



COURT OF APPEAL FOR ONTARIO

CITATION: 514052 Ontario Limited v. 2000768 Ontario Inc.,
    2015 ONCA 401

DATE: 20150605

DOCKET: C58651

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
)

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 appellants claim. Appellants
    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.


