Focus On

UNJUST ENRICHMENT - Elements

Friday, June 05, 2020 @ 9:06 AM  


Lexis Advance® Quicklaw®
Appeal by the plaintiff, Catalyst Capital Group Inc., from an order striking five of its claims without leave to amend. The plaintiff alleged it had an agreement with the Dundee Kilmer Developments Limited Partnership (DKD) defendants to participate in the financing and development of the Athletes’ Village for the 2015 PanAm Games. The plaintiff sued the DKD defendants for damages arising from the breach of that agreement. In addition, the plaintiff sued two Ontario government entities and the Ontario Crown alleging material misrepresentations and tortious conduct arising from its exclusion from formal participation in the project. Specifically, the plaintiff’s claim alleged the DKD defendants breached an oral agreement, breached a funding term sheet, breached an ad hoc fiduciary duty, made negligent and fraudulent misrepresentations, and were unjustly enriched. The plaintiff’s claim against the Ontario defendants alleged a breach of public law duty, misfeasance in public office, negligent or fraudulent misrepresentation, and unjust enrichment. The motion judge struck the claims against DKD for breach of the funding term sheet and breach of fiduciary duty without leave to amend. The judge also struck the unjust enrichment and quantum meruit claims against all defendants as statute-barred and struck the breach of public law duty and misrepresentation claims against the Ontario defendants based on Crown immunity. The plaintiff appealed.

HELD: Appeal allowed in part. In striking the claim for breach of the funding term sheet, the judge erred by failing to consider the entirety of the parties’ agreements, including a senior term financing agreement and the parties’ initial oral agreement. When the funding term sheet’s obligation to negotiate in good faith was read in the context of the oral agreement, it was not plain and obvious that the plaintiff’s claim would fail. The motion judge erred in finding that the plaintiff failed to plead the required undertaking element giving rise to an ad hoc fiduciary duty and instead impermissibly assessed the claim on the merits in the absence of an evidentiary record. In addition, the motion judge erred in failing to find that the plaintiff’s original pleading pled material facts needed to support the unjust enrichment and quantum meruit claim against DKD. Otherwise, the motion judge did not err in finding that the plaintiff’s original pleading failed to disclose a similar claim against the Ontario defendants and failed to set out any that any such enrichment was beyond incidental. No error was established with respect to the striking of the public law duty claim and misrepresentation claims against the Ontario defendants.

Catalyst Capital Group Inc. v. Dundee Kilmer Developments Limited Partnership, [2020] O.J. No. 1872, Ontario Court of Appeal, D.H. Doherty, D.M. Brown and J.A. Thorburn JJ.A., April 29, 2020. Digest No. TLD-June12020009