Wednesday, 25 November 2015

Federal Exemption from Liens is No Simple Matter

With significant recent and ongoing expansion at the Calgary, Edmonton and Fort McMurray airports, a number of trades have been interested in the question whether airports are subject to builders’ liens. In the recent Alberta decision Park Avenue Flooring Inc. v. EllisDon Construction Services Inc., the judge states categorically that the Alberta Builders’ Lien Act has no application to the Calgary Airport because it is federal property. This is the first time a court has made such a clear pronouncement on this issue in Alberta.

The issue is canvassed more fully in the 2009 B.C. case Vancouver International Airport v. Lafarge Canada Inc.

Constitutional Questions
The issue is actually more complex than the decision in Park Avenue Flooring case might suggest. It is not every construction project relating to an airport that is exempt from provincial lien legislation. First, an interest in land owned by the federal government is clearly exempt. But... not all airport lands are owned by the federal government. Second, an operation or “undertaking” that is within the jurisdiction of the federal government may be exempt (whether or not the lands in question are owned by the federal government) based on constitutional principles. The federal government clearly has jurisdiction over aeronautics. But this doesn’t mean that airports are exempt from provincial legislation for all purposes and in all cases; various case-specific considerations might come into play, such as the degree of federal control over the operation or undertaking… and not all airports are subject to the same degree of federal control. Third, there may be multiple interests in land at an airport; i.e. the federal government, the airport authority, airlines, hotels, car rental agencies, concessions... Different considerations may come into play depending which interest in land is in issue; the cases referenced here do not resolve the question whether subsidiary interests (e.g. leases) in airport lands could sometimes be subject to liens at the same time other interests are exempt.

Although it would be easy to suggest that airports are categorically exempt from lien legislation based on the Park Avenue Flooring case, it would be a mistake to interpret the court’s comments in that case too broadly. It remains arguable that not all interest in airport lands are exempt from provincial lien legislation. But no doubt valid provincial lien rights at airports would very much be the exception.

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