Roni Excavating v. Sedona Development, et al., 2015 ONSC 6576 (Ont. Div. Ct.)
RE: the extent to which the proceeds of sale of a townhouse project are trust funds for the benefit of contractors even absent privity of contract
RE: the relationship between s.9 and ss. 7 and 8 of the Construction Lien Act, RSO 1990, c.C30
In this proceeding we successfully opposed, on behalf of 32 lien claimants, the defendant’s appeal of Mr. Justice Richetti’s decision, made on summary judgment, that the proceeds of sale of townhouses were trust funds for their benefit. The decision is important as the Appellant argued that trust claims under the Construction Lien Act depend on privity of contract.
The Court agreed with the our submissions that the trust created under s. 9 of the Act (which deals with proceeds of sale) must be distinguished from the trusts created by sections 7 and 8, which deal with the flow of funds through the construction pyramid. The Ontario Courts had not, prior to this decision, rendered a decision on the scope and intention of s. 9 in this regard.