Executive Summary: Key Legal and Evidentiary Issues

• Dispute over whether payment under the fixed-price construction contract was conditional on the defendants obtaining project financing
• Credibility contest between the contractor’s detailed evidence of work completed and the owners’ lay estimate alleging overstatement of invoices
• Determination of the proper percentage of completion and whether the invoiced amounts accurately reflected work done and agreed extras
• Interpretation and application of the Construction Act timelines for registering a construction lien in the context of an allegedly abandoned project
• Fact-driven assessment of when the project was truly “abandoned,” based on site demobilization, remaining equipment, and ongoing payment discussions
• Enforcement of contractual interest on overdue invoices and calculation of the total monetary amount owing to the contractor

Factual background and the construction project

The dispute arises from a heritage building restoration project involving an old stone church located at 761 William Campbell Road in Montague, Ontario. The plaintiff, Modern Hieroglyphics Inc. operating as MH Stoneworks, is a masonry and heritage restoration contractor engaged to carry out significant exterior stonework and related construction. The defendants, Matthew Timothy Rippeyoung and Samuel Karl McEwen, owned the property and entered into a contract with MH Stoneworks for the restoration work. The parties executed a CCDC-2 stipulated price contract on January 9, 2022, providing for heritage stonework restoration at a fixed price of $215,000 plus HST, with additional work to be charged on a time-and-materials basis, bringing the total contract value with extras to $258,685.25. The scope of work included repointing and rebuilding all exterior walls above and below grade, excavating and repointing below-grade stone walls, excavation and backfill around the exterior, demolition of the front portico entrance, removal of the chimney down to grade, and all setup and heating required to perform this work. A mid-winter start date meant the work areas had to be tarped and heated, adding logistical complexity and cost.

Performance of the work and invoicing history

Work commenced on January 18, 2022. Between February and May 30, 2022, MH Stoneworks issued three invoices totaling $179,856.45, with specified due dates in March, April, and June 2022. Despite these clear payment terms, the defendants failed to pay the invoices within the stipulated times, making only partial payments totaling $3,100 up to August 2, 2022. During this period, MH Stoneworks continued to perform work from January through April 2022 while simultaneously following up for payment and waiting for the defendants’ anticipated financing to materialize. Ultimately, as non-payment persisted, the plaintiff registered a claim for lien on October 13, 2022, in the amount of $176,756.45. In November 2022, the defendants made an additional payment of $34,000, leaving a balance of $142,756.45 outstanding. Under the contract, interest was also payable on outstanding amounts, and the plaintiff claimed that interest as part of its recovery.

Alleged forbearance and financing condition on payment

A central legal issue was whether there was any agreement, outside the written contract, that payment would be deferred or made conditional on the defendants obtaining financing. The defendants suggested that payment obligations were effectively tied to their ability to secure financing for the project. The court rejected this position. The written contract contained an integration clause (Article A-2, 2.1), providing that the contract superseded all prior negotiations, representations, or agreements, whether written or oral, relating to the work, thereby limiting the scope for any collateral financing condition. The documentary record, including email exchanges, showed the defendants attempting to restructure their financing and explore options to meet their payment obligations, but nothing in the correspondence established that payment was contingent upon financing. In fact, the communications tended to confirm that the defendants recognized the debt and were trying to figure out how to pay it, rather than disputing liability pending financing approval. In his testimony, defendant Mr. Rippeyoung ultimately acknowledged that payment was not conditional on financing. On this evidentiary basis, the court concluded there was no forbearance agreement and no condition precedent tying payment to the success of the defendants’ financing arrangements.

Dispute over the accuracy of the invoices and percentage of completion

Another key issue was whether the plaintiff’s invoices overstated the value of the work performed. Before litigation, there had been no real dispute on the amounts billed; discussions focused on how and when the defendants could make payment, not on the quantum owed. Once the case reached court, the only significant challenge to the invoiced amounts came from Mr. Rippeyoung, who argued that only about 49% of the project had been completed, contrasting with the approximately 70% completion reflected in the contractor’s invoices. The court closely examined the parties’ respective expertise and the nature of the evidence. Mr. Rippeyoung candidly acknowledged that he had no construction expertise. His estimate of completion was not supported by technical documentation or professional assessment. By contrast, David Watson, the owner of MH Stoneworks, had decades of construction experience and gave detailed evidence of the work performed. His evidence was supported by photographs and itemized invoices outlining specific tasks and percentages of completion for various components of the project. The judge found no reason to doubt the reliability of Watson’s evidence or the accuracy of the invoices. On a balance of probabilities, the court accepted the plaintiff’s evidence on the work performed and the amounts claimed were found to be properly supported by the documentary and testimonial record. Accordingly, MH Stoneworks was held entitled to the invoiced sums and to contractual interest on the outstanding balances.

Construction lien timing and the concept of abandonment

The third major issue involved the validity of the claim for lien under Ontario’s Construction Act, specifically whether the lien had been registered within the statutory time limits. Section 31 of the Act sets out expiry rules for liens, including the timelines for contractors’ liens relative to substantial performance, completion, abandonment, or termination. There was no evidence that the contract had been substantially performed, completed, or formally terminated, and no certificate or declaration of substantial performance was published. Consequently, the focus shifted to whether and when the contract was “abandoned” for the purposes of the lien expiry period. The lien had been registered on October 13, 2022. The plaintiff argued that the earliest date of abandonment was August 18, 2022, which would make the registration fall within the 60-day window following abandonment. The defendants contended that the project had been abandoned as early as April 2022, placing the lien registration outside the statutory period. The court adopted the definition of abandonment from earlier case law, describing it as a cessation of all work coupled with an intention not to complete the contract, or a cessation that is permanent in the sense that the project is no longer intended to be carried to completion. Applying this test, the judge concluded that abandonment occurred on August 18, 2022. Several factual elements underpinned that conclusion. First, as of April 2022, approximately 70% of the work had been completed, and although work then stopped due to payment and financing problems, completion remained a realistic possibility. The court accepted that, had financing been obtained, the work would likely have resumed. Second, equipment and materials remained on site through May, June, and July, and the site was not fully demobilized. The judge accepted David Watson’s explanation that leaving equipment in place facilitated resuming work; the gradual demobilization supported the view that any pause was not yet a permanent abandonment. Third, the parties continued to meet between June and August to negotiate payment for work already done and to discuss future plans for the building. An email from MH Stoneworks dated June 30, 2022, thanked the defendants for an e-transfer and proposed a call to discuss payment on the current bill and the owners’ altered building plans, signaling that both sides still contemplated some continuation or resolution of the contract rather than a final termination. Finally, an email dated August 18, 2022, stated that the crew would come the next morning to demobilize the exterior of the site and that David Watson would attend later to finalize demobilization and disconnect external power from inside the house. The judge regarded this final demobilization and power disconnection as the decisive step marking permanent discontinuation of the project and thus the date of abandonment. Counting 60 days from August 18, 2022, the October 13, 2022 lien registration fell within the statutory period. The lien was therefore held to have been preserved in time and remained valid.

Interest, total amount owing, and overall outcome

Having found that there was no financing condition attached to payment, that the invoiced amounts accurately reflected the work performed, and that the construction lien was validly registered, the court turned to the calculation of the total amount owing. The contract expressly provided for interest on outstanding invoices, and the plaintiff adduced a calculation of the interest accrued up to the time of trial. The judge accepted this calculation as accurate. The total interest charged came to $57,401.80, and when this was added to the unpaid principal balance, the court determined that the total amount owing to the plaintiff was $200,158.25. On the question of costs, the court did not fix a specific sum in this decision. Instead, it directed a short written costs procedure, inviting the plaintiff to file brief written submissions within 15 days, the defendants to respond within 7 days thereafter, and the plaintiff to reply within a further 5 days. The judge indicated that if no submissions were filed, he would presume the issue resolved and would not order costs. Overall, the judgment represents a clear win for the contractor. The court found that Modern Hieroglyphics Inc. o/a MH Stoneworks had properly established its claim, including the validity of its lien and entitlement to contractual interest, and accordingly ordered that the defendants pay a total of $200,158.25 in favour of the successful party, with any additional amount for costs still to be determined, or not ordered, depending on subsequent written submissions.