Raytech Electrical Systems Ltd. v. Maritech Construction Inc.

Raytech Electrical Systems Ltd. v. Maritech Construction Inc.

Section 44B creates a statutory trust independent of lien registration; Raytech proved the trust elements for the Cumberland Health Authority project and Maritech admitted receipt and misappropriation of funds, so Maritech breached the statutory trust and the Farrows, as directing minds, are jointly and severally...

Source-derived case information.

Citation
2025 NSSC 213
Parties
Applicant: Raytech Electrical Systems Ltd.; Respondent: Maritech Construction Inc.; Respondent: Brian Harold Farrow; Respondent: Phillip Brian Farrow
Court
Supreme Court of Nova Scotia
Jurisdiction
Canada
Judgment Date
24 June 2025
Procedural Posture
Application in Court Under the Builders' Lien Act (breach of Statutory Trust) / Decision (trial Court)
Outcome
Application granted in part. Judgment for applicant against respondents jointly and severally for breach of trust in the amount of $59,210.37; claim relating to Scotia Hyundai dismissed; punitive damages denied.
Legal Topics
Builders' Lien Act, Statutory Trust, Breach of Trust, Directors' Liability, Lien Registration
Source Language
english
Construction Law Trusts Corporate Law Civil Procedure Builders' Lien Act Statutory Trust Breach of Trust Directors' Liability +1 more

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Parties

Raytech Electrical Systems Ltd.

Applicant

Maritech Construction Inc.

Respondent

Brian Harold Farrow

Respondent

Phillip Brian Farrow

Respondent

Procedural Posture

Application in Court Under the Builders' Lien Act (breach of Statutory Trust) / Decision (trial Court)

Legal Issues

  1. 1 Whether a subcontractor must register and perfect a builders' lien before invoking the statutory trust under the Builders' Lien Act
  2. 2 Whether the contractor breached the statutory trust in respect of amounts received for the Cumberland Health Authority project
  3. 3 Whether Raytech proved a trust in respect of the Scotia Hyundai project

Ratio Decidendi

Section 44B creates a statutory trust independent of lien registration; Raytech proved the trust elements for the Cumberland Health Authority project and Maritech admitted receipt and misappropriation of funds, so Maritech breached the statutory trust and the Farrows, as directing minds, are jointly and severally liable under s.44G for $59,210.37; Raytech failed to prove the trust for the Scotia Hyundai project and that claim is dismissed.

Court Disposition

Application granted in part. Judgment for applicant against respondents jointly and severally for breach of trust in the amount of $59,210.37; claim relating to Scotia Hyundai dismissed; punitive damages denied.

Orders

  • Judgment for Raytech Electrical Systems Ltd. against Maritech Construction Inc., Brian Harold Farrow and Phillip Brian Farrow, jointly and severally, in the amount of $59,210.37 for breach of trust under s.44B of the Builders' Lien Act.
  • Raytech's claims in relation to the Scotia Hyundai project dismissed for failure to establish the statutory trust.