LOLG Wins Judgment in Unjust Enrichment Application
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On June 25, 2021, Lars Brusven and John Carlo Mastrangelo won judgment for their client, Intermarket CAM Limited, in an important unjust enrichment case. The Ontario Superior Court granted Intermarket the return of a $2.5 million overpayment on its purchase of a 192-acre parcel of farmland in Cambridge, Ontario.
On the eve of closing, the vendors demanded that Intermarket pay an increased purchase price for parts of the property that were not developable, contrary to the agreement between the parties. Intermarket closed the transaction under duress because it had previously agreed to assign its rights under the purchase agreement to a third party. Intermarket paid the vendors’ increased purchase price but reserved its right to dispute the overpayment before the Court.
In the application, LOLG argued that the proper interpretation of the parties’ purchase agreement did not obligate Intermarket to pay for parts of the property that were non-developable. The Court agreed with LOLG, granting Intermarket the return of the $2.5 million overpayment in respect of these non-developable lands. The Court ultimately rejected the vendors’ position that the contract doctrine of merger applied in the circumstances, finding instead that Intermarket was entitled to restitution on principles of unjust enrichment, notwithstanding that the transaction had closed and title transferred. The Court’s decision offers important guidance on the relationship between the doctrine of merger and recovery for unjust enrichment in circumstances of duress or practical compulsion.