CITATION: Cline v. Moran, 2016 ONSC 4490

COURT FILE NO.: 3348/14 (Hamilton Family)

DATE: 20160718

ONTARIO

SUPERIOR COURT OF JUSTICE – FAMILY COURT

BETWEEN:

Robert Cline

Raymond Sowley, for the Applicant

Applicant

• and -

Lora Moran

Fareen L. Jamal and Sanaz Golestani, for the Respondent

Respondent

HEARD: April 11, 12, 13 & 14, 2016 in Hamilton and written submissions dated May 2 to 12, 2016

R. A. Lococo, J.

REASONS FOR JUDGMENT

I. Introduction

1Robert Cline and Lora Moran met and became friends in the late 1990s when they were both employed at the same restaurant. Ms. Moran was married with two young children. Mr. Cline was single.

2Ms. Moran and Mr. Cline began dating in the spring of 2002 after Ms. Moran separated from her husband. Ms. Moran then resided with her children in a house in Grimsby that she purchased for $127,900 following her separation. Mr. Cline lived in shared accommodations in Hamilton which he rented from his friend, Kathy Funke. He also had use of an office in those premises.

3By September 2002, Mr. Cline began staying overnight at Ms. Moran's Grimsby residence. According to Mr. Cline, he and Ms. Moran began cohabiting at that time. Ms. Moran disputes that they were cohabiting, but agrees that Mr. Cline spent extended periods of time staying with her at the Grimsby residence during their volatile, on-again/off-again relationship. Mr. Cline continued to rent part of Kathy Funke’s Hamilton residence. When Ms. Funke moved to new premises in Burlington in 2003, Mr. Cline rented part of those premises from Ms. Funke, including an office and a separate bedroom suite. In 2008, Mr. Cline stopped paying rent to Ms. Funke, but continued to leave furniture and other belongings in those premises, testifying that there was no room for them at the Grimsby residence he shared with Ms. Moran.

4In late 2010, Ms. Moran agreed to purchase a larger house in Stoney Creek for $380,000. That transaction closed on February 18, 2011. The property was registered in Ms. Moran's name alone, and she was the sole mortgagee. Ms. Moran's Grimsby house was sold effective March 4, 2011 for $210,000, and the net proceeds of $129,000 were used to finance part of the purchase price of the Stoney Creek property. Ms. Moran also used $88,000 of her own funds, which included an inheritance from her grandmother. The parties agree that they resided together in the Stoney Creek residence until early August 2013, except for the period from June or July 2011 to the end of that year, when Mr. Cline stayed at Ms. Funke’s Burlington premises after a dispute involving Ms. Moran's son Michael.

5Following the parties' final separation in August 2013, Mr. Cline claimed an interest in the Stoney Creek residence in which he resided with Ms. Moran. In September 2014, he brought an application in which he alleged, among other things, that Ms. Moran was unjustly enriched by his financial and other contributions during their relationship, which he characterized as a “joint family venture.” He seeks a monetary award of $55,200 to compensate him for his resulting loss, arguing that the award should be calculated on a “value surviving” basis.

6As part of the application, Mr. Cline initially claimed an equity interest in the Stoney Creek property by way of constructive trust, also relying on section 10 of the Family Law Act.¹ However, he is no longer pursuing that claim. In any case, Part I of the Family Law Act relating to Family Property (which includes section 10) would not apply in this case, since Mr. Cline and Ms. Moran were never married (see the definition of “spouse” in section 1(1) of that Act).

7Ms. Moran denies that Mr. Cline is entitled to any amount arising from their relationship. In her submission, Mr. Cline has not established the necessary elements of unjust enrichment. She also contested use of the “value surviving” basis for calculating a monetary award, arguing that Mr. Cline had not established that their relationship constituted a “joint family venture.”

8Ms. Moran also seeks repayment of $3,700, being the balance of investment loans totaling $12,700 that she claims that she made to Mr. Cline in 2008 for stock market investments in shares of Petro-Canada and Suncor. As well, she seeks the return of $3,122 (plus accumulated interest) for charges that Mr. Cline made to her credit card account in the summer of 2013.

9Mr. Cline denies that Ms. Moran loaned him any money for investments, but concedes that he holds Suncor common shares in his RRSP account for her benefit arsing from a joint investment. In his submission, the value of those shares on the date of separation should be set off against any amount Ms. Moran owes him for unjust enrichment. Mr. Cline also concedes that he charged $3,122 to Ms. Moran’s credit card account, using the supplemental card in his name on that account. However, he claims that he gave Ms. Moran $2,000 in cash in June 2013 to be applied against his credit card debt, leaving a balance owing to Ms. Moran of $1,122.

10The issues to be determined are therefore as follows:

1. Unjust enrichment: Was Ms. Moran unjustly enriched at Mr. Cline's expense?

2. Calculation of monetary award: If Ms. Moran was unjustly enriched, how should Mr. Cline’s monetary award be calculated?

3. Stock market investments: Is Ms. Moran entitled to the return of any amount she provided to Mr. Cline for stock market investments?

4. Credit card debt: How much does Mr. Cline owe Ms. Moran for charges he made to her credit card account?

11I will deal with each of these issues in turn.

II. Unjust enrichment

(a) Legal principles

12Was Ms. Moran unjustly enriched at Mr. Cline's expense?

13As indicated by the Supreme Court of Canada in Pettkus v. Becker,² Peter v. Beblow,³ Kerr v. Baranow⁴ and other decisions, there are three requirements to be satisfied in order to establish an unjust enrichment:

1. An enrichment of or benefit to another person;

2. A corresponding deprivation of the claimant; and

3. The absence of a juristic reason for the deprivation.

14While the cause of action of unjust enrichment did not originate in the family law context, the Pettkus, Peter and Kerr decisions confirmed that the requirements for establishing that cause of action apply equally in family law cases.

15In Kerr v. Baranow, the Court provided guidance with respect to each of the three requirements to establish unjust enrichment,⁵ usefully summarized by Justice Blishen of our court in Guertin v. Guertin,⁶ as follows:

To satisfy the first requirement, the Supreme Court of Canada indicates the applicant must show he or she gave something to the respondent that the respondent received or retained. The benefit must be tangible.

In considering the second requirement, the Court notes that the applicant's loss is material only if the respondent has been enriched. That is why the applicant must establish the enrichment corresponds to a deprivation.

The third requirement involves a two part analysis. The court must begin by applying established categories of juristic reasons (e.g., contract, gift or donative intent, disposition of law, or other valid common law equitable or statutory obligations). If no juristic reason exists from one of the established categories, the applicant has made out a prima facie case. However, the prima facie case is rebuttable. The second part of the analysis permits the respondent to show a reason why the enrichment should be retained. At this stage, the courts have regard to the reasonable expectations of the parties and public policy considerations.

16If an unjust enrichment claim is established, the next step is to determine the remedy, either a monetary award or an interest in property. As previously noted, the remedy that Mr. Cline seeks in the current action is monetary only. In particular, Mr. Cline is claiming a proportionate share of the value of Ms. Moran’s Stoney Creek residence that accumulated during their relationship based on his financial and other contributions during the relationship. His claim is therefore made on a “value surviving” basis (using the term employed in the Kerr decision) rather than a “value received” basis (also referred to as “fee-for service” or quantum meruit).

17As indicated in Kerr, in order to recover a monetary award on a “value surviving” basis, the claimant must show that there was a “joint family venture,” and that there was a link between the claimant’s contribution to that venture and the accumulation of assets.⁷ In that regard, the Court stated the following:

My view is that when the parties have been engaged in a joint family venture, and the claimant's contributions to it are linked to the generation of wealth, a monetary award for unjust enrichment should be calculated according to the share of the accumulated wealth proportionate to the claimant's contributions. In order to apply this approach, it is first necessary to identify whether the parties have, in fact, been engaged in a joint family venture.⁸

18The Court also indicated that the analysis required to determine if there was a joint family venture is fact specific, and that the existence of a joint family venture must be well-grounded in the evidence. The Court went on to outline factors that may be helpful for a court to consider when making that determination, grouping them under four main headings: mutual effort, economic integration, actual intent, and priority of the family.⁹

19The onus of establishing unjust enrichment is on the claimant, in this case Mr. Cline. For the reasons outlined below, I am not satisfied that Mr. Cline has met the onus of establishing unjust enrichment or that he has suffered any monetary loss. Accordingly, I am dismissing his claim for unjust enrichment.

(b) Details of Mr. Cline’s claim and additional facts

20As previously indicated, Mr. Cline claims that Ms. Moran was unjustly enriched by his financial and other contributions during their relationship. He seeks a monetary award to compensate him for his loss.

21In particular, as outlined in the Applicant’s written closing submissions, Mr. Cline claims $55,200 from Ms. Moran as compensation for unjust enrichment. That amount represents 12 per cent of the “current value” of the Stoney Creek property, which Mr. Cline testified was $460,000. He purported to use the “value surviving” approach to determine the monetary award, citing the calculation methodology outlined by the British Columbia Court of Appeal in Wilson v. Fotsch.¹⁰ In that case, the Court indicated that the first step is to determine the value of the asset at the relationship’s beginning and at its end, and that generally speaking, the increase in value during the relationship would be the value available for apportionment. The second step is to analyze the respective contributions to determine the share to which the claimant would be entitled.

22In advancing Mr. Cline’s claim for that amount, his counsel made various assertions in his closing submissions, including the following.

(a) The Grimsby residence was valued at $127,900 when the parties commenced cohabitation in 2002.

(b) The Stoney Creek residence they lived in when they separated in August 2013 was valued at $460,000.

(c) Mr. Cline made the following contributions during the course of their relationship: (i) he provided direct monetary contributions to Ms. Moran of in excess of $45,000; (ii) he paid 50 per cent of the household expenses; (iii) he provided two cars and a boat to the family in respect of which he paid all the expenses; (iv) he provided “domestic services” and assisted Ms. Moran with her children; and (v) he paid some of the children’s expenses.

(d) Upon sale of the Grimsby residence in 2011 for $210,000, Mr. Cline would have been entitled to “some share” of the increase in value since 2002, as a result of his payments and other contributions when they lived there in that period. Mr. Cline’s share of the increased value constituted part of the purchase price for the Stoney Creek residence.

23In order to consider the validity of Mr. Cline’s claim, it would be helpful to consider the evidentiary basis for it in more detail.

24As noted previously, Ms. Moran disputed Mr. Cline’s assertion that they starting cohabiting in September 2002, claiming instead that they starting living together when the Stoney Creek residence was purchased in 2011. In one sense, nothing of substance turns on exactly how the parties’ relationship during that period is characterized. There is no claim for spousal support by either party. Since the parties were not married, neither party has a claim for equalization of net family property under the Family Law Act, which would require certainty as to when cohabitation began and ended in order to make the necessary statutory calculations.

25While the parties’ versions of events differed in many respects, there is little doubt that their testimony (even to the extent that they were in agreement) left ample room for argument as to the nature of their relationship, especially prior to the purchase of the Stoney Creek residence in 2011. Based on their testimony, there is little doubt that the parties were largely independent of one another from a financial perspective. As discussed later in these reasons, one exception related to limited investments in the stock market, an area in which Mr. Cline had greater expertise and experience. Otherwise, the following facts are notable.

(a) The parties did not have joint bank accounts, and did not comingle their funds on a day to day basis.

(b) They owned their own motors vehicles and insured them separately.

(c) When they took trips together, they generally reimbursed each other for expenses incurred for the trip.

(d) The parties had a volatile relationship, with extended periods of “separation” when Mr. Cline was not staying with Ms. Moran, including a six or seven month period after the purchase of the Stoney Creek property in 2011.

(e) At least until the purchase of the Stoney Creek residence in 2011, Mr. Cline had furniture and other belongings in part of Kathy Funke’s residence, for which he paid rent until at least 2008. He also stayed there for the first several months of 2011 after leaving the Stoney Creek residence because of a dispute involving Ms. Moran’s son. As well, as discussed further below, during the time Mr. Cline was employed as a political aide in 2006-2007, he also paid rent for shared premises in Ottawa, where he stayed weekdays when working in that city.

(f) The parties did not have children together. Child-rearing responsibilities for Ms. Moran’s children fell almost entirely on Ms. Moran, with contributions from her former husband who paid child support and had access rights. Mr. Cline provided incidental assistance when staying with Ms. Moran and the children.

(g) While Mr. Cline claimed to contribute to the children’s expenses on occasion, there is no doubt on the evidence that Ms. Moran together with her former husband covered virtually all their expenses, including post-secondary education expenses for Ms. Moran’s son.

(h) While Mr. Cline claimed that he paid utility bills, property taxes and other household expenses, the actual receipts he produced totaled less than $135 for two utility bills (in 2006 and 2010) and $579 for property tax (in 2008). I am satisfied on the evidence that the burden of household expenses, as well as the expenses for various renovations to both the Grimsby and Stoney Creek residences, fell overwhelmingly on Ms. Moran. As well, Ms. Moran made the mortgage payments for both the Grimsby and Stoney Creek residences.

(i) While the parties’ employment history was of limited relevance in these proceedings, they both appear to have been steadily employed (with some short-term gaps) for various employers and in various capacities throughout their relationship. Ms. Moran had various positions as a law clerk. Mr. Cline at various times was a self-employed financial consultant, a senior political aide, a regulatory official with the Mutual Fund Dealer Association and a restaurant server. While a political aide in 2006-2007, he spent weekdays in Ottawa (staying in shared rented premises) and generally spent weekends at the Grimsby residence with Ms. Moran. Mr. Cline suggested that he relinquished this position in order to spend more time with Ms. Moran and her children. However, the evidence as a whole does not support the view that the parties sacrificed their careers or advancement for the benefit of the other by reason of their relationship.

26In making the foregoing findings, I relied to the extent necessary on the testimony of Ms. Moran in preference to that of Mr. Cline. In contrast to Ms. Moran’s testimony relating to those and other matters, I found Mr. Cline’s testimony less credible, internally inconsistent and generally not supported by the documentary evidence before the court.

27Apart from the foregoing contributions, Mr. Cline claims that both before and after the purchase of the Stoney Creek residence in 2011, he made financial contributions directly to Ms. Moran that exceeded $45,000 in total. In her testimony, Ms. Moran confirmed receiving certain payments, but the parties disagreed on the reasons for the payments as well as the total amount. These payments included the following.

(a) From March to July 2006, Mr. Cline claimed that he contributed a total of $6,000 to Ms. Moran, during a period in which she was unemployed. According to Mr. Cline, those payments consisted of four cheques for $1,000 and the balance in cash. Ms. Moran agreed that she received $4,000 in cheques, but claimed that they were intended to reimburse her with respect to a previous stock market investment in Microsoft shares made through Mr. Cline. She also disputed being unemployed during that period except for short periods (measured in weeks rather than months) when she was between jobs, and claimed that she drew money from her line of credit, rather than receiving additional funds from Mr. Cline.

(b) From October 2008 to January 2011, Mr. Cline claimed that he paid Ms. Moran $200 per month (in cash) by way of contribution to the Grimsby residence, for a total of $5,600. Ms. Moran’s evidence was that those payments were for groceries and were not paid every month, since Mr. Cline was not staying with her continuously during that period.

(c) From February 2011 until July 2011 (when Mr. Cline temporarily moved out of the Stoney Creek residence after a dispute involving Ms. Moran’s son), Mr. Cline claimed that he paid Ms. Moran $750 per month (for a total of $4,500) by way of contribution to the Stoney Creek residence. According to Ms. Moran, the payments were for five months only (for a total of $3,750) and were rent payments. The parties agreed that these payments did not continue during the period of their temporary separation for the balance of 2011.

(d) In March and April 2011, Mr. Cline received three third-party cheques for $1,000 in payment for work he performed as a political consultant. Mr. Cline claimed that he turned the proceeds of these cheques over to Ms. Moran as an additional contribution to the Stoney Creek residence. Ms. Moran claimed that these payments covered part of the $3,750 in rent due for the five month period from February to June 2011, as set out in the previous paragraph.

(e) In March 2011, Mr. Cline provided Ms. Moran with a cheque for $3,800. He claimed that this amount was a contribution toward the Stoney Creek residence, being one per cent of the purchase price. Ms. Moran denied that this payment had anything to do with the Stoney Creek residence, stating that it was intended to reimburse her with respect to stock market investments in Petro-Canada and Suncor shares made through Mr. Cline (discussed further below under “Stock market investments”).

(f) From January 2012 to July 2013 (the last full month before the parties finally separated), the parties are agreed that Mr. Cline made payments of $600 per month for 19 months, for a total of $11,400. Mr. Cline claimed that these payments were by way of contribution to the Stoney Creek residence. Ms. Moran testified that they were rent payments.

(g) The parties are agreed that in June 2013, Mr. Cline received a third party cheque for $2,000 upon the sale of his boat, and turned the cheque over to Ms. Moran. Mr. Cline testified that the cheque was to be applied to the charges he made to Ms. Moran’s Visa credit card (discussed further later in these reasons). Ms. Moran testified that that amount was paid to reimburse her for Mr. Cline’s share of a vacation in St. Maarten they had taken earlier that year. Mr. Cline testified that he reimbursed her in cash for his share of that vacation earlier in the year.

28In his testimony, Mr. Cline claimed to have made a number of other less significant payments, some of which Ms. Moran disputed and some not. In particular, Mr. Cline claimed that he made the following payments: (i) $600 for blinds for both the Grimsby residence and the Stoney Creek residence (not disputed); (ii) a total of $213.88 for paint supplies and repairs to Grimsby residence prior to sale (not disputed); (iii) $500 cash in early 2011 to pay for a fence at Stoney Creek residence (according to Ms. Moran, that amount was part of the rent payment for that period, not in addition); and (iv) $900 cash toward paving the driveway at the Stoney Creek residence in February 2012, from the proceeds of the sale of a motor vehicle by Mr. Cline (according to Ms. Moran, the driveway was not paved until June 2012, it being too cold to do so in February – she paid the entire $1,800 cost of paving herself).

29As indicated further below, I accept Ms. Moran’s testimony in preference to Mr. Cline’s with respect to the amount of and explanation for the payments in the previous two paragraphs. In general terms, I found Ms. Moran’s testimony to be more reliable than Mr. Cline’s, for the reasons I previously indicated.

(c) Analysis and conclusion

30Dealing initially with the first two elements of unjust enrichment, the Kerr decision directs that “a straight forward economic approach” be taken to determining whether there has been an enrichment and corresponding deprivation.¹¹ Applying that approach, I am satisfied that there has been an enrichment and corresponding deprivation in this case. While the extent of any benefit to Ms. Moran is clearly in dispute, the evidence clearly indicates that Ms. Moran received a benefit from Mr. Cline’s financial and other contributions in the course of their relationship, and that Mr. Cline suffered a corresponding deprivation.

31Respondent’s counsel argued that to the extent there was any benefit to Ms. Moran, there was no corresponding deprivation to Mr. Cline since he also derived benefits from the relationship, including a place to live and domestic services. As indicated in the Kerr decision, the question of mutual benefit conferral “should mainly be considered at the defence and remedy stage”, but in limited circumstances may also be relevant to whether there is a juristic reason for the deprivation.¹² Clearly, however, it is not relevant when considering the first two elements of the cause of action. As well, as indicated by the Supreme Court of Canada in Peter v. Beblow, “if there is enrichment, … it would almost invariably follow that there is a corresponding deprivation suffered by the person who provided the enrichment.”¹³

32Turning to the third element of unjust enrichment, I have concluded that Mr. Cline has not established that there is no juristic reason for the deprivation in this case. In particular, I accept Ms. Moran’s testimony that the periodic payments referred to in subparagraph 25(b) above were intended to be Mr. Cline’s share of the groceries rather than contributions to the Grimsby residence. I am also satisfied that the periodic payments referred in subparagraphs 25(c), (d) and (f) were intended to be rent payments rather than contributions to the Stoney Creek residence. As previously indicated, I also accept Ms. Moran’s testimony in preference to Mr. Cline’s with respect to the payments referred to in the balance of paragraph 25 as well as paragraph 26.

33Applying the analytic approach for the third unjust enrichment requirement provided for in Kerr, I am satisfied that the explanations provided for Mr. Cline’s financial payments (for example, for rent or contribution to groceries) overwhelmingly fall within established juridical categories, indicating that there is a juridical reason for the payments. To the limited extent that an established juridical reason may be less obvious (for example, the purchase of blinds, payments for painting and decorating, and the occasional payment of household expenses), I did not consider these amounts to be material, particularly given my conclusion that the burden of such expenses fell overwhelmingly on Ms. Moran rather than Mr. Cline throughout their relationship. A further relevant consideration was the nature of the relationship between the parties outlined in paragraph 24, including their largely independent financial and other arrangements. In all the circumstances, I would not consider it to be within the reasonable expectations of the parties that Mr. Cline’s contributions would result in a monetary award for unjust enrichment, especially one that related to some notional interest in the Stoney Creek property. I see no injustice in permitting Ms. Moran to retain whatever limited benefit she may have derived from her relationship with Mr. Cline.

34For the foregoing reasons, I have concluded that Mr. Cline has not established that Ms. Moran has been unjustly enriched at his expense.

III. Calculation of monetary award

35If unjust enrichment had been established, how would the monetary award be calculated?

36As previously noted, Mr. Cline claimed a monetary award of $55,200 from Ms. Moran as compensation for unjust enrichment. That amount represents 12 per cent of the “current value” of the Stoney Creek property, which Mr. Cline testified was $460,000. According to Mr. Cline, that amount was calculated on a “value surviving” basis, and constitutes a proportionate share of the value of the Stoney Creek residence that accumulated during the relationship based on Mr. Cline’s financial and other contributions.

37As indicated in Kerr, in order to recover a monetary award on a “value surviving” basis, the claimant must show that (i) there was a “joint family venture,” and (ii) there was a link between the claimant’s contribution to the joint family venture and the accumulation of assets. Even if Mr. Cline had established that Ms. Moran was unjustly enriched at his expense, I am not satisfied that it would have been appropriate in this case to calculate a monetary award on a “value surviving” basis.

38Given the characteristics of their relationship described in paragraph 24 above, I am not satisfied that Mr. Cline has demonstrated that there was a “joint family venture”, taking into account factors that Kerr indicated may be helpful to consider in making that determination (categorized as mutual effort, economic integration, actual intent, and priority of the family). In particular, as previously indicated, the evidence as a whole supports the conclusion that the parties’ economic status was largely independent, and there was a paucity of evidence indicating joint effort toward common goals. With respect to priority of the family, I have already found that the evidence does not support the view that the parties sacrificed their careers or advancement for the benefit of the other by reason of their relationship. As well, with respect to actual intent, the evidence indicated that when the Stoney Creek property was purchased in Ms. Moran’s name, the parties specifically considered the circumstances in which Mr. Cline would come to have a defined interest in the property, based on future financial payments. While I was not satisfied that specific terms were ever finalized, Mr. Cline conceded that he had not complied with the terms that he believed had been settled.

39In addition, I am not satisfied that Mr. Cline has established the second requirement for use of the “value surviving” calculation method, that is, a link between his contributions to the venture and the accumulation of assets, specifically the Stoney Creek property in this case. As indicated in Kerr, determinations relating to joint family ventures must be well-grounded in the evidence. Given the conclusions I have already reached with respect to the nature of Mr. Cline’s contributions, I do not consider the evidence sufficient to support a link in this case.

40In any case, I had difficulty understanding Mr. Cline’s methodology or the evidentiary basis for calculating the proposed monetary award in the way he proposed. Among other things:

(a) The suggested $460,000 value for the Stoney Creek property did not take into account any mortgage debt against the property;

(b) It was not clear why Mr. Cline considered 12 per cent to be the appropriate proportion to apply in order to reflect his contributions, apart from the indisputable concession that a 50 per cent share would not be appropriate based on the relative contributions of the parties; and

(c) Given the calculation methodology suggested in Wilson v. Fotsch that Mr. Cline purported to rely on, it was not clear why he considered it appropriate to notionally apportion the whole value of the Stoney Creek property between the parties without taking into account the value of the property (or a proxy for it) at the beginning of his relationship with Ms. Moran.

41Given my conclusion that it would not have been appropriate in this case to calculate a monetary award on a “value surviving” basis, the Kerr decision indicated that the alterative would be to calculate the award on a “value received” basis, also referred to as “fee-for-service” or quantum meruit. However, there was no evidence and no submissions with respect to the calculation of a monetary award on that basis.

IV. Stock market investments

42Is Ms. Moran entitled to the return of any amount she provided to Mr. Cline for stock market investments?

43Ms. Moran seeks repayment of $3,700, being the balance of investment loans totaling $12,700 that she claims that she made to Mr. Cline in 2008 for stock market investments. In the alternative, she seeks a monetary award for breach of fiduciary duty arising from Mr. Cline’s handling of her investment funds, including an amount on account of the returns on her investment.

44By way of background, the parties agree that Ms. Moran provided Mr. Cline with $9,900 in April 2008 in connection with the purchase of Petro-Canada shares and $2,800 in November 2008 in connection with the purchase of shares of Suncor (the successor company to Petro-Canada). The parties also agree that funds were returned to Ms. Moran in May 2008 following the sale of some of the shares. Ms. Moran’s testimony was that she received a cheque for $5,200 from Mr. Cline at that time. According to Ms. Moran, she received a further return of funds in March 2011 by way of a cheque from Mr. Cline for $3,800, leaving a balance of $3,700.

45In her testimony, Ms. Moran characterized the advance of funds to Mr. Cline as investment loans. She understood that the funds were to be used to purchase shares of Petro-Canada and Suncor in Mr. Cline’s brokerage account, her understanding being that upon the eventual sale of those shares, the full amount she advanced would be returned to her plus any gain realized on the sale. She denied that she was assuming any risk, stating the she expected the full amount of her loan to be repaid even if the shares were sold at a loss.

46Mr. Cline denied that the $12,700 payments that Ms. Moran provided to him were investment loans. According to Mr. Cline, those funds were her share of the purchase price for a joint investment in shares of Petro-Canada and later Suncor. He agreed that funds were returned to Ms. Moran in May 2008, but testified that she received a total of $$6,121 at that time, consisting of the cheque for $5,200 and the balance in cash (with Ms. Moran denying receipt of additional cash). As previously indicated, he denied that that his cheque for $3,800 in March 2011 was related to this investment. Therefore, according to Mr. Cline, Ms. Moran’s net investment in Petro-Canada and Suncor shares was $6,579.

47Mr. Cline also testified that Ms. Moran’s share of the remaining Petro-Canada shares was valued at $4,600 at the date of separation, and that he currently held those shares in his RRSP account for her benefit. He suggested that this amount be returned to Ms. Moran by way of set off against any amount she owes him for unjust enrichment. On that basis, the aggregate amount that would be returned to Ms. Moran would be $11,179 of her initial $12,700 investment. Her net loss would be $1,521, reflecting the fluctuation in the share price from the acquisition date to the date of separation.

48While both parties were intelligent witnesses, it was evident from their testimony relating to stock market investments that Mr. Cline had significantly more knowledge and experience in that area, which Ms. Moran acknowledged. Taking that into account, and given my previous observations relating to Ms. Moran’s credibility as a witness, I have no reason to doubt that Ms. Moran expected the return of the entire amount she advanced to Mr. Cline, perhaps consistent with previous investment experience with him. However, from an objective standpoint, I do not consider it reasonable to characterize the amount she advanced to Mr. Cline as a loan (at least in the conventional sense). In addition to the return of the amounts initially advanced, Ms. Moran expected to receive the full upside benefit if the share price rose, while assuming no downside risk if the price fell (as it eventually did). In my view, such a characterization would not accord with economic reality or the reasonable expectations of the parties. Ms. Moran, being the claimant for this aspect of the application, had the onus of demonstrating that the transaction should properly be characterized as a loan. I am not satisfied that she had done so.

49As argued by applicant’s counsel, I consider it more reasonable to conclude that Ms. Moran advanced funds to Mr. Cline to invest in Petro-Canada and Suncor shares, with the understanding that funds would be returned to her from time to time upon the sale of shares. On the evidence, I find that Ms. Moran advanced $12,700 to Mr. Cline and that Mr. Cline returned a total of $9,000 to her, leaving the net amount invested at $3,700. In this regard, I have already found that the cheque for $3,800 she received from Mr. Cline in March 2011 constituted a return of funds previously provided for investment rather than being a contribution to the Stoney Creek property. As well, I accept her testimony that she received $5,200 by way of cheque from Mr. Cline in May 2008 as an additional return of funds, and did not receive an additional cash amount at that time as stated by Mr. Cline.

50If the funds provided to Mr. Cline were considered funds for investment, respondent’s counsel argued in the alternative that Ms. Moran was entitled to damages for breach of fiduciary duty arising from Mr. Cline’s handling of her investment funds, including an amount on account of the returns on her investment. Her counsel in fact argued that the amount Ms. Moran should recover on this alternative basis should exceed the amount she would receive if I accepted her primary argument that the advance of funds constituted investment loans. I found the latter position to be unpersuasive, as being akin to an attempt to suck and blow at the same time.

51Based on Mr. Cline’s testimony and his brokerage records for the relevant period, I agree with respondent’s counsel that there was some issue as to whether the funds were fully accounted for. However, it is unnecessary to consider this issue further, since Mr. Cline’s position is that he holds Suncor shares for Ms. Moran’s benefit, and she is entitled to what amounts to a further return of capital with respect to those shares. In the circumstances, I have concluded that the appropriate result is to order Mr. Cline to pay Ms. Moran $3,700 as a return of capital, rather than as a loan repayment.

V. Credit card debt

52How much does Mr. Cline owe Ms. Moran for charges he made to her credit card account?

53The parties agree that as of the date of separation on August 4, 2013, the balance of Mr. Cline’s charges on Ms. Moran’s credit card account was $5,059, and that there were off-setting payments the following month totaling $1,937, leaving a balance of $3,122, plus interest accruing at a rate of 19.99 per cent per annum. The only point of disagreement is that Mr. Cline claims that he provided Ms. Moran with $2,000 in June 2013 to reduce the amount he owned on her credit card. As previously indicated, I have accepted Ms. Moran’s testimony that this amount was to repay her for Mr. Moran’s share of a vacation in St. Maarten earlier that year.

54Accordingly, in payment of credit card debt that Mr. Cline incurred, Mr. Cline is required to pay Ms. Moran $3,122 plus interest at 19.99 per cent per annum commencing August 4, 2013 to the date of payment.

IV. Conclusion

55Based on the foregoing, a final order will issue in the following terms:

1. The applicant’s claim based on unjust enrichment is dismissed;

2. The applicant shall pay the following amounts to the respondent:

(a) As a return of investment capital, the sum of $3,700;

(b) In payment of credit card debt, the sum of $3,122 plus interest at the rate of 19.99 per cent per annum from August 4, 2013 to the date of payment; and

3. The balance of the relief that the parties claimed in these proceedings is dismissed.

56If the parties are unable to agree on costs, the respondent may serve and file brief written submissions (not to exceed three pages) together with a bill of costs and any pertinent offers within 21 days. The applicant will have 14 days after receipt of the respondent’s submissions to respond by brief written submissions. The respondent may reply by brief written submissions within seven days. All such submissions are to be forwarded to the Trial Coordinator in Hamilton and to me at 59 Church Street, 4th Floor, St. Catharines L2R 7N8. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs.

The Honourable Mr. Justice R.A. Lococo

Footnotes

1. 1R.S.O. 1990, c. F.3.
2. 21980 CanLII 22 (SCC), [1980] 2 S.C.R. 834, at para. 38.
3. 31993 CanLII 126 (SCC), [1993] 1 S.C.R. 980, at para. 3.
4. 42011 SCC 10, [2011] 1 S.C.R. 269, at paras. 31-32.
5. 5Ibid. at paras. 36-45.
6. 62015 ONSC 1239, [2015] O.J. No. 887, at paras. 40-42.
7. 7Supra note 4, at para. 100.
8. 8Ibid. at para. 87.
9. 9Ibid. at paras. 88-89.
10. 102010 BCCA 226, 319 D.L.R.(4th) 26, at paras. 62-63.
11. 11Ibid. at para. 37.
12. 12Ibid. at para. 104.
13. 13Supra note 3, at para. 72.