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Thomas G. Heintzman, O.C., Q.C.McCarthy TtraultToronto,
Ontario
www.mccarthy.ca [email protected]
www.constructionlawcanada.com
Thomas Heintzman specializes in commercial litigation and is
counsel at McCarthy Ttrault inToronto. His practice focuses on
litigation, arbitration and mediation relating to
corporatedisputes, shareholders rights, securities law,
broadcasting/telecommunications and classactions.
He has been counsel in many important actions, arbitrations, and
appeals before all levels of courts in many Canadian provinces as
well as the Supreme Court of Canada.
Thomas Heintzman is the author of Goldsmith & Heintzman on
Building Contracts, 4 th Editionwhich provides an analysis of the
law of contracts as it applies to building contracts in Canada.
Goldsmith & Heintzman on Building Contracts has been cited
in 182 judicial decisions including
two Supreme Court of Canada decisions:M.J.B. Enterprises Ltd. v.
Defence Construction (1951) Ltd., 1999 Carswell Alta 302 andDouble
N Earthmovers Ltd. v. Edmonton (City), 2007 Carswell Alta 36
Unjust Enrichment Are the Services Incontrovertibly Beneficial
?
A recent decision of the Ontario Court of Appeal outside the
field of construction law remindsus of the principles of Unjust
Enrichment that apply to the payment for services provided to
aconstruction project. Unless the services were requested by the
defendant, payment can only
be recovered in unjust enrichment if the services were
incontrovertibly beneficial to thedefendant.
In Grover v. Hodgins, 2011 ONCA 72 (CanLII), the plaintiffs were
owners of condominium units
in British Columbia who had retained lawyers to sue the manager
of the condominium building.However, the defendants had refused to
retain those lawyers. The plaintiffs said that thedefendant had
benefited from the litigation against the manager because the
management
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contract had been terminated and the condominium units had been
sold for a substantiallyhigher value. The plaintiffs sued the
defendants in British Columbia for unjust enrichment andwere
successful. They then sought to enforce the judgment in
Ontario.
The Court of Appeal for Ontario held that the defendant was not
unjustly enriched. The Court
distinguished between the benefit from services from the benefit
from money. In the case of alleged benefit from services, the
defendant must be shown to have incontrovertiblybenefited from
these services. The Court of Appeal applied the words of the Sup
reme Co u rt of Canada in Peel (Regional M u nici p ality) v.
Canada; Peel (Regional M u nici p ality) v. Ontario, 1992CanLII 21
( S.C.C.), [1992] 3 S.C.R. 762 . In the Peel decision, the Supreme
Court said that anincontrovertible benefit means something that is
an unquestionable benefit, a benefit that isdemonstrably apparent
and not subject to debate or conjecture .
In Grover, the Ontario Court of Appeal held that, since the
relationship between the departure
of the manager and any consequential benefit to the defendant by
the increased value of hiscondominium unit was not
incontrovertible, the plaintiffs were not entitled to require
thedefendant to contribute to the legal costs.
This decision is a warning to suppliers of services to
construction projects: get clear instructions.If you don t, and you
later want to make a claim based on the equitable principles of
unjustenrichment, you will have a high standard of proof. You will
have to show that the defendantreceived a benefit from those
services that is not subject to debate or conjecture. That may
notbe easy to do.
Unjust Enrichment-
Grover v. Hodgins, 2011 ONCA 72 (CanLII)
