Court File and Parties

COURT OF APPEAL FOR ONTARIO DATE: 20240313 DOCKET: COA-23-CV-0730

Judges: Rouleau, Lauwers and Monahan JJ.A.

BETWEEN:

Ekum-Sekum Incorporated carrying on business as Brantco Construction Plaintiff (Appellant)

and

Lanca Contracting Limited, Keith Oliver Lancaster, Linda Margaret Lancaster and Nathan Keith Lancaster Defendants (Respondents)

Counsel: Anthony J. Gabriele and Andrew M. Beney, for the appellant Dennis Touesnard, for the respondents

Heard and released orally: March 12, 2024

On appeal from the amended judgment of Justice Ian Smith of the Superior Court of Justice, dated July 4, 2023.

Reasons for Decision

[1] The appellant appeals the trial judge’s finding that equitable set-off was available because, in its view, the respondents did not come to court with clean hands.

[2] The two construction contracts in issue were related as apparent from the conduct of the appellant, making equitable set-off available. The trial judge adverted to the clean hands doctrine of the law of equity. He exercised his discretion to award equitable set-off, fully recognizing that both parties had breached their contracts. Those breaches of contract did not, in his view, give rise to a finding of unclean hands. He found that the claimed breach of trust under the Construction Lien Act, R.S.O. 1990, c. C.30, was not made out on the evidence because the funds in issue were adequately accounted for as provided by the applicable case law.

[3] The appellant has not established that the trial judge made a palpable and overriding error of fact or an extricable error of law. We defer to the trial judge’s exercise of discretion in allowing equitable set-off.

[4] The appeal is dismissed with costs to the respondents in the agreed amount of $15,000, all-inclusive, in respect of this appeal and the Divisional Court proceeding.

“Paul Rouleau J.A.”

“P. Lauwers J.A.”

“P.J. Monahan J.A.”