Issues:

1. Entitlement to specific performance of a purchase agreement.
2. Entitlement to damages based on unjust enrichment.

Background

• Foodies Curry & Shawarma Inc. (seller) entered into a $260,000 purchase agreement with Royal Paan Leasing Ltd. (buyer) for restaurant assets.
• The agreement stipulated that all assets must be free of encumbrances and set a closing date of May 31, 2023.
• The assets remained encumbered by security interests, including one with BMO, which Foodies failed to discharge or adequately address.
• Despite Foodies' breach, Royal Paan took possession of the assets and premises on June 1, 2023, without paying the purchase price.

Court’s Analysis and Rulings

1. Specific Performance:

   • Denied as Foodies breached the agreement by failing to deliver unencumbered assets or meet Royal Paan's conditions for accepting the encumbered ones.
   • The court found damages, not specific performance, sufficient as a remedy.

2. Unjust Enrichment:

   • Granted. Royal Paan was enriched by possessing and using the assets without payment, corresponding to Foodies' deprivation.
   • The court rejected Royal Paan’s "unclean hands" defense, finding Foodies’ breach did not bar equitable relief.
   • Relief was limited to the $260,000 purchase price, adjusted to address the BMO security.

Disposition

• Royal Paan must pay $237,130.27 into escrow for asset transfer and discharge of the BMO encumbrance.
• Foodies is responsible for any shortfall in the BMO loan payout.
• Costs submissions were deferred pending party negotiations.