This post was written prior to our January 2017 merger, under our previous firm name, MacPherson Leslie & Tyerman LLP.
People who perform work or provide materials to improve land generally think that they are entitled to a lien against that land for the value of the services or materials supplied. While this is generally true, only certain types of services and materials are lienable. This blog explores the question of what types of services and materials are lienable under the Saskatchewan Builders’ Lien Act, as informed by the recent decision of the Saskatchewan Court of Queen’s Bench in Boomer Transport Ltd. v Prevail Energy Canada Ltd. 2014 SKQB 368.
Boomer Transport Ltd. and Prodahl Environmental Services Ltd. had each provided services and materials to Prevail Energy Limited in relation to a number of oil wells in Saskatchewan, preparatory to and in connection with the recovery of oil and gas. Prevail Energy Limited failed to pay Boomer Transport Ltd. for the hauling of oil and water, and failed to pay Prodahl Environmental Services Ltd. for the supply and installation of containment systems. As a result, the companies each filed liens against Prevail’s well assets in the summer of 2010 to secure their liens.
Section 22 of The Builders’ Lien Act [the “Act”] provides a person who provides services or materials for an improvement on lands has a lien on such lands for as much of the price of the services or materials as remains owing to the lien claimant. A line of case authorities in Saskatchewan establishes that the test as to whether a lien arises is whether there exists a sufficient connection between the services or materials provided and the improvement. For example, the provision of camping services, such as cooking, cleaning and laundry, are lienable only insofar as they are sufficiently connected to the making of the improvement. Another example of application of the “substantial connection” test is Points North Freight Forwarding Inc. v. Coats Drilling Ltd. (Trustees of) 1992 3 WWR 152, in which the Saskatchewan Court of Queen’s Bench held that “a mere hauler of materials, depending on the circumstances, may indeed have a valid lien claim”.
One of the hurdles for the lien claimants in Boomer was to overcome a challenge to the validity of their liens on the basis that the services provided were not in regard to an improvement “in the process of being constructed”. All or substantially all of the prior case law applied the “substantial connection” test in regard to services or materials provided to an improvement in the process of being constructed. In challenging the lien claim, it was argued that since the improvement already existed, the hauling of oil and water did not “improve” the improvement. The Court in Boomer, citing Points North, determined that the pumping out and hauling away on a continuous basis of the water that was required to be extracted from the oil and water mixture being pumped from the ground through the oil well head was an integral part of the production of oil for market, and thus was a lienable service.
It was clear from the Court’s review of the evidence that the improvement was complete. In spite of this fact, the Court showed no reluctance in granting the lien to the water hauler. This implicitly suggests that a lien can be available when an improvement is complete.
This case is significant because it provides lien claimants with additional authority for the general proposition that the mere hauling of materials can give rise to a valid lien. The case also affirms that a valid lien may arise in regard to services or materials provided to a completed and fully operational improvement—provided that those services or materials are integral to its operation.