Court File Number 2001 05482 Court Court of Queen's
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COURT FILE NUMBER 2001 05482 Clerk’s Stamp COURT COURT OF QUEEN’S BENCH OF ALBERTA JUDICIAL CENTRE CALGARY IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, RSC 1985, c C- 36, as amended AND IN THE MATTER OF THE COMPROMISE OR ARRANGEMENT OF JMB CRUSHING SYSTEMS INC. and 2161889 ALBERTA LTD. APPLICANT R BEE AGGREGATE CONSULTING LTD. DOCUMENT BENCH BRIEF OF THE APPLICANT, R BEE AGGREGATE CONSULTING LTD., IN SUPPORT OF AN APPLICATION TO CONTEST LIEN DETERMINATION NOTICE ADDRESS FOR SERVICE Bishop & McKenzie LLP AND CONTACT 2300, 10180 – 101 Street INFORMATION OF Edmonton, AB, T5J 1V3 PARTY FILING THIS Telephone: 780-426-5550 DOCUMENT Facsimile: 780-426-1305 Attention: Jerritt R. Pawlyk File No. 110151-003 TABLE OF CONTENTS I. INTRODUCTION ................................................................................................................. 1 II. FACTUAL BACKGROUND ................................................................................................. 2 The Agreement .............................................................................................................2 The Lands .....................................................................................................................2 The Project ....................................................................................................................4 The Claim ......................................................................................................................6 III. ISSUES ............................................................................................................................... 8 IV. LAW AND ARGUMENT ...................................................................................................... 8 Statutory Background ....................................................................................................8 Interpretation of the Act ...............................................................................................10 Whether a common purpose exist between the Lands and the Roads ........................ 10 Whether the services performed and the materials furnished by RBEE are in respect of an improvement as contemplated by the Act ...............................................................12 V. CONCLUSION AND REMEDY SOUGHT ...........................................................................14 VI. INDEX OF AUTHORITIES .................................................................................................17 Evidence .....................................................................................................................17 Legislation ...................................................................................................................17 Jurisprudence ..............................................................................................................17 I. INTRODUCTION The Applicant, R Bee Aggregate Consulting Ltd. (“RBEE”) supplied work and materials at various locations around the Municipal District of Bonnyville No. 87 (the “Municipality”) that directly contributed to the overall construction and maintenance of the roads in the Municipality. RBEE supplied the work and materials on behalf of JMB Crushing Systems Inc. ("JMB"), ensuring the seamless continuation of the construction and maintenance of the roads around the Municipality. To date, RBEE has not been paid in full for the services they performed and JMB is in insolvency proceedings under the Companies' Creditors Arrangement Act, RSC 1985, c C-36 (the “CCAA”). On May 15, 2020, RBEE filed several liens against relevant lands in accordance with the Builders' Lien Act, RSA 2000, c B-7 (the “Act”). RBEE submitted a lien notice to the court-appointed monitor of JMB, FTI Consulting Canada Inc. (the “Monitor”) in accordance with the process outlined in the Honourable Madame Justice Eidsvik’s May 20, 2020 Order – Lien Claims Process for MD of Bonnyville. However, the Monitor denied RBEE’s lien claim on July 27, 2020 (the “Lien Determination Notice”).1 RBEE therefore seeks to have the Lien Determination Notice reversed and its lien claim declared valid. RBEE also seeks a direction from this Honourable Court that the sum of $1,270,791.71, plus interest thereon in accordance with the Judgment Interest Act, RSA 2000 c J-1, and costs, be released by the Monitor to RBEE through its counsel, Bishop & McKenzie LLP. 1 Order – Lien Claims Process for MD of Bonnyville, dated May 20, 2020 [Tab 1] [Order]; Lien Determination Notice, dated July 27, 2020 [Tab 2] [Lien Determination]. 1 II. FACTUAL BACKGROUND The Agreement On or about November 1, 2013, JMB entered into a contract (the “Prime Contract”) with the Municipality to perform services including the crushing of rock and gravel for the Municipality.2 On or about February 25, 2020, JMB entered into a Subcontractor Services Agreement (the “Subcontractor Agreement”) with RBEE whereby RBEE agreed to perform services on behalf of JMB under the Prime Contract.3 Pursuant to the Subcontractor Agreement, RBEE’s services consisted of crushing rock and gravel (the “Services”), at a site located within St. Paul County No. 19 approximately 10 km southwest of the Town of Elk Point, referred to in the Subcontractor Agreement as the “Shankowski Pit”. In the Subcontractor Agreement, JMB represented to RBEE that it was the owner of the Shankowski Pit, identified therein as being located at SW 21-56-7- 4, being the SW Quarter of Section 21, Township 56, Range 7, West of the 4th Meridian.4 The Lands RBEE’s Services in respect of the Shankowski Pit were conducted upon multiple titled parcels of land, with the following legal descriptions, which shall herein be referred to collectively as the Shankwoski Pit: a. FIRST MERIDIAN 4 RANGE 7 TOWNSHIP 56 SECTION 21 QUARTER NORTH WEST CONTAINING 64.7 HECTARES (160 ACRES) MORE OR LESS EXCEPTING THEREOUT: HECTARES (ACRES) MORE OR LESS A) PLAN 1722948 – ROAD 0.417 1.03 2 Affidavit of David Howells, sworn May 29, 2020 [“First Howells Affidavit”] at para 2. 3 First Howells Affidavit, supra note 2 at para 3, Exhibit “A”. 4 Ibid at paras 4–5. 2 EXCEPTING THEREOUT ALL MINES AND MINERALS AND THE RIGHT TO WORK THE SAME SECOND MERIDIAN 4 RANGE 7 TOWNSHIP 56 SECTION 21 QUARTER SOUTH WEST CONTAINING 64.7 HECTARES (160 ACRES) MORE OR LESS EXCEPTING THEREOUT: HECTARES (ACRES) MORE OR LESS A) PLAN 1722948 – ROAD 0.417 1.03 EXCEPTING THEREOUT ALL MINES AND MINERALS AND THE RIGHT TO WORK THE SAME (the “Shankowski Land”); and b. MERIDIAN 4 RANGE 7 TOWNSHIP 56 SECTION 16 QUARTER NORTH WEST CONTAINING 64.7 HECTARES (160 ACRES) MORE OR LESS EXCEPTING THEREOUT: HECTARES (ACRES) MORE OR LESS A) PLAN 4286BM – ROAD 0.0004 0 .001 B) ALL THAT PORTION COMMENCING AT THE SOUTH WEST CORNER OF THE SAID SAID QUARTER SECTION; THENCE EASTERLY ALONG THE SOUTH BOUNDARY 110 METRES; THENCE NORTHERLY AND PARALLEL TO THE WEST BOUNDARY OF THE SAID QUARTER 110 METRES; THENCE WESTERLY AND PARALLEL TO THE SAID SOUTH BOUNDARY TO A POINT ON THE WEST BOUNDARY; THENCE SOUTHERLY ALONG THE SAID WEST BOUNDARY TO THE POINT OF COMMENCEMENT CONTAINING........... 1.21 3.00 C) PLAN 1722948 – ROAD 0.360 0.89 EXCEPTING THEREOUT ALL MINES AND MINERALS (the “Havener Land”).5 The certificate of title to the Havener Land also evidences the registration of a caveat in respect of a royalty agreement by JMB as registration no. 002 170 374 on June 20, 2000 (the “Havener Caveat”).6 5 Ibid at paras 8–12, Exhibits “B”–“E”. 6 Ibid at para 13, Exhibit “F”. 3 The aggregate rock and gravel that was crushed by RBEE was delivered to lands owned by the Municipality and located within the Municipality at the Northeast Quarter of Section 19, Township 61, Range 5, West of the 4th Meridian (the “Municipality Lands”).7 Title to the quarter section of land that makes up the Municipality Lands consists of three registered plans (road, descriptive, and subdivision), and a title for the entire quarter section excepting those registered plans, with the following legal descriptions: a. PLAN 0928625 BLOCK 1 LOT 1 EXCEPTING THEREOUT ALL MINES AND MINERALS AREA: 20.22 HECTARES (49.96 ACRES) MORE OR LESS (the “Plan 0928625 Land”); and b. MERIDIAN 4 RANGE 5 TOWNSHIP 61 SECTION 19 QUARTER NORTH EAST CONTAINING 64.7 HECTARES (160 ACRES) MORE OR LESS EXCEPTING THEREOUT: HECTARES (ACRES) MORE OR LESS A) PLAN 8622670 ROAD 0.416 1.03 B) PLAN 0023231 DESCRIPTIVE 2.02 4.99 C) PLAN 0928625 SUBDIVISION 20.22 49.96 EXCEPTING THEREOUT ALL MINES AND MINERALS (the “Municipality Quarter Section”).8 Collectively, the Shankowski Land, the Havener Land, the Plan 0928625 Land and the Municipality Quarter Section shall be referred to herein as the “Lands”. The Project The aggregate rock and gravel that was crushed by RBEE from the Shankowski Pit was deposited on the Municipality Lands at either, or both, of the Plan 0928625 Land and the Municipality Quarter Section.9 7 Ibid at para 14. 8 Ibid at paras 16–19, Exhibits “G” – “I”. 9 Ibid at para 19. 4 The aggregate rock and gravel that was crushed by RBEE was crushed into two different sizes: a. ½ inch base gravel with material number 112.5 (“112.5”); and b. 5/8-inch base gravel with material number 216 (“216”) (collectively, the “Materials”).10 The Materials that were crushed by RBEE were deposited onto the Municipality Lands. The ½ inch base gravel with material number 112.5 was deposited on the Municipality Lands in one pile (the “112.5 Pile”). The 5/8-inch base gravel with material number 216 was deposited on the Municipality Lands in another