Executive Summary: Key Legal and Evidentiary Issues

• Dispute arose over entitlement to $311,164.27 paid into court under section 15(4) of the Public Works Act (PWA).

• Dawson Wallace claimed full entitlement, arguing funds were contractually owed to it by Alberta Social Housing Corporation (ASHC).

• EKO and Adexmat, as sub-subcontractors to D’Amani, asserted claims under the PWA without privity to Dawson Wallace or ASHC.

• Core legal issue involved interpretation of who is "entitled" to funds under s 15(4) PWA—whether it includes claimants not directly linked to the Crown’s contractor.

• Dawson Wallace relied on binding precedent (AGT and Opron) holding only those claiming through the contractor can share in PWA court-held funds.

• Appeal decision confirmed Dawson Wallace’s entitlement and dismissed EKO and Adexmat’s claims for lack of entitlement through the contractor.

Project background and contractual relationships

Alberta Social Housing Corporation (ASHC) hired Dawson Wallace Construction Ltd. in October 2020 as the construction manager for the Gilchrist Gardens Phase II project in Calgary. Dawson Wallace subcontracted exterior finish work to D’Amani Stucco Solutions Inc., who in turn hired EKO Wall Systems Ltd. for stucco and Adexmat Inc. for exterior cladding. D’Amani abandoned the project in April 2021 after completing only 18% of the work, which Dawson Wallace described as “unsatisfactory and substandard.”

Dawson Wallace terminated D’Amani’s subcontract and retained Holt Construction (AB) Ltd. to complete and correct the work. The cost for correction and completion was approximately $647,838, excluding legal expenses. D’Amani went bankrupt, and both EKO and Adexmat went unpaid. Their respective claims were: $160,000 for EKO and $151,164.27 for Adexmat, totaling $311,164.27.

Payment into court and claims under the Public Works Act

ASHC paid the $311,164.27 into court on August 8, 2022, pursuant to a Consent Order under section 15(4) of the Public Works Act. The Consent Order confirmed that the sum represented claims from EKO and Adexmat and was to be held in court pending a determination of entitlement among Dawson Wallace, EKO, and Adexmat. The order also explicitly stated that the funds were “due and owing to Dawson Wallace pursuant to the contract with ASHC” and that payment into court was “not an admission of the validity” of EKO and Adexmat’s claims.

EKO and Adexmat filed PWA claims under section 14, asserting that they were owed for labor and materials provided to the project. Dawson Wallace did not file a PWA claim. Both EKO and Adexmat’s lawsuits were discontinued following the payment into court and the Consent Order.

Initial ruling by the Applications Judge (2023 ABKB 471)

Applications Judge Schlosser acknowledged the contrasting legal authorities cited by the parties: Dawson Wallace relied on Alberta v Opron Construction Company and AGT, which restrict entitlement to claimants “through” the contractor. EKO and Adexmat relied on Moonview Builders Ltd and Graham Construction and Engineering Inc v Alberta, arguing that sub-subcontractors can assert claims under the PWA.

The judge held that all three parties—Dawson Wallace, EKO, and Adexmat—had demonstrated sufficient basis to advance claims under a “pragmatic and remedial” reading of the PWA. However, due to insufficient factual evidence to assess entitlement and amounts, he dismissed all applications. He noted that absent proof of claim amounts or legal basis, default entitlement would revert to the contractor, Dawson Wallace.

Final decision on appeal (2025 ABKB 124)

Justice Michalyshyn overturned the Applications Judge’s finding that EKO and Adexmat could claim under section 15(4). He confirmed that only contractors—or those claiming through the contractor—may be entitled to funds under section 15(4), reaffirming the legal principle from AGT and Opron.

He found that the precedents relied upon by EKO and Adexmat (Moonview and Graham) did not consider or overrule AGT or Opron, and were therefore not binding. The Consent Order, along with contractual evidence, confirmed Dawson Wallace’s entitlement to the funds. The failure to file a PWA notice did not preclude its claim, as the Consent Order recognized Dawson Wallace as having a right to the money.

EKO and Adexmat, as creditors of the bankrupt subcontractor D’Amani, did not qualify as claimants “through” the contractor (Dawson Wallace) and thus lacked standing to claim under the PWA.

Outcome

The appeal of Dawson Wallace was allowed. The appeals of EKO and Adexmat were dismissed. The court directed that Dawson Wallace is entitled to the $311,164.27 paid into court. The legal test under the Public Works Act remains: only contractors, their assignees, or those claiming through them can be deemed “entitled” under section 15(4).