Unjust Enrichment in Ontario: When Can You Make a Legal Claim?
You provided money, services, or labour. Someone else benefited. You were not paid, and there was no formal contract in place. Now you are wondering whether the law provides any recourse. In Ontario and across Canada, it does: the legal doctrine of unjust enrichment exists precisely for situations where one party has gained at another's expense in a way that the law regards as unfair to keep.
This article explains what unjust enrichment means in Ontario law, the three-part test courts apply, the remedies available including constructive trust and quantum meruit, the defences a defendant can raise, and what the limitation period is for bringing a claim.
It arises in business disputes, personal relationships, estate matters, and construction or real estate conflicts. Remedies can include repayment, a share of property through constructive trust, or compensation for the fair value of services rendered.
What is unjust enrichment?
Unjust enrichment is a recognized cause of action under Canadian common law. It applies when one person has been enriched at the expense of another in circumstances that the law regards as unjust to allow the enrichment to stand without compensation or restitution.
The doctrine is important precisely because it operates independently of contract. Where a breach of contract claim requires a binding agreement with a specific term that was violated, unjust enrichment asks a different and broader question: regardless of whether there was a contract, is it fair for the defendant to keep what they have received? If the answer is no, and if the three legal elements are satisfied, the court can order a remedy.
Common situations where unjust enrichment claims arise in Ontario include:
- A business provides services or delivers goods and is not paid because the other party claims no contract was formed
- One partner in a personal relationship makes financial contributions to a property held in the other's name
- A contractor improves a property but the owner refuses to pay because no written contract was signed
- An estate dispute where one party has received a benefit from the deceased's estate without proper legal entitlement
- A company pays another party under a mistaken belief, and the mistake later comes to light
How to prove unjust enrichment: the three-part test
The Supreme Court of Canada established the modern framework for unjust enrichment in Garland v. Consumers' Gas Co., 2004 SCC 25, building on earlier decisions including Pettkus v. Becker, [1980] 2 SCR 834. Ontario courts apply a three-part test to every unjust enrichment claim.
Enrichment of the defendant
The defendant must have received a benefit. This can take many forms: money, services, labour, use of property, or the improvement of an asset. The benefit does not need to be money in the defendant's hands it can be a saved expense or an improved asset.
Corresponding deprivation of the plaintiff
The plaintiff must have suffered a corresponding loss or deprivation. The benefit received by the defendant must have come at the plaintiff's expense. This does not require that the plaintiff is worse off in an absolute sense it requires that whatever the defendant gained, the plaintiff provided.
No juristic reason for the enrichment
There must be no valid legal reason for the defendant to keep the benefit. A valid contract, a gift, a statutory obligation, or a court order can all provide juristic reason. If none applies, the enrichment is unjust and a remedy may be available.
Remedies for unjust enrichment in Ontario
If all three elements are established, the court has flexibility in choosing an appropriate remedy. The remedy is designed to reverse the unjust enrichment, not to punish the defendant or to give the plaintiff a windfall beyond what is necessary to correct the injustice.
Restitution (repayment)
The most common remedy is an order requiring the defendant to repay money or return assets to the plaintiff. The amount is calculated to reverse the enrichment giving the plaintiff back what they provided, not more. Restitution is a personal remedy against the defendant and does not confer any interest in specific property.
Constructive trust
Where the unjust enrichment is connected to specific property and a monetary remedy would be inadequate, the court may declare that the defendant holds a portion of the property on constructive trust for the plaintiff. This gives the plaintiff a proprietary interest in the asset itself, not just a personal claim against the defendant. It is particularly valuable where the property has appreciated in value since the plaintiff's contribution.
Quantum meruit
Quantum meruit meaning "as much as was earned" allows the court to award the fair market value of services provided where no price was agreed upon, where the contract was unenforceable, or where services were rendered in circumstances that make it unjust for the recipient to keep them without payment. The award reflects what those services were actually worth in the market, not the plaintiff's subjective valuation.
Has someone benefited from your money, work, or property without paying you?
Unjust enrichment claims are highly fact-specific and the limitation period runs from the date you discovered the loss. The sooner you get advice, the more options you have.
Call: 1-800-771-7882 Speak With a LawyerDefences to an unjust enrichment claim
A defendant facing an unjust enrichment claim has several defences available. Because unjust enrichment is highly fact-specific, defences must be assessed carefully against the particular circumstances of each case.
The benefit was a gift
If the plaintiff freely gave the benefit without any expectation of compensation as a gift there is no unjust enrichment. The challenge for the defendant is establishing the donor's intention at the time. Courts look at the surrounding circumstances, the relationship between the parties, and any communications about the nature of the transfer.
A valid contract or legal obligation applies
If a binding contract governs the transaction, that contract provides juristic reason for the defendant to retain the benefit. The plaintiff's remedy, if any, lies in contract law. Similarly, a statutory obligation or court order that requires the defendant to receive the benefit provides juristic reason.
No corresponding deprivation
If the plaintiff did not actually suffer a loss corresponding to the defendant's gain, the second element fails. This may arise where the plaintiff provided services voluntarily, where the plaintiff was already compensated through other means, or where the benefit the defendant received did not actually come at the plaintiff's expense.
Limitation period expired
In Ontario, under the Limitations Act, 2002, an unjust enrichment claim must generally be commenced within two years of the date the plaintiff discovered or ought to have discovered the claim. In BC, the same two-year period applies under the Limitation Act. A claim that is brought too late is statute-barred regardless of its merits.
Change of position
A defendant who, in good faith and without knowledge of the plaintiff's claim, changed their position in reliance on the benefit received may be able to reduce or eliminate their liability. This defence prevents unjust enrichment law from being applied in a way that would itself be unfair to defendants who reasonably relied on the benefit they received.
Unsure whether you have an unjust enrichment claim or a contract claim?
The distinction matters: choosing the wrong cause of action can result in your claim being dismissed. Achkar Law can assess your situation and advise on the strongest legal approach. See our guide to breach of contract in Ontario for the contractual alternative.
Speak With a Litigation Lawyer Or call us: 1-800-771-7882Unjust enrichment in British Columbia
BC courts apply the same three-part test developed by the Supreme Court of Canada. The doctrine of unjust enrichment is consistent across Canadian common law provinces and the same elements must be established in BC proceedings as in Ontario. Constructive trust and quantum meruit are equally available as remedies in BC.
The primary procedural difference is that BC claims proceed in the BC Supreme Court rather than the Ontario Superior Court, and BC's Limitation Act governs the two-year limitation period rather than Ontario's Limitations Act, 2002. If you are a BC resident or business with an unjust enrichment claim, the legal principles are the same but the procedural rules differ. Obtain advice from a lawyer familiar with BC civil procedure.
Practical takeaways
Frequently asked questions
What is unjust enrichment in Ontario?
Unjust enrichment is a legal cause of action that applies when one party receives a benefit from another, that benefit came at the other party's expense, and there is no valid legal reason for the recipient to keep it. It operates independently of contract law and is available in Ontario courts and across Canada under the framework established by the Supreme Court of Canada.
How do you prove unjust enrichment in Ontario?
Ontario courts apply a three-part test: (1) the defendant received a benefit; (2) the plaintiff suffered a corresponding loss; and (3) there is no juristic reason for the defendant to retain the benefit. All three elements must be established. The third element absence of juristic reason is often the most contested, requiring the plaintiff to show that no contract, gift, statutory authority, or other legal justification exists for the defendant keeping the benefit.
What is a constructive trust in an unjust enrichment claim?
A constructive trust is a proprietary remedy granted where unjust enrichment is connected to specific property and a monetary award alone would be inadequate. The court declares that the defendant holds a share of the property on trust for the plaintiff. Unlike a personal damages award, a constructive trust gives the plaintiff an interest in the asset itself, which is particularly valuable where the property has increased in value.
What is quantum meruit?
Quantum meruit means "as much as was earned" and is a remedy for the fair value of services provided where no price was agreed upon, where the contract was unenforceable, or where it would be unjust for the recipient to keep the services without payment. The amount is based on the fair market value of the services rendered, not the plaintiff's own assessment of their worth.
What defences are available against an unjust enrichment claim?
Common defences include: the benefit was a gift; a valid contract or other legal obligation provides juristic reason for retaining the benefit; the plaintiff suffered no corresponding deprivation; the limitation period has expired; or the defendant changed their position in good faith in reliance on the benefit received. Because unjust enrichment is highly fact-specific, defences must be assessed carefully on the particular circumstances.
How long do you have to bring an unjust enrichment claim in Ontario?
In Ontario, the basic limitation period under the Limitations Act, 2002 is two years from the date the claim was discovered or ought to have been discovered. In BC, the same two-year period applies under the Limitation Act. Missing this deadline bars the claim regardless of its merits. If you suspect you have an unjust enrichment claim, seek legal advice without delay.
Believe someone has been unjustly enriched at your expense? Talk to a litigation lawyer.
Unjust enrichment claims require careful analysis of the facts, the relationship between the parties, and the availability of defences. Getting the cause of action right from the outset determines whether you recover what you are owed. Achkar Law represents businesses and individuals across Ontario and British Columbia in commercial litigation including unjust enrichment, constructive trust, and quantum meruit claims.
Call us at 1-800-771-7882 or fill out the form below and we will be in touch.