Executive Summary: Key Legal and Evidentiary Issues

• Validity and scope of Thermo Coustics’ construction lien against both the registered owner and the tenant under the Ontario Construction Act
• Quantum of unpaid amounts on the original asbestos abatement quote and additional work, proven largely through uncontested viva voce evidence and deemed admissions
• Effect of deemed admissions arising from the defendants’ failure to respond to a Request to Admit, and their unsuccessful attempt to withdraw those admissions
• Characterization of additional asbestos removal as extra work authorized by both defendants and recoverable as part of the construction price
• Enforceability of a high contractual interest rate printed on invoices without proof of agreement, and the resulting application of statutory prejudgment interest instead
• Determination of “owner” status under the Construction Act for both landlord and tenant, including whether the landlord’s involvement and benefit support lien liability

Background and facts of the dispute
Thermo Coustics Limited (“Thermo”) is an asbestos abatement contractor that performed work on a commercial building located at 174 Main Street East in North Bay, Ontario (the “Pareja property”). The property was owned at all material times by Walter Pareja (“Walter”), who leased it to Resilience Lifestyle Inc. (“Resilience”), a corporation whose sole shareholder is Walter’s daughter, Paola Pareja-Garcia (“Paola”). Thermo claimed it was not fully paid for asbestos abatement work carried out on the premises and sought relief under the Ontario Construction Act.
The work arose after a Designated Substances Survey (“DSS”) report was prepared on March 13, 2020, by Risk Check Inc. The DSS identified asbestos-containing materials (“ACMs”) that were observable and accessible at the time of the inspection, and it also warned that ACMs might be present in areas that were inaccessible or could not be sampled during the site visit. Thermo alleged that, in or about July 2020, it was retained based on a quote of $41,000 plus HST provided to Resilience to remove the observable/accessible ACMs identified in the DSS. There was no formal written contract; the parties proceeded on the basis of this quote.
Thermo rendered an invoice on September 21, 2020 (Invoice #16287) in the amount of $27,798.00, inclusive of HST, for the asbestos abatement work associated with the original quote. A portion of that invoice was paid, but Thermo maintained that a balance of $5,330 remained outstanding. While the pleadings did not clearly explain how this invoiced amount related mathematically to the original $41,000 quote, Thermo’s position was that only this $5,330 remained unpaid on the quoted work.

Additional asbestos discovered and extra work performed
As Thermo carried out the initial work, additional ACMs were discovered in parts of the building not identified in the DSS, consistent with the DSS’s caution about inaccessible areas. Thermo asserted that both Walter (the owner) and Paola (on behalf of Resilience) instructed it to proceed with additional asbestos removal even though the exact cost of this extra work could not be provided in advance. Thermo said it completed this extra abatement work and issued a further invoice on or about November 6, 2020 (Invoice #16440) in the amount of $15,023.35. Thermo alleged that this second invoice was never paid.
On November 23, 2020, Thermo registered a construction lien against the Pareja property to secure payment for the unpaid amounts. Combining the balance claimed on the first invoice and the full amount of the second invoice, Thermo alleged a total principal outstanding of $20,353.35. In addition, Thermo claimed contractual interest at a rate of 2% per month (24% per annum), as set out on the face of its invoices, eventually asserting more than $38,000 in interest alone by the time of trial.

Procedural history and earlier decisions
The litigation experienced significant delay and procedural complexity. The matter was first set for trial on September 8, 2024, when both defendants were represented by counsel. On August 14, 2024, Thermo’s counsel, Mr. Thomas Davis, served the defendants’ counsel with a detailed Request to Admit (“RTA”). The defendants never responded to this August 14 RTA, which later gave rise to deemed admissions under Rule 51 of the Rules of Civil Procedure. Although no summary judgment motion was brought ahead of the 2024 trial date, the case did not proceed on that date and was adjourned.
The trial was rescheduled for May 26, 2025. Shortly before that date, on May 2, 2025, Mr. Davis served a second, more focused RTA on the defendants. This second RTA overlapped to some extent with the first and concentrated on the total amount claimed ($20,353.35 plus interest) and the validity of the construction lien. By that time, the defendants were no longer represented by counsel. Paola, as sole shareholder, was permitted to represent Resilience; Walter appeared self-represented.
Thermo then brought a motion under Rule 51.06 for summary judgment based on deemed admissions arising from the defendants’ failure to respond to the August 14, 2024 RTA, supplementing those admissions with viva voce evidence from Thermo’s president, Thompson Kline. The defendants insisted they had not known about the August 14 RTA and claimed that their former lawyer had responded to the May 2, 2025 RTA on May 21, 2025, one day before the 20-day response window expired. Thermo’s counsel had no record of receiving that alleged May 21 response, but he elected, for the purpose of the motion, to rely solely on the August RTA deemed admissions and not on any deemed admissions from the May RTA.
At the May 26, 2025 hearing, the trial judge (Ellies J.) reserved on the summary judgment motion and subsequently released reasons on May 27, 2025 (Thermo Coustics Limited v. Pareja, 2025 ONSC 3151). In that earlier decision, the judge granted the defendants leave to bring a motion under Rule 51.05 to withdraw the deemed admissions arising from the August RTA, cautioning that it would likely be necessary to obtain evidence from their former lawyer. The judge also indicated that if the defendants’ motion to withdraw admissions ultimately failed, he would then return to decide Thermo’s outstanding summary judgment motion.
The defendants’ motion to withdraw the deemed admissions was heard on December 12, 2025 by Regional Senior Justice W.D. Newton. For reasons released on January 26, 2026 (Thermo v. Pareja et al., 2026 ONSC 508), Newton R.S.J. dismissed the motion. A central failing was that the defendants chose not to obtain evidence from their former lawyer, relying instead on “information and belief” evidence from another individual, which the court found insufficient to justify withdrawal of the admissions. With the deemed admissions remaining in place, Ellies J. then proceeded to decide Thermo’s summary judgment motion, culminating in the April 21, 2026 decision.

Key evidentiary findings on the unpaid invoices
On the question of the amount still owing under the original quote, the court noted that Thermo alleged that Invoice #16287, dated September 21, 2020, reflected the asbestos abatement work tied to the quote and that a payment had been made, leaving a balance of $5,330 outstanding. While the defendants had denied owing any money in their statement of defence, they did not seriously challenge the breakdown of that invoice during cross-examination. Mr. Kline testified about the work performed, the issuance of the invoice, and the payment history, explaining that the remaining balance of $5,330 was unpaid. Cross-examination focused mainly on the interest Thermo claimed to be charging, not on the quantum of the principal outstanding. The judge accepted Mr. Kline’s uncontested evidence and found that $5,330 remained owing on the original abatement invoice.
For the extra work, Thermo alleged that Invoice #16440, dated around November 6, 2020, for $15,023.35, represented the additional asbestos abatement not covered by the original quote. Again, while the defendants pleaded that they owed nothing, they did not meaningfully dispute in evidence that this invoice represented the value of extra work performed. Mr. Kline testified that the invoice was issued “for … the extra abatement work” and that it remained unpaid, and this evidence went essentially unchallenged on cross-examination, which again focused on entitlement rather than quantum. The court accepted this and found that Thermo was owed $15,023.35 for the additional work.

Effect of the deemed admissions on entitlement to payment
The August 14, 2024 RTA, to which the defendants never responded, was crucial to the court’s analysis on whether Thermo was entitled to charge for the extra work. By operation of the Rules, the defendants were deemed to admit a series of key factual propositions. Among other things, they were taken to have admitted that the DSS had expressly stated that ACMs might be present in inaccessible areas; that only observable/accessible ACMs were included in the DSS; that the $41,000 quote was based on those observable/accessible ACMs; and that Thermo had been instructed to proceed with additional work even though the extra costs could not be provided at the time. They were also deemed to admit that they agreed to pay the cost of the additional work and never instructed Thermo to stop, but instead encouraged completion of the extra abatement.
In light of these deemed admissions, the court concluded that Thermo was contractually entitled to charge for the additional asbestos abatement. The work had been expressly authorized; the defendants understood that additional costs would be incurred beyond the original quote; and there was no evidence that they ever withdrew their authorization or objected to Thermo continuing the work.

Interest claim and rejection of the contractual rate
A significant aspect of Thermo’s claim concerned prejudgment interest. On each invoice, Thermo had printed a term stating: “Due upon receipt, 2% per month, 24% per annum on overdue accounts.” Thermo treated this as a binding interest clause and prepared an account statement calculating interest at 2% per month, compounded monthly, on the combined principal of $20,353.35 up to April 30, 2025. By that calculation, interest alone was approximately $38,397.56, producing a total claim of roughly $58,751.04 for principal plus interest by the time of trial.
The court rejected Thermo’s claim to contractual interest at 2% per month. The judge held that there was no evidence of any agreement—express or implied—between Thermo and the defendants to pay interest at that rate. Merely printing an interest clause on invoices, without evidence that the customer agreed to it, does not suffice to impose a binding interest obligation. The court referred to prior authorities confirming that suppliers cannot unilaterally impose interest simply by including a term on their invoices; some form of agreement is required, even if implied through consistent dealings. In this case, the work had been authorized based on a quote from July 2020, and that quote contained no reference to any interest rate.
Because Thermo had not proven an agreement on interest, the court concluded that it could not recover interest at 2% per month. Instead, the Construction Act governed. Section 6.9 of the Act provides that interest on unpaid amounts accrues at the prejudgment interest rate determined under section 127(2) of the Courts of Justice Act, unless the contract or subcontract specifies a different interest rate for that purpose, in which case the greater of the two applies. Here, in the absence of a proven contractual rate, Thermo was limited to the statutory prejudgment interest rate under the Courts of Justice Act. The judge also noted that, even on Thermo’s own wording (24% per annum), the manner in which it compounded interest at 2% per month actually produced an effective annual rate of 26.82%, exceeding the stated 24% per annum.

Owner status and lien rights under the Construction Act
Thermo sought a declaration that the lien it had registered against the Pareja property was valid and enforceable. This required determining whether the parties who benefited from the work—Walter and Resilience—fell within the statutory definition of “owner” in the Construction Act and whether Thermo’s services constituted an “improvement” to the property.
Section 14(1) of the Act provides that a person who supplies services or materials to an improvement for an owner, contractor, or subcontractor has a lien upon the interest of the owner in the premises for the price of those services or materials. Section 14(2) clarifies that no lien arises for interest itself, although a separate right to interest may exist independently. The Act defines “owner” broadly as any person having an interest in the premises at whose request, and upon whose credit, or on whose behalf, or with whose privity or consent, or for whose direct benefit an improvement is made. Case law confirms that multiple persons can simultaneously qualify as owners for lien purposes and that a variety of interests—legal title, leasehold rights, and other estates—can satisfy the “interest in the premises” requirement.
In this case, it was straightforward that Walter, as registered owner, had an interest in the premises and that Resilience, as tenant under a five-year lease, had a leasehold interest capable of supporting a lien. The more nuanced question was whether Walter, as landlord, met the additional prerequisites: that the improvement was made at his request, on his credit or behalf or with his consent, and for his direct benefit. The deemed admissions from the August 14 RTA were again decisive.
By virtue of those deemed admissions, the defendants acknowledged that both Paola and Walter met with Thermo at the site and that Walter advised he would oversee the renovations along with another individual; that both defendants instructed Thermo to commence work; that they met with Thermo and Risk Check Inc. to discuss the additional ACMs; that they authorized Thermo to proceed with the extra work and agreed to pay the additional costs; and that all of Thermo’s work constituted an improvement to the property and benefited both defendants. The admission that Thermo removed ACMs from the building was sufficient, in the court’s view, to treat the work as a “partial demolition” within the statutory definition of “improvement,” which expressly includes complete or partial demolition or removal of any building, structure, or works on the land.
Taking these admissions and the surrounding circumstances together, the court held that both Walter and Resilience met the statutory definition of “owner.” Walter’s legal ownership and direct involvement in authorizing and overseeing the work, coupled with the obvious benefit of asbestos removal to his property, satisfied the requirements. Resilience’s leasehold interest and role in requesting and benefiting from the work also brought it squarely within the definition. As a result, Thermo’s lien attached to the interests of both defendants in the Pareja property.

Final disposition, outcome, and monetary relief
Having accepted Thermo’s evidence on the unpaid invoices and applied the deemed admissions to resolve the entitlement and lien issues, the court granted Thermo’s motion for summary judgment in part. It concluded that the defendants owed Thermo a total principal amount of $20,353.35, composed of $5,330 outstanding on the original asbestos abatement invoice and $15,023.35 for the additional abatement work. The court declared Thermo’s construction lien valid, provided that only this principal amount was stated in the registered lien.
However, Thermo did not succeed on its claim to interest at 2% per month. The judge held that Thermo had failed to prove any agreement on that contractual interest rate and therefore was entitled only to statutory prejudgment interest under the Construction Act and Courts of Justice Act framework. Prejudgment interest was awarded at the Courts of Justice Act prejudgment interest rate, calculated from the day after each invoice was delivered, but the exact dollar amount of this interest was not quantified in the reasons.
On costs, the court observed that while Thermo’s counsel had provided a costs outline, the judge had not yet invited submissions from either side. In the April 21, 2026 reasons, the court therefore directed that Thermo could file written submissions of up to five pages on costs within ten days, and the defendants could file their submissions within twenty days, after which the court would determine costs. As of this decision, no costs figure had yet been fixed.
Overall, Thermo Coustics Limited emerged as the successful party. It obtained judgment against both Walter Pareja and Resilience Lifestyle Inc. for the full principal sum of $20,353.35, together with prejudgment interest at the Courts of Justice Act rate from the day after each invoice was issued. The total monetary award, including interest, is not precisely stated in the decision, and the amount of costs to be awarded remains undetermined pending further submissions.