Seeking payment for work completed from directors and shareholders of a company that has experienced financial failure is a tough strategy to follow. However, that didn’t stop a Surrey, B.C., company. The problem was that they lacked evidence to prove their case. Metro-Can Construction had been contracted by developer Alderbridge Way Limited Partnership for excavation and civil works related to a mixed-used development in Richmond, B.C.
When Alderbridge became insolvent and sought creditor protection, it left unpaid $6.6 million previously invoiced by Metro-Can. Metro-Can sought judgment against Alderbridge and its directors, investors and shareholders for about $8.6 million, including damages for negligent misrepresentation and breach of trust., Metro-Can alleged that payment holdbacks held by Alderbridge were subject to a statutory trust, as per the British Colombia Builders Lien Act. It also claimed Alderbridge had directed and facilitated the payment of the holdbacks to parties who were not beneficiaries. Knowingly assenting to or directing these actions should be regarded as a breach of trust.“This is a case where a contractor has unfortunately not been paid for all of the work it completed, and it is attempting to shift liability from the party it contracted with to that party’s directors and shareholders,” wrote Justice Majaw