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Quantum Meruit Denied: Contract Illegal

Quantum Meruit Denied: Contract Illegal

Lindsay v Ambrosi 2019 BCCA 442 denied a realtor’s claim for quantum  meruit on the basis that since he was not licensed under the Real Estate Services Act (RESA), he was statute barred from any remuneration in relation to real estate services.

The realtor unsuccessfully argued that he was entitled to compensation based on quantum meruit for the real estate services he provided at the request of the appellants, and that the appellants benefited from. He contended that, in spite of the statutory prohibition in section 3 of the RESA, it remained open to the court to determine the consequences of his statutory breach based on equitable principles in order to avoid the appellants been unjustly enriched by his services.

The appeal court held that the trial judge erred in following the realtor’s argument, and that there was a statutory prohibition that could not be waived or altered by the courts stating that the realtor was not entitled to remuneration if he was not licensed to practice real estate.

The court found that the realtor services were illegal and followed precedent King v. Rosenberry 1972 BCJ 357, services performed under an illegal contract cannot form the basis of the claim for quantum meruit.

The court reviewed the doctrine of illegality and found that historically it was divided into two categories:

a) common-law illegality and
b) statutory illegality

The courts have more recently found the classical approach to illegality to be incoherent and unprincipled and consequently began to develop the modern approach to illegality.

This approach was paraphrased by Saunders, J In Berne Development LTD v Haviland (1983) , 40 OR238, as one that “balanced the need to preserve public policy by not enforcing illegal agreements against the need to prevent unjust enrichment by denying recovery.”

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