Court File and Parties
COURT FILE NO.: 13/16 DATE: 2018-09-06 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
MICHELLE MAUREEN KAMERMANS Applicant DAVID GUSTAAF GABOR Respondent
COUNSEL: Michellene A. Beauchamp, for the Applicant James G. Battin, for the Respondent
HEARD: April 24 and 25, 2018 at Woodstock; written argument completed June 8, 2018
HEENEY J.:
Reasons for Judgment
[1] The sole issue in this case is whether the respondent, who contributed the entire down payment toward the purchase of the home in which the parties resided as common law spouses (title to which was taken in joint tenancy) should receive that down payment “off the top” from the proceeds of sale of that home, with the balance to be divided equally. He claims that the applicant will be unjustly enriched if the entire proceeds of sale are divided equally, and claims a constructive trust in the applicant’s interest to the extent of one-half of his down payment.
[2] The remaining issues in this case, including the applicant’s claim for spousal support, have either been resolved between the parties or withdrawn.
The Facts:
[3] The parties began dating in May or June 2007. They began residing together in a common-law relationship when the applicant and her two children moved in with the respondent to his home on Beckett Boulevard. That happened in September 2008, according to the evidence of the respondent. The applicant testified that cohabitation began in September 2007, but she also said that they resided at Beckett Blvd. for almost 2 years until they bought 86 Concession St. W. in July 2010. That would make the September 2008 date the correct one for the commencement of cohabitation, although not a great deal turns on it.
[4] The evidence of the parties differs as to the applicant’s contribution to the maintenance of Beckett Blvd. According to her, the property was overgrown, and she spent two weeks pulling weeds, adding soil, planting and so on. She fixed walls in the garage and painted the interior of the house extensively.
[5] The respondent denies that she did any work outside, and says that all of that work was done by him and his nephew Trevor Chambers. Trevor was unable to testify to corroborate this evidence because he is in Australia. According to the respondent, all the applicant did outside was pull the odd weed. He does, however, concede that she painted the entire interior of the house a least three times, and supplied her own paint in the process. He values her work at $5,000, and is prepared to compensate her in that amount.
[6] It seems to me obvious that painting an entire house three times is worth more than $5,000. The conflict in the evidence as to her outside work is not particularly significant, since it only amounted to two week’s work in any event. While putting a quantum meruit value on her interior painting is not an exact science, it seems to me that $2,500 for each round of house painting is a reasonable amount. Thus, I assess her contribution to Beckett Blvd. at $7,500.
[7] In 2010 they discovered a house at 86 Concession St. W. with a large lot and a great deal of potential, although on the evidence of both parties it was in terrible condition. From the photographs filed one could describe it as a “fixer-upper”, although no-one used that label in their testimony. It had an indoor pool filled with bugs, mouldy carpets, doors falling off the kitchen cabinets and mould in the basement. It required extensive renovations inside, including new flooring, doors and millwork, as well as a great deal of exterior work.
[8] According to the applicant, the respondent asked her if she was up to the challenge of buying this house. He told her he couldn’t have bought the house with anyone else, because he knows her talent and ambition.
[9] The respondent said the property was “in very rough shape”. He said they didn’t look at any other properties at the time, because this was the one they decided on. He said they discussed how to clean it up, and what it would be worth after they put their money and time into it. And it did, ultimately, take a lot of work from both of them to complete the renovation.
[10] The respondent testified that he told the applicant at the time of purchase that if things didn’t work out between them, he wanted his down payment back and they would split everything thereafter. He said the applicant was fine with that. The applicant denies that any such conversation ever took place.
[11] They decided to put in an Offer to Purchase, and took title as joint tenants on July 6, 2010. The respondent sold Beckett Blvd. on the same date, and was left with net proceeds of sale of $88,129.65, which was received by Mr. Battin, who did the real estate transaction. However, the respondent received back a cheque for $17,667.93 from those proceeds, which was, on the evidence of both parties, used for renovations at a later date. Thus, the amount actually paid by the respondent as a down payment toward the purchase was $70,461.72. The balance of the purchase price of $240,000 was contributed by both parties through a mortgage with the Bank of Nova Scotia in the amount of $170,000, which they both signed and upon which they were both liable.
[12] Following the purchase of 86 Concession St. W., the work began. The applicant kept meticulous records of the jobs she did and expenses she incurred renovating and improving the property, and a summary of her time and materials is found at Ex. #1 Tab 3. She considers herself to be a professional painter, and values her time at $55 per hour. She calculated her labour and materials on the renovation project to be $36,788.
[13] Her work included rehabilitating the three fish ponds in the rear yard, planting bushes and plants and removing, cleaning and placing all of the rocks back; landscaping the front yard; installing a patio stone walkway; painting the concrete porch; painting the pool and the interior of the house, which required a skim coat of drywall compound on the walls because of their condition; painting the deck, soffits, renovating the bathroom, and so on.
[14] The respondent detailed the many tasks done by him, including removing shrubbery and trees from outside; demolishing the basement; tearing out flooring; installing interior doors, casing and baseboards; installing ceramic tile in the kitchen floor; and renovating the bathroom down to the studs, with new drywall and flooring. He testified that he paid for “a lot” of the materials but clearly not for all of them, and was unable to say what the applicant paid for.
[15] Both parties went into extensive detail as to the work each one put into renovating this property. Their evidence differs considerably in many of the details, but it is not necessary to spend time analyzing and resolving those conflicts in the evidence. This is because it is clear on the evidence that both parties worked together, and very hard, on this project. The applicant testified that “everything was a joint effort for the first few years, both of us worked on the house”. The respondent testified that he put as much labour into the house as the applicant did. From the receipts and other records filed, both parties also expended a considerable amount of money purchasing materials for these renovations.
[16] The respondent paid the mortgage payments, but the applicant maintains that she paid the utility accounts, and has receipts to prove it. She thereby made an indirect contribution toward the mortgage payments. The respondent disputed this, and testified that it was he who paid the utilities, but was unable to point to any entries in his bank records showing such payments being made. He denied that the applicant provided him with any meals, and testified that he paid for his own food. However, his ledger shows that in 2011 he spent only $328.62 for food. When confronted on cross-examination with the fact that this meant he was surviving on less than $1 per day, he stood by his evidence. His refusal to admit such an obvious error in his evidence gives me cause to doubt many of the other entries in his ledger.
[17] Once again, though, it is not necessary or desirable to go through a line by line analysis of who paid what expense during cohabitation. Both parties had jobs throughout cohabitation and used those earnings toward the cost of running and renovating the house. On all of the evidence, I am satisfied that both parties made significant and roughly equal contributions toward their overall living expenses and toward the domestic tasks of running a home, and it is not necessary to be more precise than that.
[18] Their relationship came to an end in February 2016, when the applicant accused the respondent of assaulting her and her daughter. Charges were laid and the respondent was ultimately found not guilty.
[19] The Concession St. W. home was sold on May 20, 2016, and pursuant to a consent order the net proceeds were paid into trust, after the payment of $19,000 to each party. After making those payments, the remaining proceeds now stand at $92,281.57, including interest accrued to the date of trial.
Analysis:
[20] The respondent, in para. 26 of his written argument, states that he is entitled to receive the sum of $88,129.55 from the sale proceeds, but does not state the legal basis for that entitlement. He goes on to state “[i]n the alternative, the Respondent should receive his half of the said amount ($44,064.82) and the balance of $44,064.83 based on the principles of constructive trust and unjust enrichment.”
[21] He filed the leading case of Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269 with his materials, and I will have much to say about that decision below. He also filed a second case, Gaunt v. Woudenberg, [2005] O.J. No. 2413 (S.C.J.) and stated that he relied upon that decision as well. That case involved a common law couple who purchased a home in joint names for $200,000, where the defendant advanced all of the $64,000 down payment. The issue was whether the plaintiff was entitled to 50% of the equity upon the sale of the property. Minden J. reviewed several authorities dealing with resulting trust, where one party advances the purchase money, but title is taken in the name of another. He noted at para. 12 that the trust of a legal estate “results to the man who advances the purchase money”. This presumption of resulting trust shifted the onus to the plaintiff to rebut the presumption by proving that the defendant’s advance of the down payment was a gift.
[22] He concluded as follows, at para. 96:
In my view the parties did not expressly or by implication, form a mutual intention at the material time that one-half of the equity of Sheppard would be a gift. The plaintiff did not meet the evidentiary threshold required to rebut the presumption of resulting trust. I conclude, therefore that the presumption of resulting trust applied and that she held her share of the equity of Sheppard in trust for the defendant.
[23] The applicant argues that Minden J. decided this case based upon the concept of common intention resulting trust. In Kerr, Cromwell J. ruled at para. 29 that a resulting trust arising from the common intention of the parties no longer has any useful role to play in resolving property and financial disputes in domestic cases. The applicant, therefore, argues that Gaunt is no longer good law and cannot be relied upon by the respondent.
[24] The problem with this argument is that, while it is no longer necessary to prove common intention, the intention of the grantor remains relevant in the law of resulting trust. At para. 25, Cromwell J. said this:
Where the issue of intention is relevant to the finding of resulting trust, it is the intention of the grantor or contributor alone that counts.
[25] The evidence of the respondent is that his intention was to receive a refund of the down payment in the event of a separation. The evidence of the applicant was entirely neutral on this issue. She did not allege that the respondent intended to make a gift of one-half of the down payment to her. Rather, the net effect of her evidence is that there was no discussion one way or the other as to the down payment. Accordingly, this change in the law does not assist the applicant.
[26] However, there are other reasons why Gaunt cannot be relied upon by the respondent. To begin with, the respondent does not allege that, in having the applicant’s name put on title as a joint tenant, his intention was that she would hold her interest in trust for him, with the net effect being that he would be, in law and equity, the sole owner. Rather, he testified that she would have the full rights of a joint tenant to become the sole owner of the home in the event of his death, and to share equally in the proceeds of sale of the home. His only qualifier was that he should receive his down payment back before any proceeds were divided. That is quite a different thing than is contemplated by the presumption of resulting trust.
[27] More importantly, though, the respondent never pleaded that he was entitled to a resulting trust in his favour. In his Answer he only requested that the property be sold pursuant to the Partition Act. He did allege in the body of his Answer that he told the applicant that he was to receive reimbursement for the down payment from the proceeds of sale, but nowhere in his pleadings did he request that the court impose a trust of any kind on the applicant’s interest.
[28] In the Trial Scheduling Endorsement Form, the issue of the respondent’s claim arising out of unjust enrichment was flagged as one of the key issues to be litigated at trial. In his opening comments at trial, counsel for the respondent stated that the sole issue at trial was the respondent’s claim for constructive trust. During the course of the trial, I requested that the respondent’s pleadings be formally amended to reflect what was actually being claimed, and that amendment is reflected in Ex. #8, which claims the return of the down payment pursuant to constructive trust.
[29] In his reply written argument, the respondent agrees that Gaunt is no longer applicable, and was not pleaded or argued at trial.
[30] Accordingly, I conclude that this case must be analyzed and decided as a claim of unjust enrichment and constructive trust, as elucidated in Kerr, and not as a claim for resulting trust. There are very good reasons for doing so. As Cromwell J. noted at para. 23, the remedial constructive trust has become “the more flexible and appropriate lens through which to view property and financial disputes in domestic situations.” At para. 82 it was described as “the preferable method of responding to the inequities brought about by the breakdown of a common law relationship…”
[31] The resulting trust focusses solely on the initial transaction, where title was gratuitously put in the name of someone who advanced no consideration for the purchase. Constructive trust, however, allows the court to take account of the entire history of the couple in question, and will include a consideration of improvements made to the property by each party subsequent to its purchase, and the exchange of mutual benefits during cohabitation. This analysis “can, and should, take place whether or not the defendant has made a formal counterclaim or pleaded set-off”: Kerr, at para. 109. That is important in the case at bar, because the applicant relies heavily on the labour and expenses she incurred in renovating the property as a defence to the respondent’s claim for the return of the down payment. Theoretically, that amounts to a claim that, should the court find that she held her interest in the property in trust for the respondent by reason of his advancement of the down payment, the court should go on to find that this same interest should be impressed with a constructive trust in her favour by reason of her contributions to the improvement of the property subsequent to its purchase. Fortunately, no such exercise in legal draftsmanship is now called for.
[32] Dispensing with the resulting trust analysis also has the effect of rendering irrelevant the authorities filed by the applicant in written argument. She relies upon Jackson v. Mayerle, [2016] O.J. No. 162 (S.C.J.), Fias v. Souto, [2015] O.J. No. 591 (S.C.J.) and Gregory v. Gregory, [2015] ONSC 488 in support of her argument that the entire proceeds of sale should be equally divided. However, each of those cases was a resulting trust case, where the presumption was found to have been rebutted and a gift had been proven.
[33] Before embarking on a consideration of the elements of an unjust enrichment/constructive trust claim, I should briefly deal with the issue as to the alleged agreement to reimburse the respondent for the down payment in the event the parties separated, and whether it has any impact on the issues to be decided.
[34] I am not persuaded that there was any agreement between the parties that, in the event of a separation, the respondent would get the return of his down payment and the parties would split the balance. Had he wished to protect his down payment, there are ways he could have done so, such as having title taken as tenants in common in unequal shares, or having the parties sign an agreement to that effect. He had a lawyer act for him on the transaction, and I would have expected some evidence of a discussion with his lawyer as to how he could protect his investment. The applicant was credible in her denial that any such discussion ever took place.
[35] This finding is largely academic, however, because even if there had been a verbal agreement to that end, it would have been unenforceable. Such an agreement would constitute a form of cohabitation agreement, since it determines how the major asset owned by the parties would be divided upon the cessation of cohabitation. Section 55(1) of the Family Law Act provides that a domestic contact, which is defined to include a cohabitation agreement, is unenforceable unless made in writing, signed by the parties and witnessed.
[36] I now move to consider the respondent’s claim that dividing the entire proceeds of sale equally will unjustly enrich the applicant, such that a constructive trust should be declared in his favour over a portion of the applicant’s interest in the proceeds, sufficient to reimburse him for the down payment he paid.
[37] There are three elements that must be proven by the respondent to establish that an unjust enrichment has occurred: first, that the applicant has been enriched by the respondent; second, that the respondent has suffered a corresponding deprivation; and, third, that the benefit and corresponding detriment must have occurred without a juristic reason: Kerr at paras. 36 – 40.
[38] As to the first element, when the respondent contributed the down payment to the purchase of property being taken as joint tenants by both parties, the applicant was enriched by reason of the instant equity she became owner of by reason of the down payment. The amount of that enrichment was not, however, the $88,129.71 which came from the sale of Beckett Blvd., because $17,667.73 was refunded at the time of closing. While that sum was later used during the course of renovations, it did not result in any instant equity in favour of the applicant. That sum is relevant to the issue of the conferral of mutual benefits and the applicant’s claims relating to her labour and expenses incurred in renovating the property, but not to the equity generated at the time of purchase. Thus, the net amount of $70,461.98 is the amount of equity that was instantly generated by the application of the down payment to the purchase of 86 Concession St. W.
[39] That money came from the sale of Beckett Blvd., which was solely owned by the respondent, and represents, in part, equity he had built up through ownership of a previous property, the proceeds of which he rolled into the purchase of Beckett Blvd. It is here that the applicant’s contribution to the improvement of Beckett Blvd. should be taken into account. The respondent concedes that the applicant made contributions to the upkeep and improvement of Beckett Blvd. for which she should be compensated, and I have fixed that compensation at $7,500. That compensation, in my view, should be reflected in a notional share of the proceeds of sale generated by Beckett Blvd., since it is causally linked to that property. Thus, it can be said that the respondent contributed $62,961.98 to the purchase of 86 Concession St. W., while the applicant contributed $7,500.
[40] This means that the respondent contributed $55,461.98 more than the applicant did towards the purchase. Since the applicant was a joint tenant, and owner of an undivided one-half interest in the property, she instantly acquired equity equivalent to one-half of that amount, i.e. $27,730.99. She was thereby enriched.
[41] The respondent was correspondingly deprived in that same amount, since he gave away that equity to the applicant.
[42] As to the third element, Cromwell J. discussed what this means at paras. 40 – 44 of Kerr:
The third element of an unjust enrichment claim is that the benefit and corresponding detriment must have occurred without a juristic reason. To put it simply, this means that there is no reason in law or justice for the defendant's retention of the benefit conferred by the plaintiff, making its retention "unjust" in the circumstances of the case: see Pettkus, at p. 848; Rathwell, at p. 456; Sorochan, at p. 44; Peter, at p. 987; Peel, at pp. 784 and 788; Garland, at para. 30.
Juristic reasons to deny recovery may be the intention to make a gift (referred to as a "donative intent"), a contract, or a disposition of law (Peter, at pp. 990-91; Garland, at para. 44; Rathwell, at p. 455). The latter category generally includes circumstances where the enrichment of the defendant at the plaintiff's expense is required by law, such as where a valid statute denies recovery (P. D. Maddaugh and J. D. McCamus, The Law of Restitution (1990), at p. 46; Reference re Goods and Services Tax, 1992 SCC 69, [1992] 2 S.C.R. 445; Mack v. Canada (Attorney General) (2002), 60 O.R. (3d) 737 (C.A.)). However, just as the Court has resisted a purely categorical approach to unjust enrichment claims, it has also refused to limit juristic reasons to a closed list. This third stage of the unjust enrichment analysis provides for due consideration of the autonomy of the parties, including factors such as "the legitimate expectation of the parties, the right of parties to order their affairs by contract" (Peel, at p. 803).
A critical early question in domestic claims was whether the provision of domestic services could support a claim for unjust enrichment. After some doubts, the matter was conclusively resolved in Peter, where the Court held that they could. A spouse or domestic partner generally has no duty, at common law, equity, or by statute, to perform work or services for the other. It follows, on a straightforward economic approach, that there is no reason to distinguish domestic services from other contributions (Peter, at pp. 991 and 993; Sorochan, at p. 46). They constitute an enrichment because such services are of great value to the family and to the other spouse; any other conclusion devalues contributions, mostly by women, to the family economy (Peter, at p. 993). The unpaid provision of services (including domestic services) or labour may also constitute a deprivation because the full-time devotion of one's labour and earnings without compensation may readily be viewed as such. The Court rejected the view that such services could not found an unjust enrichment claim because they are performed out of "natural love and affection" (Peter, at pp. 989-95, per McLachlin J., and pp. 1012-16, per Cory J.).
In Garland, the Court set out a two-step analysis for the absence of juristic reason. It is important to remember that what prompted this development was to ensure that the juristic reason analysis was not "purely subjective", thereby building into the unjust enrichment analysis an unacceptable "immeasurable judicial discretion" that would permit "case by case 'palm tree' justice": Garland, at para. 40. The first step of the juristic reason analysis applies the established categories of juristic reasons; in their absence, the second step permits consideration of the reasonable expectations of the parties and public policy considerations to assess whether recovery should be denied:
First, the plaintiff must show that no juristic reason from an established category exists to deny recovery... . The established categories that can constitute juristic reasons include a contract (Pettkus, supra), a disposition of law (Pettkus, supra), a donative intent (Peter, supra), and other valid common law, equitable or statutory obligations (Peter, supra). If there is no juristic reason from an established category, then the plaintiff has made out a prima facie case under the juristic reason component of the analysis.
The prima facie case is rebuttable, however, where the defendant can show that there is another reason to deny recovery. As a result, there is a de facto burden of proof placed on the defendant to show the reason why the enrichment should be retained. This stage of the analysis thus provides for a category of residual defence in which courts can look to all of the circumstances of the transaction in order to determine whether there is another reason to deny recovery.
As part of the defendant's attempt to rebut, courts should have regard to two factors: the reasonable expectations of the parties, and public policy considerations. [paras. 44-46]
Thus, at the juristic reason stage of the analysis, if the case falls outside the existing categories, the court may take into account the legitimate expectations of the parties (Pettkus, at p. 849) and moral and policy-based arguments about whether particular enrichments are unjust (Peter, at p. 990). For example, in Peter, it was at this stage that the Court considered and rejected the argument that the provision of domestic and childcare services should not give rise to equitable claims against the other spouse in a marital or quasi-marital relationship (pp. 993-95). Overall, the test for juristic reason is flexible, and the relevant factors to consider will depend on the situation before the court (Peter, at p. 990).
[43] It can readily be seen that no juristic reason from an established category exists. I have already found that there was no donative intent on the part of the respondent. Equally, there was no contract, disposition of law or other valid common law, equitable or statutory obligations that would justify retention of the enrichment. Thus, the respondent has made out a prima facie case of unjust enrichment.
[44] At this stage, the court may take into account the legitimate expectations of the parties and moral and policy-based arguments about whether this particular enrichment is unjust. With respect to the mutual benefits conferred on each other during cohabitation subsequent to the purchase, and in particular the work done and expenses incurred by the applicant in renovating the property, this should primarily be considered at the remedy stage. Cromwell J. explains, at para 115, the limited purpose for which it can be considered at the “juristic reason” stage of the analysis:
The fact that the parties have conferred benefits on each other may provide relevant evidence of their reasonable expectations, a subject that may become germane when the defendant attempts to show that those expectations support the existence of a juristic reason outside the settled categories. However, given that the purpose of the juristic reason step in the analysis is to determine whether the enrichment was just, not its extent, mutual benefit conferral should only be considered at the juristic reason stage for that limited purpose.
[45] It is clear on the evidence of both parties that they bought this home, which was in rough shape and in need of a great deal of work, for the purpose of fixing it up and improving its value. The respondent testified that they discussed at the time of purchase how to clean it up, and what it would be worth after they put their money and time into it. This shows a mutual legitimate expectation that they will both work on the property to improve it, and thereby profit from the increase in value. It does not, however, show any mutual expectation as to how to deal with the equity created by the respondent at the time of purchase, and cannot, therefore, constitute a juristic reason for the enrichment related to the down payment. The primary relevance of their mutual expectations will be at the remedy stage of the analysis.
[46] The applicant argued that the fact that title was taken in joint names is, in and of itself, a juristic reason for the enrichment, because the public requires confidence in how title is held. It is argued that title should be clear and unequivocal except in the most exceptional of cases.
[47] I do not accept this argument. In every single constructive trust case the claimant seeks an interest in land, or monetary compensation in lieu of an interest, that is at odds with the manner in which legal title is already held. If the applicant’s argument were valid, no constructive trust claim would ever succeed.
[48] I am satisfied that no juristic reason for the enrichment has been proven. Thus, an unjust enrichment has been established.
Remedy:
[49] I now turn to remedy. At para. 47 of Kerr, Cromwell J. gave this introductory explanation:
Remedies for unjust enrichment are restitutionary in nature; that is, the object of the remedy is to require the defendant to repay or reverse the unjustified enrichment. A successful claim for unjust enrichment may attract either a "personal restitutionary award" or a "restitutionary proprietary award". In other words, the plaintiff may be entitled to a monetary or a proprietary remedy (Lac Minerals Ltd. v. International Corona Resources Ltd., 1989 SCC 34, [1989] 2 S.C.R. 574, at p. 669, per La Forest J.).
[50] The first remedy to consider is always a monetary award (see para. 47), and in this case that is precisely what the respondent is seeking.
[51] Where the choice is made to award a monetary remedy, there are two approaches to arriving at the appropriate award. One is quantum meruit, which places a value on the services received. The other is a “value survived” basis, which is calculated by reference to the overall increase in the couple’s wealth during the relationship.
[52] At para. 100, Cromwell J. offered the following summary regarding “quantum meruit versus constructive trust”:
I conclude:
- The monetary remedy for unjust enrichment is not restricted to an award based on a fee-for-services approach.
- Where the unjust enrichment is most realistically characterized as one party retaining a disproportionate share of assets resulting from a joint family venture, and a monetary award is appropriate, it should be calculated on the basis of the share of those assets proportionate to the claimant's contributions.
- To be entitled to a monetary remedy of this nature, the claimant must show both (a) that there was, in fact, a joint family venture, and (b) that there is a link between his or her contributions to it and the accumulation of assets and/or wealth.
- Whether there was a joint family venture is a question of fact and may be assessed by having regard to all of the relevant circumstances, including factors relating to (a) mutual effort, (b) economic integration, (c) actual intent and (d) priority of the family.
[53] In determining the appropriate remedy, it is also necessary to consider the conferral of mutual benefits. This is where the work done and expenses incurred by both parties in renovating the property have the most relevance. Cromwell J. said the following, at paras. 101 -102:
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?
The answer is fairly straightforward when the essence of the unjust enrichment claim is that one party has emerged from the relationship with a disproportionate share of assets accumulated through their joint efforts. These are the cases of a joint family venture in which the mutual efforts of the parties have resulted in an accumulation of wealth. The remedy is a share of that wealth proportionate to the claimant's contributions. Once the claimant has established his or her contribution to a joint family venture, and a link between that contribution and the accumulation of wealth, the respective contributions of the parties are taken into account in determining the claimant's proportionate share. While determining the proportionate contributions of the parties is not an exact science, it generally does not call for a minute examination of the give and take of daily life. It calls, rather, for the reasoned exercise of judgment in light of all of the evidence.
[54] It is the position of the respondent that dividing the proceeds of sale equally would result in the applicant receiving a disproportionate share of the assets resulting from the purchase and renovation of the Concession St. W. property. The analysis described above is, therefore, engaged.
[55] In this case, I am satisfied that the parties were engaged in a joint family venture, insofar as the acquisition and improvement of this house is concerned. They purchased this run-down property with the express intention of fixing it up and profiting from the increase in value that would thereby be generated. They both worked hard, as a team, to do all of the work necessary to complete the renovations. While they each maintained separate bank accounts, they each contributed to the various household expenses on an ongoing basis. There was a pooling of effort and team work toward the common goal of improving and profiting from this property. Both counsel conceded in their oral submissions that the purchase and renovation of the Concession St. W. home was a joint family venture.
[56] There is a clear link between the contributions of both parties and the accumulation of wealth represented by the increase in value of the house. I have already found that both parties worked hard on these renovations, and I accept the evidence of the respondent that each one worked as hard as the other. Both parties incurred considerable expenses in renovating the property. I assess their contributions to the improvement of this property to be roughly equal. It is not necessary or desirable to conduct a line by line analysis of each task accomplished by each party and each expense incurred. To do so would be to engage in “duelling quantum meruits”, which is to be avoided: see Kerr at para. 48.
[57] Since the parties should receive a share of the increase in wealth represented by the increase in the value of the house, proportionate to the contributions of each party to that increase, it follows that the increase in the value of the house should be shared equally. That is easy to calculate. The property was purchased for $240,000, and was sold for $307,000. That represents an increase of $67,000, so that each party is entitled to receive $33,500.
[58] Each party has already received $19,000 from the proceeds of sale pursuant to an interim order. A further $14,500 must be paid to each party to satisfy the entitlement just discussed. The remaining proceeds now stand at $92,281.57. Paying out a total of $29,000 would leave $63,281.57 remaining in trust.
[59] I have to this point discussed only the increase in wealth resulting from the joint efforts of the parties in renovating the property. What remains to be resolved is what to do with the wealth resulting from the initial contributions of the parties to the purchase of the residence, which is largely reflected in the remaining balance of the proceeds of sale. I have already found that, notionally, the respondent contributed $62,961.98 to the purchase while the applicant contributed $7,500. Consistent with the same principle that the parties should share in their wealth proportionate to their contributions, this means that the respondent should receive 89.4% and the applicant should receive 10.6%. Applying those percentages to the remaining money in trust means that the respondent should receive $56,573.72, and the applicant should receive $6,707.85.
[60] To summarize, the monies in trust shall be divided as follows: to the applicant $21,207.85; and, to the respondent $71,073.72. If any interest has accrued since trial, it should be divided between the parties in proportion to their overall share in the proceeds.
[61] I encourage the parties to agree on the issue of costs. If they cannot do so, I will accept brief written submissions from the applicant within 15 days, with the respondent’s response to follow within 10 days thereafter, and any reply within 5 days thereafter. Failing that, the parties will be deemed to have resolved the issue of costs as between themselves.
“T. A. Heeney J.” T. A. Heeney J. Released: September 6, 2018