In a February 2011 decision (link), the British Columbia Court of Appeal confirmed that the principal sections of the provincial Builders Lien Act were inapplicable to the Vancouver International Airport Authority, which leases the federal lands upon which the Airport is built.
Two contractors who had supplied materials and labour for improvements to the airport premises filed builders liens against the Airport’s leasehold interest in the Airport lands. The Builders Lien Act creates liens that can be enforced by sale of land if the debt to the filing party is not paid.
The Airport Authority argued that the principal sections of the Builders Lien Act encroached on the federal government’s jurisdiction over aeronautics and a vital part of the Airport Authority’s mandate to manage the air and ground operations of the Airport. It argued that provisions of the Builders Lien Act had the potential to significantly intrude upon the Airport’s operations.
The Court of Appeal agreed with the Airport’s arguments and concluded that “registration of a lien against the Authority’s leasehold interest has the potential to impair the Authority’s ability to obtain financing in order to meet its objectives. Sale of the Authority’s leasehold interests to enforce a registered lien would end its mandate to operate the airport”. The Court also ruled that the Builders Lien Act impaired the operation of the federal jurisdiction over aeronautics.
This decision, like the two recent Supreme Court of Canada cases of Canadian Owners and Pilots Association and Lacombe (discussed in a previous post), reaffirmed that a provincial government’s laws and regulations will be struck down if they impair a core power of the federal government’s authority over aeronautics.