Court of Appeal for Ontario
Date: 2025-04-09
Docket: C69936
Coram: Huscroft, Harvison Young and Copeland JJ.A.
Between:
Kirk Richard Iredale
Applicant (Appellant)
and
Carol Jeanette Dougall
Respondent (Respondent)
Appearances:
Stephen P. Kirby, for the appellant
David A. Reid, for the respondent
Heard: 2024-10-02
On appeal from the order of Justice Russell M. Raikes of the Superior Court of Justice, dated March 20, 2020, endorsements dated September 22, 2020 and June 25, 2021, and from costs order, dated September 9, 2021, with reasons reported at 2019 ONSC 1692, 2021 ONSC 4572 and 2021 ONSC 5958.
Overview
1At the core of this appeal is the relationship between the equalization provisions governed by the Family Law Act, R.S.O. 1990, c. F.3 (“FLA”) and unjust enrichment arising out of a marriage’s joint family venture. This appeal raises issues similar to those addressed in Martin v. Sansome, 2014 ONCA 14, 118 O.R. (3d) 522, and McNamee v. McNamee, 2011 ONCA 533, 106 O.R. (3d) 401.
2For reasons of clarity and convenience I will refer to the appellant husband Kirk Iredale as Kirk and the respondent wife Carol Dougall as Carol. Carol and Kirk separated in June 2016 after a marriage of approximately 24 years. Over the last roughly eight years of the marriage, they had built up an organic crop farm on the property upon which the matrimonial home was located. The parties initially began by farming four acres in their first year and leased land from Carol’s family. Sometime later, Carol’s parents gifted her shares of the farming corporation, which owned the farm property and what became the matrimonial home. In the year of separation, the amount of land farmed had expanded to 187 acres.
3This appeal arises out of the final order made by the trial judge regarding the equalization of the parties’ assets and spousal support. Kirk raises three grounds of appeal.
4First, Kirk submits that the trial judge erred in finding that the equalization payment ordered adequately remedied Carol’s unjust enrichment occasioned by Kirk’s efforts to build the farming business. He argues that the monetary award improperly excluded the value of the farm property and should have been calculated on a “value survived” basis.
5Second, Kirk asserts that the trial judge erred in declining to order Carol to pay Kirk indefinite spousal support. He submits that the trial judge erred in principle in finding that Carol was unjustly enriched by Kirk’s actions yet finding that Kirk had not made out a claim to compensatory spousal support. He argues these findings are inconsistent. Kirk further submits that it was an error to grant a time-limited award for spousal support because the Spousal Support Advisory Guidelines (“SSAGs”) recommend an indefinite duration of support when the length of the relationship plus the length of the recipient’s age at separation equals or exceeds 65.
6Finally, Kirk submits that the trial judge erred in not re-opening and admitting into evidence an appraisal of the portion of the farm subject to equalization almost a year after the trial judge had rendered his decision.
7For the following reasons, I would dismiss the appeal.
Factual Background
8The parties married in 1992. They have two children who are now independent. Carol was primarily responsible for caring for the children during the marriage.
9Initially, Kirk started a home inspection business while Carol worked in sales at a business offering self-development courses. Kirk’s business was not doing well in 2005, and Carol began working at a furniture store, then a small organic meat and dairy store.
10Carol’s parents owned and operated a 99-acre farm in Huron County. In 2008, Carol’s father suffered a serious aneurysm and could not continue farming. As a result, her parents decided to move into town to better care for Carol’s father. The parties subsequently rented the farm property from Carol’s parents and paid rent monthly. Title to the property was held through WMFERN Acres Inc. (“WMFERN”), a farming corporation owned by Carol’s parents. WMFERN owned not only the land, but also various farm equipment.
11The parties converted the farm to organic crops under the stewardship of a local mentor, Francis Hartman. All farming done until 2013 was performed solely by the parties.
12In 2013, Kirk retired from his home inspection business and the parties extended their farming business to neighbouring lands owned and leased by Carol’s sister.
13In December of that year, Carol’s parents gifted each of their children a farm property. Carol received the farm property at issue. Carol’s parents transferred all of their shares of WMFERN to Carol and Carol became the owner of the company. Kirk was not involved in this arrangement and was not aware of the details. The trial judge found that there was a clear intention to grant the shares solely to Carol as a sort of early inheritance.
14Until the parties separated in June 2016, the parties and Mr. Hartman had cultivated and planted the fields. Kirk suffered a stress injury to his shoulder. After the date of separation, Kirk was unable or unwilling to do any farm work. Carol and Mr. Hartman completed any further farm work and all farming ended in 2017. In the meantime, in 2016 and 2017, Carol cleaned houses and worked for another farmer.
15Carol began leasing the land for organic farming in 2018 and has received rental income from that since.
Issues on Appeal
16Kirk alleges that the trial judge made a number of errors. First, he submits that the trial judge erred in concluding that the equalization pursuant to the FLA had adequately remedied the unjust enrichment of Carol such that no further monetary award was required. Second, he argues that the trial judge’s award of spousal support to Kirk was inadequate given that he had found that Carol had been unjustly enriched at Kirk’s expense. Third, he submitted that the motion to admit fresh evidence should have been allowed and the 2018 appraisal admitted into evidence.
Law and Analysis
17At the outset, it is important to emphasize that a finding made with respect to an unjust enrichment and remedial constructive trust claim is very fact specific and that the applicable standard of review is generally that an appellate court should only intervene where there is a palpable and overriding error: Tsai v. Dugal, 2022 ONCA 81, paras. 8, 10; Djekic v. Zai, 2015 ONCA 25, para. 16. Additionally, an appellate court should only intervene on a review of a spousal support order “when there is a material error, a serious misapprehension of the evidence, or an error in law”: Hickey v. Hickey, [1999] 2 S.C.R. 518, para. 12.
(1) Unjust Enrichment
18Relying on Kerr v. Baranow, 2011 SCC 10, the trial judge found that Kirk had made out a claim for unjust enrichment. Kirk had provided something of benefit to Carol through the work he did on the farm for their farming venture both before and after Carol acquired ownership of the property by way of gift of the shares from her parents. Such work included, for example, research to convert the farm from conventional farming to organic farming, the repair and maintenance of farm equipment, the planting and harvesting of crops, assisting with the hens and building roosts in the barn for them, helping with the transportation of product to market, clearing rocks from the fields and planting numerous trees, clearing weeds since pesticides could not be used, helping to construct grain silos and bins, and adding solar panels to the barn roof.
19The trial judge went on to find that Kirk’s work and efforts on the farm constituted a corresponding detriment. While there is no evidence that the value of the lands or rent payable per acre was any greater in relation to organic than conventional farming as a result of his work, the fact that the lands had already been converted to organic provided the opportunity to lease to Mr. Hartman. Lastly, there was no juristic reason to permit Carol to retain the benefits received from Kirk’s work.
20Turning to remedy, the trial judge found that a monetary award was appropriate and sufficient in the circumstances. The joint farm operation was no longer a going concern, there was no evidence that money would be an inadequate remedy, and the property was not encumbered and could be used to secure payment if needed. He noted that, as in Martin, any post-separation increase in value is not a valid rationale to find a monetary award insufficient.
21Finally, and importantly, the trial judge determined that the equal division of net family property in the circumstances of this case adequately remedied the unjust enrichment such that an unequal division under s. 5(6) of the FLA was not warranted. Pursuant to ss. 4(2) and 18(3) of the FLA, he fixed the amount of land connected to the use and enjoyment of the matrimonial home on the farmland at two acres. He valued the matrimonial home at $110,500. Carol was required to pay Kirk $80,476.76 as an equalization payment and $61,172.49 as a buyout on jointly owned assets. [1]
22To begin with, it is important to remember that the express purpose of the equalization provisions of the FLA is to address the unjust enrichment that would otherwise arise upon marriage breakdown: s. 5(7) of the FLA. In McNamee, at para. 66, this court stated that, “in the vast majority of cases, any unjust enrichment that arises as the result of a marriage will be fully addressed through the operation of the equalization provisions under the Family Law Act”: see also Martin, at para. 64.
23In McNamee, at para. 66, Blair and Rouleau JJ.A. instructed that the court must first resolve questions of ownership, including beneficial ownership, before it determines each party’s net family property and calculates the equalization payment. It follows that, where a party is claiming a remedial constructive trust, as Kirk claims in the present case, the court is to determine the claim for unjust enrichment (and the appropriate remedy, if any) before determining the claim for equalization: Korman v. Korman, 2015 ONCA 578, para. 29. Additionally, pursuant to s. 10(1) of the FLA, a person may apply to the court to determine questions of ownership between married spouses, including consideration of any beneficial interests in property arising pursuant to the imposition of a remedial constructive trust.
24The trial judge found that a monetary remedy was appropriate to address the unjust enrichment claim, and he therefore did not have to determine whether a claim for constructive trust could be made out in this case. As explained earlier in these reasons, Carol’s parents gifted her all of the shares in WMFERN, which owned the entire property including the matrimonial home. Carol was required to include the matrimonial home in her assets: s. 18 of the FLA. This therefore increased the total net family property subject to equalization.
25Because of the special protection given to the matrimonial home under the FLA, and the special provisions that apply when a matrimonial home is part of a larger farm property (s. 18), the value of the matrimonial home was taken into account and reflected in the equalization payment. Carol was required to include the matrimonial home in her assets, which ultimately increased the amount of the equalization payment she owed to Kirk.
26Additionally, Carol’s gift of WMFERN was excluded from the equalization as well as Kirk’s joint account with his mother. The relative size of the exclusions may have differed, but the approach was consistent and fair to both.
27There was no evidence of an intention to convey the farm property or company to the parties jointly and the trial judge did not find that Kirk had a beneficial interest in the land. The trial judge fixed the amount of land connected to the use and enjoyment of the residence at two acres, and subject to division as the “matrimonial home”. This value was included in the equalization calculation. The trial judge’s finding that equalization was sufficient to remedy the unjust enrichment is entitled to deference. I see no error of law, principle, or palpable and overriding error in the trial judge’s finding.
(a) The distinction between the farming business and the farm property
28Kirk argues that the trial judge failed to recognize the fact that the equalization provisions of the FLA cannot remedy unjust enrichment that relates to an asset that was specifically excluded from equalization by the terms of the FLA. Here, that exclusion resulted from the fact that the farm property was gifted to Carol during the marriage and was accordingly excluded from Carol’s net family property by s. 4(2) of the FLA. Half of the farm property’s value was therefore not shared with Kirk through the equalization process.
29Kirk points out that Carol continues to receive the benefit of the income streams established as a result of the parties’ farming operations, including the rent received from the organic farm, the income from the egg business, and the income received in relation to the solar panels installed on the property during the relationship. Kirk submits that he worked the land for years and the property cannot be separated from the farming venture.
30I disagree. As discussed earlier in these reasons, it is well established that the determination of a party’s beneficial ownership through a constructive trust is a preliminary step which must be done before any determination of net family property and equalization: McNamee, at para. 66; Martin, at para. 47; Korman, at para. 29. That is why the assessment for unjust enrichment is conducted first.
31If a finding for unjust enrichment is made, a monetary remedy is the “default” remedy: Moore v. Sweet, 2018 SCC 52, para. 89. The onus is on the plaintiff to establish that monetary damages would be insufficient: Kerr, at para. 52.
32Here, the trial judge found that a monetary award would be sufficient to remedy the unjust enrichment as follows:
I find that a monetary award is appropriate in the circumstances in this case for the following reasons:
a. The farm has been in Carol’s family for many years. She grew up on that farm and has an attachment to it;
b. Kirk has no special connection to or history with this property. He lived there only nine years and moved to Pembroke, a considerable distance away;
c. The joint farm operation is not a going concern. Carol continues to have hens for eggs and broiler chickens but, otherwise, the cultivated land is rented out;
d. Kirk has shown no interest post-separation in continuing to farm;
e. There is no evidence that money would be an inadequate remedy;
f. The property is not encumbered and could be used to secure payment if needed; and
g. As in Martin v. Sansome, any post-separation increase in value is not a valid rationale to find a monetary award insufficient.
Given the finding that a monetary remedy is appropriate, it is unnecessary to consider whether Kirk can demonstrate a sufficiently substantial and direct link or causal connection between his contributions and the acquisition, preservation, maintenance or improvement of the property.
(paras. 90-91)
33Nor did Kirk establish that his work or expenditures increased the value of the farm. Neither party provided a business valuation, so there was no evidence before the court that valued Kirk’s contributions. There was also no evidence that conversion to organic farming increased the value of the lands or that the increase in land value post-separation was connected to the contributions made by Kirk. The trial judge found that the land’s increase in value was the result of market conditions.
34Kirk worked the land for eight years, three of which on a full-time basis. The trial judge found that this did not increase the value of the land and, therefore, the unjust enrichment is not attributable to the property itself but to the business. The trial judge accordingly declined to consider whether Kirk could demonstrate a sufficiently substantial and direct link or causal connection between Kirk’s contributions and the acquisition, preservation, maintenance or improvement of the property.
35Kirk cannot now argue that he had a right to any value of the farm property when the trial judge clearly found he did not, barring a reversible error. Carol is not retaining a disproportionate share of assets resulting from the joint farm business, which has largely ceased operations, even if she retains the majority of the gifted farm property. The expenses for the solar panels and other assets were valued and formed part of the equalization calculation. Similarly, the farm equipment purchased as part of the farming venture was valued and accounted for in the calculation of net family property. Put another way, including these amounts in an equalization calculation would constitute double recovery with respect to these items.
36Kirk’s argument is circular, and essentially asks this court to re-try issues that were fully before the trial judge. In particular, Kirk wishes to re-litigate whether he held a beneficial interest in the farm property. That is not the role of this court. The trial judge found that a monetary award was appropriate and gave reasons which were well grounded in the evidence which supported his conclusion.
37Contrary to the appellant’s submission, the mere fact that the parties’ business relates to farming the land does not create a strict rule that both partners should receive a beneficial interest in the land. A constructive trust “should only be awarded if there is reason to grant to the plaintiff the additional rights that flow from recognition of a right of property”: Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574, at p. 678. In the context of a joint family venture, “the court may take into account the probability of recovery, as well as whether there is a reason to grant the plaintiff the additional rights that flow from recognition of property rights”: Kerr, at para. 52; Martin, at para. 59. This may be the case, for example, if there would otherwise be insufficient funds to pay the claimant the amount calculated as an equalization payment, or where the claimant’s efforts resulted in an unquantifiable or indeterminable increase in value for which the claimant should receive the benefit.
38It is also important to note that the existence of a causal connection between the benefit received and the detriment suffered does not lead inexorably to a 50:50 share. Such an assumption risks confusing equalization with unjust enrichment. This is not an exact science. The claimant party should be granted the percentage equal to the value of their contribution to the venture. That could be more or less than fifty percent: Lesko v. Lesko, 2021 ONCA 369, para. 34, leave to appeal refused, [2021] S.C.C.A. No. 39804.
(b) The equalization payment was sufficient
39Kirk argues that the trial judge would have found that the parties were engaged in a joint family venture, such that the monetary award pertaining to Carol’s unjust enrichment should be calculated on a value survived basis. However, he claims that the analysis was not undertaken, and no reference was made to the joint family venture framework set out in Kerr. Kirk submits that the trial judge erred in failing to consider those principles and compare the “value survived” monetary award he was seeking with the equalization payment owed by Carol. I do not agree.
40As discussed earlier in these reasons, the farming business has come to an end and the land is now leased to a third party. The trial judge correctly found that this was not a case where spouses built a successful business that one spouse then carried on after separation. As already established, neither party adduced a business valuation report. There is no reason for a sum to be calculated on a value survived basis.
41Further, the argument fails to follow the “order of operations” laid out in the case law for this analysis: McNamee, at para. 56; Martin, at para. 47; Green v. Green, 2015 ONCA 541, para. 44; Townshend v. Townshend, 2012 ONCA 868, para. 29.
42The trial judge determined that the equalization payment was sufficient to address the unjust enrichment. The trial judge did not need to explicitly determine whether a value is attributed by way of a joint family venture or whether it was calculated through value survived or value received. Rather, the trial judge determined that the business had mostly wrapped up and all value had already been distributed equally between the parties, reflective of their contributions to the business.
43At its core, Kirk takes issue with the value the trial judge attributed to Kirk’s efforts and with the remedy granted. I see no basis for this court’s intervention here.
44Lastly, it should be noted that it is trite law that the FLA provides enhanced protection to spouses’ interests in a matrimonial home. In the case of farm properties, it may be difficult to draw distinctions between a matrimonial home and farm property in the broader sense. Section 18(3) addresses this:
Residence on farmland, etc.
(3) If property that includes a matrimonial home is normally used for a purpose other than residential, the matrimonial home is only the part of the property that may reasonably be regarded as necessary to the use and enjoyment of the residence.
45As Tellier J. wrote in White v. White, 2021 ONSC 6018, para. 23, “[t]he separation of one piece of property based on use and purpose in section 18(3) supports the continuing functionality of a farm or other activity, without derogating from either spouse’s separate rights in relation to the matrimonial home.” The price of buying a farm is generally very high. Asking a party to pay for half of not just the home but large farm property would often result in selling the entire property. It is important to preserve farms in one piece and keep them in the hands of people who are more likely to farm the land.
(2) Spousal Support
46The trial judge concluded that a time limited spousal support award payable by Carol to Kirk was appropriate in this case and fixed the duration of ongoing spousal support at five years commencing January 1, 2020 at the monthly amount of $350. He determined that Kirk was not entitled to spousal support on a compensatory basis as he was satisfied that the sacrifices made by Carol to her economic disadvantage during the marriage substantially outweighed any contribution by Kirk to ongoing farming income earned by Carol. Moreover, he found that Kirk did not sacrifice his career or economic prospects for Carol at any time.
47A court is not entitled to overturn a support order simply because it would have made a different decision or balanced the factors differently: Lesko v. Lesko, 2021 ONCA 369, para. 5; Cronier v. Cusack, 2023 ONCA 178, para. 8.
48Kirk submits that the trial judge should have considered, as a matter of fact, that Kirk had made sufficient contributions and suffered sufficient deprivations to ground a claim of unjust enrichment in his analysis of Kirk’s compensatory claim. He argues that this constituted an error which led the trial judge to strictly limit the quantum and duration of support, ignoring the recommendations of the SSAGs in the process.
49I do not agree. The objective of a compensatory award is “to provide some degree of compensation for the sacrifices and contributions which a spouse made during the marriage, for economic losses which they experienced and may continue to experience as a result of the marriage, as well as the benefits which the other spouse has received as a result of these sacrifices and contributions”: Thompson v. Thompson, 2013 ONSC 5500, para. 55. The trial judge considered and applied the correct considerations in light of the objectives of compensatory support as established by the governing statutory provisions and case law.
50Kirk seeks to re-weigh the factors already weighed by the trial judge. The trial judge’s conclusion attracts deference and there is no basis for the intervention of this court.
51Kirk additionally argues that the “Rule of 65” applied in this case, and therefore the SSAGs recommend an indefinite duration of spousal support. Kirk was approximately 58 years old at the date of separation. The parties were in a relationship for roughly 24 years. The sum of these values is 82, far exceeding 65.
52Kirk further argues that, while the court has the discretion to depart from the recommendations set out in the SSAGs, the failure to provide an adequate explanation for doing so constitutes a reversible error in law. Again, I do not agree.
53Indefinite support is not permanent support: SSAGs, s. 13.8. This rule is directed at aiding spouses who may have difficulty becoming self-sufficient given their age: Politis v. Politis, 2021 ONCA 541, paras. 42-43. Moreover, notwithstanding the Rule of 65, the court may make spousal support time-limited rather than indefinite based on all of the relevant circumstances of the case under consideration: Fisher v. Fisher, 2008 ONCA 11, para. 108.
54Although the trial judge did not grant an order for spousal support of indefinite duration, he explained why this was not appropriate in the circumstances. Both parties are still able to work, even if the end of work horizon is visible. Both have investments already divided from the marriage and marriage breakdown, and Kirk is receiving an equalization payment of $80,476.76 and a buyout of $61,172.49 on jointly owned assets. Furthermore, Carol may have the benefit of potential ongoing rental income, but that income stream is not guaranteed nor is the amount that will continue to be generated. I see no basis for the intervention of this court on this point.
(3) Motion for Fresh Evidence
55Almost a year after the trial judge released his decision, Kirk brought a motion to have a September 2, 2018 appraisal of the matrimonial home plus one acre of land admitted into evidence. He argued that this appraisal would serve as evidence that the matrimonial home should be valued at $217,000 instead of $110,500. Kirk claimed that his trial counsel had agreed to the inclusion of the appraisal together with two other appraisals, but that it had been omitted from a joint documents brief at trial by mistake.
56The trial judge considered and dismissed the motion. He declined to exercise his discretion to re-open the trial after considering the test set out in 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59. While the trial judge was unable to say whether the evidence, if presented at trial, would have probably changed the result at trial on the record before him, he did find that the evidence existed at all material times and could have been adduced during the trial with reasonable diligence: Sagaz, at para. 20. Moreover, the decision was by then 15 months old, Kirk could and should have addressed the issue as soon as or reasonably soon after discovering the omission, Carol would be prejudiced, it was not in the interests of justice, the integrity of the trial process was not at risk, and no exceptional circumstances existed to warrant re-opening the trial.
57Kirk submits that the trial judge erred in law by imposing a strict due diligence requirement with respect to the re-opening of the evidence to include the September 2, 2018 appraisal. Kirk indicates that, without the additional appraisal, the trial judge had no expert evidence on the value of the matrimonial home and that the trial judge was left to engage in a rough estimation.
58Kirk argues that the due diligence requirement should have been relaxed, including where necessary due to a lack of diligence by counsel as was the case here, rather than a party. He relies upon Castlerigg Investments Inc. v. Lam, para. 9, and Degroote v. Canadian Imperial Bank of Commerce, para. 9, for the position that the due diligence requirement can be relaxed in order to prevent a miscarriage of justice, and that a lack of diligence by counsel should not serve to perpetuate an injustice.
59This was a discretionary decision on the part of the trial judge. The case law Kirk relies upon emphasizes the discretionary nature of this decision. The trial judge considered the relevant factors. The decision to relax the diligence requirement was up to the trial judge. He chose not to do so. His decision is entitled to deference: Sagaz, at para. 60.
Disposition
60For these reasons, I would dismiss the appeal.
61Costs of $12,500 plus HST are awarded to Carol. Costs from trial are still payable by Kirk to Carol in the amount of $78,750 inclusive of disbursements and applicable taxes.
Released: April 9, 2025
“G.H.”
“Harvison Young J.A.”
“I agree. Grant Huscroft J.A.”
“I agree. J. Copeland J.A.”
1Paragraphs 1 and 2 of the Final Order of Raikes J. dated March 20, 2020.