SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: FS-15-20010
DATE: 2015-12-09
RE: Jessica Reiter, Applicant
AND:
Tiar Hollub, Respondent
BEFORE: Pollak J.
COUNSEL:
J. Lester Davies, for the Applicant
Elissa Boyle, for the Respondent
HEARD: October 13, 14, 15, 2015
ENDORSEMENT
Overview
1The Applicant, Ms. Jessica Reiter, seeks an award of one-half of a $410,000 increase in the equity of a house owned by the Respondent, Tiar Hollub, on the basis of unjust enrichment. The parties lived together for six years in this house. The value of the house increased during their cohabitation by $410,000. The increase in value is a result of market force increase of $283,000 and mortgage payments of $127,000.
2At trial, the Applicant advised that she is not pursuing her claim for a resulting trust or spousal support.
3The Applicant relies on in the Supreme Court of Canada case of Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269.
4She claims that the parties were in a “joint family venture” and that it is unjust for the Respondent to have the benefit of the entire increase in the value of the house, which she submits, was the result of the efforts of both parties.
5The Supreme Court of Canada in Kerr summarized the principle of unjust enrichment relied on by the Applicant at paras. 32 and 34:
Canadian law, however, does not limit unjust enrichment claims to these categories. It permits recovery whenever the plaintiff can establish three elements: an enrichment of or benefit to the defendant, a corresponding deprivation of the plaintiff, and the absence of a juristic reason for the enrichment[…]
Although the legal principles remain constant across subject areas, they must be applied in the particular factual and social context out of which the claim arises. The Court in Peter was unanimously of the view that the courts “should exercise flexibility and common sense when applying equitable principles to family law issues with due sensitivity to the special circumstances that can arise in such cases” (p. 997, per McLachlin J. (as she then was); see also p. 1023, per Cory J.). Thus, while the underlying legal principles of the law of unjust enrichment are the same for all cases, the courts must apply those common principles in ways that respond to the particular context in which they are to operate.
[Emphasis added.]
6The Applicant relies on the court’s finding in Kerr to support her claim that a monetary award of one-half of the increase in the value of the home (during the period of cohabitation) is appropriate. With respect to the appropriate remedy, if a claim for unjust enrichment in the context of a family law dispute has been established, the court in Kerr held, at para. 100:
I conclude:
The monetary remedy for unjust enrichment is not restricted to an award based on a fee-for-services approach.
Where the unjust enrichment is most realistically characterized as one party retaining a disproportionate share of assets resulting from a joint family venture, and a monetary award is appropriate, it should be calculated on the basis of the share of those assets proportionate to the claimant’s contributions.
To be entitled to a monetary remedy of this nature, the claimant must show both (a) that there was, in fact, a joint family venture, and (b) that there is a link between his or her contributions to it and the accumulation of assets and/or wealth.
Whether there was a joint family venture is a question of fact and may be assessed by having regard to all of the relevant circumstances, including factors relating to (a) mutual effort, (b) economic integration, (c) actual intent and (d) priority of the family.”
[Emphasis added.]
7The evidence of the parties was largely uncontradictory and the parties agree that the legal principles set out in Kerr are applicable. They, however, disagree on the application of the facts of this case to the legal principles set out by the Supreme Court of Canada.
8The Applicant relies on the evidence that the parties lived in a common law relationship for six years and three months sharing expenses for housing, utilities, groceries and paying for their own vacations. Further, they worked on a number of projects to maintain and improve the value of the house and they maintained a vegetable garden together. As well, throughout the period of cohabitation, the total reduction in the amount of principal on the mortgage was $127,000. This is in contrast to the fact that after two years of living in the house, prior to the cohabitation, the Respondent was only able to reduce the mortgage from $166,000 to $156,000. The Applicant argues that the reason that the Respondent was able to reduce the mortgage by $127,000 during the period of cohabitation of six years was the fact that the couple were sharing expenses and labour which enabled such a large reduction in the mortgage. This further enabled both of them to increase their personal savings by substantial amounts.
9The Respondent submits that the evidence does not support a finding of unjust enrichment and submits even more importantly that the evidence does not support a finding of “joint family venture” as set out in the Kerr case, to support the requested remedy.
10The parties focused the vast majority of argument on the determination of whether there was a “joint family venture”. In this regard, the Supreme Court of Canada stated, at para. 89:
In undertaking this analysis, it may be helpful to consider the evidence under four main headings: mutual effort, economic integration, actual intent and priority of the family. There is, of course, overlap among factors that may be relevant under these headings and there is no closed list of relevant factors. What follows is not a checklist of conditions for finding (or not finding) that the parties were engaged in a joint family venture. These headings, and the factors grouped under them, simply provide a useful way to approach a global analysis of the evidence and some examples of the relevant factors that may be taken into account in deciding whether or not the parties were engaged in a joint family venture. The absence of the factors I have set out, and many other relevant considerations, may well negate that conclusion.
11Clearly, a global analysis of all of the evidence in this case is required.
Background Facts
12There is significant agreement between the parties on the background facts in this Application:
The Applicant, Jessica Reiter is 29 years old, born March 28, 1986.
The Respondent, Tiar Hollub is 53 years old, born December 2, 1961.
The Applicant met the Respondent in the spring of 2006 when she was an intern at the Respondent's place of employment.
The parties work in the same industry as prosthetic technicians and earn a similar salary.
The Applicant's income in 2013 was $61,162.
The Respondent's income in 2013 was $71,696.
The Respondent purchased 440 Westmoreland Avenue North, Toronto, Ontario ("the property"). The funds for the purchase of the property came from the proceeds of sale of another house owned by the Respondent in the amount of $150,000 and the balance came from a first mortgage on the property. The Respondent took possession of the property on July 31, 2006.
The parties began living together in a conjugal relationship on September 1, 2008 and separated on November 29, 2014. During the relationship, Jessica and Tiar lived at the property.
Prior to moving in with the Respondent, the Applicant was paying more than $400 per month in rent.
While Jessica and Tiar were living together, Jessica gave Tiar $400 monthly. Tiar had a mortgage payment of $1,000 per month.
In 2013, Jessica paid Tiara a $5,000 lump sum to pay towards the mortgage.
The value of the property on September 1, 2008 was $420,000. The amount outstanding on the mortgage on September 1, 2008 was $156,000. The amount outstanding on the mortgage on November 1, 2014 was $29,000.
The increase in equity from September 1, 2008 to November 1, 2014 was $410,000.
On November 16, 2014, the Applicant told the Respondent of the Applicant's affair with Jeff Tiessen. The Applicant confessed to the Respondent that she had spent a night at the Days Inn with Jeff Tiessen in November, 2014. The Applicant moved out of the property on November 29, 2014.
The Applicant saved approximately $105,000, exclusive of her pension, between September 1, 2008 and November 16, 2014. In addition to the increase in equity of $410,000, the Respondent saved approximately $112,000, excluding his pension, between September 1, 2008 and November 16, 2014.
The Applicant did not make any sacrifice to her career between September 1, 2008 and November 16, 2014, as a result of her relationship with the Respondent.
The Applicant purchased the maximum amount of RRSP's each year during the relationship.
The Applicant is paying more than double the $400 per month for her current rental residence.
13The Applicant emphasizes the fact that she gave the Respondent $5,000 to make a payment on the mortgage and that she worked on house improvements and repairs, as well as paying for expenses, when the Respondent asked her to do so.
14The Respondent makes the following submissions to support his position that there can be no finding of a joint family venture:
Although they knew each other, Jessica had nothing to do with the acquisition of Tiar’s house. She did not help him pick the house and she did not contribute to the down payment.
The parties maintained their own accounts and had no joint accounts. They paid for their own utilities and groceries. Tiar paid the mortgage, property tax and insurance. They paid for their own vacations. Jessica did not know what Tiar’s income was, and Tiar was not privy to Jessica’s finances. Although Tiar encouraged Jessica to save money and invest in her future, this couple did not discuss their individual finances. Jessica was clear in her examination in chief that she had her own personal savings and not savings “together.”
Neither party named the other as the beneficiary of the RRSPs. Neither party made a will that named the other as a beneficiary.
The parties specifically discussed marriage and Tiar was clear he did not want to get married. The parties used contraception to ensure there were no children of the relationship. The parties did not prioritize their relationship over their individual interests.
There was no intention to share a portion of Tiar’s house with Jessica. Jessica was not given any reasonable expectation that she would share any ownership of the house. They did not even discuss the division of property. They never discussed her going on title.
There was no detrimental reliance by Jessica for the sake of the relationship. She worked in the same job throughout the relationship. Jessica did not leave the workforce as a result of the relationship. She did not do anything that would benefit Tiar’s career, except encourage him to try a different job. She did not testify to taking more than one day off from work to advance any goals of the two of them. The parties shared the domestic tasks. Although Jessica did more of the cooking of dinners during the week, Tiar did more of the cleaning, including the dishes, laundry and cleaning the bathroom. Tiar did much more of the work for repairs and improvements. Initially Tiar made both of their lunches. They made their own breakfasts.
Although much time was spent discussing home repairs and improvements, it is likely that the cost of these issues is higher than the value of these repairs and improvements. By her own admission, Jessica has no idea how much she spent on these repairs and improvements. She kept no record of these expenditures.
15The Respondent’s evidence was that the total cost of the repairs was around $6,000 in six years, approximately one day per year on these repairs and improvements.
16He testified that the time spent was minimal and that he did most of the work. There was no evidence that any of these repairs or improvements resulted in an increase in value to the house. The Respondent argued that the Applicant also received the benefit of his hard work around the house, paying very little for maintenance.
Joint Family Venture Analysis
17Applying the guidance of the Supreme Court of Canada on a global analysis of the evidence in this case, this court makes the following observations:
With respect to the consideration of “mutual effort” the Court, in Kerr, referred to the fact that there were several factors which suggested that throughout the relationship the parties were working collaboratively towards common goals. The Applicant had been an equal contributor throughout the relationship with the parties making important decisions, keeping the overall welfare of the family at the forefront which included various moves for the family. As well, the parties had pooled their efforts for the benefit of the family unit with the wife running the home and caring for the children while the husband worked and managed the family finances. The finding was that through their joint efforts the couple was able to raise a young family and acquire wealth. It was noted that without the wife’s efforts, the husband could not have made the effort to build up his company. It was also emphasized that the parties had been in a long relationship of twelve years.
In this case, the period of cohabitation was much shorter, (six years); there were no children; and, there was no pooling of family funds and resources. The parties kept their finances separate although there was a sharing of expenses. There is no evidence of discussion between the parties as to working towards particular goals.
With respect to the factor of “economic integration”, the court in Kerr noted that there was a pooling of resources as the wife and children were financially dependent on the husband. In this case, there were no joint accounts and no common pool of savings with no evidence of prioritization of the family over individual interests. With the exception of the contribution to the expenses, there was no evidence of extensive integration of the parties’ financing, economic interests and economic well-being.
With respect to the factor of “actual intent”, the evidence was that the Applicant discussed marriage with the Respondent who indicated that he did not want to get married and that he did not want to have children. There was also no evidence of the transfer of any property or any provisions in any will of either party.
With respect to “priority of family”, there was no evidence in this case of any detrimental reliance or sacrifice made by the Applicant for the “family unit”.
18On the basis of a global consideration of the evidence in this case, and when I apply the principles set out by the Supreme Court of Canada, I agree with the Respondent that I cannot make a finding of a “joint family venture” which would support the appropriateness of the remedy requested by the Applicant.
19For this reason alone, the Applicant is not entitled to the remedy she seeks even if she can establish her claim that the Respondent has been unjustly enriched. For the reasons that follow, I find that the evidence does not support a finding of unjust enrichment.
Unjust Enrichment Analysis
20Did the Applicant give the Respondent a benefit because she shared in expenses and participated in some home maintenance and improvement?
21Did her contributions cause or partially cause the increase in the value of the equity of the house?
22In Kerr, the court also cautioned, at para. 85:
I conclude, therefore, that the common law of unjust enrichment should recognize and respond to the reality that there are unmarried domestic arrangements that are partnerships; the remedy in such cases should address the disproportionate retention of assets acquired through joint efforts with another person. This sort of sharing, of course, should not be presumed, nor will it be presumed that wealth acquired by mutual effort will be shared equally. Cohabitation does not, in itself, under the common law of unjust enrichment, entitle one party to a share of the other’s property or any other relief. However, where wealth is accumulated as a result of joint effort, as evidenced by the nature of the parties’ relationship and their dealings with each other, the law of unjust enrichment should reflect that reality.
[Emphasis added.]
23Did the wealth increase in the equity of the house result from the joint effort of the parties? ($127,000 in payments were made on the mortgage and the house increased in value by $283,000 due to the market.)
24The Respondent relies on the case of Montgomery v. Schlender, 2012 ABQB 332, 2012 CarswellAlta 937 wherein the court commented on the appreciation of a house as a result of market forces as follows, at para. 54:
Apparently the only asset of significant value that Mr. Schlender had was the house. The appreciation in its value was largely the result of market forces which could not be significantly affected by the efforts of a joint family venture if one existed. The only effort that might be made to “built” or “create” wealth was effort in connection with the home improvement projects. As noted, in my view Ms. Montgomery’s contribution to those projects was not of great significance and, in my view, she engaged in even those projects not for the purpose of increasing the value of the property but for the purpose of improving her living environment.
25I agree that such reasoning is applicable in this case. The evidence does not support a finding that the increase due to the market is the result of the joint effort of the parties.
26In Kerr the court discussed the elements of an unjust enrichment claim at paras. 36 et seq.:
(i) whether the defendant has been enriched by the plaintiff;
(ii) whether the plaintiff has suffered a corresponding deprivation; and
(iii) there is reason in law or justice for the defendant’s retention of the benefit conferred by the plaintiff, making its retention “unjust” in the circumstances of the case.
27The increase in value was caused by a market fare increase of $283,000. In this regard, the reasoning of the court in the Montgomery case is applicable. I find that evidence does not support the finding that the Applicant’s efforts did contribute to this increase. The Applicant did not make any monetary contribution to the purchase of the house. I find there has been no enrichment of the Respondent.
28The increase in equity of $127,000 is the result of payments made on the mortgage. The parties agreed that the Applicant gave the Respondent $5,000 to pay down the mortgage.
29In this regard, there has been an enrichment of the Respondent.
30I find that there has been a deprivation of the Applicant in the amount of $5,000.
31If an Applicant demonstrates an enrichment to the Respondent and a corresponding deprivation, the Court has to decide whether there is juristic reason for the enrichment.
32Is there a reason in law or justice for the Respondent’s retention of the benefit by the Applicant, making its retention “unjust” in the circumstances of the case.
33I agree with the Respondent that there was an agreement between the parties to share living expenses, which justifies the retention of the benefit of $5,000 by the Respondent. Both of the parties benefited from this agreement.
34For all of the above-noted reasons, the Applicant’s claim against the Respondent is dismissed.
Costs
Costs
35The Respondent has been successful on this motion. He is therefore entitled to an appropriate cost award. If the parties are unable to agree on the cost award, they may make brief written submissions as follows:
Mr. Hollub’s costs submissions must be delivered by 12:00 p.m. on December 18, 2015; and Ms. Reiter's costs submissions must be delivered by 12:00 p.m. on December 30, 2015. In accordance with what the Rules provide, the submissions should not exceed three pages in length.
Pollak J.
Date: December 9, 2015