The Supreme Court of Canada dealt with the rights of parties to a real estate joint venture agreement in its December 20, 2007, decision, Jedfro Investments (USA) Limited. v. Jacyk. Three individuals, acting through three corporations – Jedfro, Prombank International (USA) Limited and Gramat Investments (USA) Limited – formed a joint venture to develop real estate in Colorado; the joint venture agreement required each party to contribute to the liabilities of the joint venture. When a mortgage on the joint venture lands came due, Prombank was prepared to fund its share while Jedfro and Gramat were unable to fund their shares. The joint venture agreement gave a right to advance money on defaulting parties' behalves, but a related company to Prombank's principal instead purchased the mortgage and foreclosed on the property, and a new joint venture between Prombank and Gramat was formed without Jedfro. Jedfro and its principal sued for various relief. Their claim was dismissed at trial, and the dismissal was upheld on appeal and by the Supreme Court of Canada. The Supreme Court held that although the joint venture agreement was not terminated by the combination of Jedfro's failure to pay its share of the mortgage and by Prombank not resorting to the remedy in the agreement itself, the purchasing of the mortgage and foreclosing under it was not a breach of the joint venture agreement; nor could Jedfro or its principal recover their investment in the joint venture under the doctrine of unjust enrichment.
At the Supreme Court, Benjamin Zarnett and Julie Rosenthal of Goodmans LLP represented the Prombank companies and the Estate of Peter Jacyk. Andrew Macdonald of Markson Macdonald represented Louis V. Matukas and Gramat. James Orr and Kenneth Dekker of Affleck Greene Orr LLP represented Jedfro and the Estate of Morris Iwasykiw.