Dawson Wallace was hired as general contractor by ASHC. Dawson Wallace retained D’Amani as stucco subcontractor. D’Amani in turn hired EKO Wall Systems and Adexmat as sub-subcontractors. D’Amani abandoned the project and went bankrupt. Dawson Wallace ultimately needed to pay more than the value of the D’Amani subcontract for its work to be completed. However, EKO and Adexmat were still unpaid a total of $311,164.27, and submitted Public Works Act ("PWA") claims in that amount. Dawson Wallace did not submit a PWA claim.

ASHC paid this amount into court under s. 15(4) of the PWA. This section of the PWA allows the Crown to pay monies claimed as owing into court and, subsequently, for the court to determine the persons entitled to the monies and direct payment in accordance with that determination.

In the consent order for payment into court, it was confirmed that ASHC owed Dawson Wallace the amounts of the PWA claims. The consent order also noted that EKO and Adexmat had brought claims under the PWA in relation to amounts alleged to be owing to them by D’Amani.

An application was subsequently brought to determine entitlement to the funds in court. The Applications Judge held that all parties were entitled to a claim against the funds in court. However, there was inadequate evidence to determine which claimant was owed the monies. The decision was subsequently appealed by all parties.

What the Courts Said

On appeal, the court held that the Applications Judge was correct in determining that Dawson Wallace was entitled to claim under the PWA even though it had not submitted a separate PWA claim. The court found that although Dawson Wallace had not brought a claim under the PWA, it was entitled to the monies under the PWA, as the consent order and evidence confirmed its contractual right to payment from ASHC.

The appeal Justice held that the Applications Judge was incorrect in finding that as sub-subcontractors, with no rights to claim through Dawson Wallace, both EKO and Adexmat were entitled to claim under the PWA.

The court relied on two 1985 decisions: Alberta v Opron Construction Co, a Master’s decision, and Alberta Government Telephones v Canadian Great Lakes Casualty and Surety Company Ltd, a Court of Appeal decision. Together, these cases held that under sections 14 and 15 of the PWA, the only person entitled to the contract monies is the contractor, or its assignee or persons claiming through it. As such, a sub-subcontractor is not entitled to funds paid into court under s. 14(5).

The court distinguished Moonview Builders Ltd v Alberta Housing Corporation and Graham Construction and Engineering Inc v Alberta (Infrastructure), both Court of King’s Bench decisions from 1983 and 2021 respectively. Both cases involved subcontractors being entitled to funds paid into court. The court held that the AGT decision, being a Court of Appeal decision, took precedence over the Court of King’s Bench decisions. Further, the facts in Graham and Moonview were distinguishable. 

As EKO and Adexmat did not claim through Dawson, they were not entitled to the funds paid into court.

Takeaways

This decision clarifies the court’s interpretation that under the PWA, the only person entitled to contract monies is the contractor, or its assignee or persons claiming through it. As such, a sub-subcontractor, even if owed funds for work performed on a public work, is not entitled to funds paid into court under s. 15(4) of the PWA.

Interestingly, the court did not consider Lawrence Customs Brokers (1970) Ltd. v. Alberta, a further 1985 Court of Appeal decision decided after AGT where sub-subcontractor PWA claimants were awarded funds paid into court. The facts of that case do not establish whether the general contractor was also owed those funds or whether the general contractor was otherwise asserting a claims to the funds paid into court. However, it would have provided clarity had the court considered the Lawrence decision, particularly given the results in AGT and Opron from the same year.

Practically, sub-subcontractors on public projects will often have recourse to labour and material payment bonds. These bonds may or may not extend potential recourse to sub-subcontractors – the actual bond wording defining who is a “claimant” will dictate. Nonetheless, it is always worth exploring the existence of surety bonding for any unpaid parties in the contractual chain.

Claims on provincial government construction projects can be complex. Please contact Anthony Burden in Calgary or Ryan Krushelnitzky in Edmonton, or any member of Field Law’s Construction Group for assistance navigating PWA claims, enforcing payment rights, and assessing your entitlement to funds.

Link to decision: Alberta Social Housing Corporation v Dawson Wallace Construction Ltd., 2025 ABKB 124