Executive Summary: Key Legal and Evidentiary Issues

• The parties agreed that Regal Realty Limited was unjustly enriched by Clarke's services, limiting the dispute to the quantum of reasonable compensation on a quantum meruit basis.
   
• Clarke's claim for 50% of net redevelopment revenue was rejected because no partnership or revenue-sharing agreement was ever concluded between the parties.
   
• Both of Clarke's damages theories — compensation based on a percentage of revenue and on 2,100 hours at a project manager's rate — were dismissed for lack of evidentiary support.
   
• Expert evidence from Robert Tancock, qualified in engineering and project management, was admitted to establish market rates and typical hours for project managers and project facilitators in Atlantic Canada.
   
• The court found that Clarke performed a hybrid role combining elements of project owner, project manager, and project facilitator, and valued his services accordingly.
   
• Costs were awarded to Clarke on a Column 3 basis; the court declined to award solicitor-client or Column 5 costs despite Regal's request.
   

Facts of the case

William Clarke, a real estate professional, began discussions with William Mahoney, principal of Regal Realty Limited, around early spring 2012 regarding the redevelopment of Regal's two-storey building on Newfoundland Drive in St. John's, Newfoundland and Labrador. Regal had acquired the property in 1994 and, beginning early in 2010, had started considering redevelopment or sale. Clarke proposed converting the property into residential condominiums and told Mahoney he had the expertise and City relationships to shepherd the rezoning through without public hearings. Clarke also introduced Regal to a group of design professionals, including RJC Services (architectural consultants led by Richard Cook), Hubert Alacoque (electrical and mechanical consultants), DBA Consultants (structural), and Dynamic Engineering (civil), among others. Although Clarke initially hired some of these consultants through one of his companies, Regal eventually retained them directly when Mahoney became aware of the billing arrangement.

Clarke helped because he anticipated becoming a 50% revenue partner in the redevelopment. He provided Regal with at least two draft Revenue Sharing Agreements (RSA) proposing a 50%-50% split of net revenue. Mahoney, however, testified that he only intended a partnership in which Clarke would share both the profits and the financial risks — what Mahoney called a "true partnership." The parties never reached agreement on how to share the risk and benefits of the redevelopment. In the fall of 2011, Clarke had also offered to purchase the property from Regal for $4.5 million, subject to rezoning approvals, but that offer was rejected.

In February 2014, the City of St. John's approved the rezoning. Clarke continued to assist Regal until around August 2014, when Mahoney returned from vacation and it became apparent, through emails between July 7 and July 22, 2014, that Mahoney no longer wanted Clarke's involvement. Regal prepared tender documents from November 2013 to March 2014, tenders closed in April 2014, and the construction contract was awarded at the end of April 2014. Clarke admitted he had little role in the tendering phase and none in the construction phase. Regal did not pay Clarke anything for his services. Regal sold the redevelopment in late winter 2026 for approximately $36 million (per Mahoney's testimony, a gross figure subject to adjustment).

Policy and legislative provisions at issue

The parties filed a Consent Order prior to trial in which they agreed that Clarke was entitled to damages for unjust enrichment and that his compensation would be assessed on a quantum meruit basis. The Consent Order expressly provided that Clarke's damages would not be based on "an entitlement pursuant to the existence of a 'verbal agreement' or 'revenue sharing agreement'" as those terms were used in Clarke's Summary Trial Brief. The court found that the Consent Order did not prevent Clarke from referring to the draft RSA as context for the fee discussions, but it did preclude basing compensation on any variant of the argument that Regal owed Clarke a percentage of the redevelopment revenue under the RSA or any purported agreement. Costs were governed by the Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D, with the court applying Rule 55.04 factors in considering whether enhanced costs were appropriate.

Reasoning and analysis

The court applied the unjust enrichment framework reaffirmed by the Supreme Court of Canada in Moore v. Sweet, 2018 SCC 52, and the Kerr v. Baranow, 2011 SCC 10 test, which requires Clarke to show a causal connection between his loss and Regal's gain. The court also drew on the Malik factors from Malik Estate v. State Petroleum Corporation, 2009 BCCA 505, as described in Craigdarlock Holdings Ltd. v. Syscon Justice Systems Canada Ltd., 2010 BCSC 1186, to assess quantum meruit compensation — considering factors including prior dealings, the nature of the anticipated fee, the value of the opportunity realized, the effort required, and the market value of the services.

The court rejected Clarke's first theory (a percentage of revenue) entirely: the parties never agreed to revenue sharing, the Consent Order precluded such a basis, and Clarke failed to prove what his share of revenue would have been or how it translated into a share of equity. The court equally rejected Clarke's second theory (2,100 hours at a project manager's rate), finding that Clarke kept no time records, presented no invoices or corroborating evidence, and that the claimed hours far exceeded what was typical for services of this kind.

On the question of Clarke's role, the court disagreed with the defence expert Tancock's characterization of Clarke as merely a project facilitator. Justice MacDonald found that Clarke performed a hybrid role: he fulfilled many duties of a project manager during the pre-construction phase, acted at times as an owner (hiring consultants initially and acting as Regal's agent with the City), and also performed all the duties of a project facilitator. The project manager role during pre-construction was effectively split between Clarke, Cook, and Mahoney. The court accepted Tancock's evidence on market rates — $125 per hour for project manager work and $100 per hour for project facilitator work — as fair and reasonable. Applying those rates to a carefully apportioned number of hours (75 hours as project manager for the period March 2012 to March 2013; 30 hours as project manager for March 2013 to late April 2014; 20 additional hours post-tendering; 75 hours for owner-role duties; and 125 hours as project facilitator including 50 hours added to recognize his critical role in assembling the project team), the court calculated compensation of $25,000 + HST for 200 hours of project manager work, and $12,500 + HST for 125 hours of project facilitator work, totalling $37,500 + HST. The court declined to apply a risk premium, finding that Mahoney had said he would have paid Clarke if invoiced and did not condition payment on project success.

Ruling and overall outcome

Justice MacDonald ruled in favour of the plaintiff, William Clarke. Regal Realty Limited was ordered to pay Clarke $37,500 plus HST, together with prejudgment interest calculated from April 29, 2014 — the date Regal awarded the construction contract — to the date of payment. Costs were awarded to Clarke on a Column 3 basis under the Rules of the Supreme Court, 1986; the court declined to award solicitor-client or Column 5 costs, rejecting Regal's argument that Clarke's conduct in prosecuting the claim was reprehensible, scandalous, or outrageous.