ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: FS-14-0015
DATE: 2015-08-19
B E T W E E N:
Diana Robert McKay,
Mary Ann Currie, for the Applicant
Applicant
- and -
Douglas James Langstaff,
The Respondent being unrepresented
Respondent
HEARD: May 26, 27 & 28, 2015,
at Thunder Bay, Ontario
Regional Senior Justice D. C. Shaw
Reasons For Judgment
[1] The two main issues to be determined at this trial are the claims by the applicant, Diana Roberta McKay, for unjust enrichment and spousal support.
Background
[2] Ms. McKay is 48 years of age. The respondent, Douglas James Langstaff, is 49 years of age.
[3] The parties began to live together in 1987. They separated 26 years later in June 2013. They did not marry.
[4] At the time they began to live together, Ms. McKay was the mother of a 1 ½ year old child, Michelle McKay, who is now 29 years of age.
[5] For approximately the first five years of their cohabitation, the parties lived in Ms. McKay’s apartment with the exception of two to three months when they resided in Ignace in connection with Mr. Langstaff’s employment. They then moved into a home which they shared with Mr. Langstaff’s parents in Thunder Bay. They intended to purchase the home from Mr. Langstaff’s parents. However, when that did not work out as planned, they purchased a rural home at 639 Connelly Road, Nolalu, Ontario. They shared equally the down payment for the purchase of the home. Title was taken in their joint names and the mortgage was joint. Around the time the home was purchased, Ms. McKay bought a motorcycle, financing about two thirds of the purchase price. That debt was rolled into the mortgage. There was no evidence at trial as to the purchase price of the home, the amount of the mortgage taken out or the amount of the motorcycle debt.
[6] The home was appraised as of January 15, 2015, at $120,000. The parties accept this value as of that date. Ms. McKay’s sworn Financial Statement, entered as an exhibit at trial, shows that as of June 2, 2013, $11,347.21 was owing on the mortgage.
[7] After the parties separated in June 2013, Ms. McKay remained in the home until November 2013, when she moved out and Mr. Langstaff moved back in. He continues to reside in the home.
[8] During cohabitation, Mr. Langstaff paid the mortgage and taxes on the home. Mr. Langstaff also paid for heating the home, by way of a wood pellet stove.
[9] During cohabitation, Ms. McKay paid for hydro, telephone and the majority of the groceries and clothing for the family. She testified that she also paid for insurance on the home and on the parties’ vehicles, although she said that Mr. Langstaff would “pitch in” if she could not pay and that he would give her money if she asked for it.
[10] There was no evidence at trial as to the amounts of those various payments by the parties.
[11] Ms. McKay testified that she did the cooking, cleaning, laundry and dishes, while Mr. Langstaff looked after the yard – cutting grass, shovelling the driveway and doing minor repairs.
[12] In addition to their joint ownership of the home, and joint obligation on the mortgage, the parties had a joint line of credit. However, they had separate bank accounts and no joint investments. The parties held title to their respective vehicles in their individual names.
[13] Mr. Langstaff owns a modest home in Florida, inherited from his parents, valued at $18,000.
[14] Ms. McKay has a Grade 12 diploma. She took a Law and Security program at college early in the relationship. After completing that course, she did construction work for about 18 years, working up to 16 hour days. She then returned to college and took a Civil Engineering Diploma. She testified that during her ongoing program she received employment insurance benefits and borrowed money from Mr. Langstaff. There was no evidence at trial as to how much she borrowed from Mr. Langstaff.
[15] After she obtained her Civil Engineering Diploma, Ms. McKay began working at DST Consulting Engineers. She has been employed there for the past nine years. She began her employment as a laboratory technician. She is presently a project manager, supervising several hundred kilometres of highway. She testified that she presently works 35 to 38 hours per week. She expects that she will soon be working 40 hours or more per week. She said that summer and fall will be very busy. Her hours are reduced during the winter. She said that she never turns down work.
[16] Throughout cohabitation, Mr. Langstaff worked as a rail mechanic for CP Rail. He testified that during his approximately 25 years with CP Rail, he has been laid off for parts of 11 years during which time he has worked at odd jobs or on construction. Although he does welding for CP Rail, he is not certified as a welder except in his capacity as a rail worker.
[17] In 2013 and 2014, the parties had the following incomes:
2013:
Ms. McKay:
- T-4 income $35,993.26
- Employment Insurance $3,239.00
- Taxable dividends $276.22
$39,508.48
(Union dues - $492.29).
Ms. Langstaff:
- T-4 income $75,510.52
(Union dues - $914.12).
2014:
Ms. McKay:
- T-4 income $44,696.09
(Union dues - $354.75)
(Professional dues - $232.29).
Ms. Langstaff:
- T-4 income $80,278.77
(Union dues - $946.98).
[18] Mr. Langstaff testified that he normally works 80 hours every two weeks. His present rate of pay is $34.028 per hour, plus $1.00 per hour as a night shift premium, for a total of $35.028 per hour. All of Mr. Langstaff’s hours are worked at night. Extrapolated over a year, Mr. Langstaff’s present annual income would be approximately $73,000.00 without overtime. He testified that his income of $80,278.77 in 2014 would not now be usual because CP Rail has implemented a strict no overtime policy, with exceptions for derailments where Mr. Langstaff would be called out to work on an urgent basis
[19] I was not given evidence of Ms. McKay’s 2015 income, other than her testimony that she presently works 35 to 38 hours but expects that to increase soon to 40 hours or more per week.
[20] Mr. Langstaff takes the position that Ms. McKay is willingly underemployed. Ms. McKay’s evidence is that she takes as much work as she is offered. Mr. Langstaff had no evidence to contradict Ms. McKay in this regard.
[21] At trial, Ms. McKay filed a Net Family Property Statement, in a format as if the parties were married. The values in the Net Family Property Statement were not disputed by Mr. Langstaff.
[22] Summarized, the parties had the following property and debts:
Ms. McKay Mr. Langstaff
Property on date of separation:
Home $60,000.00 $60,000.00
Household items and vehicles $16,400.00 $53,200.00
Bank account $758.58 $45,768.67
RRSP $6,625.69
Pension - Union $4,022.51 $26,011.90
Pension – CP Rail $180,398.05
Life insurance $18,916.11 $5,774.20
Home in Florida _______ $18,000.00
Value of Property Owned on Date of Separation $106,722.89 $389.152.86
Debts on date of separation:
Mortgage $5,673.61 $5,673.61
Line of Credit $8,729.11 $8,729.11
Credit Card $169.59
Total debts on Date of Separation $14,572.31 $14,402.72
Property on Commencement of Cohabitation
Household items and vehicles $5,000.00 $5,000.00
Bank accounts $300.00 $4,000.00
Life insurance $3,500.00
Total of property on Commencement of Cohabitation $5,300.00 $12,500.00
Inheritance:
Home in Florida $18,000.00
[23] If the parties had been married, Mr. Langstaff would have had net family property on the date of separation of $344,250.11. Ms. McKay would have had $86,850.58. This would have resulted in an equalization payment by Mr. Langstaff of $128,699.79.
[24] The parties, of course, are not married and are not subject to the Family Law Act regime of equalization of net family property. Ms. McKay acknowledges this. However, she sets out the parties’ respective assets and liabilities in the Net Family Property format for the purposes of illustrating her claim for unjust enrichment.
[25] Mr. Langstaff testified that he and Ms. McKay agreed at the outset of their relationship that he would be a male role model for Michelle. He said that he treated Michelle as his step-daughter. Ms. McKay agreed that Mr. Langstaff`s role towards Michelle was as a father. When Michelle was married in February 2015, Mr. Langstaff, standing in the role of a father, gave her away at her wedding.
[26] The evidence at trial showed that during the relationship, Ms. McKay, Mr. Langstaff and Michelle went on many and various family outings and vacations. Their friends and family saw them as a family unit. At one point, early in the relationship, Mr. Langstaff proposed marriage, which Ms. McKay declined. Ms. McKay became pregnant with Mr. Langstaff`s child in 1990, but chose to terminate the pregnancy.
[27] Mr. Langstaff testified that he did not consider the parties to be “a married couple” except insofar as Michelle was concerned. He said that they kept their finances separate. He testified that he had told Ms. McKay that she required her own pension. He said that Ms. McKay had brought papers home to apply for a pension, but that she did not complete them. At the date of separation, Mr. Langstaff had a pension with CP Rail valued at $180,398.05 and a union pension valued at $26,011.90. Ms. McKay had a union pension valued at $4,022.51. All values are net of notional income tax, at an agreed average tax rate of 20%.
[28] Ms. McKay testified that she could have contributed more to her pension but that she thought that she would be taken care of in retirement. She said that she and Mr. Langstaff did not really have any discussions about his pension and she never asked him how much was in his pension.
[29] Mr. Langstaff included Ms. McKay and Michelle on his extended health benefits plan with CP Rail. Mr. Langstaff designated Ms. McKay as the beneficiary of his pension. He designated her as the beneficiary of his life insurance policy with London Life, in the face amount of $30,849.
[30] After Mr. Langstaff’s mother died, Mr. Langstaff’s father spent his winters in Florida and his summers in a trailer at Shebandowan Lake. For approximately two months of the year, in the Spring and Fall, he lived with Mr. Langstaff and Ms. McKay in their home. This continued for approximately five years. Ms. McKay testified that she did not have a problem with this except that after five years it became a challenge. Mr. Langstaff said that Ms. McKay was not happy that his father lived with them. Mr. Langstaff testified that his father was self-sufficient, did his own cooking and laundry and ate a lot of his meals outside the home.
[31] Eventually Mr. Langstaff’s father sold his trailer at Shebandowan, rented an apartment in Thunder Bay and stopped residing with Mr. Langstaff and Ms. McKay. He was killed in a car accident shortly thereafter.
[32] Prior to separating, the parties went for counselling to address their relationship. The counselling was paid through Mr. Langstaff’s Employee Assistance Program.
Submissions
Ms. McKay
[33] Ms. McKay submits that because she provided domestic services, managed the household and cared for Mr. Langstaff’s father during their relationship, Mr. Langstaff was unjustly enriched. She submits that it would be shocking if the assets owned by Mr. Langstaff, relative to those assets owned by her, did not show unjust enrichment and deprivation.
[34] Ms. McKay submits that the parties resided together for 26 years in a joint family venture. They had a jointly owned home, a joint mortgage and joint line of credit. They shared the family’s expenses. Ms. McKay was the beneficiary of Mr. Langstaff’s pension, life insurance and health care plan. She submits that there was significant economic integration. She submits that they were not simply two people living separate lives. They went on family outings and family vacations. They held themselves out as a family unit. Mr. Langstaff gave Ms. McKay several rings and at one point proposed marriage.
[35] Ms. McKay submits that once unjust enrichment has been established and the parties are seen to be a joint family venture, the appropriate remedy is an equal division of their wealth.
[36] Ms. McKay submits that if Mr. Langstaff’s pension is removed from the calculation, he would be required to pay her $38,500 to “equalize” their net family property. However, she acknowledges that Mr. Langstaff is entitled to a credit for the principal amount of the joint mortgage paid off after separation, and an additional credit for the sum of $7,700 which Ms. McKay took from the joint line of credit after separation. These two credits total $14,400. This would leave Mr. Langstaff paying Ms. McKay $24,100 ($38,500 - $14,400), plus $60,000 for her half interest in the home for a total of $84,100. Ms. McKay claims that Mr. Langstaff also owes her for one-half of the value of his pension, namely, $112,748 plus interest from the date of separation. Ms. McKay also claims to be entitled to interest on her share of the value of the matrimonial home.
[37] Ms. McKay seeks spousal support from November 1, 2013, forward, subject to Mr. Langstaff receiving credit for amounts which he has voluntarily paid.
[38] For November and December 2013, Ms. McKay submits that she should receive the mid-point of the Spousal Support Advisory Guidelines (“SSAG”), namely $1,300 per month, based on Mr. Langstaff’s 2013 employment income of $75,511 and her 2013 employment income of $35,993, plus her employment insurance benefits of $3,239 and actual dividends of $200. The parties’ respective union dues are subtracted from their incomes for the purposes of the SSAG calculations.
[39] For 2013 and forward, Ms. McKay submits that she should receive the mid-point of the SSAG, namely $1,276 per month, based on Mr. Langstaff’s 2014 employment income of $80,279 and her 2014 employment income of $44,696, and actual dividends of $200.
[40] Ms. McKay claims spousal support on an indefinite basis.
Mr. Langstaff
[41] Mr. Langstaff submits that he was not unjustly enriched. Rather, he submits that Ms. McKay, herself, and Michelle, were unjustly enriched by his payment of the majority of the household expenses.
[42] He submits that this was not a situation where Ms. McKay stayed home to look after the parties’ own children. Mr. Langstaff submits that the parties were not involved in an economic partnership. He submits that their finances were not intermingled. He submits that Ms. McKay had her designated expenses to pay and he had his. They purchased their assets, other than the home, as individuals.
[43] Mr. Langstaff submits that he worked more than Ms. McKay and paid more expenses than Ms. McKay.
[44] Mr. Langstaff notes that during the relationship, Ms. McKay pursued her education and that he gave her every opportunity to earn more money.
[45] Mr. Langstaff submits that Ms. McKay is not entitled to support. He points out that on her present income Ms. McKay has been able to obtain a mortgage of approximately $170,000 on a home that she purchased after separation for $180,000.
Discussion
A. Ms. McKay’s claim for unjust enrichment
(i) The Law
[46] The law on unjust enrichment arising out of the relationship between unmarried spouses has been comprehensively addressed by the Supreme Court of Canada in Kerr v. Baranow, 2011 SCC 10, 2011 S.C.C. 10. In Elkaim v. Markina 2011 ONSC 2586, at para. 9, Sachs J. summarized the framework set out in Kerr to assess property claims in common law relationships:
The law surrounding the resolution of property claims in common law relationships has recently been clarified by the Supreme Court of Canada in Kerr v. Baranow, 2011 SCC 10. In that case the Court found that the “common intention” approach to resulting trust has no “useful role to play” in the resolution of property claims by domestic partners on the breakdown of their relationships: at para. 29. The Court also found that the role of the parties’ reasonable or legitimate expectations in the unjust enrichment analysis was a limited one. Rather, the framework to be used can be summarized as follows:
(a) First, the court must determine if there has been an unjust enrichment.
In doing so, the questions are:
• Has the defendant been enriched?
• Has the plaintiff suffered a deprivation?
• Is there “no reason in law or justice for the defendant’s retention of the benefit conferred by the plaintiff?”: at para. 40.
It is in the consideration of the third stage, “if the case falls outside the existing categories” of juristic reasons for the retention of the benefit, then the court may consider looking to “the reasonable expectation of the parties and public policy considerations to assess…whether particular enrichments are unjust”: at paras.43-44.
(b) If the court finds that there is a basis for the unjust enrichment claim the court must then turn its mind to the question of what remedy is appropriate to “reverse the unjustified enrichment.” This may include either a “monetary or proprietary remedy”: at para. 46.
(c) On the question of remedy, the first remedy to consider is “always a monetary award. In most cases it will be sufficient to remedy the unjust enrichment”: para. 47.
(d) A proprietary award may be required if:
(i) the plaintiff has demonstrated a sufficiently substantial and direct link between his or her contributions and the property, in which case “a share of the property proportionate to the unjust enrichment can be impressed with a constructive trust in his or her favour”: at para 50; and,
(ii) the plaintiff has established that a monetary award would be insufficient in the circumstances. This involves considering the probability of recovery of such an award and considering whether “there is a reason to grant the plaintiff the additional rights that flow from recognition of property rights”: at para. 52.
(e) If a monetary award is appropriate, the question then becomes how to quantify that award.
• To do so, the court must first characterize the nature of the unjust enrichment claim. Is the basis of the “unjust enrichment…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 plaintiff’s contributions to the joint venture and the accumulation of wealth” : at para. 81.
• If so, “a monetary award for unjust enrichment should be calculated according to the share of the accumulated wealth proportionate to the claimant’s contributions”: at para. 87.
(f) To determine whether a joint family venture exists, the court should have regard to the following factors as set out in Kerr v. Baranow at paras. 87-99:
(i) Mutual Effort: Did the parties pool their efforts and work together towards common goals?
(ii) Economic Integration: This involves considering how extensively the parties’ finances were integrated.
(iii) Actual Intent: What did the parties actually intend? Did they intend to have their lives economically intertwined or did they make the choice not to? This intent may be expressed or inferred from conduct.
(iv) Priority of the Family: This factor asks the court to consider to what extent the parties gave priority to the family in their decision making. “A relevant question is whether there has been in some sense detrimental reliance on the relationship, by one or both of the parties, for the sake of the family.”
If the monetary award should not be quantified on a “joint family venture” basis, then the court should consider a “fee for service” or quantum meruit calculation. It is generally at this stage that the court will consider whether the claim should be discounted because of a mutual conferral of benefits.
[47] At the heart of the doctrine of unjust enrichment lies the notion of restoring a benefit that justice does not permit one to retain: Peel (Regional Municipality) v. Canada, 1992 21 (SCC), [1992] 3 S.C.R. 762, at para. 788.
[48] The Court has taken a straightforward economic approach to the first two elements – enrichment and corresponding deprivation: Kerr, para. 37.
For the first requirement — enrichment — the plaintiff must show that he or she gave something to the defendant which the defendant received and retained. The benefit need not be retained permanently, but there must be a benefit which has enriched the defendant and which can be restored to the plaintiff in specie or by money. Moreover, the benefit must be tangible. It may be positive or negative, the latter in the sense that the benefit conferred on the defendant spares him or her an expense he or she would have had to undertake (citations ommitted).
Turning to the second element — a corresponding deprivation — the plaintiff’s loss is material only if the defendant has gained a benefit or been enriched (Peel, at pp. 789-90). That is why the second requirement obligates the plaintiff to establish not simply that the defendant has been enriched, but also that the enrichment corresponds to a deprivation which the plaintiff has suffered (citations ommitted).
[49] The provision of domestic services can support a claim for unjust enrichment: Kerr para. 42.
[50] During both the benefit analysis and the deprivation analysis, the court must resist the temptation to evaluate the reciprocal exchange of benefits. “Attempting to set-off or account for reciprocal benefits to show that the plaintiff has not suffered any detriment and is, in fact, better off than before is not appropriate” Wilson v. Fotsch, 2010 BCCA 5, [2010] B.C.J. No. 8 (B.C.C.A.), at para. 19. “The receipt of benefits by a plaintiff does not mean ipso facto that the defendant has not been unjustly enriched”: Wilson, para. 31.
[51] Although mutual conferral of benefits should not be addressed at the benefit/detriment stage of the analysis, that is not to say that mutual benefits are to be ignored. Rather, as stated by Cromwell J. in Kerr, at para. 109:
- As I noted earlier, my view is that mutual benefit conferral can be taken into account at the juristic reason stage of the analysis, but only to the extent that it provides relevant evidence of the existence of a juristic reason for the enrichment. Otherwise, the mutual exchange of benefits should be taken into account at the defence and/or remedy stage. It is important to note that this can, and should, take place whether or not the defendant has made a formal counterclaim or pleaded set-off.
[52] At para. 124 of Kerr, Cromwell J. summarized the role of the parties’ reasonable expectations in the domestic context:
To summarize:
The parties’ reasonable or legitimate expectations have little role to play in deciding whether the services were provided for a juristic reason within the existing categories.
In some cases, the fact that mutual benefits were conferred or that the benefits were provided pursuant to the parties’ reasonable expectations may be relevant evidence of whether one of the existing categories of juristic reasons is present. An example might be whether there was a contract for the provision of the benefits. However, generally the existence of mutual benefits flowing from the defendant to the claimant will not be considered at the juristic reason stage of the analysis.
The parties’ reasonable or legitimate expectations have a role to play at the second step of the juristic reason analysis, that is, where the defendant bears the burden of establishing that there is a juristic reason for retaining the benefit which does not fall within the existing categories. It is the mutual or legitimate expectations of both parties that must be considered, and not simply the expectations of either the claimant or the defendant. The question is whether the parties’ expectations show that retention of the benefits is just.
[53] The concept of a “joint family venture” comes into play at the remedy stage, after it has been determined that there has been an unjust enrichment.
[54] In Kerr, Cromwell J. held that it was inappropriate to limit the awards for unjust enrichment to a strict remedial dichotomy of either a monetary award assessed on a fee-for-services basis or a proprietary one, generally in the form of a remedial constructive trust where the claimant can show that the benefit conferred contributed to the acquisition, preservation, maintenance or improvement of a specific property. Cromwell J. referred to the Court’s past recognition of the reality of joint family ventures, to which the Court should respond in fashioning an equitable remedial remedy when an unjust enrichment has been established, a remedy that does not strictly adhere to a quantum meruit approach or to the imposition of a remedial constructive trust:
Unlike much matrimonial property legislation, the law of unjust enrichment does not mandate a presumption of equal sharing. However, the law of unjust enrichment should respond to the social reality identified by the legislature that many domestic relationships are more realistically viewed as a joint venture to which the parties jointly contribute.
[55] At para. 80, Cromwell J. held:
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.
[56] At para. 81, Cromwell J. described the appropriate remedy:
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.
(ii) Discussion
[57] I am satisfied that Ms. McKay has established that the financial contributions and services that she provided during the parties’ 26 years of cohabitation found a claim for unjust enrichment. The groceries and clothing that she purchased, the hydro, telephone and insurance that she paid for and the cooking, cleaning and laundry services that she provided were tangible economic benefits that Mr. Langstaff received and retained. They were expenses and services that he would have had to take on if they had not been provided by Ms. McKay. The monies paid by Ms. McKay and the domestic services that enriched Mr. Langstaff also corresponded to a deprivation for Ms. McKay.
[58] I am also satisfied that there was no juristic reason for the conferral of benefits on Mr. Langstaff, either from an established category such as contract or gift, or from the category of residual defences that would lead a court to deny recovery, as explained in Kerr at para. 43. The second category imposes a burden of proof on a defendant to show a reason why the enrichment should be retained. In this regard, consideration can be given to the mutual reasonable expectations of the parties and public policy considerations. Mr. Langstaff did not present evidence to discharge this burden.
[59] Having found that Ms. McKay has established the requisite elements of unjust enrichment, the question then becomes: “What remedy is appropriate to reverse the unjust enrichment?”
[60] The listing of assets and liabilities of the parties set out above, shows that Mr. Langstaff has retained a disproportionate amount of the wealth that the parties acquired during their relationship.
[61] I am satisfied, taking into account the particular circumstances of this couple, that they conducted their relationship as a joint family venture. They had a long term relationship of 26 years. Although they did not have children together, they raised Michelle from an infant to an adult as if she were Mr. Langstaff’s own child. Even after the parties separated, Mr. Langstaff stood at Michelle’s wedding as the father of the bride – a testament to the closeness between Michelle and Mr. Langstaff and confirmation of the commitment that Mr. Langstaff (to his great credit) made at the outset of his relationship with Ms. McKay, to treat Michelle as his own child.
[62] Mr. Langstaff, Ms. McKay and Michelle were seen by their family and friends as a family unit. They did all the things that one would expect that a family unit would do – attending family get-togethers, socializing and vacationing.
[63] Ms. McKay and Mr. Langstaff bought their family home together and held title as joint tenants. They were jointly responsible for the mortgage. They held a joint line of credit.
[64] They divided the household expenses for their mutual benefit. They divided their household duties for their mutual benefit. Mr. Langstaff named Ms. McKay as a beneficiary of his life insurance, health insurance and pension.
[65] There are some factors that do not support a finding of a joint family venture: the parties did not have a joint bank account; titles to vehicles and boats were registered in their respective names; Ms. McKay, early in the relationship, turned down Mr. Langstaff’s marriage proposal.
[66] There is little evidence as to the parties’ mutual intentions. Mr. Langstaff testified that he did not consider the parties to be “a married couple”, except for the purpose of raising Michelle. He told Ms. McKay that she should provide for her own pension. On the other hand, Ms. McKay testified that they talked, or dreamed, of retiring and perhaps buying the home of Mr. Langstaff’s parents in Florida. Although Ms. McKay testified that she never had discussions with Mr. Langstaff about his pension, she also testified: “I thought I would be taken care of.”
[67] However, although direct evidence of mutual intent is lacking, the evidence of how the parties actually lived their lives, giving little weight to their ex post facto assertions, supports the finding of a joint family venture and overwhelms the factors that would support a contrary finding.
[68] Where there has been a finding of a disproportionate share of wealth and a finding of a joint venture, there should be a remedial monetary award “… calculated according to the share of the accumulated wealth proportionate to the claimant’s contributions”: Kerr, paras. 87 and 81.
[69] It is at the remedy stage that the issue of conferral of mutual benefits comes into play. Kerr, para. 102:
… The remedy is a share of that wealth proportionate to the claimant’s contributions. Once the claimant has established his or her contribution to a joint family venture, and a link between that contribution and the accumulation of wealth, the respective contributions of the parties are taken into account in determining the claimant’s proportionate share. While determining the proportionate contributions of the parties is not an exact science, it generally does not call for a minute examination of the give and take of daily life. It calls, rather, for the reasoned exercise of judgment in light of all of the evidence.
[70] I am satisfied that in their division of domestic services and in the payment of household expenses, Mr. Langstaff and Ms. McKay contributed in an overall roughly equal way. Although Mr. Langstaff earned the larger income and may have paid more towards the parties’ bills, Ms. McKay appears to have spent more time on household duties, including caring for Michelle, while Mr. Langstaff worked nights. On the other hand, while Ms. McKay went to college on two occasions, Mr. Langstaff was the sole income earner, apart from monies Ms. McKay received from mother’s allowance and employment insurance benefits. Her diploma in civil engineering, obtained while Mr. Langstaff worked, has enabled her to significantly increase her income potential from her previous experience as a labourer in construction.
[71] If their contributions to the joint family venture are seen as roughly equal, then it would be fair for the parties to share equally that portion of their wealth to which the contributions of Ms. McKay are linked. In my view, Ms. McKay’s financial and domestic contributions would reasonably have allowed Mr. Langstaff to divert resources that he would otherwise had had to use for groceries, hydro, insurance, telephone, clothing and domestic services and enabled him to acquire multiple vehicles, boats and other chattels, of a value of $53,200, compared to $16,500 for vehicles and chattels acquired by Ms. McKay, and to leave the relationship with a bank account of $45,000, while Ms. McKay had $7,500 in her account.
[72] I do not come to the same conclusion, however, with respect to Mr. Langstaff’s CP Rail pension. There is no evidence to indicate that Ms. McKay’s contributions, financially and domestically, are linked in any way, directly or indirectly, to Mr. Langstaff’s CP Rail pension. Mr. Langstaff worked for CP Rail for 25 years, almost the entirety of the parties’ cohabitation. There was nothing that Ms. McKay did that preserved or enhanced or benefitted Mr. Langstaff’s career as a lifelong employee of CP Rail. The parties did not move from one town to another to further Mr. Langstaff’s career (with the exception of one or two months in Ignace when they first resided together). Ms. McKay did not give up any employment so that Mr. Langstaff could remain with the railroad or so that he could advance in his position with the railroad. She did not stay home from employment to care for children so that he could work at CP Rail. She did not support him so that he could further his education to enable him to take a better job. (In fact, as noted, it was Ms. McKay who went back to school on two occasions to improve her employment prospects while Mr. Langstaff continued to work.)
[73] In short, I find that there was nothing that Ms. McKay did that could reasonably lead to the conclusion that the parties’ joint efforts had an effect on Mr. Langstaff’s CP Rail Pension.
[74] The home is an asset that was acquired as part of the parties’ joint venture. Ms. Langstaff paid down the mortgage while Ms. McKay paid other household expenses. Title is held jointly. The parties agree that the value of $120,000 should be divided equally and that Mr. Langstaff will purchase Ms. McKay’s one-half interest for $60,000. The parties agree that Mr. Langstaff is entitled to credit for the principal amount of the mortgage which he paid off after November 2013 when he returned to live in the home.
[75] The remaining issues to be dealt with are:
Ms. McKay: - RRSP $6,625.69
Union pension $4,022.51
Life Insurance cash surrender value $18,916.11.
Mr. Langstaff: - Union pension $26,011.90
- Life Insurance cash surrender value $5,774.24.
[76] There was no evidence as to how or when those assets were accumulated other than Ms. McKay’s evidence that insurance was among the household expenditures that she paid for during cohabitation. It is not clear if either or both her life insurance policy and Mr. Langstaff’s policy were the subject of this expense.
[77] The Net Family Property statement prepared by Ms. McKay shows that Mr. Langstaff had a policy of life insurance on the commencement of cohabitation valued at $3,500. There is nothing to indicate whether this is the same policy described on the date of separation as “Term Co-operators London Life”. If it is the same policy, I do not know if the value increased because of the passage of time or contributions during cohabitation. I note that it is unlikely that a “Term” policy would have a cash surrender value.
[78] There is not enough evidence to conclude that Ms. McKay’s RRSP, union pension and life insurance, and Mr. Langstaff’s union pension and life insurance should be subject to any remedial monetary award. These assets of Ms. McKay have a value of approximately $29,500. Those of Mr. Langstaff have a value of approximately $31,750. There is little practical consequence if those values not equalized.
[79] To summarize, I have concluded that Ms. McKay has established an unjust enrichment, that there was no juristic reason for the enrichment, that Mr. Langstaff retained a disproportionate share of the parties’ wealth, that the parties were engaged in a joint family venture and that there should be a monetary award to remedy the unjust enrichment which should be calculated according to the share of the accumulated wealth acquired through the joint efforts of the parties. I have determined that, in addition to the jointly owned home, the clear link between Ms. McKay’s contribution to the joint venture and the accumulation of wealth relates to the value of chattels and bank accounts owned by the parties. The remedial monetary award for that disproportionate share of the wealth should be a payment by Mr. Langstaff to Ms. McKay to equalize the values of the chattels and bank accounts as follows:
Ms. McKay Mr. Langstaff
Chattels $16,400.00 $53,200.00
Bank accounts $758.58 $45,768.67
$17,158.58 $98,968.67
Equalizing payment: $98,968.67
- $17,158.58
$81,810.09 ÷ 2 = $40,906.05.
[80] Ms. McKay acknowledges that Mr. Langstaff should be credited with $14,400 for: (a) his assumption of the line of credit, which Ms. McKay increased by $7,700 after separation, and (b) for his payment of the principal amount of the mortgage. That leaves a net sum of $26,505.05 ($40,905.05 - $14,400).
[81] Mr. Langstaff shall pay an additional sum of $60,000 for Ms. McKay’s interest in the home at 639 Connolly Road, Marks Township.
[82] Ms. McKay submits that she should receive prejudgment interest on the monies payable to her, including the $60,000 for her interest in the home, from the date of separation, namely June 2, 2013. Ms. McKay claimed prejudgment interest in her application.
[83] Ms. McKay is entitled to prejudgment interest on the $26,505.05, from the date of separation, at the rate prescribed by the Courts of Justice Act. In my view, prejudgment interest should not be payable on Ms. McKay`s half interest in the home from the date of separation. The date of the appraisal of the home is January 16, 2015. The appraisal was obtained jointly by the parties, as indicated in the appraisal report. Ms. McKay remained in the home until November 2013. Mr. Langstaff resided in the home thereafter. There is no evidence as to what the value of the home was on June 2, 2013 when the parties separated, or November 1, 2013, when Ms. McKay moved out. As joint owners, the parties should, generally, share equally in any increase or decrease in the value of the home. Because Mr. Langstaff wishes to retain the home, at the value agreed to as of January 16, 2015, I will award Ms. McKay pre-judgement interest, at the rate prescribed by the Courts of Justice Act, from January 16, 2015, on her one-half share of the appraisal value, namely $60,000.
(B) Ms. McKay`s claim for support
(i) The Law
[84] Ms. McKay`s claim for spousal support is made under Part III of the Family Law Act. Section 30 of the Family Law Act provides:
Every spouse has an obligation to provide support for himself or herself and for the other spouse, in accordance with need, to the extent that he or she is capable of doing so.
[85] Section 30(8) of the Family Law Act sets out the purposes of an order for support of a spouse:
An order for the support of a spouse should,
(a) recognize the spouse’s contribution to the relationship and the economic consequences of the relationship for the spouse;
(b) share the economic burden of child support equitably;
(c) make fair provision to assist the spouse to become able to contribute to his or her own support; and
(d) relieve financial hardship, if this has not been done by orders under Parts I (Family Property) and II (Matrimonial Home).
(ii) Discussion
[86] This was a long term relationship of 26 years, where Mr. Langstaff earned the greater income throughout. Ms. McKay contributed equally to the relationship which I have found to have been a joint family venture. During the relationship, with the support of Mr. Langstaff, Ms. McKay was able to further her education and, by so doing, obtain permanent, stable employment that pays her relatively well. Her income, however, remains significantly less than Mr. Langstaff`s income. In view of the length of the relationship, the roles performed and the discrepancies in incomes, I am satisfied that Ms. McKay is entitled to support on both a compensatory basis and a non-compensatory basis. Some of the economic hardship arising out of the breakdown of the relationship has been addressed by the finding of unjust enrichment and the monetary award payable by Mr. Langstaff. She can use that payment, for example, to eliminate the non-mortgage debt that she shows in her Financial Statement. However, even with the elimination of that debt and eliminating Ms. McKay’s expense of $200 per month for alcohol and tobacco, her budget, which otherwise appears reasonable, shows a shortfall between income and expenses of approximately $9,000 per year going forward.
[87] Based on the parties respective incomes for 2013, previously set out, I find it reasonable to award Ms. McKay transitional support at the mid-point of $1,300 per month for November and December 2013, and of $1,275 per month, commencing January 1, 2014, through December 1, 2014.
[88] For 2015, I find Mr. Langstaff’s income to be $73,000, based on 80 hours every two weeks, at an hourly rate of $35.028, inclusive of a $1.00 per hour night shift premium.
[89] The most recent income information which I have for Ms. McKay is from her 2014 Income Tax Return, which shows employment income of $44,696 and actual dividends of $200.
[90] The SSAG calculations for their respective incomes suggests a range of monthly spousal support of a low of $866, a mid-range of $1,011 and a high of $1,130, for an indefinite duration, subject to variation and possibly review.
[91] Taking into consideration the SSAG range and the expenses shown in Ms. McKay’s Financial Statement, with reductions for her monthly debt payment of $300 and of $200 for alcohol and tobacco, I am of the view that support in the mid-range of $1,000 per month would be appropriate.
[92] This support award is based on the premise that: (a) Ms. McKay is working on a full-time basis and that her income going forward will be similar to her 2014 income; and (b) Mr. Langstaff is working 80 hours every two weeks, at an hourly rate of $35.028. The parties will be required to exchange their income tax returns on an annual basis. The amount of support will be subject to variation at the instance of either party if there is a material change in circumstances of either party.
[93] Mr. Langstaff shall be credited by Ms. McKay for the support payments which he has voluntarily made since November 1, 2013.
Conclusion
[94] An order shall go that:
(1) Mr. Langstaff shall pay to Ms. McKay, as a remedial monetary award for unjust enrichment, the sum of $40,905.05, less credit of $14,400 for assumption of the line of credit and payment of the mortgage, for a net payment of $26,505.05;
(2) Mr. Langstaff shall pay to Ms. McKay the sum of $60,000 for her interest in 639 Connelly Road, Nolalu, Ontario, P0T 2K0. Forthwith upon payment of the $60,000, Ms. McKay shall transfer to Mr. Langstaff her interest in the home, free and clear of any encumbrances, liens or executions in her name alone;
(3) Mr. Langstaff shall pay to Ms. McKay prejudgment interest at the rate prescribed in the Courts of Justice Act on the said sum of $26,505.05 from November 1, 2013. Mr. Langstaff shall pay to Ms. McKay prejudgment interest at the rate prescribed by the Courts of Justice Act on the said sum of $60,000 from January 16, 2015;
(4) Mr. Langstaff shall pay spousal support to Ms. McKay as follows:
(a) for each of November and December 2013, the sum of $1,300 per month;
(b) for the period of January 1, 2014 through December 1, 2014, inclusive, the sum of $1,275 per month;
(c) commencing January 1, 2015, the sum of $1,000 per month, subject to variation at the instance of either party if there is a material change in circumstances of either party;
(d) Ms. McKay shall credit Mr. Langstaff, as against the support payments ordered, with any spousal support payments which he made voluntarily after November 1, 2013.
(5) By June 1 of each year, commencing June 1, 2016, the parties shall exchange copies of their respective Income Tax Returns and Notices of Assessment for the previous calendar year.
Costs
[95] Success on this matter has been divided. If the parties are unable to agree on costs, they shall contact the Trial Co-ordinator within 30 days to schedule a hearing, not exceeding one hour, to make submissions on costs.
___”original signed by”
The Hon. Mr. Justice D. C. Shaw
Released: August 19, 2015
COURT FILE NO.: FS-14-0015
DATE: 2015-08-19
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Diana Robert McKay,
Applicant
- and -
Douglas James Langstaff,
Respondent
REASONS FOR JUDGMENT
Shaw R.S.J.
Released: August 19, 2015
/mls