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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

When It Comes To Estate Claims, Good Guidance Saves Time And Money

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As the old warning goes, “There’s many a slip ‘twixt cup and lip”. In estate litigation, good guidance is essential, to avoid that ‘slip’. This is particularly so, when challenging a Will.

Contesting a Will is far more common than successfully challenging a Will.

There are a number of reasons for that:

1). Perceptions among family members and/or social pressures may prevent some properly founded claims from carrying forward to a conclusion.

2). When a claim is filed, it is settled by the parties, or partially settled by removing some issues from the table. This often occurs after disclosure of evidence and exchange of the parties’ information but before trial. This is often how claims resolve.

3). Challenging a Will is a costly, risky endeavour. Obtaining early advice from an experienced estate litigation lawyer may avoid a claimant taking unwarranted risks, or provide key strategic advice to executors and beneficiaries responding to a claim.

A stitch in time saves nine. Whether you are the claimant, or the executor responding to an estate claim, early legal advice may prevent wasted time and expensive steps.

There are important legal considerations on which a claimant or an executor should be advised, including:

• The legal standards (established case law and customary principles) that apply to Will challenges or claims against estates.
• The high evidentiary standard that is required to be met by the claimant or the executor, which is unique to estate claims.
• The specific nature of the evidence that the courts require, to rule on an estate claim or Will challenge. The claimant generally bears the overall onus to prove their claim.
• The penalties that courts issue against claimants who are not successful in their claims. Such consequences are higher for certain types of allegations than others.
• The courts are increasingly aware of the number of claims being filed against estates, and Will challenges being brought. They have reinforced the ability to dismiss such claims at a very early stage, where they are not proven adequately.

To highlight these principles, the Alberta Court of Appeal has recently reinforced these considerations, in its April 12, 2017 decision in Beimler v Kendall.That case involved a Will challenge, on two common fronts:

• Allegations that the testator making the Will lacked testamentary capacity; and,
• Allegations that the testator was unduly influenced by someone to change his Will (that ‘someone’ is usually the new beneficiary, whose entitlement is challenged by the claimant).

The claimants in the Beimler case were the testator’s (deceased’s) common law wife, and his informally adopted son.

Following a series of Wills that named them as beneficiaries of his estate, he changed his Will to remove them as beneficiaries, and named his sister as his sole beneficiary. He was 83 at the time of his newest Will, and in ill health (in hospital).

The sort of evidence advanced by the claimants in Beimler is common. It is also commonly unsuccessful. Their claim included allegations that:

• The sister was manipulating an elderly man to change his Will.
• The testator was under his sister’s power, having first granted a Power of Attorney to her and, in turn, this influenced him to change his Will to give her his estate.
• The beneficiary had care for the testator’s medical care (i.e innuendo of influence).
• a conspiracy by the beneficiary to change the Will.
• The testator allegedly had dementia and “lacked capacity” and was “slipping mentally” (sweeping statements, without specificity).

Equally common in such claims, the executor and beneficiary responded with evidence that included affidavits from relatives confirming the testator’s mental abilities, and an affidavit from the lawyer who prepared the Will at issue, confirming that:

• He assessed the testator’s testamentary capacity from a lay standpoint (checklist of observed behaviour relevant to the legal test for testamentary capacity).
• He ensured that there was no influence by anyone on the testator for any of the three occasions on which he met with the testator before the testator signed his Will.
• He verified that the testator’s wishes were his own, and specifically that they were not those of his sister (the new beneficiary responding to the challenge).

The Court of Appeal found that the claimants’ evidence was largely self-serving, and not corroborated (which is a common shortcoming in estate claims).

Although the medical evidence showed diminishing cognitive abilities, it fell far short of supporting the claimants’ allegations that the testator lacked task-specific mental capacity to make a Will (often expert evidence is required, together with very significant lay evidence to lay a factual foundation for such expert opinion evidence).

The Court of Appeal upheld the lower judge’s dismissal of the Will challenge at an early stage, and without a trial. The claimants simply did not advance sufficient, specific, corroborated evidence to support their allegations. Mere suspicion by disappointed prior beneficiaries is not enough.

This is a common end for such attempts, where the evidence or argument is not robust and detailed enough to support the claim. The courts strongly censure such unsuccessful attempts that are advanced to a hearing that uses scarce publicly funded judicial resources.

Claimants are wise to avoid this sort of scene, and executors are best equipped to respond to it, by obtaining legal advice at an early stage.

The unsuccessful party is often left paying the tab, and the penalty can be quite high indeed…

Walsh LLP Partner Contributes To Homes Of Hope Home-Build In Tijuana, Mexico

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Walsh LLP Partner and President-Elect of Rotary Club of Calgary West, Benjamin Kormos, traveled to Rosarito, Mexico (Tijuana State) on March 2-5, 2017 to assist with the Homes of Hope home-build with other Rotarians.

The Rotary Club of Calgary West and the Rotary Club of Fish Creek partnered with Homes of Home (and Youth With a Mission), to build 5 homes in 2 building days in Rosarito, Mexico.   The Homes of Hope project provides homes for families that otherwise would not be able to afford basic, safe housing.

Pictured is Walsh LLP’s Benjamin Kormos, together with other Rotarians contributing to this new home for the Peña family in Rosarito, Mexico.

Walsh LLP Lawyers Argue Constitutional Case Before Supreme Court Of Canada

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Brendan Myers Miller and Josh Sutherland of the Regulatory, Criminal and Public Law Group at Walsh LLP argued before the Supreme Court of Canada on February 14, 2017.

Mr. Miller and Mr. Sutherland argued that, due to the serious nature of securities offences in Alberta, those accused of such charges are constitutionally entitled a jury trial. The punishment for someone convicted of a securities offence in Alberta is up to five (5) years and six (6) months less one day in jail per conviction, including default time for failing to pay the portential $5 million fine. They argued that, because of this serious potential sentence, a jury trial is the proper manner to try such charges.

Although in the Supreme Court of Canada’s R. v. Aitkens decision, the Court did not yet accept this argument in this particular case, Mr. Miller and Mr. Sutherland presented a strong, effective argument and the Court left open the question for different case, whether certain sentences in legislation can provide the right to a jury trial, where the sentences are harsh.

Pictured are Joshua Sutherland (left) and Brendan Miller (right), at the Supreme Court of Canada.

Commercial Litigation Update: Alberta Court Of Appeal Finds That Claim For Injury At Mexican Resort Is Litigable In Alberta

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The Alberta Court of Appeal has found that a claim for injury at Mexican resort will proceed in Alberta’s courts.  In this interesting case, the most important finding was that the vacation contracts were formed in Alberta.  See the short summary here: https://lnkd.in/gkAX5Xe.

The claim was about a severe injury suffered at the resort.  An Alberta woman drank a clear, odourless, liquid chemical from minibar. The bottle, from which she took only a few large gulps of what she believed was bottled water, actually contained a very caustic commercial chemical cleaner used to clean the shower tile grout.  The young lady suffered severe injuries, which required more than 80 surgeries to repair.

The legal result in this case is interesting, because it confirms that Alberta courts can hear claims for injuries suffered outside of Alberta, and even outside of Canada, where there is a clear contractual or other connection to Alberta.

Save Needless Worry! Get The Grant – Probate and Executor Liability

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Save needless worry! Get the Grant of Probate.

Personal Representatives (Executors) or Trustees who take steps before obtaining a Grant of Probate (or Grant of Administration) from the Court are taking on serious risks of personal liability.  They risk becoming seen as what is legally termed a “de facto trustees (trustee de son tort).”  Effectively, that means operating without confirmed authority of a Trustee (or Personal Representative / Executor as a specific type of trustee), when in fact that authority may not be completely sound until it is proven to the Court and the Court issues a Grant to you, to confirm that authority.

And, it is important to note, liability is strict in a case where someone takes on the role without obtaining the Grant.  In comparison, as a practical and legal matter there are more defences to a Personal Representative’s activities if a Grant issued beforehand.

It is important to note, as well, that the job (if taken on) is onerous.  Precise accounts of financial matters are required: See Manitoba court’s decision in re: Bereskin Estate: https://lnkd.in/gnrNGDs. These principles may be applied to a Power of Attorney document as well.

Speak with one of our Estate lawyers if you have questions on this, or if you wish to apply for a Grant of Probate (or other Grant) to confirm your authority to act under a Will for an estate.  We can also advise you on your various legal obligations in acting as a Personal Representative (Executor) or Trustee.

Bleak House? Think Again: No Unlimited Right To Raise Wills Or Estate Challenges

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Bleak House? Think again. The Ontario Court of Appeal has confirmed, as is the law in Alberta, that an interested person doesn’t have an automatic right to force Formal Proof of a Will.  Such claims are commonly filed, often by raising mental capacity or undue influence allegations.

There is a strong “buffer” or defence against such claims, at the early stage.  There is a useful evidentiary test that applies to screen out frivolous attacks, which can be raised when the claim is filed, to attempt to stop the longer, protracted, and costly legal proceedings that may otherwise follow.

The clear policy at play in this principle is that the courts and Personal Representatives (Executors), and beneficiaries wish to prevent unnecessary litigation and erosion of the estate’s value through such claims.  The case report, found here: http://canlii.ca/t/gnmms, is a great read for other legal aspects too. For this particular aspect (screening out unfounded claims), see paragraphs 80 forward in the decision.

If you are a beneficiary, Personal Representative (Executor), Trustee, or otherwise connected to an estate that is involved in litigation, please contact our Estate, Will, and Trust Litigation and Dispute Resolution group.

Estate Planning & Litigation Update: Promises Do Keep! Equity Prevails Where Strict Legal Rights Fail

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Whether now or later, your word will be your bond.

In the opening words of the Supreme Court of Canada’s December 14, 2017 decision in Cowper-Smith v. Morgan, Chief Justice McLachlan wrote some of her final words to the Canadian judiciary, lawyers, and the public, before her retirement on December 15.

In her final chapter as Chief Justice of Canada, she turned her mind to what should happen when a someone makes a promise to give someone else rights in specified property — is a promise enough? Can you promise something you do not yet legally own? Does it take a contract or written agreement, to become enforceable? 

Well, according to the Chief Justice, the short answer is: “Equity enforces promises that the law does not.” So, what does that mean?

Bleak House? — What this estate fight was all about.

Let me explain what this important new decision in Cowper-Smith is all about. This decision considers a smattering of several Court of Appeal decisions across Canada that had confirmed proprietary estoppel as a principle of Canadian law, but applied it without a consistent legal test for general guidance.

This new top-court case consolidates the principles of proprietary estoppel and defines what must be proven, to establish a solid claim. It also expressly reduced the requirements to prove such a claim. While this particular fight in Cowper-Smith involved siblings, the equitable claims addressed apply to any sufficient promise, such as often occurs between romantic partners, business partners, or even friends.

A history of sibling discord.

The situation that caused the fight in Cower-Smith was this history:

• Elizabeth was a mother of three, living in Victoria, British Columbia. Her daughter, Gloria, became a potter and settled in Victoria. Her son, Max, moved to England and practiced law. Nathan moved to Edmonton and worked for the Alberta government’s child services branch.
• When their father died in 1992, he told the children that he and Elizabeth wanted everything evenly divided between the children, for family harmony.
• Gloria had a dispute with Nathan. In 2000, Nathan moved back home with Elizabeth after a relationship failed in Alberta. Nathan did some house work, which Elizabeth liked. However, Gloria would visit Elizabeth and she became agitated and concerned that Nathan would take her house from her. She was troubled by some alleged plans by Nathan to throw “gay parties” in her house.
• In 2001, Gloria penned a letter to Nathan, demanding that he not shout or raise his voice in Elizabeth’s home, or “entertain Gay Males” at home, amongst other grievances. A further letter demanded that he leave the house and not return. He returned from a trip to discover the locks were changed and his belongings removed. Nathan moved back to Edmonton.
• Also in 2001, Elizabeth transferred title to her home and all investments into joint names of herself and Gloria. In a “Declaration of Trust” document, Elizabeth confirmed that Gloria held those assets as bare trustee for Elizabeth, but that Gloria would be “entitled absolutely” to them upon Elizabeth’s death. She also signed a new Will appointing Gloria as executor.
• In 2002, Elizabeth revoked the 2001 Will and appointed Gloria as executor. In this final Will (2002), she decided that all three children would share evenly in her estate. Yet, all property remained in joint title with Gloria (which, without the court claims by Max, would mean the others would receive their even share of nothing).

No good deed goes unpunished — how the dust-up began.

• After their father’s death in 1992, Max suffered financial and mental health and substance use difficulties. His marriage concluded. After 2000, his situation improved.
• In 2003 and 2005, Max visited Victoria. He had some discussions with Gloria. Elizabeth was reaching a stage of life where she needed more assistance in her daily tasks. Gloria asked Max to return home to live with Elizabeth and care for her.
• In 2005, Elizabeth also asked Nathan to forgive her for what occurred earlier when she evicted him. Nathan confirmed he knew it was Gloria’s doing. That same year, he discovered that Gloria’s name was jointly on title with Elizabeth. Gloria assured him that he would still get his 1/3 share of Elizabeth’s estate upon her death.
• The three siblings all eventually came to an agreement that Gloria, would sell her share of the family home to Max, if Max would move from England (where he had an established life and successful law practice) back to British Columbia and care for their mother. Max would also have expenses covered by Elizabeth, and have use of her car, and be permitted to live in her house permanently.
• In 2009, Gloria later disputed this agreement. Max then also discovered the change of title from Elizabeth’s sole name to Elizabeth and Gloria jointly, which had occurred in 2001. Like Nathan, she assured Max he would share evenly in their mother’s estate.
• When Elizabeth died in 2011, Gloria became Elizabeth’s executor. She refused to sell Max her share of the estate house, arguing that she could not have reached a legally enforceable contract to sell something she did not own at the time (note: in strict legal senses, as opposed to in equity, this argument may have succeeded, as the Court of Appeal in British Columbia found before the Supreme Court of Canada heard this appeal).
• Gloria attempted, as executor, to sell the house while Max was still living in it. He then discovered the “Declaration of Trust” document from 2001, and commenced legal proceedings to enforce the promise by Gloria to sell him her 1/3 interest in the house.
• Nathan confirmed that Gloria’s earlier agreement occurred, and supported Max’s claim in court.

What the Court decided: What sort of promise is promising for your claim?

The Supreme Court of Canada confirmed that oral promises can indeed be sufficient to grant rights in property. No contract or legal formality is necessary. Certain requirements must be met.

Once the following 3 principles align in a particular case, a proprietary estoppel arises to confirm that the claimant’s right exists (and can create a new right and claim).

• A promise for rights about specific property: “A representation or assurance is made to the claimant, on the basis of which the claimant expects that he will enjoy some right or benefit over property.” This promise can be express or implied from words or conduct. The property over which rights are promised need not actually be owned or held by the person making the promise. It is sufficient that they hold an interest “sufficient to fulfil the claimant’s expectation.” The equity will become enforceable when that interest is later held by the person making the promise.
• Relied on the promise: “The claimant relies on that expectation by doing or refraining from doing something, and his reliance is reasonable in all the circumstances.”
• Detriment / inconvenience from relying on promise: “The claimant suffers a detriment as a result of his reasonable reliance, such that it would be unfair or unjust for the party responsible for the representation or assurance to go back on her word.”

Once all 3 factors are advanced with sufficient proof, the courts will confirm that a proprietary estoppel exists which prevents the responding party from denying the claimant’s rights. They are enforceable. The court then issues a remedy which can take various forms, depending on the needs of the particular case.

In Cowper-Smith, the Supreme Court of Canada confirmed that the claimant (Max) had shown that the responding party (Gloria) made a promise to him that was specific enough, and that it was intended to be relied upon by him, and that he relied upon it, in moving away from his established life in England to Victoria, British Columbia, to care for their mother.

It did not matter that Gloria did not yet own the legal rights she promised to Max (her 1/3 interest in the estate house). That promise became binding the moment Gloria’s interest in the property (as a beneficiary) arose when Elizabeth died.

The Court ordered that Gloria must acknowledge Max’s right to purchase her 1/3 interest in their mother’s home. The Court also directed that Gloria, wearing her executor hat, must accept this fact within the Estate also, and give effect to it.

Background on equitable claims in Canadian courts: bridging the gap between strict legal rights and what is “fair.”

Why do the courts possess such powers to enforce promises? It’s simple: it’s about fairness. A serious promise is enough; it’s about keeping one’s word and avoiding unfair results based on strict legal rights.

The Supreme Court of Canada confirmed:

“proprietary estoppel avoids the unfairness or injustice that would result to one party if the other were permitted to break her word and insist on her strict legal rights.”

Equitable claims can include proprietary estoppel (like in this Cowper-Smith case) or unjust enrichment, or other equitable complaints. Such claims grant Canadian courts very broad discretion to enforce such rights, in contrast to legal claims which must follow a much narrower and sometimes more onerous path to victory.

Equity is often said to grant the power to ‘do what ought to be done’, where narrow legal rights are often too strict.  This new case from our top court certainly reinforces that principle in Canadian law.

We hope you have enjoyed reading this summary! Have other estate litigation or estate planning questions?

Walsh LLP’s Trust, Wills, & Estate Litigation and Dispute Resolution Group and our Wills & Estate Planning Group are here to help.

Contact us and read more! We are here to guide you on your journey!

Construction Lien Rights Won For The Oil & Gas Industry

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If you or your company have not been paid for the services or materials provided to a construction or oil or gas project, the Alberta Builders’ Lien Act (“BLA”) can be utilized to protect your rights to repayment.

Under the BLA, contractors and sub-contractors on a construction project usually have 45 days from the last day worked (or the day the contract was abandoned) or the last date rented equipment was on site to file a lien. However, if the services or materials provided were with respect to improvements to an oil or gas well or an oil or gas well site, a longer 90 day registration period may apply.

The recent Alberta Court of Queen’s Bench decision of Davidson Well Drilling Limited (Re), 2016 ABQB 416, considered a number of builders’ liens filed against a Syncrude oil sands project near Wood Buffalo, Alberta. The general contractor on the project, Davidson Well Drilling (“Davidson”), went into receivership, leaving numerous sub-trades unpaid for the work they had provided. 

The Receiver acting on behalf of Davidson had to determine which liens were valid. The Receiver argued that five liens were invalid due to, among other things, the fact that they were not filed within 45 days. The primary issue for the court to consider was whether the Syncrude Oil Sands project was “an oil or gas well or oil or gas well site,” entitling its sub-trades to the longer 90 day registration period under the BLA.

Walsh LLP represented lien claimants who had provided services as sub-trades on the project and successfully argued that, in fact, the longer 90 day registration period applied in the circumstances.

Although the Alberta Energy Regulator had designated the sites as “mines,” the story did not end there. The court instead adopted a liberal interpretation of the term “oil or gas well or well site,” consistent with the remedial purpose of the legislation, and ruled that this included exploratory wells, evaluation holes, or test wells.

In the case at hand, Davidson was involved in the drilling of exploratory wells in order to locate bitumen from which oil would be processed. Their services, as well as those providing services or materials to them, were therefore entitled to the 90 day lien period.

The oil and gas service companies represented by Walsh LLP were assisting with these drilling endeavours. The court agreed with Walsh LLP that their liens were valid and they were entitled to payment for same.

However, simply doing work on an oil or gas site does not necessarily entitle you to a longer lien registration period. If the work provided is totally unrelated to the drilling of wells, the shorter 45 day lien period may apply. Therefore, it is best to err on the side of caution and file all liens within 45 days.  Each case is determined on its own facts.

For any questions or comments regarding builders’ liens or construction law disputes, contact one of Walsh LLP’s Construction Litigation lawyers.

In Memory Of Tom Walsh

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It is with sadness that the members of the Firm of Walsh LLP learned of the passing of its founder, Tom Walsh, on June 30, 2016. Since establishing the Firm in 1959 and long after his retirement, Tom was an integral part of the Firm and the values that he instilled will live on. Tom loved his Firm and in many respects, the members of the Firm were his second family. The qualities on which Tom built the Firm include loyalty, leadership and comradery. All of which have contributed to the success that we enjoy today.  Loyalty was always a very important quality to Tom and it is evidenced by members who have been at the Firm for over 40 years, by past members who continue to return and consider the Firm their own and by those new members who are bring the Firm to new heights.

Tom’s example of leadership is evident not only with his legacy to the Firm, but through his accomplishments in the community, including the Law Society of Alberta, Canadian Bar Association, Calgary Bar Association, Calgary Chamber of Commerce, The Rotary Club of Calgary, Calgary Parks Foundation, Calgary Stampede and Calgary Airport Authority.  He was officially recognized by the Order of Canada and the Alberta Order of Excellence and received both a Diamond Jubilee Medal and Queen’s Golden medal.  He inspired each of us.

Comradery was important to Tom and is still foremost for the Firm today. We continue to honour and guard the culture of the Firm that has evolved through Tom’s example.  As Tom continued to visit the Firm after his retirement from law, his booming voice never failed to bring a smile to us all when we heard him coming through the door.  His family has said that he “brightened the corner where he was” and all of us at the Firm can attest to that.  We were very happy to be one of the corners where he spent time and we will miss him in the halls of Walsh LLP but his memory and his work will be carried on.