What Is The Role Of Owners and Contractors In The Application Of Trust Funds?

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Construction Law - Construction Liens - Trust Fund Provisions

The Ontario Court of Appeal has recently considered some interesting issues relating to the trust fund provisions of the Construction Lien Act of Ontario. In Colautti Construction Ltd. v. Ashcroft Development Inc., the Court provided some useful guidance about the roles of owners and contractors in the application of trust funds. The Court also held that those provisions cannot be enforced by the owner, but only by the subcontractors or suppliers for whose benefit the provisions were enacted.

This decision is a welcome clarification of the trust fund provisions. Those provisions are some of the most important parts of the Construction Lien Act. They provide very substantial protection for contractors, subcontractors and suppliers.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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