Court obliged to decide on warehouser’s lien where party has no other interest in property

Person with no ownership interest has no claim on prima facie basis: Alberta Court of Appeal

Court obliged to decide on warehouser’s lien where party has no other interest in property
Properties used for construction must be returned if agreement falls apart

The Alberta Court of Appeal has ruled that a warehouser’s lien claim can be decided in an application to return the property, where the lien is the only proprietary claim that justifies retention of the property.

In 10378968 Canada Inc v. GSV Futures Inc., 2022 ABCA 126,  10378968 Canada Inc. (103) is an electrical contractor providing services to data mining sites. GSV Futures Inc. (GSV) are bitcoin data mining service companies that construct data mining facilities. GSV engaged 103 to complete the site construction of several facilities, but this arrangement became fractured.

GSV severed ties with 103 and demanded return of the property that was in their control with the owner’s consent. 103 refused, claiming an unvalued warehouser’s lien over such property. This was their only interest in the property, since they conceded to have no ownership interest in it.

GSV brought an application seeking return of the property. The chambers judge expressed reservations about the warehouser’s lien but nevertheless required GSV to post security sufficient to protect the lien.

GSV later sought an order of replevin – to have the property returned – and to dispense with the security that protected the warehouser’s lien. After considering additional evidence, the chambers judge dispensed with a bond that partially secured the warehouser’s lien claim.

103 appealed, alleging that the chambers judge erred in deciding the claim summarily without formal application.

The appellate court disagreed.

The chambers judge was “obliged to consider the warehouser’s interest the appellants asserted to justify retaining the property in which they disavowed any other interest,” said the court. Here, 103 failed to establish their claim at least on a prima facie basis, said the court. Its claim against GSV’s application for replevin was the only issue the chambers judge had to decide, and it could hardly be said that 103 was surprised by the issue when the judge decided it, said the court.

“On the available evidence, the warehouser’s lien was unsupportable on the plain language of the statute,” said the court. The appellate court found no evidence that 103 was in the business as warehousers, and their possession of the property was pursuant to an electrical construction contract.

Further, the Alberta Rules of Court, Alta Reg 124/2010 do not state a specific form of security, but rather simply one satisfactory to the judge, said the court. It is implicit that the security be sufficient to protect the interest found, which is what the judge did here, said the court.

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