Tron Construction
Written by Ty Schmidt
In the recent decision of Tron Construction (Re) (2022 SKKB 203), the Saskatchewan Court of King’s Bench determined that a claims process for builders’ lien claims can be established through a single-proceeding model under the Bankruptcy and Insolvency Act[1] rather than through provincial builders’ liens legislation (in this case, Ontario’s Construction Act[2]).
Tron Construction is a general contractor that had entered into construction contracts with Bruce Power LP to perform work on projects located on lands leased by Bruce Power from Ontario Power Generation Inc. Tron Construction was unable to meet milestones and complete the required work, eventually filing a notice of intention for restructuring under the BIA and disclaiming their contracts. As a result, various parties filed lien claims on the land. [3]
Because Bruce Power had a duty to keep the land clear of all encumbrances, they had to apply to the court for an order to create a claims procedure under the BIA. Their rationale for choosing this route was that it will lead to the most efficient and expedient resolution of matters, as compared to through the Construction Act, and thus would allow for the liens to be cleared and for claimants to receive their funds as early as possible. [4]
Tron Construction opposed the claims process. They asserted that Bruce Power and the lien claimants were strangers to their initial BIA proposal and should not be allowed to pursue their claims through the BIA. This defense did not stand, as the lien claimants were at least contingent creditors and make up a large portion of Tron Construction’s debts.[5] As a result, Bruce Power and the lien claimants were not strangers to Tron’s restructuring proposal, and the single proceeding claims process was allowed.
[1] Bankruptcy and Insolvency Act, RSC, 1985, c B-3.
[2] Construction Act, RSO, 1990, c C30.
[3] 2022 SKKB 203 at paras 4-6.
[4] Ibid at paras 43 and 46.
[5] Ibid at para 56.
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