Queen’s Marque was developing a mixed-used project and hired Gamma, as general contractor, who subcontracted certain portions of the work to Guildfords. A dispute arose between Queen’s Marque and Gamma, resulting in Gamma terminating the prime contract with Queen’s Marque. Gamma then terminated its subcontract with Guildfords.

Guildfords filed a builder’s lien, claiming it was owed over $800,000 for work performed and materials installed on the project. It then filed a lawsuit and applied for summary judgment. In response to Guildfords’ summary judgment application, Gamma filed an Affidavit that referenced a reconciled statement of account showing that Guildfords was still owed the amount it was claiming. Queen’s Marque filed an Affidavit that included statutory declarations executed by Gamma stating that all subcontractors, including Guildfords, had been paid in full, except for any holdback funds.   

The Nova Scotia Supreme Court granted Guildfords’ summary judgment application. Queen’s Marque appealed on the basis that there were unresolved factual issues requiring Trial and, therefore, the matter was not appropriate to be determined on a summary basis. In particular, on appeal, Queen’s Marque argued that the statutory declarations from Gamma affirming that all subcontractors had been paid directly contradicted the evidence respecting the acknowledgement of outstanding funds owing by Gamma to Guildfords.

What the Court Said

The Nova Scotia Court of Appeal granted Queen’s Marque’s appeal, overturning the lower Court’s summary judgment ruling. The Court held that there were factual inconsistencies constituting genuine disputes that required a Trial and were not appropriate to determine on a summary basis.

In particular, the inconsistencies between Gamma’s statutory declarations stating all subcontractors, including Guildfords, had been paid in full, conflicted with Gamma’s evidence that Guildfords was owed the amount of its claim. In simple terms: Gamma swore statutory declarations for Queen’s Marque stating that all subcontractors were paid in full, only to later swear an affidavit acknowledging one of its subcontractors was owed approximately $800,000.

In reaching its decision, the Nova Scotia Court of Appeal noted that summary judgment is, generally speaking, a limited tool in lien disputes, because such claims often involve competing factual narratives. Therefore, Courts may be reluctant, especially in the face of contradictory evidence, to resolve matters without a full Trial.

Key Takeaways

This decision signals that, in the right circumstances, Courts may place significant weight on statutory declarations. A common lament of owners and general contractors is that statutory declarations serve no purpose when situations such as in the Queen’s Marque case arise. Namely, where a general contractor swears a statutory declaration stating that all subtrades have been paid in full, to allow the owner to release payment for the general contractor, only for the general contractor to later acknowledge significant amounts are owed to its subtrades.

In this case, Gamma’s apparently contradictory evidence prejudiced Guildfords’ ability to obtain summary judgment. While Gamma did not dispute its subcontractor’s debt claim in the application, Queen’s Marque, as owner, was entitled to dispute the extent of Guildfords’ claim, as that claim was a charge against the lands and the owner’s holdback obligations. Accordingly, caution ought to be exercised when using statutory declarations, as any inaccuracies or inconsistencies may become critical and closely scrutinized in legal proceedings.

This decision also further reinforces the principle that summary judgment is not appropriate when there are genuine factual disputes. It highlights the need for precise documentation and transparency in lien and construction disputes.

If you would like advice on payment issues on construction projects, please contact Anthony Burden or Tristen Pomerance in Calgary, Ryan Krushelnitzky in Edmonton, or any member of Field Law's Construction Group for guidance and assistance in this area.

Link to decision: Queen’s Marque Developments Ltd. v. Guildfords Inc., 2025 NSCA 7