Executive Summary: Key Legal and Evidentiary Issues

Ms. Taylor's failure to respond to the statement of claim resulted from her misunderstanding of service documents and lack of appreciation for the legal deadline, compounded by her former lawyer's withdrawal and absence of follow-up communication from Bernier Millwork's counsel. The absence of a written contract between Ms. Taylor and Bernier Millwork creates a genuine dispute over whether she agreed to pay only for remediation work or for the entirety of the original invoices initially charged to HVR. Bernier Millwork's legal counsel failed to exercise professional courtesy by not attempting to contact Ms. Taylor before noting her in default, particularly after learning that her former lawyer was withdrawing and that she had become self-represented. Triable issues arise under The Builders' Lien Act regarding whether Bernier Millwork and HVR occupy the same class of lien claimants and whether Bernier Millwork may retain funds paid by Ms. Taylor in priority to other lien claimants. Potential procedural defects exist concerning whether service of the statement of claim complied with the 30-day service requirement under The Builders' Lien Act. Equitable considerations favor allowing Ms. Taylor her day in court when she has presented an arguable defence and the delay, while significant, was not wilful and caused no irreparable harm to Bernier Millwork.

The factual background of home construction and contractual disputes

In January 2021, Sharon Taylor and her then spouse David Taylor began discussions with HVR Construction Ltd. to construct a new residence on land owned by Peterson Acres Inc. in the Rural Municipality of Round Hill, Saskatchewan. Peterson Acres Inc. was a privately held corporation with Ms. Taylor's mother as its sole shareholder and director. Following Ms. Taylor and Mr. Taylor's separation, Ms. Taylor continued planning the construction and eventually agreed to the terms outlined in a "Spec. Sheet Based on estimate dated 8/30/2021." HVR Construction undertook the home construction and in the fall of 2022 engaged Bernier Millwork Ltd. to supply cabinetry, custom countertops, millwork, and plumbing fixtures for the project, which HVR subsequently installed in the residence. Bernier Millwork invoiced HVR for these materials and finished cabinetry in the total amount of $114,046.65 inclusive of GST, though Ms. Taylor was not a party to the subcontract between HVR and Bernier Millwork.

Ms. Taylor's progress payments and identified construction deficiencies

During construction, Ms. Taylor made progress payments to HVR, including through a construction mortgage registered against the home in favour of CIBC Mortgage Corporation. However, in November 2022, prior to the home being ready for occupancy, Ms. Taylor identified significant deficiencies in the construction, including problems with HVR's installation of the millwork and cabinetry supplied by Bernier Millwork. As of November 24, 2022, $253,724.82 remained owing to HVR. After the contractor stopped work on the project, Bernier Millwork had only received a $20,000 progress payment from HVR and remained unpaid for the remainder of its supply contract. When Ms. Taylor refused to pay the balance of HVR's invoices, HVR registered a claim of lien under The Builders' Lien Act on November 29, 2022 against the land upon which the home was constructed.

The parallel litigation proceedings and remediation agreement dispute

On January 16, 2023, HVR commenced a related proceeding against Ms. Taylor, David Taylor, Peterson Acres Inc., and the Canadian Imperial Bank of Commerce, seeking payment for the construction balance and advancing claims under The Builders' Lien Act trust provisions. Bernier Millwork was not named in this HVR Action. At approximately the same time, Ms. Taylor approached Bernier Millwork directly to remediate the deficiencies she had identified in HVR's installation work. Although Bernier Millwork initially declined, it subsequently agreed to undertake the remediation work. However, the parties fundamentally disagreed on the scope of their agreement. Ms. Taylor maintained that she agreed only to pay for the remediation work and that the original invoiced amounts for the supply of materials were HVR's responsibility and should be paid from the advances she had made to HVR prior to the contractor stopping work. Conversely, Bernier Millwork alleged that Ms. Taylor agreed to pay both the balance owing on the original invoiced amounts and the additional cost of the remediation work. In support of its position, Bernier Millwork reissued the original invoices to Ms. Taylor with adjustments only for PST and forwarded them by email on January 19, 2023.

Payments made and remediation work completion

Ms. Taylor acknowledged receiving and reviewing the reissued invoices. She made an advance payment of $25,000 to Bernier Millwork on February 3, 2023, which she characterized as a good faith gesture with the intention of subsequently claiming this payment from HVR, whom she maintained bore responsibility for paying Bernier Millwork's invoices. Between January 31, 2023 and March 15, 2023, Bernier Millwork completed the remediation work. On April 21, 2023, Bernier Millwork emailed Ms. Taylor an invoice for $7,871.20 for this remediation work. Ms. Taylor did not immediately pay this invoice nor did she make additional payments on the original invoices reissued in January 2023. On May 9, 2024, Bernier Millwork registered a claim of lien under The Builders' Lien Act and commenced the Bernier Millwork Action by statement of claim issued on May 24, 2024, naming Ms. Taylor, HVR, Peterson Acres Ltd., and the Canadian Imperial Bank of Commerce as party defendants.

Service of the statement of claim and the procedural default

At the time the statement of claim was filed, Ms. Taylor was being represented by a different lawyer than her current counsel in the HVR Action. Her former lawyer was provided with a copy of the statement of claim by Bernier Millwork's lawyer on June 3, 2024, and the latter sought to coordinate service. Her former lawyer indicated he did not have instructions to accept service of the statement of claim. Although Ms. Taylor's former lawyer advised her of the claim, she did not retain him to address this new matter. On June 25, 2024, a process server served a copy of the statement of claim on Ms. Taylor at a strip mall location. Ms. Taylor acknowledged picking up documents on that date but did not realize or appreciate that she was being served with a statement of claim. She was struggling personally at that time, going through a divorce with her former spouse, and believed the documents were related to her divorce proceedings rather than the construction dispute. She did not serve and file a statement of defence to the Bernier Millwork Action.

Coordination efforts and counsel withdrawal

On August 21, 2024, the lawyer representing HVR in the HVR Action sent an email to Bernier Millwork's lawyer and Ms. Taylor's former lawyer seeking to schedule a meeting with all counsel involved to discuss procedural matters. The email specifically noted that the Bernier Millwork Action was closely related to the HVR Action against Ms. Taylor and suggested that the two matters should likely be consolidated to avoid duplication. In response, Ms. Taylor's former lawyer indicated they were not representing her in the Bernier Action and would be withdrawing as her lawyer in the HVR Action. They subsequently served a Notice of Withdrawal of Lawyer dated August 22, 2024 on all parties in the HVR Action. There was no evidence of any communication between Bernier Millwork's lawyer or HVR's lawyer and Ms. Taylor between August 22, 2024 and October 31, 2024 regarding the consolidation proposal or any warning that default proceedings would be initiated.

Default judgment and Ms. Taylor's eventual retainer of counsel

Bernier Millwork obtained a default judgment against Ms. Taylor on October 31, 2024. After the default judgment was granted, Bernier Millwork registered it in the judgment registry and against Ms. Taylor's real and personal property. The default judgment was not served on Ms. Taylor. In January 2025, when HVR brought an application under The Builders' Lien Act to extend the time for setting the HVR Action down for trial, Ms. Taylor retained her current lawyer. On January 27, 2025, her counsel sent an email to Bernier Millwork's lawyer advising of the retainer and requesting copies of the pleadings in the Bernier Millwork Action, while also seeking an undertaking that Ms. Taylor not be noted in default. Bernier Millwork's lawyer responded that Ms. Taylor had already been noted for default and a default judgment had been taken out.

Settlement negotiations and the application

After learning of the default judgment, Ms. Taylor sought to negotiate its setting aside with Bernier Millwork. She made a further payment of $10,000 through a third party, which she understood would result in having the default judgment set aside, though Bernier Millwork disputed this understanding and characterized the payment as a partial payment on the default judgment rather than a settlement of the default. Ms. Taylor's lawyer also proposed that the parties enter into a "Standstill Agreement" to suspend further enforcement proceedings by Bernier Millwork pending resolution of the outstanding matters between the related parties. Bernier Millwork rejected this proposal. Ms. Taylor subsequently brought this application on April 10, 2025, which came before Justice Turcotte in chambers on June 26, 2025. HVR took no position on the application.

The court's legal analysis and findings on delay

The court applied established Saskatchewan legal principles for applications to set aside a default judgment, which require consideration of whether the applicant has provided satisfactory explanation for delay, whether an arguable defence exists, and whether the plaintiff would suffer irreparable harm. Although Bernier Millwork argued that Ms. Taylor, as a sophisticated businesswoman who had already filed a statement of defence and counterclaim in the related HVR Action, should have been aware of her obligation to respond to the statement of claim, the court found that Ms. Taylor had not acted wilfully in ignoring the claim. The court accepted her explanation that she did not fully appreciate her obligation to respond, particularly because Bernier Millwork's lawyer took no steps to follow up with her after she became self-represented following her former lawyer's withdrawal. The court also noted that the principal of Bernier Millwork was familiar with Ms. Taylor and had her personal contact information, including her cell phone number, making it possible to follow up with her before proceeding to default. The court found that as a matter of professional courtesy, Bernier Millwork's lawyer should have attempted to contact Ms. Taylor to notify her of its intention to proceed to default between August 22, 2024 and October 31, 2024.

The court's analysis of the arguable defence

The court examined whether Ms. Taylor had presented an arguable defence to the statement of claim. First, the court found that the absence of any written contract between Ms. Taylor and Bernier Millwork created a genuine and triable issue regarding whether Ms. Taylor contracted only for remediation work or for payment of the entirety of the Bernier Millwork invoices initially charged to HVR and subsequently reissued to her. Second, the court found that the Bernier Millwork Action is closely related to the HVR Action, as both parties have registered separate claims of lien under The Builders' Lien Act and are subject to the Part II trust provisions of that Act. Depending on how the contract between Ms. Taylor and Bernier Millwork is ultimately determined, triable issues arise as to whether the two parties occupy the same class of lien claimants or separate classes, and whether Bernier Millwork may retain funds paid by Ms. Taylor in priority to other lien claimants, including HVR. Third, although not argued by Ms. Taylor, the court noted that the statement of claim was issued on May 24, 2024 and served on Ms. Taylor on June 25, 2024, and that Section 87 of The Builders' Lien Act requires service within 30 days of issuance. With 31 days in May, there may be an argument that service was improper, a matter that may need to be addressed in the subsequent proceedings.

The court's remedy and partial success for Ms. Taylor

Rather than completely setting aside the default judgment, the court determined that the noting for default should be set aside, allowing Ms. Taylor to proceed. The court declined to set aside the default judgment itself but instead allowed Ms. Taylor to proceed under Rule 3-21 of The King's Bench Rules, placing the onus on her to establish that the judgment should be varied, including as to any joint or several obligation of her and HVR to Bernier Millwork. The court required Ms. Taylor to have the carriage of that proceeding by counterclaim and ordered that execution of the judgment be stayed until further order. Ms. Taylor was directed to serve and file a statement of defence and counterclaim within 20 days, setting out the particulars of her claim and seeking a variation of the judgment accordingly. Regarding costs, the court determined that it was appropriate for costs to remain in the cause to be eventually determined by a trial judge in the event the parties were unable to reach a resolution of the outstanding issues prior to trial. The successful party in this interlocutory application was partially Ms. Taylor, who obtained the setting aside of the noting for default and the right to proceed with her defence and counterclaim, though the judgment itself was not set aside. No specific monetary award or costs were ordered at this stage, as costs were reserved to be determined following final resolution of the underlying dispute.