The respondent subcontractor obtained default judgment against the general contractor for unpaid work and subsequently sued the appellant owners for breach of statutory trust under the Construction Lien Act.
The motion judge granted summary judgment against the owners and their directors.
On appeal, the respondent conceded the motion judge erred in finding a subcontractor could be a beneficiary of the owner's trust under s. 7(1).
The respondent alternatively argued the owners were liable under s. 13 for having 'effective control' of the general contractor by paying its invoices.
The Divisional Court rejected this argument, holding that merely paying invoices does not constitute effective control of a corporation's relevant activities.
The appeal was allowed and the claim against the owners dismissed.