Executive summary: key legal and evidentiary issues

• UIG registered a builders' lien of $1,469,850.00 against Britannia's lands for unpaid materials and labour on a residential housing project, later replaced by a $1,595,842.50 lien bond posted as court security.

• Britannia applied to vacate or reduce the security, and the Applications Judge released it by applying s. 46(2) of the PPCLA by analogy—a provision not included in Britannia's application.

• On appeal, the Court found that s. 46(2) was inapplicable because the lien and certificate of lis pendens had already been discharged and replaced by security under s. 48 of the PPCLA.

• Granting unrequested relief under s. 46(2) deprived UIG of a fair opportunity to present evidence and submissions, constituting a procedural error.

• The contentious $801,567.27 construction delay claim, supported by expert evidence, was found to be arguable and not specious, making it inappropriate to adjudicate its validity in a security-reduction application.

• Security was reinstated at the reduced amount of $1,408,607.84, with costs awarded to UIG and a court-directed case conference ordered across all three extant actions.

The construction project and the unpaid claim

1951789 Alberta Ltd., operating as Urban Interiors Group ("UIG"), supplied materials and labour to a residential housing project on lands municipally located at 5112 Elbow Drive SW (the "Lands"), owned by Britannia Block General Partnership Inc. ("Britannia"). West Pointe Building Services was the general contractor; it is not a party to the appeal. UIG last worked on the Lands in January 2020 and alleges it has not been paid. On February 4, 2020, UIG registered a builders' lien against title to the Lands in the amount of $1,469,850.00, and on July 9, 2020, a certificate of lis pendens was registered in connection with UIG's Statement of Claim filed on June 30, 2020.

Replacement of the lien with court security

By 2021, Britannia wished to sell the Lands, but the Lien and certificate of lis pendens impeded the sale. By consent, the parties agreed to discharge the Lien and the certificate of lis pendens so Britannia could sell. In their place, Britannia posted a lien bond with the Clerk of the Court in the amount of $1,595,842.50, representing UIG's lien claim and costs. This arrangement was memorialized in an order pronounced July 21, 2021, by Applications Judge Mason (the "Mason Order"). The Mason Order specified that the provisions of s. 48(2) of the Prompt Payment and Construction Lien Act ("PPCLA") would apply to the security, and that any party was at liberty to make further application to the Court respecting any matter pertaining to the Lien, the security, or the issues in dispute, including the adjustment of the type or amount of the security. Britannia later sold the Lands for $60 million.

Protracted litigation across multiple actions

The dispute generated a complex procedural history spanning three parallel court files: Britannia's Originating Application to remove the Lien, UIG's action for unpaid materials and work (the "UIG Action"), and a separate claim Britannia brought against UIG for amounts UIG allegedly owed to its subtrades, Teodoro Construction Ltd. ("Teodoro") and Wescan Decorating Ltd. ("Wescan"), whose claims had been assigned to Britannia (the "Subtrades Action"). On June 30, 2021, Britannia advised UIG that amounts owed by UIG to Teodoro and Wescan had been assigned to Britannia and demanded payment on their behalf. On December 13, 2021, Britannia issued a Statement of Claim in the Subtrades Action. Over several years, the parties engaged in multiple rounds of questioning, undertaking disputes, and filed competing summary judgment and summary dismissal applications, which were ultimately adjourned sine die by consent. Settlement negotiations took place on more than one occasion but did not resolve the dispute. Britannia changed legal counsel from Code Hunter to JSS Barristers on February 9, 2024.

The nature of UIG's lien claim and the delay component

UIG's total lien claim, as clarified in correspondence dated May 8, 2025, stood at $1,408,607.84. The most contentious portion was a significant construction delay claim of $801,567.27 supported by expert evidence. In Alberta builders' lien jurisprudence, some delay claims are allowed as liens and some are not; the answer tends to depend upon the nexus to the improvement on the land. If the delay charge relates to work associated with creating the improvement on the land, they are sometimes allowed as lien claims; if they are more in the nature of general office overhead, they are often not allowed. Both the Applications Judge and the appeal court recognized that UIG's delay claim was not specious and was supported by expert evidence, making it arguable. Both decisions agreed that a determination of the delay claim's validity would be tantamount to summary judgment and would be inappropriate in a security-reduction application.

The applications judge's decision to vacate the security

On April 24, 2025, Applications Judge Farrington heard Britannia's application to release or reduce the security as a special chambers application. In his decision released May 28, 2025 (2025 ABKB 324), the Applications Judge considered two bases for the relief sought. On the first—whether the facts as now known justified a reduction—he found UIG's claims arguable and declined to reduce or vacate the security solely on the basis of the facts and merits of the dispute. On the second basis, although s. 46 of the PPCLA was not specifically relied upon in Britannia's application, the Applications Judge found it applied by virtue of the combined effects of ss. 46 and 48 of the Act. He reasoned that the parties were well past the two-year mark, and the matter appeared nowhere near trial. He noted significant costs associated with posting the security, appearing to be approximately $30,000 per year. He released the security and directed that the proceedings shall proceed as unsecured claims. He further held that even if s. 46 did not apply, the substitution of security for land is discretionary and subject to oversight by the Court, and given the state of the action and its progress, it was reasonable to release the security.

The appeal and the interpretation of the PPCLA

UIG appealed the decision. Justice J.C. Price heard the appeal on January 21, 2026, applying a de novo standard of review on correctness. New affidavit evidence was filed by both parties and was found to be relevant and material. In the decision released April 13, 2026 (2026 ABKB 283), Justice Price addressed three sub-issues under the question of whether the Hearing Judge erred in vacating the security. On the first sub-issue, the Court found that the relief sought by Britannia did not include relief pursuant to s. 46(2); it was not referenced in Britannia's application and was not implied. The Hearing Judge, on his own motion, applied s. 46(2) of the PPCLA. Courts should avoid granting remedies not pleaded where there is no consent to the relief being ordered, as doing so deprives the parties of an opportunity to present further evidence or make legal submissions. On the second sub-issue, s. 46(2) was found to be inapplicable because its purpose is to authorize vacating a certificate of lis pendens and discharging a lien; it does not authorize vacating security that has already replaced those instruments under s. 48 and the Mason Order. Relying on the principle from Factors Western Inc v DCR Inc, 2021 ABCA 433, that builders' lien statutes require strict interpretation, Justice Price held that applying PPCLA sections by analogy should be avoided as this reduces the clarity of the PPCLA and contravenes the practical approach it requires. On the third sub-issue, Justice Price found that even if s. 46(2) applied, UIG was not on notice that s. 46(2) relief was in issue and was not given a fair opportunity to respond with evidence and submissions, including an explanation for why there had been a delay in prosecuting the UIG Action—an opportunity that case law requires be afforded to the lien claimant.

Disposition of the security and assessment of delay

Turning to Britannia's application under the Mason Order and the Court's discretion under s. 48(1)(c) of the PPCLA, Justice Price concluded the security should be reinstated. The procedural record did not resemble a case of inaction or abandonment; it showed ongoing procedural activity: multiple related actions, repeated applications, consent adjournments, examinations, and intervals of settlement negotiations. Without making determinations as to who is most responsible for this protracted litigation, both parties in the Court's view had contributed to its lengthy history. As noted in Whitson Contracting Ltd v Pacific West Systems Supply Ltd, 2023 ABKB 309, "to the extent that the convoluted procedural history makes this a borderline delay case, the default should be to let it continue." The Court further declined to reduce the security on account of the assigned subtrades claims, agreeing with UIG's counsel that as the Subtrades Action and the UIG Action remain separate actions, reducing the security to account for the assignments to Britannia was not appropriate on this application. Determining whether, and to what extent, the assigned amounts should be netted out would require findings about the scope and effect of the assignments and their interaction with UIG's lien claim—issues better determined on a proper record in the actions where they are pleaded.

The ruling and overall outcome

Justice Price allowed UIG's appeal and reinstated the security in the reduced amount of $1,408,607.84, which must be provided to the Clerk of the Court within 45 days of the decision, unless the parties otherwise agree in writing. Costs were awarded to UIG; if the parties cannot agree on costs, either may request an appearance before Justice Price through the scheduling clerk to address the amount. Additionally, pursuant to Rule 4.10, Justice Price directed the parties to schedule a case conference covering all three extant actions—the UIG Action (2001 08204), Britannia's Originating Application (2001 02493), and the Subtrades Action (2101 15171)—to address consolidation of the actions, finalize a litigation plan, and identify further procedural steps necessary to bring the matter to final resolution. The exact amount of costs was not determined at the time of the decision.