Status of interest payments reflected status of principal sums on which interest accrued

Construction Law – Contracts - Breach of terms of contract

Action was started by plaintiff contractors, under Construction Lien Act (CLA). Subcontractor claimed entitlement to money, that was subject to priority claims. Subcontractor claimed to be trust beneficiary under CLA. Counsel for contractors claimed entitlement to charging order. Contractors claimed for breach of contract and breach of trust. Contractors' action allowed, with subcontractors being liable for holdbacks. Charging order was granted, having priority over subcontractor's claims. Subcontractor appealed priority portion of judgment. Appeal allowed. Charging order took precedence over unsecured claims. However, trial judge erred in finding that subcontractor was not trust beneficiary. Subject funds were properly seen to be trust funds. Status of interest payments reflected status of principal sums, on which interest accrued. Subcontractor was entitled to payment in full on its trust claim, in amount of $54,737.61.

Great Northern Insulation Services Ltd. v. King Road Paving and Landscaping Inc. (2019), 2019 CarswellOnt 9651, 2019 ONSC 3671, D.L. Corbett J., F.L. Myers J., and Sheard J. (Ont. Div. Ct.); varied (2017), 2017 CarswellOnt 20276, 2017 ONSC 7675, R.E. Charney J. (Ont. S.C.J.).

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