C&S Construction Co. v. Konopaki et al., 2012 SKCA 113

• Judge: Lane, Ottenbreit and Caldwell, JJ.A.
• Court: Court of Appeal (Saskatchewan)
• Case Date: October 14, 2012
• Jurisdiction: Saskatchewan
• Citations: 2012 SKCA 113;(2012), 405 Sask.R. 39 (CA)

C&S Constr. Co. v. Konopaki (2012), 405 Sask.R. 39 (CA);

    563 W.A.C. 39

MLB headnote and full text

Temp. Cite: [2012] Sask.R. TBEd. DE.004

Sahara Spa Inc. and 101118808 Saskatchewan Ltd. (appellant) v. C&S Construction Co. Ltd. (respondent)

(CACV2240; 2012 SKCA 113)

Indexed As: C&S Construction Co. v. Konopaki et al.

Saskatchewan Court of Appeal

Lane, Ottenbreit and Caldwell, JJ.A.

November 29, 2012.

Summary:

The plaintiff claimed judgment against each of the four defendants for $93,428.98 plus interest. The amount claimed was the balance owing on a loan which enabled the defendant, Sahara Spa and Fitness Inc., to acquire and renovate property in Moose Jaw for the purpose of establishing a new spa and fitness business.

The Saskatchewan Court of Queen's Bench, in a decision reported at 390 Sask.R. 275, allowed the claim against three of the defendants. Two defendants appealed. The plaintiff cross-appealed from the finding that the debt was unsecured.

The Saskatchewan Court of Appeal dismissed the appeal and the cross-appeal.

Contracts - Topic 9001

Rights and liabilities of strangers to contract - Privity of contract - Exceptions - The plaintiff sued the defendants for the balance owing on a loan which enabled the defendant, Sahara Spa and Fitness Inc. (SSF Inc.), to acquire and renovate property for the purpose of establishing a new spa and fitness business - Two defendants, who had purchased all of the assets of the business from SSF Inc., in return for the payment of the debts owing by SSF Inc. to its creditors including the plaintiff, argued that there was no privity of contract between them and the plaintiff - The trial judge rejected the argument - The doctrine of privity with respect to third party beneficiaries should be relaxed in the circumstances - The "privity of contract" defence could only be advanced because SSF Inc., as the vendor of the property, was making no cross-claim against the other two defendants - The defence was only possible because the three corporate defendants had chosen to align themselves for the purposes of the litigation - This case fit within the principled exception to the rule of privity of contract - It also satisfied the requirements for recovery based on unjust enrichment - The Saskatchewan Court of Appeal dismissed an appeal, stating "The outcome of the legal and equitable issues arising at trial turned heavily on the findings and inferences of fact made by the judge... his findings of fact and the inferences he drew were eminently reasonable in the circumstances. Moreover, we see no palpable and overriding error." - See paragraph 2.

Restitution - Topic 62

Unjust enrichment - General - What constitutes - [See Contracts - Topic 9001 ].

Counsel:

Kyla Dilling, for the appellants;

Lyle O. Phillips, for the respondent.

This appeal and cross-appeal were heard on October 14, 2012, before Lane, Ottenbreit and Caldwell, JJ.A., of the Saskatchewan Court of Appeal, who released the following decision on November 29, 2012.