CITATION: Gonsalves v. Scrymgeour, 2016 ONSC 6659
COURT FILE NO.: FS-12-18256
DATE: 20161027
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
PRUDENCE PERSAUD GONSALVES
Applicant
– and –
STEVEN SCRYMGEOUR
Respondent
Elliot Birnboim and Faye Yao, for the Applicant
Avra Rosen, for the Respondent
HEARD: April 11-15, 18-20, 22, May 25, June 20, September 19-20, 2016
GLUSTEIN J.:
NATURE OF ACTION
[1] The applicant, Prudence Persaud Gonsalves (“Gonsalves”) seeks the following relief against the respondent, Steven Scrymgeour (“Scrymgeour”)[^1]:
(i) a declaration that Gonsalves is a half-owner of the property located at 6 Allenwood Crescent in North York, Ontario (the “Allenwood Property”), registered in Scrymgeour’s sole name, by way of a remedial constructive trust,
(ii) in the alternative, a declaration that Gonsalves is entitled to a monetary award equivalent to a half-interest in the Allenwood Property, and
(iii) a declaration setting out the entitlement and quantum of Gonsalves to child and spousal support from Scrymgeour.
[2] Gonsalves seeks the relief in subparagraphs (i) and (ii) above pursuant to the doctrine of “joint family venture” set out by the Supreme Court of Canada in Kerr v. Baranow, 2011 SCC 10 (“Kerr”).
[3] Gonsalves did not plead “joint family venture” in her application. However, under Rule 11(3) of the Family Law Rules, Ont. Reg. 114/99, “the court shall give permission to a party to amend an application, answer or reply, unless the amendment would disadvantage another party in a way for which costs or an adjournment could not compensate”.
[4] Further, from the outset of the trial, Gonsalves based both her constructive trust claim and the alternative monetary claim on the doctrine of unjust enrichment through a “joint family venture” as set out in Kerr.
[5] Consequently, Scrymgeour did not require Gonsalves to amend the application, but reserved the right to address any cost consequences arising from the reliance at trial on “joint family venture”.
[6] The issues on this application with respect to the joint family venture claim are as follows:
(i) Was there a joint family venture arising from the relationship between Gonsalves and Scrymgeour?
(ii) If so, was there a disproportionate accumulation of assets linked to the contributions of Gonsalves to the joint family venture?
(iii) If so, is the appropriate remedy a declaration of constructive trust or a monetary remedy?
(iv) How should the remedy be assessed?
[7] Scrymgeour acknowledged at the hearing that he is required to pay child and spousal support. However, both counsel advised the court that the issue of spousal support could only be determined after the court made a finding of (i) the appropriate relief (if any) under the joint family venture claim, and (ii) the imputed income for both Gonsalves and Scrymgeour. Consequently, in these reasons, the only support issue I address is the appropriate income to be imputed to both Gonsalves and Scrymgeour.
[8] Both counsel advised the court that retroactive support payments would be appropriate, from March 2013 for spousal support, and from September 2015 for child support.
[9] Finally, I order the parenting plan as signed on April 12, 2016 and produced as exhibit 7 at trial.
CREDIBILITY OF THE PARTIES
[10] For the reasons that follow, I do not find Scrymgeour to be a credible witness on many of the issues related to joint family venture in this case. Scrymgeour consistently sought to lead evidence that was inconsistent with his prior pleadings, his trial evidence, and the documentary record, in order to avoid a finding of joint family venture.
The decision in Davies
[11] I rely on the analysis of credibility set out by Stinson J. in Davies v. Canadian Satellite Radio Inc., 2010 ONSC 5628 (SCJ) (“Davies”).
[12] In Davies, Stinson J. held that the plaintiff, Davies, had been constructively dismissed (Davies, at paras. 54-55). Stinson J. noted the importance of credibility and stated that, “The case largely turns on credibility and findings of fact” (Davies, at para. 2).
[13] Stinson J. made the following comments on the credibility of the witnesses (Davies, at paras. 31-33):
I found Davies to be a very impressive witness. His evidence was internally consistent, made sense, and had a "ring of truth". I also found his recollection of detail to be impressive. Where there were frailties in his recollection he conceded them, but on the important facts his evidence was clear. In cross-examination, his evidence was not shaken. He was not impeached on any occasion with reference to his discovery transcript or a document. His answers to questions on cross-examination were responsive and direct. When challenged on a point, his spontaneous explanations made sense and were logical. I have no reason to doubt the accuracy of the material parts of his testimony.
By contrast, Lyons was a most unimpressive witness. On frequent occasions, his testimony was vague and nonspecific. He often resorted to the use of ‘I would have’ or ‘I believe’ to preface statements of fact, leaving me with the impression that he was attempting to reconstruct information that he was unable to recall or simply did not know. On numerous occasions he gave nonresponsive answers to questions on cross-examination, sometimes to the point where he seemed evasive. He often provided additional information, not requested by the questioner, where he perceived it would explain or be helpful to the defendant's position in the lawsuit. Several times he was forced to concede (sometimes reluctantly) that his testimony was at odds with documents authored at the time. On other occasions, he was contradicted by his own discovery testimony. In addition, he often stepped out of the role of witness and into that of advocate, either arguing with counsel over the premise of the question or explaining why a certain proposition put to him did not have the effect that counsel sought to give it.
In light of any assessment of the credibility of these two witnesses, to the extent there is any conflict between the testimony of Davies and that of Lyons on any material point, I unhesitatingly prefer and accept the testimony of Davies and reject that of Lyons.
[14] I now apply the factors considered by Stinson J. to the evidence before me.
Credibility of Scrymgeour and Gonsalves
[15] In the present action, many of the factors that Stinson J. relied upon in Davies with respect to the “unimpressive witness”,[^2] Lyons, apply to Scrymgeour. In the course of Scrymgeour’s testimony, there were repeated instances where:
(i) Scrymgeour “gave nonresponsive answers to questions on cross-examination, sometimes to the point where he seemed evasive”;
(ii) Scrymgeour “often provided additional information, not requested by the questioner, where he perceived it would explain or be helpful to his position in the lawsuit”;
(iii) “Several times [Scrymgeour] was forced to concede (sometimes reluctantly) that his testimony was at odds with documents [or pleadings] authored at the time”;
(iv) “On other occasions, [Scrymgeour] was contradicted by his own [trial] testimony”; and
(v) “In addition, he often stepped out of the role of witness and into that of advocate, either arguing with counsel over the premise of the question or explaining why a certain proposition put to him did not have the effect that counsel sought to give it”.
[16] By way of example:
(i) Scrymgeour claimed that he only lived with Gonsalves to be a “father for Justin”[^3]. However, Scrymgeour referred on several occasions to the relationship arising from his 16-year cohabitation with Gonsalves and their two subsequent children as a “family”, stating that they “wanted to have a family”, “we did not want to be apart”, and that even though “we had issues”, Scrymgeour and Gonsalves “wanted it to work”;
(ii) Scrymgeour repeatedly claimed that Gonsalves had a limited role in caring for the children and was “never around”. However, in the application he filed in May 2012 at the Ontario Court of Justice, Scrymgeour pleaded that: “until early 2005, both parties were actively involved in the children’s care and shared in their day-to-day care each in their respective way”; “[Gonsalves] was the primary caregiver weekday mornings, Monday to Wednesday afternoons, and when [Scrymgeour] was not home”; and “[b]oth parties have been historically involved in the children’s education, attending parent-teacher interviews, and appointments”; and
(iii) Scrymgeour stated that he paid all of the children’s expenses but acknowledged on cross-examination in the face of documentary evidence that this was not the case. His answer was, in effect, “just show me the evidence and I’ll agree to it”.
[17] As for Gonsalves’ evidence as to joint family venture issues, I find that[^4]:
(i) Her evidence was internally consistent, made sense, and had a "ring of truth";
(ii) “Where there were frailties in [her] recollection [she] conceded them, but on the important facts [her] evidence was clear. In cross-examination, [her] evidence was not shaken”;
(iii) “[Her] answers to questions on cross-examination were responsive and direct”; and
(iv) “When challenged on a point, [her] spontaneous explanations made sense and were logical”.
[18] Consequently, to the extent there is any conflict between the testimony of Scrymgeour and the testimony of Gonsalves, I prefer and accept the testimony of Gonsalves.
EVIDENCE
[19] I review the evidence both (i) in a chronological manner, and (ii) on particular issues which span the cohabitation between the parties.
Chronological Review of the Evidence
i) 1989-1991: Dating, pregnancy, and the ultimatum
[20] Gonsalves moved to Canada when she was four years old from Trinidad and Tobago. She did not complete high school.
[21] Scrymgeour obtained his bachelor of commerce degree from the University of Toronto in 1985. He worked at Price Waterhouse from 1985 as a “student in accounts”. Scrymgeour remained in that position (at the same pay and without promotion) until 1988 when he passed his universal chartered accounting exam on his third attempt.
[22] Scrymgeour joined ScotiaBank in the spring of 1989 as a commercial account officer, at a salary of $42,000. He worked with the bank manager, but had no managerial role.
[23] Gonsalves met Scrymgeour in the spring of 1989 when she worked as a full-time bank teller at ScotiaBank. Gonsalves was 19 and Scrymgeour was 28.
[24] Gonsalves and Scrymgeour knew each other for a few months before they started dating. Approximately in May 1990, Gonsalves became pregnant with Scrymgeour as the father.
[25] When Gonsalves advised Scrymgeour of her pregnancy, Scrymgeour gave Gonsalves an ultimatum: either have an abortion or end the relationship.
[26] In his examination-in-chief, Scrymgeour claimed that the parties separated because he was “immature” and “not ready” to be a father. However, on cross-examination, he acknowledged that the ultimatum was something that he “may have said”. I accept Gonsalves’ evidence that she was faced with the ultimatum.
[27] Gonsalves chose to keep the child and the relationship ended before Justin was born on February 18, 1991. Gonsalves took a maternity leave and lived with her parents.
[28] Gonsalves needed support for Justin and hired a lawyer. She brought an application and accepted Scrymgeour’s offer which was incorporated into a court order of the Ontario Court of Justice, dated October 28, 1991 (the “1991 Order”), which provided that:
a) Gonsalves “shall have sole permanent custody” of Justin; b) “Scrymgeour shall have generous and liberal access” to Justin, including every Sunday afternoon; c) Scrymgeour would pay child support of $550 per month indexed under the Consumer Price Index; and d) Scrymgeour’s estate would be bound unless Scrymgeour maintained a life insurance policy “in the sum of $150,000.00 having [Gonsalves] as an irrevocable beneficiary … for so long as [Scrymgeour] is obliged to pay child support”.
ii) 1991-94: Reconciliation and the decision to purchase a home
[29] After the ultimatum, the parties went their separate ways. However, after the 1991 Order, Gonsalves’ relationship with Scrymgeour improved.
[30] Scrymgeour seemed interested in seeing Justin, and Gonsalves provided access. About a year later, in the course of these access visits, the parties began dating again.
[31] In 1993, Gonsalves and Scrymgeour began to discuss living together and getting married. As part of those discussions, they decided to look for a home for their family.
[32] Both parties had real estate agents looking for a house. Scrymgeour advised Gonsalves that he had found something he liked (the Allenwood Property) and asked Gonsalves and Justin to visit it. Scrymgeour told Gonsalves that if she liked the Allenwood Property, they would start their future together at that home. Scrymgeour said that he would take care of everything related to the house and paperwork.
[33] On February 14, 1994, the sale closed on the Allenwood Property. Gonsalves and Scrymgeour moved into the Allenwood Property on the first weekend in March. Unbeknownst to Gonsalves, Scrymgeour purchased the Allenwood Property only in his name, with a $35,000 deposit. The balance of the $356,300 purchase price was financed by a $326,000 interest-free mortgage payable on demand (the “Mortgage”) to Scrymgeour’s father, Thomas Charles Scrymgeour (“Thomas”).
iii) 1991-1999: The Deloitte Years
[34] In August 1991, Scrymgeour joined Deloitte in its insolvency group, at a salary of $55,000 per year. He did not work as a chartered accountant but was, instead, in a training program to be a trustee in bankruptcy. Scrymgeour passed his exams to be a trustee in bankruptcy in June 1995.
[35] After Scrymgeour became qualified as a trustee in bankruptcy, there was a reorganization at Deloitte, and the insolvency group became part of “Deloitte Consulting”.
[36] At Deloitte Consulting, Scrymgeour did consulting work on large projects. He did less insolvency work. His salary increased to approximately $75,000 when he became qualified as a trustee, but he had no title as a “trustee”. Rather, Scrymgeour was a “manager”, which was the lowest level of the group.
[37] Scrymgeour worked on some large-scale business improvement projects. He tracked financial reporting and key performance indicators. He worked with the finance group on projects, but did no consultant work. The group was “competitive” with a “lot of hours”.
[38] On June 18, 1995, Gonsalves and Scrymgeour’s second son, Scott, was born.
[39] Scrymgeour’s evidence was that there was “turmoil” in their relationship after Scott was born. However, Scrymgeour’s evidence was that they worked hard to stay together because they “wanted to have a family” and “we did not want to be apart” and that even though “we had issues”, they “wanted it to work”.
[40] After a year-long project running in 1996-97, Deloitte Consulting advised members of the team that the next project would require 90% of their time to be on the road. At that time, Scrymgeour moved to Deloitte’s “Management Solutions” group, which focused on much smaller consulting opportunities. Scrymgeour took an unpaid leave during the summer of 1997.
[41] In September 1997 to June 1999, Scrymgeour worked at Management Solutions, earning close to $100,000. While at Management Solutions between September 1997 and March 1998, Scrymgeour was posted in Halifax for six months, which put a “lot of strain” on Gonsalves who felt as if she were a “single mother”.
[42] Upon his return to the North York office of Management Solutions, Scrymgeour still was required to travel, going to Dallas in the summer of 1998. Scrymgeour was required to generate billable hours with an onus to obtain business. Scrymgeour tried to generate business in the local area to minimize travel, but these were small projects which kept him busy for a month or so. Consequently, he needed chargeable hours and travel was necessary for such intensive projects.
[43] While he was at Deloitte, Scrymgeour did not manage a team of people. His title was “Leader of Performance Management”, but he was the only member of that “group” and the title was for marketing purposes. He did not develop strategy for clients, which was done by consultants who were amongst the “elite” at Management Solutions, charging three times Scrymgeour’s hourly rate. Scrymgeour did not bring in clients. He did not lead executive or board meetings which were led by partners.
[44] Scrymgeour was never offered partnership, and his responsibilities at Deloitte were limited to costing and financial reporting.
[45] At Management Solutions, Scrymgeour worked in “performance management” using a “balanced scorecard” method to allocate bonuses and incentives. That method tracked performance to obtain a “score” which would translate into a dollar figure. Scrymgeour was one of a half dozen people on the project.
[46] Scrymgeour’s evidence was that he made himself more available at home once he and Gonsalves moved in together, and even more so after Scott was born. However, that position is contrary to the description of his work set out above, and also contrary to Scrymgeour’s evidence that he was generally involved with the children on weekends and evenings and that he worked “long hours” with “material absences” while at Deloitte.
[47] During this time period, Gonsalves was the primary parent. She worked full-time from 10 a.m. to 3 p.m. as a teller from February 1992 (one year after Justin was born) until Scott was born in June 1995. At that point, Gonsalves took a second maternity leave, and then returned to ScotiaBank as a part-time teller on Thursdays and Fridays (during which period Gonsalves’ mother would look after the children).
[48] While at home (either during her maternity leave or on a part-time work schedule), Gonsalves performed household activities such as bathing, cooking and cleaning. She was generally responsible for the care of the home and children. She did the laundry and grocery shopping. Gonsalves attended to medical appointments and purchased clothes.
[49] Scrymgeour’s evidence is that during the Deloitte years, at least up until Scott was born, his “access was limited” due to his workload. He was in “work mode” and involved with the children on evenings and weekends while Gonsalves looked after the “daily routine”. They also had help from both sets of parents and other family members.
iv) 1999-2005: Consulting work on own and with Bank of Montreal (“BMO”)
[50] Given the lengthy work hours and travel involved while Scrymgeour was at Deloitte, Scrymgeour and Gonsalves agreed that Scrymgeour should leave Deloitte to do consulting work so that he could spend more time with his family. They both understood that there was a risk that their family income could be affected by that decision, since it was not known if Scrymgeour could find enough work to “survive”.
[51] After Scrymgeour spent the summer of 1999 in Ottawa with the children, he obtained some contracts in 1999 and 2000, including some with the Ontario Association of Radiologists. Scrymgeour initially created a sole proprietorship called Financial Information Services as the entity for those contracts, and later incorporated UXL Consulting Services Inc. (“UXL”) when he obtained more contracts.
[52] These contracts did not produce significant income.
[53] By the year 2000, it was difficult for Gonsalves and Scrymgeour to make ends meet. Scrymgeour asked Deloitte if he could return to work, but Deloitte refused. Scrymgeour looked for work in 2000 and was not “cutting it” as an independent contractor. He depleted money market funds through 2000.
[54] At the end of 2000, Scrymgeour began to get more contracting work. Shoppers Drug Mart gave him a “balanced scorecard” project.
[55] Subsequently, he obtained multiple projects with BMO, including work on “balanced scorecard” projects and a contract related to the implementation of “PeopleSoft” software. These projects began in April of 2001 and extended to January 2005.
[56] Scrymgeour’s contracts ranged in remuneration, but at their peak, he earned approximately $180,000 per year.
[57] During this time period, Gonsalves and Scrymgeour had their third child, John, who was born on July 3, 2002. Scrymgeour’s evidence at trial was that he felt that he was the “primary parent” at least from the time John was born.
[58] Scrymgeour attempted to support his position at trial by adding comments (which were not responsive to the questions) that his children saw him as a “home dad” and that Gonsalves had issues with punctuality.
[59] However, the position that Scrymgeour was the primary caregiver is belied by his own application for custody and access which he brought before the Ontario Court of Justice in 2012 summarized at subparagraph 16 (ii) above.
[60] Further, an August 2003 calendar reviewed at trial confirms that during that time, Gonsalves took the children for dental and medical appointments.
[61] After John was born in July 2002, the parties had relationship difficulties and prepared a draft separation agreement. However, the parties worked to resolve those difficulties. They went for counselling with the purpose “to resolve these issues we have to solve to get married”. The parties continued to have sexual relations, which they did throughout their cohabitation.
v) 2005-2010: Work history after BMO contracts until separation in 2010
[62] After the fourth contract ended with BMO, Scrymgeour could not get additional contract work with BMO because Revenue Canada took the position that an individual on contract for more than two years was considered an employee, and BMO did not want to have any such issues related to source deduction if Scrymgeour remained as a contractor.
[63] Gonsalves did not want Scrymgeour to return to BMO. She felt that family should be a priority and he should spend time with the children. Gonsalves wanted Scrymgeour to adjust his priorities to be with her and the children.
[64] Scrymgeour did not obtain another contract from BMO after January 2005.
[65] After Scrymgeour left BMO, he worked at home. He had a few small contracts of limited value and tried other ventures which were not successful. He did some work for the family business. To pay family expenses, Scrymgeour drew down on his RRSP. A potential contract with BMO did not materialize due to the collapse of the financial markets in 2008.
[66] During this period of time from 2005, Scrymgeour was an active father. He volunteered to coach, and took the children to extra-curricular activities.
vi) 2007 – 2009: Gonsalves’ depression
[67] Gonsalves was forthright about her struggle with depression as of 2007. Gonsalves was reluctant to take anti-depressants because she had seen the effect of such medication on her friend. At that point, “things were falling apart, in my mind”. Justin had serious mental health issues. There was a strained relationship between Gonsalves and Scrymgeour.
[68] The parties continued to see marriage counsellors, and maintained sexual relations.
[69] Scrymgeour was home during this time period. Gonsalves felt that Scrymgeour (i) interfered in her routine, (ii) refused to let her do her “things with the kids”, and (iii) “wanted to take over my life”. Gonsalves felt that Scrymgeour “wouldn’t listen” and that he kept trying to take control.
[70] Gonsalves’ uncontested evidence was that she (i) felt as if her life was spiraling out of control, and (ii) told Scrymgeour in 2007 that “it’s all yours, you do it”.
[71] That period lasted until 2009, when Gonsalves decided to “take my life back”.
vii) 2009-2010: The decision to separate
[72] After Gonsalves decided to re-engage into family life, she and Scrymgeour continued to seek family counseling. At a counselling session in 2009, Scrymgeour said that he was staying with Gonsalves “just because of the children”. This was the first time that Scrymgeour had stated this position, even though he had been asked that question many times before by therapists and had denied the suggestion.
[73] At that point, Gonsalves felt some “relief” as she “knew the truth”. She recognized that she had to decide whether to live in the same house with separate lives or end the relationship. They agreed that it would be better if he left, which he did in December 2010.
viii) 2010-15: Living arrangements after separation
[74] Gonsalves stayed in the Allenwood Property from December 2010 until March 2013. Scrymgeour paid bills, taxes and utilities as well as the amounts due under the 1991 Order. Gonsalves bought groceries and paid for the children’s needs.
[75] On March 7, 2013, Gonsalves received a text from Scrymgeour that he had packed up her effects in two boxes on the front porch and had changed the locks. Scrymgeour told Gonsalves that she should collect her effects and leave. Gonsalves called the police and returned to the Allenwood Property, but the police advised Gonsalves that since Scrymgeour’s name was on title, Gonsalves had to leave and should call a lawyer.
[76] By that time, Gonsalves had commenced the present application.
[77] After Gonsalves left the Allenwood Property, she stayed with her uncle in Scarborough until the school year ended. She then moved to Barrie to live with her parents and picked up John after work on Saturday. Scrymgeour picked up John on Sunday and kept him until the next Saturday. This was done because John continued to go to his middle school and the Office of the Children’s Lawyer recommended against moving John to Barrie.
[78] The above arrangements were set out in an order of Goodman J., dated September 4, 2013, which provided that John would reside temporarily at the Allenwood Property “until the Applicant is able to secure accommodations in the North York area”.
[79] Gonsalves received no support from Scrymgeour after she left the Allenwood Property until she obtained a court order, dated August 18, 2015, in which Justice Stewart ordered Scrymgeour to pay $3,000 per month on an unallocated and without prejudice basis. Gonsalves then immediately found an apartment in North York and John came to live with her, with access to Scrymgeour, beginning in September 2015.
Non-Chronological Issues
i) Discussions of marriage
[80] Gonsalves raised the issue of marriage with Scrymgeour on several occasions.
[81] Gonsalves’ uncontested evidence was that three months after they moved into the Allenwood Property, they discussed marriage. Scrymgeour had told Gonsalves that he did not want to get married in a church, so Gonsalves found a venue for the wedding. Scrymgeour told Gonsalves “do me a favour, tell me when and where and hopefully I will show up”.
[82] Gonsalves was concerned about Scrymgeour’s commitment to the relationship when he reacted negatively to Gonsalves’ efforts as set out above. Scrymgeour told her that the marriage would happen, but that “we just have issues we have to sort out-it will happen”.
[83] Scrymgeour acknowledged that (i) the issue of marriage was raised occasionally “in passing”, but (ii) he did not say much when Gonsalves raised the issue. Scrymgeour never said that they would not get married.
ii) Scrymgeour continues to make child support payments
[84] At the time they moved into the Allenwood Property, Gonsalves, on the basis of legal advice that the payments continue until marriage, insisted that Scrymgeour continue to pay child support under the 1991 Order.
[85] Gonsalves used those payments for family expenses. Scrymgeour took care of the home expenses.
[86] I accept Gonsalves’ evidence that the support payments were not a trade-off or “nest egg” for not being an owner of the Allenwood Property. There is no evidence from Scrymgeour to support such an arrangement. Rather, Gonsalves relied on her lawyer and advised Scrymgeour that the payments would stop when they got married.
iii) Gonsalves’ $400 monthly “contribution to the mortgage”
[87] While Scrymgeour paid “child support” in the amount under the 1991 Order, he also insisted that Gonsalves contribute $400 per month “to the mortgage”.
[88] There is a dispute on the evidence as to whether Gonsalves continued to pay $400 monthly after Scott was born. I accept Gonsalves’ evidence that during her maternity leave for Scott, Scrymgeour advised Gonsalves that (i) she did not have to pay the $400 per month since she was not getting a full income but (ii) once she went back to work, the payments would resume. Gonsalves did not make payments during her maternity leave.
[89] I accept Gonsalves’ unequivocal evidence that she continued to make payments until 2009, when Scrymgeour acknowledged in a counselling session that he was only staying with Gonsalves “for the kids”. I accept Gonsalves’ evidence that such payments were in cash.
[90] Scrymgeour relies on a “read-in” from Gonsalves’ questioning when she agreed that the payments stopped when Scott was born. However, that statement is accurate, in that Gonsalves acknowledged that Scrymgeour did not request payments while she was on maternity leave. The “read-in” did not address what happened after the maternity leave ended, an issue directly addressed by Gonsalves at trial and whose evidence I accept.
[91] Scrymgeour generally denied that Gonsalves made any financial contribution to the household, except for limited amounts that he set out in an expenditure chart he prepared for the litigation. However, Scrymgeour’s evidence based on his chart was self-serving and not credible.
[92] Scrymgeour claimed that he reviewed “over 100,000” individual transactions on his bank statements. He claimed that the chart did not contain any payments from Gonsalves other than amounts reflected in “deposit from Prudy???” which would be deposits into his bank account. Scrymgeour also had a row in his chart labelled “other receipts” which he stated was money coming in that was not designated as income, but were not payments from Gonsalves.
[93] However, on cross-examination, when confronted with corresponding transactions between the parties’ bank accounts, Scrymgeour acknowledged that certain payments from Gonsalves to him were improperly characterized as “other receipts” and could have been contributions from Gonsalves. His answer was in essence “if you show them to me, I will agree”.
[94] I accept Gonsalves’ evidence that she paid the $400 monthly throughout the cohabitation, for 15 years from 1994 until 2009, except for maternity leaves. While Scrymgeour asks the court to reject the evidence as there is no “tracing” of those amounts, I accept Gonsalves’ evidence that the payments were made in cash based on withdrawals from her account.
[95] Gonsalves believed (until she found out in 1998) that she was paying down an arm’s-length mortgage. Scrymgeour conceded on cross-examination that he would have paid down a mortgage had it been arm’s-length.
[96] Even excluding two maternity leaves, over a period of approximately 13 years of payment, at $4,800 per year, Gonsalves contributed approximately $60,000. This amount is consistent with Gonsalves’ financial statement and her evidence that this was an amount that she and Scrymgeour agreed had been paid on her part based on her $400 per month contribution, as well as being consistent with Scrymgeour’s offer to pay $52,000 to Gonsalves, a figure Scrymgeour chose when he asked Gonsalves to move out of the Allenwood Property after June 2012.
iv) Discussions between the parties about joint ownership and Scrymgeour’s representations about joint ownership of the Allenwood Property
[97] From the outset of their decision to consider cohabitation, Gonsalves sought assurances from Scrymgeour that they would be joint owners of their home.
[98] Scrymgeour advised Gonsalves that her name “would be on the house”.
[99] Gonsalves asked Scrymgeour if she should get a loan for her share of the $35,000 down payment. Scrymgeour said it was not necessary as he preferred that Gonsalves pay off her debt. Scrymgeour told Gonsalves that he would take care of “everything” related to the house.
[100] At trial, Scrymgeour did not contradict any of Gonsalves’ evidence with respect to the discussion or his representation that both parties would take title as joint owners.
[101] Scrymgeour led evidence that the decision to purchase the Allenwood Property was his “alone”, and that Gonsalves had “nothing” to do with it. I reject this evidence as Scrymgeour asked Gonsalves to visit the home before the purchase for her approval.
[102] Scrymgeour described the Allenwood Property as the “matrimonial home”. He gave evidence that this was the home in which Gonsalves and Scrymgeour raised their “family”.
[103] Gonsalves’ uncontested evidence was that four years after moving into the Allenwood Property, and after paying the $400 monthly towards a “mortgage” which she thought was with TD Bank, she asked Scrymgeour how much he owed on the mortgage.
[104] It was during this discussion that Scrymgeour advised that he did not have a mortgage with a financial institution but, rather, had a mortgage through his father. Scrymgeour advised Gonsalves that his father would not accept cheques. Scrymgeour also advised Gonsalves, for the first time, that she was not on title.
[105] Scrymgeour told Gonsalves not to be concerned that her name was not on title. They had already discussed a possible move, as Gonsalves thought the Allenwood Property was old. Scrymgeour told Gonsalves that she could be the owner of the next property since she would be a first-time buyer. Scrymgeour also told Gonsalves that the name on title for the Allenwood Property would not matter when they got married.
[106] Scrymgeour also asked Gonsalves to continue the monthly $400 payments which he said he would keep in a joint account to either pay down the Mortgage (if requested) or for renovations to the property. Gonsalves agreed but asked that both of them sign cheques if monies were to come out of the account. Scrymgeour agreed with that proposal.
[107] A few years later, Gonsalves started receiving notices of withdrawals from the account. When Gonsalves questioned the withdrawals, Scrymgeour told her that “bills have to be paid” and that he had not set up the account to require both signatures.
v) Difficulties in their relationship
[108] The parties had difficulties in their relationship and, in particular, from the period after John was born in July 2002. At that time, Gonsalves became concerned that the marriage would not take place and the couple might separate. The parties discussed a draft separation agreement and Scrymgeour met with counsel.
[109] In 2002-03, the couple saw a marriage counsellor. Scrymgeour told Gonsalves that (i) they could work out their difficulties; (ii) the marriage would happen; and (iii) they just needed to resolve their issues. Counselling continued on an intermittent basis until 2009.
vi) Joint accounts and credit card
[110] Gonsalves and Scrymgeour had a joint investment account. Scrymgeour’s evidence is that Gonsalves did not contribute to this account.
[111] Gonsalves’ evidence is that she believed there was a joint account which was to be put into place after she learned that there was no arm’s-length mortgage, as I discuss at paragraphs 106-07 above.
[112] The parties had a joint MasterCard for groceries which was held from 2005 to 2009.
vii) Family and social outings
[113] I accept Gonsalves’ evidence that she attended work functions with Scrymgeour as a couple. They went out as a couple on dates. Gonsalves attended at Scrymgeour’s family functions and felt warmly treated by Thomas. Scrymgeour did not always attend at Gonsalves’ family functions (particularly after 2002), but he attended regularly prior to that point, although he would often remain silent or on his own during that time.
viii) Scrymgeour’s evidence as to the intent of living together
[114] Scrymgeour denied that he intended to form a family when he lived with Gonsalves for more than 16 years. Scrymgeour’s evidence was that by April 1994, their intention was only to be parents for Justin and to have another child so that Justin would not be an only child.
[115] Scrymgeour’s evidence was that he was not interested in having a relationship with Gonsalves. His evidence was that he was “just interested in having [Gonsalves] bear [him] more children” when asked about the birth of Scott.
[116] Scrymgeour acknowledged that after the birth of Scott, he and Gonsalves continued to have sexual relations and had another child. Scrymgeour and Gonsalves continued to attend family counseling to work on the relationship.
[117] On cross-examination, Scrymgeour’s evidence was that “I don’t think the relationship [with Gonsalves] was effectively over in my mind until 2009”.
[118] Further, I accept Gonsalves’ evidence that it was at Scrymgeour’s suggestion that Gonsalves set out her status as “single” on tax returns, and listed her parents’ address in Barrie for child tax benefit statements. It is not credible that Gonsalves instructed Scrymgeour to do so, particularly as Scrymgeour was a chartered accountant with financial expertise who prepared the family businesses’ tax returns and there is no evidence that Gonsalves had any such financial knowledge. The child tax benefits were deposited into the children’s account and used for the children, home, and personal expenses.
ix) Income splitting
[119] While Scrymgeour was earning higher incomes as a consultant with BMO, he was able to income-split with his children, establishing a trust account for them worth almost $150,000 as at March 7, 2016 (and worth approximately $70,000 as of December 2010).
x) Payments on the Mortgage
[120] Shortly after the closing, Scrymgeour paid back $135,340 on the Mortgage. The payment was made through a share transfer from an account Scrymgeour held with Wood Gundy which included funds received when Thomas purchased back two of Scrymgeour’s common shares in Thomas’ holding company, Glassary Holdings Limited (“GHL”).
[121] In October 1996, Scrymgeour made a second payment on the Mortgage, in the amount of $53,600, again using his Wood Gundy funds, leaving a balance owing of $137,060.
[122] The October 1996 payment came from a reserve Scrymgeour set aside at the initial purchase. Scrymgeour’s evidence from a read-in was that:
The 130 was prior savings. At the time I’m 33 and I had worked for a fair amount of time and done some investing. The 50 was – we had a budget or a plan for – or I did. When you move in there’s always a risk of emergency repair and other things for the house. So I had set that aside just in case the roof fell in, which it kind of did, and the furnace broke, which it did. But we managed to get through that and didn’t spend significant amounts on furnishings. … And so that was the reserve that I had from the initial purchase that I ended up paying.
[123] From that point onwards, Scrymgeour’s evidence is that Thomas would not accept further payments on the Mortgage as his sister Sandra had been unable to make her payments on her family mortgage, and Thomas insisted on a similar treatment for Scrymgeour.
[124] The Mortgage was transferred to David. It is not discharged to date.
xi) Value of the Allenwood Property
[125] Pursuant to a joint valuation retainer obtained for trial, the value of the Allenwood Property (i) as at May 1, 2016 was estimated at $1,380,000 and (ii) as at December 15, 2010 was estimated at $795,000.
ANALYSIS
[126] There are two issues in this application: (i) joint family venture and (ii) imputed income. I address each of these issues below.
I. Joint Family Venture Issues
[127] The issues on this application with respect to the joint family venture claim are as follows:
i) Was there a joint family venture arising from the relationship between Gonsalves and Scrymgeour?
ii) If so, was there a disproportionate accumulation of assets linked to the contributions of Gonsalves to the joint family venture?
iii) If so, is the appropriate remedy a declaration of constructive trust or a monetary remedy? and
iv) How should the remedy be assessed?
[128] I address each of those issues below.
Issue 1: Was there a joint family venture arising from the relationship between Gonsalves and Scrymgeour?
[129] I first set out the applicable law and then review the evidence on this issue.
The Applicable Law
i) The remedy of a joint family venture is available to protect against unjust enrichment in domestic relationships
[130] Prior to Kerr, some courts applied a “remedial dichotomy” in situations of unjust enrichment arising out of parties who lived together in a domestic relationship. Under that dichotomy, “there are only two choices of remedy for an unjust enrichment: a monetary award, assessed on a fee-for-services basis; or a proprietary one (generally taking 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 specific property” (Kerr, at para. 57).
[131] In Kerr, the court rejected that dichotomy. Cromwell J., speaking for the court, held that if there is a “joint family venture” and the joint efforts of the parties are linked to the accumulation of wealth, then unjust enrichment can arise if one party is left with a disproportionate share of the wealth. Cromwell J. held (Kerr, at para. 60):
At least one other basis for an unjust enrichment claim is easy to identify. It consists of cases in which the contributions of both parties over time have resulted in an accumulation of wealth. The unjust enrichment occurs following the breakdown of their relationship when one party retains a disproportionate share of the assets which are the product of their joint efforts. The required link between the contributions and a specific property may not exist, making it inappropriate to confer a proprietary remedy. However, there may clearly be a link between the joint efforts of the parties and the accumulation of wealth; in other words, a link between the ‘value received’ and the ‘value surviving’, as McLachlin J. put it in Peter, at pp. 1000-1001. Thus, where there is a relationship that can be described as a ‘joint family venture’, and the joint efforts of the parties are linked to the accumulation of wealth, the unjust enrichment should be thought of as leaving one party with a disproportionate share of the jointly earned assets. [Emphasis added]
[132] Under Kerr, “the law of unjust enrichment can and 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” (Kerr, at para. 62).
[133] A joint family venture will be found without an “artificial balance sheet approach which does not reflect the true nature” of the parties’ relationship. Cromwell J. held (Kerr, at para. 69):
For many domestic relationships, the couple's venture may only sensibly be viewed as a joint one, making it highly artificial in theory and extremely difficult in practice to do a detailed accounting of the contributions made and benefits received on a fee-for-services basis. Of course, this is a relationship-specific issue; there can be no presumption one way or the other. However, the legal consequences of the breakdown of a domestic relationship should reflect realistically the way people live their lives. It should not impose on them the need to engage in an artificial balance sheet approach which does not reflect the true nature of their relationship. [Emphasis added]
[134] The basis of the unjust enrichment is the retention of an “inappropriately disproportionate amount of wealth” by one party engaged in the joint family venture, irrespective of legal title to particular assets. Cromwell J. held (Kerr, at para. 81):
[T]he 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). […] 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.
[135] Cromwell J. held that a party in a joint family venture should not be deprived of a remedy when the other party retains a disproportionate share of assets accumulated during the course of the relationship (Kerr, at para. 84):
It is not the purpose of the law of unjust enrichment to replicate for unmarried partners the legislative presumption that married partners are engaged in a joint family venture. However, there is no reason in principle why remedies for unjust enrichment should fail to reflect that reality in the lives and relationships of unmarried partners. [Emphasis added]
[136] Consequently, Cromwell J. expanded the law to permit unjust enrichment claims for “unmarried domestic arrangements that are partnerships” to “address the disproportionate retention of assets acquired through joint efforts with another person”. He held (Kerr, 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]
ii) The factors relevant to determining whether there is a joint family venture
[137] Cromwell J. considered four factors to identify a joint family venture: (i) mutual effort, (ii) economic integration, (iii) actual intent, and (iv) priority of the family. Cromwell J. noted that there might be “overlap” among these factors and it is not a “closed list” (Kerr, at para. 89). I address the applicable law for each factor below.
a) Mutual effort
[138] The “mutual effort” factor requires consideration by the court of “whether the parties worked collaboratively towards common goals”, which include consideration of “the pooling of effort and team work, the decision to have and raise children together, and the length of the relationship” (Kerr, at para. 90).
[139] Under this factor, the court will also consider “joint contributions, or contributions to a common pool”, “the use of parties’ funds entirely for family purposes”, or “[t]he parties may also be said to be pooling their resources where one spouse takes on all, or a greater proportion, of the domestic labour, freeing the other spouse from those responsibilities, and enabling him or her to pursue activities in the paid workforce” (Kerr, at para. 91).
b) Economic integration
[140] The court considers “the degree of economic interdependence and integration that characterized the parties' relationship” (Kerr, at para. 93), which takes into account “the integration of the couple’s finances, economic interests and economic well-being” (Kerr, at para. 92). “The sharing of expenses” may also be a relevant consideration (Kerr, at para. 92).
[141] Cromwell J. also noted that “The parties' conduct may further indicate a sense of collectivity, mutuality, and prioritization of the overall welfare of the family unit over the individual interests of the individual members” (Kerr, at para. 93).
c) Actual intent
[142] When considering the actual intent of the parties, Cromwell J. held (Kerr, at paras. 94-96)
(i) “Those intentions may have been expressed by the parties or may be inferred from their conduct”;
(ii) “The stability of the relationship may be a relevant factor as may the length of cohabitation”;
(iii) “When parties have lived together in a stable relationship for a lengthy period, it may be nearly impossible to engage in a precise weighing of the benefits conferred within the relationship”; and
(iv) “Even where title is registered to one of the parties, acceptance of the view that wealth will be shared may be evident from other aspects of the parties' conduct. For example, there may have been little concern with the details of title and accounting of monies spent for household expenses, renovations, taxes, insurance, and so on”.
d) Priority of the family
[143] The court considers the “extent [the parties] have given priority to the family in their decision-making”. Cromwell J. held (Kerr, at para. 98):
A final category of factors to consider in determining whether the parties were in fact engaged in a joint family venture is whether and to what extent they have given 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. … Whether the roles of the parties fall into the traditional wage earner/homemaker division, or whether both parties are employed and share domestic responsibilities, it is frequently the case that one party relies on the success and stability of the relationship for future economic security, to his or her own economic detriment (Parkinson, at p. 243). This may occur in a number of ways including: leaving the workforce for a period of time to raise children; relocating for the benefit of the other party's career (and giving up employment and employment-related networks as a result); foregoing career or educational advancement for the benefit of the family or relationship; and accepting underemployment in order to balance the financial and domestic needs of the family unit.
[144] Priority of the family can also be established by financial sacrifices of the higher earning spouse. Cromwell held (Kerr, at par. 99):
As I see it, giving priority to the family is not associated exclusively with the actions of the more financially dependent spouse. The spouse with the higher income may also make financial sacrifices (for example, foregoing a promotion for the benefit of family life), which may be indicative that the parties saw the relationship as a domestic and financial partnership.
Application of the Law to the Evidence in this Case
[145] On the basis of the above principles set out in Kerr, and as applied by courts as I discuss below, I find that there is a joint family venture based on the evidence in this case.
[146] I address each of the four factors set out in Kerr below.
i) Mutual effort
[147] The facts of the present case are similar to those in Gibson v. Mead, 2015 ONSC 6935 (“Gibson”), in which the court found a joint family venture. Sutherland J. held that there was “mutual effort” (Gibson, at para. 64):
I do find that the evidence does show a mutual effort between the Respondent and the Applicant. The evidence that supports this conclusion includes:
(i) The length of the relationship from 1990 to 2011, being twenty-one years.
(ii) The raising of two children and the Applicant was the primary caregiver of those children.
(iii) The joint financial contributions to the expenses of the home which include the part-time work of the Applicant during the common law relationship which was utilized to pay the expenses of the family;
(iv) The domestic labour provided by the Applicant which included not only taking care of the children but also the household laundry, outside landscaping and general cleaning of the home.
(v) The ability of the Respondent to better his education by getting his grade twelve high school diploma and attending George Brown College to obtain his millwright licence. An example was his ability to go to Mexico for seventeen weeks to better his employment opportunities with his employer, Magna while the Applicant stayed at home and took care of the house and the children.
[148] In Jackson v. McNee, 2011 ONSC 4651 (“Jackson”), the court found a joint family venture on facts similar to the present case. With respect to mutual effort, Ingram J. held (Jackson, at paras. 52-53):
These parties lived together for 18 years. They raised three children. Steven worked exceedingly long hours by his own admission, up to 15 hours per day, seven days each week. Correspondingly, Karie was required to work long hours maintaining the house, raising the children and doing domestic chores, both indoors and outside. In addition, she contributed to the rental properties by doing some manual work (cleaning, painting and minor repairs), as well as answering tenant inquiries. In the early years of Steven's pool business, she helped in the distribution of fliers, answered the phone and did occasional pick-ups and deliveries.
Steven could not have worked such hours without the home support provided by Karie. Similarly, Karie could not have handled all of the home chores without the financial support provided by Steven. The parties have pooled their efforts to provide for the family unit. [Emphasis added]
[149] On the evidence in the present case, there was mutual effort in the relationship between Gonsalves and Scrymgeour. I rely on the following evidence:
a) The parties cohabited for more than 16 years, with a relationship that began even earlier when their first child was born;
b) The parties had three children together, raised as a “family”;
c) Gonsalves took maternity leave for each of the children, supported by Scrymgeour;
d) Gonsalves worked part-time at all times after the birth of their second child in 1995 (except for a maternity leave after John was born in July 2002);
e) Scrymgeour worked long hours, travelled extensively, attempted to build his career, and saved assets;
f) There were common expenses to which the parties contributed, including groceries, expenses for the children, and other items; and
g) The parties had a joint credit card.[^5]
ii) Economic integration
[150] I again rely on the decisions in Gibson and Jackson, which present similar facts.
[151] In Gibson, Sutherland J. held that there was economic integration (Gibson, at para. 66):
The evidence of both parties indicates that there was an economic integration between them. Even though there were no joint bank accounts, the income that they both accrued went to the Family. The [sic] shared expenses of the Family. Income earned was used to support the expenses of the Family. Their priority was that of the Family and their children. The Respondent, to his credit, acknowledged in his evidence that his children were his highest priority and the money he earned, and the betterment of his education and employment skills were for his children. He quite clearly stated that he needed to make more money to aid his children in any post-secondary education they wish to achieve.
[152] In Jackson, Ingram J. held (Jackson, at paras. 54-55):
Karie never had bank accounts and only the Dominican Republic property in her name, however, unlike some spouses, she was never lacking in financial resources. While Steven seemed preoccupied with money, he readily gave her money when requested, often from the large amounts of cash that seemed prevalent in their residence. When she worked for money in the early years of their relationship as a waitress and in later years doing daycare, her funds, like Steven's funds, were used for the benefit of the family.
Thus, while Steven appeared to have the finances in his name alone, the reality is that they shared the use of the income and assets. Karie saw no need to have anything in her name. [Emphasis added]
[153] In the present case, the parties did not lead independent economic lives. Both parties contributed to the family economic unit.
[154] Gonsalves contributed $400 monthly to Scrymgeour, which she first was advised was for a mortgage and then later was advised would be used to repay the Mortgage or for renovations.
[155] The monthly “child support” payment, used by Gonsalves for family expenses, constitutes economic integration, as those funds contributed to the family’s economic well-being.
[156] On the evidence, there was “a sense of collectivity, mutuality, and prioritization of the overall family unit over the individual interests of the individual members” (Kerr, at para. 93).
[157] It is not a required factor under Kerr that parties share a common bank account and have a common credit card. Parties can keep separate accounts into which employment or other income is paid, or have separate credit cards. If they make payments from such accounts towards family life, economic integration can be established.
[158] Similarly, it is not a requirement for economic integration that both parties must contribute to expenses. One party may stay at home without income while the other pays expenses. The test, as summarized by Sutherland J. in Gibson, is whether the parties were “making the welfare of the family a higher priority to the individual parents’ interests” (Gibson, at para. 65). If so, then there will be a “sense of collectivity, mutuality, and prioritization of the overall welfare of the family unit over the individual interests of the individual members”, as described in Kerr.
[159] On the facts of the present case, that test was met.
iii) Actual intent
[160] The parties in the present case did not make a “deliberate choice not to have their lives economically intertwined” (Kerr, at para. 94).
[161] In the present case “[t]here was no suggestion that the intention of the parties to not marry was based on a conscious decision to keep property separate” (as noted by Ingram J. in Jackson, at para. 56).
[162] Cromwell J. in Kerr noted the importance of the “stability” of the relationship as well as “the length of cohabitation” (Kerr, at para. 95). While much evidence was led at trial as to the relationship difficulties between the parties that arose after John was born in July 2002, the test for “stability” does not mean that parties cannot have difficulties in their relationship. Happiness is not the same requirement as stability.
[163] In the present case, the parties stayed together throughout their period of relationship difficulties, seeking counselling and continuing sexual relations. Scrymgeour referred to the relationship arising from his 16-year cohabitation with Gonsalves and their children as a “family”, stating that they “wanted to have a family” and “we did not want to be apart”. Scrymgeour states that while “we had issues”, Scrymgeour and Gonsalves “wanted it to work”. He described the Allenwood Property as the “matrimonial home”.
[164] Consequently, the parties had a stable, long-term relationship, with acknowledged relationship difficulties which they worked to resolve together.
[165] Ex post facto assertions of “intent” from Scrymgeour should be disregarded and the evidence of how the parties lived their lives with direct evidence of intention at the time should be considered. I rely as well on the following:
a) Gonsalves’ evidence that she was led to believe that she was a joint owner of the Allenwood Property and was contributing to (what she believed) was an arm’s length mortgage and then to a fund to either pay down the Mortgage or pay for future renovations,
b) Gonsalves’ uncontradicted evidence that she was told by Scrymgeour that the next home they acquired would be in her name, and
c) Gonsalves’ evidence about discussions of marriage and Scrymgeour’s acknowledgment that he did not state that the parties would not get married.
[166] For the above reasons, I find that the “actual intent” of the parties was consistent with a joint family venture.
iv) Priority of the family
[167] The evidence establishes “detrimental reliance on the relationship, by one or both of the parties, for the sake of the family” (Kerr, at para. 98).
[168] The analysis in both Gibson and Jackson is based on similar facts to those in the present case. In Gibson, Sutherland J. held (Gibson, at para. 74):
As already stated in this decision, both parties have indicated that they gave priority to the Family. The Applicant put herself in a finically [sic] dependant relationship with the Respondent to take care of the children and the household. The Respondent took advantage of the fact that the Applicant was at home taking care of the children and the house to better his education and career. He admitted that he had to make more money to fund any educational aspirations of the children. His ability to do so was aided by the actions of the Applicant.
[169] In Jackson, Ingram J. held (Jackson, at para. 60):
The parties have raised three children. Their roles evolved with Steven being the breadwinner and Karie being in charge of the children. Steven encouraged Karie to be at home with the children. In hindsight, this worked to her detriment as her workplace skills have potentially atrophied and she left the relationship with no means.
[170] In the present case, I rely on the following evidence:
a) The parties chose to live together and have more children;
b) The Allenwood Property was acquired with a view to building a family;
c) There was an intention to build and have a “family” as admitted by Scrymgeour;
d) Gonsalves put herself in a financially dependent relationship in which she took maternity leaves and worked part-time, thereby having a lesser career with a smaller pension and not acquiring a home, all while paying $400 per month, while Scrymgeour attempted to develop his career and acquired more savings and assets; and
e) Scrymgeour and Gonsalves made joint decisions that Scrymgeour should spend more time at home with the children (both in relation to Deloitte and BMO), so that he would prioritize the family.
[171] For the above reasons, I find that this factor under Kerr has been established.
Conclusion on Joint Family Venture
[172] For the above reasons, I find that there is a joint family venture.
Issue 2: Was there a disproportionate accumulation of assets linked to the contributions of Gonsalves to the joint family venture?
[173] I first address the applicable law and then the evidence relevant to this issue.
The Applicable Law
[174] There are two sub-issues raised by the parties. First, the parties disagree as to the appropriate test to be applied under Kerr once a joint family venture is found: does the court then consider whether there is a disproportionate accumulation of wealth, or must the court find corresponding deprivation and absence of juristic cause under the doctrine of unjust enrichment?
[175] The second sub-issue is whether increases in market value over time can constitute a disproportionate accumulation of wealth. I address each sub-issue below.
Sub-issue 1: The appropriate test under Kerr once a joint family venture is found
[176] Gonsalves interprets Kerr to require a two-part test: once a joint family venture is found, the court then considers whether there is a disproportionate accumulation of assets of one party linked to the contributions of the other party in the joint family venture.
[177] Consequently, Gonsalves submits that a joint family venture is a “category” of unjust enrichment such that the court does not consider if there has been corresponding deprivation or absence of juristic cause, as a finding of joint family venture incorporates those factors.
[178] Scrymgeour submits that before the court can consider whether there is a disproportionate accumulation of assets of one party linked to the contributions of the other party in the joint family venture, the court must determine whether there has been a corresponding deprivation and absence of juristic cause.
[179] For the reasons that follow, I agree with Gonsalves’ position on the applicable test.
[180] However, as I discuss below, the distinction is not material on the facts of this case, as I find both (i) corresponding deprivation and absence of juristic cause, and (ii) a disproportionate accumulation of assets linked to the contributions of Gonsalves to the joint family venture.
i) The applicable law
[181] A claim for unjust enrichment under a joint family venture arises “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” (Kerr, at para. 87).
[182] Cromwell J. states that “unjust enrichment is understood to arise” from a joint family venture when a “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 course of the relationship through their joint efforts” (Kerr, at para. 81).
[183] The Court of Appeal recently summarized the analysis in Kerr as a two-part test. In Farkas v. Bedic, 2016 CarswellOnt 1048 (CA) (“Farkas”), Laskin J.A. spoke for the court (Farkas, at para. 35):
To obtain an award for unjust enrichment arising from a joint family venture, a claimant must show two things: first, a joint family venture; and second, a link between the claimant’s contribution to the venture and the accumulation of assets or wealth […]
[184] The two-part test, which considers a joint family venture as a category of unjust enrichment, is further supported by Garson J.A.’s[^6] analysis in Ibbotson v. Fung, 2013 BCCA 171 (“Ibbotson”).
[185] Garson J.A. held that a joint family venture is the “actual and relational basis” for relief if there is a link to a disproportionate share of wealth by one of the parties, an approach consistent with the view that a joint family venture is a category of unjust enrichment. Garson J.A. held:
In short, where unjust enrichment can be characterized as one party retaining a disproportionate share of assets following the breakup of a joint family venture, the other party may be entitled to a proportionate share of those assets. (Ibbotson, at para. 38).
A joint family venture is the actual and relational basis on which a court may equitably divide wealth created by joint efforts in varying circumstances. Through Kerr, Cromwell J. states that where a party can demonstrate they had a joint family venture, there will be unjust enrichment if one party has retained a disproportionate share of the wealth created by joint efforts (Ibbotson, at para. 53).
[186] In both Jackson and Gibson, the court considered the factors of detriment and juristic cause. In Jackson, Ingram J. held (Jackson, at para. 63):
As C.E.O. of the kids and the home, Karie has conferred a benefit upon Steven for more than 18 years. In so doing, she has been deprived of acquiring a profession to fall back on, and assets in her name. Thus there has been a corresponding deprivation. No juristic reason, such as contract, gift, reasonable expectation of the parties, or public policy for this inequity applies to this case. See Peter v. Beblow at pp. 994-996.
[187] In Gibson, Sutherland J. considered these factors in more detail (Gibson, at paras. 45-51).
[188] I adopt the two-step approach, i.e., if a joint family venture is found, the court then considers whether there is a link to the disproportionate accumulation of assets. Such an approach appears consistent with Farkas, as well as the factors considered as part of the joint family venture analysis of Cromwell J. in Kerr, including pooling efforts, sharing expenses, and priority of the family, which already take into account “detrimental reliance on the relationship, by one or both of the parties” (Kerr, at para. 98).
[189] Such an approach is also consistent with how the court applies the law to the facts in the Vanasse appeal addressed in Kerr at paragraphs 154-57, in which Cromwell J. did not discuss either juristic cause or deprivation.
[190] However, on the facts of the present case, it makes no difference which approach I follow, as I discuss below.
ii) Application of the law to the evidence
[191] In the present case, there is “a clear link between the claimant’s contributions to the joint venture and the accumulation of wealth” (Kerr, at para. 81).
[192] On the evidence described above, Gonsalves participated in a long-term joint family venture which resulted in Scrymgeour owning the Allenwood Property which quadrupled in value from date of purchase until trial and resulted in a disproportionate accumulation of assets. The Allenwood Property is the most significant asset of the joint family venture. Consequently, the “link” required under the two-part test is established.
[193] Further, a “link” exists because the issue of joint ownership of the home was raised from the outset of their decision to live together after the ultimatum and reconciliation. Gonsalves expressed concern over title of the Allenwood Property. Scrymgeour’s representations led Gonsalves to have “little concern with the details of … accounting of monies spent for household expenses, renovations, taxes, insurance, and so on” (Kerr, at para. 96).
[194] The result would be the same under the alternative approach proposed by Scrymgeour of determining whether there has been corresponding deprivation and an absence of juristic cause.
[195] In Kerr, Cromwell J. noted the comments of Cory J. in Peter v. Beblow, 1993 CanLII 126 (SCC), [1993] 1 SCR 980 (“Peter”). Cromwell J. stated (Kerr, at para. 108):
Cory J. (with whom McLachlin J. agreed on this point) made short work of Mr. Beblow's submission that Ms. Peter had not shown deprivation. He observed, ‘As a general rule, if it is found that the defendant has been enriched by the efforts of the plaintiff there will, almost as a matter of course be deprivation suffered by the plaintiff’: at p. 1013.
[196] Similarly, if the approach of Sutherland J. in Gibson were followed, it applies equally to the present case to find that there was a corresponding deprivation. Sutherland J. held (Gibson, at para. 45):
The evidence shows that the Applicant provided the Respondent with the benefit of staying home, taking care of the children, taking care of the household, and taking care of the different residences that they occupied. By doing so, the Applicant did receive a deprivation in that she was not able to better herself from an educational or work experience/skills point of view. Further, the Applicant did not receive any compensation for the benefits that she provided to the Respondent.
[197] Scrymgeour submits that the payment of child support under the 1991 Order, or Gonsalves’ receipt of child tax credits, can be seen as “juristic cause” for the enrichment. However, there is no evidence that such payments were considered or discussed as quid pro quo to replace Gonsalves’ claim to joint ownership of the Allenwood Property. To the contrary, the evidence was that Scrymgeour’s payments were used for the household, not as a “nest egg” to balance any ownership claims.
[198] This same argument was rejected by Sutherland J. in Gibson with respect to payments received under an amended separation agreement. Consequently, if the alternative approach proposed by Scrymgeour is followed, I would adopt Sutherland J.’s analysis which applies in the present case (Gibson, at paras. 50-51):
As the evidence indicated, the Applicant did not receive any ‘spousal support’ or direct support from the Respondent. The amended separation agreement shows that the Respondent paid to the Applicant monies for the ‘children’ namely for household expenses. The Applicant utilized these monies to pay for the household expenses for herself, the children, and for the Respondent. The fact that the monies given by the Respondent to the Applicant through this amended separation agreement were used for the children's expenses and also for that of the Respondent, does not, in my opinion, constitute compensation to the Applicant or to provide a juristic reason for the enrichment received by the Respondent and I thus, agree with the Applicant on this point. The Applicant has shown, in my opinion, that there is no juristic reason for the enrichment received by the Respondent.
I therefore find that there is an absence of a juristic reason for the Respondent to keep the enrichment he received from the Applicant. [Emphasis added]
[199] For the above reasons, I find that the test in Kerr is met, regardless of the approach to be taken after finding a joint family venture.
Sub-issue 2: The effect of market forces on increase in value – does it vitiate a link to a disproportionate share of assets?
[200] Scrymgeour submits that when a property increases in value as a result of market forces, there cannot be a link to a disproportionate share of assets or any corresponding deprivation to warrant relief under Kerr. I do not agree.
[201] In Ibbotson, Garson J.A. rejected the submission of the appellant that market force increases in the Vancouver housing market could not result in a disproportionate share of assets arising from a joint family venture. Garson J.A. held (Ibbotson, at paras. 46-48):
Dr. Fung submits that the claimant in this case did not establish any connection between the increases in value beyond bare reliance on ascending housing prices. Any improvements were incidental, and negligible compared to the massive inflationary increase in the value of the Property. He says it is necessary for a court to conclude that the actual increase in value can reasonably be linked to the contributions of the claimant and that that cannot be done in this case. He says a value received measure is a more equitable measure otherwise the claimant would receive an unfair windfall from inflation.
At first glance, this argument places an unreasonable burden on any claimant to establish that they improved the value of the property. To take an example from the appellant’s factum, no second floor addition or new garage during the heyday of rising prices in Vancouver could have matched the inflationary tide. How could anyone reasonably claim a proportionate share when the value of any improvement will be swallowed up in the rising land values? In my view, imposing such a burden on a claimant would also have the effect of unreasonably rewarding the status quo party, who retains the benefit of the inflation. If inflationary increases in housing prices are available to a title holder, there is no principled reason to withhold them from a proper claimant under an unjust enrichment claim.
If inflationary increases in housing prices are available to a title holder, there is no principled reason to withhold them from a proper claimant under an unjust enrichment claim. [Emphasis added]
[202] I adopt the conclusion of Garson J.A. (Ibbotson, at para. 70):
The implications of characterizing the Property as a joint family venture is that the value survived approach becomes appropriate, meaning that Ms. Ibbotson would benefit from the inflationary increase in value to the Property.
[203] Scrymgeour relies on Reiter v. Hollub, 2015 ONSC 6397 (“Reiter”), in which the court held that (i) the value increased by market forces; and (ii) “that evidence does not support the finding that the Applicant’s efforts did contribute to this increase” (Reiter, at para. 27). In Reiter, the court relied on the decision in Montgomery v. Schlender (2012) ABQB 332 (“Montgomery”).
[204] In Montgomery, Burrows J. held (Montgomery, 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.
[205] However, in Montgomery, the court found that none of the factors under Kerr had been established for a joint family venture.
[206] Further, Burrows J. also noted that there were no discussions or expectations of joint ownership. He held (Montgomery, at para. 52):
[T]here is no suggestion in the evidence that at any time during the time Ms. Montgomery and Mr. Schlender cohabited … there was any communication between them on the subject of Ms. Montgomery having any entitlement to participate in any appreciation on the value of the house. There is nothing to suggest that Ms. Montgomery ever said she had such an entitlement or even speculated about whether she might.
[207] Similarly, in Reiter, the court held that the requirements for a joint family venture had not been established.
[208] I adopt the comments of Garson J.A. in Ibbotson. Given that the role of the court is to provide a remedy that is fair and equitable, a party who (i) participated in a mutual effort towards a joint family venture, (ii) was fully integrated economically in a domestic partnership, (iii) was assured that she would be a joint owner of the home, and (iv) lived together as a family, ought not to be deprived of a fair share of an asset such as a home which has dramatically increased in value through the cohabitation and yields a disproportionate share to the spouse listed on title.
[209] I find that the approach of Garson J.A. is consistent with the views of Cromwell J. in Kerr, in which Cromwell J. stated (Kerr, at para. 60):
Even when title is registered to one of the parties, acceptance of the view that wealth will be shared may be evident from other aspects of the parties’ conduct.
[210] A finding that a party in a joint family venture cannot share in increased value of the family home due to market forces would deprive that party from participating in what is often the greatest source of disproportionate accumulation of assets in a long-term domestic relationship, when the other party is solely listed on title. In my view, that is not a fair and equitable result. For those reasons, I adopt the approach of Garson J.A. in Ibbotson and find that an increase in market value can be considered as a component of a disproportionate share of assets.
[211] Consequently, I now address the issue of remedy.
Issue 3: Is the appropriate remedy a declaration of constructive trust or a monetary remedy?
[212] For the reasons that follow, I find that the appropriate remedy is monetary. I first review the applicable law and then consider the evidence in this case.
The Applicable Law
[213] With respect to remedy, Cromwell J. held that “the first remedy to consider is always a monetary award” and that “in some cases, when a monetary award is inappropriate or insufficient, a proprietary remedy may be required” (Kerr, at paras. 47, 50).
[214] Under the heading, “The Approach to the Monetary Remedy”, Cromwell J. stated that the monetary remedy addresses the unjust retention of a disproportionate share of assets accumulated in a joint family venture (Kerr, at para. 80).
[215] A constructive trust order requires a “sufficiently substantial and direct link between the plaintiff’s contribution and the property which is the subject matter of the trust”. “Indirect contributions of money and direct contributions of labour may suffice, provided that a connection is established between the plaintiff’s deprivation and the acquisition, preservation, maintenance, or improvement of the property” (Kerr, at paras. 50-51).
[216] The plaintiff must also establish that a monetary award would be insufficient in the circumstances. The court may take into account the probability of recovery, as well as whether there is a reason to grant the plaintiff the additional rights that flow from recognition of property rights such as the unfairness of a change in value accruing to a party’s account (Lac Minerals Ltd. v. International Corona Resources, 1989 CanLII 34 (SCC), [1989] 2 SCR 574, cited at Kerr, at para. 52).
Application of the Law to the Evidence
[217] On the facts of this case, the requirements for a proprietary award have not been met.
[218] In Jackson, Ingram J. considered a similar issue and ordered a monetary remedy when finding a joint family venture and disproportionate accumulation of assets after an 18-year relationship when the respondent owned three properties solely in his name. Ingram J. held (Jackson, at para. 64):
The plaintiff has established her claim of unjust enrichment. I will now turn to the appropriate remedy. As noted above, to establish a proprietary remedy the plaintiff must satisfy the court that there is a sufficient nexus between the unjust enrichment and the property. The plaintiff must further establish that a monetary award would be inappropriate. In this case, I have not been satisfied that a monetary award is inappropriate or would lead to an injustice. Even though Steven has failed to properly pay child support and is in arrears, this alone is not enough to satisfy me that a monetary award would be inappropriate.
[219] There is no evidence that there is insufficient equity in the Allenwood Property to recover payment of a monetary reward. To the contrary, with a value of $1,380,000 at trial (or $795,000 at date of separation) and no debt other than the $137,000 balance outstanding on the Mortgage, there is more than sufficient equity to pay an award.
[220] I now address the monetary remedy that is appropriate in this case.
Issue 4: How should the monetary remedy be assessed?
[221] This question raises several issues which were contested by the parties:
a) Should the date of trial or date of separation be used to determine the value of the Allenwood Property?
b) What deductions, if any, should be made for Scrymgeour’s payment of the down payment and part of the Mortgage, or the outstanding amount of the Mortgage?
c) Should any deduction be made under the basis of mutual benefit conferral?
d) What proportion should Gonsalves receive as a contributor to the joint family venture?
[222] I first address the general principles relevant to remedies arising out of a joint family venture and then consider the particular sub-issues raised by the parties.
Discretion Based on Fairness in Crafting Remedies for Unjust Enrichment
[223] There are two principles which flow from the discretion of the court to craft remedies for unjust enrichment. First, such a discretion is broad and allows the court to craft a remedy suited to the facts of each particular case. Second, because of the broad discretion, a proprietary or monetary remedy should not lead to different results to redress unjust enrichment when there is a joint family venture. I address these two points below.
i) The broad discretion to craft fair remedies to redress unjust enrichment
[224] The overarching principle in determining the appropriate remedy for unjust enrichment is that the court retains a broad discretion to craft a remedy that is fair and equitable given the circumstances of the case. Cromwell J. set out this principle (Kerr, at paras. 72-73):
Turning specifically to remedies for unjust enrichment, I refer to Binnie J.'s comments in Pacific National Investments Ltd. v. Victoria (City), 2004 SCC 75, [2004] 3 S.C.R. 575 at para. 13. He noted that the doctrine of unjust enrichment, while predicated on clearly defined principles, ‘retains a large measure of remedial flexibility to deal with different circumstances according to principles rooted in fairness and good conscience’. Moreover, the Court has recognized that, given the wide variety of circumstances addressed by the traditional categories of unjust enrichment, as well as the flexibility of the broader, principled approach, its development has been characterized by, and indeed requires, recourse to a number of different sorts of remedies depending on the circumstances: see Peter, at p. 987; Sorochan, at p. 47.
Thus, the remedy should mirror the flexibility inherent in the unjust enrichment principle itself, so as to allow the court to respond appropriately to the substance of the problem put before it. This means that a monetary remedy must match, as best it can, the extent of the enrichment unjustly retained by the defendant. There is no reason to think that the wide range of circumstances that may give rise to unjust enrichment claims will necessarily fall into one or other of the two remedial options into which some have tried to force them. [Emphasis added]
[225] Cromwell J. reiterates the importance of flexibility (Kerr, at para. 79):
The unjust enrichment principle is inherently flexible and, in my view, the calculation of a monetary award for a successful unjust enrichment claim should be equally flexible. This is necessary to respond, to the extent money can, to the particular enrichment being addressed. To my way of thinking, Professor Fridman was right to say that ‘where a claim for unjust enrichment has been made out by the plaintiff, the court may award whatever form of relief is most appropriate so as to ensure that the plaintiff obtains that to which he or she is entitled, regardless of whether the situation would have been governed by common law or equitable doctrines or whether the case would formerly have been considered one for a personal or a proprietary remedy’ (p. 398). [Emphasis added]
ii) The distinction between proprietary or monetary remedy should not affect the fairness of the relief ordered to redress unjust enrichment arising from a joint family venture
[226] Given the flexibility in crafting a remedy to redress unjust enrichment arising from a joint family venture, the distinction between a proprietary and monetary remedy should not affect the fairness of the relief ordered.
[227] In Ibbotson, Garson J.A. held that a proprietary remedy and monetary remedy ought not to lead to different results in the context of a joint family venture (Ibbotson, at paras. 60-62):
Third, this Court has recognized that the practical distinction between a monetary award calculated on the basis of value survived and a proprietary remedy are in reality only distinct insofar as there are, in law, particular requirements for a constructive trust and certain property rights that flow from the imposition of a constructive trust. In Wilson, Madam Justice Huddart made the following observations at para. 50:
Because the sharing of the benefits and risks of ownership proportionate to the owners’ contributions is implicit in the grant of a constructive trust, the finding of entitlement to a proprietary remedy is usually only notional in family cases. Most plaintiffs in family cases claim a constructive trust, and then ask for an award of damages on a value survived basis as at the date of trial. While this may occasionally result from the difficulty of proof on a quantum meruit basis, more often it is seen as necessary to provide a meaningful remedy, whether to allow increases (or losses) in property value to accrue to the true title holder, to permit the plaintiff to receive priority in a bankruptcy, or to permit access to consequential remedies such as tracing and following. Not all of these factors can be satisfied by a monetary award. To the extent they can be, a monetary award will be appropriate and there will be no need for a declaration of trust.
In my view, the joint family venture was created, at least in part, to avoid the all or nothing outcome of either a constructive trust or the unsatisfactory (in many cases) fee-for-services award. In many cases the contributions of one party lacked the required link to a specific asset, (necessary for a constructive trust) giving rise to the need to link the contributions with the general accumulation of assets, although that is not the case here. The discussion crafting this remedy in Kerr was premised heavily on the need for flexibility and the uniqueness of individual relationships (see for example para. 84). Given these observations, I do not read Kerr as standing for the inflexible proposition that all assets must fall under the umbrella of the joint enterprise or that a joint family venture can never support a proprietary or monetary remedy over a specific asset. While Cromwell J. may have viewed the joint family venture as mainly a vehicle for unjust enrichment claims over the general estate, the reasons do not exclude a claim for something more limited.
Following Kerr then, one may say that the practical distinction between a monetary award and a proprietary one has been blurred to some extent. Both remedies are responses to unjust enrichment in the family context, but they often amount to the same thing. [Underlining in original, emphasis added]
[228] A similar approach was followed in Jackson, in which the court, while ordering a monetary remedy, calculated it as half of the value of the properties held in the respondent’s name (Jackson, at paras. 69-70).
[229] Consequently, the court has a broad discretion to craft a fair and equitable remedy, with the distinction between proprietary and monetary relief of less practical importance as they are both responses to unjust enrichment in the context of a joint family venture.
Sub-issue 1: Should the value of the Allenwood Property be considered as of the date of trial or the date of separation?
[230] This is a pivotal issue in the remedy analysis. Gonsalves submits that the law supports valuation of the Allenwood Property at $1,380,000 as of May 1, 2016 (taken as the date of trial). Scrymgeour submits that the law supports valuation of the Allenwood Property at $795,000 as of December 15, 2010 (taken as the date of separation). The difference between the values is almost $600,000.
[231] At the outset of trial, the only evidence as to the value of the Allenwood Property was from MPAC assessments (at the time limited to 2010 and 2012 values).
[232] In his initial calculations, Scrymgeour based the value of the Allenwood Property on the 2010 MPAC value, while Gonsalves sought a constructive trust without providing an assessment of value. Prior to closing submissions, the parties agreed to retain a joint valuator whose report was filed with the court for the values at both dates.
[233] For the reasons that follow, I agree with Gonsalves and apply the value as at the date of trial.
[234] In Jackson, Ingram J. considered this issue and held that the proper approach is to consider the value at the date of trial. I adopt his reasons (Jackson, at paras. 66-67):
The values of the three remaining properties will be divided between the parties equally in recognition of their roles as co-venturers.
When should the property be valued? In this case, and in many others, the litigants do not begin their trial immediately after the separation. An important question arises in this case: should the monetary award be based on the values at the time of separation or at the time of trial? In McMillan v. Johnson (Estate), 2011 BCCA 48 at paragraph 60, the court considered this issue in an estate case although McLachlin, C.J. had indicated in Peter v. Beblow, supra that constructive trusts in family law are no different than in other areas of the law. The British Columbia Court of Appeal held that in awarding a monetary award in lieu of a property, the correct valuation date is the date of trial on the basis that the parties are sharing in the benefits and risks of property ownership. [Emphasis added]
[235] An approach that applies the value of the property at trial is consistent with the comments of Garson J.A. in Ibbotson that a proprietary remedy and monetary remedy ought not to lead to different results in the context of a joint family venture (Ibbotson, at paras. 60-62).
[236] Although decided in the context of a constructive trust, Justice Chiappetta’s comments in Ombac v. George, 2015 ONSC 1938 (SCJ) (“Ombac”) apply in the present case (Ombac, at para. 30):
Rather, it appears that the value increased strictly as a result of the passage of 8 years and the natural increases organic to the real estate market. Had George recognized Ombac's rightful beneficial entitlement to the family residence at the time of separation, his payment to her today would be significantly less. He chose however to deny her rightful entitlement for 8 years and must now pay Ombac her 50% beneficial ownership interest based on the current value of the residence at $537,500 or $268,750.
[237] On the facts of the present case, it is particularly unjust to base a monetary remedy on the date of separation when Scrymgeour promised Gonsalves that she would be a joint owner of the Allenwood Property, before they cohabited and moved into what Scrymgeour describes as the “matrimonial home”. Gonsalves even offered to pay half of the down payment.
[238] Scrymgeour also told Gonsalves that she would have her name on the next house as sole owner (at a time when Gonsalves had expressed dissatisfaction with the Allenwood Property) and that title to the Allenwood Property would not matter when they got married.
[239] In such a case, to allow Scrymgeour to benefit from the delay between separation and trial is not just.
[240] Gonsalves’ reasonable expectations were that she was to be a joint owner. She raised that issue before and after the Allenwood Property was purchased. Scrymgeour ought not to benefit from an increased property value over the more than five-year period between separation and the date of trial when he was the party who did not comply with the representations he made about the joint family venture to be undertaken by the parties.
[241] For the above reasons, I apply the valuation of the Allenwood Property as at the date of trial when determining the monetary remedy.
Sub-issue 2: What deductions, if any, should be made for Scrymgeour’s payment of the down payment and part of the Mortgage, or the outstanding balance of the Mortgage?
[242] Gonsalves submits that there should be no deductions for any of these amounts, leaving a total value of $1,380,000 for the Allenwood Property.
[243] Scrymgeour submits that all of these amounts should be deducted, which would result in a net value of $1,019,000 for the Allenwood Property.[^7]
[244] From either net value, the court would then have to address issues relating to mutual benefit conferral and the appropriate percentage of contribution to the joint family venture, which I address below.
[245] The flexible nature of the remedy under Kerr does not provide an equalization regime for common law spouses equivalent to that for married couples. That is a matter for the legislature, as such amendments have been made in other provinces (by way of example, in British Columbia). Consequently, the court must consider the fairness and enrichment principles discussed in Kerr and not overcompensate a party when the contributions were made with no link to the joint family venture, but fairly compensate a party when such a link exists.
[246] For the reasons that follow, I agree with Scrymgeour that it is appropriate to deduct his payment on the Mortgage of the $135,340 he paid from his Wood Gundy account in February 1994, and the $53,600 he paid from that account in October 1996. I do not find that the $35,000 deposit or remaining balance on the Mortgage of $137,060 should be deducted. As a result, the net amount of the Allenwood Property (before considering mutual benefits conferral and the appropriate percentage), would be $1,190,060.
i) The down payment
[247] The deposit of $35,000 is minimal (less than 3% of the current value of the Allenwood Property). Gonsalves would have paid her half of that amount, except for Scrymgeour’s representation that she did not have to do so (and that they would still be joint owners).
[248] Further, Gonsalves was responsible for care of Justin for the three-year period after the ultimatum, with child support only after she hired a lawyer and obtained a court order.
[249] The present case is similar to the decision in Ombac, in which Chiappetta J. fixed ownership on a 50% basis without any deduction for the deposit.
[250] On different facts, the payment of a deposit might be significant, and the court could consider that contribution amongst other factors such as the length of cohabitation. For example, in Junker v. Hughes, 2016 ONCA 81 (“Junker”), the Court of Appeal (without comment on the issue) upheld the decision of the trial judge who credited the appellant for her down payment of $147,000 on a home which cost $272,000, when the parties lived together for seven years (Junker, at para. 23).
[251] However, in the present case, it is not fair to deduct the down payment from the value of the Allenwood Property as it would provide a benefit to Scrymgeour of a deduction when (i) he represented that it would not be necessary; (ii) the down payment was minimal on the Allenwood Property; and (iii) Gonsalves and Scrymgeour lived together for more than 16 years.
[252] Consequently, I do not deduct the down payment from the value of the Allenwood Property.
ii) Payments of part of the Mortgage from the Wood Gundy account
[253] On the facts of the present case, the payment of those funds can be traced out of Scrymgeour’s Wood Gundy account. Those payments were from funds and growth derived from Thomas’ purchase of Scrymgeour’s two common shares in GHL in 1990. Further, the 1994 transfer was made immediately after closing and the October 1996 transfer was early in the cohabitation.
[254] Based on the principle in Kerr that the joint family venture must be linked to the disproportionate share of assets, it would not be fair for Scrymgeour to pay an amount that includes funds[^8] that he put into the Allenwood Property from his own pre-cohabitation assets.
[255] Consequently, I deduct the Wood Gundy transfers of $188,940.
iii) The balance of the Mortgage
[256] With respect to the outstanding balance of the Mortgage, I accept the evidence of Scrymgeour and his brother, David, that the balance is outstanding and is required to be paid upon sale. However, that does not support a deduction from the value of the Allenwood Property.
[257] Scrymgeour acknowledged in his cross-examination that he would have paid off the Mortgage had it been at arm’s-length. The funds to pay off the balance of the Mortgage would have been earned as a result of the joint family venture. Had those arm’s-length payments been made, there would have been no deduction for such payments as the funds would have been linked to the joint family venture.
[258] Scrymgeour should not benefit from a decision by Thomas which permitted Scrymgeour to increase his own personal assets at the expense of not paying the Mortgage. If Scrymgeour is required to pay the balance of the Mortgage at some point, he is not prejudiced as he earned personal funds as a result of the joint family venture. I accept Gonsalves’ submission that:
[T]he issue here is not one of ‘tracing’ but rather the disproportionate accumulation of assets. It matters not which ‘pile’ of the respondent’s assets he used to pay.
[259] In contrast, when parties have used funds linked to a joint family venture to pay down part of an arm’s-length mortgage and there is an outstanding amount, the equity in the property is properly reduced by the amount of the remaining balance of the arm’s-length mortgage.
[260] I further note (although not necessary to the above reasons) that the funds paid by Gonsalves to Scrymgeour from the $400 monthly payments amount to approximately $60,000 which is almost one half of the balance of the Mortgage.
[261] For the above reasons, I do not deduct the balance of the Mortgage from the value of the Allenwood Property.
Sub-issue 3: Should any deduction be made under the basis of mutual benefit conferral?
[262] Scrymgeour submits that Gonsalves’ increase in net worth arising during the cohabitation should be deducted from the value of the Allenwood Property.
[263] Gonsalves fairly acknowledged at trial that her net worth increased from approximately $12,000 in debt to $108,000 by the end of cohabitation, a net gain of $120,000. Using her pension valuation of approximately $15,000, Scrymgeour’s net gain during the relationship would be $135,000.
[264] Scrymgeour submits that up to $225,000 should be deducted as a mutual benefit conferral from the net equity value of the Allenwood Property, before the balance is allocated by percentage of contribution. On the evidence, if an amount were to be deducted for mutual benefit conferral, I find that the correct amount would be $135,000.
[265] However, for the reasons I discuss below, I do not agree that a deduction for mutual benefit conferral is appropriate on the facts of this case.
i) The applicable law
[266] Mutual benefits must be considered when assessing unjust enrichment. In Kerr, Cromwell J. stated (Kerr, at para. 101):
As discussed earlier, the unjust enrichment analysis in domestic situations is often complicated by the fact that there has been a mutual conferral of benefits; each party in almost all cases confers benefits on the other: Parkinson, at p. 222. Of course, a claimant cannot expect both to get back something given to the defendant and retain something received from him or her: Birks, at p. 415. The unjust enrichment analysis must take account of this common sense proposition. How and where in the analysis should this be done? [Emphasis added]
[267] Mutual benefit conferral should be considered at the defence or remedy stage, unless the benefits can be shown to be a juristic cause of the enrichment (Kerr, at para. 109).
[268] As I discuss above, there is no evidence that any benefits received by Gonsalves as a result of the joint family venture were a juristic reason for her to forego the joint ownership promised to her from the outset.
[269] In Ibbotson, Garson J.A. commented on the importance of taking a “global” approach to the issue of mutual benefit conferral, even if a proportionate share is claimed from a single asset. Garson J.A. held (Ibbotson, at para. 63):
Finally, a joint family venture over specific property does not foreclose any opportunity to consider the assets globally. This may be done at the analysis of mutual benefits. While in this case the trial judge found that the equities offset, in many cases, a trial judge could undertake an analysis of the mutual benefits and rebalance the proportionate share of the value survived of a single asset in accordance with the equitable and legal set-off analysis in Wilson (at paras. 65-66; 73, 80-88). [Emphasis added]
[270] I apply the above principles to the facts of this case.
ii) Application of the law to the evidence
[271] Taking a global approach, there is, at a minimum, a balancing of any benefits Gonsalves may have received with a global review of the other assets of Scrymgeour at the date of separation. By way of example, Scrymgeour acknowledges in his financial statement that he has $38,585.41 in his UXL account as of the separation date, and Scrymgeour also acknowledges that he put $70,072.20 in trust for his children (as of the separation date) through income-splitting when he was consulting. In addition, the value of his RRSP increased more than $150,000 during the cohabitation period.
[272] Consequently, under the global approach contemplated in Ibbotson, I make no deduction for benefits conferred on Gonsalves as a result of cohabitation.
Sub-issue 4: What proportion should Gonsalves receive as a contributor to the joint family venture?
[273] If there is unjust enrichment from a joint family venture when one party emerges from the relationship with a disproportionate share of assets accumulated through their joint efforts, the court considers the parties’ respective contributions to determine a proportionate share. That assessment is not an “exact science”. A “minute examination of the give and take of daily life” is not required. Rather, the court must engage in a “reasoned exercise of judgment in light of all the evidence” (Kerr, at para. 102).
[274] Given the long-term cohabitation of 16 years, the three children, and the extent of the contributions I discuss above, I find that the parties should equally share the Allenwood Property, subject to the deductions I discuss above.
[275] This was the approach taken by Ingram J. in Jackson, in which the court held that the total equity in the three properties held by the respondent in his name “is to be divided equally between the parties” (Jackson, at para. 70).
Conclusion on Joint Family Venture Issues
[276] Based on the above, I fix the net value of the Allenwood Property at $1,191,060, and Gonsalves’ share at $595,530.
II. Imputed Income Issues
[277] The issue before the court is the income to be imputed to Scrymgeour and Gonsalves for the purposes of spousal and child support.
[278] I first address the relevant evidence. I then consider the applicable law and apply the law to the evidence in this case.
The Relevant Evidence
i) Evidence related to Gonsalves’ income
[279] Gonsalves earned in the range of $22,000 as a part-time teller at ScotiaBank. She currently works 18.70 hours per week at an hourly rate of $20.33 per hour.
[280] Gonsalves fairly acknowledged at trial that she plans to work full-time, and that a full-time salary would be approximately $40,000 on a current scale.
[281] Gonsalves agreed that her lifestyle while at the Allenwood Property was comfortable but not extravagant. The children did not attend private school, and the family did not take extensive or expensive holidays every year. When they separated, Gonsalves had a 10-year-old car and Scrymgeour had a 5-year-old van.
ii) Evidence relevant to Scrymgeour on income issues
[282] Gonsalves submits that the court should impute income based on (i) Scrymgeour’s ability to seek employment as an accountant, trustee in bankruptcy, or as a consultant, (ii) funds Scrymgeour received as inheritances from his mother and father, and (iii) Scrymgeour’s one-third interest in GHL, the holding company established by his father. I address the evidence on these issues below.
a) Employment
[283] I summarize these facts at paragraph 316 below and do not restate them in this section.
b) Funds from mother’s inheritance
[284] Scrymgeour received $457,936.10 from his mother’s estate in four separate distributions, three in 2011 and one in August 2012. Each sibling received the same amount.
[285] By the commencement of trial, the balance of the inheritance was in Scrymgeour’s two investment accounts at TD Waterhouse, totalling $392,805.69, three TFSA’s totalling $35,827.48 and some funds in his chequing and savings account totalling $15,901.31.
[286] Scrymgeour declared interest earned on these funds as part of his income.
c) Funds from father’s inheritance
[287] Scrymgeour’s father, Thomas, had an estate valued at $4,880,366.95 at distribution. $866,085.41 of this amount was distributed to various charities in 2012, the year Thomas died.
[288] The remaining balance of funds (approximately $4 million) was equally allocated to the three children, with Sandra receiving approximately $1.3 million for her to make her own charitable donations.
[289] The remaining balance of approximately $2.6 million constituted David and Scrymgeour’s respective shares of approximately $1.3 million. Scrymgeour and David pledged their inheritances to the University of Toronto to establish scholarships in the Scrymgeour name.
[290] Approximately $1.6 million of the amount pledged by Scrymgeour and David was donated by the trial date. A further $500,000 was to be paid in 2016, with the balance to be paid by December 31, 2017.
[291] I accept the evidence of Scrymgeour and David that it was their father’s wish that his estate be distributed to charity and, in particular, that Scrymgeour and David distribute their shares of Thomas’ estate to the University of Toronto. A good friend and mentor of Thomas had established a scholarship at the university and Thomas wanted to do the same.
[292] I accept the evidence of Scrymgeour and David that both parents (i) wanted Thomas’ monies go to charitable institutions and (ii) held discussions with their children about their charitable intent.
[293] I accept Scrymgeour’s evidence that he renounced his interest in writing by a document prepared at the request of legal counsel at the University of Toronto at the end of 2012.
[294] Thomas’ will does not directly leave his estate to charity, but it is consistent with the evidence of Scrymgeour and David that their parents hoped that their children would fulfil their parents’ charitable wishes. Clause iv of the will provides:
- A child’s share [would be distributed] to each child of mine who, provided they do not renounce their interest as specified in this clause, is alive at the time of my death:
a. A child of mine may renounce his/her interest in his/her share in favour of a family foundation, not for profit or registered charity that they designate;
b. A child may renounce his/her interest in his/her share of my estate by providing my Trustee with notice in writing of the intention to renounce and, in the same notice, designating the family foundation, not for profit or registered charity.
c. Where one of my children renounces his/her interest in my estate then my Trustee is directed to give effect to the designation contained in the written notice. The estate shall give effect to the designation in the most tax efficient manner possible.
d) Interest in GHL
[295] GHL is a holding company set up by Thomas in 1980. Each of the children originally had five common shares, but Thomas bought back two common shares from each of the children in 1990 for $50,000 each such that, as of the date of cohabitation in 1994, each child had three common shares and Thomas had six common shares.
[296] The only asset of GHL was an investment account. As of January 2012, the value of that account was approximately $2.93 million. The source of those funds to create the investment account came from Thomas’ 1986 sale of his 50% share of his “DataFile” business, which he sold for $3 million.
[297] Thomas had full voting control of GHL, with 1,000 voting preference shares.
[298] The share structure of GHL did not change at any time during cohabitation until 2012. When Thomas’s cancer returned, the share structure changed. David became the owner of the preferred shares as well as the owner of nine common shares.
[299] David is the sole director and officer of GHL. The investment account of GHL now focuses on growth and capital gains instead of interest income from preference shares and bonds. Steven’s only involvement in GHL is that he prepared its financial statements when David acquired control of the company.
[300] Between 1994 and 2010, Scrymgeour received no funds, salary, or dividend from GHL, and did not render services for it. After his father’s death, Scrymgeour received one dividend of $50,000 in 2013 from GHL.
The Applicable Law
i) The principles relevant to imputing employment income
[301] The test for imputation of income from under-employment is set out in Drygala v. Pauli, 2002 CanLII 41868 (ON CA), 2002 CarswellOnt 3228 (CA) (“Drygala”). The principles can be summarized as follows (Drygala, at paras. 22-36):
a) Section 19(1)(a) of the Regulations Establishing Federal Child Support Guidelines, SOR/97-175 provide that the court may impute income to a spouse as it considers appropriate in the circumstances, which include when a parent or spouse is intentionally under-employed or unemployed except where required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the parent or spouse;
b) There is no need to find a specific intent to evade child support obligations before income can be imputed;
c) A parent is intentionally under-employed if that parent chooses to earn less than he or she is capable of earning. It does not apply to situations in which, through no fault or act of their own, spouses are laid off, terminated or given reduced hours of work;
d) Spouses have a joint financial obligation to maintain the children of the marriage in accordance with their relative abilities to contribute to the performance of that obligation; and
e) A parent must earn what he or she is capable of earning.
[302] When imputing income based on intentional under-employment or unemployment, a court must consider what is reasonable in the circumstances. The factors to be considered include age, education, experience, skills and health of the parent, as well as the availability of job opportunities, the number of hours, and the hourly rate that the parent could reasonably be expected to obtain (Drygala, at para. 45).
[303] Persistence in unremunerated and under-remunerative employment constitutes intentional under-employment (Caine v. Ferguson, 2012 ONCJ 139, at para. 20).
ii) The principles relevant to determining income from capital assets
[304] Capital amounts themselves should not generally be regarded as income for the purpose of calculating child or spousal support. The income they can reasonably generate should be imputed for the purposes of calculating the amount of support (Laurain v. Clarke, 2011 ONSC 7195 (“Laurain”), at para. 55).
[305] A party must act reasonably in adopting an investment strategy (Spikula v. Spikula, 2008 CanLII 51783 (SCJ), at para. 62).
[306] The court can base its calculation of support on the income that the payor was capable of earning but did not because he chose to live on his capital instead (Laurain, at para. 102).
[307] Reckless depletion of a capital fund could support a finding that capital is not reasonably utilized to generate income (Dalton v. Craig, 2001 CarswellOnt (SCJ), at para. 30).
iii) The principles relevant to inheritances
[308] A post-separation inheritance is not a result of the economic union of the parties (Thomson v. Thomson, 2004 CarswellOnt 3404 (SCJ) (“Thomson”), at para. 51). Income produced from the inherited asset forms part of income (Thomson, at para. 52).
[309] The court must guard against redistributing the payor’s capital in the guise of support (Marinangeli v. Marinangeli, 2003 CanLII 27673 (ON CA), 2003 CarswellOnt 2691 (CA), at para. 74).
[310] Inherited property which is exempt from equalization provisions on marriage breakdown should not be looked to for support where the inherited property is not an income-producing asset. If a party chooses to share some of his inheritance with his children or charity, that has no bearing on the support (Gogas v. Gogas, 2011 CarswellOnt 7172 (SCJ), at para. 30).
Application of the Law to the Evidence
[311] It is not contested that $40,000 is the income properly imputed to Gonsalves on the basis that she can return to full-time work as a bank-teller. I impute this income on an ongoing basis and for the period from 2013 to 2015.
[312] The issue is the appropriate income to impute to Scrymgeour.
i) Positions of the parties
[313] Gonsalves submits that Scrymgeour’s income from employment should be imputed at $200,000 per year with $180,000 imputed for investment income based on a 4.5% rate of return on Scrymgeour’s inheritance and holdings in GHL. Consequently, Gonsalves asks the court to impute a total income of $380,000 per year to Scrymgeour.
[314] Scrymgeour submits that his income from all sources should be imputed at $75,000.
[315] I find that both positions are not reasonable based on the evidence before me.
ii) Scrymgeour’s employment income
[316] The facts relevant to Scrymgeour’s imputed income from employment are as follows:
a) Scrymgeour never worked as a chartered accountant;
b) Scrymgeour became qualified as a trustee in bankruptcy, but became part of Deloitte’s consulting group;
c) Scrymgeour moved to Management Solutions at Deloitte which focused on smaller consulting opportunities. He did not manage a team of people or develop strategy for clients;
d) Scrymgeour did not bring in clients and did not lead executive or board meetings which were led by partners;
e) Scrymgeour left Deloitte in 1999 when he was earning $100,000. This was based on the joint decision of Scrymgeour and Gonsalves to be more involved with their children. Gonsalves felt like a “single mom” and “she wanted the children to grow up with a father”;
f) Scrymgeour worked on his own as a consultant in 1999 and 2000 and did not earn significant income;
g) In 2000, Deloitte refused Scrymgeour’s request to return to work;
h) Scrymgeour was able to get multiple contracts with BMO based on his “balanced scorecard” projects and a project related to “PeopleSoft” software, with his peak income approximately $180,000;
i) After his fourth contract with BMO, Scrymgeour could not get additional contract work with BMO because Revenue Canada took the position that an individual on contract for more than two years was considered an employee, and BMO did not want to have any such issues related to source deduction if Scrymgeour remained as a consultant;
j) Further, Gonsalves did not want Scrymgeour to work at BMO. She felt that Scrymgeour was working too hard at BMO and “thought it would be better if he could split his time a little bit more evenly between work and his kids” and “he was just doing too much again for them and not enough at home”. She was supportive of his decision not to continue to work at BMO when the contracts were not renewed even though he would lose the income;
k) Scrymgeour never got another contract from BMO after January 2005. A potential contract with BMO in 2008 did not materialize due to the collapse of the financial markets;
l) In or about 2006, Scrymgeour had a few contracts with the Ontario Association of Radiologists and for sleep studies for small income amounts ($15,000 or less);
m) Scrymgeour worked with Business Development Bank of Canada managers to assist start-up companies to come up with a business plan and present financial information to obtain loans. However, Scrymgeour did not get paid unless the client got a loan. Only one client got a loan and Scrymgeour received $2,500;
n) Scrymgeour attempted on-line sales for “Outlook Purification” systems which had the distribution rights to air purifiers and humidifiers. He thought he could use his connections with senior citizen homes but they did not need the products. Scrymgeour pursued this venture for a year but it was not successful;
o) Scrymgeour’s income between 2006 to 2010 was in the general range of $20,000, including RRSP withdrawals from time to time;
p) After separation, Scrymgeour’s employment income remained in the range of $20,000. As of his father’s death in 2012, he began working for his father’s former companies (controlled by David) and for some of David’s companies;
q) Scrymgeour pursued other employment ventures through a headhunter who specialized in financial work but was not successful. He applied for contract work through another agency and was not successful;
r) Scrymgeour had more recent meetings with a consulting firm with the hope of building up his resumé by providing unpaid mentoring. Scrymgeour hopes that it will help him to obtain consulting work; and
s) Scrymgeour is employed by David’s companies as a bookkeeper at $50 per hour. Scrymgeour works on average one day per week for up to $2,000 per month.
[317] Based on the above evidence, it is not reasonable to conclude that Scrymgeour can return to the workforce and earn $200,000 per year. He never worked as a chartered accountant or as a trustee in bankruptcy, so it is not reasonable to seek income based on those professions.
[318] Further, there is no evidence that Scrymgeour can return to the workforce as an independent contractor in performance management. The processes in which he specialized are now obsolete, and he was not able to obtain many contracts after his work with BMO.
[319] On the other hand, Scrymgeour currently works only up to 40 hours per week in a bookkeeping role for his brother’s companies, earning $50 per hour which is the “market rate” for such services as per the uncontested evidence of David and Scrymgeour.
[320] I find that Scrymgeour could seek and obtain full-time work as a bookkeeper. He has significant financial and consulting experience with varied businesses. At an hourly rate of $50 per hour, and based on a weekly salary of $2,000, I impute his employment income at $98,000 per year based on a 49-week work year.
iii) Scrymgeour’s investment income from disclosed sources (mother’s inheritances, dividends, capital gains)
[321] After 2012, Scrymgeour received an inheritance from his mother and began to receive regular income from dividends and capital gains. That income was approximately $81,000 in 2013, $43,000 in 2014, and $34,000 in 2015.
[322] There has been a significant increase in Scrymgeour’s dividend and interest income since 2012. Those amounts include a dividend payment from GHL, capital gains income from the sale of shares from his mother’s inheritance, and other interest and foreign investment income. David has paid dividends from GHL to himself, Sandra, and Scrymgeour from time to time since 2012.
[323] The average of Scrymgeour’s disclosed investment income between the three-year period of 2013 to 2015 is $52,000 per year. I add that income to his employment income.
iv) Scrymgeour’s income in relation to his father’s inheritance and his interest in GHL
[324] I do not impute income from Scrymgeour’s inheritance from his father or his interest in GHL.
a) Father’s inheritance
[325] Scrymgeour renounced his interest in Thomas’ estate, as did his siblings. The funds have been donated to the University of Toronto pursuant to endowment agreements and the scholarships have been established under the Scrymgeour family name, which was at the request of Thomas who wanted to be memorialized.
[326] In the present case, I adopt the analysis of Healey J. in Gogas and find that Gonsalves “is not entitled to share in any aspect of that inheritance” since it is not “an income producing asset”. Scrymgeour is entitled to donate his inheritance to charity (Gogas, at para. 30).
[327] There is no evidence that Scrymgeour donated his inheritance to deliberately reduce his support obligations. To the contrary, the evidence is that Thomas had lengthy conversations with his children about his wishes that his estate be left to charity.
[328] The will is consistent with those discussions. While Thomas did not directly bequeath his assets to the University of Toronto, he left his children with an option: they could renounce their interests and fulfil Thomas’ wishes, or take their share if they so choose. All of the children chose to comply with the family’s wishes.
[329] It is clear from Laurain that inheritance income is not to be redistributed for support, although income generated from inherited assets is to be included.
[330] Also, I do not find that it is “reckless depletion of a capital fund” to renounce the inheritance. The inheritance was renounced pursuant to Thomas’ wishes.
[331] For the above reasons, I do not include a rate of return on the inheritance renounced by Scrymgeour and donated to the University of Toronto as part of Scrymgeour’s income.
b) GHL
[332] I do not include a reasonable rate of return based on Scrymgeour’s ownership of a one-third share of the common shares of GHL, except for my inclusion of dividend income as I discuss above.
[333] Scrymgeour has no access to GHL. David has control of the company and but for the dividend in 2013 (which was disclosed on Scrymgeour’s income tax return), Scrymgeour has not received funds from GHL.
[334] Gonsalves submits that Scrymgeour could release the value in GHL (estimated at $3 million in total and $1 million for Scrymgeour’s share) through an oppression application to compel dissolution of the company.
[335] A party claiming oppression must satisfy the court that his or her reasonable expectations as a shareholder have been oppressed. There is no evidence that either Scrymgeour, Sandra, or David had a reasonable expectation that the investment account would be distributed to them. Rather, (i) Thomas treated the funds as his own; and (ii) there is evidence from David that Thomas’ intention was to distribute GHL funds in the same charitable manner as with the inheritance.
[336] Further, prior to Thomas’ death, he had full control of the company and the evidence is uncontested that he treated it as his “pension fund”, even though the children held nine of the 15 common shares. Thomas had full voting control of the company, just as David now has that control.
[337] Consequently, I do not find it reasonable based on the evidence before me to impute income on a capital fund on the basis of a potential oppression claim, particularly as David did not agree at trial that he would dissolve the company and release the one-third share of funds to Scrymgeour if asked.
[338] For the above reasons, I do not include a reasonable return on the $1 million share of GHL.
Conclusion on Imputed Income Issues
[339] For the above reasons, I impute income to Scrymgeour on an ongoing basis at a total amount of $150,000 per year ($98,000 from employment and $52,000 from investments).
[340] For the years 2013 to 2015, I impute the same amount of $98,000 as employment income. John was aged 11 to 13 during those years and there is no evidence that Scrymgeour could not have obtained full-time employment.
[341] Combined with Scrymgeour’s investment income for 2013 to 2015 as I set out at paragraph 321 above, I impute Scrymgeour’s total income at $179,000 for 2013, $141,000 for 2014, and $132,000 for 2015.
Order and costs
[342] For the above reasons, I order as follows:
a) Scrymgeour is to pay Gonsalves the amount of $595,530;
b) Scrymgeour’s imputed income on an ongoing basis is set at $150,000, with retroactive income as determined at paragraph 341 above.
[343] I will conduct a case conference to address the process for the remaining support issues and costs, to be scheduled by counsel through the Family Law Office.
[344] I thank counsel for their thorough preparation at trial and the assistance provided to the court through their oral and written submissions.
Justice Glustein
DATE: 20161027
CITATION: Gonsalves v. Scrymgeour, 2016 ONSC 6659
COURT FILE NO.: FS-12-18256
DATE: 20161027
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
PRUDENCE PERSAUD GONSALVES
Applicant
– and –
STEVEN SCRYMGEOUR
Respondent
JUDGMENT
GLUSTEIN J.
Released: 20161027
[^1]: In these Reasons, I refer to the respondent, Steven Scrymgeour, as “Scrymgeour”. As I set out below, I refer to his other family members by their first names, David (Scrymgeour’s brother, Thomas David Scrymgeour), Sandra (Scrymgeour’s sister, Sandra Beaumont), and Thomas (Thomas Charles Scrymgeour, the father of Scrymgeour, David, and Sandra). [^2]: All references in quotations in this paragraph are from the decision of Stinson J. in Davies, at para. 32, as cited above. [^3]: The first child of Gonsalves and Scrymgeour born in 1991 when they were dating as discussed below. [^4]: All references in quotations in this paragraph are from the decision of Stinson J. in Davies, at para. 31, as cited above. [^5]: As I discuss above, Scrymgeour’s evidence is that Gonsalves did not contribute to their joint investment account. The “mutual effort” would exist regardless of this account, as would economic integration as I discuss below, so the issue of who contributed to the account (or even the existence of a joint account) is not necessary for my conclusion as to the existence of a joint family venture. [^6]: Garson J.A. was the only judge on the panel who considered the issues of joint family venture as the other members of the court held that the trial judge correctly found a proprietary constructive trust. [^7]: This amount applies only if the valuation date is the date of trial, which Scrymgeour opposes as I discuss above. If the $795,000 amount is used, the deductions proposed by Scrymgeour would reduce the net amount of the Allenwood Property to $434,000 before considering mutual benefits conferral and the appropriate percentage. [^8]: (but not any increase in the value of the home as a result of the funds, which would be part of the remedy calculation based on my analysis at paras. 200-210 above)