Court of Appeal for Ontario
Citation: 514052 Ontario Limited v. 2000768 Ontario Inc., 2015 ONCA 401
Date: 2015-06-05
Docket: C58651
Before: Juriansz, Lauwers and Huscroft JJ.A.
Between:
514052 Ontario Limited and 1176847 Ontario Limited c.o.b. as Orfus Realty Plaintiffs (Appellants)
and
2000768 Ontario Inc., Drew Future Developments Inc., and 2080323 Ontario Inc. Defendants (Respondent)
Counsel: Blair W.M. Bowen, for the appellant No one appearing for the respondent
Heard: June 1, 2015
On appeal from the judgment of Justice Kofi N. Barnes of the Superior Court of Justice, dated March 17, 2014.
Endorsement
[1] The appellant, a developer, entered into a development agreement with a municipality. The agreement entitled the appellant to receive credits in the amount of $123,443.37 from the municipality against development charges it would have to pay as a condition of obtaining a building permit for any development it wished to build on property it owned. The appellant constructed the infrastructure required to earn the credits but did not proceed with the development. Instead, the appellant sold the land and its entitlement to receive the credits to 2000768 Ontario Inc. The agreement of purchase and sale required 2000768 Inc. to pay to the appellant the credits once the municipality had established their amount. The agreement of purchase and sale also provided that if 2000768 Inc. did not develop the property, it would obtain a similar covenant from a subsequent purchaser of the property.
[2] 2000768 Inc. sold the land and its entitlement to Drew Future Developments Inc., but did not include the covenant to pay to the appellant the credits once the municipality had established their amount. Drew Inc. did not develop the property. Instead, it sold the property to the respondent, 2080323 Ontario Inc., without obtaining a covenant to pay to the appellant any credits it ultimately obtained. The respondent developed the property and received credits from the municipality in the amount of $123,443.37.
[3] The appellant settled its action against 2000768 Inc. and Drew Inc. The trial and this appeal concern only its action against the respondent. The appellant claims the respondent was unjustly enriched by the amount of the credits granted by the municipality.
[4] The trial judge found the respondent had been enriched and the appellant had suffered a corresponding deprivation. However, he concluded there was a juristic reason for the enrichment and so dismissed the appellant’s claim. Appellant’s counsel advanced a cogent and effective argument that the trial judge erred in his analysis of whether there was a juristic reason for the enrichment. We find it unnecessary to deal with that argument as we would dismiss the appeal on a different basis.
[5] The trial judge found as a fact that the respondent paid a premium for the property because it had been led to believe it would receive credits from the municipality. The trial judge said, “…it is not within a reasonable expectation of [either party] that [the respondent] would return a benefit it had paid a premium for and was never aware was due to [the appellant] and there were not public policy considerations in support of recovery”.
[6] On our analysis, the factual finding that the respondent had paid a premium for the land leads to the conclusion the respondent was not enriched. While the appellant attacked this factual finding, there was evidence to support it. The respondent may not have understood the precise nature or amount of the credits, but it did a pay a premium for the property because it believed it would receive credits in the order of $100,000. The respondent, having paid out a premium in the expectation of future credits, could not be enriched by the eventual receipt of those credits. The party that was enriched is Drew Inc., which received the premium paid for the property without incurring the expenses of installing the infrastructure.
[7] The appeal is dismissed. There will be no order as to costs.
“R.G. Juriansz J.A.”
“P. Lauwers J.A.”
“Grant Huscroft J.A.”