Supreme Court of Canada

Palachik v. Kiss, [1983] 1 S.C.R. 623

Date: 1983-05-17

Andrew Joseph Palachik, Trustee of the Estate of Margit Margaret Kiss, and Andrew Joseph Palachik (Plaintiffs) Appellants;

and

Frank Kiss (Defendant) Respondent.

File No.: 16841.

1982: June 17; 1983: May 17.

Present: Ritchie, Estey, McIntyre, Lamer and Wilson JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Estates—Husband excluded from wife’s will—Contract governing property’s purchase frustrated—Maintenance of matrimonial home and rental units—Whether or not constructive trust in favour of husband should be imposed on estate—Whether or not husband a dependent and in need of support under The Succession Law Reform Act, 1977—The Family Law Reform Act, 1978, 1978 (Ont.), c. 2, ss. 4, 8, 54(1) (now R.S.O. 1980, c. 152)—The Succession Law Reform Act, 1977, 1977 (Ont.), c. 40, s. 69 (now R.S.O. 1980, c. 488, s.62)—The Statute of Frauds, R.S.O. 1970, c. 444, s. 4 (now R.S.O. 1980, c. 481).

Respondent’s claims against his wife’s estate for relief pursuant to The Family Law Reform Act, 1978 and The Succession Law Reform Act, 1977, fell in three areas. Firstly, by oral agreement the wife was to convey to respondent a one-half interest in a duplex bought in her name once respondent had paid her one-half of the purchase price through monthly installments. Secondly, respondent had performed work throughout the marriage in maintaining the property, particularly the revenue-producing rental units. Finally, the couple’s financial position was disparate—respondent’s assets were meagre, his wife’s substantial. Respondent’s exclusion from his wife’s will left him in straightened financial circumstances. The award given at trial was supported on appeal but for differing reasons. Appellant argued here that the doctrine of constructive trust was inapplicable and that recovery of the monthly payments could not be effected based on contractual law.

Held: The appeal should be dismissed.

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The Family Law Reform Act, 1978 does not apply to claims made against deceased persons and therefore did not apply here.

The constructive trust is available where the facts display an enrichment, a corresponding deprivation, and no juristic reason—such as contract or disposition of law—for the enrichment. Here, the estate had been unjustly enriched by the retention of payments and the Court could order their return. Respondent was an innocent party to the breach of contract, and could recover payments made in quasi contract as 1) he did not breach the contract, 2) the contract was breached or frustrated by the other party in circumstances beyond his control and 3) the breach resulted in a total failure of consideration. The joint possession and occupation of the premises would not be deemed consideration as it occurred pursuant to the marriage. The claim in quasi contract was not prevented by The Statute of Frauds; the trial judge properly found the payments to be made pursuant to the oral contract.

The award for compensation for improvements made and services rendered to the apartments and the matrimonial home, was valid on the basis of constructive trust and was not precluded by contract. This Court could not consider the question of quantum as the respondent did not cross-appeal the Court of Appeal’s finding. Alternative arguments based on The Succession Law Reform Act, 1977, while justified, did not need to be considered.

Pettkus v. Becker, [1980] 2 S.C.R. 34; Rathwell v. Rathwell, [1978] 2 S.C.R. 36; Fibrosa Spolka Akcyjna v. Fairbairn Lawson Combe Barbour, Limited, [1943] A.C. 32; Maddison v. Alderson (1883), 8 A.C. 467; Brownscombe v. Public Trustee of Alberta, [1969] S.C.R. 58; Deglman v. Guaranty Trust Company of Canada, [1954] S.C.R. 25; Murdoch v. Murdoch, [1975] 1 S.C.R. 23, referred to.

APPEAL from a judgment of the Ontario Court of Appeal (1981), 1981 1727 (ON CA), 130 D.L.R. (3d) 246, 34 O.R. (2d) 484, 24 R.F.L. (2d) 337, dismissing an appeal and cross-appeal from a judgment of Keith J. Appeal dismissed.

Igor Ellyn and Marshall Garnick, for the appellants.

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O.D. Young, for the respondent.

The judgment of the Court was delivery by

WILSON J.—Frank Kiss and Margaret Palachik were married in November 1966 when he was 66 years old and she was 67. Emigrating to Canada in 1925 Mr. Kiss had worked in a variety of jobs from farming to mining, factory work and construction. He had only meagre assets: savings between $6,000 and $7,000, income from two mortgages and an old age pension. She, on the other hand, was a widow with substantial inherited assets: $65,000 in the bank, two apartment houses and a farm, rental income and an old age pension. Although they were married for twelve years until her death in April 1979, Mrs. Kiss, who left an estate of approximately $240,000, excluded her husband from her will “because my present assets partly are and partly were always my separate assets”. Her estate included the property in which they had lived for almost eleven years. It was valued at $100,000 at trial and was registered in her name. Mr. Kiss was left at her death with life savings of $20,000 and an old age pension which yielded in total an income of $3,700 in 1979.

Mr. Kiss claimed against the estate of his deceased wife and against the residuary beneficiary and sole surviving son of his wife by her first marriage, Andrew Joseph Palachik, the appellant in this case. He claimed under The Family Law Reform Act, 1978, 1978 (Ont.), c. 2 (now R.S.O. 1980, c. 152) for $120,000 for contributions to the estate and under The Succession Law Reform Act, 1977, 1977 (Ont.), c. 40 (now R.S.O. 1980, c. 488) for support out of the estate.

In March 1967, not long after the marriage, Mr. and Mrs. Kiss purchased a home for $17,500 cash. He contributed $5,000 and his wife $12,500. Title was taken as tenants in common of a one third and two third interest respectively. In May 1968 that

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house was sold for $23,500 and Mrs. Kiss gave her husband back his $5,000. In the meantime they purchased in March 1968 a larger home, a duplex on Melgund Road, for $31,500 but, because Mr. Kiss could not afford one half of the purchase price, title was taken in his wife’s name only. An oral understanding was reached to the effect that he would pay his wife $100 each month until he paid half the purchase price whereupon he would acquire a one half interest in the property. He testified:

Q. And at the time that she bought it, did you talk with her at all about how you might pay for a part of it?

A. Yes.

Q. What did you talk about?

A. When I said, “Who going to pay the house,” she said, “You have half the money like sixteen thousand.” “I’m sorry, I haven’t so much.”

I said, “I’ll give you the five thousand back what you gave to me.” She said, “It’s not enough. I’ll tell you something, Frank. I got so much money in the bank,” she said, “I’ll pay the house off myself, and you will pay hundred dollars a month. You pay the hundred dollar. We could change the deed any time then.”

“When you pay down about half such a way, we could change the deed.”

The couple moved into the ground floor apartment in May 1968. It was their matrimonial home. Mrs. Kiss forgave the initial monthly payments in consideration of her husband’s partitioning and painting the upper floor which was to be leased to tenants. There was some dispute as to when the payments actually began. The trial judge found that payments began in September 1968 but the evidence supports a finding that they began in January 1969. Assuming that payments began in January 1969, Mr. Kiss was given eight months’ credit for work performed. The payments continued until December 1978 but from 1975 Mrs. Kiss’ health had begun seriously to deteriorate and in August 1978 she suffered a severe paralytic stroke which imposed a further burden on Mr. Kiss. On two occasions after the December 1978

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payment she refused further payment from her husband saying, “You work hard on me.” Mr. Kiss was about thirty-six months short of paying his one half of the $31,500 purchase price when she died.

During the subsistence of the marriage Mr. Kiss looked after the tenants’ quarters. There was accommodation for four tenants as a result of his renovations. He showed the premises to prospective tenants, did the laundry and cleaning, took out the garbage and performed many other services. He did all the maintenance work on the property, which the learned trial judge found was extensive, and built a sun porch and a garage. He collected the rents and turned them over to his wife. Mrs. Kiss appears to have paid all household expenses, taxes, heating, insurance, hydro, with the exception of day-to-day living expenses for food and clothing which were shared equally.

The claims made by Mr. Kiss against the estate of his deceased wife were in three areas. First, there was the oral agreement between the couple that payment of one half of the purchase price of the Melgund Road duplex would entitle him to a conveyance of a one half interest in the property. Second, there was the work he performed throughout the marriage in maintaining the property, particularly the upper floor where the paying tenants resided. Third, there was the couple’s disparate financial position and particularly the precarious financial circumstances in which Mr. Kiss found himself as a result of being excluded from his wife’s estate.

At trial before Mr. Justice Keith, Mr. Kiss was awarded the sum of $49,198. This was made up of the return of the monthly payments made by him in the amount of $12,400, the sum of $13,200 by way of compensation for work done and services rendered in respect of the upper floor of the Melgund Road property, and interest on both at 9 per cent per annum. The entire amount represented,

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according to Keith J., his contribution of “work, money or money’s worth” to a non-family asset, i.e., the upper floor of the Melgund Road property under s. 8 of The Family Law Reform Act, 1978. Although Mr. Kiss was found by the learned trial judge to be a dependent under The Succession Law Reform Act, 1977 he did not receive an award under the Act since his means, augmented by the foregoing award under The Family Law Reform Act, 1978, were sufficient to relieve his situation of dependency.

The result reached by Mr. Justice Keith was affirmed on appeal but on different grounds. Speaking through Lacourcière J.A., the Ontario Court of Appeal ruled that, while Part I of The Family Law Reform Act, 1978 has no application to the estate of a deceased spouse or former spouse unless both are living at the time of the institution of the proceedings, the return of Frank’s monthly payments was supportable on the basis of constructive trust and the award in respect of his work and services on the basis of both constructive trust and The Succession Law Reform Act, 1977.

Two main issues were raised in this Court. The appellant submitted that the doctrine of constructive trust has no application to this case. Accordingly, the respondent’s right to the return of his monthly payments falls to be determined as a matter of pure contract law as does also his right to be paid for his work and services. In respect of neither does contract law afford him a remedy. He submitted also that the respondent was not a dependent under The Succession Law Reform Act, 1977 having regard to the criteria set out in s. 69 (now s. 62) of the Act. Accordingly, there was no proper basis in law for the award made to him.

No issue was taken in this Court with the conclusion of the Court of Appeal that The Family Law Reform Act, 1978 has no application

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to claims made against deceased spouses and, indeed, I believe this conclusion is inescapable on the language of the statute. Its whole object appears to be to prescribe the legal consequences of marriage breakdown between living spouses. I turn now, therefore, to the applicability of the doctrine of constructive trust to the facts of this case. Can the learned trial judge’s award to the respondent representing (a) the return of his monthly payments and (b) compensation for his contribution to the Melgund Road property be supported on the basis of constructive trust?

A good starting point for this consideration is the following statement of the learned trial judge:

It has been urged on me that by reason of the monthly payments of $100. I should find that whether by way of resulting trust or a constructive trust the plaintiff had a proprietary interest in 19-21 Melgund Road. I must reject that submission in view of the plaintiff’s evidence that he was not to get an interest in the property until he had contributed half the cost. That day never arrived.

The submission of counsel for the appellant is that the parties agreed that until one half of the price was paid the respondent was to have no interest in the Melgund Road property. He finds support for this submission in the passage already quoted from the reasons of the learned trial judge. What does this finding of the learned trial judge say about the intention of the parties? Was the trial judge saying that no interest in the property was intended by the parties to accrue to the respondent until the last payment was made or was he saying only that the respondent’s entitlement to a transfer of a one half interest was not to arise until the last payment was made? These seem to me to be two quite different things and it may be that the respondent’s evidence is more consistent with the latter than the former. The agreement seems to have been that when he had completed his monthly payments the way in which title to the property was held would be changed. “When you pay down about half such a way, we could change the deed.”

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The appellant submits that Mr. Justice Keith found on the basis of the respondent’s own evidence that the respondent was to have no interest in the property until the last payment was made. In face of such a finding, he says, the Court cannot import a constructive or resulting trust with respect to the property since both types of trust require a finding of common intention that the non-titled spouse was to have an interest. I think this is certainly true of the resulting trust. I believe, however, that it is now clearly established that it is not true in the case of the constructive trust. In Pettkus v. Becker, [1980] 2 S.C.R. 34, this Court held that the constructive trust was available as a remedial tool in the absence of proof of a common intention. Indeed it was available, as Dickson J. had said in Rathwell v. Rathwell, [1978] 2 S.C.R. 36, in all cases where the facts “display an enrichment, a corresponding deprivation, and the absence of any juristic reason—such as a contract or disposition of law—for the enrichment”.

The appellant submits, however, that there is a “juristic reason” for the enrichment in this case, namely the contract and that it would be wholly inconsistent with the contract to find an interest in the property accruing to the respondent payment by payment. This, he says, flies in the face of the learned trial judge’s finding. I think in order to respond to this submission it is necessary to identify precisely what it is that is being awarded to the respondent. The trial judge was clearly awarding compensation in lieu of an interest in the property itself under s. 8 of The Family Law Reform Act, 1978. He found that the respondent’s contribution was equivalent to the payments he had made. It seems to me that in order to follow that course the learned trial judge had first to find that it was a proper case for an interest in the property under s. 8. If it was, then he could award compensation in lieu of an interest in the property. If, however, the award is to be justified under the constructive trust doctrine, as the Court of Appeal found it had to be because of the inapplicability of The Family Law Reform Act, 1978, then we are not concerned with whether the respondent can establish an interest in the property itself. It is immaterial. A constructive

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trust can be imposed on the payments. In other words, it may be open to the Court to find that the estate has been unjustly enriched by the retention of those payments and that they must therefore be returned to the respondent. The imposition of the trust is not then foreclosed by the trial judge’s finding that the respondent was not to have an interest in the property until the last payment was made.

If this is correct, then the question the Court has to answer takes a slightly different form, namely: can the Court impose a trust on the money in face of the contract between the parties or does contract law preclude it? The trial judge, in effect, found that the contract was entire and not divisible and that no rights in the property arose in the respondent until he had fully performed. The Court of Appeal held that the respondent could nevertheless recover his money because it was affected by a constructive trust in his favour. Is this position supportable?

If we confine our consideration for the moment to contract law it would appear that an innocent party to a breach of contract who has made payments pursuant to the contract can recover them in quasi contract: see Fibrosa Spolka Akcyjna v. Fairbairn Lawson Combe Barbour, Limited, [1943] A.C. 32. He must, however, be able to show that he did not breach the contract, that it was either breached by the other party or frustrated by circumstances beyond his control and that the result of the breach or frustration was a total failure of consideration. The purchaser cannot, of course, allege a total failure of consideration if he has enjoyed the subject matter in the interval. It is necessary therefore in this case to review the evidence to see whether the requirements for this form of relief to the respondent are met.

It seems to me that they are. I have already quoted the relevant passage from the respondent’s

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evidence and, while the appellant attempted at trial to establish that the monthly payments of $100 represented rent paid by the respondent to his wife for the privilege of living in her house, the learned trial judge, not surprisingly, gave this submission short shrift. It was argued, however, on behalf of the appellant in this Court that the respondent repudiated the contract when he stopped making his payments when his wife was ill. The only evidence surrounding the cessation of the payments is that of the respondent himself. On examination‑in‑chief the following exchange took place:

Mr. Young: Q. Okay, Mr. Kiss, after that stroke—

A. Yes.

Q.—in August, 1978—

A. That’s right.

Q.—were you still paying your $100. a month to her. Did you go on paying it right up to the time of her death?

A. No.

Q. When did you stop?

A. Last two months before she died I tried give her my hundred dollar cash in her hand in the bed. She didn’t take it. I says, “Why don’t you?” She says, “No.” She was very sick then.

Second time one moment before she died I try again my hundred dollar cash on her hand. Her son was down beside the bed, Joey. She didn’t take it again, so I missed the two months.

Q. Did she say why she didn’t take it?

A. She said, “You work hard on me”. That’s all she said. So twice the last two months before she died she didn’t take my hundred dollars.

Q. Now, during the whole period of time from when you started to pay the $100. a month—

A. Yes.

Q.—right up to the very end, had you missed any

months that you recall?

A. I never missed.

This evidence was not contradicted and the trial judge clearly accepted it.

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It seems to me that, if there was any repudiation or breach of contract, it was not by the respondent. His efforts to continue making his payments to his wife were frustrated by his wife’s refusal (presumably from the highest of motives) to accept them, by her serious illness and by her subsequent death. Immediately following her funeral the respondent was evicted by the appellant.

Counsel for the appellant further urged upon the Court that the respondent cannot recover the payments he made pursuant to the contract even if it was terminated for reasons beyond his control because there was not a total failure of consideration. The consideration that flowed to him from the making of the payments was, it was alleged, the opportunity to acquire an interest in the property on very advantageous terms. I think this submission discloses a lack of appreciation of the two different senses in which the concept of “consideration” has significance in contract law. “Consideration” is frequently used to describe that which is given or promised in order to bring a binding contract into existence. It is also used, however, to describe the performance of the promise and it is in the latter sense that a total failure of consideration or an absence of performance will give rise to a claim in quasi contract. The relevant question is: has the respondent received the benefit of the payee’s performance in exchange for which he made the payments? The answer to this question would seem in this case to be clearly no. Nor do I find any merit in the submission made on behalf of the appellant that there was not a total failure of consideration because of the respondent’s joint possession and occupancy of the premises during the time he was making the payments. I think there is a simple answer to that. His occupancy was not pursuant to the agreement but pursuant to the marriage. I am satisfied that there has been a total failure of consideration here.

A further attack on the respondent’s right to recover the payments made pursuant to the oral agreement was based on s. 4 of The Statute of Frauds, R.S.O. 1970, c. 444 (now R.S.O. 1980, c. 481). It was alleged that the agreement was unen-

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forceable and that it was not saved by the doctrine of part performance because the acts of performance, i.e. the making of the payments, were not “unequivocally referable” to the oral agreement for the acquisition of an interest in the property: see Maddison v. Alderson (1883), 8 A.C. 467; Brownscombe v. Public Trustee of Alberta, [1969] S.C.R. 58. The same argument was made in respect of s. 54(1) of The Family Law Reform Act, 1978. We do not have to concern ourselves with The Family Law Reform Act, 1978 but it seems to me that the learned trial judge accepted the respondent’s evidence as to the nature of the payments and that they were made pursuant to the oral agreement. I see no basis in the evidence, once the trial judge rejected the appellant’s submission that they were for rent, that would derogate from or cast doubt upon their unequivocal nature. In any event, I do not believe that The Statute of Frauds presents any barrier to a claim in quasi contract. Such a claim was successful in Deglman v. Guaranty Trust Company of Canada, [1954] S.C.R. 25, where a nephew rendered services to his aunt on the strength of an oral agreement that she would provide for him in her will and in particular leave him a certain piece of property. The requirements of the statute were not met but this was no bar to recovery based on the doctrine of unjust enrichment. Quoting from the judgment of Rand J. at p. 728:

On the findings of both courts below the services were not given gratuitously but on the footing of a contractual relation: they were to be paid for. The statute in such a case does not touch the principle of restitution against what would otherwise be an unjust enrichment of the defendant at the expense of the plaintiff. This is exemplified in the simple case of part or full payment in money as the price under an oral contract; it would be inequitable to allow the promissor to keep both the land and the money and the other party to the bargain is entitled to recover what he has paid. Similarly is it in the case of services given. [Emphasis added]

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It seems to me that the respondent is entitled to the return of his money in quasi contract. I believe this relief is available despite the finding of the learned trial judge that the contract was entire and not divisible. This is a clear case of money paid for a specific purpose which through no fault of the respondent has not been achieved. In consequence the payee has been unjustly enriched at the expense of the payor. I emphasize that the right of the respondent is to the return of the money per se, not to an interest in the Melgund Road property or to compensation in respect of such an interest. I think it matters not whether one characterizes the appellant as a constructive trustee of the money for the respondent, as did the Court of Appeal, or simply declares the respondent entitled to its return in quasi contract. The essence of the relief is the same. Equity fastens on the conscience of the appellant and requires him to deliver up that which it is manifestly inequitable that he retain. The constructive trust which the Court of Appeal imposed arises from the duty to return the money.

The value of the payments made by the respondent was $12,400. The learned trial judge awarded him interest on that amount at 9 per cent per annum which produced an additional $11,292. The Court of Appeal did not interfere with the interest award and I do not propose to do so either. The Melgund Road property trebled in value over the ten year period and the upstairs apartments yielded a substantial income for Mrs. Kiss which went to the enhancement of her estate.

Turning now to Mr. Kiss’ claim for compensation for improvements made and services rendered to the Melgund Road property, the learned trial judge awarded him one half of what it would have cost his wife to employ someone to do the work. He found that it would have cost her $50 per week. Only half was awarded because the award was made under s. 8 of The Family Law Reform Act, 1978 and only the upper floor was a non-family asset for purposes of the section. The Court of Appeal changed the basis although not the amount

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of the award, holding that The Family Law Reform Act, 1978 did not apply. They supported the award of compensation on the dual basis of s. 69 (now s. 62) of The Succession Law Reform Act, 1977 and constructive trust. I pause here to note that once the compensation award was divorced from s. 8 of The Family Law Reform Act, 1978 there was no need for any apportionment of his claim under the constructive trust doctrine. The nature of the asset to which the improvements were made and on which the services were expended, whether family or non-family, became irrelevant in this context. The line of authorities which culminated in Pettkus v. Becker, supra (see: Murdoch v. Murdoch, [1975] 1 S.C.R. 23; Rathwell v. Rathwell, supra) makes it quite clear that the constructive trust doctrine applies to both the matrimonial home and to property held for business purposes. Because The Family Law Reform Act, 1978 in cases to which it applies has already conferred on the non-titled spouse an interest in the matrimonial home under s. 4, the rights conferred in s. 8 are confined to non-family assets. The respondent here received no interest in the matrimonial home, i.e. the ground floor of the Melgund Road property, the Act being held inapplicable.

The claim made in the statement of claim under The Family Law Reform Act, 1978 in the original action was a general claim for compensation for contributions made to the Melgund Road property. Mr. Kiss made no distinction in his pleading between the ground floor which was the matrimonial home and the upper floor which was income producing. The learned trial judge, however, awarded compensation only under s. 8. This is not, of course, an issue in this Court because of the inapplicability of the Act. It does, however, raise the question as to whether the Court of Appeal, in adopting the amount fixed by the learned trial judge, directed its mind to the fact that this was the figure determined by the learned trial judge to be appropriate in relation to the

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upper floor only. I quote from the reasons of the learned trial judge:

The deceased’s estate was further enhanced by reason of the plaintiffs constant labour, thus relieving the deceased from employing persons to do what the plaintiff did for her and paying wages to have the work done. On the evidence that I have heard, it seems to me that she could not have purchased such services for less than $50. per week. Assuming half of such services were for the improvement and maintenance of the matrimonial home, the lower duplex, and the balance directed toward the upper duplex which provided rental income, then again, according to the evidence of Mr. Graham, the actuary, $25. per week or $100. per month from May, 1968, until April, 1979, with interest at 9 percent would amount to another $25,506. as of 1st October, 1980.

In my view, these sums represent nothing more than the return of money or money’s worth within the meaning and intent of section 8 of The Family Law Reform Act…

The Court of Appeal said this:

The pleadings were sufficiently broad to support a claim under the common law doctrine of constructive trust. The learned trial judge considered the periodic payments of $100 per month made by the plaintiff pursuant to an oral agreement and, on the basis of actuarial evidence, placed a value on them of $23,692. He set the value of the plaintiff's labour and services for the improvement and maintenance of the rooming house at $25,506 and gave judgment in favour of the plaintiff of $49,198 and post judgment interest as a charge against the estate under the provisions of s. 8 of The Family Law Reform Act, 1978, thus excluding the value of the plaintiff’s labour on the lower duplex because it was a family asset. [Emphasis added]

The Court of Appeal then went on to find that this award could be justified either under The Succession Law Reform Act, 1977 or on the basis of the doctrine of constructive trust. It dismissed the plaintiff’s cross appeal alleging error by the trial judge in not allowing the contribution made by him to the lower floor. In the endorsement on the record prior to the delivery of the written reasons Jessup J.A. on behalf of the Court wrote:

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With respect to the cross appeal the appellant having recovered his payment of money and for his work done on the upstairs apartments is not entitled to be compensated for his work on the premises which he occupied and enjoyed. [Emphasis added]

If the Court is saying here that no award should be made in favour of a non-titled spouse for compensation for improvements to the matrimonial home if he or she has enjoyed living in it, it must be in error. There is no support for this proposition in the authorities already referred to and, indeed, it seems to be quite out of keeping with the policy underlying these authorities and now reflected in s. 4 of The Family Law Reform Act, 1978. The respondent, however, did not cross appeal from the Court of Appeal’s judgment.

It seems to me that it was open to the Court of Appeal to support the award of compensation for improvements and services to the respondent on the basis of the constructive trust doctrine. The only question in my mind is as to the proper quantum and further consideration of that subject by this Court would appear to be foreclosed. I cannot accept the submission of the appellant that such an award was precluded by the contractual arrangements between the parties. The argument put forward was that the respondent was well aware that his acquisition of an interest in the property was to depend on his performing his obligations under the oral agreement to make the required number of payments: it was not to depend on his contribution through the provision of services. With respect, I do not think these are mutually exclusive. It was perfectly correct that the respondent was attempting to buy a half share of the Melgund Road property from his wife and, if he had succeeded in completing his payments by the time of her death, he would have had a half interest in it. His claim for improvements and services would then presumably have been made only against her one half interest.

It was further argued, however, that recovery for these services is precluded in the absence of any evidence that the person for whom they were

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rendered had promised either expressly or impliedly to pay for them. Reliance was placed on the Deglman case (supra). Moreover, counsel submitted that there is a presumption against payment when the provider of the services is a member of the family. With respect, I think the Deglman line of authorities poses no obstacle here. The respondent does not rely on any promise, express or implied, that he be paid for these services. His submission on the constructive trust aspect of his claim was that he had contributed money’s worth to the property in terms of improvements and services and that the appellant would be unjustly enriched by the retention of this benefit. The only contract we have in this case is the one already dealt with, the one which contemplated his purchase of a one half interest in the property. His claim for improvements and services is a totally separate matter and his claim in this regard is for equitable relief based on the principle of unjust enrichment. It has nothing to do with any express or implied promise to pay for the services.

Having concluded that the award in respect of the improvements and services can be supported on one of the grounds relied on by the Court of Appeal namely constructive trust, it is unnecessary to consider the alternate ground of The Succession Law Reform Act, 1977. Suffice it to say that I am in complete agreement with the Court of Appeal that the award can also be fully justified under s. 69(1)(a)(vii) and (viii) (now s. 62(1)(a)(vii) and (viii)) of that Act. Like the Court of Appeal I would not interfere with the learned trial judge’s award of interest.

For the reasons given I would dismiss the appeal and award the respondent solicitor and client costs out of the estate. The trial judge expressed the view that this case should never have come to trial and I agree with him. However, because it raised some difficult legal issues and provided an opportunity for this Court to clarify the law, this Court granted leave to appeal. I do not think that the

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respondent’s meagre resources should be further depleted by being compelled to bear the cost of defending his judgment a second time.

Appeal dismissed with costs.

Solicitors for the appellants: Ellyn & Associates, Toronto.

Solicitors for the respondent: Fleming, Smoke, Burgess & Phillips, Toronto.