COURT FILE NOS.: CV-21-672215 & CV-21-674170
DATE: 2025 06 17

ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF the Construction Act , RSO 1990, c. C.30, as amended

BETWEEN:
SENSO GROUP BUILDING SUPPLIES INC.
J. Frustaglio, for the plaintiff
Plaintiff

• and -

57-63 FINCH DEVELOPMENTS INC., DC&F CORP., ROMSPEN INVESTMENT CORPORATION and WESTMOUNT GUARANTEE SERVICES INC.
D. Stoddard, for the defendant, DC&F Corp.
D. Martino, representative of the defendant, 57-63 Finch Developments Inc.
Defendants

AND BETWEEN:
TMAP HOME SOLUTIONS PLUS INC.
S.A. Hussain, for the plaintiff
Plaintiff

• and -

57-63 FINCH DEVELOPMENTS INC., DC&F CORP., ROMSPEN INVESTMENT CORPORATION and WESTMOUNT GUARANTEE SERVICES INC.
D. Stoddard, for the defendant, DC&F Corp.
D. Martino, representative of the defendant, 57-63 Finch Developments Inc.
Defendants

HEARD: July 16-19, 23-25, August 29 and September 25, 2024

REASONS FOR JUDGMENT

Robinson A.J.

I. OVERVIEW

[ 1 ] These two lien actions arise from the construction of a condominium development known as Nova Urban Towns. The project involved construction of 42 stacked townhomes, one level of underground parking, and various exterior works. The project lands are owned by 57-63 Finch Developments Inc. (“Finch”). Finch contracted with DC&F Corp. (“DC&F”) as construction manager at risk for the project.

[ 2 ] DC&F entered into numerous subcontracts with various trades and suppliers to complete the necessary construction work. Among the suppliers and subcontractors who provided materials and performed work on the project for DC&F were Senso Group Building Supplies Inc. (“Senso”) and TMAP Home Solutions Plus Inc. (“TMAP”). Senso supplied drywall, masonry, and other building accessories to the project. TMAP was subcontracted to install various doors and interior trim work in the residential units.

[ 3 ] DC&F ultimately terminated its contract on October 6, 2021, and subsequently liened the project for $1.68 million. Validity of DC&F’s termination and its lien are heavily disputed by Finch, which has counterclaimed against DC&F for $8 million. However, those claims are not the subject matter of this trial. This trial was scheduled to deal with the remaining subcontractor and supplier liens in advance of the more complex trial of DC&F’s claim and Finch’s counterclaim, which has yet to be scheduled. After the relationship between DC&F and Finch broke down, numerous subcontractor and supplier liens were preserved and perfected, including those by Senso and TMAP, as well as various additional non-lien claims being commenced. The only unresolved subcontractor and supplier lien claims are those of Senso and TMAP.

[ 4 ] Senso claims $152,167.13 as the unpaid amount owing from its supply of materials to the project at DC&F’s request. Senso did not have a specific subcontract for this project, but rather supplied materials as requested by DC&F under a credit supply agreement, which is acknowledged by DC&F. Senso’s lien of $149,085.24 was vacated by Kaleido Developments Inc. (“Kaleido”), a related entity to Finch. Cash security in the amount of $186,356.55 remains in court.

[ 5 ] TMAP claims $211,787.43 as the unpaid amount for the work that it performed. TMAP was paid nothing by DC&F on the job. Finch’s position is that it was entirely unaware that TMAP was supplying any services or materials. TMAP’s lien was similarly vacated by Kaleido. Cash security in the amount of $264,734.29 remains in court.

[ 6 ] DC&F concedes the validity of both liens and the quantum of the claims advanced by each of Senso and TMAP. DC&F’s sole defence to both claims is one of payment timing. Its position is, essentially, that both Senso and TMAP agreed to be paid only when DC&F was paid by Finch. Since Finch has refused payment, DC&F is not liable to pay either Senso or TMAP. In the case of TMAP, DC&F specifically relies on the lack of any certificate for payment for TMAP’s work, which DC&F argues is a contractual prerequisite to payment.

[ 7 ] Finch’s position is that DC&F should be solely responsible for paying the claims of Senso and TMAP. Finch asserts that neither lien is timely and that the claimed supply of services and materials has not been proven by either of Senso or TMAP. Finch further asserts that its statutory holdback obligations have been reduced by payments made to DC&F and its other subtrades, such that Finch has no liability to either Senso or TMAP.

[ 8 ] Despite their liens being vacated, neither Senso nor TMAP had discontinued their actions against the mortgagee defendants prior to trial. Senso had noted those defendants in default. TMAP had not. However, given the security in court, neither Senso nor TMAP pursued any relief against the mortgagees at trial.

[ 9 ] I find that Senso has proven its lien in the amount of $149,085.24 and its contract claim in the amount of $152,167.13, as conceded by DC&F. TMAP has failed to prove timeliness of its lien, which is fatal to the lien claim. DC&F has nevertheless conceded an earned and unpaid amount of $211,787.43 under TMAP’s subcontract. DC&F has failed to prove any “pay when paid” agreement with Senso or that there is an enforceable agreement with TMAP to defer payment of earned and unpaid amounts until DC&F is paid. Finch has failed to prove that its basic holdback obligation less than the amount of Senso’s proven lien.

[ 10 ] In the result, Senso and TMAP shall each have judgment in contract against DC&F for $152,167.13 and $211,787.43, respectively. I am further declaring that Senso has a valid and timely lien in the amount of $149,085.24, and that Finch’s personal holdback liability as owner was at least that amount, such that Senso may recover its full lien amount from the security posted into court. TMAP’s lien is discharged and security for its lien will be paid out of court DC&F and Finch have agreed to defer their respective crossclaims in these two actions to be decided at the trial of DC&F’s lien action. Nevertheless, my disposition at this trial is not being stayed pending that subsequent trial.

II. Issues

[ 11 ] All parties agree that the procurement process for the project was commenced prior to July 1, 2018. Accordingly, pursuant to s. 87.3 of the Construction Act, RSO 1990, c C.30 , the act as it read on June 29, 2018 – i.e., the former Construction Lien Act (“ CLA ”) – continues to apply to the improvement and all liens arising from it. I thereby refer to the provisions of the CLA in the balance of these reasons.

[ 12 ] The purpose of this trial was to address four main disputes, namely: (a) whether Senso and TMAP have valid and timely liens; (b) whether DC&F is liable to pay Senso and TMAP for the amounts claimed by them, which DC&F has admitted have been earned and remain unpaid; (c) whether holdback liability of Finch under the CLA is greater than the liens of Senso and TMAP; and (d) whether Finch has any liability as “owner” under the CLA to Senso and TMAP.

[ 13 ] Based on how the trial unfolded, the main issues to be decided are as follows:

(a) For Senso’s lien and contract claims:
(i) Is Senso’s lien timely?
(ii) Has Senso proved the actual supply of materials in its claimed unpaid invoices?
(iii) Was there any pay-when-paid agreement between Senso and DC&F or is DC&F liable to pay the admitted amount owing to Senso?

(b) For TMAP’s lien and contract claims:
(i) Is TMAP’s lien timely?
(ii) Has TMAP proved its claimed supply of services and materials?
(iii) What agreement between TMAP and DC&F governs for payment of TMAP’s supply of services and materials?

(c) For Finch’s holdback liability:
(i) Is Finch’s total holdback obligation under the CLA greater than the extent of proven liens?
(ii) Is Finch entitled to reduce its holdback obligation or set-off against holdback for amounts paid from allocated holdback to DC&F and other subcontractors and suppliers?
(iii) Are the liens of Senso and TMAP, if proven, payable from the security posted in court by Kaleido, in whole or in part?

III. Analysis

[ 14 ] These lien actions are before me in a reference under s. 58 of the CLA . Specifically, a judgment of reference was obtained in the now-settled lien action of another of DC&F’s subcontractors, Yalda Contracting Inc. (“Yalda”). Several liens and lien actions, including those by DC&F, Senso, and TMAP, became subsumed into the reference by operation of the provisions of the CLA and the language of the judgment of reference. Those operate together such that all lien claimants served with notice of trial became parties to Yalda’s lien action, with all liens and lien actions necessarily being subsumed into this reference for determination: see, for example, North Key v. Miwell , 2013 ONSC 4433 at para. 16 .

[ 15 ] Although many liens had already been resolved by the time this reference was constituted before me, several liens remained outstanding. All liens except for those of DC&F, Senso, and TMAP have since been resolved. After Yalda’s action was dismissed, the reference was continued under DC&F’s lien action as the new lead reference file.

[ 16 ] As noted above, this trial was convened to deal with the supplier and subcontractor liens ahead of a trial of DC&F’s claims and Finch’s counterclaim. Although there is some overlap (or potential for overlap) between these trials and the future trial in DC&F’s lien action, I am seized of all steps in all lien actions within this reference, including the trials. The concerns and risks of separate trier of facts in these two lien actions from DC&F’s lien action do not apply. I found no basis to tie a final determination of the claims by Senso and TMAP to the main dispute.

[ 17 ] Senso and TMAP were each engaged by DC&F to supply materials and perform work within DC&F’s contractual scope on the project. Finch’s position, and the evidence of its principal, David Martino, at trial, is that Finch had limited knowledge of Senso’s involvement and no knowledge of TMAP’s involvement while the project was ongoing.

[ 18 ] Although DC&F filed defences opposing the claims of both Senso and TMAP, it has withdrawn substantially all of its pleaded defences. DC&F concedes quantum and timeliness of Senso’s lien and TMAP’s lien. DC&F also concedes the contract amounts claimed by both Senso and TMAP, subject to DC&F’s position that payment is not yet due. DC&F relies on separate payment arrangements allegedly reached with each of Senso and TMAP. Both Senso and TMAP deny that they agreed to any deferred payment or pay when paid arrangements.

[ 19 ] Finch has taken issue with DC&F’s revised position at trial that substantially concedes the claims of both Senso and TMAP. Mr. Martino argues on behalf of Finch that DC&F’s trial position is inconsistent with its pleadings in both actions. Finch relies on the well-established principle that it is fundamental to the litigation process that lawsuits be decided within the boundaries of the pleadings: Rodaro v. Royal Bank of Canada (2002), 59 OR (3d) 74 (CA), at para. 60 . That is true. However, Rodaro and similar case law are about parties having their cases decided on the issues joined in the pleadings. Put another way, courts are not to make findings of liability and damages based on issues that have not been pleaded. That principle does not preclude a defendant from withdrawing its own defences without formally amending a statement of defence.

[ 20 ] DC&F was entitled to concede the claims of Senso and TMAP, subject to maintaining defences on payment. It has done so. To the extent that DC&F has changed its litigation position by withdrawing substantially all of its pleaded defences, that is now an issue for costs.

[ 21 ] Although DC&F’s concessions were argued at trial to bind Finch, they do not. Finch is an independent defendant in each action and entitled to require that each of Senso and TMAP prove their liens. Finch challenges timeliness of both liens and takes the position that the claimed services and materials have not be proven. Those challenges are germane to the extent of Finch’s liability under the CLA to each of Senso and TMAP. That is limited by the extent to which their liens are proven and by the extent of Finch’s statutory holdback obligations under the CLA .

a. Senso’s Lien

[ 22 ] I deal first with Senso’s lien. As noted above, there are three issues for trial with respect to Senso’s claim, namely (i) whether Senso’s lien is timely; (ii) whether Senso supplied the materials outlined in its unpaid invoices; and (iii) whether there was any pay-when-paid agreement between Senso and DC&F.

i. Is Senso’s lien timely?

[ 23 ] DC&F concedes timeliness of Senso’s lien. Finch does not. As noted above, DC&F’s concession does not bind Finch. Senso has the evidentiary onus of proving timeliness of its lien. I am satisfied that Senso has met its onus and that its lien is timely.

[ 24 ] It is undisputed that Senso is a “subcontractor” under the CLA, i.e., “a person not contracting with or employed directly by the owner or an agent of the owner but who supplies services or materials to the improvement under an agreement with the contractor”: CLA, s. 1(1) . Under the CLA , a subcontractor’s lien must be preserved with 45 days of last supply of services and materials and perfected within 45 days from the last day on which the lien could have been preserved: CLA, ss. 31(3)(b) and 36(2).

[ 25 ] Although it is undisputed that Senso supplied materials, it did not have a formal subcontract with DC&F defining the scope of materials required for the project. The evidence before me supports that DC&F obtained a credit account with Senso in November 2019 for the supply of drywall, masonry, and other building-related materials. Senso supplied various materials to DC&F on the project, as well as to other projects.

[ 26 ] Senso’s position is that its supply arrangement with DC&F was an ongoing relationship for the supply of equipment, services, or materials, which is known in construction law as a prevenient arrangement. Senso’s primary witness at trial was Senso’s president, Cynthia Prazeres. Ms. Prazeres describes in both of her trial affidavits that DC&F would place purchase orders by telephone, email, or text message for materials. Ms. Prazeres would then be responsible for scheduling the material deliveries and dispatching them to site. That arrangement was confirmed by both DC&F’s director, Eyad (Tommy) Saleh, and DC&F’s construction manager on the project, Danick Leclerc, in their own trial affidavits.

[ 27 ] Where materials are supplied under a prevenient agreement, the time limit for preserving a lien runs from the date of the last delivery of materials, not from each delivery: Wood Lumber Co. (Ontario) Ltd. v. Eng (1999), 45 OR (3d) 795 at para. 19 . Senso’s lien rights accordingly run from its last supply to the project, as opposed to running from each supply under each purchase order.

[ 28 ] Cynthia Prazeres’ trial affidavit sets out that Senso supplied a total of $663,280.17 in materials to the project, of which $152,167.13 is claimed to be unpaid. Senso’s claim for lien was for the lower amount of $149,085.24. It was registered on November 12, 2021, with a certificate of action registered less than one week later on November 18, 2021. For its lien to be timely, Senso must accordingly have supplied services and materials under its subcontract on or after September 28, 2021.

[ 29 ] Senso’s claim for lien asserts that its date of last supply was on September 29, 2021. Based on the evidence before me, the last supply by Senso prior to October was actually on September 17, 2021. However, the evidence tendered by Senso at trial is that its actual last supply to DC&F occurred on October 5, 2021. As discussed below, I am satisfied that the claimed supply of materials on that date has been made out on the evidence and, further, that Senso is entitled to rely on the actual date of supply, rather than formalistically applying the date in the claim for lien as a barrier.

[ 30 ] Specifically, on the facts of this case, I agree with Senso that including an incorrect date of last supply in its claim for lien is a minor irregularity that does not invalidate the lien. The CLA provides that a claim for lien is not invalidated by reason only of a failure to comply strictly with the content requirements for certifications and preservation under the CLA, unless there has been prejudice and then only to the extent of prejudice suffered: CLA, s. 6. I find no prejudice from allowing Senso to rely on a later date of last supply, if proven. DC&F has conceded timeliness. Finch did not tender any evidence of prejudice nor has it argued any prejudice from the date of last supply being incorrect in the claim for lien.

[ 31 ] Finch primarily challenges timeliness of Senso’s lien on two bases: (i) that there has been no confirmation in evidence that the quantities and specifications of the materials allegedly delivered by Senso on October 5, 2021 were, in fact, delivered to the project site, and (ii) that there is nothing supporting that the material was deficiency-free. Both arguments fail.

[ 32 ] Regarding the first argument, Senso relies on its shipment invoice, billing invoice, and three witnesses to prove last supply: Cynthia Prazeres, who organized the supply on behalf of Senso; Tommy Saleh, a representative of DC&F who confirmed the supply; and Danick Leclerc, DC&F’s project manager who received the materials on October 5, 2021 and instructed workers on using them. The evidence of Ms. Prazeres, Mr. Saleh, and Mr. Leclerc on Senso’s last supply was consistent and is supported by the delivery invoice and Senso’s billing.

[ 33 ] Senso’s final shipment invoice and billing invoice each set out that, on October 5, 2021, Senso supplied TREMproof waterproofing, parging mix, and Novoplan self-leveling concrete mix. Nominal additional charges were included for three buckets and deposits for two skids. A total of $3,081.89, including HST, was charged. Finch argues that the delivery receipt contains no signature confirming delivery. However, there was direct evidence at trial from both Mr. Saleh and Mr. Leclerc that the materials claimed by Senso as being supplied on October 5, 2021 were received on site and used that day.

[ 34 ] Specifically, Mr. Leclerc testified during cross-examination that he was present when the materials were delivered to site, and that they were used that day for floor levelling and waterproofing around a planter in one unit and parging in the elevator. He confirmed that work twice at different points during his cross-examination. Although Mr. Martino made various submissions in his closing argument about collusion between DC&F, Senso, and TMAP, I was directed to no evidence supporting a finding that Mr. Leclerc should not be believed or lacked credibility. His evidence was not demonstrated to be internally inconsistent and nothing in his cross-examination called the credibility of his testimony into question. He provided his own first-hand account of the delivery and how the materials were used.

[ 35 ] I give no effect to Finch’s argument that I should put weight on the fact that the invoice for the October 5, 2021 supply is not included in a statement of account pulled on October 13, 2021. I accept Senso’s position that the invoice was not yet outstanding when the account statement was generated. In any event, on a balance of probabilities, the totality of the evidence on Senso’s last supply – including the order being placed, the materials being received on site, and how they were used – overrides any potential inconsistency with a computer-generated statement of account document.

[ 36 ] Regarding the second argument, Finch’s position is that the work being performed by DC&F was deficiency work, so Senso’s supply of materials was not lienable. Finch points to cross-examination testimony from Tommy Saleh and Danick Leclerc that the project was 85-90% complete at the time that DC&F terminated, with deficiencies remaining outstanding. Finch’s position is that waterproofing, parging, and concrete work was all completed prior to October 5, 2021, with the project in its finishing stages by that time. Finch relies on documentary evidence that tiling and flooring was completed in the lower-level units, with vanities and shower enclosures installed, by late August 2021. Self-levelling concrete is argued to have been used to correct deficient concrete flooring in the lower-level units. Finch argues that even if Senso did supply materials on October 5, 2021, those materials were used for repairs and deficiency correction by DC&F and its subcontractors, not for new work for the improvement.

[ 37 ] It is well-established in the case law that repair work and deficiency correction are not a lienable supply of services and materials and do not extend the period within which a lien claimant must preserve its lien: Quality General Contractor’s Inc. v. Wu, 2024 ONSC 2909 at para. 42 ; Toronto Zenith Contracting Limited v. Fermar Paving Limited, 2016 ONSC 4696 at para. 27 . However, Finch has tendered no cogent evidence supporting that the work described by Mr. Leclerc as being performed on October 5, 2021 using the materials supplied by Senso was, in fact, deficiency remediation work. Finch’s submissions seek to have me draw an inference from documentary evidence without corroborating witness testimony. Ultimately, though, I need not address whether the work performed by DC&F was or was not deficiency work.

[ 38 ] In my view, there is an important distinction between the supply of materials by Senso and the work being performed by and on behalf of DC&F with those materials. Whether DC&F’s work did or did not relate to repairs or deficiency correction only impacts DC&F’s lien rights, namely whether that work extends DC&F’s lien rights and whether it constitutes a separate, compensable supply of services from the original work alleged by Finch to have been deficiently performed. It does not impact Senso’s own lien rights from the supply.

[ 39 ] Finch has put forward no case law supporting that a supply of new materials used for deficiency remediation work cannot be a lienable supply by the material supplier. This is not a situation where Senso’s materials were deficient and it was supplying replacement materials. That would clearly matter to whether there was a lienable supply. However, there is no evidence supporting such a finding.

[ 40 ] In any event, Senso has no evidentiary burden to show that the materials it supplied were deficiency free. The party alleging a deficiency has the evidentiary burden of proving that deficiency. In this case, that is Finch. There is no evidence of any deficiencies being found in the materials supplied by Senso or that Senso’s last supply was a re-supply of replacement materials. Ms. Prazeres’ second affidavit specifically states that she was never informed by DC&F that there were any defects or deficiencies in the materials provided by Senso. That statement was unchallenged on cross-examination or by other evidence. No defects or deficiencies in any material supplied by Senso was identified.

[ 41 ] Mr. Leclerc’s cross-examination testimony supports that Senso was asked by DC&F to make a fresh supply of new materials for use on site. Senso was supplying those new materials under its supply agreement with DC&F. Nothing before me supports that Senso knew or ought to have known that it was supplying materials for DC&F to use in remedying deficiencies in the construction work. In my view, it would be unreasonable to expect material suppliers to confirm the purpose for which they are asked to supply materials to a project. Doing so would be unduly burdensome on suppliers and, in my view, contrary to the remedial nature of the CLA and the protections that the legislation affords to those who supply services and materials.

[ 42 ] Since there is no evidentiary basis to find that Senso’s last supply was to replace its own defective materials, I find that Senso’s lien rights are not impacted by the purpose to which DC&F may have used the materials. Senso’s supply of materials remains fully lienable. I find that Senso’s last lienable supply of materials to the project site was, in fact, on October 5, 2021. Senso’s lien was preserved within 45 days of that supply and, as such, is timely.

ii. Has Senso proved the actual supply of materials in its claimed unpaid invoices?

[ 43 ] I am satisfied from the evidence at trial that Senso has proven its supply of materials as set out in the unpaid invoices comprising its claim.

[ 44 ] Senso’s claim is essentially for supply of materials. “Materials” is defined in s. 1(1) of the CLA, in part, as every kind of movable property that becomes, or is intended to become, part of the improvement, or that is used directly in the making of the improvement, or that is used to facilitate directly the making of the improvement. There is an additional requirement for the supply of materials in s. 1(2) of the CLA . That subsection provides, in part, that materials are supplied to an improvement when they are placed on the land on which the improvement is being made or, in any event, incorporated into or used in making or facilitating directly the making of the improvement. “Improvement” is defined in s. 1(1), in part, to mean, in respect of any land, any alteration, addition or repair to the land or any construction, erection or installation on the land.

[ 45 ] There is no genuine dispute that the construction of the Nova Urban Towns project is an “improvement” to the subject lands. I have no hesitation finding that the materials claimed by Senso, which are set out in the billing and shipping invoices appended to Cynthia Prazeres’ first trial affidavit, were moveable property that was delivered to the site, were incorporated into the improvement, were used directly to make the improvement, or were used to facilitate making the improvement. That finding is amply supported by the trial evidence of Ms. Prazeres, DC&F’s director, Tommy Saleh, and DC&F’s construction manager, Danick Leclerc. Specifically, both Mr. Saleh and Mr. Leclerc unequivocally confirm in their trial affidavits that the materials claimed by Senso were delivered to the project site and used on the project. That evidence was maintained during cross-examination.

[ 46 ] Finch’s position is that it was unaware of Senso’s supply agreement with DC&F and that relevant line items in the statement of values under DC&F’s contract dealing with Senso’s claimed unpaid supply had been fully drawn by DC&F in its progress draws. Neither Finch’s awareness of Senso’s supply nor DC&F’s billing is germane to whether Senso supplied the claimed materials and remains unpaid for that supply. Rather, they are issues at the prime contract level between Finch and DC&F, notably whether the amounts recoverable by DC&F under the contract are limited to the unbilled and unpaid balance of relevant line items in the schedule of values.

[ 47 ] Finch further argues that the invoice chart in Senso’s statement of claim identifies only $21,898.51, despite the claim being much higher. Finch submits that the statement of claim was never amended, so it binds Senso. I give no effect to that argument. Senso’s claim amount is clearly set out in the statement of claim in several places, regardless of whether adding the values in the chart does not match that figure. Moreover, in Senso’s reply pleading, a revised invoice chart was included totalling to the claim amount of $152,167.13. Finch also received Ms. Prazeres’ first affidavit in late March 2023, long before the trial, in which Senso’s claim is further quantified. There has been no surprise to Finch (or at least there ought not to be) regarding Senso’s claim quantification.

[ 48 ] Finch challenges an invoice included in Ms. Prazeres’ trial affidavit that relates to another project. However, Mr. Prazeres clarified during her cross-examination that the invoice was included in error and did not form part of the statements to DC&F or the claim accounting. Indeed, the disputed invoice is not listed in the chart setting out the invoices that comprise Senso’s unpaid invoice claim. I thereby give no weight to Finch’s argument about the invoice being improperly included.

[ 49 ] Senso seeks an order declaring its lien timely and valid in the amount of its unpaid invoices of $152,167.13. I agree that Senso has proven its claim for unpaid invoices, but its contract claim is separate from its lien claim. Senso preserved a lien for only $149,085.24. Although Senso has proven the higher contract claim amount, the reduced sum for which it liened is the extent to which Senso may have its lien declared valid.

iii. Was there any pay-when-paid agreement between Senso and DC&F

[ 50 ] Despite conceding Senso’s lien and contract claim, DC&F’s position is that it is not liable to pay the claim by reason of Finch’s non-payment. DC&F argues that Senso agreed to a pay when paid arrangement. Senso denies it, maintaining that I should apply its standard net 30-day payment term.

[ 51 ] DC&F bears the evidentiary burden of proving its alleged pay when paid defence. It has not met that onus. The evidence does not support a finding, on a balance of probabilities, that Senso ever agreed to defer payment of its accounts pending payment by Finch to DC&F.

[ 52 ] The only witness tendered by DC&F in support of the alleged pay when paid defence is Tommy Saleh. I have given his evidence on the alleged pay when paid agreement little weight. Although no objection was raised at trial, Mr. Saleh’s affidavit is rife with hearsay, opinion, and legal argument. On the pay when paid issue, it is entirely self-serving to DC&F and unsubstantiated by the documents tendered at trial.

[ 53 ] Cross-examination confirmed that Mr. Saleh was not involved in DC&F’s credit application nor was he involved in negotiating the payment terms with Senso at the outset of their relationship. That was all done by Guiseppe Bartolo, who is Mr. Saleh’s partner in DC&F. I find that Mr. Saleh has no personal knowledge of what, if any, payment arrangements were discussed and agreed during negotiation of the supply agreement between DC&F and Senso.

[ 54 ] Mr. Saleh’s trial affidavit evidence and testimony supports that the alleged “pay when paid” agreement did not arise until the last few months of Senso’s material supply to the project. Mr. Saleh alleges that Cynthia Prazeres agreed to a pay when paid arrangement. Senso denies the agreement, but argues that even if there was an agreement, it is legally unenforceable for want of consideration. I am satisfied and find that there was no such agreement reached during the project. It is unsubstantiated by the documentary record and witness testimony before me at trial.

[ 55 ] Senso correctly argues that a “pay when paid” term must be clear and unambiguous. Although not cited by the parties, as I previously discussed in PBW High Voltage Ltd. v. Metrolinx, 2021 ONSC 6715 , at para. 66 , case law has held that a “pay when paid” clause must use clear and unambiguous language and will be enforceable where the subcontractor knew and accepted the risk. DC&F has not established a clear and unambiguous pay when paid agreement knowingly accepted by Senso.

[ 56 ] DC&F relies on a series of text exchanges between Tommy Saleh and Cynthia Prazeres from May to August 2021 as demonstrating an agreement by Senso to defer payment until DC&F was paid by Finch. I find that the text exchange falls far short of demonstrating a clear and unequivocal agreement to a pay when paid arrangement. The text exchange is largely updates by Mr. Saleh on payment issues with Finch and why payment is not being made (or is being delayed) to Senso, with acknowledgments by Ms. Prazeres.

[ 57 ] Mr. Prazeres’ testimony is that she never agreed to a pay when paid term. During cross-examination on the text exchange, Ms. Prazeres challenged the proposition that she was agreeing that Senso would only be paid when DC&F received payment. Specifically, she stated that DC&F’s lawyer may be confusing kindness and patience as agreeing to something different.

[ 58 ] Based on the evidence at trial, Ms. Prazeres’ subjective view is borne out on the objective evidence and the language used in the text exchanges. I find that, viewing the exchanges objectively on a balance of probabilities, the responses by Ms. Prazeres reflect nothing more than patience with the ongoing non-payment of Senso’s invoices, not acceptance that Senso would only be paid once DC&F was paid by Finch. There is nothing clear and unambiguous in the text exchange with respect to any such arrangement.

[ 59 ] I accordingly find that no agreement was reached for Senso to be paid when DC&F was paid. There being no pay when paid agreement, I need not address the arguments on consideration for a new payment term. DC&F was in breach of contract for failing to make payment to Senso. Since DC&F has conceded the lien and contract claims, I find that DC&F is liable to Senso in breach of contract for payment of the earned and unpaid amount of $152,167.13.

b. TMAP’s Lien

[ 60 ] I deal next with TMAP’s lien. As noted above, the trial issues with respect to TMAP’s lien and claims are (i) whether TMAP’s lien is timely; (ii) whether TMAP has proved its claimed supply of services and materials; (iii) whether TMAP has proved the value of its work was equal to its total subcontract price; and (iv) what agreement existed, if any, between TMAP and DC&F on the timing of payment to TMAP.

i. Is TMAP’s lien timely?

[ 61 ] As with Senso’s lien, DC&F concedes timeliness of TMAP’s lien. Finch does not. TMAP has the evidentiary onus of proving timeliness of its lien in response to Finch’s challenge. It has failed to do so on a balance of probabilities.

[ 62 ] Although TMAP’s claim for lien asserts a date of last supply on October 12, 2021, TMAP’s position at trial was that its last day of lienable supply was on October 4, 2021. TMAP tendered only two witnesses in support of its claim: its president, Yunbo (Tony) Tang, and Tommy Saleh from DC&F. Both provided fairly general evidence on the work performed by TMAP within the relevant lien period.

[ 63 ] It is undisputed that TMAP is a “subcontractor” under the CLA. Like Senso, timely preservation and perfection of its lien turns on the date of last supply. TMAP had 45 days to preserve its lien and a further 45 days to perfect it. TMAP’s claim for lien was registered on November 2, 2021. The lien was vacated prior to perfection, with TMAP issuing its statement of claim on December 21, 2021, more than 45 days after the claim for lien was registered. I accordingly do not need to address whether TMAP supplied lienable services within 45 days of preserving its lien. The perfection date governs. For the lien to be timely, TMAP must accordingly have supplied lienable services and materials on or after September 22, 2021 (90 days prior to the lien perfection date of issuing the statement of claim).

[ 64 ] Mr. Tang tendered two trial affidavits. The first affidavit does not address when TMAP completed its subcontract work and does not discuss any work performed after September 16, 2021. Mr. Tang’s affidavit sets out that, on September 16, 2021, DC&F provided TMAP with deficiency lists for two units. The emails with the deficiency lists are appended to the affidavit. Mr. Tang states that TMAP completed work as directed by DC&F and removed the deficiencies. There is nothing else in the affidavit about work performed.

[ 65 ] The second affidavit includes various timesheets for “work completed”. Those timesheets suggest that work was performed until October 21, 2021, although were not previously produced in the litigation and were not authenticated by Yunbo Tang in his trial affidavits. The timesheets are tendered without any explanation. Nothing in Mr. Tang’s affidavit addresses what specific work was completed on any of these days. There is also no evidence in the affidavit on who, when they were prepared, the source of the information used in preparing them, and for what purpose they were prepared. That was not addressed until Mr. Tang’s cross-examination.

[ 66 ] Some evidence was given during Mr. Tang’s cross-examination about the timesheets, but little evidence was tendered supporting that any new subcontract work was performed on or after September 22, 2021. Since TMAP must have supplied services and materials on or after that date for its lien to be timely, only two of the timesheets are relevant: one for “work completed” that covers September 20-25 and 27-30, 2021, and one for “work completed” on October 4, 13, and 21, 2021. These two timesheets outline hours worked for four workers, none of whom were called as witnesses at trial.

[ 67 ] For September 20-25 and 27-30, the timesheet notes 8 hours per day for each of the four workers in a single line for each of the two periods. For the timesheet covering October 4, 13, and 21, 2021, there are 4 hours per day noted for each of two workers. Other than identifying the “Work Location” as “57 Finch”, there are no details of the work performed beyond a pre-typed work description of “Labour – Door & trim installation”, which is the same on each timesheet.

[ 68 ] During cross-examination, Mr. Tang was asked about the timesheets and work performed by TMAP. He gave specific testimony about completing TMAP’s work on October 4, 2021 and then sending two workers on October 13, 2021 to speak to the site supervisor (who they did not see when there) and check for anything that TMAP needed to fix. He again sent two workers on October 21, 2021 to collect tools. Mr. Tang further testified that he was personally present on site on October 4, 2021 for a half-day. None of that evidence was in his trial affidavits of evidence in chief.

[ 69 ] Even if Mr. Tang and TMAP’s workers did attend the site as Mr. Tang’s evidence suggests, there is no evidence on what work was actually performed. As discussed above, it is well-established in case law that performing new contract (or subcontract, in this case) work will extend lien rights, but performing repair or deficiency correction work does not. Mr. Tang’s cross-examination evidence supports that he does not have personal knowledge of what work, if any, was performed by TMAP’s workers. He confirmed that the timesheet documents were created by TMAP’s accountant for tracking payment to TMAP’s workers. It was not created to prove how much money is owned to TMAP. Certain entries were confirmed to reflect minimum hours of pay rather than actual hours worked.

[ 70 ] Very limited evidence was tendered at trial on what specifically TMAP’s workers were doing on site on and after September 22, 2021. Mr. Tang’s oral testimony was quite general and he provided no specific evidence on the work being performed when he was on site himself on October 4, 2021. He did not explain what work was done to “complete” TMAP’s scope of work. The only contemporaneous emails in evidence tendered through or put to witnesses about TMAP’s work are from September 16, 2021. As discussed above, they deal specifically with homeowner deficiency lists for two units. Those emails corroborate that TMAP was still on site as of mid-September, but imply that the work being performed was deficiency remediation.

[ 71 ] Importantly, in neither of Mr. Tang’s two trial affidavits nor during his cross-examination did Mr. Tang identify any specific incomplete subcontract work, as opposed to repairs or deficiency correction, that was still being performed on or after September 22, 2021. Neither did Tommy Saleh during his examination.

[ 72 ] During Mr. Saleh’s oral testimony on TMAP’s claim, in response to being asked to confirm Mr. Tang’s testimony that TMAP’s last day of supply was on October 4, 2021, Mr. Saleh simply confirmed that “we” were aware that TMAP’s crew was on site on that date. Mr. Saleh did not confirm what specific work was performed on October 4, 2021 and, in any event, was not established to have any personal knowledge of what TMAP’s workers were doing that day.

[ 73 ] TMAP submits that there is no evidence to contradict the testimony of Mr. Tang and Mr. Saleh, so I should accept that October 4, 2021 was TMAP’s last day of work. That argument misapplies TMAP’s evidentiary burden. I am not concerned with TMAP’s last day of work on the job. I am concerned with its last day of lienable supply. TMAP has the evidentiary burden of proving that last supply on a balance of probabilities. Finch has no evidentiary burden to challenge or disprove TMAP’s position, at least not until TMAP’s initial evidentiary burden has been met.

[ 74 ] Although I accept and find that TMAP was performing repairs and deficiency correction work during the relevant lien period, I am not satisfied that TMAP has met its evidentiary burden of establishing, on a balance of probabilities, that lienable services were supplied on or after September 22, 2021. As a result, I find that TMAP’s lien rights had already expired prior to perfecting its lien.

ii. Has TMAP proved its claimed supply of services and materials?

[ 75 ] DC&F has already conceded the amount of TMAP’s claim of $211,787.43 as being earned and unpaid. During his examination, Mr. Saleh confirmed that DC&F’s project manager, Walter Halaseh, signed and approved TMAP’s final invoice for that amount. Finch, however, has not conceded TMAP’s claim. Nevertheless, given my finding that TMAP’s lien expired prior to being perfected, I need not address Finch’s challenges to whether the claimed supply of services and materials has been proven. Absent a timely lien, TMAP has no sustainable claim against Finch, with which TMAP had no contract. Finch’s other defences to TMAP’s claim are thereby rendered legally moot.

[ 76 ] The sole remaining disputed issue with respect to TMAP’s claim is whether the conceded earned and unpaid amounts are due and payable.

iii. What agreement between TMAP and DC&F governs for payment of TMAP’s supply of services and materials?

[ 77 ] A written CCA-1 2008 stipulated price form subcontract was signed between TMAP and DC&F in February 2019. Yunbo Tang signed on behalf of TMAP. Mike Saleh and Guiseppe Bartolo signed on behalf of DC&F. Yunbo Tang’s first trial affidavit sets out that there was also a subsequent verbal discussion between Mr. Tang and Giuseppe Bartolo of DC&F regarding TMAP’s work on the project. Mr. Tang’s evidence is that the two of them agreed that TMAP’s scope of work and price would be as set out in the written agreement and that TMAP would be paid within 30 days after completing its work. Price and scope are not disputed. Only the timing of payment is disputed as between TMAP and DC&F. TMAP’s position is that the 30-day payment term should apply. DC&F’s position is that the terms of the written contract should be applied since any collateral oral agreement fails for lack of consideration.

[ 78 ] The contractual payment term is, as argued by DC&F, essentially that TMAP would be paid only after payment to DC&F for approved work. The precise language of the payment provision relied upon by DC&F, which is in Article 6.2 of the CCA-1 2008 stipulated price subcontract, is as follows:

6.2 The Subcontractor shall make applications for payment together with supporting sworn statements and other documents that are required by the Subcontract Documents on or before the 20 day of each month (herein called the Submission Date) to the Contractor for approval and due processing. The amount claimed shall be for the value, proportionate to the amount of the Subcontract , of Subcontract Work performed and Products delivered to the Place of the Work up to the 30 day of the month. The Contractor shall pay the Subcontractor , no later than 30 calendar days after the Submission Date or 10 calendar days after the date of a Consultant's certificate for payment whichever is later, 10.00 percent of the amount applied for or such other amount as the Contractor or the Consultant determines to be property due . Where the Contractor or the Consultant makes any changes to the amount of the applications for payment as submitted by the Subcontractor , the Subcontractor shall be advised promptly in writing by the Contractor of changes and given the opportunity to defend the Subcontractor 's submission without delay. [emphasis added]

[ 79 ] DC&F argues that the written subcontract governs the contractual relationship between DC&F and TMAP, not any subsequent collateral oral agreement, and points to the entire agreement clause included within the definition of the term “Subcontract” in the agreement. DC&F submits that the subcontract clearly provides that the written agreement was the entire agreement between the parties, that TMAP does not allege mistake or fraud when it signed the subcontract, and that there was no evidence of mistake or fraud adduced at trial.

[ 80 ] DC&F’s position is that payment to TMAP is not yet contractually due, since payment was to be made the later of 30 calendar days after the “Submission Date” ( i.e., starting on the 20 th day of the month) or 10 calendar days after a consultant’s certificate for payment is received. DC&F submits that there were no consultant certificates for payment of TMAP’s invoice. The evidence at trial supports that position. Since DC&F was not itself paid for TMAP’s invoice, it maintains that nothing remains payable.

[ 81 ] TMAP argues that the written subcontract was varied by the subsequent oral agreement, for which no new consideration was required. Despite the alleged oral agreement with Giuseppe Bartolo, DC&F did not call Mr. Bartolo as a witness at trial, even though he was the only other party to the alleged verbal agreement. Mr. Bartolo did not provide an affidavit or testify at trial. Mr. Tang’s account of their discussion was unchallenged by any other witness, although was the subject matter of some cross-examination. In the absence of any material challenge to Mr. Tang’s affidavit evidence and testimony on a discussion directly involving him, I find that an agreement was reached on the terms set out by Mr. Tang. Whether the agreement is legally enforceable is a different question.

[ 82 ] DC&F argues that there was no consideration for the variation of payment terms. I disagree. TMAP was agreeing to forego its entitlement to monthly invoicing and regular payments to TMAP during the course of its work on the project, which ultimately spanned from February 2019 to October 2021. TMAP agreed only to bill DC&F once TMAP had had completed its work. In return for receiving no payment for the duration of the subcontract work, TMAP would be afforded payment within 30 days after completion. Practically, DC&F would be entitled to continue progress billings for work completed, including by TMAP, and receive payment for that work, but have no obligation to pay TMAP. DC&F was accordingly receiving a clear benefit from the agreement by deferring payment until TMAP’s subcontract was complete.

[ 83 ] DC&F also points to the language used by Mr. Tang in his affidavit for the verbal terms, notably that TMAP was to be “paid on the completion of the project”. The language used is not clear, since there are multiple interpretations, including when TMAP completed is work on the project (as TMAP argues) or when the entire project has been completed. I need not decide which interpretation to apply. The result is the same. I am satisfied that when DC&F terminated the contract with Finch, it “completed” its role on the project. That triggered DC&F’s payment obligation under the verbal agreement.

[ 84 ] Even if I am wrong in the foregoing, I would find that the agreement to vary the payment terms should be enforced despite a lack of consideration. Although tendered in support of its position with Senso, DC&F has put forward case law suggesting that the court may, in appropriate circumstances, enforce an amendment or variation to a contract that is unsupported by consideration, provided that it is willingly accepted by both parties and not procured under economic duress, is not unconscionable, and there are no other public policy concerns that may render an otherwise valid term unenforceable: King Road Paving and Landscaping Inc. v. Plati, 2017 ONSC 557 at para. 66 ; Rosas v. Toca, 2018 BCCA 191 at para. 183 .

[ 85 ] In my view, commercial parties should be entitled to vary those terms of their contracts that deal with contract administration, as opposed to price or scope of work, without the court subsequently unwinding those decisions with overly technical application of the law of consideration. Particularly in the construction industry, the freedom to contract ought to extend to permitting parties to make commercially reasonable amendments to how they will administer their contracts, provided that is done without economic duress and the amendments or variations are willingly agreed by both parties.

[ 86 ] In the case before me, I have found an agreement to change the timing of payment, but not the scope of work or the price for that work. It was an agreement reached at the outset of TMAP’s work, not at a time of economic duress. I find no reason to deny giving effect to the agreement reached between Yunbo Tang and Giuseppe Bartolo to vary the payment terms.

[ 87 ] If I am also wrong in that, I would still find that the conceded earned and unpaid amounts had become due and payable under the terms of the written subcontract. The position taken that, DC&F is not required to pay TMAP absent a consultant’s certificate is a commercially unreasonable interpretation of the contract. Nothing in Article 6.2 of the subcontract suggests a formal pay when paid arrangement. Moreover, DC&F did not receive and approve TMAP’s invoice until after DC&F had already terminated the contract with Finch and ceased work. Terminating the contract would seem to render certification of TMAP’s work practically impossible. In any event, based on the record before me, DC&F made no meaningful efforts to invoice Finch for TMAP’s work.

[ 88 ] DC&F’s interpretation of the subcontract in these circumstances leads to a commercial absurdity. Pursuant to Article 6.2, DC&F is not obliged to pay TMAP until 30 calendar days after the “Submission Date” or 10 calendar days after a consultant’s certificate is issued, whichever is later. Since a consultant’s certificate was not sought or obtained, and is unlikely now to be obtained, the conceded earned and unpaid amounts owing to TMAP may never be payable. The secondary payment condition tied to a consultant’s certificate was frustrated by DC&F’s termination, yet DC&F seeks to rely on it to indefinitely postpone payment to TMAP pending disposition of DC&F’s own lien action.

[ 89 ] DC&F acknowledges that the $211,787.43 claimed by TMAP is earned and unpaid under the subcontract. TMAP’s final invoice was approved on or around October 12, 2021. I find that the written contract was varied to amend the payment term for TMAP’s work to 30 days after completion, asserted by TMAP and conceded by DC&F to have been on October 4, 2021.

[ 90 ] If I am wrong in that, then since certification of TMAP’s work was not reasonably possible and DC&F did not make any effort to seek certification, I find that the condition in Article 6.2 was sufficiently frustrated to no longer be enforceable. DC&F was thereby liable to pay TMAP the undisputed earned and unpaid amount within 30 days of October 20, 2021, being the next “Submission Date” under Article 6.2 of the subcontract.

c. Finch’s Holdback Liability

[ 91 ] Since I have found that TMAP’s lien is not timely and, accordingly, is not valid, Finch has no liability to TMAP. However, I have found Senso’s lien to be valid and timely in the amount of $149,085.24. There is security in court for Senso’s lien. Pursuant to s. 44(6) of the CLA , upon the posting of that security, Finch was returned to the position as if the lien had not been preserved. Nevertheless, since the lien security stands in place of the liened premises, Finch’s liability under the CLA bears directly on the extent to which Senso may enforce its lien against that security posted into court.

[ 92 ] As noted earlier in these reasons, Finch’s liability as owner and payer is limited to the holdbacks that it was required to retain under the CLA . However, I need not determine the full extent of Finch’s holdback liability under the CLA. Rather, I need only determine whether Finch’s statutory holdback obligation is greater than the amount of Senso’s proven lien. I have no hesitation in finding on the evidence before me that Finch’s minimum statutory holdback was at least that much.

i. Is Finch’s total holdback obligation greater than the proven liens?

[ 93 ] Determining Finch’s actual holdback obligation is beyond the scope of this trial. It will require evidence and argument that can only reasonably occur at the trial in the main action dispute between DC&F and Finch. Nevertheless, rather than focusing on factual evidence relevant to the issues at this trial, Mr. Martino used his affidavit testimony to advance Finch’s positions and arguments more broadly. He also spent a great deal of time challenging DC&F’s billing practices and performance on the job. None of those were issues at this trial.

[ 94 ] The CLA creates a holdback obligation for any “payer”, which is defined in s. 1(1) as an “owner, contractor or subcontractor who is liable to pay for the services or materials supplied to an improvement under a contract or subcontract”. A payer’s holdback obligation is to retain 10% of the price of services or materials as they are actually supplied under the contract until all liens that may be claimed against the holdback have expired or been satisfied, discharged or otherwise provided for under the act: CLA, s. 22(1).

[ 95 ] Finch is a “payer” and was required to retain 10% of the price of services and materials actually supplied by DC&F. The value of those services and materials is hotly contested. Finch alleges significant deficiencies and costs of completion, which it argues are directly relevant to determining the value of DC&F’s work as of the date of termination.

[ 96 ] Pursuant to my orders dated November 30, 2022 and February 1, 2023, Finch was directed to “advise all lien claimants of its position on the precise calculation of its statutory holdback obligations, including the impact of any payments that have been made to other lien claimants on account of their liens.” In compliance with that order, on February 2, 2023, Finch’s former lawyers provided a response confirming the following information on Finch’s basic holdback obligation:

(a) as of September 29, 2021, Finch retained a total minimum statutory holdback of $954,536, which is an amount that had been determined by the lender’s cost consultant on the project, BTY Group, who Finch concedes was the de facto payment certifier;
(b) prior to October 6, 2021 (when DC&F terminated the contract), Finch had released $280,724 from the basic holdback to DC&F, leaving $673,812; and
(c) after October 6, 2021, Finch disbursed a total of $469,785.60 to various subcontractors on the project.

[ 97 ] Ultimately, Finch has the evidentiary onus of proving that its holdback obligation is less than the value of Senso’s lien: Urbacon Building Groups Corp. v. Guelph (City) at para. 48 . Although a great deal of time was spent at trial on evidence and argument about Finch’s minimum holdback obligation, three key concessions were made by David Martino during his cross-examination and by Finch during closing submissions:

(a) during cross-examination by DC&F, David Martino admitted that the value of DC&F’s work on the project was at least $4 million;
(b) Finch maintains that $280,724 from basic holdback was released to DC&F, which DC&F failed to pay to subcontractors; and
(c) during closing submissions, Mr. Martino conceded that he agreed that the sum of $204,027, which is the net holdback figure remaining after deductions as set out in the letter from Finch’s former lawyers, was Finch’s holdback obligation for the purpose of this trial.

[ 98 ] Senso, TMAP, and DC&F all point to the first concession as admitting a basic holdback liability of at least $400,000. Only Senso has proven its lien. Accordingly, the second and third concessions are sufficient for this trial. Finch has conceded a minimum holdback obligation that is greater than the value of Senso’s lien: at least $280,724 already paid out to DC&F contrary to s. 22(1) of the CLA and a further $204,027 acknowledged to remain. Even taking the last concession that Finch has a holdback obligation of $204,027 is sufficient, since that figure is greater than Senso’s proven lien.

ii. Is Finch entitled to reduce its holdback obligation or set-off against holdback for amounts paid to DC&F and other subcontractors and suppliers?

[ 99 ] Finch takes the position that, in assessing its holdback liability, I should consider the significant sums paid to DC&F and its subcontractors and suppliers from funds that were earmarked as holdback. Finch essentially argues that such payments legally reduce its holdback obligation or that it is entitled to set-off against holdback for those amounts. In total, the evidence at trial is that Finch has paid $750,509.60 to DC&F and its subtrades.

[ 100 ] Finch’s position that its payment of holdback to DC&F and its payments to other subcontractors and suppliers somehow reduces its basic holdback obligation is unsupported by any case law put before me at this trial. It also runs contrary to the statutory holdback regime under the CLA . There are several relevant provisions in the CLA that restricted Finch’s ability to use basic holdback funds, notably the following:

(a) as discussed above, s. 22(1) of the CLA requires that Finch retain an amount equal to 10% of the price of the services or materials as they are actually supplied under the contract with DC&F until all liens that may be claimed against the holdback have expired, or have been satisfied, discharged, or vacated under s. 44; and
(b) s. 28 of the CLA permits Finch to make payments directly to DC&F’s subcontractors, with such a payment being deemed a payment to DC&F, but it also provides that “no such payment reduces the amount of the holdback required to be retained under this Part or reduces the amount that must be retained in response to a written notice of lien given by a person other than the person to whom payment is made.”

[ 101 ] Basic holdback is inviolate. Payments made by an owner directly to subcontractors cannot be set-off against it. In paying out basic holdback, an owner cannot prefer one claimant over another. That is contrary to the scheme of the CLA : Urbacon Building Groups Corp. v. Guelph (City) , supra at para. 31 . Accordingly, basic holdback obligations cannot be reduced by assertions of deficiencies, completion costs, delay claims, or by payments made directly from the owner to one or more subcontractors, except in compliance with s. 25 (which provides for payment of holdback where a subcontract has been certified as complete): Wellington Plumbing & Heating Ltd. v. Villa Nicolini Incorporated, 2012 ONSC 5444 at para. 65 .

[ 102 ] When Finch made payments to DC&F and other suppliers and subtrades, Senso’s lien rights had not yet expired or Senso had a preserved lien. Finch could not release basic holdback prior to the expiry of all liens or until all liens had been satisfied, discharged, or vacated. An owner who releases the basic holdback, in whole or in part, before the time limit for preserving a lien has expired or in the face of an existing lien is still liable to a successful subcontractor lien claimant for the basic holdback. In that circumstance, the owner must pay the same amount twice: first to the contractor (or to whomever the funds were paid) and a second time to the successful lien claimant: King Road Paving and Landscaping Inc. v. Plati, 2017 ONSC 6319 at paras. 22-23 .

[ 103 ] There is no evidence before me of any subcontract being certified as complete under the CLA. The evidentiary record supports that there were no such certifications. It follows that Finch was not able to use holdback funds to pay DC&F and other subcontractors without jeopardy of potentially paying twice. I am unconvinced that the payments to DC&F or other subcontractors have any bearing on Finch’s basic holdback obligation vis-à-vis Senso. To the extent that it seeks to reduce its basic holdback obligation in reliance on its preferential payment to DC&F itself and to other subcontractors, that is contrary to established case law.

[ 104 ] Finch has not met its onus of demonstrating, on a balance of probabilities, that its basic holdback obligation was less than the value of Senso’s proven lien. I am satisfied that Finch’s holdback liability was at least that amount.

iii. Are proven liens payable from the security posted in court, in whole or in part?

[ 105 ] In their written closing submissions, both Senso and DC&F seek an order that Finch pay Senso’s clam from holdback. Senso is not entitled to any direct judgment against Finch by operation of s. 44(6) of the CLA. That subsection provides that the lien becomes a charge against security posted into court to vacate it, and the owner is thereafter in the same position as if the lien had not been preserved or written notice of lien had not been given. Accordingly, Senso’s lien is now a charge against the security in court. There is no basis for a personal judgment to issue against Finch for holdback liability.

[ 106 ] As set out by the Divisional Court in Basic Drywall Inc. v. 1539304 Ontario Inc., at para. 21, when a lender or other person posts security to vacate a lien, the security is simply a substitute for the land. Posting security cannot enlarge the rights of a lien claimant. In this case, the security posted by Kaleido is only chargeable by Senso’s lien for that portion of the lien that Finch was required to hold back. Finch’s holdback obligation is thereby only relevant insofar as Senso is entitled to recover from the security in court. However, since Senso’s proven lien is less than Finch’s minimum holdback obligation, the lien is fully recoverable against the security.

IV. Conclusion

[ 107 ] For the foregoing reasons, I find and declare as follows:

(a) Senso has a valid and timely lien in the amount of $149,085.24;
(b) TMAP’s lien has expired, is hereby discharged, and the security previously posted into court for that lien shall be paid out;
(c) Finch’s minimum holdback obligation exceeds the proven amount of Senso’s lien, such that Senso’s lien may be enforced against the security previously posted into court as security for Senso’s lien, if not otherwise paid;
(d) Senso shall have judgment for breach of contract against DC&F in the amount of $152,167.13, plus pre-judgment interest;
(e) TMAP shall have judgment for breach of contract against DC&F in the amount of $211,787.43, plus pre-judgment interest; and
(f) the crossclaims by DC&F and Finch against one another shall be tried with DC&F’s claim and Finch’s counterclaim in DC&F’s lien action.

V. Costs, INTEREST & INTERIM REPORT

[ 108 ] The parties should make earnest efforts to resolve costs of these two actions themselves, as well as calculating pre-judgment interest on the judgment amounts. If they cannot, then written submissions shall be exchanged and filed. Submissions shall not exceed six (6) pages, excluding any attachments such as offers to settle, case law, and any documents required to support each party’s cost claims/positions. If calculation of pre-judgment interest has not been agreed, then the parties shall also include their position on proper calculation of interest, including the interest rate sought, the trial evidence supporting such an interest rate, and a per diem rate that may be applied to the date of my report.

[ 109 ] Senso and TMAP shall serve their respective costs and interest submissions by July 9, 2025. DC&F shall serve its responding submissions by July 23, 2025. Finch shall serve its responding submissions by August 6, 2025. If either defendant seeks costs against the other or against the plaintiffs, then brief reply submissions not exceeding two (2) pages may be served by August 13, 2025. There shall otherwise be no reply without leave. Any party seeking costs shall identify the amount and scale of costs claimed and against which parties the costs are sought. All written submissions shall be submitted by email to my Assistant Trial Coordinator (ATC), Christine Meditskos, with proof of service.

[ 110 ] Both the CLA and the Rules of Civil Procedure, RRO 1990, Reg 194 require that the results of this trial be embodied in a report. I encourage the parties to discuss an appropriate form of draft interim report, using language from the prescribed form. If an agreement is reached, then it shall be filed with my ATC, in Word format, by the deadline for reply costs submissions. If the parties cannot agree on a form of report, then my ATC should be so advised, and each side shall submit the version of the report that they propose. I will then settle the form of report following my decision on costs or convene a hearing or submissions on settling the report.

ASSOCIATE JUSTICE TODD ROBINSON
Released: June 17, 2025

COURT FILE NOS.: CV-21-672215 & CV-21-674170
DATE: 2025 06 17

ONTARIO SUPERIOR COURT OF JUSTICE
IN THE MATTER OF the Construction Act , RSO 1990, c. C.30, as amended

BETWEEN:
SENSO GROUP BUILDING SUPPLIES INC.
Plaintiff

• and -

57-63 FINCH DEVELOPMENTS INC., DC&F CORP., ROMSPEN INVESTMENT CORPORATION and WESTMOUNT GUARANTEE SERVICES INC.
Defendants

AND BETWEEN:
TMAP HOME SOLUTIONS PLUS INC.
Plaintiff

• and -

57-63 FINCH DEVELOPMENTS INC., DC&F CORP., ROMSPEN INVESTMENT CORPORATION and WESTMOUNT GUARANTEE SERVICES INC.
Defendants

REASONS FOR JUDGMENT
Associate Justice Todd Robinson

Released: June 17, 2025