Van Camp v Laurentian Bank of Canada: Discharging Contracts and Unjust Enrichment

Van Camp v Laurentian Bank of Canada, 2015 ABCA 83 [Van Camp], is predicated on a dispute between the Laurentian Bank (“Bank”) and the Van Camps. The Bank sought recovery from the Van Camps for debts relating to conditional sales contracts. The Van Camps sought, against the Bank, money that had been withdrawn from their account. The Court of Appeal found that the Bank was not entitled to withdraw funds from the Van Camps’ account once the claimants had terminated the conditional sales contracts.


The dispute stems from an agreement between the Van Camps and a third party. The Van Camps had agreed, in early 2005, to purchase two motorcycles from Chrome Horse. The Van Camps relied on the Bank to finance the transaction. Each purchase was conducted through both a sales agreement and a conditional sales contract.

The motorcycles were never delivered. On September 23, 2005, the Van Camps notified the Bank of the termination of the sales agreement with Chrome Horse. However, pursuant to the agreements, the Bank had already advanced $78,411.24 directly to Chrome Horse and had begun withdrawing monthly payments from the Van Camps’ accounts to satisfy that amount. In total, the Bank withdrew $37,496.96 from the account.

Once the agreement was terminated, the Van Camps sought recovery from various parties for the amounts they had paid to the Bank. The Bank claimed against the Van Camps the balance of the purchase price.

First Hearing: The Master’s Decision

The Master decided, in regards to one motorcycle, that the Van Camps had received title. Thus, the Bank could claim the balance it was owed for financing that particular transaction. The Van Camps, in turn, received a judgment against Chrome Horse and another party relating to that motorcycle.

The Bank’s claim relating to the second motorcycle was dismissed. There was a series of documentation errors that amounted to a failure of consideration. As a result, the Van Camps were not responsible for any amount relating to the second transaction.

Second Hearing: The Chambers Judge’s Decision

The Bank appealed the lower-level decision, claiming a right to the balance of the purchase price. This claim failed. The chambers judge also dismissed the Van Camps’ claim against the Bank for recovery of the amount that had been withdrawn from their account.

Both parties appealed those decisions to the Court of Appeal.

The Court of Appeal

The Bank

The main issue, in the eyes of the Bank, was whether the “Van Camps were entitled to treat their obligation to repay the Bank at an end when the motorcycles were not delivered” (para 18). The Bank made several arguments in support of this appeal.

It argued, through a clause in the conditional sales contract, that the Van Camps had represented that they had received the motorcycles. This would have estopped the Van Camps from grounding their claim on Chrome Horse’s non-delivery. The clause read: “You acknowledge having received the Goods on the date hereof (or, if a date of delivery is indicated hereafter, we shall deliver the Goods on such date: [20 February 2005].)” (para 19).

This argument was rejected. The clause was better characterized, in the opinion of the chambers judge, as a “promise by the seller to deliver … and not an acknowledgement by the Van Camps that they had received the goods on that date” (para 22). According to the Alberta Court of Appeal (“ABCA”), this determination was a reasonable one.

Further, because the Bank was Chrome Horse’s assignee, it was placed in Chrome Horse’s position. As soon as Chrome Horse breached its obligations to the Van Camps, which occurred upon non-delivery, the Van Camps were entitled to discharge the contracts. Given the communications that occurred, such repudiation had occurred at the latest on October 21, 2005.

As a result, the ABCA upheld the previous decision.

The Van Camps’ Appeal

The ABCA also found the dismissal of the Van Camps’ claim against the Bank incorrect because the chambers judge focused solely on contract law. The ABCA, on the other hand, preferred to frame the Van Camps’ suit as an action in unjust enrichment.

The Court of Appeal affirmed Professor McInnes’ interpretation of Garland v Consumers’ Gas Co, [2004] 1 SCR 629, and held that in a claim of unjust enrichment, “[t]he plaintiff no longer needs to establish a positive reason, such as failure of consideration, for reversing a transfer” (para 41, citing Mitchell McInnes, The Canadian Law of Unjust Enrichment and Restitution (Markham: LexisNexis Canada, 2014) at 642). Instead, a plaintiff is entitled to recover whatever amounts have been transferred after a contract has been discharged, unless the defendant can raise a “residual defence” (para 46). Since no defence existed, the Bank owed the Van Camps the amount it withdrew after the Van Camps gave notice of their termination.


This case exemplifies the importance of restitutionary doctrines. The chambers judge’s analysis was not so much wrong as it was incomplete. He failed to appreciate the full scope of the law of obligations. In so doing, he reached an unfair conclusion.

Parties should not be able to enter into contracts, fail to exercise them, and continue to reap the benefits of those bargains. However, once a contract has been discharged, there is no longer a bargain to ground the use of contract law. The law of restitution fills this gap by ensuring that unfair behavior does not go unanswered. Through the tripartite principle, and the logic of the traditional categories of unjust enrichment, the ABCA was able to resolve this conflict. A party cannot take benefits it could have received under a contract once that contract has been terminated. This case, if nothing else, exemplifies the role that restitution plays in Canada’s private law system.

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