Forgetful would-be lien claimants who miss the 45 day window to
register a construction lien will appreciate this April 2016
decision of the Ontario Superior Court of Justice. In NKP
Painting Inc., Justice Douglas allowed a subcontractor to
recover holdback from the owner under the common law of unjust
enrichment, despite the fact that the subcontractor did not have a
registered lien or a contract with the owner.
York Condominium Corporation, the owner, contracted with RBG,
the general contractor, for the refurbishment of a common area and
building corridors at a cost of approximately $285,000. The general
contractor retained NKP Painting, the subcontractor, to supply
painting and wallpapering materials. The owner paid 90% of the
contractor's invoices, retaining the requisite 10% holdback
under the Construction Lien Act
("CLA"). The contractor went
bankrupt and the subcontractor was not paid.
Neither the contractor nor subcontractor registered liens under
the CLA, but the subcontractor brought a claim for unjust
enrichment against the owner. In the lower court (Small Claims
Court), the Deputy Judge found that there was no contract between
the subcontractor and the owner, and dismissed the
subcontractor's claim for unjust enrichment. The subcontractor
appealed to the Superior Court.
Remedies under the CLA do not exist to the exclusion of
common law remedies such as unjust enrichment.
The common law remedy of unjust enrichment involves the
enrichment of one party, the corresponding deprivation of a second
party, and no juristic reason for the enrichment of the first party
(such as a gift or a contract). The courts will also consider the
reasonable expectations of the parties in deciding whether a party
has been unjustly enriched.
In NKP Painting Inc, the owner was enriched because it
received 100% of the benefit of the invoiced renovation work, but
paid only 90% of the invoiced amounts. The owner's enrichment
corresponded to the efforts of the subcontractor, for which it
received no compensation, and therefore suffered a detriment. There
was no contract between the owner and the subcontractor or other
juristic reason for the owner's benefit and the
subcontractor's corresponding deprivation. Furthermore, the
owner could not reasonably have expected to retain the holdback
funds, which represent a windfall to the owner.
On appeal, Justice Douglas of the Superior Court held that the
owner was unjustly enriched in a sum equal to the amount of the
holdback and ordered that the subcontractor receive judgment in the
amount of the holdback.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The prospect of an internal investigation raises many thorny issues. This presentation will canvass some of the potential triggering events, and discuss how to structure an investigation, retain forensic assistance and manage the inevitable ethical issues that will arise.
From the boardroom to the shop floor, effective organizations recognize the value of having a diverse workplace. This presentation will explore effective strategies to promote diversity, defeat bias and encourage a broader community outlook.
Staying local but going global presents its challenges. Gowling WLG lawyers offer an international roundtable on doing business in the U.K., France, Germany, China and Russia. This three-hour session will videoconference in lawyers from around the world to discuss business and intellectual property hurdles.
Russell v. Township of Georgian Bay provides a useful reminder of the fact that while municipal officials sometimes appear to hold all of the cards in disputes with home owners, that is not always the case.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).