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UNJUST ENRICHMENT - Elements - Deprivation

Monday, April 20, 2020 @ 7:51 AM  

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Appeal by the Bank from a jury verdict finding the respondent not liable to repay the Bank $118,713 it claimed was owing to it as a result of AGF Trust Company advancing $245,000 to the respondent in 2007. The Bank was the successor of AGF. A financial adviser with Keybase Financial had submitted a loan application and a pledge and assignment of documents to the Bank in the respondent’s name to allow her to borrow money to invest in mutual funds. Without the respondent’s knowledge or consent, he inflated her assets and income, forged her signature on the loan documentation and falsified the income tax documents forwarded with the application. The Bank approved the loan. The respondent received monthly cash distributions from the mutual funds and paid monthly interest payments to the Bank until 2015, when she stopped paying. In 2014 the respondent was awarded a judgment of $233,190 in her successful lawsuit against Keybase. She did not use any of this money to repay the Bank. The jury found the respondent’s conduct had not ratified a forged loan agreement, it was unconscionable to enforce the loan against her, and the respondent was not unjustly enriched by the receipt and use of the money the Bank advanced to her.

HELD: Appeal allowed. The Bank is awarded the amount of $118,713. No jury, reviewing the evidence as a whole and acting judicially could have determined that the respondent was not unjustly enriched by the receipt and use, for over eight years, of the $245,000 advanced to her. The unchallenged evidence indicated the total cash disbursements the respondent received from the mutual funds purchased with the money advanced by the Bank exceeded the monthly interest payments she made to the Bank by $47,749. She also received $210,003 from her action against Keybase that was directly related to the loss she sustained as a result of the money advanced by the Bank being invested in the mutual funds. The Bank suffered a corresponding deprivation as it was not repaid the money it advanced together with interest. There was no reason, based upon law, for the respondent not to be required to repay the Bank. The wrong done to her was done by Keystone, not by the Bank, and the respondent had been fully compensated for that.

B2B Bank v. Shane, [2020] N.S.J. No. 73, Nova Scotia Court of Appeal, D.P.S. Farrar, J.W.S. Saunders and M.J. Hamilton JJ.A., February 20, 2020. Digest No. TLD-April202020001