The plaintiffs advanced funds secured by three mortgages on a property owned by the defendant, which went into default.
The plaintiffs also advanced approximately $400,000 in construction costs to build a cottage and boathouse to enhance the property's value for sale.
The property sold for $1,250,000.
The court determined the outstanding mortgage balances and found that while the construction loans were not secured by the third mortgage, there was an implied agreement to pay interest at 5% under the Interest Act.
The court imposed an equitable mortgage and constructive trust over the sale proceeds to secure repayment of the construction costs, finding the defendants were unjustly enriched.
