Noranda Exploration Co. Ltd. v. Sigurdson

The parties have agreed to stating a question of law arising in this case in the form of a Special Case for the opinion of the Court pursuant to Marginal Rule 389 of the Supreme Court Rules.

The Plaintiff agrees that if the question of law is decided against him, then such decision will be determinative of the action and the Defendants will be entitled to a dismissal.

It is agreed that either party may appeal the decision of the Learned Trial Judge on the Special Case to the Supreme Court of Canada. If the question of law is ultimately determined in favour of the Plaintiff, then the action will be continued before the Learned Trial Judge.

The amount or value of the matter in controversy herein exceeds $10,000.00.

Basarab Construction Co. Ltd., in bankruptcy, (hereinafter referred to as “Basarab”) was the general contractor on the subject project, however, no relief is claimed by the Plaintiff against Basarab and Basarab has no interest in these proceedings and has not entered

[Page 299]

an Appearance. The Plaintiff is the Trustee in bankruptcy of Basarab.

The property against which the Plaintiff seeks to enforce its liens is described in Paragraph 5 of the Statement of Claim. The mining property in question is recorded in the name of the Defendant, Noranda Exploration Company Limited, and is held in trust for the Defendant, Noranda Mines Ltd. (“Noranda”), the beneficial owner thereof.

On April 8th, 1971, Noranda entered into a construction agreement whereby Basarab as head contractor was to do certain work on the foundations of several structures which Noranda wished to have constructed at a mine on the above-described property. On July 15th, 1971, Basarab entered into a second construction agreement as head contractor, with Noranda, to do certain other work on the foundations of additional structures on the mine site.

The parties admit that at least some of the liens are valid and in order, and that this Honourable Court has jurisdiction to hear the issues herein.

Basarab went into bankruptcy during the performance of the above-mentioned contracts, (which will be entered as exhibits on the hearing of this Special Case) and it is agreed that Basarab abandoned the contracts, and never completed them. On October 25th, 1971 Noranda wrote two letters to Basarab (copies of which will be entered in these proceedings).

It is further agreed that at the time of Basarab’s aforesaid abandonment, it has done and caused to be done work on the aforesaid improvements, and that Noranda, the owner, had held back from Basarab, more than the required statutory holdback of 15% of the value of the work done by Basarab, it sub-contractors and material men. The aforesaid sub-contractors and material men are the Mechanics’ Lien claimants who assigned their claim to the Plaintiff herein as set out in Paragraph 4 thereof.

The cost to Noranda to complete the improvements in question after the aforesaid abandonment, exceeded the sum of the aforesaid contract prices less the amounts paid to Basarab on account.

The question of law that the parties ask this Honourable Court to determine is: