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Planning and development - Unjust enrichment

Thursday, March 16, 2017 @ 8:00 PM  


Appeal by WMJO Limited (WMJO) from a decision declaring that it was obligated to contribute on a pro rata basis to the expenses incurred by Middlesex Condominium Corporation 229 (MCC 229) to maintain and operate a sanitary sewer pumping system. MCC 229 was built on the same parcel of land as three condominium projects owned by WMJO. The land on which all four condominium projects were built was lower than the adjacent city street Hamilton Road. The City of London (City) required the sewage from the condominiums be pumped uphill to the city sewer than ran under Hamilton Road. In 1989, Trenion Developments Corp (Trenion) was the owner of the parcel of land, and entered into a development agreement with the City (the “development agreement”) requiring Trenion to construct and maintain at its sole expense a sanitary sewer pumping system. Trenion constructed the required system. Trenion conveyed the land to Award Development Ontario (Award). Award transferred the part of the land on which MCC 229 would be built and on which the sanitary sewer pumping station was located to a related company, Double G Contractors Limited (Double G). Double G and Award entered into a joint use agreement, registered on title, providing for the sharing of the sanitary sewer pumping station, and stipulated that the costs of the system would be shared pro rata among the properties built on the land. The joint use agreement contained a provision that it would be binding on successors on title. Double G developed its property and registered the declaration creating MCC 229. The sanitary sewer pumping station was included as part of the common elements of MCC 229. The balance of the parcel of land came into possession of WMJO, which build three condominiums. Each project connected to the existing sewer pumping station. For more than 10 years, WMJO contributed its proportionate share for the costs of the sanitary sewer pumping station in line with the joint use agreement. WMJO stopped making payments after 2006, and took the position that it had no obligation to do so. The trial judge found WMJO liable based on the principles of unjust enrichment.

HELD: Appeal dismissed. There was no basis for interfering with the findings of the trial judge with regard to enrichment and corresponding deprivation. There was ample evidence to establish that WMJO received the benefit of the use of the sanitary sewer pumping station, without having to pay operating or management costs. As a result, MCC 229 suffered the corresponding deprivation of increased costs for electricity, repairs and maintenance. It was also established at trial that the risk of breakdown of the sanitary sewer pumping station increased with the volume of sewage. The development agreement always contemplated the sharing of expenses for the maintenance of the sanitary sewer pumping station. The fact that MCC 229 had an obligation to maintain and operate the sanitary sewer pumping station under the Ontario Water Resources Act was not a juristic reason for why WMJO should obtain the benefit of the system free of charge. The statute did not deal with who should be responsible for the cost of maintaining such a system. An unenforceable contract was a recognized basis for granting a remedy in unjust enrichment.