DATE: 20011212 DOCKET: C33200
COURT OF APPEAL FOR ONTARIO
McMURTRY C.J.O., ABELLA and MacPHERSON JJ.A.
B E T W E E N :
BERT VAN LIEROP and ANJA VAN LIEROP
Karmel Sakran and Karl W. Scholz for the respondents
Plaintiffs (Respondents)
- and -
FRANZ HOLLENBACH and ELKE HOLLENBACH
Michael G. Emery for the appellants
Defendants (Appellants)
Heard: September 6, 2001
On appeal from judgment of Justice Nancy M. Mossip dated October 27, 1999, reported at [1999] O.J. No. 4225.
BY THE COURT:
[1] The appellants, Franz Hollenbach and Elke Hollenbach (“the Hollenbachs”), appeal from the judgment of Justice N. Mossip awarding net damages of $94,305 to the respondents, Bert Van Lierop and Anja Van Lierop (“the Van Lierops”).
[2] The Hollenbachs owned Long Lane Farms near Puslinch, Ontario. There were three houses at Long Lane Farms. The Hollenbachs lived in the main house. Beside the main house was a guest house. Some distance from these two structures was a red brick house which had been used continuously as a residence for employees and their families since the Hollenbachs acquired the farm in 1980.
[3] In 1993, the Hollenbachs were looking for a responsible couple to occupy the red brick house and to help on the farm. They approached the Van Lierops who had lived in the same apartment in Burlington for 19 years. The parties entered into an agreement which was not reduced to writing. The Van Lierops would come to live in the red brick house. They would engage in general property maintenance on the farm, which included work each day after Mr. Van Lierop returned from his regular job as a co-ordinator of major projects for the Halton District School Board, as well as work on week-ends and holidays. In addition, the Van Lierops would look after the farm when the Hollenbachs were away. These duties would be recompensed by deemed rent on the red brick house and by the Hollenbachs paying the hydro, fuel and pool maintenance expenses associated with the red brick house.
[4] The Van Lierops moved onto Long Lane Farms in January 1994. It appears that the arrangement worked well until March 1997 when Mr. Van Lierop and Mrs. Hollenbach had angry words about repairs to one of the farm trucks. Mr. Van Lierop continued working until May 3. On June 1, he received a letter from Mr. Hollenbach which stated:
As our business needs a full-time manager in residence at the farm, we require vacant possession of the brick house at Long Lane Farms you occupy at present by August 1, 1997.
[5] The Van Lierops initiated an action against the Hollenbachs. The essential relief they sought was restitution by way of damages of $425,000 for unjust enrichment. The basis of their claim was their view that Mr. Van Lierop had done far more than general maintenance and caretaker work on the farm and that it would be unfair of the Hollenbachs to both order them off the farm and keep the benefits of all the extra work Mr. Van Lierop had done.
[6] The particular focus of the Van Lierops’ claim was what the parties described as “special projects”, that is, work above and beyond the general maintenance and caretaker duties Mr. Van Lierop performed on almost a daily basis. The special projects on which Mr. Van Lierop worked during the 1994-1997 period were the construction of two lean-to sheds, renovations to the basement of the guest house, conversion of a cattle barn, and panelling of a horse trailer. In addition, in the autumn of 1993 before they moved to the farm, Mr. Van Lierop did a great deal of work renovating the red brick house in which the Van Lierops would live.
[7] At trial, the Van Lierops divided their claim into three categories: daily work on the horse farm, special building projects, and additional duties primarily related to extra work they performed when the Hollenbachs were away from the farm.
[8] Following a trial which lasted seven days, Mossip J. held that the Van Lierops were entitled to be compensated at an hourly rate of $10 (not $30 as they sought) for 20 hours per week (not the 25 they sought) for their daily work. The Van Lierops were also entitled to be compensated for Mr. Van Lierop’s work on the special projects. The trial judge also held, however, that the Van Lierops were not entitled to be compensated for the extra work they performed when the Hollenbachs were away because “whatever extra work there was during these periods is included in the average of 20 hours per week during the time Mr. Van Lierop worked for the Hollenbachs”. Finally, the trial judge held that the amount owed by the Hollenbachs to the Van Lierops should be reduced by the value of the rent for the red brick house which she determined was $750 per month.
[9] In the result, the trial judge summarized her conclusions in this fashion:
The Plaintiffs are therefore entitled to:
(1) $35,600.00 for damages for payment for work done on the farm on a regular basis from January, 1994 to June 4, 1997, calculated at 20 hours per week for 178 weeks @ $10.00 per hour.
(2) $111,205.00 for damages for the value of the benefit conferred on the defendants for the renovation of the red brick house and the special projects completed by Mr. Van Lierop on the Hollenbachs farm, as well as for out of pocket expenses paid by the Van Lierops.
Total $146,805.00
The Defendants are therefore entitled to:
$52,500 for rent calculated from January, 1994 to October, 1999, [^1] being 70 months at $750.00 per month.
Accordingly, judgment to go for the Plaintiffs in the amount of $94,305.00.
[10] The appellants appeal from the trial judge’s decision on three bases: (1) she misapplied the law of unjust enrichment; (2) she erred in her calculation of damages; and (3) she erred by awarding costs to the plaintiffs on a solicitor-and-client basis for the trial.
(1) Unjust enrichment
[11] The appellants contend that the trial judge erred by concluding that the Hollenbachs were unjustly enriched at the expense of the Van Lierops. In particular, they submit that she erred by finding that there was no juristic reason for the enrichment of the Hollenbachs. The appellants’ position is that the essence of the parties’ agreement was that no money would change hands during the life of their relationship. Accordingly, the special projects were merely part of the work the Van Lierops did in return for rent free accommodation in the red brick house.
[12] We disagree. The evidence indicates that the original agreement between the parties contemplated general maintenance and caretaker duties in return for accommodation, utilities and pool maintenance. For example, Mrs. Hollenbach described the conversation her husband had with the Van Lierops at their first meeting in these terms:
Q. Okay. Now, did anything else happen that day in terms of discussing this issue between the Hollenbachs and the Van Lierops?
A. Franz explained to him exactly what he would have to do about the small repairs and looking – mainly be there when we were gone and – they were talking about the day-to-day duties he would have to fulfil.
[13] Even more telling was the evidence of Mr. Hollenbach, who did not testify at the trial. However, plaintiffs’ counsel read in some of the testimony he gave at discovery, where Mr. Hollenbach said that the special projects “had nothing to do with his [Mr. Van Lierop’s] general being on the farm”. Later there was this exchange:
Q. Okay. But those one time things you indicate you expected to receive an invoice from my client?
A. Yes.
Later Mr. Hollenbach gave a clear description of his view of the nature of the relationship:
A. His coming to the farm and I think I said this before, was subject to being there when we were gone and doing certain chores. That was why he was there. When he was working, then his work would have been offset against outstanding rent. I think I mentioned that before in that – in that way. So this project, the big project, that was the one time situation. That was not what was meant by letting him live on the farm, at no time.
[14] Given this testimony, the trial judge concluded that the Van Lierops had conferred a benefit on the Hollenbachs and that there was no juristic reason for the Hollenbachs to retain the benefit. In reaching this conclusion, she carefully considered and, in our view, correctly applied, the leading authorities on unjust enrichment, including Pettkus v. Becker, [1980] 2 S.C.R. 837, Peel (Regional Municipality) v. Canada, [1992] 3 S.C.R. 762, and Campbell v. Campbell (1999), 43 O.R. (3d) 783 (C.A.).
(2) Damages
[15] The appellants contend that the trial judge erred by relying on the expert report of William Huinink with respect to both the method for calculating, and the quantum of, damages.
[16] We disagree. The method of calculation – namely, as expressed by the trial judge, “an assessment of the ‘cost’ value of the work to the Hollenbachs, less of course amounts already paid by the Hollenbachs for these projects” – was an acceptable method: see Peter v. Beblow, [1993] 1 S.C.R. 980 and Bell v. Bailey, [2001] O.J. No. 3368 (C.A.).
[17] As to the quantum, the calculations of the plaintiffs’ and defendants’ experts were quite close, $286,745 and $235,070 respectively before deductions. The trial judge accepted the calculations of the plaintiffs’ expert. We can see no principled basis for interfering with this choice.
[18] The appellants further contend that the trial judge erred by granting all of the expenses claimed by the Van Lierops for materials and labour which they paid for in relation to renovations to the red brick house. The amount the trial judge credited to the Van Lierops was $16,594 whereas in their statement of claim they sought only $13,050. At the appeal hearing, counsel for the respondents did not disagree with the appellants’ submission on this issue. We are of the view that the damages should be reduced by $3,544 to bring the award into line with the statement of claim.
(3) Costs
[19] The trial judge awarded the Van Lierops their costs on a party-and-party basis up to the commencement of the trial and on a solicitor-and-client basis for the trial. The appellants contend that the trial judge erred in the second component of this award because they did not engage in any reprehensible conduct that might attract such an award.
[20] We agree. Although appellate courts should accord a good deal of latitude to trial judges on the question of costs, the basic principle is that “it is only in the rare and exceptional case that costs are awarded on a solicitor-and-client scale rather than on a party-and-party scale”: see Mortimer v. Cameron (1994), 17 O.R. (3d) 1 at 23 (C.A.); Foulis v. Robinson (1978), 21 O.R. (2d) 769 (C.A.); and Neill v. Pellolio (Ont. C.A., unreported, November 30, 2001).
[21] There is nothing in the nature of this case or in the conduct of the appellants to justify an award, even a partial one, of costs on a solicitor-and-client scale. There was a good deal of money at stake in the litigation. There was no document of any kind setting out the relationship between the parties. The trial judge herself described the proceeding as “novel and complex”. Accordingly, it was not wrong for the appellants, in the words of Dubin J.A. in Foulis v. Robinson, supra, at p. 776, “to put the plaintiff to the proof”. Moreover, although the respondents succeeded at trial, on several issues the trial judge found against them or awarded damages well below what the respondents sought.
[22] For these reasons, in our view the trial judge erred by departing from the general rule that the successful party should be awarded costs on a party-and-party basis.
(4) Disposition
[23] The judgment of the trial judge on the substantive issues relating to unjust enrichment is affirmed.
[24] The judgment of the trial judge on the damages issue is affirmed, with one minor exception. We would allow the appeal to the extent of reducing the damages awarded to the plaintiffs/respondents from $94,305 to $90,761.
[25] We would allow the appeal on the costs issue and vary the order of the trial judge to provide that the plaintiffs/respondents receive their costs of the trial on a party-and-party basis.
[26] Although, viewed globally, the respondents have been more successful than the appellants on the appeal, in our view the appellants have succeeded on enough matters to justify the conclusion that the parties should bear their own costs of the appeal.
RELEASED: December 12, 2001
“R. Roy McMurtry C.J.O.”
“R. S. Abella J.A.”
“J. C. MacPherson J.A.”
[^1]: Although the van Lierops were ordered to leave the farm on August 1, 1997, they remained there until the end of the trial. The trial judge held: “The defendants are entitled to a writ of possession for the red brick house. The writ shall not be issued or enforced until January 1, 2001.” The Van Lierops did not appeal this aspect of the judgment.