Published on August 30, 2008
FILE PHOTO (2008): Royalty Heights on the Royalty Road in Charlottetown opens for business. From left are Jas Boparai, president of operations and services for Royalty Heights; Murray McCulloch, director of business development for Royalty Heights; Steve Uppal, president of sales and development for Royalty Heights; Charlottetown Mayor Clifford Lee and Della Parker, Parker Realty. Guardian photo
Published on November 01, 2010
Scales of justice
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.