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Cease Work at Your Peril: Campus Contracting Inc. v. Torbear Contracting Inc.

Determining whether a contractor or subcontractor has abandoned a project can be a tricky issue that owners and contractors often have to address quickly. Helpfully, the Ontario Superior Court of Justice recently provided some guidance on this issue in Campus Contracting Inc v. Torbear Contracting Inc., 2023 ONSC 6782. The Court adjudicated a subcontractor’s claim for unpaid invoices after it stopped work, and, after seven days of trial, the court found the subcontractor had abandoned the project and denied its claim for payment.

Key Takeaways

Before a contractor or subcontractor ceases work on a construction project due to alleged non-payment, it must ensure that payment is owing in strict accordance with the contract’s payment terms. All conditions for payment must be satisfied. Notice requirements must be complied with to support the reasons for ceasing work. Non-payment of invoices must go to the root of the contract to support the decision to halt the contract’s performance requirement. Otherwise, the contractor ceases work at its peril.


Torbear Contracting Inc. (“Torbear”) contracted Campus Contracting Inc. (“Campus”) to install high pressured concrete watermains and sewers at a project site in Vaughan, Ontario (the “Project”).

The pipes installed by Campus repeatedly failed pressure testing and a dispute emerged over liability for the failure. Torbear faulted Campus for installing the pipes on unstable subgrade. Campus blamed Torbear for failing to make the subgrade suitable for pipe installation, alleging that Torbear had failed to install a supporting concrete beam or sufficiently compact backfill.

Campus requested payment of $130,000, otherwise it would cease work. Three days later it stopped work. Torbear alleged that Campus’ work was deficient and claimed damages for the deficiency, incomplete work and delay in the Project.[1] In the weeks and months following its cessation of work, Campus delivered further invoices to Torbear, none of which were certified for payment by the Payment Certifier.

The dispute resulted in multiple separate legal actions: a claim for breach of contract, a claim for breach of trust and a further claim under the Project’s labour and material payment bond. This decision dealt only with the issue of liability for breach of contract in the first of three actions.


The court rendered its decision on two primary issues: (1) whether Campus was owed the amounts it claimed prior to its cessation of work; and (2) whether Campus had abandoned the Project or Torbear had unlawfully terminated by refusing to pay Campus. The court found against Campus on both issues.

Issue #1: Non-payment prior to cessation of work

Campus was unsuccessful on its claim for amounts owed under the contract prior to its cessation of work for three reasons:

  • The invoice that Campus delivered immediately prior to ceasing work was never certified. The contract made payment of invoices contingent on certification by the payment certifier and the court strictly enforced this term. It doing so, it relied on a prior Ontario Superior Court decision, Pentad Construction v. 2022988 Ontario Inc., that held that such provisions will be enforced “as long as the payment certifier acts fairly, honestly and impartially and provided there is no collusion between the owner and the certifier.”[2]
  • It had failed to comply with the contractual payment process. The amounts Campus had claimed on August 3 were not actually due until September 30, a month after it had walked off the Project. Campus never challenged the contract’s “pay when paid” clause that made payment contingent on Torbear receiving payment from the owner. There was also no evidence that Torbear had been paid by the owner for this amount.
  • It did not present any evidence at trial to contest the account summary put forward by Torbear. The summary showed the subcontractor had actually been overpaid.

Issue #2: Did Campus abandon the Project or did Torbear unlawfully terminate the Contract?

The court found that by leaving the Project and refusing to return, Campus had abandoned the Project and Torbear was “within its rights to terminate the Contract pursuant to the terms of the Contract.” As a result, Campus’ claims for payment following its abandonment were dismissed.

In arriving at its decision, the court reviewed the law of abandonment as summarized by Associate Justice Albert in D&M Steel v. 51 Construction Ltd. and Jing Yin Temple.[3] D&M stands for the proposition that a contractor cannot recover for unpaid amounts following a repudiation of the contract.

The court agreed that Campus’ behavior amounted to a breach of contract:

  • Campus demanded payment as a precondition to continuing work before any such amounts were due under the contract. The court found that Campus could no longer afford to continue and wanted “out of the ordeal it was in.”
  • Campus did not provide a 10-day notice as required under the terms of the contract. This supported the court’s view that Campus’ cessation of work was for reasons other than non-payment.
  • Campus failed to prove that the deficiencies were the fault of Torbear or for any reasons beyond its control. Campus did not respond to Torbear’s notice of default and did not cure its default (or provide an acceptable schedule to cure its default) as required under the contract’s terms.

Concluding Thoughts

Campus was in a losing situation after it was repeatedly unable to remediate deficient work on the Project: it had not yet earned full payment under the contract and stood to lose more by continuing. Although it may have been financially unsustainable to continue the Project, Campus ceased work in circumstances that left its claims vulnerable to later dismissal.

This decision underscores the importance of careful contract management during projects, especially after they become distressed, to preserve all available contractual remedies. Many aspects of this situation appear to have been outside Campus’ control, but it could have better protected itself by strictly complying with the contract’s terms. Campus had not satisfied the contract’s preconditions for payment and was therefore unable to justify its cessation of work on that basis. By failing to respond to Torbear’s notice of default under the contract’s terms, it left itself further exposed to termination under the terms of the contract.


[1] Campus Contracting Inc v. Torbear Contracting Inc., 2023 ONSC 6782 at para 3.

[2] Pentad Construction Inc. v. 2022988 Ontario Inc., 2021 ONSC 824 (CanLII) at para 93.

[3] D&M Steel v. 51 Construction Ltd. and Jing Yin Temple, 2016 ONSC 1335 (CanLII); aff’d 2018 ONSC 2172 (SCJ) at paras. 58-60.



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