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Case has implications for subcontractors working on large mining equipment |
| 01-Nov-06 |
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Rahco International Inc. v. Laird Electric Ltd., 2006 ABQB 592
"This case has implications for subcontractors who do work on, or supply materials to, large pieces of mining equipment at the Alberta tar sands projects," as Master in Chambers J.B. Hanebury noted in her Reasons for Judgment. The following information is extracted from the judgment.
Laird Electric entered into a contract with Rahco International to assemble and do the electrical connections for several large pieces of mining equipment at the Suncor Energy tar sands near Fort McMurray. The equipment is huge and had to be trucked in and assembled on site.
Laird said it was not paid for all of its work and filed a builder’s lien for $ 1.3 million against the freehold and leasehold mineral titles to the Suncor lands where the equipment was assembled and is operating.
Rahco International applied to discharge the lien on the basis that the work performed by Laird on the equipment was not work performed on an “improvement to the land” as required by the Builders’ Lien Act. At issue was whether this large, mobile, custom-built mining equipment was an improvement to the land.
On July 28, 2006, J.B. Hanebury, Master in Chambers, found that the equipment in question was not an “improvement” to the lands as the equipment was “not intended to be or become part of the land.” Therefore, the work performed by Laird was not subject to the Builders’ Lien Act.
The lien was therefore declared invalid.
Laird appealed Master Hanebury’s decision and on October 16th, Justice A.M. Lutz of the Court of Queen’s Bench upheld her decision, dismissing Laird Electric’s appeal.
Laird has appealed Justice Lutz’s decision and the case is now going to the Alberta Court of Appeal.
Jamie Flanagan, Partner with McLennan Ross in the Labour & Employment, Commercial Litigation and Construction practice groups, represented Rahco International.
Note: This case has gone to the Alberta Court of Appeal. Please watch for further developments. |
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