Executive Summary: Key Legal and Evidentiary Issues

• A core issue was whether there was a genuine issue of material fact regarding the amount justly due to Guildfords under the Subcontract.

• Evidence conflicted between Gamma’s statutory declarations (stating all subcontractors had been paid) and Gamma’s affidavit (stating Guildfords was owed $815,206.04), creating a factual dispute.

• The appeal considered whether summary judgment was appropriate given unresolved factual inconsistencies in the builders’ lien claim.

• Queen’s Marque argued the holdback was not payable without certification of substantial performance under the Builders’ Lien Act and the Prime Contract.

• The Court noted that an agreement between Gamma and Guildfords regarding the amount owed did not bind Queen’s Marque for lien purposes.

• The Court found the hearing judge erred in concluding there was no genuine issue requiring trial and set aside the summary judgment order.

Facts of the case

Queen’s Marque Developments Limited was the developer of a mixed-use project located adjacent to Halifax harbour. On September 28, 2018, it entered into a contract with Gamma Windows and Walls International Inc. for the supply and installation of a glazed aluminum curtain wall and panels. Gamma subcontracted a portion of the work to Guildfords Inc. on October 30, 2019. In February 2022, disputes between Queen’s Marque and Gamma led Gamma to terminate the Prime Contract, which also terminated Guildfords’ Subcontract. Guildfords’ work remained incomplete at the time. On April 13, 2022, Guildfords registered a builders’ lien against the Project in the amount of $848,582.65.

On May 26, 2022, Guildfords filed a Statement of Claim seeking, among other relief, a declaration of a valid lien, payment of the claimed amount, sale of the Project lands, and judgment against Gamma for any deficiency. Queen’s Marque filed a defence on June 27, 2022 disputing the builders’ lien claim and alleging deficiencies in Gamma’s and Guildfords’ work. It also asserted Gamma had been paid in full under the Prime Contract, supported by statutory declarations that all subcontractors had been paid except for holdback. Gamma filed a defence on February 15, 2023, disputing any amount was due to Guildfords or alternatively alleging deficiencies in its work.

Procedural history and policy terms at issue

On September 14, 2023, Guildfords sought summary judgment under Civil Procedure Rule 13.04 for the holdback retained under the Prime Contract. The Nova Scotia Supreme Court granted summary judgment on May 27, 2024, ordering Queen’s Marque to pay Guildfords $815,206.04. The decision considered sections of the Builders’ Lien Act, including section 13, which requires a holdback of 10% until 60 days after substantial performance; section 13A, which governs certification of subcontract completion; and section 13B, which allows release of holdback after certification. The Prime Contract’s GC 5.2.6 required Gamma to provide statutory declarations confirming subcontractors had been paid except for holdback and disputed amounts.

Outcome and reasoning of the Nova Scotia Court of Appeal

The Nova Scotia Court of Appeal allowed the appeal and set aside the summary judgment. The Court held that the hearing judge erred in concluding there was no genuine issue of material fact. The statutory declarations by Gamma, signed by corporate officers including Mr. Scarfo, stated all subcontractors had been paid, conflicting with Gamma’s affidavit asserting an agreement with Guildfords that $815,206.04 was owed. This inconsistency required resolution at trial. The Court emphasized that agreements between Gamma and Guildfords did not bind Queen’s Marque under the Builders’ Lien Act for purposes of quantifying the lien claim. The appeal costs were fixed at $5,000, payable in the cause of the builders’ lien proceeding.