Unique P.E.I. law goes against big banks

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Curran & Briggs keeps first access, over Bank of Montreal, to remains of failed Charlottetown subdivision

The P.E.I. Supreme Court has narrowly upheld a unique piece of Island law that gives construction companies a fighting chance against banks.

The P.E.I. Court of Appeal has struck down an application by Bank of Montreal to have priority access to money remaining from a defunct multi-million dollar development project in Charlottetown known as Royalty Heights.

It was proposed by a company registered to Amandeep (Steve) Uppal which came to P.E.I. in 2007 with the proposal for a subdivision located at the junction of Upton and Royalty roads. It was announced as a $170 million project for 524 high-quality homes.

Curran & Briggs was hired in 2008 to construct some $2.3 million worth of sewer, water, electrical connections and other infrastructure.

It got paid a little for its first invoice but that’s it.

Two demonstration homes were built but the project collapsed and headed to the courts.

It was familiar ground for Uppal, as Atlantic Business Magazine reported in an investigative article for its May/June 2011 issue. Rob Antle’s reporting shows Uppal had gotten thousands of dollars from all levels of government to make gloves in Newfoundland. The project failed to make a single item and Uppal made a successful bankruptcy claim in B.C. in 2000.

Back on P.E.I. seven years later, Uppal got financing from Bank of Montreal for his Royalty Heights project. The bank forced him into receivership in 2010 and has been in battle with Curran & Briggs ever since for the money remaining of Uppal’s project.

Duncan Shaw and Darren MacKay purchased the development in a receivership sale and have rebranded it Windsor Park.

That leaves about $1.4 million currently being held by the receiver, PricewaterhouseCoopers Inc.

Curran & Briggs is seeking $820,000 for unpaid work on the site, plus significant legal fees from five years of court battles. The Bank of Montreal is seeking close to $2 million.

A lower court had previously confirmed that Curran and Briggs was first in line over the bank, based on the P.E.I. Mechanic’s Lien Act.

On Prince Edward Island whenever a project fails and a receiver is trying to determine priority of payment amongst the creditors, a mechanic’s lien can supersede a bank’s mortgage in some circumstances.

P.E.I. is the only jurisdiction in the country where that occurs.

In this recent decision, the three member appeal court ruled in favour of Curran & Briggs, with one dissenting opinion from Justice John Mitchell.

Curran and Briggs owner Rick Kennedy declined an offer to comment on the court’s decision, Wednesday, saying he needed time to consider it.

In a previous interview about the case, Kennedy warned that BMO’s appeal could have overturned the status quo, giving banks the upper hand in nearly all circumstances when projects go bankrupt.

“Without the sanctity of the mechanic’s lien, the contractor’s left with very little (with which to protect themselves),” said Kennedy.

Curran & Briggs was awarded $5,000 in this appeal to help cover its legal costs.

BMO now has an option to ask the Supreme Court of Canada to hear the case.

Organizations: Bank of Montreal, Atlantic Business Magazine, PricewaterhouseCoopers Inc. Supreme Court of Canada

Geographic location: Prince Edward Island, Newfoundland, B.C. Windsor Park

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Recent comments

  • johnny uppal
    July 09, 2015 - 12:36

    This project was a milestone in the marketing of PEI as a place to invest for non Canadian "s in the United Kingdom. A few plots were purchased from High Flying Barristers from London and the reason for it"s collapse was NOT as implied by Mr Uppal. This project was without a doubt another victim of The Global Financial Disaster which has manifested in such projects to fail. I do not think your reporting on this story is balanced as it clearly implies Mr Uppal is responsible and the truth of the mater is that the Banks who should be questioned about the "risk assessment" Clearly the new company who have taken over are very lucky to be handed over such a wonderful area of Land in PEI without having to do very much ! All the pre planning, and services where complete and I would question certain aspects of your facts. No professional company would expose themselves to the risk of not being paid $2 m without taking out indemnity for non payment. Could it be that the small business circles of PEI knew that they would be getting a ready made deal if Royalty Heights was labelled as a failure which would mean a significant loss of "consumer confidence". PEI is a beautiful place and with our without Mr Uppal the project is one which is the milestone in the development of PEI. I am surprised the editor of this paper has allowed such a one sided story which I have tried to highlight and I am sure my opinion will not be given the attention it deserves for the people of PEI

  • enough already
    July 11, 2014 - 07:45

    How do people on the East Coast keep getting sucked in by these type of people?

    • johnny uppal
      October 01, 2015 - 11:19

      A good example to answer your question would be to compare and contrast the events in East Europe and the mass migration of them looking for the peace and safety they were promised by The West....

  • Uno Whoweare
    July 11, 2014 - 07:38

    Interesting, but isn't the story (that requires some journalistic effort) how Amandeep Uppal takes advantage of "the rules" to benefit his interests? Could it be that what allows Uppal's interests the same social policies that allows for pipelines, deep water wells, fracking, unnessary infrastructure and other crimes against the common people? This story has more significance than a quick read reveals; rigiourous journalism would open some critical questions.