This dispute arose following work carried out by Consulate
Ventures ("Consulate") and its
principal, together with Amico Contracting
("Amico") and Windsor Factory Outlet
Mall ("Windsor"), on a project that
turned 22 acres of land into a thriving manufacturer's outlet
mall. On the day before Phase I of the mall was to open, Amico and
Windsor took the position for the first time that they did not have
a binding joint venture agreement with Consulate.
Consulate sought damages for breach of contract or
restitutionary relief based on quantum meruit. The trial
judge dismissed the claim in its entirety because: (a) there was no
formal joint venture agreement and therefore no contract claim; and
(b) the quantum meruit claim was dependent in law on a
On the original appeal, the Court of Appeal rejected the idea
that a quantum meruit claim is dependent on the existence
of a valid contract, and found that Consulate was in fact entitled
to such relief. The court sent the matter back for a new trial to
determine damages and liability. At the new trial, Newbould J.
valued the quantum meruit claim at $2.25 million, and
found Amico and Windsor to be jointly liable. Amico and Windsor
appealed these findings.
The appellants took issue with the trial judge's valuation
approach. The court preferred the approach of Consulate's
expert, who placed a value of $20 per square foot on the services
rendered, though the judge reduced the figure to $10 per square
foot. The appellants submitted that the proper approach would have
been to cost out the services on an item-by-item basis in
accordance with market rates, and that the trial judge
impermissibly looked at the amount by which the services increased
the value of the project.
The Court of Appeal rejected this assertion. The Court of Appeal
did agree that the proper approach for valuing the quantum
meruit claim was the "value received" rather than
the "value added" approach, but found that the expert on
whom the judge relied was keenly aware of the difference between
the two. Had the expert applied a value-added approach, he would
have valued the claim even higher. The Court of Appeal noted that
the manner in which the "value received" is to be
calculated is flexible and not mechanistic. It is possible to take
a contextual approach to the valuation, particularly since the
remedy is founded in equity. The trial judge correctly recognized
that, in this case, any attempt to value the services on a
piecemeal basis would be artificial and not in keeping with the
true role of Consulate's principal. The trial judge
appropriately took into account the unique experience and expertise
of Consulate's principal, the scarcity of such expertise within
the marketplace, and the fact that Consulate's principal did
not view his services as piecemeal in nature and was acting as a
Another ground of appeal was that Amico should not have been
held liable as it was only involved in the construction work and
did not derive any direct benefit from the services provided by
Consulate. The Court of Appeal rejected this argument. The trial
judge found that Amico was involved in more ways than simply
construction. Amico and Windsor were essentially "fingers of
the same hand" and both gained directly from the successful
development of the property.
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