The Alberta Court of Queen\u2019s Bench clarified the requirements for perfecting a claim under Alberta\u2019s Public Works Act, <\/em>RSA 2000, c P-46 (the \u201cPWA<\/em><\/strong>\u201d) in Graham Construction and Engineering Inc v Alberta (Infrastructure), <\/em>2021 ABQB 184 [Graham<\/em>]. This case arose from a construction project in Grande Prairie, on which Graham Construction and Engineering Inc. (\u201cGraham<\/strong>\u201d) acted as general contractor. The contract was formed in July of 2011 and Graham provided its own invoices and those of its subcontractors to the counterparty to the contract, the Ministry of Infrastructure, on a regular basis as required by the contract. The relationship between the Ministry and Graham came to an end in September of 2018 and the contract was terminated.<\/p>\n\n\n\n After the contract was terminated, claims were filed with the Ministry by various vendors. Many, but not all, of these claims were submitted specifically as \u201cnotices\u201d under the PWA. <\/em>The claims totalled over $60,000,000, and half of that was paid into court under the doctrine of interpleader. 17 parties were paid out of the interpleader funds in 2019 pursuant to court orders, as their claims had been submitted properly under the PWA. <\/em>32 other parties, including Graham, pursued claims against the interpleader funds but had not followed the prescribed process under the PWA. <\/em>This case resulted from an application by Graham to satisfy its claim out of the interpleader funds held in court, despite Graham not having submitted its claim in the proper form.<\/p>\n\n\n\n Since claims against the Crown do not fall under the Builders Lien Act, <\/em>RSA 2000, C B-7, a contractor or subcontractor who remains unpaid under a contract with the Crown (including the Minister of Infrastructure) must submit a claim to the Crown in accordance with the PWA <\/em>ss 14 and 15, the relevant portions of which read:<\/p>\n\n\n\n 14. (1) When<\/p>\n\n\n\n that person may send a notice of that person’s claim to the Minister, or agent of the Crown that is responsible for the public work. (3) The notice of claim, other than for a claim referred to in subsection (2), must<\/p>\n\n\n\n 15. In this section, “surety” means a person who guarantees to the Crown the payment of creditors.<\/p>\n\n\n\n (4) Instead of paying the claimant as provided in this section, the Crown may apply to the Court of Queen’s Bench to pay the money into Court on the terms and conditions, if any, determined by the Court and, on the money being paid into Court, the Court may determine the persons who are entitled to the money and direct payment of the money in accordance with that determination.<\/p>\n\n\n\n (5) Notwithstanding anything to the contrary in any other Act, a person having a claim under section 14 with respect to a public work has priority over any other claimant<\/em> with respect to any money payable under the contract with the Crown for the construction, alteration, demolition, repair or maintenance of that public work.<\/p>\n\n\n\n Other claimants and potential claimants opposed the distribution of the interpleader funds proposed by Graham, arguing that only they held priority as a result of the wording in section 15(5) of the PWA<\/em>. Specifically, they argued that Graham had not filed a section 14 claim and those parties that filed such claims therefore had priority for distribution over an entity who did not.<\/p>\n\n\n\n In the lower court, the Master had decided that any contractors and subcontractors whose claims were in substantial compliance with the PWA <\/em>should be assessed on a case-by-case basis. This in effect created two priorities \u2013 first priority for claims that were \u201cperfected\u201d by virtue of having been submitted in accordance with the PWA; <\/em>and a secondary priority, on a case-by-case basis, for claims for which the Minister had sufficient notice because Graham had submitted invoices in their respects, but that had not otherwise been \u201cperfected\u201d by a claim being submitted in accordance with the PWA. <\/em>The Master\u2019s decision was appealed to the Court of Queen\u2019s Bench.<\/p>\n\n\n\n The primary issues before the Court of Queen\u2019s Bench were whether the Master had erred in holding that there were two different classes of claimants as defined by the PWA<\/em> \u2014 those who “complied” and those who “substantially complied” with the notice requirements under s 14 \u2013 as well as how the PWA <\/em>restricted the different claimants. Additionally, the Court considered whether s 15(5) of the PWA <\/em>was enforceable, whether a claimant must submit a claim in a specific format to trigger s 15 of the PWA, <\/em>and which of the parties had valid claims under the PWA. <\/em><\/p>\n\n\n\n The Court of Queen\u2019s Bench first considered whether s 15(5) of the PWA<\/em> was unenforceable for ambiguity and uncertainty. Under this section, claims where notice is given under s 14(3) of the PWA <\/em>are given priority over other types of claims, although this priority is limited to “any money payable under the contract with the Crown.” The PWA <\/em>does not identify the fund to which the priority attaches, which Graham argued rendered s 15(5) unenforceable. Additionally, Graham argued that interpreting the PWA<\/em> to require strict adherence to the notice provisions would allow parties to claim money that was earned and payable to other claimants, simply because a particular form was used instead a submission of certified invoices.<\/p>\n\n\n\n The Court rejected Graham\u2019s argument on the basis that it did not account for a key purpose of s 15(5) of the PWA, <\/em>which was to create more certainty in determining how the Crown would decide which claims would be paid under the PWA. <\/em>The secondary case-by-case priority class created by the Master would have the effect of detracting from the clarity created by 15(5) of the PWA, <\/em>so the Court of Queen\u2019s Bench overturned this part of the Master\u2019s decision. As such, the Court clarified that claims under the PWA <\/em>must be submitted in accordance with s 14(3) in order to be successful.<\/p>\n\n\n\n The Court of Queen\u2019s Bench next considered whether claims of which the Minister had notice existed independently of whether the required notice was given under s 14(3) of the PWA, <\/em>such that a claim under s 14(1) of the PWA <\/em>maintained its priority regardless of the notice given. Graham argued that a person who sought protection of its claim under the PWA <\/em>could read s 14 as being permissive rather than mandatory because of the presence of the word \u201cmay\u201d in the below portion of the section:<\/p>\n\n\n\n 14(1)\u2026that person may<\/em> send a notice of that person’s claim to the Minister, or agent of the Crown that is responsible for the public work,<\/p>\n\n\n\n Accordingly, Graham argued that formal notice in accordance with s 14 was not required to maintain a claim under the PWA, <\/em>and as such it was entitled to share in the distribution of any of the interpleader funds held in court. Graham alleged that the invoices it had provided to the Ministry were sufficient for the purpose of entitling it to a share in the interpleader funds held in court.<\/p>\n\n\n\n\n
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Enforceability of Section 15(5) of the PWA<\/h2>\n\n\n\n
Whether non-compliant notice is sufficient notice<\/h2>\n\n\n\n