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Trillium v Marydel: can an old debt be included in a construction contract price?

July 2025

Citation: Trillium v Marydel, 2025 ONSC 4194

Overview

In Trillium Masonry Group Inc. v Marydel Homes (Beaverton) Inc. and Vito Montesano, 2025 ONSC 4194 (“Trillium v Marydel”), the court was asked to decide what can be included in the Construction Act’s definition of “price”.

Background

Trillium agreed to supply masonry services to Marydel with respect to 43 lots for a residential development project (“First Contract”). A dispute arose and Trillium claimed it was owed $193,000 for the work provided (“Debt”). Marydel did not pay, and Trillium did not lien. The time to lien for amounts unpaid under the First Contract expired.

Later, Trillium and Marydel executed a second contract (“Second Contract”) for masonry services with respect to a lot not included in the First Contract. The Second Contract included a provision that made the Debt under the First Contract part of the contract price of the Second Contract, along with the per brick unit price.

A further dispute arose, and Trillium registered a lien for $228,000 which included the Debt under the First Contract and the per brick price of services rendered under the Second Contract.

Marydel vacated the lien and then brought a motion to discharge the lien or, alternatively, reduce the security posted to vacate the lien.

The decision

The Court distilled the dispute down to a simple question:

does the Construction Act prohibit a lien claimant from registering a lien for the full amount of the agreed-upon “price” for a lienable service where the “price” includes an outstanding debt that is no longer lienable?

Section 1 of the Construction Act defines “price” as the contract price agreed between the parties, or where there is no specific agreed-upon price, the actual value of services or materials supplied.[1]

Price is determined by the stipulated price in a contract. Moving to subsection (a)(ii) to determine the value of the work supplied is only necessary if there is no agreement with respect to the price.

Here, there was an explicit agreement about the price of the Second Contract. It included the Debt under the First Contract and the price per brick supplied under the Second Contract. The Court held that there is nothing in the Construction Act that prohibits parties to a contract from agreeing to a price that includes an old debt.

The fact that the price of the Second Contract was broken down (i.e. the old Debt and the price per brick) was of no consequence. The Court surmised, hypothetically, that if the parties were to agree that the price for the work supplied under the Second Contract was $228,000, without any breakdown between the old Debt and the new price per brick, the Parties would be free to do so, and the supplier could lien for the full price despite the fact that the agreed-upon price is exorbitantly higher than the per brick price.

Marydel cited three policy concerns to attempt to illustrate the danger of the Court’s interpretation of the definition of “price”.

• First, a party could secure any debt with a lien, regardless of the nature and extent of the debt.
• Second, an agreement could be used to circumvent s. 48 of the Construction Act which makes a discharge of a lien irrevocable and unrevivable.
• Third, that other lien claimants could be prejudiced if one contractor includes an old debt in its contract price, thereby increasing the share of holdback funds available despite supplying minimal work.

The Court acknowledged that there may be some merit to Marydel’s policy concerns but held that they are largely speculative and “premised on the unlikely event that an owner or general contractor would contract with a person to effectively revive expired or discharged liens.”[2]

The Court refused to interfere with the parties’ freedom to contract and dismissed Marydel’s motion.

Analysis and takeaways

If not already clear, reading your contracts is critical. The inclusion of old debts as part of the price for a new contract, whether explicitly or implicitly, is a real risk to contracting parties. All parties in the construction pyramid should ensure they have reviewed and understand their contracts.

In the rare situation where two parties enter into a contract and one has a debt outstanding, the scheme in Trillium may be a creative way to secure the old debt without offending the Construction Act. This could be a useful tool for parties with an ongoing commercial relationship to defer or resolve a non-payment issue while maintaining a working relationship.

It should be noted that while the Court dismissed the motion, this is not the end of the road for Marydel. At trial it may be able to prove that it did not agree to the price provision in the Second Contract (as was alleged in the affidavit evidence proffered by Marydel’s affiant), but the motion judge did not have the enhanced powers necessary to engage a credibility analysis on this motion and thereby discharge the lien or reduce the security posted.

Beale & Co is excited to have opened a new office in Toronto, supporting our Canadian and international clients with their construction and infrastructure project needs. Our team has experience in both Ontario and BC and can assist you in navigating the coming changes to the Ontario Construction Act. Should you have any questions about this article or require advice on how best to tailor your contract for your commercial and construction needs, please contact Dylan Dilks.

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[1] Construction Act, s. 1(1) “price”

[2] Notably, that is precisely what happened in this case.

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