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BCL Law Notes Restitution of Unjust Enrichment BCL Notes

Rbc Dominion Securities V. Dawson Notes

Updated Rbc Dominion Securities V. Dawson Notes

Restitution of Unjust Enrichment BCL Notes

Restitution of Unjust Enrichment BCL

Approximately 620 pages

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RBC Dominion Securities v. Dawson

Facts

In 1984 the respondent, Rosemary Dawson, purchased, through RBC (securities brokers), 3,000 common shares of Hawthorne Gold Corporation for approximately $2,700.00. RBC held the shares for Ms. Dawson. Thereafter, Ms. Dawson received from RBC regular monthly statements showing the value of her shares. Shortly after they were purchased, the value of the shares began to drop and Ms. Dawson lost interest in her investment.

In 1989, under a mandatory plan of amalgamation with Eureka Resources Inc., five common shares of Hawthorne were to be exchanged for one common share of Eureka.

When Ms. Dawson received her monthly statement for the period ending May 31, 1990, it showed an adjustment based on receipt of five common shares of Eureka for each share of Hawthorne. Ms. Dawson was told she held 15,000 shares of Eureka. The statement should have said 600. The value of Ms. Dawson's holdings was given as $6,750.00. It should have been $270.00. Ms. Dawson sought, from a broker employed by RBC, verification of the facts contained in the statement. The broker, apparently on the basis of incorrect data in RBC's computer, confirmed the information. Ms. Dawson then instructed RBC to sell her shares in Eureka. After payment of commission, she received $5,069.74 for the sale of her shares, $4.919.74 more than their value.

The error was subsequently discovered. On July 26, 1990, Ms. Dawson was written and advised of the error. RBC requested a refund. Ms. Dawson refused.

Holding

Recognition of Change of Position

The development of the defence of change of circumstances was, in part, a reaction to the deficiencies of the defence of estoppel including the necessity of establishing a representation of fact or breach of duty and the fact that estoppel could deny the payor a remedy though it was inequitable that the payee be permitted to retain all of the money. (Law of Restitution by Goff and Jones, 3rd ed., p. 113.)

In addition to stating the foundation of actions for recovery of money paid under mistake of fact, Storthoaks also recognized the existence of the defence of change of circumstances. It is available "... if it can be established that [the defendant] had materially changed its circumstances as a result of the receipt of the money." Justice Martland adopted the American view as expressed in the Restatement of the Law of Restitution.

Estoppel defence no longer applies

The estoppel defence, while protecting the innocent payee, may unnecessarily maintain the inequity for the payor. To make the estoppel defence one which operates pro tanto would be inconsistent with the most commonly accepted view of estoppel: that it is a rule of evidence which prevents evidence of the...

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