There is an old expression about “selling the Brooklyn Bridge”. Recently, a bankrupt subcontractor attempted to register a lien against the MacDonald Bridge spanning Halifax Harbour. If it succeeded and the lien were not then paid out, the subcontractor’s ultimate remedy would be to sell the Bridge to satisfy its lien. Fortunately (and not too surprisingly), the N.S. Supreme Court decided the MacDonald Bridge cannot be liened nor sold to satisfy a lien. McInnes Cooper’s Douglas Tupper QC represented the successful contractor.
The decision is a good reminder of against what and whom a lien can be registered and how it can quickly be challenged.
The Angus L. MacDonald Bridge between Halifax and Dartmouth, N.S. is being renovated in “The Big Lift” project. The Halifax Dartmouth Bridge Commission owns and operates the Bridge and is the registered owner of various properties at both ends of its span. The Bridge Commission hired American Bridge to perform the renovations. American Bridge hired Cherubini Metal Works to fabricate replacement deck panels for the Bridge, and Cherubini in turn hired Certified Coating Specialists to put certain coatings on the panels. Certified Coating performed all its work at Cherubini’s workshop, then transported, raised and inserted the panels into the Bridge’s span. Certified Coating did not perform any work on any properties the Bridge Commission owned, excepting the Bridge span itself. After it performed its work, Certified Coating Specialists declared bankruptcy. Its receiver and trustee, The Bowra Group Inc., registered a lien against various properties that the Bridge Commission owned to secure a claim for approximately $400,000.00 against Cherubini. Cherubini denied it had any obligation to pay the claim and applied to the N.S. Supreme Court under the summary procedures available under Section 29(4) of the N.S. Builders’ Lien Act to vacate the lien on the basis the lien was legally invalid.
On September 22, 2016, the Nova Scotia Supreme Court in Certification Coating Specialists v. Cherubini et.al. decided that while Bowra is entitled to pursue its claim against Cherubini (which claim Cherubini is entitled to defend), it is not entitled to register a lien against the Bridge or any related properties as security for its claim.
THREE LIEN REMINDERS
The court’s decision offers a good reminder of against what and whom a lien can be registered, and how it can quickly be challenged. Construction industry participants in other Canadian provinces and territories, however, should check their own lien legislation since if could differ from that of N.S.
Since Certified Coatings’ work was done solely on the deck panels, the Bridge itself was the only property owned by the Bridge Commission that Certified Coatings could possibly have the right to lien. But since the Bridge span itself was a public street or highway, the lien was invalid. Bowra Group (as Certified Coatings’ Trustee) could still advance a claim against Cherubini, but it could not be secured by a builders’ lien against any of the Bridge Commission’s properties.
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McInnes Cooper prepared this article for information; it is not legal advice. Consult McInnes Cooper before acting on it. McInnes Cooper excludes all liability for anything contained in or any use of this article. © McInnes Cooper, 2016. All rights reserved.
About the author:
John Kulik is an experienced construction and insurance lawyer at McInnes Cooper. He represents a broad range of clients in the construction industry, conducting construction-related litigation and arbitrations and preparing and reviewing construction contracts, with a special focus on construction liens. You can reach John at email@example.com.