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Lepera Contracting Inc. v. Royal Timbers Inc. 2016 Ont Div Ct

Contractor did work on 2 phases of the same project pursuant to a successful response to a request for tenders. The contractor entered into 2 contracts: one for phase 1 and one for phase 2 of the project. The contract for phase 1 was with Newco, a stand-alone corporation that was to take title to phase 1 and develop the property as a hotel. The contract for phase 2 was with the titled owner of both phases 1 and 2. The owner of the project had entered into a contract to sell phase 1 to a hotelier, which had incorporated Newco to take title and develop the property. The agreement to sell fell through and Newco, which had no assets, defaulted on a payment of $385,000 to the contractor who had performed site servicing work. The contractor liened and sued the titled owner to enforce the construction lien and for unjust enrichment. The lien action was dismissed because the court held that the titled owner was not an “owner” for purposes of the Construction Lien Act. The contractor knew that it was dealing with Newco, a non-owner, on phase 1 and with the titled owner on phase 2. The court also held that there was no unjust enrichment because there was a juridical reason for the enrichment, the contract for phase 1.

Written by Jonathan Speigel Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.