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Appeal Court Dicta

Restitution - Enrichment/Deprivation

. Physicians’ Dialysis Center Inc. v. Credit Valley Hospital

In Physicians’ Dialysis Center Inc. v. Credit Valley Hospital (Ont CA, 2023) the Court of Appeal considers a form of 'loss' that satisfies the deprivation element of unjust enrichment:
[2] As noted by the trial judge, the test for unjust enrichment is whether: (i) the defendants were enriched; (ii) the plaintiffs were correspondingly deprived; and (iii) there was no juristic reason for the benefit and corresponding detriment: Moore v. Sweet, 2018 SCC 52, [2018] 3 S.C.R. 303, at paras. 35 to 59, 63, and 83. The question is whether the defendant unjustly became richer in circumstances where the plaintiff became poorer. The concept of “loss” captures a benefit that was never in the plaintiff’s possession but that the court finds would have accrued for their benefit had it not been received by the defendant: Moore, at para. 44, citing Citadel General Assurance Co. v. Lloyds Bank Canada, 1997 CanLII 334 (SCC), [1997] 3 S.C.R. 805, at para. 30.
. Kerr v. Baranow

In Kerr v. Baranow (SCC, 2011) the Supreme Court of Canada considered the enrichment and deprivation elements of restitution, here in 2011:
(1) Enrichment and Corresponding Deprivation

[36] The first and second steps in the unjust enrichment analysis concern first, whether the defendant has been enriched by the plaintiff and second, whether the plaintiff has suffered a corresponding deprivation.

[37] The Court has taken a straightforward economic approach to the first two elements — enrichment and corresponding deprivation. Accordingly, other considerations, such as moral and policy questions, are appropriately dealt with at the juristic reason stage of the analysis: see Peter, at p. 990, referring to Pettkus, Sorochan v. Sorochan, 1986 CanLII 23 (SCC), [1986] 2 S.C.R. 38, and Peel, affirmed in Garland v. Consumers’ Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629, at para. 31.

[38] For the first requirement — enrichment — the plaintiff must show that he or she gave something to the defendant which the defendant received and retained. The benefit need not be retained permanently, but there must be a benefit which has enriched the defendant and which can be restored to the plaintiff in specie or by money. Moreover, the benefit must be tangible. It may be positive or negative, the latter in the sense that the benefit conferred on the defendant spares him or her an expense he or she would have had to undertake (Peel, at pp. 788 and 790; Garland, at paras. 31 and 37).

[39] Turning to the second element — a corresponding deprivation — the plaintiff’s loss is material only if the defendant has gained a benefit or been enriched (Peel, at pp. 789-90). That is why the second requirement obligates the plaintiff to establish not simply that the defendant has been enriched, but also that the enrichment corresponds to a deprivation which the plaintiff has suffered (Pettkus, at p. 852; Rathwell, at p. 455).
. Professional Institute of the Public Service of Canada v. Canada (Attorney General) [enrichment can be 'negative']

In Professional Institute of the Public Service of Canada v. Canada (Attorney General) (SCC, 2020) the Supreme Court of Canada considered whether restitution can apply against government [it could], and that enrichment can take the form of 'relief from a negative' [it can]:
(2) Unjust Enrichment

[148] As this Court found in Elder Advocates, it is possible to claim unjust enrichment against the government (provided the issue is not restitution for taxes paid under an ultra vires statute).

[149] In order to prove a claim in unjust enrichment, the plaintiff must establish: (1) an enrichment of the defendant; (2) a corresponding deprivation of the plaintiff; and (3) an absence of juristic reason for the enrichment (Pacific National Investments Ltd. v. Victoria (City), 2004 SCC 75, [2004] 3 S.C.R. 575 (“Pacific National”), at para. 14). Where these elements are satisfied, the remedy of constructive trust may be available if (1) “monetary damages are inadequate”, and (2) “there is a link between the contribution that founds the action and the property in which the constructive trust is claimed” (Peter v. Beblow, 1993 CanLII 126 (SCC), [1993] 1 S.C.R. 980, at p. 988).

[150] As Binnie J. explained in Pacific National, at para. 15, “[a]n enrichment may ‘connot[e] a tangible benefit’ . . ., or it can be relief from a ‘negative’, such as saving the defendant from an expense he or she would otherwise have been required to make” (emphasis in original).

[151] Following this Court’s decision in Peter v. Beblow, the enrichment must correspond with a deprivation from the plaintiff. While the test for unjust enrichment is typically articulated as having three elements, it is important to recognize that the enrichment and detriment elements are the same thing from different perspectives. As Dickson C.J. suggested in Sorochan v. Sorochan, 1986 CanLII 23 (SCC), [1986] 2 S.C.R. 38, cited by Cory J. in his concurring reasons in Peter v. Beblow, at p. 1012, the enrichment and the detriment are “essentially two sides of the same coin”.

[152] The “straightforward economic approach”, as described in Pacific National, to enrichment and detriment, is properly understood to connote a transfer of wealth from the plaintiff to the defendant (para. 20). As the purpose of the doctrine is to reverse unjust transfers, it must first be determined whether wealth has moved from the plaintiff to the defendant.

[153] Accordingly, the first inquiry is not whether the government was somehow enriched or benefitted by amortizing or removing the surpluses in the Superannuation Accounts. Rather, the question is whether the government was enriched at the appellants’ expense. Even if it could be shown that the government benefited in some way by reducing the stated financial obligations of Canada, it would not assist the appellants unless the gain corresponded to the appellants’ loss.

[154] As the Superannuation Accounts are mere accounting records, and do not contain assets in which the appellants have an interest, no enrichment and corresponding deprivation can be found in either (1) the government’s decision prior to April 1, 2000 to amortize the surpluses for accounting purposes under the FAA, or (2) Parliament’s decision to enact Bill C-78 to require the debiting of a portion of the surplus directly from the Accounts.

[155] The Court of Appeal found that there was no enrichment because “whatever benefit there was to such actions enured to all Canadian taxpayers” (para. 106). I do not understand the nature of the inquiry in the same way. The enrichment and corresponding deprivation elements ask whether there was a transfer of wealth from the plaintiff to the defendant. The fact that the defendant is a public body is irrelevant to whether such a transfer of wealth took place. Indeed, this reasoning would have the effect of insulating the government from any claim for unjust enrichment.

[156] The Court of Appeal indicated that there might have been a deprivation because the government’s actions “were detrimental to plan members if for no other reason than the fact that those actions apparently led to increases in plan member contribution rates” (para. 107). As I observed in connection with the issue of whether the Superannuation Accounts contained assets, the evidence does not support such an alleged deprivation.

[157] Further, if the increase in contribution rates did constitute a deprivation, the corresponding enrichment could only be the additional deductions taken from employee pay cheques following the rate hikes, and not the amount of the surpluses amortized and removed. But the appellants have sought a declaration that they have an equitable interest in the balances in the Superannuation Accounts as at March 31, 2000, and not the return of the increased contributions after Bill C-78 came into force. Accordingly, on the argument that increased contribution rates constituted a deprivation, there is no link between the alleged deprivation and the property right they seek, the return of the amortized surplus and subsequently debited surplus.

[158] I conclude that there was no enrichment and corresponding deprivation, and that the appellants have not established a prima facie case of unjust enrichment. The third branch of the test for unjust enrichment, the absence of a juristic reason for the enrichment, need not be analyzed.
. The Catalyst Capital Group Inc. v. Dundee Kilmer Developments Limited Partnership [quantum meruit enrichment basis; enrichment as services; enrichment must be direct]

In The Catalyst Capital Group Inc. v. Dundee Kilmer Developments Limited Partnership (Ont CA, 2020) the Court of Appeal stated on unjust enrichment as follows:
[79] Similarly, in its Original Claim against DKD and IO, Catalyst pleaded the material facts needed to support the two elements of a quantum meruit claim: (i) that the services were furnished at the request, or with the encouragement or acquiescence of, the opposing party; and (ii) that in the circumstances it would be unjust for the opposing party to retain the benefit conferred by the provision of the services: Consulate Ventures Inc. v. Amico Contracting & Engineering (1992) Inc., 2011 ONCA 418, 278 O.A.C. 216, at para. 8.


[86] As well, I agree with the motion judge that Catalyst’s claims for unjust enrichment and quantum meruit against IO and the Crown should be struck on the ground that it is plain and obvious they cannot succeed. In Peel (Regional Municipality) v. Canada, 1992 CanLII 21 (SCC), [1992] 3 S.C.R. 762, 98 D.L.R. (4th) 140, the Supreme Court stated, at p. 797, that any enrichment or benefit to the defendant must be conferred directly and specifically on the defendant and that it is not sufficient that the enrichment or benefit to the defendant is indirect:
While not much discussed by common law authorities to date, it appears that a further feature which the benefit must possess if it is to support a claim for unjust enrichment is that it be more than an incidental blow-by. A secondary collateral benefit will not suffice. To permit recovery for incidental collateral benefits would be to admit of the possibility that a plaintiff could recover twice — once from the person who is the immediate beneficiary of the payment or benefit (the parents of the juveniles placed in group homes in this case), and again from the person who reaped an incidental benefit. … It would also open the doors to claims against an undefined class of persons who, while not the recipients of the payment or work conferred by the plaintiff, indirectly benefit from it. This the courts have declined to do. The cases in which claims for unjust enrichment have been made out generally deal with benefits conferred directly and specifically on the defendant, such as the services rendered for the defendant or money paid to the defendant. This limit is also recognized in other jurisdictions. For example, German restitutionary law confines recovery to cases of direct benefits… [Internal citations omitted, emphasis added.]
. Grover v. Hodgins

In Grover v. Hodgins (Ont CA, 2011) the court reviews the application of the doctrine of unjust enrichment to the case, here focussing on when services may constitute enrichment as well as other elements that failed:
[51] I now therefore turn to the trial judge's conclusion that, based on unjust enrichment, the respondents were entitled to judgment in the amount of the contribution paid by each member of the Ontario-based group of condominium owners to the legal fees of the British Columbia action.

[52] As the trial judge correctly stated, the cause of action for unjust enrichment has three elements: (1) an enrichment of the defendant; (2) a corresponding deprivation of the plaintiff; and (3) an absence of any juristic reason for the enrichment: Pettkus v. Becker, 1980 CanLII 22 (SCC), [1980] 2 S.C.R. 834, [1980] S.C.J. No. 103, at p. 848 S.C.R.

[53] The trial judge held that the respondents established each of these requirements. I respectfully disagree. In my view, the respondents met none of the requirements and the claim in unjust enrichment must therefore fail. [page734]

[54] First, the trial judge erred in holding that the appellants were enriched through the efforts of the respondents and the expenses they incurred to fund the British Columbia litigation.

[55] The trial judge found that the appellants received a benefit because their condominium unit increased in value following the removal of the old management through the B.C. litigation. Thus, he held that the appellants were enriched by the respondents' litigation that was ultimately to the advantage of the appellants. I disagree.

[56] What the trial judge overlooked is the difference between unjust enrichment through the provision of money and unjust enrichment through the provision of services. This difference was explained by Laskin J.A. in Sharwood & Co. v. Municipal Financial Corp. (2001), 2001 CanLII 24066 (ON CA), 53 O.R. (3d) 470, [2001] O.J. No. 927 (C.A.), at para. 26: "The receipt of money is always a benefit to the defendant. The receipt of services may not be a benefit because the defendant may not have wanted the services or may not have wanted them if it had to pay for them."

[57] The provision of services will constitute a benefit in two situations: (a) where they were performed at the request of the defendant, or (b) where the defendant has been "incontrovertibly benefited": see Maddaugh and McCamus in their text The Law of Restitution, looseleaf (Aurora, Ont.: Canada Law Book, 2010), at p. 3-17.

[58] There is no evidence that the appellants requested that the respondents subsidize their contribution to the legal services or that they requested the services themselves, so the issue of whether the appellants were enriched comes down to whether they were "incontrovertibly benefited".

[59] In Peel (Regional Municipality) v. Canada; Peel (Regional Municipality) v. Ontario, 1992 CanLII 21 (SCC), [1992] 3 S.C.R. 762, [1992] S.C.J. No. 101, McLachlin J. explained the basic concept of an "incontrovertible benefit", at p. 795 S.C.R.:
An "incontrovertible benefit" is an unquestionable benefit, a benefit which is demonstrably apparent and not subject to debate and conjecture. Where the benefit is not clear and manifest, it would be wrong to make the defendant pay, since he or she might well have preferred to decline the benefit if given the choice. (Emphasis added)
[60] Here, based on the trial judge's conclusion that "the evidence is far from clear to draw a direct link between the departure of the former managers [and] an increase in value of the units", it cannot be said the appellants received any demonstrably apparent benefit. [page735]

[61] For these reasons, I cannot accept the finding of an enrichment or a benefit.

[62] Nor can I agree with the trial judge's finding of a corresponding deprivation. He found the deprivation to be the $7,550 the respondents paid toward the legal costs of the British Columbia action. This finding fails to take into account the benefit the respondents received themselves. They paid for legal services. They received the services. They suffered no deprivation. Given the trial judge's finding that the appellants did not agree to share costs, each plaintiff paid no more, and no less, than he or she agreed to pay.

[63] Even if I were to accept that there had been a benefit conferred and a corresponding loss, the respondents have not met the third requirement for unjust enrichment. Simply put, it would not be unjust for the appellants to retain the benefit given there is nothing in the record to support a conclusion that the appellants requested or otherwise indicated that they wanted the service.
. Moore v. Sweet [deprivation]

In Moore v. Sweet (SCC, 2018) the Supreme Court of Canada considers the unjust enrichment (restitution) element of 'deprivation':
[43] In addition to an enrichment of the defendant, a plaintiff asserting an unjust enrichment claim must also establish that he or she suffered a corresponding deprivation. According to Professor McInnes, this element serves the purpose of identifying the plaintiff as the person with standing to seek restitution against an unjustly enriched defendant (M. McInnes, The Canadian Law of Unjust Enrichment and Restitution (2014), at p. 149; see also Peel, at pp. 789-90, and Kleinwort Benson Ltd. v. Birmingham City Council, [1997] Q.B. 380 (C.A.), at pp. 393 and 400). Even if a defendant’s retention of a benefit can be said to be unjust, a plaintiff has no right to recover against that defendant if he or she suffered no loss at all, or suffered a loss wholly unrelated to the defendant’s gain. Instead, the plaintiff must demonstrate that the loss he or she incurred corresponds to the defendant’s gain, in the sense that there is some causal connection between the two (Pettkus, at p. 852). Put simply, the transaction that enriched the defendant must also have caused the plaintiff’s impoverishment, such that the defendant can be said to have been enriched at the plaintiff’s expense (P. D. Maddaugh and J. D. McCamus, The Law of Restitution (loose-leaf ed.), at p. 3-24). While the nature of the correspondence between such gain and loss may vary from case to case, this correspondence is what grounds the plaintiff’s entitlement to restitution as against an unjustly enriched defendant. Professor McInnes explains that “the Canadian conception of a ‘corresponding deprivation’ rightly emphasizes the crucial connection between the defendant’s gain and the plaintiff’s loss” (The Canadian Law of Unjust Enrichment and Restitution, at p. 149).

[44] The authorities on this point make clear that the measure of the plaintiff’s deprivation is not limited to the plaintiff’s out-of-pocket expenditures or to the benefit taken directly from him or her. Rather, the concept of “loss” also captures a benefit that was never in the plaintiff’s possession but that the court finds would have accrued for his or her benefit had it not been received by the defendant instead (Citadel General Assurance Co. v. Lloyds Bank Canada, 1997 CanLII 334 (SCC), [1997] 3 S.C.R. 805, at para. 30). This makes sense because in either case, the result is the same: the defendant becomes richer in circumstances where the plaintiff becomes poorer. As was succinctly articulated by La Forest J. in Lac Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC), [1989] 2 S.C.R. 574, at pp. 669-70:
When one talks of restitution, one normally talks of giving back to someone something that has been taken from them (a restitutionary proprietary award), or its equivalent value (a personal restitutionary award). As the Court of Appeal noted in this case, [the respondent] never in fact owned the [disputed] property, and so it cannot be “given back” to them. However, there are concurrent findings below that but for its interception by [the appellant], [the respondent] would have acquired the property. In Air Canada . . . , at pp. 1202-03, I said that the function of the law of restitution “is to ensure that where a plaintiff has been deprived of wealth that is either in his possession or would have accrued for his benefit, it is restored to him. The measure of restitutionary recovery is the gain the [defendant] made at the [plaintiff’s] expense.” (Emphasis added.) In my view the fact that [the respondent in this case] never owned the property should not preclude it from the pursuing a restitutionary claim: see Birks, An Introduction to the Law of Restitution, at pp. 133-39. [The appellant] has therefore been enriched at the expense of [the respondent]. [Emphasis in original.]
While Lac Minerals turned largely on the defendant’s breach of confidence and breach of fiduciary duty, the above comments were made in the context of La Forest J.’s analysis of the tripartite unjust enrichment framework as it was applied in that case. My view is thus that these comments are applicable to the analysis in the present case.

[45] The foregoing also indicates that the corresponding deprivation element does not require that the disputed benefit be conferred directly by the plaintiff on the defendant (see McInnes, The Canadian Law of Unjust Enrichment and Restitution, at p. 155, but also see pp. 156-83; Maddaugh and McCamus, The Law of Restitution, at p. 35-1). This understanding of the correspondence between loss and gain has also been accepted under Quebec’s civilian approach to the law of unjust enrichment:
The theory of unjustified enrichment does not require that the enrichment pass directly from the property of the impoverished to that of the enriched party . . . . The impoverished party looks to the one who profited from its impoverishment. It is then for the enriched party to find a legal justification for its enrichment.
(Cie Immobilière Viger Ltée v. Lauréat Giguère Inc., 1976 CanLII 4 (SCC), [1977] 2 S.C.R. 67, at p. 79; see also Lacroix v. Valois, 1990 CanLII 46 (SCC), [1990] 2 S.C.R. 1259, at pp. 1278-79.)


[49] My view is that it is not useful, in the context of unjust enrichment, to distinguish between expectations based on a contractual obligation and expectations where there was a breach of an equitable duty (see my colleagues’ reasons, at para. 104). Rather, a robust approach to the corresponding deprivation element focuses simply on what the plaintiff actually lost — that is, property that was in his or her possession or that would have accrued for his or her benefit — and on whether that loss corresponds to the defendant’s enrichment, such that we can say that the latter was enriched at the expense of the former. As was observed by Professors Maddaugh and McCamus in The Law of Restitution, one source of difficulty in these kinds of disappointed beneficiary cases is
a rigid application of the “corresponding deprivation” or “expense” element as if it requires that the benefit in the defendant’s hands must have been transferred from, or constitute an out-of-pocket expense of, the plaintiff. . . . [R]estitution of benefits received from third parties may well provide a basis for recovery. In this particular context, the benefit received can, in any event, normally be described as having been received at the plaintiff’s expense in the sense that, but for the mistaken failure to implement the arrangements in question, the benefit would have been received by the plaintiff. [Emphasis added; p. 35-21.]
I agree. In this case, given the fact that Michelle held up her end of the bargain, kept the policy alive by paying the premiums, did not predecease Lawrence, and still did not get what she actually contracted for, it seems artificial to suggest that her loss was anything less than the right to receive the entirety of the insurance proceeds.
. Moore v. Sweet [enrichment/deprivation nexus]

In Moore v. Sweet (SCC, 2018) the Supreme Court of Canada considers the unjust enrichment (restitution) elements of enrichment and deprivation, and their integral relationship:
[41] The first two elements of the cause of action in unjust enrichment require an enrichment of the defendant and a corresponding deprivation of the plaintiff. These two elements are closely related; a straightforward economic approach is taken to both of them, with moral and policy considerations instead coming into play at the juristic reason stage of the analysis (Kerr, at para. 37; Garland, at para. 31). To establish that the defendant was enriched and the plaintiff correspondingly deprived, it must be shown that something of value — a “tangible benefit” — passed from the latter to the former (Kerr, at para. 38; Garland, at para. 31; Peel, at p. 790; Pacific National Investments Ltd. v. Victoria (City), 2004 SCC 75, [2004] 3 S.C.R. 575, at para. 15). This Court has described the enrichment and detriment elements as being “the same thing from different perspectives” (Professional Institute of the Public Service of Canada v. Canada (Attorney General), 2012 SCC 71, [2012] 3 S.C.R. 660 (“PIPSC”), at para. 151) and thus as being “essentially two sides of the same coin” (Peter, at p. 1012).


[51] ... To be clear, it is not simply that Risa gained a benefit with a value equal to the amount of Michelle’s deprivation. Rather, what Risa gained is the precise benefit that Michelle lost: the right to receive the proceeds of Lawrence’s life insurance policy. I would also add that the insolvency of Lawrence’s estate simply means that Michelle would be unable to recover the value of her loss by bringing an action against Lawrence’s estate in breach of contract; it does not affect her ability to bring an unjust enrichment claim against Risa. The fact that a plaintiff has a contractual claim against one defendant does not preclude the plaintiff from advancing his or her case by asserting a separate cause of action against another defendant if it appears most advantageous (Central Trust Co. v. Rafuse, 1986 CanLII 29 (SCC), [1986] 2 S.C.R. 147, at p. 206).


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