Dispute Over Purchase Of Canadian Art Results In Unjust Enrichment Claim

• Published date: 14 June 2022
• Subject Matter: Litigation, Mediation & Arbitration, Trials & Appeals & Compensation
• Law Firm: Gardiner Roberts LLP
• Author: Mr James R.G. Cook

While it may be tempting to purchase expensive artwork directly from a private seller without the involvement (and associated costs) of a reputable art gallery, care should be taken to ensure that the terms of the transaction, including the price and specific pieces involved, are put into writing.

In Huntjens et al v. Obradovic, 2022 ONSC 2629 (CanLII), the plaintiffs were art collectors for many years, with a special interest in Canadian art. After retirement, they operated a small business, purchasing and selling artwork.

In May 2018, they came across the defendant who said that he had artwork for sale. The defendant was not an artist and had never owned an art gallery. The parties first met on May 22, 2018, in the parking lot of a pawn shop in Mississauga. The defendant advised that he was "downsizing" his grandparents' antiques slowly, painting-by-painting. After the sale of paintings to the plaintiffs, the defendant did not sell artwork to anyone else.

The plaintiffs purchased a number of paintings from the defendant and exchanged at least one item from their personal collection. All the paintings were attributed to purportedly renowned Canadian artists and had the expected markings, stamps and signatures.

Three cheques were delivered by the plaintiffs to the defendant, one for $30,000 (dated May 31, 2018), and two for $50,000 (one dated May 31, 2018, and one dated June 2, 2018).

The parties subsequently became embroiled in a dispute over the agreed-upon purchase price for the artwork. The plaintiffs claimed that the agreement was actually for $80,000, and that they had only paid the additional $50,000 by way of a replacement cheque for one the defendant reported as having "bounced," but which had actually cleared.

The defendant claimed that the price was $130,000, being the amount the plaintiffs actually paid. There was no written agreement which set out the specific price or paintings that were being purchased for what amounts. However, the plaintiffs had contemporaneous email correspondence in which they indicated that they had only provided the second cheque for $50,000 because they understood the first cheque had not been cashed.

The plaintiffs sued when the defendant failed to reimburse the $50,000 overpayment and stopped responding to their communications.

It turned out that the defendant had entered into an agreement of purchase and sale to purchase a property in Toronto for $368,000, with a deposit of $20,000 delivered on June 2, 2018, that...