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On Point Ltd. v CECCE: Court Confirms Portable Classrooms are Lienable Interests under Ontario’s Construction Act

The Ontario Superior Court of Justice released new guidance on the meaning of an “improvement” under Ontario’s Construction Act[1] (the “Act”). In a summary judgment motion in On Point Ltd. v Conseil des Ecoles Catholiques du Centre Est et al, 2023 ONSC 1341, the court held that the construction and installation of portable classrooms was a lienable improvement to the school lands. This decision will likely impact future disputes, given the rising trend of modular construction.


In July 2019 the defendant and moving party, Conseil des Ecoles Catholiques du Centre (“CECCE”) hired the co-defendant Ty Corporation (“Ty Corp”) to construct and install 14 portable classrooms on the Paul Desmarais school property (the “school site”).[2] Portable classrooms are modular buildings located outside of the official school building that function as classrooms. CECCE required the portable classrooms to be ready in advance of the school year in September.[3]

Ty Corp in turn hired the plaintiff and responding party, OnPoint Group Ltd. (“OnPoint”), to build the portable classrooms.[4] OnPoint constructed the portable classrooms offsite, and they were transported by another contractor to the school site and completed on site. Once delivered, another contractor placed the portable classrooms on a temporary foundation, where they would remain until the installer set them up more permanently.

Ty Corp did not complete all 14 portable classrooms by September 2019 as required by the contract, and CECCE eventually ended the contract. CECCE hired Multi-Service Restoration and Provision Construction Management Inc. (“MSR”), an intervening party in the motion, to construct the remaining portables. OnPoint was not fully paid by Ty Corp, and registered a lien on the school site.

CECCE’s position on the motion was that OnPoint’s lien should be removed because the portable classrooms were not “improvements” within the meaning of the Act.


The main question on the motion was whether the portable classrooms were “improvements” under the Act, thus triggering the availability of lien rights on the school site.

At the outset, the court determined that this was an appropriate case for summary judgment. The issue did not require a trial because the court could rely on the parties’ affidavits, documentary productions and testimony from examinations for discovery to make the necessary findings of fact.

Legal framework

The court engaged in a fulsome review of the legislative framework, historical developments, secondary sources, and relevant case law.[5] In doing so the court reaffirmed that whether or not a person is entitled to a lien should be strictly construed.[6] The concept of the lien is rooted in adding value or utility to the land; the Act permits subcontractors who supply labour and materials to a property to bring a lien claim against the owner (a non-contracting party), provided the work completed meets the definition of “improvement”.[7] As demonstrated by the court’s analysis in this case, summarized below, this determination is a fact driven exercise.[8] 

Are the portable classrooms “improvements”?

Yes. The court concluded that the portable classrooms are improvements to the school site and therefore lienable interests under the Act for the following reasons:

  • OnPoint constructed the portables on the school site;
  • The final destination of the portables was known to the parties, and therefore was a connection to the school site;
  • CECCE regularly held back 10% of the funds advanced to Ty Corp; and finally,
  • The portables enhanced the value and utility of the school overall.[9]

The court undertook a detailed analysis of the following four factors: 1) the intentions of the parties, 2) the construction of the portable classrooms, 3) the installation of the portable classrooms and, 4) the building features of the portable classrooms.

Intentions of the parties: In this case the parties did not contemplate lien rights in the construction contract, which made no reference the Act.[10] However, CECCE did retain a 10% holdback from payments to Ty Corp, albeit not earmarked as statutory holdback. The court inferred from the fact that CECCE retained holdback that it was operating on the basis that the portable classrooms were a lienable supply.[11] Additionally, the parties intended for the portable classrooms to remain on the school site to meet the fluctuations in student populations, not to be leased or returned to the contractor or OnPoint.[12] These factors weighed in favour of finding that the portable classrooms were improvements.

Construction: While the court acknowledged that there is an inherent impermanence to portable classrooms because they are movable, in this case the removal of a portable was not a simple task because of the way they were built and subsequently anchored to the land with custom supports (as opposed to on wheels, for example).[13] After considering in detail several features of their construction, the court concluded that this factor weighed in favour of a finding that a portable classroom was an improvement.

Installation: The court found that there was a direct connection between the work performed to install the portables (i.e., installing cement pillars, placing the portables on the pillars, arranging for an electrician to connect the portable to the school’s electrical system, etc.) and enhancing the utility of the school.[14]

Building features: The court observed that the case law on modular prefabricated structures suggests that the availability of lien rights turns on the nexus between the structure and its connection to the specific lands. Essentially, the court should consider whether a modular structure is a chattel. A structure is a chattel if it is built with no particular end destination and can be moved. In contrast, lien rights exist when a structure is manufactured for specific land and/or a specific project.[15] Here, there was a sufficient nexus between the portable classrooms and the specific school site because they enabled the school to received more students without the expense of expanding the school building.[16]

Unjust enrichment

A secondary issue in the motion was OnPoint’s claim that, because it was not paid in full, CECCE had been unjustly enriched to its detriment. The court rejected the unjust enrichment claim, finding no evidence that CECCE had been enriched. In any event, it was Ty Corp (general contractor) that owed OnPoint payment under their subcontract. As there was no privity of contract between CECCE (owner) and OnPoint (subcontractor), CECCE’s contract with Ty Corp was a juristic reason for any enrichment. Accordingly, the court would have rejected OnPoint’s unjust enrichment claim on that basis.[17]

Key Takeaways

Given the rising trend in modular construction, parties to these construction contracts should be aware that the supply of services or materials for prefabricated modular structures may give rise to lien rights on the property on which they are situated. The movable nature of a prefabricated structure is not determinative; the availability of lien rights will ultimately depend on if the structure adds value or utility to the lands.

As OnPoint demonstrates, parties to a construction contract should carefully consider if the Construction Act applies to their project, and if the contract as drafted and/or the parties’ conduct could be interpreted to suggest they are operating on the basis that the Act applies.

Clients should be sure to understand how Ontario’s Construction Act affects their projects. McCarthy Tétrault’s Construction Law Group has the industry expertise to assist and protect your interests throughout your project from conception to completion.


[1] RSO 1990, c. C.30, s. 1.

[2]On Point Ltd. v. Conseil des Écoles Catholiques du Centre Est et al., 2023 ONSC 1341 at para 10 [“OnPoint”]

[3]OnPoint at paras 10-11.

[4]OnPoint at para 12.

[5]OnPoint at paras 38-73.

[6]OnPoint at para 81; Kennedy Electric Limited v Dana Canada Corporation, 2007 ONCA 664.

[7]OnPoint at para 39.

[8]OnPoint at para 41.

[9]OnPoint at paras 82, 164.

[10] OnPoint at para 98.

[11]OnPoint at paras 104, 110.

[12]OnPoint at para 100.

[13]OnPoint at para 149.

[14]OnPoint at paras 152-155.

[15]OnPoint at para 156-157.

[16]OnPoint at para 158-159.

[17]OnPoint at paras 176-180.



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