Ottawa Construction News staff writer
An Ontario Superior Court judge has granted summary judgment against an Ottawa construction contractor and its directors for unpaid material invoices, while ruling that building suppliers cannot unilaterally reallocate customer payments contrary to project remittance directions.
In Morin Bros. Building Supplies Inc. v. Bond Group Ottawa 2018 Inc., decided Oct. 1, 2025, Justice Owen Rees held contractor Bond Group Ottawa 2018 Inc. liable for breach of contract and statutory trust obligations under Ontario’s Construction Act, while holding company directors Maria Marcantonio and Antonio (Tony) Marcantonio personally liable.
In a legal commentary analyzing the decision, WeirFoulds LLP construction law partner Max Gennis and co-author/summer student Christina Schirripa noted the ruling serves as a “cautionary tale” for the construction industry, emphasizing that handling trust funds requires strict accounting and dedicated bank accounts.
The dispute arose after Morin Supply provided specialty building materials to Bond Group for several Ottawa developments, including the Wateridge Flats and Witherspoon Building projects. Morin Supply sought $132,043.97 in unpaid principal, claiming a total of $254,393.30 including interest under a credit agreement executed in January 2019.
When Bond Group made full and partial payments on invoices for the Wateridge and Witherspoon projects, it included remittance slips explicitly directing how the funds should be allocated. Morin Supply disregarded those directions and reallocated the money to older outstanding accounts, including invoices for an unrelated project known as the Bloomington Project.
Justice Rees ruled that Morin Supply was not entitled to override Bond Group’s written payment directions. Under common law, a debtor has the right to allocate payments as it sees fit if it provides a clear expression of intention, which Bond Group accomplished through its remittance slips.
The court also determined that statutory trust funds created under section 8 of the Construction Act must be applied to the specific project for which they were received. Rees noted that the presumption in Clayton’s Case—which applies payments to the oldest outstanding account—does not apply to statutory trust monies under the Act.
In their analysis, Gennis and Schirripa highlighted that the ruling offers a vital practical lesson: suppliers and contractors must pay close attention to payment identification, issue clear remittance directions, and refrain from applying project-specific trust funds to unrelated accounts.
“Morin Supply misallocated payments impressed with a trust from one project to another,” Rees wrote in his judgment. “It was not open to Morin Supply to disregard Bond Group’s allocation.”
Despite the supplier’s misallocation, Justice Rees rejected Bond Group’s argument that Morin Supply’s actions should defeat its entire breach of trust claim or strip it of contractual interest. The court applied the common law rule requiring payments to be applied against accrued interest before principal.
Interest under the credit agreement accrued at 25.5 per cent per year, compounded monthly. For Maria Marcantonio under her personal guarantee, the court set the applicable rate at the contractual guarantor interest rate of 18 per cent per year, compounded monthly.
Addressing a set-off claim, the court acknowledged that Bond Group had pre-fabricated and constructed a two-storey garage at the personal residence of Morin Supply president Yanik Morin, issuing invoices totaling $38,035.25. Justice Rees ordered that this $38,035.25 set-off must be credited against accrued interest first, with any remaining surplus applied to reduce principal.
On the statutory trust claim, the court found Bond Group liable for multiple breaches of the Construction Act. Bond Group received funds from project owners but failed to pay Morin Supply in full, failed to maintain a separate bank account for trust funds as required under section 8.1, and commingled trust monies in its general chequing account.
Bond Group also failed to respond to a formal request for information under section 39 of the Act or provide an accounting of project funds, leading the court to draw an adverse inference that trust funds were improperly applied.
Justice Rees held Maria Marcantonio, president, and Tony Marcantonio, vice-president, personally liable under section 13 of the Construction Act. The court found that as sole officers and directors who shared management, financial oversight, and accounting responsibilities, both Marcantonios assented to or acquiesced in conduct they knew or reasonably ought to have known constituted a breach of trust.
WeirFoulds partner Max Gennis noted that section 13 provides a powerful statutory remedy that effectively pierces the corporate veil without requiring proof of personal dishonesty or direct personal benefit. The commentary cautioned contractors and subcontractors to review their bookkeeping and banking practices to ensure trust funds are kept separate from general operating accounts used for company overhead.
Citing Ontario Court of Appeal precedent in Great Northern Insulation Services Ltd. v. King Road Paving and Landscaping Inc., Justice Rees confirmed that contractual interest forms part of the statutory trust claim under section 8 of the Construction Act.
Justice Rees directed the parties to calculate final damages in accordance with the court’s findings on allocation, interest, and set-offs. Morin Supply was awarded fixed costs of $30,000, inclusive of HST, reduced from its requested $36,529.51 because of its improper reallocation of payments.
Morin Supply was represented by Anthony Imbesi, while Bond Group and the Marcantonios were represented by Daniel J. Wright.
