Vancouver International Airport v. Lafarge Canada Inc.; Can Someone Put a Lien On a Runway?

 The Federal government has in recent years transferred the operation of many airports to local governments.  This has often included the transfer of title to the land on which the airport and its improvements are located.  The recent decision of the B.C. Supreme Court in Vancouver International Airport v. Lafarge Canada Inc. (2009 BCSC 961) considers the extent to which builders’ liens may be placed on land used for an airport.

The case arose after several liens were filed for work done at Vancouver’s airport terminal.  While the liens giving rise to the case were discharged by the time the case was heard, the Airport pursued the matter because the Registrar of Land Titles refused the Airport’s request to not register future liens against the Airport’s leasehold interest (in this case, the land at the Airport remains owned by Her Majesty in Right of Canada).

The issue was argued as one of constitutional law: did the Province have the authority to enact legislation (i.e., the Builders’ Lien Act) over property used in connection with an activity over which the federal government has constitutional jurisdiction?  In this case, it was argued that the “purpose” of the Airport is in relation to (1) aeronautics and (2) international and interprovincial trade, which are federal powers constitutionally. 

The Court held that because the underlying use behind the Airport’s leasehold interest was within the realm of federal powers as noted above, several sections of the Builders’ Lien Act were inapplicable and inoperative to that leasehold interest.  The basis for the Court’s decision was not the federal ownership of the lands, but that the liens could affect activities within federal jurisdiction.  This was highlighted by the lien holders’ remedy, which would ultimately be the sale of the Airport property, and the Court referred to other cases which held that to allow provincial liens on inter-provincial undertakings such as railways and pipelines would “impair, if not destroy” their powers.

The decision does not mean that a lien cannot be placed on a leasehold interest over land owned by the federal government.  Instead, the decision provides that the closer the property interest is to the “core” of a matter within federal jurisdiction, the less likely it is that a lien can be applied to it.  The reasoning of the case should also apply to other instances where the core purpose of a property comes within federal jurisdiction, such as ports.  The Province of B.C. has filed an appeal in this case.