Can a contractor hold back more then 10% because the builder hasn't paid him?

I was called to provide an estimate to Tap/Mud a commercial job and I provided an estimate of $5,500 + HST. All materials were supplied by the contractor however ran out 3 times. There was an agreement made because he was out of town that I'd buy what was needed and I'd be paid back. 2 days before completing my job I requested payment for 2 of 3 material purchase I made. He paid one and my pay for my work. I was told Friday, then 2 more different days.

After 2 weeks he tells me about this hold back thing of 10%. He said he wasn't paid yet by the builder so I'd be paid when he's paid.... the understanding I know is money owing on materials can't be a pat of a hold back. Also there was no contract nor term of hold back mentioned. I was a Subcontractor. 3 weeks after I finished I was asked to return to repair a few minor imperfections. I refused for non payment of the materials and a breach of trust for failure to pay 3 times.

The contractor back charged me the total amount owing for about $75.00 worth of time. The painter completely painted the builder. He used tinted primer but the contractor waited till completely painted to inspect my work. He also backed charged for repainting the areas .... total owing was $1,400 from $5,500, so 1500 less 300 for materials he held back more then 10%. Didn't pay Any HST.

Can he do this?