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Recent case law in Alberta allows parties to sue for damages arising from the registration of a grossly inflated or wrongful claim under the Public Works Act ("PWA").
In Opabin Sand and Gravel Inc v Tsuu T'ina Contracting Limited Partnership, 2025 ABKB 623, the Court of King's Bench permitted a general contractor to advance claims for abuse of process and conversion tied to the registration of an allegedly improper PWA claim and the initiation of a related civil action. The decision now makes it possible to sue for damages arising from the registration of a grossly inflated or wrongful claim under the PWA.
When the sub-subcontractor Opabin Sand and Gravel Inc ("Opabin") issued a PWA claim for over $9 million, then a civil claim to enforce it, the Crown withheld the sum from the contractor, Vinci, causing Vinci losses. However, unlike the Prompt Payment and Construction Lien Act, which provides for damages from wrongful registrations of lien claims, the PWA grants no such rights. Vinci thus framed its claim against Opabin as either an abuse of process or conversion, on the basis that Opabin issued ttractor to acquiesce to Opabin's claim for compensation or to obtain further supply agreements.
An applications judge struck the amended counterclaim for disclosing no cause of action. Vinci appealed.
The appeal Court also allow the conversion claim to proceed. Vinci pleaded that the PWA claim was a wrongful act because Opabin was not a recognized claimant under the PWA, the filing was out of time, and it sought expectation damages not recoverable under the statute. The Court held it was arguable on the pleadings that the PWA claim was wrongful on these grounds and noted that innocence is not a defense to conversion.
The Court accepted that Vinci could potentially establish a right to possession of the withheld funds. Further, it was foreseeable that in filing the PWA claim that Vinci's progress payments would be withheld. The Court acknowledged that there is an argument that the filing of the PWA claim resulted in Vinci losing access to property to which it was entitled to, as it denied Vinci's access to the funds which were not paid at the relevant time.
The Court emphasized its role at this stage was to assess whether the argument is hopeless, not whether it will be successful, and concluded the conversion claim was adequately pleaded.
Although section 40 of the Prompt Payment and Construction Lien Act provides a statutory cause of action where wrongful lien claims cause improper withholding, the PWA contains no parallel provision. The Court's ruling signals that common law torts—specifically conversion and abuse of process—may be available to contractors affected by wrongful or grossly inflated PWA claims that trigger ministerial withholding of funds. Two caveats are important. First, the Court did not adjudicate the merits; it simply declined to strike the claims. Second, the abuse of process analysis proceeded on the basis that the civil claim, rather than the PWA claim itself, was the legal proceeding said to be misused. Whether a standalone claim of abuse of process can be grounded directly in the filing of a PWA claim remains an open question.
Takeaways for contractors and claimants
For contractors facing withheld progress payments arising from questionable PWA claims, this case provides a potential remedy and supports pleading conversion. Abuse of process may be available where a related civil action is alleged to be launched to exert the leverage created by an improper PWA claim. Therefore, this decision fills a remedial gap for public projects.
For claimants, the decision reinforces the risk of tort exposure for PWA claims that fall outside statutory eligibility, timing, or permissible heads of recovery.
Read the original article on GowlingWLG.com
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