The plaintiff subcontractor sued the defendant contractor in Small Claims Court for unpaid invoices.
During closing arguments, the trial judge raised the issue of a trust claim under the Construction Lien Act, which had not been pleaded.
The trial judge found the defendant liable for breach of trust.
On appeal, the Divisional Court held that while the Small Claims Court has jurisdiction to hear trust claims within its monetary limits, it was unfair to the defendant to grant judgment on an unpleaded trust claim, as it deprived him of the opportunity to adduce evidence to discharge his burden as trustee.
The appeal was allowed and a new trial ordered.
