Executive Summary: Key Legal and Evidentiary Issues

• Whether The Limitations Act’s two-year discoverability period barred TNA Construction from commencing an action to enforce its vacated builder’s lien.
• Timing of claim “discoverability,” including when a reasonable contractor would know that a proceeding was an appropriate means to remedy non-payment under s. 6(1)(d) of The Limitations Act.
• Effect of paying lien security into court under s. 56 of The Builders’ Lien Act and whether funds could be returned to the owner once the lien claim became statute-barred.
• Evidentiary sufficiency of TNA Construction’s attempts to invoke the contractual dispute resolution process to delay the limitation period.
• Interpretation and practical operation of the dispute resolution clause (clause 44), including negotiation, mediation and arbitration, in the context of statutory limitation periods.
• Whether the court could order the remaining $176,039.10 in court to be paid out to Avana despite no adjudication on the underlying construction dispute’s merits.

Factual background of the construction project and lien

Avana Developments Inc. and Avana Foundation Inc. (together, Avana) engaged TNA Construction Ltd. (TNA Construction) under a contract for wood framing services on a residential construction project at 3000 Trombley Street in Regina, Saskatchewan. TNA Construction allegedly stopped work on or about February 14, 2023, and claimed it was owed money for work performed. In response to non-payment, TNA Construction registered a builder’s lien against the property on March 13, 2023. To clear title and keep the project moving, Avana applied under s. 56(1) of The Builders’ Lien Act and paid $310,522.48 into court. By order dated March 20, 2023, the lien was vacated and removed from title, and, by operation of s. 56(6), the vacated lien ceased to attach to the land and became a first charge on the funds held in court. Later, on Avana’s further application, the court ordered that $134,483.38 be paid out of those funds to subcontractors who had provided services on the project, leaving a balance of $176,039.10 in court standing as security for TNA Construction’s claim. TNA Construction, however, never commenced a statement of claim to enforce its lien, even though s. 56(7) of The Builders’ Lien Act and Part VIII of that statute require an action to be brought in accordance with the usual King’s Bench procedures for lien enforcement.

The limitation period issue and applicable legislation

The central legal question was whether TNA Construction had run out of time to sue on its lien, such that its claim was extinguished and Avana was entitled to return of the remaining funds. The Builders’ Lien Act does not itself prescribe a specific limitation period for commencing an action to enforce a lien, so the court followed its established practice of applying The Limitations Act, SS 2004, c L-16.1, to lien-based proceedings. Under s. 5, a claimant must commence a proceeding within two years from the day the claim is “discovered.” Sections 6(1)(a)–(d) set out the discoverability test: the claimant must know (or ought reasonably to know) that (a) an injury, loss or damage has occurred, (b) it appears to have been caused by the defendant’s act or omission, (c) that act or omission appears to be that of the defendant, and (d) a proceeding would be an appropriate means to seek a remedy. Section 6(2) presumes the claimant knew all these elements on the date of the underlying act or omission, unless the contrary is proved. Section 18 places the burden on the claimant, once a limitation defence is raised, to show that the limitation period has not expired. Avana argued that TNA Construction at least had all necessary knowledge by March 13, 2023, when it registered its lien. On that date, TNA Construction plainly knew it had not been paid, believed Avana was responsible, and had already taken formal steps to secure its claim. On that view, the two-year limitation period expired in March 2025, and any lien action was now statute-barred.

The contractual dispute resolution clause and TNA’s position

TNA Construction acknowledged that it had discovered its loss and the cause of that loss, but argued that the fourth discoverability element—when a proceeding became an “appropriate means” of resolving the dispute—had not yet been met. Relying on s. 6(1)(d) and appellate authorities emphasizing that parties should not be driven prematurely into litigation where viable alternative dispute resolution (ADR) processes exist, TNA contended that the contractual dispute resolution process under clause 44 delayed or even prevented the limitation clock from starting. Clause 44 provided a multi-step process: Avana would direct performance of the work; all differences, disputes and claims arising out of the work and its performance were to be addressed first by negotiation, with the parties making reasonable efforts and exchanging information on a without-prejudice basis; either party could then initiate mediation by giving notice and, if the parties could not agree on a mediator, the Chair of the Canadian Arbitration Association could appoint one; the parties would meet with the mediator and attempt to resolve their dispute; and if the dispute remained unresolved 21 days after appointment of the mediator, either party could withdraw from mediation and refer the matter to binding arbitration under The Arbitration Act, 1992 (Saskatchewan). TNA said this stepwise ADR scheme effectively barred it from commencing a court proceeding until negotiation, mediation and arbitration had been completed, and therefore it could not reasonably view litigation as an “appropriate means” under s. 6(1)(d) until that contractual process had fully run its course.

Evidence of attempts at negotiation and ADR

To support its argument that the limitation period had not begun, TNA relied primarily on the affidavit of its representative, Kevin Schauenberg. He deposed that, after not receiving payment on March 9, 2023, he registered the builder’s lien and later contacted Avana by email on April 23, 2023 and August 14, 2023 to initiate settlement discussions, with a further registered letter dated January 30, 2024, again seeking to engage in dispute resolution. According to his evidence, Avana did not meaningfully respond to these outreach efforts, and TNA argued that this left it stalled in the ADR process described in clause 44. The contract itself, exhibited to the affidavit, used broad language—“all differences between the parties” and “all disputes and claims of either party arising out of the Work and its performance”—which, on its face, seemed wide enough to cover non-payment disputes that might give rise to a builder’s lien. Avana, however, contested the applicability of clause 44, suggesting the clause presupposed completion of the “Work” and that TNA had not finished its contractual obligations.

The court’s analysis of discoverability and ADR

The court accepted that, in principle, the “appropriate means” element in s. 6(1)(d) can delay the commencement of the limitation period where parties are actively and reasonably pursuing an alternative process—such as contractually mandated negotiation, mediation or arbitration—that offers an adequate potential remedy. Case law recognizes that this promotes negotiated outcomes and discourages unnecessary litigation. However, applying those principles is fact-specific. Two key questions guided the analysis: (1) whether the contractual ADR clause genuinely governed the dispute arising out of the work and alleged non-payment, and (2) if so, whether TNA had led sufficient evidence to show that it took reasonable, concrete steps within that process which would justify postponing the start of the limitation period. The judge noted there was little evidence about the underlying construction dispute or about whether the claim fell squarely within the defined “Work,” and correspondingly little detail about Avana’s assertion that TNA did not complete its work. Nonetheless, the court proceeded on the assumption, in TNA’s favour, that clause 44 could apply to this dispute. Even on that assumption, the judge held that TNA had not rebutted the statutory presumption in s. 6(2) that the claim was discovered at the time of the underlying act or omission. The affidavit referred generally to reaching out three times to “begin the settlement process” but contained no copies of the correspondence, no explanation of which specific stage of the contractual process TNA sought to trigger, and no evidence that TNA formally invoked mediation or arbitration as set out in clause 44. There was also no indication that TNA provided written notice calling for appointment of a mediator; no evidence it approached the Chair of the Canadian Arbitration Association when agreement on a mediator could not be reached or when Avana failed to respond; and no suggestion that TNA ever commenced arbitration after the contractual mediation window elapsed. The court characterized the evidence as insufficient to demonstrate that TNA had truly engaged the agreed dispute resolution framework in a way that would justify delaying the limitation clock. At the same time, the factual context weighed against TNA: it had registered a lien in March 2023, Avana had vacated that lien by paying a substantial sum into court, and the funds had remained there—first as full security, then reduced after payments to subcontractors—with TNA’s vacated lien constituting a first charge. Against that backdrop, a reasonable contractor in TNA’s position would have appreciated, as of the lien registration date, that a formal proceeding was an appropriate means of enforcing its claim, particularly given that the money was already secured in court.

Finding that the limitation period expired and effect on the lien

On the record before it, the court concluded that TNA knew, or ought to have known, all of the discoverability elements in s. 6(1)(a)–(d) by March 13, 2023, when it registered its lien. That meant the two-year limitation period to commence an action to enforce the lien expired in March 2025. Because TNA did not start a lien action within that time, its underlying claim was statute-barred and, in law, extinguished. The court rejected TNA’s further suggestion that it should be excused from commencing a claim because Avana could have stayed any lawsuit by invoking the ADR clause. The judge emphasized that where parties have chosen ADR, the burden remains on the claimant to show that it reasonably pursued that process and that doing so truly postponed the point at which a court proceeding became appropriate. Absent such evidentiary foundation, the statutory presumption of discoverability stands. With the lien claim extinguished, TNA could no longer “prove” its claim for the purposes of The Builders’ Lien Act. That, in turn, opened the door to Avana’s request for release of the remaining funds held in court.

Disposition and outcome for the parties

Having determined that TNA Construction’s lien claim was time-barred and therefore could not succeed, the court turned to s. 56(9) of The Builders’ Lien Act, which allows the court, on notice to affected persons, to order that money paid into court as lien security be paid out to the person found entitled where the lien claimant whose lien was vacated is “not able to prove his claim.” The judge held that TNA was unable to prove its claim, not because of a determination on the construction merits, but because any action was now plainly barred by the expired limitation period. The court also noted that, in these circumstances, the funds could equally be returned under s. 56(4), relying on prior authority that permitted repayment of lien security once it is clear that no enforceable lien claim remains. There was no evidence of competing claims to the remaining balance. As a result, the court granted Avana’s application and ordered that the balance of the funds in court—$176,039.10, after earlier payments out to subcontractors—be paid to Avana as the party entitled to the money. Avana Developments Inc. and Avana Foundation Inc. thus emerged as the successful parties. The decision does not specify any additional damages or quantified costs beyond the direction that this remaining sum be released, so the only determinable monetary amount ordered in favour of the successful party is the $176,039.10 standing in court.