlIWOICB) IHTBtEST TAX

UNNeRIALCO.fRACfACCOUNT IIICOIICIUA'_

YOM'O" TERMINAL

DEPOSlHDlDlWJC REDUCTION

INOICEAMOONI'

PI'O.ECJAMOONI'

~OH

S\JBCOffIRAC1tl

lurA!..

WESlES. 123,111.17 m,,04II." 112.104."" '.111 7.,13'.•

CENIRAL CMWlIAN IG.m.GO 5'5.... (11.134.101 I,DD 441.711.21

DAYOON MECANCAL U82,1111.11t ''-'.100.111 f1I1,111.GOt (-,•.110] 1,21'. '7I.GO

SUPERIOR WEIOHINO J!O,10.1IlJ 2~25G.1a P(231.C1') '.1IlJ 21',021.82

IlGRA RlUNDA1IOHS 7.,113.111 741,III.DG 1.1IlJ a.DO 7411,•.GO

COIINUNRY ElECJRIC 111,IIII.GO _,ItUJ ce,I11.4I) 1.1IlJ _,203.1'

NORD.aEH MErAL 2,_,118.13 UU.I2I.14 (.82,..... ".4'1.2., 1.1131,3'1.17

TOALEN.....V _,"2.17 '13,'74.11 '.GO '.IID '13,114.10

lHVERAL GRAIH SYStEM lIS1,114.1IlJ 125,14U7 (82,1M11) '.DO _.Ol1.5D

o.........~

CI:I.....CI:ICI:I

•~~....Nc.o

....~.....~:z:oCI:IN~

011

SJoN011 ~

oN011

07/18/88 MON 17:34 FAX 308 ~58 0785

IN YOUR RBPLY 'PLEASEltEPE1l TO:

J0688-1 JwmSMr. Mumy R. Sawauky

.-... "4IIClOllQ'" l. c.C.(,.a.,."GClIIDClN J.1l\JIIQ. a.c, 'I1iR1ONCI a. CIMI'. a.c.lIlOe!PlT N. MIWOPI LYNN A.IMlTH"It li~WNWn4. D.C. MNN!TW". 1'lliADV. D.C.UICI""iL W. MILANI W. IVoNOAU. flClDIti·Mflc.N A. P'Cit. Cl.C. ~ILJP J. ro.w..nWAYNI! L RI'INAK!VITCH"" l'DNAIJ) L. MlI.LIA. o.c.~'''1l\1li ~.~IC MU"IIIAY '" lAWAnKV.lAMii A.~ lI\JSNl "IAN!"""kEVIN A. LAN(; 8RliNT D.I.Ul~·

........I!I N. ICORPor.N aRtN M. I. WISINGBIOi~ It1I!1'lIDN'l' ITIJAAT J. WICUCJ\OISI(\DoUlYl.1 U'8..cH· ......115 II.~JAY~l! c, lCflUiQiR 8HE1LA !. CAS'rtlN"JOSE"~ T. ICt1UCIC II\MAI'lDA M. CIClUT!I'lG.~m l.JallNlIHAU OWiN M.1'lICi

c::au-LWll,I,IAU ~. R&AOY. a.c" u.AQ.MIl'I YOUCK

.&fg()ttF~-!?4eru(p.!iW(V'niJlen ef'$~~

7fJfJ .9kpdgaJ9d~'p.IfJ.,(J..,.,t,l.PI~,

.9k~ .9adL~tMa•

TeL!PHON! (3081757,1841FACSIMIL.E (308) 358-<1115

DIRICTLINE (3Oe)5es.s141!-mal~; IllAWaczkyOrnc:dclu;8lIrudy.c:orn

May 21, 1999

Via Fax: 359..()590 It Registered Mail

Kanuka ThuringerBarristers and Solicitors1400 - 2500 Victoria AvenueRegina, SaskatchewanS4P 3X2

Attention' James Ehmann

Dear Sirs:

This and ~he follo~in9 page isExhibit "C" referred to in theAffidavit of Murray R. SawatzkySW9~ to herein before me this

{ day of JU~y, 1999.

~~-~A ~ISSIONER FOR OATHS in andfor the Proviee of Saskatchewan;My commission expires: July 31, 2001.

Re: Westeel LienAnchor Construction Industrial Products Ltd.Goodman Steel&: Iron Works (1986) Ltd.Conagra LimitedYour File: 20792·6 JSE

We are the solicitors in Saskatchewan for Westeel and Anchor Construction IndustrialProducts Ltd.. We ask that you provide the following information pursuant to section 82 ofThe Builders' Uen Act (the "Act"):

1. The terms of the contraets with Universal Grain Systems Inc. and any otherentities for theconstTUction of the three projects that are SUbject of the litigationbearing Q.B. No. 1509 of 1998 including the names of the parties to thecontracts. the contract price and the state of the accounts between the owner andthe contractor. This should also include the amount of the holdback, andwhether interest is accruing on the holdback funds.

2. The name and address of the bank. tIUst and loan corporation or credit union inwhich a holdback trust account has been opened and the account numberthereof;

H'\f'SOILlQlTDlwruTl!I. QaDUP\fAJI • IlEG'D NAIl.IAIoIUIHWANN.DOC

• A~~IOINT aN USU1'OOft,l.....o',.r""

~... Dlr/o",

{jQC)!.~ ~'ItXlNC!t'",C",.., ~Q'AL .,.>11< MJILDINGI1Q z... STnEfT EAlT. 'AiKAltlON. SIIStC 571<_TILE~"""'£ t:-Oljl GS~·lli1l ''''CI~IILE 1:JCt'1 ~"", I'

07/19/99 MON 17:23 [TX/RX NO 9218] ~029

07/18/88 MON 17:34 FAl 308 3&9 078S McDOUGALL READY

- 185 -

2

~030

3. A statement as to the particulars ofcredits to and payments from the holdbacktrust account includina the date ofthe credits and payments and the balance at thetime the infonnation is given;

4. A copy of any labor and material payment bonds posted by the contractor withthe owner with respect of the contracts;

S. Please advise of any payments or monies paid to a bank or finance companyinstead of directly to Che contractor. Universal Grain System Inc. or any othercontraetor.

Pursuant to section 82(3) of the Act. we request that you comply with the above withinten (10) days after this notice has been served on you.

This is formal notification to you.

)

MRS/ps

pa;\l!;\lbomPson\..ctlaCl\fulhoml

07119/99 IlON 17:23 [TX/RX NO 9218J /ll030

.cDOUGALL READY 1lI03J

IN YOUR. UPLY PLEASERBfiRTO:

,#lIN~ o.c.

""''''1GOADON .I. 1CUlllQ, ;"C. TiIlOlCi Q.~ Q.C.AClIlI!I'IT N. M1l,l.N1 L'fM'l A. -nrk 8~WN SMmt. C,c. K/iNNlm1A. A!AI71'. Q,c.MICHAEL W. Mll.ANI W. fW\IOAlL~.MAON ,. FOil. a.c. f'!o1lI.IP J.~WAVNt, L.Il~ ~ L. MU..!f\, Q.C.:.81\1"'''' M. II\IlIIlIYlC MON'I"'v III. IAWA1ZIO'JAMEs A. /o4CJlIUIIIllQN:. BUaAN 1I.1I'1'IRlrKEvIN". LNolG IRl!HT O. IAIllIU)l',lNlolIS III. lCDRlIItool efllN M. 8. K\.5l8lNCel'llleol'lGEiT!~ S'llWlT J. WlCIJClW&I(IDAlII'I'L~ Ul8ACH" JIW!S 1'...Y8CHIJI(JA'I'loIe C. KRU9iR &HilLA I. c,,$TON''nsf"~ T. ICt4UCk NJ,IKJA ... CMOMTEfl.~~ O\WNM. RICi

CCUNIilWII.I..WoI ,. ,.pov, Q.C. U-D.I!UiEA YQUCK

- 186-

.4tc!!dOapd( gjeadp,se~~ 4- sPJ/ar()N

;1l1l9'i()paI'gaJg~.I1l~()..,~d.JJI~

~..9'Iu~~~

TeLEPHONE (3OIl) '57.1&&1FACSlMII£ (a0fi) 358-0'165

PIItECTUNE (SOlI) lSS5-Ilt'1g~ E-INIl: ~rncdouoa~,ClI'm

June 2, 1999

Via Fax: 359-0590

Kanuka, ThuringerBarristers and SolicitorsRegina, SaskatchewanS4P 3X2

Attention: James Ehmann

Dear Sir:

~his and the fo11owinq two pages isExhibit "D" referred to in theAffidavit of ~urray R. Sawatzky &wornto herein before me this~ day ofJul¥ r 19 .----

for

20r

Re: Universal Grain Systems Inc. v. Conagra Limited, et a1.Westeel and Anchor Construction Industrial Products Inc.Your File: 20792=6 JSE

Further to our conversation of recent date, we pve been advised by our client thatdespite the fact that a meeting may occur during the week of June 21. 1999. we are instructedto continue with proceedings in Saskatchewan. This letter is in addition to the initial demandfor information forwarded to you on May 21, 1999. We anticipate that much of theinformation that may be provided. to us wID simply be a reiteration of the information providedin the October 29, 19971ettcr to all subcontractors from Pitblado & Hoskin. We havereceived that information and find it deficient in terms of identifying all of the facts necessaryto make an appropriate assessment and anticipate that in our most recent request forinformation that you will include the following additional information:

1. With respect to the calculation of the holdback, please provide the value of theservices or materials provided by Universal Grain Systems Inc. under thecontract. If this amount equals the amount invoiced by Universal GrainSystems Inc., please confum.

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2. How much intereSt has accrued on the holdback trust account and. at what rate isit presently being in\'estcd?

3. There appears to have been no holdback relating 10 the work performed byAgra-FoundatioDS. Please explain.

4. The reference in the headlnzs of the account reconciliation statement refers to-deposit reduction-. -project open account" and "deposit interest". Pleasedefine these terms.

S. We calculate the holdback to be somewhat higher than the amount calculated inthe account reconciliation based on invoices paid. You can advise how theholdback has been calc:ulated •

6. The letter from Pitblado & Hoskin dated October 29. 1997 indicates a copy ofthe construction agreement with Universal Grain Systems Inc. would be filcclwith the court. As this has Dot yet been done, we would ask that you pleaseprovide a copy to our offices. .

i·I 7. Please provide a copy of the letter of termination dated August 25, 1997 by

Conagra to Universal Grain Systems Inc:..

8. Please provide the cletailcd c=osts incurred by CODagra to have the terminalscompleted. Please advise as to what if any poniOD of this is being claimed as asetoff against funds owing to the subcontractors and Universal Grain SystemsInc..

9. The letter from Pitblado" Hoskin dated October 29, 1997 also makes referenceto an anticipated court application to be made to vacate the liens and obtainnecessary declaratory orders to resolve intetprctation questions. Please identifythe intetpretation questions that were to be resolved and why this applicationhas not been brought to date.

10. The letter from Pitblado &. Hoskin dated October 29. 1997 refers to requiringadditional infonnation from a large portion of the c1.aimaDts as 10 the exactmoneys to each of the various claimants. Please advise whether Conagra hasreceived this information and will prOVide it to us.

11. The letter from Pitblado &. Hoskin dated October 29 f 1997 also refers to certainsubcontractors heine paid directly in accordance with contractual arrangementsbetween the parties. Please identify the specifics of the contractual

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arrangements. the panies. copies of those contracts as well as payments madeOD each of those contracts together with any setoff claim in relation thereto.

12. Please provide dates of the issuance of substaDtial performance of the UniversalGrain Systems Inc. contract and any other contracts as referenced in paragraph11.

We look forward to receipt of this additional detailed information within the time linesprovided by section 82 of The Builders' Lil1l Aa.

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