Court of Appeal for Ontario

CITATION: LaRochelle v. Elite Environments Inc., 2023 ONCA 206

DATE: 20230327

DOCKET: C69746

Benotto, Trotter and Zarnett JJ.A.

BETWEEN

Hélène LaRochelle and Michael Nimchuk

Appellants

and

Elite Environments Inc. and Landscape by Evergreen Ltd., Antonio Savoia and Lucio Savoia A.K.A. Lou Savoia

Respondents

Counsel:

Robert J. Kennaley, for the appellants

Robert K. Brown, for the respondents Antonio Savoia and Elite Environments Inc.

Anthony Colangelo, for the respondents Lou Savoia and Landscape by Evergreen Ltd.

Heard: March 20, 2023

On appeal from the order of Justice Pinto of the Superior Court of Justice, dated July 12, 2021.

REASONS FOR DECISION

[1] The appellants retained the respondent Elite Environments Inc to renovate their backyard. The respondent Antonio Savoia is the owner of Elite. On April 22, 2016, the appellants and Antonio Savoia signed a contract for a flat fee of $175,000 with milestone payments set out as follows:

− 20% on signing ($35,000)

− 15% on commencement ($26,500)

− 40% after gravel bases and all deck supports are installed ($70,000)

− 15% after all hard landscaping is completed

− 10% on completion

[2] The appellants paid Elite $35,000 upon signing the contract.

[3] Antonio’s uncle, the respondent Lou Savoia, is the owner of Landscape by Evergreen Ltd. Shortly after the contract was signed, Elite and Landscape signed an Assignment Agreement. Elite gave roughly half of the first payment, $17,000, to Landscape. Landscape took over responsibility for the job and was to receive the remaining payments. In June 2016, the appellants paid Landscape the next two installments in accordance with the contract.

[4] For a variety of reasons, work was then delayed until June 2017, when Lou Savoia demanded a further $26,250, an amount not required by the contract. By that time, the appellants had paid $131,250 of the total cost of $175,000. The appellants contended that the actual value of the work performed to that date was $92,280. The parties entered into an Addendum Agreement whereby the appellants paid Landscape $12,500 with $14,500 payable once certain work was performed. A dispute arose about the location of a toilet in the shed in the backyard and the appellants refused to allow work to continue. They hired another contractor to complete the project.

[5] The appellants issued a statement of claim for breach of contract, seeking damages of $163,222.70. They also claimed damages for unjust enrichment because the respondents had been overpaid for their work.

[6] Elite and Antonio Savoia filed a statement of defence, did not counterclaim and did not seek damages from the appellants for breach of contract. Landscape and Lou Savoia filed a statement of defence and counterclaim of $100,000 on the basis that the plaintiffs breached the initial contract.

[7] The trial judge dismissed the appellant’s claim, having found that the respondents had not fundamentally breached the contract such that the appellants were entitled to repudiate it. He also dismissed Landscape’s counterclaim for breach of the 2016 contract because Landscape was not a party to that contract.

[8] The trial judge then awarded damages of $31,250 to the respondents, representing the difference between the amount paid ($143,750) and the total amount to be paid under the contract ($175,000).

[9] The trial judge did not address the claim for unjust enrichment in the reasons.

[10] The appellants claim that the trial judge erred by: (i) not addressing their claim in unjust enrichment; and (ii) awarding damages to the respondents in the absence of a counterclaim.

ANALYSIS

[11] The fact that the trial judge did not address unjust enrichment makes the decision on this basis insufficient for appellate review. However, on the facts, the unjust enrichment claim was bound to fail.

[12] A claim for unjust enrichment requires the plaintiff to establish three elements: (i) an enrichment of the defendant; (ii) a corresponding deprivation of the plaintiff; and (iii) an absence of juristic reason for the enrichment. (Garland v. Consumers’ Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629, at para. 30). The contract required payments upon the completion of certain construction milestones. The milestones were reached. That 70% of the funds were due when the work was only partly, or half done represents a term of the contract. The contract provides a juristic reason for the respondents’ enrichment. Consequently, despite the trial judge’s failure to address the issue, we see no substantial wrong or miscarriage of justice requiring a new trial.

[13] As to the second issue, the trial judge was correct to dismiss Landscape’s counterclaim. Elite did not counterclaim and was not entitled to damages for breach of contract. We therefore allow the appeal in part by setting aside paragraph 3 of the judgment awarding damages to the respondents.

[14] Success on the appeal was divided so there will be no costs of the appeal.

“M.L. Benotto J.A.”

“Gary Trotter J.A.”

“B. Zarnett J.A.”