COURT FILE NO.: FC-11-2339

DATE: 2014/03/27

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

IRINA RISTO

Applicant

– and –

PAUL MARCELAIS

Respondent

Julius Dawn, for the Applicant

Kenneth Bickley, for the Respondent

HEARD: January 27-28, 2014 (at Ottawa)

REASONS FOR JUDGMENT

m. linhares de sousa j.

INTRODUCTION

[1] This matter concerns an application claiming payment for unjust enrichment in the context of an unmarried couple who cohabited for a period of 15 years. The Applicant, Irina Risto also claims for spousal support to be awarded on the basis of an imputed income to the Respondent, Paul Marcelais.

[2] Ms. Risto also originally brought a claim for damages against Mr. Marcelais based on his physical assault on her but that claim was not pursued at trial.

[3] With respect to the mode of payment of both, any claim which she might have for unjust enrichment and spousal support, Ms. Risto is asking for a proprietary award in three properties owned by Mr. Marcelais and in Mr. Marcelais’ military pension which is in receipt.

[4] As a result of the findings of this Court that Mr. Marcelais, leading up to this trial, was non-compliant with various court orders requesting him to provide financial disclosure and to make certain money payments, even after having been given numerous opportunities to provide the required financial disclosure and money payments, his Answer was “struck out and the Applicant/Risto will not be required to include the Answer or Financial Statements filed by the Respondent/Marcelais in the Trial Record.” By that same order of Mr. Justice James, Mr. Marcelais was not permitted to adduce evidence or conduct cross-examinations at trial. Nonetheless, Mr. Marcelais or his counsel was permitted “to make closing submissions and legal arguments at the conclusion of the evidentiary portion of the trial, subject to the directions of the trial judge.” (Applicant/Risto’s Trial Record tab 6, order of Justice James, dated December 16, 2013).

[5] In accordance with this order, Mr. Marcelais had his counsel, Mr. Bickley present throughout the duration of the trial. Mr. Marcelais’ counsel was permitted to make both opening and closing submissions and legal arguments at the end of the trial. Mr. Marcelais, himself, attended the first day of trial for a brief period of time but was absent for the rest of the trial.

FACTUAL BACKGROUND

[6] The following relevant facts were supported by the evidence presented at trial. Ms. Risto and Mr. Marcelais met in 1995 in Val Cartier, Québec where Mr. Marcelais was employed by the Canadian military. Their romantic relationship developed quickly. Both of them were coming out of failed marriages.

[7] Ms. Risto, a German national, had married a Canadian in the Canadian military in Lars, Germany and had one son, Daniel Risto, from that union. She immigrated to Canada in 1993 to be with her husband and son at a location close to Val Cartier, Québec.

[8] Ms. Risto and Mr. Marcelais first began to cohabit in March of 1996 in Val Cartier. According to the testimony of Mr. Daniel Risto he lived with the parties since he was eight years old.

[9] In the spring of 1997, Mr. Marcelais was posted to Ottawa as an administrative clerk. Ms. Risto and her son accompanied him to live with him in military housing in Ottawa. Ms. Risto was not employed nor had she been employed since her arrival in Canada. She had had some employment in the German banking system but had not worked upon her immigration to Canada due to her lack of French language proficiency.

[10] Ms. Risto testified that during that early period of the couple’s cohabitation money was tight. Mr. Marcelais was obligated to pay child support for his first family. Ms. Risto had received a financial settlement from her own marriage breakup which she shared with Mr. Marcelais. She also earned a little bit of money selling Tupperware. Mr. Marcelais took charge of the family finances from the very beginning. She gave him all of the money she received or earned and Mr. Marcelais paid all of the bills.

[11] According to Ms. Risto they pooled their joint financial resources and were able to sufficiently provide for their common household. Ms. Risto indicated that the couple opened and operated out of one joint bank account and shared a joint visa card at the Royal Bank in Ottawa.

[12] The evidence showed that when Ms. Risto and Mr. Marcelais began to cohabit they discussed marriage which was their intention. However, only after their move to Ottawa was she legally able to be remarried. The couple were committed to each other as a married couple and as a family.

[13] They held themselves out to the public as a couple, although not married, living as husband and wife. They jointly signed documentation for the military to that effect. Documentary evidence to this effect can be found in exhibit 1, tab A, filed in this trial, where by way of a statutory declaration both parties declared on June 22, 1998, that there was no legal impediments to their marriage to each other, that they cohabited for at least a period of one year and that they held themselves out publically as husband and wife. Ms. Risto recalled that they celebrated the signing of this document with an exchange of rings, which Mr. Marcelais had purchased, and of mutual vows, followed by a party.

[14] Furthermore, very early on in their relationship Mr. Marcelais declared Ms. Risto to be the beneficiary of his military employment benefits, such as his employment death benefit (exhibit 1, tab 1) and his medical, dental and health plan, which also included Daniel Risto (exhibit 1, tabs 2 and 3).

[15] The evidence showed that the parties executed mutual wills, declaring each other the executor/executrix of their respective estates as well as the beneficiaries of those estates. They granted each other a Power of Attorney to deal with personal care and for property of the other. This was done twice during their relationship, in 2001 and again in 2008 (exhibit 1, tabs 4 and 5). Ms. Risto’s son, Daniel, was declared in those documents to be an alternate executor and beneficiary. In the testamentary documents signed by him, Mr. Marcelais refers to and identifies Ms. Risto as his “spouse”.

[16] Ms. Risto testified that there were other official documents in which Mr. Marcelais identified her as his spouse and declared publicly their common law status. This was reflected in their annual income tax returns as well as in the tax benefits they enjoyed. Once Mr. Marcelais retired from the military in order to embark on his real estate career, Mr. Marcelais took advantage of splitting his pension income with Ms. Risto, for income tax purposes (exhibit 1 tabs 7, 8 and 9). According to Ms. Risto, Mr. Marcelais, throughout their cohabitation, always prepared and filed their income tax returns. He also did those filed by her son, Daniel.

[17] Ms. Risto testified that after the couple’s move to Ottawa, Mr. Marcelais became more and more dissatisfied with his 25 year employment in the military. He could not anticipate any possibility of promotion because of his education level. According to Ms. Risto, the couple made a joint decision that they would begin to invest in property. Mr. Marcelais began to qualify for his real estate licence which he finally succeeded in doing and taking tax courses. Mr. Marcelais then began to spend more and more time working in the real estate field, finally leaving his employment with the military to dedicate his time on a full-time basis to a property investment and management business which began in earnest some time after the couple purchased their first family home.

[18] When asked to describe the parties’ respective roles in the early part of their relationship, Ms. Risto testified that she would do all of the household chores such as the cooking and cleaning and gardening, essentially all of the domestic chores. She also regularly drove Mr. Marcelais to work.

[19] Mr. Marcelais did his job in the military and began to concentrate on his real estate qualifications. He also took tax courses and he travelled quite frequently with his work. He also did all of the family finances and banking.

[20] When the decision was made to change Mr. Marcelais’ career and to begin investing in real estate, Ms. Risto offered to cash and bring to Canada some investment funds she received upon her divorce and which she had invested in Germany. Her evidence was that there were two sources of these funds, namely an RSP fund owned by her and an education fund established for her son, Daniel.

[21] According to the testimony of Ms. Risto in cashing and exchanging these funds she was able to obtain approximately $35,000 to $36,500. Exhibit #1 tabs 13 to 15 and tab 17 were filed as evidence of this exchange of funds. Unfortunately, the documents are in German and have not been translated.

[22] The evidence of Ms. Risto indicated that all of this money went into the purchase of the couple’s first family home, 6374 Sablewood. According to Ms. Risto this was the only money available as a down payment on the purchase of this property because Mr. Marcelais did not have any money of his own. It was also the first of many other withdrawals Ms. Risto made of money she had invested in Germany in order to fund the couple’s property investment activities.

[23] 6374 Sablewood was purchased in March of 2000 (see exhibit 1 tab 17). It was purchased in the joint names of Ms. Risto, Mr. Marcelais and Daniel Morin, Ms. Risto’s son who later changed his name to that of his mother. The mortgage ($105,420) placed on the property at the time of purchase was also in the name of Ms. Risto, Mr. Marcelais and her son. The parties also took out mutual life insurance policies to cover the mortgage in the event of their deaths. These policies were subsequently cancelled in April of 2009 (see exhibit 1, tab 9).

[24] Using the ownership of 6374 Sablewood as a base and collateral, Mr. Marcelais then began his property investment business while at the same pursuing his real estate career. As described by Ms. Risto the method of operation of this business was simple. Firstly, Mr. Marcelais had Daniel’s name removed from the title of 6374 Sablewood as well as from the mortgage on this property. Ms. Risto testified that Mr. Marcelais’ explanation for this was that it gave him greater flexibility in dealing with the property and in using it as collateral to raise other funds for the purchase of other property. Ms. Risto testified that she trusted Mr. Marcelais and so did not question this decision.

[25] Mr. Marcelais then took out a second mortgage on 6374 Sablewood ($50,514) and used those funds to purchase the couple’s first rental property, namely, 116 Lavergne. The property 116 Lavergne and the mortgage attached to it at its purchase were registered in Mr. Marcelais’ name alone, as were all subsequent rental properties purchased by him.

[26] In the usual course, the couple would rent the investment property for a number of years and then sell it (“flip it) for a profit. During the period of time that these investment properties were rented before their eventual sale, Ms. Risto’s evidence was that the couple earned substantial income from the rental of the property because the total expenses of these properties never exceeded the rental income. Furthermore, they were able to use those rental business expenses to their tax advantage. The profits earned from this rental business as well as the profits earned from the eventual resale of the rental properties would then be used to purchase other rental properties. The properties would also be used to raise other funds for more purchases of rental properties. And so the business cycle would commence again.

[27] According to Ms. Risto, Mr. Marcelais took total charge of the purchasing and selling of these investment properties as well as the proceeds from the rental of the properties and their resale.

[28] From memory and the limited documentary evidence she had and in the face of Mr. Marcelais not complying with an order for full disclosure and a full accounting of all of the properties purchased and sold by him during the cohabitation, Ms. Risto created a flow chart of all of the properties she believes made up Mr. Marcelais’ property holdings during the course of the cohabitation. This is found at exhibit 1, tab 17.

[29] As exhibit 1, tab 17 shows and as Ms. Risto testified to, in February of 2005 the couple had built a new family home at 332 Timbertrail. Like the previous family home this property was registered in the joint names of the parties. Its purchase price of $396,266 was made up of the net proceeds from the first jointly held family home at 6374 Sablewood and a Line of Credit on demand in lieu of a mortgage.

[30] Shortly after the purchase of the 332 Timbertrail property, Mr. Marcelais, using the same modus operandi he used with the earlier property investments, began using the joint line of credit to fund the purchase of other rental properties which he continued to put in his name alone.

[31] The details of the purchases, mortgaging, remortgaging and sale of the properties are also found in exhibit 1, tab 17, supported by the property registry documentation (exhibit 1, tabs 18 to 29) as well as Ms. Risto’s oral evidence.

[32] From this evidence one can conclude that during the course of the cohabitation, Mr. Marcelais purchased substantial investment properties in his name using the equity of the couple’s jointly held property, investment funds provided by Ms. Risto directly from her own savings and that of her son or funds from the couple’s joint line of credit.

[33] Upon the sale of these investment properties, Mr. Marcelais received the net proceeds from those sales. He has never accounted for those proceeds to Ms. Risto although ordered to do so by this Court several times. An attempted accounting by Mr. Marcelais is found at exhibit 1, tab 30. It is clear from that attempted accounting that Mr. Marcelais mixed the net proceeds from the sale of the investment properties with his own funds and used them for his own personal use. It is also clear from the evidence that Mr. Marcelais continued to dispose of investment properties and other personal property when ordered not to do so by this Court once this litigation was commenced.

[34] Based on all of this evidence the following is found to be the total of sale proceeds from the sale of investment property received by Mr. Marcelais or property held by Mr. Marcelais for which he has not accounted to Ms. Risto and for which she claims an unjust enrichment because of her contribution, direct and indirect, to the acquisition of those properties:

(1) 116 Lavergne, a rental property, was purchased with a deposit of $50,514 obtained by a second mortgage put on the jointly owned first family home, 6374 Sablewood which had been purchased with a down payment made up of investment monies cashed in Germany from Ms. Risto’s RSP and Daniel’s education fund. A second mortgage was put on 116 Lavergne to purchase another rental property, 1538C Beaverpond in August, 2003. 116 Lavergne was eventually sold in July of 2004 for a profit of $148,500 which was used to build the second jointly owned home in February of 2005 at 332 Timbertrail. Consequently, there are no net proceeds to be accounted for from the sale of 116 Lavergne other than the second mortgage funds that went into purchasing 1538C Beaverpond.

(2) 1538C Beaverpond, a rental property, was purchased in August, 2003 with funds obtained from the second mortgage put on 116 Lavergne in the amount of approximately $34,000. Mr. Marcelais sold this 1538C Beaverpond property in January of 2006 and received net proceeds from the sale of this investment property in the amount of $50,000. This money has never been accounted for to Ms. Risto.

(3) 222-956 Gulf Place, a rental property, was purchased by Mr. Marcelais in April of 2002. In purchasing this property there was a down payment of $20,000 put on the property with the balance paid for by way of a mortgage in Mr. Marcelais’ name. Ms. Risto testified that she provided the $20,000 down payment on the purchase of this property by cashing an investment certificate she had in Germany (see exhibit 1, tab 20). 22-956 Gulf Place was sold by Mr. Marcelais in August of 2004, part of the net proceeds ($27,500) from its sale went into the purchase of the couple’s jointly held second family home, 332 Timbertrail and part of the net proceeds ($35,750) went into the purchase of another rental property in Mr. Marcelais’ name alone, namely, 1440 Heron Road.

(4) 1440 Heron Road, a rental property, was purchased in August of 2004 with a down payment made up of the part of the net proceeds received from the sale of 222-956 Gulf Place. The balance of the purchase price, of $143,000 was funded by way of a mortgage. In March of 2012, after this litigation had commenced and at about the time that this Court issued a restraining order prohibiting, on consent, either of the parties from selling any real estate from March 29, 2012 on, Mr. Marcelais sold 1440 Heron Road to a friend and client. Based on the documentation filed, the net proceeds from the sale of 1440 Heron Road received by Mr. Marcelais were $89,697 which was never accounted for to Ms. Risto.

(5) 1927 Stonehedge, a rental property was purchased by Mr. Marcelais in November of 2002 with a down payment of $32,400. The balance of the purchase price of $129,000 was funded by a mortgage put on this property in Mr. Marcelais’ name. According to the testimony of the Ms. Risto, while she could not remember where all of the down payment funds on the purchase of this rental property came from she knows that $10,000 came from an investment certificate which she cashed in Germany and which a cousin brought over to Canada (see exhibit 1, tab 22). I find Ms. Risto’s evidence concerning her money contribution to 1927 Stonehedge problematic. Her evidence relating to the German investment document is in German and not translated. The copy of it is almost illegible. Furthermore, the evidence of the $10,000 being transferred to Canada dates the transfer of the funds in December of 1999. 1927 Stonehedge was purchased two years later, in 2002. There was no evidence about what happened to those funds during the two year interval. The parties only operated out of one joint bank account. It may have been deposited into the parties’ joint bank accountant, but that would be speculation. Unlike with many of the other rental properties purchased by Mr. Marcelais, Ms. Risto has failed to establish on the evidence that she made a direct financial contribution to the purchase of 1927 Stonehedge. 1927 Stonehedge was sold by Mr. Marcelais in August of 2009 and received from its sale net proceeds of $75,000 which also have not been accounted for by Mr. Marcelais.

(6) 1941 Stonehenge, a rental property, was purchased by Mr. Marcelais in July of 2005 for $143,500. Most of this purchase was funded by a mortgage but there was a down payment of cash put on the property in the amount of $35,875. These funds came from a withdrawal on the parties’ joint line of credit which was taken out when they purchased and completed the building of their second family home, 332 Timbertrail. Mr. Marcelais sold 1941 Stonehenge two years later in April of 2007. The net proceeds received by Mr. Marcelais for the sale of this property were $72,500. These net proceeds were never accounted for by Mr. Marcelais. Nor is there any evidence that any of the net proceeds received from the sale 1941 Stonehenge were ever put back into the joint line of credit.

(7) 306-1807 St. Joseph, a rental property, was purchased by Mr. Marcelais in February of 2006 for $108,266. The full purchase price was paid with cash drawn on the parties’ joint line of credit. Two years later Mr. Marcelais sold this property at a small profit for $118,000. The net proceeds of this sale were never accounted for to Ms. Risto. Nor is there any evidence that any of the net proceeds from the sale of 306-1807 St. Joseph were ever put back into the joint line of credit.

(8) 2205 Stonehedge, a rental property, was purchased by Mr. Marcelais in October of 2008 for the purchase price of $150,000. There was no mortgage put on this property. Mr. Marcelais paid for it in cash funded by a withdrawal of $151,025 from the parties’ jointly held line of credit. Approximately one year later, in August of 2009, 2205 Stonehedge was sold by Mr. Marcelais for a small profit. He received the net proceeds of $160,000 from its sale. The net proceeds of this sale were never accounted for by Mr. Marcelais to Ms. Risto. Nor were any of the net proceeds from the sale of 2205 Stonehenge ever put back into the joint line of credit.

(9) 482 St. Phillipe, a rental property, was purchased by Mr. Marcelais in April of 2010 for the purchase price of $150,000. Once again there was no mortgage put on this property and the purchase price was funded by the parties’ joint line of credit which shows a withdrawal at that time of $138,425.89. In addition, the vendor was given a year’s lease and the right to continue to reside on the property for a period of 12 months for a value of $12,000 ($1,000 per month). Subsequent to Mr. Marcelais purchasing this property, on October 4, 2011, he put a post-purchase mortgage on the property for the sum of $140,000 thereby depleting it of most of its equity. With funds from this mortgage Mr. Marcelais purchased 40 Honore, Limoges, Ontario where he currently resides. Mr. Marcelais continues to hold the title to 482 St. Phillipe but there is a certificate of pending litigation registered on its title arising from these proceedings. For purposes of these proceedings this property has been appraised at $160,000. It would appear therefore that Mr. Marcelais has gained approximately $20,000 in increased equity due to the increased value of this property since its purchase in 2010. There is no evidence to indicate that Mr. Marcelais has ever reimbursed the parties’ joint line of credit for the funds ($138,425.89) he withdrew to purchase 482 St. Phillipe.

(10) 40 Honore, Limoges, now Mr. Marcelais’ principal residence, was purchased by Mr. Marcelais in October of 2011, a few months after the parties had separated. The purchase price for 40 Honore was $315,000. On the same day Mr. Marcelais purchased this property there was a charge registered on its title for a line of credit to the Caisse Populaire in the amount of $253,000. It is clear from the evidence that in order to purchase and to fund the purchase of 40 Honore, Mr. Marcelais took out a mortgage of $140,000 which he put on 482 St. Phillipe, thereby depleting that property of most of its equity, (October 4, 2011). He also had withdrawn $100,000, in two separate withdrawals of $50,000, from the joint line of credit (September 9 and 12, 2011, one month after the separation of the parties). All of these funds he deposited into his own personal line of credit charged to 40 Honore the day he took title to 40 Honore along with approximately $64,000, from an unknown source which he additionally required to make up the total purchase price for 40 Honore (September 9 and 12, 2011 and October 4, 2011). By making these three deposits into his personal line of credit charged to 40 Honore, Mr. Marcelais was able to reduce the balance on his personal line of credit charged with the purchase price for 40 Honore to zero on October 4, 2011. Mr. Marcelais has never accounted to Ms. Risto for any of the funds used to purchase 40 Honore, from either the mortgage monies from 482 St. Phillipe nor from the joint line of credit ($240,000). Nor has Mr. Marcelais ever reimbursed the parties’ joint line of credit for any funds withdrawn on the joint line of credit in order to fund the purchase of 40 Honore. There is a certificate of pending litigation registered on the title of this property arising out of this litigation.

[35] The total amount of the above sale proceeds or equity not accounted for by Mr. Marcelais to Ms. Risto totals $825,197 if one includes the net proceeds received from 1927 Stonehedge the evidence about which, as I indicated presented some evidentiary deficits relating to any direct contribution by Ms. Risto. If one excludes the net proceeds received by Mr. Marcelais for this property the total amount of proceeds or equity not accounted for by Mr. Marcelais to Ms. Risto totals $750,197.

[36] It was the evidence of Ms. Risto that while the couple talked of getting formally married and intended to do so, they never did. Rather than spend their joint money on a large wedding they decided to dedicate their available money to their property investment and property management businesses. Nonetheless, the couple celebrated annually their union. Whatever available money she had Ms. Risto willingly shared with Mr. Marcelais in their property business.

[37] The evidence shows that apart from the couple’s principal residences all of the properties invested in by the couple were registered in the sole name of Mr. Marcelais as were any charges attached to the properties. When questioned about this, Ms. Risto testified it was Mr. Marcelais who qualified for his real estate licence and he took care of all of the family finances and their annual income tax filings. Mr. Marcelais repeatedly told her, even when she questioned the legality of certain of his practises in their property business, that he knew what he was doing. Ms. Risto regarded all of their business activity as being for the benefit of the family and she trusted Mr. Marcelais.

[38] While Mr. Marcelais handled all of the formal side of the properties purchased, rented and sold by him, Ms. Risto worked actively in the couple’s real estate business. Ms. Risto’s responsibilities increased with the real estate business. She was actively involved, through her own contacts, with searching for rental properties and going to see potential properties for Mr. Marcelais to buy. She participated very actively in maintaining and renovating the purchased rental properties in Mr. Marcelais’ name. When there was a change of tenants she cleaned and prepared the rental properties for the next tenants. As a result, she did such things as washing and painting walls, washing windows, fridges and stoves and stripping carpets. Mr. Marcelais and her son also helped in this. Ms. Risto took care of the washers and dryers in the rental properties and collected the monies from the washer and dryer machines. She collected the rents from these rental properties.

[39] With respect to Mr. Marcelais’s real estate business, she also contributed labour. She made computer entries regarding properties up for sale; she filed documents and received faxes relating to the business. She performed some bookkeeping duties for the business such as filing and paying bills. She filled in and showed certain properties up for sale to prospective purchasers. She also prepared homes for open houses and made snacks for those events. She would also prepare and deliver flyers and feature sheets advertising the open house events. She also hosted events in order to promote Mr. Marcelais’ real estate and the property business.

[40] According to Ms. Risto, as a result of their work in the real estate and the property rental business, clients and other people began to ask her and Mr. Marcelais to take care of their own property while they were away. As a result, she and Mr. Marcelais then also began a business in property management which included maintaining, sometimes renovating and collecting the rents for the property of others. Mr. Marcelais would receive a property management fee for this service. Ms. Risto considered this source of money too as family money and she trusted Mr. Marcelais.

[41] Ms. Risto testified that she was as actively involved in the property management business as she was with the couple’s own rental property business. She performed similar duties such as preparing the apartments for a change of tenants and collecting the rents on these properties.

[42] According to Ms. Risto, some of the tenants from whom she collected rents paid their rent in cash and some by way of cheques. Ms. Risto testified that generally the rent far exceeded the expenses of the rental properties which they owned so they always made a profit. According to Ms. Risto, this regular profit was not always declared or deposited in the bank by Mr. Marcelais. In this way a cash reserve was built up by the parties and kept in piles of $100 and $50 bills which they kept in a safe at home and which they planned to use for their retirement. Ms. Risto believed, because she had helped Mr. Marcelais count the bills, that at the time of separation the parties had in their safe as much as $600,000 which Mr. Marcelais took with him when he left the family home. Mr. Marcelais has never accounted to Ms. Risto for these funds.

[43] Ms. Risto questioned Mr. Marcelais about the legality and the correctness of some of his practises but was told by him that he knew what he was doing. Ms. Risto trusted Mr. Marcelais.

[44] According to the testimony of Ms. Risto, Mr. Marcelais was audited by the Canada Business Revenue Agency and found to have deducted more business expenses than were permitted. As a result, he was required to pay back the calculated income tax adjustments (see exhibit #2, tab 16). Despite this, Ms. Risto testified that Mr. Marcelais continued his questionable practises in his various businesses.

[45] Ms. Risto’s son, Daniel Risto, was also called as a witness at the trial. He confirmed the evidence given by his mother relating to her physical involvement in Mr. Marcelais’ real estate business, and property management business. He acknowledged the substantial contribution of her labour to those two businesses as well as that of his own labour in these businesses. Mr. Daniel Risto also observed the different bundles of cash counted out by his parents and deposited into the family safe after rent collection from the various rental properties owned by Mr. Marcelais.

[46] It was the evidence of Mr. Daniel Risto that he gave up his college studies in business management at Algonquin College in order to qualify for his real estate licence so that he could join Mr. Marcelais in his real estate business. As a family, according to Mr. Risto, it was always expected that Daniel would one day take over Mr. Marcelais’ real estate practise upon the retirement of Mr. Marcelais. Mr. Risto indicated that he worked with Mr. Marcelais for about two years and then left the business. His reasons were that he was not happy with some of Mr. Marcelais’ practises in the business. According to Mr. Risto, Mr. Marcelais refused to share the profits with him in an equitable way and Mr. Risto began to feel that Mr. Marcelais no longer wanted him to be in the business. Mr. Risto also testified that, as he began to observe the conflict between his parents increase, he decided to step away.

[47] In addition to the rental properties and the matrimonial homes, the parties acquired during their relationship other assets such as RRSPs, expensive cars and a motorcycle, a boat and a private plane. Ms. Risto has listed these assets, either owned by herself or by Mr. Marcelais in her Net Family Property Statement filed as Exhibit #1, tab 11. They also feature in Mr. Marcelais’ Net Family Property Statement filed as Exhibit #2, tab 1 but at very different and lesser values. On the evidence the values attributed to these assets by Ms. Risto appear to be more accurate and supported by reliable evidence. What is clear is that Mr. Marcelais has continued to dispose of these assets and incur debts against assets even in the face of the non-dissipation order of this Court.

[48] In May, 2010, shortly before the parties separated, Mr. Marcelais entered into a loan agreement with Ms. Risto’s son, Daniel, in order to allow Daniel to purchase a car. The loan was in the amount of $25,000. The funds for this loan, according to Ms. Risto, came from the parties’ joint line of credit. When the parties separated Daniel determined to make the payments on that loan to his mother in view of the source of the funds. Because the loan agreement was made between Mr. Marcelais and Daniel Risto, Mr. Marcelais threatened to repossess the car by way of a collection agency. Mr. Daniel Risto paid Mr. Marcelais the loan in full as evidenced by exhibit #2, tab 13. The funds received on the repayment of this loan have also never been accounted for by Mr. Marcelais to Ms. Risto.

[49] It was the testimony of Ms. Risto that once the real estate business and property management business got under way the couple enjoyed a comfortable standard of living. Ms. Risto, supported by source documentation (notices of assessment), prepared a summary of the declared income (gross and taxable) of Mr. Marcelais for the years 2000 to 2012 inclusive. As can be seen from that summary for the majority of those years Mr. Marcelais’ gross income was over $200,000. His taxable income was substantially lower for those years with the lowest being $29,469.47 in the year of separation, 2011 and $6,235 for the year following separation in 2012. As already indicated for most of those years Mr. Marcelais split his pension income with Ms. Risto as his designated spouse. Given Mr. Marcelais’ questionable business practises as testified to by Ms. Risto, it is very difficult to determine how close to reality, in terms of real income earned and retained by Mr. Marcelais, those figures were.

THE SEPARATION

[50] Ms. Risto testified that throughout their relationship Mr. Marcelais had been physically abusive to her. Her evidence is that Mr. Marcelais also became increasingly emotionally and psychologically abusive towards her, not crediting any value to her contribution to his various businesses and to the family household. Ms. Risto also perceives that Mr. Marcelais’ personality has completely changed. He now spends time riding his motorcycle with a group of other cyclists called the Falcons (Veterans Canada), information that Ms. Risto obtained from her observations of his new appearance and from his Facebook (see Exhibit #2, tab 22).

[51] On the day of the couple’s separation, Mr. Marcelais decided to end his argument with Ms. Risto by throwing the dining room table on her legs. Police were called and the criminal charge of assault causing bodily harm was laid against him. Mr. Marcelais pled guilty to this charge and was sentenced. But not before, Mr. Marcelais, who clearly is limited in his ability to communicate in English, informed all of his clients of his criminal proceedings (“I had some situation with my spouse who require me to go in court” (see Exhibit #2, tab 18) and essentially voluntarily closed down his real estate practise.

CURRENT FINANCIAL SITUATION OF MR. MARCELAIS AND MS. RISTO

[52] Mr. Marcelais’ most up to date Financial Statement is dated December 10, 2012, and was filed as Exhibit 2, tab 4. In that Statement Mr. Marcelais declares that his only source of income is the pension income he receives in the amount of $22,980 per year. His yearly expenses he reports at $108,782 in that same statement.

[53] What is curious about this Financial Statement sworn by Mr. Marcelais is that in April of the same year, in a loan application signed by him to Desjardins, Cabinet de services financiers, Mr. Marcelais declared his income to be between $100,000 and $149,999 and his asset holdings to be $500,000 or more. (See Exhibit #2, tab 17). These figures are certainly more in keeping with Mr. Marcelais’ historical earnings.

[54] According to Ms. Risto, Mr. Marcelais informed her that he was not able to work for health reasons. On October 9, 2012, Mr. Marcelais resigned from his reality brokerage group alleging that he was leaving because of his bladder cancer and his anxiety and depression. (See Exhibit 2, tab 19). Ms. Risto was not aware of any of these illnesses allegedly being suffered by Mr. Marcelais. Based on medical reports on Mr. Marcelais filed as Exhibit 2, tab 20, it appears that Mr. Marcelais may have undergone some surgery relating to bladder cancer at the end of 2011. A report dated March 5, 2012, however, indicates that Mr. Marcelais is recovering normally from his illness. It was shortly after receiving this report that Mr. Marcelais purchased his new Harley-Davidson motorcycle for $$22,828.58 (see Exhibit #2, tab 21). His activities, including his motorcycling do not appear to have been curtailed by his illness. At this time there is no further information about how Mr. Marcelais is supporting himself or what is his ability to pay spousal support.

[55] Ms. Risto’s Financial Statement, dated January 23, 2014, was filed as Exhibit #2, tab 23. Her sole source of income is her pension income which she receives as a result of her first marriage in the amount of $684.12 per month or $8,209.44 per year. She continues to try and sell Tupperware which permits her to deduct some expenses to her advantage. Her estimate was that this activity gives her $1,000 to $1,500 per year in profits.

[56] With respect to her ability to earn other income based on her past work experience, Ms. Risto testified that since the separation her health has not been good. She has a psychological adjustment disorder as a result of her separation and the spousal abuse she suffered during her cohabitation with Mr. Marcelais. Specifically, she finds herself being anxious, fearful and unable to sleep. She experiences recurring nightmares. She is undergoing therapy and takes medication for her depression. She has noticed that her memory is not what it used to be. Mr. Daniel Risto also spoke to the change and deteriorating health of his mother since the separation.

[57] In addition to all of this Ms. Risto suffers from osteoporosis which causes pains to her right hip and lower back. She is now a candidate for a hip replacement. Ms. Risto also suffers from a digestive disorder. In light of all of this Ms. Risto is not able to undertake employment at this time. This is confirmed in a report from Ms. Risto’s treating physician filed as Exhibit #2, tab 26.

[58] Mr. Justice Minnema on September 18, 2012, ordered Mr. Marcelais to pay Ms. Risto spousal support in the amount of $3,210 per month commencing September 1, 2012. In addition, Mr. Marcelais was ordered to pay 50% of all monthly payments, principal and interest, on the parties’ Desjardins Caisse Populaire joint line of credit. In this same order Mr. Marcelais was prohibited from dissipating and depleting any savings, assets and incurring any liabilities. Mr. Marcelais has not respected this order. As of November 1, 2013, Ms. Risto’s calculation of spousal support arrears was $15,528.46 which is currently being collected by the Family Responsibility Office (exhibit #2, tab 29). Furthermore, Mr. Marcelais has removed Ms. Risto from his military medical and dental plan coverage which she enjoyed during the cohabitation. Nevertheless, Ms. Risto received some funds from the Criminal Injuries Compensation Board which has permitted her to undertake some therapy.

[59] Ms. Risto has continued to live in the family home, 332 Timbertrail since the separation. Because of the absence of a mortgage, it is a reasonable accommodation for her. Since the separation Ms. Risto has paid the monthly interest payments on the joint line of credit secured by the family home which has permitted her to remain in the home. The summary of those payments are found at Exhibit #2, tab 14 and since November, 2011 to January, 2014 total $21,248.88. Although ordered to make payments of 50% of all monthly payments, principal and interest, on the joint line of credit, Mr. Marcelais has not done so.

[60] Ms. Risto’s monthly expenses total approximately $11,000 per month with the highest item being her legal fees in this litigation. The next highest items are those related to maintaining the capital costs of the family home, such as the interest on the line of credit charged against the home, property taxes and property insurance for a total of $1,349.25 per month. Otherwise, the other items of her monthly expenses are quite modest.

[61] Ms. Risto is able to pay her monthly expenses from loans given to her by her son Daniel. Daniel Risto has given up his own accommodation, lives with his mother and assists her financially to maintain the expenses relating to the family home and to her personal expenses. In her sworn Financial Statement Ms. Risto indicates that as a result of these loans she owes her son $125,000.

[62] Based on the evidence of Ms. Risto above, Mr. Marcelais withdrew substantial amounts from the couple’s joint line in order to fund his real estate business without returning those funds or accounting for those funds upon the disposition of the properties in question. According to the evidence of Ms. Risto at the time of the separation the joint line of credit balance was $192,485.96. As of January 23, 2014, the date Ms. Risto swore her Financial Statement, the joint line of credit balance was $300,000, increased by Mr. Marcelais’ withdrawals as described earlier.

[63] Based on the evidence provided, Ms. Risto submitted a comparison of the parties’ net family property holdings at the time of separation, dividing equally between them the jointly owned property, namely the family home, 332 Timbertrail and the joint debts and crediting to each party individually the property in their name as well as any proceeds from the sale of property not accounted for where such property was purchased with funds from one of the parties or with funds taken from the joint line of credit and for which both remain liable. Those calculations indicate that Mr. Marcelais’ net worth at the end of the relationship was $1,268,375 compared to Ms. Risto’s net worth of $70,616. If the section 5 of the Family Law Act were to apply to this couple it is clear that Mr. Marcelais would owe to Ms. Risto a substantial equalization payment.

THE JURISPRUDENCE AND APPLICATION TO THE FACTS OF THIS CASE

[64] In view of the fact that this couple were never legally married section 5 of the Family Law Act, R.S.O. 1990, c. F. 3, does not apply. However, in my view the evidence presented at this trial supports the conclusion that Ms. Risto’s claim to a payment in unjust enrichment has merit and ought to be granted.

[65] The jurisprudence justifying this conclusion can be found in the cases of Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269 and Cloutier v. Francis, 2011 ONSC 5550, 2011 CarswellOnt 15427, and more recently by the Ontario Court of Appeal in the case of Martin v. Sansome, 2014 ONCA 14.

[66] In Kerr v. Baranow, supra, Cromwell J., speaking for a unanimous court, summed up the legal principle which was at the heart of the doctrine of unjust enrichment, namely, “the notion of restoring a benefit which justice does not permit to retain”. (Para. 31).

[67] Cromwell J. established that in order to succeed on a claim for unjust enrichment, the party making the claim needs to establish on the facts of the case the following elements:

(1) An enrichment of or benefit to the defendant,

(2) A corresponding deprivation of the plaintiff, and

(3) The absence of a juristic reason for the enrichment.

[68] In Kerr v. Baranow, supra, Cromwell J. advanced and developed the claim and payment of unjust enrichment beyond the established legal principles of quantum meruit and constructive trust in his discussion of a “joint family venture”. He states at paras. 80-81 of his decision:

(4) The Approach to the Monetary Remedy

80 The next step in the legal development of this area should be to move away from the false remedial dichotomy between quantum meruit and [page312] constructive trust, and to return to the underlying principles governing the law of unjust enrichment. These underlying principles focus on properly characterizing the nature of the unjust enrichment giving rise to the claim. As I have mentioned above, not all unjust enrichments arising between domestic partners fit comfortably into either a "fee-for-services" or "a share of specific property" mold. Where the unjust enrichment is best characterized as an unjust retention of a disproportionate share of assets accumulated during the course of what McLachlin J. referred to in Peter (at p. 1001) as a "joint family venture" to which both partners have contributed, the monetary remedy should reflect that fact.

81 In such cases, the basis of the unjust enrichment is the retention of an inappropriately disproportionate amount of wealth by one party when the parties have been engaged in a joint family venture and there is a clear link between the claimant's contributions to the joint venture and the accumulation of wealth. Irrespective of the status of legal title to particular assets, the parties in those circumstances are realistically viewed as "creating wealth in a common enterprise that will assist in sustaining their relationship, their well-being and their family life" (McCamus, at p. 366). The wealth created during the period of cohabitation will be treated as the fruit of their domestic and financial relationship, though not necessarily by the parties in equal measure. Since the spouses are domestic and financial partners, there is no need for "duelling quantum meruits". In such cases, the unjust enrichment is understood to arise because the party who leaves the relationship with a disproportionate share of the wealth is denying to the claimant a reasonable share of the wealth accumulated in the course of the relationship through their joint efforts. The monetary award for unjust enrichment should be assessed by determining the proportionate contribution of the claimant to the accumulation of the wealth.

[69] On the facts of this case, Ms. Risto, during the parties’ cohabitation, clearly provided Mr. Marcelais with an enrichment or benefit. This benefit was in the form of cash contributions to the initial purchase of properties which formed the basis of Mr. Marcelais’ business in the purchase, rental and flipping of the various properties put in his name and by which he profited. As Ms. Risto testified, when the couple decided to go into the real estate business, Mr. Marcelais had no cash or capital to use for that purpose. Ms. Risto willingly cashed and contributed her various investments, as well as those of her son so that the real estate business could be started and maintained. In fact, without that initial financial contribution from Ms. Risto it is uncertain whether Mr. Marcelais would ever have been able to start his property investment business.

[70] In addition to this direct financial contribution, Ms. Risto made a substantial contribution to the advancement of Mr. Marcelais’ career as a real estate agent, his property investment business and his property management business by way of her labour. Ms. Risto described in detail the extent of that work which was not insignificant to the profits of those businesses.

[71] There was also another kind of contribution made by Ms. Risto to Mr. Marcelais’ property investment business which has to be recognized. As the evidence shows Mr. Marcelais’ modus operandi in the property investment business was to freely use the couples’ joint line of credit to fund property purchases. While Mr. Marcelais was the sole beneficial owner of the property, Ms. Risto became and remains equally liable with Mr. Marcelais on the parties’ joint line of credit for those unilateral actions of Mr. Marcelais. While Mr. Marcelais attributed a salary to Ms. Risto in the businesses, she nonetheless was never paid that money except as it went into the general household, whose finances were always controlled by Mr. Marcelais.

[72] Ms. Risto throughout the cohabitation continued to make these substantial contributions to Mr. Marcelais’ real estate, property investment and property management businesses even though she was aware that Mr. Marcelais, shortly after the couple purchased their first jointly owned family home, began to register all of the rental properties in his name alone. Her evidence was that she trusted him and she relied on his word that he knew what he was doing and that it was all for the benefit of their family. Given all of the financial resources and labour Ms. Risto put into Mr. Marcelais’ real estate businesses during their cohabitation there is no question that the second and third elements of the test of unjust enrichment, “a corresponding deprivation of the plaintiff” and “the absence of a juristic reason for the enrichment” have also been met on the facts of this case.

[73] Related to this and based on the evidence presented at trial by both Ms. Risto and her son, I have no hesitation in concluding that during the course of their habitation Mr. Marcelais and Ms. Risto operated their personal, financial, investment and work affairs as a joint family venture with the family expectations that all of that would entail. While the couple chose to not be legally married they certainly held themselves out to the rest of the world as a married couple. They celebrated anniversaries as a married couple would normally do. They formally declared each other like a legally married couple to Mr. Marcelais’ employer. Mr. Marcelais declared Ms. Risto to be his spouse for the purpose of allowing her and her son to benefit from his extended employment medical and dental coverage. This was also done for the purpose of income tax savings and benefits. They made each other executors and beneficiaries of each other’s will. They looked to each other to be the custodian of the other’s assets and care in the event that either one of them would suffer a disability. They pooled their resources and their time and both expected, throughout the cohabitation and their prolonged mutual effort, to equally reap the benefits of their joint family venture.

[74] Because of all of this evidence, and in consideration of the context of an appropriate remedy for a claim of unjust enrichment, I come to the conclusion, as I did in the case of Cloutier v. Francis, supra, that the facts of this case puts it in that category of cases specifically referred to by Cromwell J. as “where the unjust enrichment is best characterized as an unjust retention of a disproportionate share of assets” accumulated during the course of a “joint family venture.”

[75] On the evidence it would be impossible to compensate Ms. Risto for her contribution of money and monies’ worth on a “fee for service” basis. So intertwined were the parties’ respective contributions during their cohabitation. What appears to be the appropriate and fair remedy in this case is to have the parties share equally all of the value of property or proceeds from property which were acquired by the parties during the course of their cohabitation, including those properties acquired by Mr. Marcelais after the parties physically separated but which he acquired only with the continuing help of the parties’ joint resources. This latter assumption is made on the basis that in certain instances a direct connection between an acquisition can be made with joint resources such as Mr. Marcelais’ purchase of 40 Honore in October, 2011, some two months after the parties’ separation. In other instances the assumption can be made because of Mr. Marcelais’ refusal or failure to account for net proceeds of property sold or dissipated assets in the face of a non-dissipation order of this Court. There is also his admission that these proceed funds were comingled with his own funds and used by him for his personal use.

[76] Based on the calculations provided by counsel for Ms. Risto an equalization of the parties’ assets in the above manner would require Mr. Marcelais to pay Ms. Risto a payment of $548,880, taking account of a payment of $50,000 which she has already received.

POSITION OF MR. MARCELAIS ON CLAIM FOR UNJUST ENRICHMENT

[77] For Mr. Marcelais’ part, his counsel made submissions and presented a two volume Book of Authorities on his behalf. Mr. Marcelais appears to recognize that he owes payment to Ms. Risto but indicates that it should not be any more than the $50,000 that she has already received. It is hard to determine how Mr. Marcelais arrived at the quantum $50,000. By acknowledging this quantum, Mr. Marcelais appears to acknowledge the financial contributions from her savings that Ms. Risto made in the early stages of the property investment business. The difficulty I have with this quantum is two-fold. The first is its paucity compared with the substantial assets left in Mr. Marcelais’ possession after a cohabitation of 15 years of comparable effort on the part of the couple. This would not in any way give effect to the principles enunciated by Cromwell J. in Kerr v. Baranow, supra.

[78] The second is this. It appears to be a roughly dollar for dollar return on the cash contributions made by Ms. Risto to the property investment business during the cohabitation. It provides Ms. Risto with almost no interest return on her money, while giving Mr. Marcelais all of the increased property interest. The other part of this is that Ms. Risto is still liable for 50% of the joint line of credit. Even as one who came to the business and investment world late in life, Mr. Marcelais would have to know how unacceptable and inappropriate that result would be.

[79] The second argument advanced by Mr. Marcelais’ counsel, in opposition to Ms. Risto’s claim for unjust enrichment, is that in view of the allegations made by Ms. Risto against Mr. Marcelais about the illegal activities he engaged in the running of his various businesses, Ms. Risto should not be able to benefit from Mr. Marcelais’ illegal activity by seeking an equitable remedy of this Court in that same property that was the subject matter of the claim. Mr. Bickley relies on the case of Craiggs v. Owens, 2012 BCSC 29. In that case, the court refused a party’s claim in unjust enrichment for their contribution to another parties’ illegal marijuana grow operation, dismissing the claim “on the doctrine of clean hands and ex turpi.”

[80] It is not clear from this argument whether Mr. Bickley is conceding on behalf of his client that Mr. Marcelais did indeed engage in illegal activity in his businesses. Regardless, having had an opportunity of examining the case referred to by counsel for Mr. Marcelais, I conclude that it can be distinguished on its facts. It is clear that in the Craiggs v. Owens, supra, case both parties in question conspired to carry out the illegal activity involved. That is not the case here. Ms. Risto was aware of certain practises and called Mr. Marcelais on them and told him not to do it because he would get into trouble. In fact, in the years 2006 and 2007 Mr. Marcelais was reassessed by the Canada Revenue Agency as a result of his bookkeeping and business practises and had to pay certain monies in reassessed taxes. Mr. Marcelais’ response to Ms. Risto was always, I know what I am doing and trust me. It is clear on the evidence who was in control of the parties’ assets and business practises. Finally, I make no order with respect to the so called $600,000 that went missing from the parties’ safe at the time of the separation. In view of the evidence relating to the accumulation of that money, if such money existed, it would not be proper to include it for the purposes of this case.

[81] For the reasons stated above, I order that Ms. Risto’s claim for a payment based on unjust enrichment be granted. Based on the evidence, I fix the unjust enrichment award of $548,880.

[82] The question remains as to how that amount is to be paid. It is clear that Mr. Marcelais has little respect for court orders. Based on the facts of this case and the conduct Mr. Marcelais has demonstrated during the course of this litigation, it is fair to conclude that there is a high probability that the award granted to Ms. Risto would not be recovered without some difficulty and without further court orders.

[83] With respect to this consideration Cromwell J. in the case of Kerr v. Baranow, supra, at para. 52 indicated that the court should consider alternate remedies to realize unjust enrichment claims. In that paragraph he states:

The plaintiff must also establish that a monetary award would be insufficient in the circumstances (Peter, at p. 999). In this regard, 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 the recognition of property rights (Lac Mineral, at p. 678, per La Forest J.).

[84] I am persuaded that the only way to guarantee that Ms. Risto will receive the unjust enrichment payment to which she is entitled is to grant her, to the extent possible on the evidence presented at trial, a proprietary remedy. Cromwell J. in para. 50 of his decision in Kerr v. Baranow, supra, recognizes this as an appropriate remedy in the following words:

(b) Proprietary Award

50 The Court has recognized that, in some cases, when a monetary award is inappropriate or insufficient, a proprietary remedy may be required. Pettkus is responsible for an important remedial [page300] feature of the Canadian law of unjust enrichment: the development of the remedial constructive trust. Imposed without reference to intention to create a trust, the constructive trust is a broad and flexible equitable tool used to determine beneficial entitlement to property (Pettkus, at pp. 843-44 and 847-48). Where the plaintiff can demonstrate a link or causal connection between his or her contributions and the acquisition, preservation, maintenance or improvement of the disputed property, a share of the property proportionate to the unjust enrichment can be impressed with a constructive trust in his or her favour (Pettkus, at pp. 852-53; Sorochan, at p. 50). Pettkus made clear that these principles apply equally to unmarried cohabitants, since "[t]he equitable principle on which the remedy of constructive trust rests is broad and general; its purpose is to prevent unjust enrichment in whatever circumstances it occurs" (pp. 850-51).

[85] I consider this to be an appropriate remedy for another reason, namely the direct and indirect contributions made by Ms. Risto, either through her own savings, her labour or her liability on the joint line of credit to the acquisition of the properties acquired by this couple during their cohabitation.

[86] There is no dispute that in order to realize a person’s interest in real or personal property, the court may make a vesting order in the property in question in favour of that person. Section 100 of the Courts of Justice Act, R.S.O. 1990, c. C.43, reads:

100. Vesting Orders - A court may by order vest in any person an interest in real or personal property that the court has authority to order be disposed of, encumbered or conveyed.

[87] In the context of a support award, the court also has the power of a property vesting order pursuant to section 34 (1) (c) which reads:

34. POWERS OF COURT - (1) In an application under section 33, the court may make an interim or final order,

(c) requiring that property be transferred to or in trust for or vested in a dependant, whether absolutely, for life or for a term of years;

[88] With respect to the realization of the unjust enrichment award granted to Ms. Risto in the amount of $548,880, in partial satisfaction of that award I make the following vesting orders. Mr. Marcelais’ half ownership in the jointly held family home at 332 Timbertrail shall vest in Ms. Risto. Based on the evidence provided by Ms. Risto, the total equity in that property amounts to approximately $120,000. Approximately $60,000 would represent Mr. Marcelais’ half interest.

[89] It is also ordered that title to 482 St. Phillipe, Alfred also vest in Ms. Risto granting her the right to sell it, if she so chooses, in order to realize as much equity as she might from its sale. On the evidence, its appraised value is $160,000 and has a post purchase mortgage in the amount of $140,000 taken out by Mr. Marcelais and used to purchase his current residence, 40 Honore, Limoges. This would give Ms. Risto another $20,000 equity to add to the $60,000 received from Mr. Marcelais’ one-half interest in the family home at 332 Timbertrail.

[90] It is further ordered that title to 40 Honore also vest in Ms. Risto granting her the right to sell it, if she so chooses, in order to realize as much equity as she might from its sale. On the evidence, the net equity to be realized on this property is approximately $240,000.

[91] Assuming this equity is realized from the sale of 482 St. Phillipe and from the sale of 40 Honore, Ms. Risto can be expected to receive from the sales a total approximate amount of $260,000. In view of the fact that these two properties were almost wholly purchased with monies unilaterally withdrawn from the parties’ joint line of credit secured against the family home, by Mr. Marcelais, it is fair and appropriate that the net proceeds from their sale be paid back to the joint line of credit. Effectively, this will relieve Ms. Risto of that part of the joint line of credit liability which was imposed on her by Mr. Marcelais’ unilateral actions. Of the net proceeds realized from the sale of 482 St. Phillipe and 40 Honore, $138,425.89 and $100,000, for a total of $238,425.89 ought to be paid into the joint line of credit and it is so ordered. I recognize that this benefits Mr. Marcelais as well.

[92] The balance of the unjust enrichment award in the amount of $228,880 ($548,880-($60,000+$20,000+$240,000) shall remain outstanding and payable by Mr. Marcelais forthwith. This judgment may be registered on any property owned by Mr. Marcelais.

SPOUSAL SUPPORT

[93] Ms. Risto is clearly entitled to spousal support upon leaving this 15-year cohabitation. The purposes for an order of support are enunciated in section 33(8) (a) to (d) of the Family Law Act. The circumstances to be considered in the determination of the amount of spousal support to which a dependant is entitled are listed in section 33(9) (a) to (m). The evidence presented at this trial supports the conclusion that the following subsections of sections 33(8) and 33(9) are relevant factors in coming to the conclusion that Ms. Risto is entitled to spousal support from Mr. Marcelais:

Section 33(8) (a), (c) and (d); and

Section 33(9) (a), (b), (c),(d),(e),(f),(g),(h),(j),(l)(m)

[94] With respect to Section 33(9) (d), namely, Mr. Marcelais’ capacity to provide support, his filed Financial Statement, dated December 10, 2012, discloses his annual income as being approximately $25,000, being his military pension. This in contrast to the substantial annual earnings Mr. Marcelais received during most of the period of the couple’s cohabitation. Furthermore, Mr. Marcelais could not sustain his annual expenses on that income. On March 10, 2012, Mr. Marcelais informed a potential lender, Desjardins that his annual income was between $100,000 and $149,999. That figure is more in keeping with Mr. Marcelais’ earning power during the cohabitation. The spousal support order of Minnema J. dated September 18, 2012 was based on an income of $150,000 being attributed to Mr. Marcelais. In December 18, 2012, Mr. Marcelais appeared before Maranger J. arguing that the spousal support payable by him “should be reduced” on the basis of an annual income of $90,000 per year instead of $150,000. His request was refused because Maranger J. could not find a legitimate material change in the circumstances since the granting of the September 18, 2012 order. Maranger J. found that Mr. Marcelais’ “decision to resign from his employment was, on the balance of probabilities, planned in advance and more likely than not motivated by the applicant’s entitlement to support.”

[95] I can find no reason on the evidence why an income of $100,000 should not be imputed to Mr. Marcelais. I have no evidence that anything has changed. Therefore, I impute an annual income to Mr. Marcelais of $100,000 for purposes of spousal support.

[96] Ms. Risto would be entitled to spousal support based on that annual income attributed to Mr. Marcelais and based on her own earnings of approximately $9,500 per year in accordance with the Spousal Support Advisory Guidelines. That would likely result in a spousal support award slightly less than the existing order for spousal support which continues in force and on which Mr. Marcelais is in substantial arrears.

[97] Ms. Risto has not been able to enforce the existing spousal support order. Nor has Mr. Marcelais been paying his one-half share of the joint line of credit monthly payments even though he has increased to almost double the amount of the balance owing on the couple’s joint line of credit. Based on this evidence it is highly unlikely that Mr. Marcelais would comply with any future spousal support orders.

[98] It is in just these types of circumstances that the court should consider an order for a lump sum award of spousal support. In Davis v. Crawford, 2011 ONCA 294, (2011), 161 O.R. (3d) 221, the Ontario Court of Appeal upheld the decision of the trial judge in awarding a lump sum spousal support order in the circumstances of that case which included the court finding that the appellant, Mr. Crawford had the assets with which to pay the lump sum spousal support award and that there was a real risk that the appellant, who had begun to gift away his assets to a daughter, would not pay periodic support.

[99] On the facts of this case, Mr. Marcelais has assets with which to pay the lump sum spousal support award. Furthermore, given his past actions, it reasonable to conclude that there is a real risk that Mr. Marcelais will not pay to Ms. Risto any periodic support ordered by this Court.

[100] As earlier mentioned pursuant to section 34(1) (c) of the Family Law Act, the court has the power to grant a vesting order on an application for support. This power was recognized by the Ontario Court of Appeal in Lynch v. Segal (2006), 2006 42240 (ON CA), 82 O.R. (3d) 641, 2006 CarswellOnt 7929 at paras. 31 and 32 in the following way:

31 The rationale for the vesting power, therefore, is to permit the court to direct the parties to deal with property in accordance with the judgment of the court. The jurisdiction is quite elastic. Nothing in the language of either s. 100 of the Courts of Justice Act or s. 34(1)(c) of the Family Law Act operates to constrain the flexible discretionary nature of the power.

32 I do not think any useful purpose is served by attempting to categorize the types of circumstances in which a vesting order may issue in family law proceedings. The court has a broad discretion, and whether such an order will or will not be granted will depend upon the circumstances of the particular case. I agree with the appellants that the onus is on the person seeking such an order to establish that it is appropriate. As a vesting order -- in the family law context, at least -- is in the nature of an enforcement order, the court will need to be satisfied (as the trial judge was here) that the previous conduct of the person obliged to pay, and his or her reasonably anticipated future behaviour, indicate that the payment order will not likely be complied with in the absence of more intrusive provisions: see Kennedy v. Sinclair, 2001 28208 (ON SC), [2001] O.J. No. 1837, 18 R.F.L. (5th) 91 (S.C.J.), affd 2003 57393 (ON CA), [2003] O.J. No. 2678, 42 R.F.L. (5th) 46 (C.A.). Thus, the spouse seeking the vesting order will have already established a payment liability on the part of the other spouse and the amount of that liability, and will need to persuade the court that the vesting order is necessary to ensure compliance with the obligation.

[101] Mr. Marcelais enjoys a military pension which he earned for his years of service in the Canadian military. An assignment of an interest in money payable under Mr. Marcelais’ pension is possible by an order under the Family Law Act (see also section 65 of the Pension Benefits Act). Furthermore, Mr. Marcelais’ pension may be divided pursuant to the Pension Benefits Division Act. Ms. Risto has provided evidence that based on her years of cohabitation with Mr. Marcelais (starting on March 1, 1996 and ending on August 15, 2011) she would be entitled to a payment of approximately $72,656.45 from Mr. Marcelais’ CFSA annuity if she had a court order to that effect.

[102] The quantum of $72,656.45 represents a reasonable figure for an award of lump sum spousal support payable to Ms. Risto by Mr. Marcelais. I come to that conclusion based on the existing arrears of spousal support, the quantum of monthly spousal support that would otherwise be ordered in the face of Ms. Risto’s limited income and Mr. Marcelais’ imputed income of $100,000 per annum, the length of the cohabitation and the indefinite duration of spousal support (see Exhibit #2, tab 30).

[103] I also consider relevant to the quantum of lump sum spousal support the fact that as part of the spousal support award granted by Minnema J. on September 18, 2012, Mr. Marcelais was ordered to pay 50% of the principal and interests payments on the joint line of credit and did not make any of those payments. From November, 2011 to January, 2014, Ms. Risto has paid a total of $21,248.88 into the joint line of credit to keep the collection process at bay (see Exhibit #2, tab 14). Assuming she has continued to make those payments to date, she will have paid more. $10,624.44 of that amount should have been paid by Mr. Marcelais.

[104] I find the facts of this case comparable to those found in Brière v. Saint-Pierre, 2012 ONSC 421, 2012 CarswellOnt 1374. In that case, Beaudoin J. granted an order for lump sum spousal support payable from a LIRA account. At paras. 30 to 33 Beaudoin J. states:

Awarding a Lump Sum from a LIRA

30 In Belton v. Belton, 2010 ONSC 2400 at para. 25, the court dealt with its jurisdiction to order lump sum spousal support held in a LIRA:

25 The other issue that must be considered is whether such an Order would contravene section 51 of the Pension Benefits Act which limits the amount of a pension that can be transferred to a spouse to fifty percent (50%) of the pension. It is clear from Nicholas v. Nicholas 1998 14871 (ON SC), [1998] O. J. No. 1750 (Ontario General Division) that section 51 of the Act deals with equalization of property and is silent as to support. As such a Court is not prevented from ordering one-half of the pension to be transferred to satisfy the property claims, with the remaining one-half of the pension to be transferred in satisfaction of a support obligation under section 65 of the Pension Benefits Act.

31 Section 65 of the Pension Benefits Act states:

Void transactions

65. (1) Every transaction that purports to assign, charge, anticipate or give as security money payable under a pension plan is void.

Idem

(2) Every transaction that purports to assign, charge, anticipate or give as security money transferred from a pension fund in accordance with section 42 (transfer), 43 (purchase of pension), clause 48 (1) (b) (pre-retirement death benefit) or subsection 73 (2) (transfer rights on wind up) is void.

Exemption for order or separation agreement

(3) Subsections (1) and (2) do not apply to prevent the assignment of an interest in money payable under a pension plan or money payable as a result of a purchase or transfer under section 42, 43, clause 48 (1) (b) or subsection 73 (2) (transfer rights on wind up) by an order under the Family Law Act or by a domestic contract as defined in Part IV of that Act.

32 I conclude that the Respondent is entitled to a lump sum spousal support award. The Applicant is in arrears of $57,465.99 enforceable as support, and these continue to accrue monthly.

33 I have been provided with calculation for a lump sum payment based on spousal support payment of $1,900.00 for 15 years. The mid-point, after taking into account the income tax implications is $223,891.00. Having regard to the amount remaining in the LIRA and the remaining arrears, I order the sum of $200,000.00 to be transferred to the Respondent from the Applicant's LIRA to secure future support. This amount is to be transferred into a LIRA registered in Philippe Saint-Pierre's name. Periodic support payments are terminated once that transfer has taken effect.

[105] For all of these reasons this Court orders Mr. Marcelais to pay Ms. Risto lump sum spousal support in the amount of $72,600 in satisfaction of any existing arrears of spousal support and to secure future spousal support. There will be a vesting order securing that lump sum in the CFSA annuity owned by Mr. Marcelais. There will be an order that the sum of $72,600 is to be transferred to Ms. Risto from Mr. Marcelais’ CFSA annuity in satisfaction of this order.

[106] Mr. Marcelais will also continue to be responsible for his 50% share of the existing joint line of credit. He is prohibited from drawing any future amounts from the joint line of credit. Should Mr. Marcelais choose to pay off completely the joint line of credit, his payment of Ms. Risto’s 50% liability on the balance of joint line of credit may be credited to him as a payment toward the balance remaining on the unjust enrichment award granted to Ms. Risto. Any amounts of his 50% share of the balance of the joint line of credit not paid by Mr. Marcelais and paid by Mr. Risto on his behalf may be added to the unjust enrichment award due and owing to Ms. Risto and payable by Mr. Marcelais.

[107] Mr. Marcelais’ counsel submitted that Mr. Marcelais very much wants removed the certificates of pending litigation on the two properties now owned by him, 482 St. Phillipe and 40 Honore. Given his modus operandi in the property investment field which traditionally has been mortgaging and quick flipping I can understand his wish for this. The certificates of pending litigation have certainly introduced less flexibility, not to mention less control to his business and financial activities. I am persuaded, however, that the only reason Mr. Marcelais still owns those properties is because of the registration of the certificate of pending litigation on the titles of those properties. Consequently, I order that the certificates of pending litigation shall remain on the two properties until Mr. Marcelais complies with the orders in this judgment. There will be a simultaneous removal of those certificates once the vesting orders take effect and the two properties are transferred and registered on title to the name of Ms. Risto as the beneficial owner.

[108] The last issue is that of costs. Ms. Risto shall have two weeks from the date of this judgment to serve and file her written submissions on costs. Mr. Marcelais shall then have two weeks from that date to serve and file his written submissions on costs. Ms. Risto shall then have one week to serve and file, any reply she may think advisable.

M. Linhares de Sousa J.

Released: March 27, 2014

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

IRINA RISTO

Applicant

– and –

PAUL MARCELAIS

Respondent

REASONS FOR JUDGMENT

M. Linhares de Sousa J.

Released: March 27, 2014