UNJUST ENRICHMENT IN CANADA
0731431 BC Ltd v Panorama Parkview Homes Ltd
2021 BCSC 607 (BC SC: Sewell J)
Unjust enrichment—fiduciary duty—constructive trust
Jaswant Sangha and his company, 690174 BC Ltd (690), developed several parcels of land between 2007 and 2011. Those projects led to two sets of lawsuits. Because the primary defendants, including Jaswant and 690, eventually became bankrupt, the claimants sought proprietary relief.
The first action arose from a Joint Venture Agreement that was created in 2007 (2007 JVA). That agreement expressly stated that each joint venturer was a beneficial owner of a proportionate share of the 2007 JVA assets. Two members of that joint venture were a couple named the Garchas. As anticipated, Jaswant and 690 took control of the 2007 JVA. In that capacity, and without the Garchas’ knowledge or consent, Jaswant and 690 used the 2007 JVA assets as security for unrelated transactions, executed land swaps with third parties and, most importantly, mortgaged the 2007 JVA assets to finance the 2011 Joint Venture (2011 JV).
In performing those acts, Jaswant and 690 received help from Jaswant’s relatives and Panorama Parkview Homes Ltd (a company that Jaswant created for the purposes of the 2011 JV). When the Garchas eventually discovered the facts, they sued for breach of fiduciary duty, knowing assistance and knowing receipt. They primarily sought a constructive trust imposed on the proceeds that 690 held in the 2011 JV.
Jaswant and Panorama created a different Joint Venture Agreement in 2010 (2010 JVA). Although he did not sign that contract, an individual named Rajpreet provided funds on the understanding that they would be used exclusively for that project. In fact, the 2010 JVA never proceeded. Jaswant and Panorama nevertheless used Rajpreet’s contribution to purchase land that would be used for the 2011 JV. Rajpreet claimed a beneficial interest in the proceeds from the 2011 JV.
Jaswant and Panorama created the 2011 Joint Venture Agreement (2011 JVA) for the purpose of the 2011 JV. Although he was not a party to that agreement, an individual named Mattu contributed funds on the understanding that he would be part of the joint venture. His contributions were used for that purpose, but he did not share in its profits. Like Rajpreet, Mattu claimed a beneficial interest in the proceeds from the 2011 JV.
Decision: Actions allowed. Constructive trusts imposed.
Held: (1) The terms of the 2007 JVA confirmed that “each 2007 Joint Venturer is the beneficial owner of their proportionate share of all of the assets of the 2007 Joint Venture” (at ). “[M]embers of a joint venture owe fiduciary duties to the joint venture and to one