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ARTICLE · 14 APRIL 2023

Competing Claims For Construction Holdback – Whose Money Is It, Anyway?

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In a recent decision of Fregeau J. of the Ontario Superior Court of Justice in Northwest Angle 33 First Nation v Razar Constructing Services Ltd. , the court reviewed the applicability of the Construction Act trust provisions.

CanadaReal Estate and Construction
Geza Banfai
Geza Banfai
Jason Annibale
Jason Annibale
Donia Hashem
Donia Hashem
Anthony Labib
Anthony Labib
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In a recent decision of Fregeau J. of the Ontario Superior Court of Justice in Northwest Angle 33 First Nation v Razar Constructing Services Ltd. 1 , the court reviewed the applicability of the Construction Act trust provisions to a dispute over holdback amounts in connection with a project on federal lands, as well as a claim by the Canada Revenue Agency to a priority over same. 2

The decision illustrates the importance of a careful analysis of the applicable contract provisions and the law in determining entitlements that, at first blush, may appear uncontroversial.

FACTS

Northwest Angle 33 First Nation contracted with Razar Contracting Services Ltd. in February 2020 for the construction of a water system for its residents. The First Nation and Razar agreed that the First Nation was entitled to retain a holdback of 10% for the benefit of subcontractors and suppliers to Razar plus an additional maintenance holdback of 3% from progress payments otherwise

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The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

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