Legal Blog

Unjust Enrichment & Lien Claims Against Owner

Direct Equipment Ltd. v. Metrolinx 2018 Ont SCJ (Master)

A subsub registered a claim for lien. The lien was vacated by order of the court after the owner paid all holdback into court. The subsub wanted to amend its statement of claim against the owner to claim for $95,000 that, the subsub alleged, the owner had not paid to anyone for rental equipment that the subsub had supplied. The Master refused to grant the amendment on grounds that the amendment was frivolous or did not disclose a reasonable cause of action. He held that there could be no contract claim because the claim in contract was against the general, not the owner. Once the claim for lien ceased to attach to the land and the holdbacks, there could be no lien claim against the owner. There could be no quantum meruit or unjust enrichment claim because section 55(1) of the then Construction Lien Act prohibited joining quantum meruit /unjust enrichment claims with lien claims. A contractual unjust enrichment claim was tenable if proven, but was not proven in this case. A contractual unjust enrichment claim is a claim made when the contract fails because the parties have not been able to agree on its terms, but still had an agreement for some payment to be made for work performed. In this case, there was no failed contract between the subsub and the owner; they never had contractual discussions at all.

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