Fred D. Cass

The appellant brought a class action seeking restitution for unjust enrichment arising from late payment penalties (LPPs) levied by the respondent gas utility in excess of the interest limit prescribed by s. 347 of the Criminal Code.

The Supreme Court of Canada allowed the appeal, holding that the appellant made out a claim for unjust enrichment.

The Court established a two-part test for the juristic reason analysis and found that the OEB orders did not constitute a juristic reason because they were inoperative to the extent they conflicted with the Criminal Code.

The respondent was ordered to repay LPPs collected in excess of the legal limit after the action was commenced in 1994.

The appellant was the original tenant of commercial leases which it assigned to a subsidiary.

The assignee later became insolvent and repudiated the leases under s. 65.2 of the Bankruptcy and Insolvency Act.

The landlords sued the appellant for outstanding rent under the assignment clause.

The Supreme Court of Canada held that the repudiation of a lease by an insolvent assignee under s. 65.2 benefits only the insolvent and does not relieve the original tenant or assignor of its contractual obligations to the landlord.