Capital Steel Inc. (Capital Steel) was a subcontractor to Chandos Construction Ltd. (Chandos) on a project in St. Albert. Capital Steel filed an assignment into bankruptcy on September 26, 2016, and Deloitte Restructuring Inc. (Deloitte) was appointed as the Trustee. On October 26, 2016, Deloitte, on behalf of the Capital Steel Estate, filed a Builder’s Lien in the amount of $150,720.58.

On November 8, 2016, the parties agreed to a Consent Order discharging the Lien on payment into court of $165,801.44 by Chandos. The Applicant named in the Order was Chandos, and the Respondent was Deloitte, as Trustee of the Capital Steel Estate. The Order read, in part, “this Order shall be filed as the Originating pleading in this Action”. When the Consent Order was filed, the “Action” it started was given docket number 1603-19909.

Some five years later, on September 14, 2021, Deloitte, as Trustee, filed an Application in Action number 1603-19909, seeking a Declaration that the Lien was valid and payment of the funds in Court to Deloitte. On September 15, 2021, Chandos filed a Cross-Application seeking return of the funds. Chandos argued that, since the time period to commence an Action to prove the claim underlying the Lien had expired, it was entitled to return of the money in Court.

The Court of Appeal held that the Consent Order of November 8, 2016, while unorthodox, should be read as explicitly commencing Lien enforcement proceedings along with providing for the payment of money into Court to remove the Lien. The Rules of Court recognize that procedural errors will occur and enable their cure if there is no irremediable prejudice, citing Rule 1.5(4). Rule 3.2(6) also applies to what happened here, which reads that “If an action that is started in one form should have been started or should continue in another, the Court may make any procedural order to correct and continue the proceeding and deal with any related matter”.

On the assumption that commencing the Lien enforcement Action by the “Action” authorized by the Consent Order was an irregularity, it could have been cured under Rule 3.2(6). Since Chandos consented to commencing the Lien Action through the Consent Order, it could not now object to curing any irregularity. It followed that that the Consent Order was effectively a proceeding for a remedial Order that satisfied the requirements of the Limitations Act. The use of an Order to commence the Action, rather than a Statement of Claim, was at most a procedural irregularity but not a nullity. The claim of Deloitte/Capital Steel was not barred by the passage of time, and the Appeal was allowed.