Some contractors will not learn. If you want to encumber the land on which you worked, then register a construction lien, perfect that lien by commencing your action, and set your action down for trial, in each case on a timely basis. The contractor in Ciccocioppo Design/Build Inc. v. Gruppuso, a 2017 decision of the Ontario Superior Court of Justice, seemingly did not learn.
The contractor had a role in the design and construction of his friend’s house. He then alleged that he was not fully paid, but did not register a claim for lien. He commenced an action seeking an interest in the house by way of a constructive trust on the basis of unjust enrichment.
To establish unjust enrichment, a plaintiff must prove that it enriched the defendant, that it was deprived because of that enrichment, and that there is no juristic reason for the enrichment. The first two tests are often easy to prove; the third is not. A juristic reason is an explanation based on law for the enrichment of one to the detriment of another. It can encompass the existence of a contract, an intent to donate, and other equitable or statutory obligations.
In this case, the judge held that there were juristic reasons for the enrichment. The parties had an oral contract, but neither claimed that there was anything in the contract that allowed the contractor to have an interest in the owner’s property. Further, the Construction Lien Act is a comprehensive statutory scheme that provides for an interest in land. It strikes a balance among all those involved in a construction project. Allowing the contractor to proceed with its claim would defeat the scheme of the Act.
The judge dismissed the contractor’s action by way of a summary judgment motion.
Image courtesy of kamuelaboy.
Written by Jonathan Speigel Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.