Tsai v. Dugal, 2022 ONCA 81

Court File and Parties

COURT OF APPEAL FOR ONTARIO DATE: 20220131 DOCKET: C68741

Strathy C.J.O., Harvison Young and Zarnett JJ.A.

BETWEEN

Wen-Chi Tsai Applicant (Appellant)

and

Lucien Dugal by his Estate Trustees, Johanne Dugal Roussee and Luc Dugal Respondent (Respondent in Appeal)

Counsel: Michael S. Deverett, for the appellant Alexandra Carr and Simran Dosanjh, for the respondents

Heard: January 17, 2022, by video conference

On appeal from the order of Justice Elizabeth M. Stewart of the Superior Court of Justice, dated October 7, 2020.

Reasons for Decision

[1]

Overview

The appellant, Wen-Chi Tsai, and the respondent, Lucien Dugal, now deceased, began a romantic relationship in 2001 which progressed to cohabitation and ended in separation in July 2014. Shortly after their separation, the appellant commenced litigation making claims against all properties owned by Mr. Dugal at the time of separation. Mr. Dugal died in November 2017, and his two children, his estate trustees, have continued to defend the claim.

2The litigation has continued since 2014 but, by the time of the hearing in 2019, the only issue for the hearing was whether the appellant was entitled to an interest in the proceeds of one of these properties (“123 Morse”) based upon the doctrine of unjust enrichment. The application judge dismissed the appellant’s claim and the appellant appeals that judgment on the basis that the application judge made numerous palpable and overriding errors of fact leading to her erroneous conclusion that the appellant had not made out a claim in unjust enrichment. She further claims that the application judge erred in failing to find that she was entitled to a share in the proceeds of the home that the parties lived in on the basis that it was a joint family venture.

3For the following reasons the appeal is dismissed.

[4]

Background

When the couple began their romantic relationship, Ms. Tsai owned a condo and was operating a golf club. Mr. Dugal owned two properties on Morse Street in Toronto, 123 and 133, both purchased over ten years before the couple began to cohabit. During the initial portion of their cohabitation, the couple spent some of their time together in Ms. Tsai’s condo but for most of the time during the relationship they resided at 123 Morse. Ms. Tsai’s son lived in the basement for extended periods.

5In 2007, Mr. Dugal sold 133 Morse at a significant profit and used some of the proceeds to pay down the mortgage on 123 Morse. Ms. Tsai never made any direct contribution toward paying off the mortgage or securing any equity stake in 123 Morse. At all times during the relationship, title to 123 Morse remained in Mr. Dugal’s name alone. Ms. Tsai held sole title to her condo. She rented it out for about five years and sold it in 2010. Her proceeds of sale were approximately $80,000. The application judge found as a fact that neither the rent she collected, nor the proceeds of sale, was shared with Mr. Dugal.

[6]

Unjust Enrichment

The appellant submits that the application judge made numerous errors and failed to take adequate account of the evidence in many ways, for example by not accounting for Ms. Tsai’s contributions to two commercial properties, her domestic services and non-pecuniary contributions, and a list of other alleged pecuniary contributions. In essence, the claim is that she erred in finding no unjust enrichment and in failing to find that there was a joint family venture. We do not agree with either argument.

7First, the application judge found that there was no unjust enrichment of Mr. Dugal. She applied the correct test, asking whether there was (a) an enrichment of Mr. Dugal; (b) a corresponding deprivation of Ms. Tsai; and (c) the absence of any juristic reason for the enrichment. She went on to say that once an unjust enrichment has been established, the concept of joint family venture comes into play when considering a remedy. She noted that “interwoven with [the appellant’s] argument of unjust enrichment is the concept of joint family enterprise which she submits entitles her to share in the value of 123 Morse”. She also correctly noted that the appellant bears the onus of proving both unjust enrichment and the existence of a joint family venture.

8We see no palpable and overriding error in the application judge’s conclusion that the appellant failed to show unjust enrichment. In finding that they did not organize their finances or their relative contributions to their livelihoods in such a way as to unjustly enrich one to the deprivation of the other, the application judge summarized her findings of facts as set out in the following extracts from the reasons for decision:

Each party maintained a residence for all or some of the time they were together. Each earned a separate income from employment or investments. To the extent Tsai may have made contributions to the parties living expenses, such contribution was modest and are amply offset by being able to live with her son rent-free at 123 Morse.

To the extent they may have had commercial property rental investments, Tsai was repaid her contributions to same and accepted a share of the sale proceeds in full satisfaction of all claims she may have had to a financial right to participate in the profits.

Accordingly, Dugal was not financially enriched by their relationship. This finding means that Tsai’s claim must fail.

9The application judge continued to say that, in any event, she was not satisfied that the appellant had suffered any deprivation during of the relationship. She pointed out that the parties had no children together, the appellant was free to pursue her career full time and to seek out her own investment opportunities.

10Again, we see no palpable and overriding errors on the part of the application judge. She was alive to the record and to the fact that Ms. Tsai did make some contributions. Concerning the investments in Jones Ave. and Queen St. East properties (both of which were held in Mr. Dugal’s name alone), she clearly found that the appellant was compensated in the amount of $300,000 that Mr. Dugal directed be paid to her from the proceeds of their sale around the time of their separation. This amount represented roughly half of the net proceeds of their sale. As far as 123 Morse is concerned, it is certainly true that the property was worth much more when it was sold in May 2019 than when the parties first began their cohabitation, but this benefit to Mr. Dugal was not achieved at the expense of the appellant. The application judge found that any contributions she made were modest and offset by the fact that she lived rent-free at 123 Morse, as did her son for significant periods of time. It is worth noting that prior to the parties’ cohabitation, Mr. Dugal lived in the basement of 123 Morse and rented out the upper two floors, so he lost the rental income that he had received before.

11It is also significant that the application judge did not accept all of the appellant’s evidence as to her contributions. For example, she did not accept her claim to have earned over $100,000 annually for most of the relationship because her tax returns showed a far lower amount, in most years amounting to half of what she asserted. In addition, it is clear from the record that her evidence as to the amounts she contributed changed over the various affidavits she swore between 2014 and 2019, which served as her evidence in chief at the hearing.

12In short, we would not give effect to the appellant’s argument that the application judge made numerous palpable and overriding errors of fact. The record as a whole provides ample support for the findings of fact that she made.

[13]

Joint Family Venture

Nor do we find any error in the application judge’s part in concluding that, even if there had been unjust enrichment, the appellant had not discharged her onus of establishing a joint family venture. The appellant does not argue that she did not apply the right test as set out in Kerr v. Baranow, 2011 SCC 10, [2011] 1 SCR 269. She was not satisfied that there was mutual effort, economic integration, actual intent, and priority of the family. Despite the fact that the couple lived together and apparently made some real estate investments cooperatively, she found that “the evidence indicates that they did not go so far as to be able to be described as having pooled their efforts and worked toward a common goal.” They did not fully integrate their finances. None of the properties were held jointly. They had no joint bank accounts or separate vehicles and seem to have kept much of their respective assets separate from each other.

[14]

Disposition

The appeal is dismissed. The funds held in trust by the estate’s real estate lawyer shall be paid forthwith to the estate trustees, to be distributed according to the terms of the will. If the parties are unable to agree as to costs, they may file brief submissions to the court within 7 days (the respondent) and 10 days (the appellant) respectively.