SUPREME COURT OF Nova Scotia Citation: M5 Marketing Communications Inc. v. GJR Developments Ltd. , 2015 NSSC 343 Date: 20151202 Docket: Hfx No. 293140 Registry: Halifax Between: M5 Marketing Communications Inc. Plaintiff v. GJR Developments Ltd., a body corporate, Sheppard’s Island Incorporated, a body corporate, Sheppards Island Development Limited Partnership, a limited partnership, and Sheppards Island Development GP Incorporated, a body corporate Defendants Judge: The Honourable Justice Margaret Stewart Heard: May 19, 20, 21, and 25, 2015, in Halifax, Nova Scotia Counsel: John T.

Shanks and Laura Rhodes, for the Plaintiff John A. Keith, Q.C. and Liam Gillis, Articled Clerk, for the Defendants By the Court: Introduction [ 1 ] M5 Marketing Communications Inc. (“M5”) claims against GJR Developments Ltd (“GJR”) the amount of $134,536.71, which represents the outstanding balance of marketing and branding services it provided in 2006 and 2007 in respect of the Sheppard’s Island Development condominium project (“Sheppard’s Island” or “the original project”).

This project was conceived by Gregory Joseph Ross (“Ross”) in 2004, on lands on the east side of the Bedford Basin, adjacent to the Dartmouth Yacht Club in Dartmouth, NS.

These lands, whose title was held by GJR, were rezoned from industrial to residential. [ 2 ] M5 claims against Sheppard’s Island Incorporated, Sheppards Island Development Limited Partnership and Sheppards Island Development GP Incorporated (collectively the “Harbour Island Group” (“HIG”)) for this debt based on the alleged assumption of M5’s liability by those defendants in February 2008, pursuant to Contribution and Side Agreements (“the 2008 Agreements”) between HIG as purchaser and GJR as vendor of the land and other property in connection with Sheppard’s Island. [ 3 ] In the alternative, M5 claims against HIG for unjust enrichment, based on the lack of a contractual or other obligation to provide work or services to HIG. [ 4 ] GJR filed no defence, counterclaim or crossclaim in this proceeding.

Ross, who had been its past president and sole shareholder, was called as a witness by M5. He testified in his personal capacity. M5 named Ross as a defendant at the commencement of the action in March 2008, but removed him and added GJR by order dated April 18, 2011. Ross’s defence and counterclaim were dismissed. [ 5 ] At the close of the M5’s case, HIG moved for non-suit, while at the same time advising of the need to hear two out-of- province witnesses, who were present. Accordingly, at the conclusion of the non-suit submissions, counsel elected to proceed with evidence rather than adjourn for a ruling.

Background

[ 6 ] In 2006 and 2007, M5 provided marketing services, promoting the Sheppard’s Island project. This project had been envisioned by Ross, to be constructed on lands owed by GJR. The project was financed by Romspen, a Toronto lending group. In March 2006, by way of a Request for Proposal, M5 was approached by Ross, using an unregistered trade name, Ross Built Homes. M5 submitted a successful proposal to provide marketing and communication services. [ 7 ] By 2007, the original project was in financial difficulty. M5’s account was unpaid.

That year, Charles Moon, Romspen’s financier and development expert, determined that a development project entailing an entirely new vision on a larger site was viable, but the Sheppard’s Island project was not. Ross was present, but not active in the development of the “Harbour Isle” project. Moon brought in new personnel, including new marketing personnel, and more land was purchased. [ 8 ] In February 2008, GJR sold all of its assets, including land, to HIG, which was created for the purpose of developing the new project. The sale was in the form of Contribution and Side Agreements.

In exchange, GJR received indemnification and assumption of all of its debts in connection with the property, and share interests in the new development calculated in part through the determination and deduction of debts subject to audit and agreement. HIG did not agree to assume any of Ross’s personal liabilities. The February 28, 2008, Contribution and Side Agreements were executed by HIG as purchaser and GJR as vendor. Clause 3.2 set out how the purchase price (the “Transfer Amount”) would be paid and satisfied: …: The Transfer Amount shall be paid and satisfied by the Purchaser as follows: (

a) the Purchaser shall, subject to the Side Agreement, assume, pay, satisfy and discharge the Assumed Liabilities and shall indemnify and save harmless the Vendor therefrom… [ 9 ] The term “Assumed Liabilities” was defined in clause 1.1(

b) to mean “all of the debts, obligations and liabilities of the Vendor in connection with the Property…” [ 10 ] In March 2008, M5 commenced this action. [ 11 ] With the market collapse in 2008, Moon’s Harbour Isle project failed. However, a new version of Harbour Isle was created by Gregory Coleman of Romspen. He began work on the project in the winter and early spring of 2009, after the site had been in limbo for some six months. Ross was no longer involved. Coleman moved forward with “Harbour Isle Two.” [ 12 ] In the next year, Coleman was able to finalize matters with Ross and GJR.

No shares were ever transferred to GJR by HIG or its predecessors. No audit was completed on GJR’s creditors. An auditor’s list existed since June 2008 and M5 was on it. Most debts were paid. M5’s account remained outstanding. By way of Settlement Agreement GJR was paid some $40,000, while agreeing to a full and final Mutual Release, dated May 18, 2010. A resolution was reached with Ross and his company GJR, and any requirement to assume, pay, satisfy liabilities and indemnify between GJR and HIG under the 2008 agreements was extinguished and rendered inactionable.

Procedural History [ 13 ] The resolution of the issues requires a detailed review of the procedural history, and particularly of the sequence of pleadings. In an Originating Notice dated March 10, 2008, M5 claimed against Ross, c.o.b. as Ross Built Homes, for damages for non-payment of invoices under a marketing and branding services contract to identify to the general public the features of, and to facilitate presales for, the Sheppard’s Island condominium development project.

M5 claimed against Sheppard’s Island Incorporated, the February 2008 transferee of assets and land, for unjust enrichment, seeking the invoice total as the value of the benefit received and corresponding value of detriment suffered by M5 from the non-payment. [ 14 ] Ross filed a Defence and Counterclaim, dated May 20, 2008. He denied that there was a contract, but if there was, he denied receipt of services as represented, and counterclaimed for damages.

He pleaded that besides failing in its marketing and providing substandard advertising and promotional literature, M5 failed to identify to the general public the features of the Sheppard’s Island project and in no way facilitated presales of the condominium units associated with the project as claimed. [ 15 ] Sheppard’s Island Incorporated – by then renamed Harbour Isle Halifax Incorporated – filed a Defence, dated June 11, 2008.

It denied any contractual or legal relationship with M5, and denied any benefit from, or use of, marketing strategies or material that M5 may have prepared for Ross, or causing any corresponding deprivation to M5.

It stated that as of February 2008 the condominium project initially conceived by GJR had failed and was inactive; that an investment group agreed to salvage the failed condominium project by acquiring certain assets from GJR – primarily the lands on which the condominium project was to be built – and caused Sheppard’s Island Investment LP (NSLP) to be formed; that Harbour Isle Halifax Incorporated was a bare trustee of NSLP; that neither it or NSLP acquired any assets from Ross; and that NSLP subsequently proceeded to re-envision, change and transform the project by acquiring, in addition to the existing ten acres, another fifteen acres of contiguous land on which the new condominium project would be constructed.

It stated that the architectural plans originally conceived by Ross had been abandoned, and new plans had been created for the new project. In terms of marketing or public opinion, the company had abandoned and distanced itself from the original, failed, condominium project and developed an entirely new marketing program. [ 16 ] M5 filed a Defence to Counterclaim dated June 12, 2008, consisting of a general denial of all claims. On February 18, 2009, M5 filed a motion for

summary judgment against Ross, including dismissal of Ross’s counterclaim. [ 17 ] In July 2009, M5 received, in the course of document disclosure, production of the February 28, 2008, Contribution and Side Agreements between GJR and HIG for the purchase and sale GJR lands and assets and other property. On April 1, 2010, M5 received leave of the court to amend the Notice of Action to add Sheppards Island Development Limited Partnership and Sheppards Island Development GP Incorporated as defendants.

Besides claiming against the three Sheppard’s Island corporate defendants, M5 further alleged unjust enrichment against the two new corporate defendants on the basis of their February 2008 assumption of the outstanding debt owing to M5 in respect of marketing services for the Sheppard’s Island condominium development project. [ 18 ] On May 14, 2010, an Amended Defence was filed by HIG. It included defences of the two newly named corporate defendants,

with a specific denial of any agreement with M5 to assume any debt or liabilities owed to it in respect of the failed condominium project.The amendment denied that M5 had any entitlement, by contract or otherwise at law, to any alleged assumption and denied anycontractual, legal or equitable relationship with M5. It stated that none of the three Sheppard’s Island corporate defendants nor theinvestment group acquired any assets from or assumed any liabilities of Ross. [19] On May 18, 2010, a Settlement Agreement and Mutual Release, dated April 30, 2010, was executed among others by HIG,Ross and GJR. [20] On August 5, 2010, the three Sheppard’s Island corporate defendants filed a motion for

summary judgment. [21] On September 23, 2010, M5 filed its Second Amended Originating Notice (Action), seeking leave to amend its pleadings toremove its claim against Ross and add GJR as a defendant. On April 18, 2011, McDougall J. granted leave to M5 to add GJR asdefendant and to remove Ross, and provided GJR with 30 days to amend Ross’s counterclaim to substitute itself as plaintiff bycounterclaim, failing which the counterclaim would be dismissed. GJR never filed a defence, counterclaim or crossclaim against theother three corporate defendants. M5 conceded in its September 28, 2010, brief relating to HIG’s

summary judgment motion that itsclaim for unjust enrichment against those defendants should be dismissed, as it was now clear that there was no sufficient evidentiarybasis for the claim. M5’s claim for unjust enrichment continued in the amended pleadings attached to the order, along with M5’s claimfor assumption of liability. [22] On May 25, 2011, the three Sheppards Island corporate defendants – collectively referred to as HIG – filed a Second AmendedDefence and Counterclaim. HIG amended the defence in response to the substitution of GJR as defendant.

HIG denied receiving anyprofit or benefit at the expense of M5; denied any corresponding deprivation to M5; and counterclaimed alleging negligentmisrepresentation, unjust enrichment and setoff.

It elaborated that M5 had provided services to Ross and Ross Built Homes, not to GJRor HIG; that HIG neither used nor acquired any benefit from any materials or services provided by M5; that HIG was not responsible forthe obligations of Ross, Ross Built Homes or GJR; that HIG had no contractual privity with M5 and had never agreed to assume anyliability to M5 for any services M5 provided to Ross, Ross Built Homes or GJR; that M5 was not party to the 2008 Agreements toassume certain liabilities of GJR and may not rely upon those agreements as a third party claiming against HIG; that in any event in2010, GJR released HIG from any and all responsibilities under the prior assumption agreements, and any and all liabilities of GJR inconnection with the project; that GJR released HIG prior to M5 asserting any claims against GJR; that any causes of action against HIGwere extinguished at that time; that M5 could not now seek to resurrect an extinguished debt, particularly as a third party with nocontractual privity; and that M5 had no entitlement in contract or at law to any alleged assumption. [23] On June 10, 2011, M5 filed a Notice of Defence to Counterclaim, containing a general denial of all claims.

Assumption of Liabilities [24] M5 alleges that HIG breached obligations under the Contribution and Side Agreements with GJR concerning unpaid accountsfor marketing services provided by M5 to GJR. M5 says it is a third party beneficiary of the Agreements. As a debt is allegedly owing toit, M5 argues that it is entitled to the benefit of HIG and GJR’s contract provisions.

Specifically, it is alleged, HIG, as a purchaser ofGJR’s property agreed to assume, pay, satisfy and discharge all of the debts, obligations and liabilities of GJR as a vendor in connectionwith the property and to indemnify and save harmless GJR therefrom. [25] HIG submits that M5 cannot advance a cause of action as a third-party beneficiary of the 2008 Agreements against HIG, acontracting party. HIG says the 2008 Agreements (and the evidence as a whole) do not indicate a clear intention to benefit M5, asrequired by Fraser River Pile & Dredge Ltd. v.

Can-Dive Services Ltd., (SCC), [1999] 3 S.C.R. 108, [1999] S.C.J. No.48; that the execution of a mutual release by the contracting parties, GJR and HIG, on May 18, 2010, extinguished the 2008 Agreementsand rendered any indemnity or assumption of liability under them no longer actionable; that HIG only assumed liabilities of GJR, and M5contracted with Ross for marketing services, not GJR; and that under the terms of the 2008 Agreements, HIG only purchased what wasof value to them on a go-forward basis, which was not the case in respect of any debt allegedly owing to M5.

Accordingly, HIG submitsthat the claim for assumption of liabilities should be dismissed. [26] Generally, a contract cannot confer rights or impose obligations on any person except the parties: see London Drugs Ltd.Cushne and Nagel International Ltd., [1992 ] (SCC), 3 S.C.R. 299. However, relaxation of the rule of privity of contractis appropriate where its strict enforcement “does not respect allocations and assumptions of risk made by the parties to the contract”:London Drugs, supra., at 423; Fraser River Pile & Dredge, supra, at para. 26.

Relaxation of privity to allow a third party beneficiary toclaim rights under a contract to which it is not a party is governed by the two-part test in Fraser River Pile & Dredge, supra.: 32 … [E]xtrapolating from the specific requirements as set out in London Drugs, the determination in general terms is made on the basisof two critical and cumulative factors: (

a) Did the parties to the contract intend to extend the benefit in question to the third party seekingto rely on the contractual provision? and (

b) Are the activities performed by the third party seeking to rely on the contractual provisionthe very activities contemplated as coming within the scope of the contract in general, or the provision in particular, again as determinedby reference to the intentions of the parties? [27] The relevant intentions when applying the Fraser River Test are those of the parties to the agreement, in this case GJR andHIG.

HIG argues that even if the test applies in this case, the wording of the 2008 Agreements reflected the intentions of the parties, andthere is no evidence that any of the parties negotiated, discussed, or intended to extend the coverage to M5. [28] Assuming for the sake of argument (but not agreeing) that M5 had contracted for services with GJR and not Ross personally,HIG identifies eight basic facts in respect of M5’s claim. (M5 does not, in principle, object to these assertions). In particular, HIG assertsthat:

(1) HIG was not a party to the contract for M5’s marketing services.

(2) M5 was not aware of HIG and HIG did not exist when M5was providing its services.

(3) M5’s verbal agreement with GJR was to provide marketing services in exchange for money. M5 did notbargain for any security such as guarantees, indemnity, or mortgages.

(4) M5 seeks payment from HIG as a third party beneficiary of the2008 Agreements. M5 thereby acknowledges that it has no privity of contract with HIG.

(5) M5 had no knowledge of or input into the2008 Agreements. M5 acknowledged that it could not say what the intentions or expectations of the contracting parties were until it

received the Agreements in July 2009, three years after its marketing services were provided and one year after M5 began this litigation.

(6) The parties to the 2008 Agreements entered into a Settlement Agreement which included a full and final Mutual Release permanently extinguishing any continuing contractual or business relationship between them on May 18, 2010.

(7) When the contractual relationship ended, M5’s claim had been amended once, but still named Ross as a personal defendant despite the fact that the first amendment (adding the two other HIG entities) occurred in April 2010 and M5 had received the 2008 Agreements in July 2009, about eight months earlier.

(8) The 2008 Agreements included no obligation with respect to Ross personally in the form of indemnities or obligations such as assumption of debts. They were limited to GJR, which was not a party to any litigation and was not subject to any claim when the mutual release was signed on May 18, 2010. [ 29 ] As noted above, HIG, GJR and Ross agreed to a Mutual Release (the Release), dated May 18, 2010, whereby any and all claims that might have arisen in respect of the 2008 Agreements were extinguished.

At issue is whether the Release precludes M5’s claim as a third party beneficiary from proceeding, given that the Release had already been agreed to when the claim was amended to include GJR. In other words, can M5 claim as a third party beneficiary to a contract that has been released by the contracting parties? [ 30 ] M5 argues that HIG was already on notice before the Release of the potential that it might be subject to M5’s claim, by way of the April 2010 amended pleadings. Besides adding the other two corporate HIG defendants, clause 13 was pleaded, which stated: 13.

Further, or in the alternative, in February 2008, Development LP by its general partner, Development GP, agreed to assume certain liabilities in respect of the Sheppard’s Island condo development. Included within those liabilities was assumption of the outstanding debt owing to the Plaintiff for services provided by the Plaintiff in respect of the Sheppard’s Island condo development.

The Plaintiff further claims against the Defendants, Development LP and Development GP, on the basis of their assumption of the debt owing to the Plaintiff. [ 31 ] M5 says the claim was amended to include the claim against HIG on the basis that HIG had assumed certain liabilities of the project. While relying on the February 2008 Agreements that were specific to GJR and HIG, M5 argues that the amended pleading does not say that the claim is a function of obligations that HIG owes specifically to Ross or GJR.

The pleading is silent as to the identity of the party from which HIG had assumed the liabilities, while alleging that HIG had assumed liabilities connected to the Sheppard’s Island project, including services provided by M5. As such, M5 says, when HIG agreed to the release, it knew about the claim against it under the terms of the 2008 Agreements.

M5’s position is that it is claiming against HIG as a function of that assumption of liability, and that the Agreements had not yet been extinguished when HIG first had knowledge of the claim being made against it. [ 32 ] In the April 2010 amendment, M5 referred to an “outstanding debt owing to the plaintiff for services” that it was “further” claiming against HIG “on the basis of HIG’s assumption of the debt owing to the Plaintiff.” This debt was pleaded and claimed to be Ross’s debt.

M5 claims against the corporate defendants jointly and severally “on the amount set out above”, being the amount M5 claims “against the defendant Ross” and “which represents the outstanding balance of services provided by the Plaintiff to the Defendant, Ross”. [ 33 ] HIG did not contract to assume certain Sheppard’s Island condo development liabilities as pleaded. Rather, the 2008 Agreements clearly indicate that HIG agreed to assume the liabilities of the vendor, GJR, in connection with the property under the definition of “assumed liabilities”.

Any claim against HIG relating to liabilities it assumed must be a debt of GJR. [ 34 ] I am not convinced that the amendment put HIG on notice of a claim or potential claim against GJR at the time the mutual release was signed. HIG knew there was a claim relating to certain liabilities involving the 2008 Agreements, but no notice of a claim against GJR had been given. M5 had been in possession of the agreements for some eight months. It is clear from the pleadings and the manner in which M5 conducted the case that M5 was focused on the debt allegedly owed by Ross, to the extent of considering

summary judgment against Ross prior to claiming against GJR in September 2010. The motion to amend to remove Ross and add GJR was dated September 23, 2010, some four months after the Release was signed. HIG moved for

summary judgment on the pleadings as they stood. It was not for HIG to surmise from the pleadings that M5 would identify a new debtor in place of Ross. Given the choice of proceeding against either GJR or Ross (as named on marketing invoices that comprised a portion of its debt), M5 chose Ross. Silence is not a pleading. The entire context was a debt allegedly owing to M5 by Ross. When the Release was signed, M5 was suing Ross who had nothing to do with the 2008 Agreements. [ 35 ] When the Release was signed in May 2010, there were no continuing rights or obligations and M5 was not claiming against GJR.

When M5 subsequently changed Ross to GJR as a defendant, it could not claim as a third-party beneficiary under a contract that no longer existed. When M5 amended its claim to remove Ross and add GJR, the contracting parties had not bound themselves to anything. HIG and GJR had released one another. There was nothing left to sue upon, and certainly nothing left for non-contracting parties to sue upon. [ 36 ] GJR released HIG from any and all liabilities associated with the Sheppard’s Island project prior to M5 ever asserting any claim against GJR.

Therefore any third party beneficiary claim which M5 might otherwise have against HIG through GJR was extinguished. The claim with respect to the 2008 Agreements cannot proceed because the contracts no longer exist and HIG is not bound by obligations that it discharged when there was no claim by M5 against GJR, but only against Ross, with whom HIG had no contractual relationship. M5’s claim for assumption of liabilities is dismissed. Unjust Enrichment [ 37 ] The elements of unjust enrichment are well settled.

To successfully sustain a claim for unjust enrichment of HIG by the services of M5, it is necessary to establish that there was an enrichment of HIG, a corresponding deprivation to M5, and an absence of any juristic reason for the enrichment. [ 38 ] Cromwell J. stated in Kerr v. Baranow , 2011 SCC 10 , [2011] S.C.J. No. 10, absence of juristic reason means “there is no reason in law or justice for the defendant's retention of the benefit conferred by the plaintiff, making its retention ‘unjust’ in the circumstances

of the case…” (para. 40). Cory J. said in Peter v. Beblow, (SCC), [1993] 1 S.C.R. 980, “When a claimant is under noobligation contractual, statutory or otherwise to provide the work and services to the recipient, there will be an absence of juristic reasonsfor the enrichment” (p. 1018). The benefit need not be retained permanently. Iacobucci J. said, in Garland v. Consumers’ Gas Co., 2004SCC 25, [2004] S.C.J.

No. 21, “While the respondent rightly points out that the language of ‘received and retained’ has been used withrespect to the benefit requirement … it does not make sense that it is a requirement that the benefit be retained permanently” (para. 37). [39] M5 says the circumstances of HIG’s assumption and indemnification of GJR’s liabilities are irrelevant, and argues that it hasno obligation to provide work or services to HIG.

It says HIG has received the benefit of M5’s marketing services for Sheppard’s Islandand is not entitled to retain these benefits without compensating M5. [40] HIG argues that M5 has failed to establish an absence of juristic reason for the enrichment. More specifically, M5 submits thatthe contract was within an established category of juristic reason, and that M5’s contract with GJR lacked protection for non-payment ofits account and failed to establish a residual proprietary interest in its service product. HIG also argues that M5 did not establish that HIGreceived benefit or value from M5’s marketing services.

Accordingly, HIG says unjust enrichment is not established. Further, HIGargues, this claim goes to the integrity of the judicial process. At discovery and in its September 2010 brief on HIG’s

summary judgmentmotion, M5 conceded that this part of the claim should be dismissed. HIG argues that the Court should exercise its inherent jurisdictionto control its own process and ensure a party cannot get relief based on one theory, then reverse that position once relief is obtained. [41] Has HIG received and retained an enrichment? The tangible benefit to HIG alleged by M5 is that, besides sparing the expensethat it would have otherwise incurred to market the development in 2006 and 2007, HIG received actual value for M5’s services duringthe initial Harbour Isle project.

The alleged benefit lay in the marketing services provided to Sheppard’s Island by M5 to publicize thatproperty as the potential location of a condominium development. [42] While acknowledging that the development has been rebranded as Harbour Isle, M5 argues that HIG has built upon the marketawareness created by M5’s marketing of a new residential development in a previously overlooked waterfront site along the BedfordBasin.

According to M5, the Sheppard’s Island project was neither completely re-imagined as Harbour Isle, nor was Harbour Islecompletely different from Sheppard’s Island in terms of its appearance and the marketing information used to promote it. While thedesign of the respective developments may have differed, they were both primarily residential and both utilized the same location.Through its marketing efforts for Sheppard’s Island, M5 repurposed an overlooked industrial waterfront site to residential, anddemonstrated to the public that this was a desirable location for a residential development.

With the ultimate development of the initialHarbour Isle project on the same site as the failed Sheppard’s Island project, M5 says, HIG benefitted from the marketing work of M5. [43] HIG submits the marketing services for which M5 seeks payment were of no benefit to the Harbour Isle development at anystage. [44] In its 2006 Request for Proposal (“RFP”), Ross Built Homes described the condominium development for which it soughtmarketing services as being located on “one of the last remaining parcels of waterfront land.” The RFP went on to describe the“Marketing Communication Objective.” Besides getting to market quickly with a strong launch, it was focused on selling “the value andbeauty of unique dwellings that integrate themes of modern convenience, historical significance and exceptional design.” [45] Evidence of what M5 did – in terms of work product and promotional methods – for Sheppard’s Island in the local marketappears in the invoices, third party disbursement invoices and estimates.

They include such items as brochures, flyers, business cards,sales insets, image pieces, booklets, pop up banners, website development, photo shoot, launch party, Atlantic Business Ads, Chronicle Herald inserts, sales display, billboards, posters, Royal Gazette notices, and sales kit folders. There is, however, a void as to what, if any,aspects of the development’s profile these items raised. With few exceptions, there is no evidence of the content or specifics of the mediacampaigns or written materials, nor is there evidence of who received them or how they were distributed.

Accordingly, I am unable tosee a basis in the evidence for the increase in public awareness asserted by M5, let alone whether any such increase was linked to M5’smarketing efforts.

I am asked to draw inferences about public awareness, which I am not prepared to do. [46] In the main brochure that M5 created for Sheppard’s Island, Ross’s mission statement on behalf of GJR was “to provide abuilding of tremendous presence.” The document went on to describe, “among these beautiful waterfront coves, a breathtakingcombination of seaside and urban living.” The one-page prelude ended by calling the prospective Sheppard’s Island development “alandmark property built in Dartmouth with old world craftsmanship.” These materials did not go into the asserted history and uniquenessof the locale, or the supposed redefining of a previously waterfront.

This appears to be in keeping with the objective of focusing on thedwelling and the complex. Indeed, the content itself focused solely on the units, with one sketch of the grounds, and provided no coastalviews other than one on the front with sail boats behind the complex. There is also reference to patio decks overlooking Bedford Basin.The other piece of evidence suggesting the content of M5’s marketing services was an invoice for a 10x12 paper billboard poster, with abusiness card-sized sample attached.

This item showed a panoramic view of the same condominium complex that appeared in thebrochure, with the words “Luxurious Waterfront Vistas” in front of it and sail boats behind it. [47] M5 argues that the actual value of its marketing services is reflected in the fact that some 32 Sheppard’s Island units were pre-sold. With the benefit of that list, HIG pre-sold some ten units in the initial Harbour Isle complex to purchasers who, according to M5’stheory, were persuaded by its marketing that this could be a desirable residence.

Although the initial Harbour Isle project was differentlyformulated and designed, M5 submits, it remained a residential development on lands that had never in recent history been marketed orpublicized as having any residential purpose, prior to M5’s efforts. As such, HIG is said to have had the benefit of M5 delivering one-third of some 32 pre-sold unit holders who were convinced of the desirability of the location, the foundation for which was laid by M5’smarketing.

Further, the fact that the benefit need not be retained permanently, as per Garland, supra, disposes of the loss of all of thepresale unit holders when the initial Harbour Isle project failed in 2008. [48] Basically, M5 asks that I consider these few pieces of marketing material, along with the listings of marketing material in thevarious invoices and estimates, and use this evidence as a basis to draw inferences – which I decline to do – that M5 was responsible for,and HIG derived the benefit of, the 32 (and subsequently ten) pre-sold units in HIG’s initial Harbour Isle project.

There is no evidence tosupport this. A total void exists as to such points as who the pre-sold unit-holders were, why they came to be involved in the original

project, and why or how a subset of them moved forward with pre-sold units in the initial Harbour Isle complex. No one testified on any of these matters. Similarly, there is no basis in the evidence upon which to make findings as to the degree of public awareness, particularly in view of the possibility that it was simply attributable to the rezoning process that GJR/Ross undertook. In

summary, M5 has failed to tender evidence sufficient to prove a benefit accruing to the defendants. [ 49 ] I note that in his defence in M5’s action against him, Ross stated that M5 completely failed in its marketing and branding plan for the Sheppard’s Island development, that it failed to identify to the public the features of the Sheppard’s Island development, and that M5 in no way facilitated pre-sales for the condominium units. At trial, he described this as a bit harsh, and was able to elaborate on at least one useful promotional method.

It does not follow, however, that any benefit was received by the later projects. James Megan – M5’s former Senior Vice President – stated on discovery that M5’s marketing efforts on the Sheppard’s Island project would have little value for the new Harbour Isle project. He testified that even the previous Sheppard’s Island clients who were potential clients for Harbour Isle would need to be re-convinced about the new entity. For him, there was no question that the decision to abandon the Sheppard’s Island project totally undermined M5’s marketing efforts (my emphasis).

He agreed that this abandonment eliminated any value M5 had already brought to the table. I accept the evidence of the HIG witnesses Moon and Chapman that they had no use for M5’s marketing materials or services and that none of it was used in either Harbour Isle project. They were two totally different types of development; among other things, there was a fifteen-acre size difference that was not accounted for in any of M5’s marketing work. [ 50 ] I conclude on the totality of the evidence that M5’s marketing services were of no value to HIG and HIG did not benefit at all from its services.

Finding as I do that no tangible benefit has been received and retained by HIG, I find it unnecessary to address the last two elements. M5’s claim for unjust enrichment is dismissed. Conclusion [ 51 ] I have reached the following conclusions: (1) the execution of the May 2010 Mutual Release extinguished the 2008 Agreements, as well as any possibility of M5, as a third party beneficiary, being able to rely on an agreement between the contracting parties HIG and GJR.

In so finding, I consider it unnecessary to comment on the law relating to the principled exception to the doctrine of privity of contract, and specifically whether the exception should be extended to allow M5 to advance a claim in the circumstances. Nor do I make any comment on the question of credibility in respect of who M5 contracted with; (2) the amended pleading, specifically clause 13, one month earlier does not negate the effect of the Mutual Release; and (3) the first criterion of unjust enrichment is not met, in that HIG received no value from M5’s services. As such, no further analysis is required.

In the result, M5’s claims are dismissed. Stewart, J.