ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-13-0142
DATE: 2015-10-21
B E T W E E N:
Richard Bruce Zapfe,
Vlad Popescu, for the Plaintiff
Plaintiff
- and -
Alvin George Zapfe,
Derek E. Zulianello, for the Defendant
Defendant
HEARD: October 7, 8, 9 and 13, 2015,
at Thunder Bay, Ontario
Mr. Justice W.D. Newton
Reasons For Judgment
[1] "Behold how good and pleasant it is for brethren to dwell together in unity!" (Psalm 133)
[2] For almost seven decades, and in particular from 1993 to 2010, two brothers, the plaintiff, Richard Zapfe (now 71), and the defendant, Alvin Zapfe (now 85), did just that at camp property owned by Alvin. When Alvin announced his intention to sell the property, the relationship was no longer "good and pleasant" and, as a consequence, this action is before me.
[3] Richard seeks an order that he has an equitable right to continue to occupy the property, an order transferring the property to him, or compensation based on unjust enrichment.
[4] Alvin seeks an order that structures built by Richard on the property be removed, and damages for trespass.
The Facts
[5] In addition to Richard, his wife Roseanne, and his daughter and son-in-law, Tracey and Gary Maki, testified. Richard and Alvin's sisters, Muriel Johnson (86) and Marjorie Zirk (66), also testified on Richard's behalf.
[6] Alvin was the sole witness for the defence.
[7] For the most part, the facts are not in dispute.
[8] The Zapfe family homesteaded on property bordering Whitefish Lake, west of Thunder Bay (“Whitefish”). The property consists of in excess of 100 acres with approximately 1000 feet of lake frontage. Muriel and Alvin were raised on the property. When they were still young children, the family moved to what is now Thunder Bay. Thereafter, the property and original cabin were used for recreation by the family.
[9] When Alvin’s and Richard's father died in 1966, Alvin acquired Whitefish in lieu of a monetary bequest. Whitefish continued to be used by the Zapfe family including Richard, Muriel, Marjorie, and Alvin for recreation, primarily as a base for fishing and hunting.
[10] In 1993, Richard moved a 27 foot fifth wheel trailer to Whitefish with Alvin's assistance. Alvin told him that he would be leaving Whitefish to him in his will. Shortly thereafter, Alvin acquired his own trailer which he also placed on the property. The old cabin was no longer fit for use.
[11] The brothers continued to enjoy Whitefish together, hunting and fishing and working together to improve the property. Alvin has no family other than his siblings. Richard has two daughters one of whom, Tracey, resides in Thunder Bay. She and her husband, Gary Maki, have two children. Richard and his wife and their extended family used the property as a "camp". Muriel and Marjorie and their families also visited at Whitefish and used the property as a "camp".
[12] Over the years, Richard added a sauna, an addition to the trailer, and sheds to Whitefish. All was done without any objection from Alvin. At times, Alvin helped with construction of some of these structures.
[13] With Alvin's permission, Richard paid to have Hydro brought onto the property in 1995.
[14] Alvin paid to have the roadway into the camp graveled.
[15] Alvin bought a larger mobile home on the property for his use and allowed Tracey and her family to use his original trailer.
[16] From 1995, Richard paid for all Hydro, including Hydro used by Alvin. Alvin paid the taxes, except for a few bills paid by Richard.
[17] Richard and his family cleared the property such that there is now about an acre of well-maintained lawn. It was described by Marjorie as "like a park". The exhibits included before and after pictures of Whitefish and the cleared area is undoubtedly an improvement to the property.
[18] Richard said that he did all this work – improving the property and adding structures – because Alvin told him that he would be leaving the property to him in his will and that the estate would "take care" of any capital gains. Alvin admitted that his will did provide that the property would be left to Richard and further testified that Richard believed that the property would be left to him because he, Alvin, told him that.
[19] At some point, there was discussion about Alvin transferring the property to Richard in exchange for Richard paying any capital gains tax only. Nothing further was done with respect to that offer. Richard said he did not have the money to pay the capital gains.
[20] Everything progressed with the brothers dwelling “together in unity” from 1993. When Alvin was present, he had his evening meal with Richard and his family. Occasionally, he would bring a contribution to the meal. Occasionally, although not that often, he would use the structures built by Richard. The brothers continued to fish and hunt together.
[21] Most of the maintenance of the property, such as clearing, lawn cutting, and some tree planting was done by Richard's family.
[22] In 2010, Alvin had a stroke. He could no longer walk over rough ground or through long grass. As a consequence, he could not use the property and told Richard that he wanted to sell the property. Richard was shocked. He wanted his brother to keep his promise. Richard and his family continued to use the property as they had before.
[23] Ultimately, in October 2012, Alvin had his lawyer write to Richard and Gary advising them that they had until December 31, 2012 "to remove all of your belongings, including buildings, contents, tools etc. from the property entirely. If the same are not removed by December 31, 2012 all buildings shall revert to and form the property of Alvin Zapfe to dispose of at his own sole discretion."
[24] Alvin gave his older trailer to Tracey and Gary and they have removed it from the property. Richard's trailer and the structures he erected remain at Whitefish.
[25] This action was commenced in response to that letter. At some point in the not too distant past, Alvin changed his will so that Richard will not inherit Whitefish.
[26] Exhibits at trial included receipts for Richard’s fifth wheel trailer, for building materials to construct the sauna and other outbuildings, for equipment such as lawnmowers and ATVs used to maintain the property and plow the road, and for the installation and monthly charges for Hydro. Richard's receipts totaled a little over $40,000.
Positions of the Parties
[27] The plaintiff argues, based on unjust enrichment and proprietary estoppel, that he is entitled to a constructive trust in Whitefish. The plaintiff relies upon Clarke v. Johnson, 2014 ONCA 237, and Cowderoy v. Sorkos Estate, 2012 ONSC 1921.
[28] The defendant argues that much of what are alleged as improvements are not improvements to the property but rather movable structures that were erected and used for Richard's benefit. Relying upon Isabelle v. Lahaie, [2007] O. J. No. 4981 the defendant argues that the onus is on Richard to prove an enrichment to the property and the amount of such enrichment.
[29] Rather than conveying a benefit for Alvin, the defendant argues that it is Richard who has received the benefit of use of the property, rent free, for almost 20 years. Relying upon Sabey v. Beardsley, 2014 BCCA 360, the defendant states that "detriment must be assessed on a holistic basis, with a view to looking at both the overall benefits gained and losses suffered by the claimant" (at para 55).
The Law
[30] As Pepall J.A. stated in Clarke v. Johnson, 2014 ONCA 237:
A cottage, a camp, a cabin, a country house, a ranch: these are the different names given to second homes across Canada. No matter the description, Canadians’ affinity for their recreational properties is deep, abiding and renowned (at para.1).
[31] In Clarke, the doctrines of proprietary estoppel and unjust enrichment were used to grant a non-owner a life interest in the camp property. The son-in-law of one of the owners had erected a cottage on the property with the consent of the owners. One of the owners sought to prevent him from using the property because of a family dispute. The trial judge found that a claim was made out in both proprietary estoppel and unjust enrichment.
[32] In upholding the trial judge's decision, the Court of Appeal stated that three elements must be established to trigger proprietary estoppel:
The owner of the land induces, encourages or allows the claimant to believe that he has or will enjoy some right or benefit over the property;
In reliance upon his belief, the claimant acts to his detriment to the knowledge of the owner; and
The owner then seeks to take unconscionable advantage of the client by denying him the right or benefit which he expected to receive (Clarke at para. 52).
[33] Similarly, the Court of Appeal stated that to establish unjust enrichment "a plaintiff must prove enrichment; a corresponding deprivation; and the absence of a juristic reason for the enrichment." Following Kerr v. Baranow, [2011 SCC 10, 2011] 1 S. C. R 269, the court defined absence of juristic reason as "no reason in law or justice for the defendant’s retention of the benefits conferred by the plaintiff, making its retention "unjust" in the circumstances of the case" (Clarke at para. 64).
[34] The court also said that the "choice of an appropriate remedy involves the exercise of discretion on a principled and reasoned basis"(at para. 73).
[35] In Clarke, the trial judge found that monetary damages were inadequate given the "emotional attachment that existed between the respondent and the camp and that the imposition of a constructive trust "reflected the legitimate expectations of the parties" (at para. 74, 75). Following Kerr, Pepall J.A. cautioned that the "first remedy to consider is always a monetary award" and that a "propriety award may be required where a monetary award is inappropriate or insufficient"(at para. 78).
[36] In Cowderoy v. Sorkos Estate, the court ruled that a will that purported to leave farm and cottage properties to certain beneficiaries was ineffective and that the property was to be conveyed to others who had performed work to their detriment for the benefit of the testator for over 25 years. In that case, the judge found that compensation on a quantum meruit basis could not adequately compensate the plaintiffs because such an attempt would be "akin to putting Humpty Dumpty back together again" (at para. 99).
Analysis and Disposition
[37] I conclude, as admitted by Alvin, that Alvin did tell Richard that he was going to leave him Whitefish. I also conclude that, in reliance upon this representation, Richard did work and expended money on the property which resulted in some improvements to the property and the erection of buildings that were primarily for the use of and benefit for Richard and his family. Alvin admitted this also. I find that detriment is proven based on the expenditures of effort and money.
[38] The difficult task set before me is how to balance the respective rights of the parties when Alvin has reneged on his promise.
[39] I conclude that Richard has satisfied each of the three requirements of proprietary estoppel and unjust enrichment. The real issue is what is the appropriate remedy.
[40] As Pepall J.A. said in Clarke, the "first remedy to consider is always a monetary award" and a "propriety award may be required where a monetary award is inappropriate or insufficient"(at para. 78).
[41] Unlike the improvements in Clarke, the improvements made by Richard are capable of being removed from the property, albeit, with some difficulty. That includes Richard’s fifth wheel trailer, the addition to it and the outbuildings; all of which are upon blocks.
[42] In the circumstances, the appropriate remedy is to have Richard's trailer and structures removed from the property but at Alvin's expense since I am satisfied that Richard would not have expended money and effort to erect these structures but for Alvin's representations. I, therefore, order that each party is to obtain an estimate for the dismantling and moving costs of the structures including anything required to make the trailer "roadworthy". Transportation costs are payable by Alvin for a distance up to the city of Thunder Bay. Any transportation costs beyond that distance are Richard's responsibility. Failing agreement as to the sum required to dismantle and transport this property, the parties are to appear before me to resolve this cost. The Certificate of Pending Litigation will remain in effect against the property pending quantification of the dismantling and moving costs until such a time as a judgment can be issued.
[43] I also conclude that the value of the property has been improved by the expenditure of funds to bring Hydro onto the property. I find that the sum expended by Richard is $3,239.20 based on exhibits 1 – 34, 37, 38. Prejudgment interest from June 12, 1995, is payable on the aforementioned sum in accordance with the Courts of Justice Act.
[44] Similarly, Richard is to be reimbursed for the sums he paid for provincial land tax and the Hardwick Local Roads Board in the amount of $297 based on exhibits 1 – 42, 43. Prejudgment interest is payable on that sum from February 11, 2004.
[45] I also conclude that the property has been improved based on the clearing that has been done by Richard and his family as evidenced in the photographs. The improved area is approximately 1 acre in size. The evidence was that this was accomplished over many years and that equipment was specifically purchased for this undertaking. Receipts relating to the lawn maintenance equipment total approximately $2,500. ATVs were also purchased over the years at a cost of just under $20,000. Some of the use of the ATVs would related to maintenance and plowing. Primarily, the ATVs were used for recreation. While it is true that Richard is still in possession of some of this equipment I conclude that the appropriate remedy is to award him the approximate value of some of that equipment, $5,000, in recognition of the contribution to the improvement. Since the work was ongoing I award prejudgment interest on that sum payable from January 1, 2000.
[46] From 1995 until 2012, Richard paid for all electricity consumed at the property in the amount of $13,385.63. In the circumstances, I conclude that Alvin should reimburse Richard one-half of the Hydro costs or $6,692.81. Prejudgment interest is payable on each annual invoice based on the date of the invoice. I do not find that it is appropriate to offset this expense based on the argument that Richard could use the property "rent-free" since no rent was sought from him at any time.
[47] In Isabelle v. Lahaie, Shaw J. was faced with a similar claim for damages for trespass. He found that the parties in that case had a reasonable expectation that they would acquire title and therefore dismissed the claims for damages for trespass. I conclude that, in this case, for the same reasons, Alvin's counter-claim for damages for trespass should be dismissed.
[48] Counsel may make an appointment through the trial coordinator to argue costs, once the dismantling and moving costs have been determined.
“Original signed by”____
The Hon. Mr. Justice W.D. Newton
[49]
Released: October 21, 2015
COURT FILE NO.: CV-13-0142
DATE: 2015-10-21
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Richard Bruce Zapfe,
Plaintiff
- and -
Alvin George Zapfe,
Defendant
REASONS FOR JUDGMENT
Newton J.
Released: October 21, 2015
/mls