COURT FILE NO.: FC-18-592

DATE: 20191220

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

JOLANTA SLONIEC

Applicant

– and –

IVAN KILIAN

Respondent

M. Giesinger, Counsel for the Applicant

Self-Represented

HEARD: November 18-22, 2019

REASONS FOR DECISION

VALLEE J.

Introduction

[1] The applicant, Ms. Sloniec, and the respondent, Mr. Kilian, lived together in a common law relationship from August 2010 until April 2015 in a house that he owned. The municipal address was 315 15/16 Sideroad, Oro-Medonte, Ontario. It was built in the early 1900s. Mr. Kilian purchased the house for $217,000. It was in very poor condition and required extensive renovations. Ms. Sloniec states that she significantly assisted Mr. Kilian with these renovations. She also performed domestic work and cared for the property. In November of 2017, after their relationship ended, Mr. Kilian sold the house for $585,000. Ms. Sloniec states that her labour contributed to the value of the house. She makes an unjust enrichment claim. She requests compensation based on an hourly rate for the work that she did. In the alternative, she claims an interest in the property by way of a constructive trust. She also claims spousal support.

[2] Mr. Kilian states that Ms. Sloniec did not assist at all with the renovations. He allows that she did perform some domestic work; however, he states that he, Ms. Sloniec and her son, who also lived there, shared in this work. He states that Ms. Sloniec is not entitled to spousal support. He denies both of her claims.

History of the Proceedings

[3] The proceedings were straightforward. Ms. Sloniec issued the Application on May 3, 2018. It was amended on November 21, 2019, during the trial, with Mr. Kilian’s consent. Mr. Kilian filed his Answer on June 29, 2018. A disclosure order was made on consent, pursuant to Minutes of Settlement, dated September 18, 2018. Mr. Kilian agreed to make best efforts to provide his receipts for expenses deducted from his 2017 income. A trial scheduling endorsement was made on September 11, 2019, which required Mr. Kilian to provide copies of invoices from his business for the last 12 months and those provided for a mortgage application.

Issues

a. Did the work that Ms. Sloniec performed in the house and on the property unjustly enrich Mr. Kilian?

b. Did Ms. Sloniec suffer a corresponding deprivation?

c. Is there any juristic reason for the enrichment?

d. If Ms. Sloniec is to be compensated, should she receive payment for the value of the services rendered?

e. If so, what is the correct amount?

f. Is Ms. Sloniec entitled to spousal support?

g. If so, what is the correct amount?

Ms. Sloniec’s Credibility

[4] Assessing a witness's credibility involves several considerations, including the characteristics of the witness, his or her general integrity, powers of observation, capacity to remember and accuracy in providing evidence.[^1]

[5] Ms. Sloniec and her witnesses provided their evidence in chief by way of affidavits pursuant to the trial scheduling endorsement. Ms. Sloniec’s evidence was overstated in several paragraphs of her affidavit. For example, she stated that Mr. Kilian spread false rumours about her in the community. On cross-examination, she conceded that he spoke to only one person. She stated that when the parties moved into the house, it had no floors on the main level. On cross-examination she conceded that there was a floor but that it was unsafe. It sagged under weight, but a person could walk on it. She stated that she did all the gardening. On cross-examination, she conceded that Mr. Kilian did some of it.

[6] Ms. Sloniec obtained her Notices of Assessment from 2010 to 2015 for the purposes of this application. She did not request her related tax returns. Her 2012 Notice of Assessment shows she paid rent. On cross-examination, she conceded that she did not actually pay rent to Mr. Kilian. She stated that Mr. Kilian told her to buy groceries with money equivalent to the rent that she would have paid. Ms. Sloniec produced her Ontario Disability Support Program (“ODSP”) file containing 51 pages. In those documents are pages entitled “Sam’s Notes”. One such page contains a note entitled “Eligibility Verification Process”. This is followed by “RuthDoronOn02/05/2017 11:05”. After that, it states, “Jolanta submitted her 2015 rent receipt from Ivan Kilian for $2,000. She should forward this to CRA so her taxes will match our records.” This note confirms that she did have at least one rent receipt.

[7] Ms. Sloniec’s husband died in 2004; however, her 2010 – 2015 notices of assessment show that she described her status as separated. Her evidence was that she did not have proof of her husband’s death. Someone who worked in the social assistance office suggested that she ought to use “separated”. From 2012 – 2014, when she was living with Mr. Kilian, her notices of assessment show that she was receiving social assistance. She likely would not have received social assistance if she had disclosed that she was living in a common law relationship. Her position was that she needed it to pay for her medications. Mr. Kilian would not give her money.

[8] Aside from these issues, her testimony was generally consistent and credible.

Mr. Kilian’s Credibility

[9] Mr. Kilian is a master electrician. He carries on business as CA Electric, which is a sole proprietorship. He also operated as a sole proprietorship a bed and breakfast business called Cosy Comfort Home Welcomes You.

[10] He stated that he did not know what his hourly rate was for the purposes of preparing estimates for jobs. He stated that he was not paid in cash very often because his customers wanted receipts.

[11] Mr. Kilian produced his business account bank records. Ms. Sloniec’s counsel prepared a summary of the deposits into that account for 2015 to 2018. The records show that the deposits for 2015 were $135,118.17, 2016 - $92,458.72 and 2017 - $79,284.35. Records for 2018 were produced only up to September 28, 2018.

[12] Mr. Kilian’s 2015 tax return shows business income gross sales of $107,455. He agreed that this was approximately $27,000 less than the bank deposits for that year. He suggested that there could be a mistake. His 2015 tax return shows a net income of $9,000 from Cosy Comfort Home Welcomes You. CA Electric showed a loss. When asked why he would continue to operate a business if it was losing money, he stated that he was “fine with it”. It did not bother him. He did some farming and produced his own food. He had chickens that provided him with eggs.

[13] In Mr. Kilian’s 2017 income tax return, the Statement of Business or Professional Activities for CA Electric shows that it had gross sales of $72,966. The amount for costs of goods sold is $25,306. A total of $57,141.18 was claimed for expenses leaving a net income of negative $9,481.18. The statement for Cosy Comfort Home Welcomes You shows gross sales of $21,239 ($1,769.91 per month). The claim for capital cost allowance for business-use-of-home expenses was $1,843.17. Net income was $19,395.83. Mr. Kilian’s personal income was $9,914.65.

[14] Mr. Kilian’s accountant, Iwona Oberznt who prepared his tax returns, testified that Mr. Kilian verbally told her that his business expenses were $57,141.18. He did not provide any receipts, nor did she request them.

[15] On January 22, 2018, Mr. Kilian made an application to Dominion Lending for a mortgage. Despite the fact that his net income was $9,914.65 in 2017, he stated on the application that his annual income was $80,000. Rental income is shown as $2,500 per month. When asked why he would state this to be his income when his actual income in 2017 was $9,914.65, he stated, “Why not?”

[16] When asked how he paid the mortgage payments of $1,396 with an income of $9,914.65, he stated that he was using the proceeds from the sale of the house in issue, being $370,000. He had been living off that until three months ago. He had none of that money left. He stated that the outstanding mortgage on the house that he subsequently purchased was approximately $285,000. He also stated that he was not considering bankruptcy.

[17] Mr. Kilian produced neither his 2018 tax return nor the Notice of Assessment. He did not produce the invoices rendered by CA Electric for the last 12 months nor did he produce the invoices submitted for the mortgage application, despite the trial scheduling endorsement that he signed, which clearly ordered him to produce all of these things. When he was asked about this, he said that he must not have understood it.

[18] Mr. Kilian stated that he did not give Ms. Sloniec any receipts for payment of rent. This is contradicted by the evidence in the ODSP file as noted above.

[19] Mr. Kilian stated that all of the interior walls on the main floor of the house were removed in the renovations to create an open concept. He did not obtain a building permit. He stated that his friends who worked in the construction industry told him that he did not need one.[^2]

[20] I find Mr. Kilian’s evidence to be much less credible than Ms. Sloniec’s evidence. Where they conflict, I prefer hers.

Applicable Legal Framework

[21] The law of unjust enrichment has been the primary vehicle to address claims of inequitable distribution of assets on the breakdown of a domestic relationship. In Pettkus v. Becker[^3], the court developed a framework for addressing these claims.

[22] In determining whether an unjust enrichment has taken place, a three-part test is applied. The facts must show an enrichment, a corresponding deprivation, and the absence of any legal (juristic) reason, such as a contract for the enrichment. In other words, it must be unjust for the respondent to retain a benefit of the applicant’s work.

[23] Once unjust enrichment is proven and the respondent has failed to show a legal reason for his keeping the benefit, the applicant is entitled to one of at least two remedies: a monetary award or alternatively, an interest in property based on constructive trust.[^4] A constructive trust is a proprietary remedy available where a direct link is demonstrated between the contribution or services provided by the claimant and the property which is the subject of the trust.^5 There is no need for a constructive trust if a monetary award is sufficient.[^6] A monetary award may be insufficient if there is a likelihood that it will not or cannot be paid or where the claimant has a special interest in the property.[^7]

[24] In Kerr v. Baranow[^8], the court held that no calculation method should be preferred. A court should choose the method which best suits the circumstances and the claimant's loss. However, where the enrichment is based on one person’s keeping the result of the collective effort, a cash award should be calculated as the claimant's proportionate contribution.

[25] In Peter v. Beblow, the court stated that flexibility and common sense should be exercised when applying equitable principles to family law issues with due sensitivity to the special circumstances that can arise in such cases.

Was Mr. Kilian unjustly enriched by Ms. Sloniec’s contributions to the house?

Applicable Law

[26] The first requirement in deciding whether an unjust enrichment has taken place is to determine whether the respondent obtained a benefit or an enrichment.[^9]

[27] The benefit analysis does not involve an assessment of whether the benefit was unjust. Rather, as a straightforward economic approach, it is to be used.[^10]

[28] A person claiming unjust enrichment for providing services must show that the recipient freely accepted the services and that the provider may have reasonably expected to be paid for providing them.[^11]

Ms. Sloniec’s Evidence

[29] Ms. Sloniec provided her evidence in chief by way of an affidavit sworn September 17, 2019. She stated that she was married before she met Mr. Kilian. She was a stay-at-home parent. Her husband was a truck driver who died tragically in 2004. Subsequently, she purchased a coffee shop which she operated for approximately 3 ½ years. After that, she worked in a bakery for approximately 1 ½ years until she was laid off. Then, she completed a hair stylist program. She worked for a short time in that field in 2012; however, because of her health problems described below, she found the constant standing and requirement to hold up her arms to be too difficult.

[30] Ms. Sloniec stated that Mr. Kilian paid $217,000 for the house. They began cohabiting there in 2010. The house was in terrible condition. There was fire damage on the second floor. Some of the walls were open. There was a mouse infestation. Rats were running around in the basement. The house had to be gutted. It required a complete renovation. There was no heat source except for a wood stove. For a significant period of time, she and Mr. Kilian slept in the living room near the wood stove. She had to carry wood to keep the fire going day and night during the cold weather. Later on, a gas fireplace was installed. Ms. Sloniec stated that she moved into this house with Mr. Kilian, despite its terrible condition, because she loved him.

[31] Ms. Sloniec stated that as soon as she moved in, she took on household duties including vacuuming, cleaning, doing yard work, weeding, taking care of animals such as chickens, and gardening, which included planting. Mr. Kilian worked as a Master Electrician. When he was home, they would share these tasks. She stated that instead of paying rent to Mr. Kilian, they agreed that she would use the money to buy groceries. She also purchased plants and bedding for the gardens as well as a number of items for the house. She provided pages of copies of receipts.

[32] Ms. Sloniec stated that she assisted with the renovations. Because the house was in such poor condition, the parties worked all the time, even in extreme cold temperatures during the winter, to get it to the point where it was livable. The parties had an understanding that she would contribute equally to the renovations that she would equally benefit from them. She stated that she wore a mask to assist with removing the garbage resulting from the wall demolition. She assisted with planing wood so that the flooring on the first floor of the house could be replaced. She painted. She carried things. She helped with drywalling. A veranda was built in the front of the house. She assisted by holding up posts. She assisted with installing shower tiles and a backsplash in the kitchen. She removed all of the old wallpaper. She assisted with painting the exterior of the house. She washed the windows. The renovations took five years. She stated that she contributed equal labour to the tasks.

[33] Ms. Sloniec stated that she began to experience pain in her arms and hips after assisting with planing the wood. After putting stucco on a ceiling, she lost the feeling in her hands for some period of time. She stated that in 2013, she saw a specialist, Dr. Holland, who gave her nerve blocks in her hips. He also sent her to a pain clinic. She was diagnosed as having fibromyalgia. Despite this, she continued to assist with the renovations. She stated that the symptoms became severe in 2015. She could no longer work through the pain. Mr. Kilian told her to leave. Ms. Sloniec stated that she applied for social housing and received it in 2015. She left the home at that time.

[34] Ms. Sloniec stated that when she and Mr. Kilian broke up, he told her that he would pay her and her son a “bonus” in recognition of their contributions toward the renovations. He agreed to pay her a portion of the proceeds when he sold the house. She stated that her son Tomasz witnessed this conversation.

[35] Ms. Sloniec produced a number of medical documents that were used in her application for funding from ODSP. They showed that she suffered from severe depression starting in 2002. Her family doctor, Dr. Wozniak, wrote a letter dated January 6, 2005 stating that she had been his patient for years and that she had often presented with severe anxiety and emotional tension. He believed that this was related to her relationship with her husband who committed suicide in 2004. Ms. Sloniec stated that despite this, she was still capable of working and had in fact worked in the bakery in 2005.

[36] On February 17, 2009, Ms. Sloniec saw Dr. Wozniak. His note states that she was depressed and that her business had fallen apart. She was slightly anxious. Under cross-examination, Ms. Sloniec agreed that at times she was anxious; however, she stated that she still had to go to work at the bakery and was able to do it.

[37] Dr. Wozniak wrote a letter to the Community Legal Clinic dated May 13, 2015, before Ms. Sloniec moved out of the house. He stated that Ms. Sloniec “was diagnosed with depression over 10 years ago. Her symptoms became very severe after tragic event of her husband committing suicide.” He commented that “she still suffers from ongoing symptoms of: low energy, low stamina, lack of concentration, constant sadness, significant psychomotor impairment, difficulty making decisions, low motivation and constant anxiety and worry.” His opinion was that she had reached a point of maximum medical recovery. Further recovery was not expected. He also noted that she had another medical problem, being fibromyalgia. He stated, “This presents a diffused musculoskeletal pain in the areas of low back, hips, shoulders, arms and upper back.” He stated that, “it limits one’s capacity to work or sustain employment.” He confirmed that, “due to the severity of her symptoms and lack of response to treatment over the years, Ms. Sloniec it is not employable now or in the future.”

[38] Ms. Sloniec’s Notices of Assessment show that she earned:

a. 2010 - $12,858 ($3,500 from Employment Insurance)

b. 2011 - $19,353 (from Employment Insurance)

c. 2012 - $7,540 ($5,440 from Employment Insurance, $2,100 from social assistance)

d. 2013 - $7,352 (all from social assistance)

e. 2014 - $7,632 (all from social assistance)

f. 2015 - $5,221 (source not stated)

She was approved for ODSP income support on May 1, 2016. At that time she was receiving $414 per month from Ontario Works.

Monique Avalos’ Evidence

[39] Ms. Avalos stated that she had been a real estate agent with Century 21 in the United States for five years before she came to Canada 12 years ago. She met Ms. Sloniec when she was operating the coffee shop. She met Mr. Kilian two years afterwards when they began dating. She described the house as a rundown abandoned house that was not livable. Initially, the front door could not be opened. The exterior had to be repaired. The windows were old, walls had to be ripped down, and flooring had to be replaced. The basement was not finished. Ms. Avalos stated that she visited from time to time. She saw Ms. Sloniec and Mr. Kilian painting, laying flooring, putting in bathrooms, repairing a bannister and building furniture. Every time she visited, Ms. Sloniec and Tomasz were working on something. Even though they would chat, Ms. Sloniec would be doing other things at the same time such as gardening, feeding chickens and picking up eggs. In her opinion, Ms. Sloniec did hard work. She stayed home to keep the heat going so the pipes would not freeze in the winter. Ms. Avalos stated that when she and her children visited during the winter, they stayed in one room because the rest of house was too cold for the children.

[40] Ms. Avalos stated that the renovations to which Ms. Sloniec contributed, greatly increased the property’s value, beyond general appreciation.

Ms. Mazur’s Evidence

[41] Ms. Mazur testified that she had been Ms. Sloniec’s friend for 25 years. She stated that she visited the house a few months after Ms. Sloniec moved in and recalled that it was a total disaster. There were loose floorboards. There was just one wood stove for heating in the middle of the living room. There was a couch next to it. Both inside and outside, it was in very poor condition. She stated that when she visited, Ms. Sloniec was always working. She testified that Ms. Sloniec would help with the renovations, do gardening and painting, take care of the animals and carry firewood in for the wood stove. She was also entirely responsible for household cleaning tasks as well as cooking and doing the laundry. Mr. Kilian worked outside of the house for most of the time. Ms. Sloniec was working day and night to improve the home, decorate, renovate, garden, cook and clean. It was constant. She would entertain Mr. Kilian’s friends every weekend and was fully responsible for cleaning the home afterwards. It was a lot of work for her.

[42] Ms. Mazur conceded under cross-examination that perhaps Mr. Kilian had done some of the household work but she did not see it. She believed that Ms. Sloniec’s physical condition deteriorated shortly after moving into the house. She continued to work despite the pain.

Marta Paczkowska’s Evidence

[43] Ms. Paczkowska is Ms. Sloniec’s niece. She testified that everything in the house was 100 years old. It had never been previously renovated. There were rats, mice and lots of mould. When she and her husband visited, he did not want to eat in the house because birds were flying around inside. Something fell off the ceiling and landed in his plate. The house was not livable. It was very cold in the winter. Mr. Kilian sealed the staircase so that heat would not escape upstairs.

[44] Ms. Paczkowska stated that whenever she came to visit, Ms. Sloniec was very busy painting outside or doing something else to renovate the house. She did all the cooking and cleaning. One time when she visited, Ms. Sloniec was outside planning wood. On another occasion, one of Mr. Kilian’s friends had given Ms. Sloniec landscaping stones. She stated that she and Ms. Sloniec installed them into a heart shape and planted flowers inside them. There was a full vegetable garden in the backyard that Ms. Sloniec tended. Ms. Paczkowska testified that she never saw Mr. Kilian do any landscaping or gardening work.

[45] Ms. Paczowska testified that Ms. Sloniec told her that she had no energy or ability to find another place to live. Ms. Sloniec would come to visit her two days a week and sometimes on weekends however; she often had to stay at the house to take care of the animals or to keep the fire going in the winter to prevent the pipes from freezing.

[46] Under cross-examination, Ms. Paczkowska agreed that she could not say that Mr. Kilian never assisted with household work. She was not there all the time. She stated that she never saw him do any of it.

Tomasz Sloniec’s Evidence

[47] Tomasz Sloniec is Ms. Sloniec’s son. He was employed by Mr. Kilian in his electrical business. Sometimes he was paid in cash. Mr. Sloniec testified that he moved into the house with his mother and Mr. Kilian in August 2010. He could not afford to live on his own. He stated that they intended to live together as a family, investing their time and money into a common home. He stated that when they moved in, the house was unsafe. It was in a terrible condition. There was no heat. The upstairs was unsafe. It remained like that for over a year. There was asbestos and mould all over the house. There was no heat, the stairs and walls were unsafe, there were holes in the floor and huge rats were running around.

[48] Mr. Sloniec testified that they all played a role in the renovations. He helped Mr. Kilian to remove the drywall. His mother carried the garbage out into the yard. She was constantly cleaning to make it possible for them to sleep in the house. They were always bringing in wood to keep fire going in the wood stove. He and his mother took turns getting up during the night to keep the fire going. It was the only source of heat. He stated that his mother assisted with painting, cleaning up garbage and laying flooring. She also helped with installing the backsplash in the kitchen, putting stucco on a ceiling and painting. She cleaned the floors and the furniture. She did the gardening and took care of the animals which required her to get up early each morning. She cooked three meals a day. Later on, people were visiting every weekend. She cleaned up after them.

[49] He testified that everyone had a purpose in the house and everyone worked for 8 to 10 hours a day, seven days a week. Mr. Kilian told him that when he worked at the house, it would go towards his rent. When he worked in the electrical business, he would be paid.

[50] Mr. Sloniec stated that Mr. Kilian travelled frequently. He went to Slovakia, Mexico and Cuba. Someone, usually his mother, had to stay behind to take care of the animals and keep the fire going in the winter to prevent the pipes from freezing. The property had a long driveway. There was no snow blower so she would help with shoveling snow. She also helped to cut wood each autumn in order to have enough for the winter to keep the fire going.

[51] Mr. Sloniec stated that he moved out of the home in January 2015. His mother moved out in May or June 2015 to an apartment on Edgehill Drive. He moved in with her. She continued to have a relationship with Mr. Kilian until 2017. At times he would rent out the house through AirBnB and stay with them in the apartment.

[52] Mr. Sloniec testified that the house was listed for sale in 2017. Mr. Kilian told them that he would pay Ms. Sloniec a portion of the sale proceeds. He did not do this. He already had another girlfriend by that time.

[53] Mr. Sloniec stated that his mother has been suffering from severe fibromyalgia. The symptoms became noticeable beginning in approximately 2015. It affects her mood and her ability to do housework. On a bad day, she limps and cries due to the pain and her depression. On a good day, she can do housework and errands. Much of the time, she is unable to do any strenuous physical activity.

[54] Mr. Sloniec testified that when his mother brought the court proceedings, Mr. Kilian threatened him at work and stated that he would be fired if he did not persuade his mother to drop the court case within 24 hours. In the end, he was fired.

Mr. Kilian’s Evidence

[55] Mr. Kilian stated that Ms. Sloniec did none of the renovation work on the house. It was made into an open concept using decorative and supporting beams and posts. They were 8 x 8 and weighed at least 100 pounds. In order to handle them, several men were required. Ms. Sloniec could not have assisted with this work. He refuted Ms. Sloniec’s statement that she applied stucco on an upstairs bedroom ceiling. He stated that there was no stucco in the house. He stated that 4 x 8 sheets of drywall were used in the renovation. Skilled trades people did the drywall work. He denied Ms. Sloniec’s statement that she assisted with the drywalling. He stated that there was wallpaper on only one wall in the living room. He denied Ms. Sloniec’s statement that she stripped wallpaper. He stated that he alone did it. Mr. Kilian refuted Ms. Sloniec’s statement that she removed construction debris. He stated that the pieces of lath and plaster were very heavy. He would not let her carry any of it. He also disagreed that Ms. Sloniec assisted with planing the wood floors. He acknowledged that she did paint one small upstairs bedroom. He disagreed that Ms. Sloniec worked up to eight hours a day on the renovations.

[56] Mr. Kilian disputed Ms. Sloniec’s evidence that she paid for flowers that she planted in the gardens and supplies. He stated that while she did look after the chickens, they all did the cleaning and cooking work together. All of the household work was shared among Mr. Kilian, Ms. Sloniec and Tomasz. He acknowledged that Ms. Sloniec would sweep up and vacuum when he was not there. He stated that she did not pay rent nor did she receive any rent receipts from him. All the amounts she claims she paid for rent are fabricated. He disagreed with her statement that he told her to use the money that she would have paid for rent to buy groceries. He stated that all three of them contributed to the cost of the food.

[57] Mr. Kilian denied Ms. Sloniec’s evidence that she had to carry firewood day and night to keep the wood stove running, which was the only source of heat in the house. He stated that in the first year, electric construction heaters were used.

Vladimir Sabo’s Evidence

[58] Mr. Sabo lives in Tillsonburg. He stated that he had known Mr. Kilian for 40 years. They met in Slovakia. He visited the house to attend parties and helped Mr. Kilian with some of the work on the house. He testified that he visited the house approximately three or four times a year and never saw Ms. Sloniec at the property. He recalled that Mr. Kilian worked but she came later in the day. She came just to greet them then she left. Under cross-examination, he conceded that sometimes Ms. Sloniec was there overnight when he was visiting.

Brian Lehen’s Evidence

[59] Mr. Lehen lives in Mississauga. He stated that he had known Mr. Kilian for over 30 years. He would visit Mr. Kilian at the house a couple of times a year. He stated that he doubted that there would be parties every weekend because usually Mr. Kilian let him know when there was going to be a party. Mr. Lehen did not recall seeing Ms. Sloniec work around the house or outside.

Mr. Kilian’s Position on Unjust Enrichment

[60] Mr. Kilian states that Ms. Sloniec made no contributions to the renovations. The domestic work was shared. He was not enriched by Ms. Sloniec’s work. There is no basis upon which she should be paid for anything.

Analysis

[61] There is no serious dispute that the house was in terrible condition when Ms. Sloniec moved there. Ms. Avalos, Ms. Mazur, Ms. Paczkowska and Mr. Sloniec all corroborated this. They also corroborated Ms. Sloniec’s evidence regarding the amount of work that she did and her significant contribution toward the renovations. They were Ms. Sloniec’s witnesses and therefore likely had some bias in her favour; however, their evidence was externally consistent regarding the work that she did. Mr. Kilian’s witnesses were not at the property very often. Their testimony implies that Ms. Sloniec did not work at the property or in the house. I give little weight to this evidence.

[62] At the end of the trial, on Mr. Kilian’s consent, Ms. Sloniec provided photographs. Mr. Kilian confirmed that they were photographs of the inside of the house. They show her wearing a mask in an area next to wall framing and bending over a blue box which appears to contain construction debris. They also show her stripping wallpaper. One photo shows her cooking food in two frying pans on the top of an old woodstove that appears to be in the middle of a room containing a sofa and a chair. The window is covered with plastic.

[63] I reject Mr. Kilian’s evidence that Ms. Sloniec did no renovation work.

[64] Ms. Sloniec’s receipts show that items were purchased at Home Hardware, H. F. Smith Lumber, Canadian Tire, Garden Gallery, Home Depot, Rona and HomeSense with cash during the time that she lived with Mr. Kilian. On a balance of probabilities, I find that she purchased items for the home and the property.

[65] Ms. Sloniec testified that the renovations took five years and that she contributed equal labour to the tasks. While the evidence demonstrates Ms. Sloniec did indeed do a substantial amount of work, I find that her contribution to the renovations was not equal to the work performed by Mr. Kilian. He, no doubt, did the heavier work. Nevertheless, I find that she assisted with the renovations as much as she was able to do and carried out most of the domestic work during this time period. Some of this was for her own benefit in that she would have had to cook and clean regardless of where she lived; however, Mr. Kilian obtained a significant benefit from it.

[66] I find that Mr. Kilian was unjustly enriched by Ms. Sloniec’s contribution to domestic work and the renovations. He obtained a demonstrable benefit from it. He freely accepted the work. But for the relationship, Ms. Sloniec might have reasonably expected to be paid for providing the services.

Did Ms. Sloniec suffer a corresponding deprivation?

Applicable Law

[67] The second requirement for establishing an unjust enrichment is to determine whether the claimant has suffered a deprivation corresponding to the recipient’s enrichment.[^12] The authorities on this point states that the measure of the plaintiff's deprivation is not limited to the plaintiff's out-of-pocket expenditures or to the benefit taken directly from him or her. Rather, the concept of "loss" also captures a benefit that was never in the plaintiff's possession but that the court finds would have accrued for his or her benefit had it not been received by the defendant instead.[^13]

Analysis

[68] The Supreme Court has described the enrichment and detriment elements as being "the same thing from different perspectives".[^14] They are "essentially two sides of the same coin".[^15] Given the fact that an enrichment occurred, it almost invariably follows that there is a corresponding deprivation suffered by the person who provided the enrichment.

[69] Ms. Sloniec argued that she was deprived of any compensation for her labour. Mr. Kilian argued that there was no deprivation because Ms. Sloniec lived rent-free. In Kerr, the court determined that although Ms. Kerr lived rent-free for the entire relationship, the benefits that she received from the relationship were lesser than her contributions.[^16]

[70] Taking a straightforward economic approach to the enrichment and corresponding deprivation elements of the unjust enrichment framework, I find that Ms. Sloniec suffered a deprivation. The required correlation exists between this deprivation and Mr. Kilian’s gain.

Is there a legal reason for Mr. Kilian to retain the enrichment?

Applicable Law

[71] The third requirement for establishing unjust enrichment is an absence of any legal (juristic) reason for it.[^17]

[72] There is a two-step process for determining where there is a legal reason to retain the benefit. First, the claimant must show that the circumstances are not within any of the established categories for denial of recovery, including the existence of a contract, disposition of law, intent to donate or other valid statutory, common law or equitable obligations. Once the claimant has demonstrated that no established category applies, the claimant has a claim for unjust enrichment. The second step allows the recipient to rebut the claim by demonstrating another reason for denying recovery. At this step, the court may examine the reasonable expectations of the parties, public policy arguments and all other circumstances of the situation to determine whether a reason exists to deny recovery.[^18]

[73] The court must consider not only what is fair to the applicant but also what is fair to the respondent.^19 Since unjust enrichment is an equitable remedy, the party claiming it must establish that her conduct leading to the deprivation was beyond reproach.[^20]

[74] A respondent may argue that the expectations of the parties are a reason to deny recovery. For instance, a respondent may allege that domestic services provided were part of a bargain made between the parties. If so, based on those expectations, the respondent’s retaining the benefit would be just.[^21]

[75] The Supreme Court has held that a common law spouse generally owes no duty at common law, in equity or by statute to perform work or services for her partner. On p. 46 in Sorochan v. Sorochan[^22], the common law wife was “under no obligation, contractual or otherwise, to perform the work and services in the home or on the land." There is no general duty presumed by the law for a common law spouse to perform work and services for her partner. The court is not to automatically impose an equal interest where one person contributes to the property held in the name of the other.[^23] The situation must be viewed objectively. An inference can be made that in the absence of evidence establishing a contrary intention, the parties expected that if the relationship were to end, they would share in the assets created in the common law relationship.^24

Analysis

[76] Mr. Kilian has not demonstrated any legal reason why he ought to retain the benefit of Ms. Sloniec’s work. For example, Mr. Kilian has not argued that the parties had a contract or that Ms. Sloniec agreed to donate her time for the work that she did. There is no evidence that they ever spoke about her work in any kind of transactional way. I find that there is no legal reason for his retaining the benefit for Ms. Sloniec’s work.

Is Ms. Sloniec. entitled to be paid for those contributions on a quantum meruit basis?

Applicable Law

[77] In Bell v. Bailey[^25], at paras. 32 – 38, the court stated that that a monetary remedy should generally be calculated on the basis of value received. The value received approach looks for the value of the benefits determined by their cost on the open market. When an award is made on a value received basis, it should be equal to the benefit received by the defendant.

Analysis

[78] Considering Ms. Sloniec’s contribution to the home and property, I find that she would reasonably have expected to share the “wealth” she helped to create. As noted above, Mr. Kilian bought the property for $217,000 in 2010 and sold it for $580,000 in 2017.

If so, what is the correct amount?

Applicable Law

[79] A quantum meruit calculation based on a value received approach assesses the value of the money, goods or services received at the time they were received and does not consider any resultant increase they have had on the value of the assets, in this case, on the Oro-Medonte home.

[80] In McLean v. Danicic[^26], a case that has facts very similar to the case at bar,[^27] Ms. McLean brought an application for quantum meruit and spousal support. The court found that compensation at the rate of minimum wage would be appropriate in assessing her quantum meruit entitlement.

Analysis

[81] Ms. Sloniec requests that the respondent pay $78,122.27 for services that she provided for approximately 5 years on the property. This amount is based on minimum wage for a 40-hour week for 52 weeks per year minus $400.00, as a set off per month for rent.

[82] Based on the record before me, I am not satisfied that Ms. Sloniec worked eight hours per day, seven days per week for five years. I find, on a balance of probabilities, that she more likely worked five hours per day for which she otherwise might have expected compensation, six days per week, from August 2010 to December 2013. She was diagnosed with fibromyalgia in 2014. I find this condition would have prevented her from working five hours per day, six days per week in 2014. She more likely worked three hours per day, five days per week. Her condition worsened in 2015. From January to May 2015, she likely worked one and a half hours per day, 5 days per week. On a balance of probabilities, I find that she worked 5,790 hours during the time that she resided in Mr. Kilian’s house. Applying the varied Ontario minimum wages from 2010-2015 as appropriate, the calculation is as follows:

a. August 2010 to December 2010 – 5 hours per day x 6 days per week = 30 hours per week X 4 = 120 hours per month X 5 months = 600 hours

i. Minimum wage in Ontario in 2010: $10.25/hour

▪ 600 hours X $10.25= $6,150

b. January 2011 – December 2011 – 120 hours per month x 12 months = 1,440 hours

i. Minimum wage in Ontario in 2011: $10.25/hour

▪ 1,440 hours X $10.25= $14,760

c. 2012 – 1,440 hours

i. Minimum wage in Ontario in 2012: $10.25/hour

▪ $14,760

d. 2013 – 1,440 hours

i. Minimum wage in Ontario in 2013: $10.25/hour

▪ $14,760

e. 2014 – 3 hours per day x 5 days= 15 hours per week x 4 = 60 hours per month x 12 = 720 hours

i. Minimum wage in Ontario in 2014: $11/hour

▪ 720 hours X $11= $7,920

f. January 2015 to May 2015 – 1.5 hours per day x 5 days = 7.5 hours/week x 4 = 30 hours per month x 5 months = 150 hours

i. Minimum wage in Ontario in 2015: $11.25/hour

ii. 150 hours X $11.25= $1,687.5

g. Quantum meruit entitlement from 2010-2015 ($6,150+ $14,760+ $14,760+ $14,760 + $7,920 + $1,687.5)= $60,037.5 (total number of hours worked: 5,790)

[83] In her calculations, Ms. Sloniec stated that there should be a set off for rent of $400 per month. She would have paid rent for 57 months.

a. Rent set off - $400 x 57 months = $22,800

i. Total after set off ($60,037.50 – $22,800) = $37,237.50

Is Ms. Sloniec entitled to receive spousal support from Mr. Kilian?

Applicable Law

[84] The purposes of spousal support are:

a. to compensate a spouse for hardship or opportunities lost due to the marriage or its breakdown;

b. to fulfill a contractual agreement, expressed or implied, that the parties were responsible for each other’s support; or

c. on a non-compensatory basis, to assist a spouse in need where there is the capacity to pay, even in the absence of a contractual or compensatory foundation for the obligation.[^28]

[85] If a party who is entitled to spousal support has limited income and/or earning capacity, because of age or other circumstances, the recipient’s needs may result in an award at the higher end of the ranges for amount and duration. Limited ability to pay on the part of the payor spouse may result in an award to the lower end of the range.

Mr Kilian’s Position

[86] Mr. Kilian states that Ms. Sloniec is not entitled to spousal support. There is no reason for him to pay her anything.

Analysis

[87] Ms. Sloniec was a stay at home parent until 2005. She has no post-secondary education. Her last paid employment was at the Italian Bakery which ended in 2009. Her first language is Polish. At times, she has trouble finding words in English. She is 56 years old. In 2014 she was 51.

[88] Although Ms. Sloniec has suffered from depression since 2002, she worked after her husband died almost up to the time when she moved in with Mr. Kilian. She had nerve blocks in her hips in 2013. Had she not been in the relationship, she likely would have been employed at least from 2010 to 2013. Prior to the end of the relationship, she began to suffer from fibromyalgia.

[89] The relationship lasted five years. Ms. Sloniec has a significant need. She has been unemployable since 2014 when she was 51 and in the relationship. The medical evidence states that she is not employable. Ms. Sloniec is entitled to spousal support on a combined compensatory and non-compensatory basis.

If so, what is the correct amount?

Analysis

[90] Ms. Sloniec’s Notice of Assessment shows that she received some form of social assistance from 2012-2014, although the type of assistance is unclear, she obtained assisted housing in 2015. She received ODSP beginning on May 1, 2016.

[91] As noted above, Mr. Kilian’s ITRs are not indicative of his actual income. I find that he earned at least $80,000 in 2018 as shown on his mortgage application. Ms. Sloniec’s counsel argued that this should be grossed up because a lender would want verification of a self-employed person’s net income in order to determine whether he could afford a mortgage payment. The evidence is insufficient for me to determine what a lender would want and whether the $80,000 was gross or net. Even though the lack of information is attributable to Mr. Kilian, better evidence would be required for a gross up.

[92] I find that the appropriate incomes to attribute to the parties for the purposes of spousal support are $80,000 to Mr. Kilian and $10,469 to Ms. Sloniec. Attributing a minimum wage to Ms. Sloniec would not be appropriate, given the medical evidence that she is not employable and the fact that her income was $10,469 in 2018 according to her T5007.

[93] A Divorcemate calculation with $80,000 attributed to Mr. Kilian and $10,469 attributed Ms. Sloniec shows a spousal support range of low $435, mid $507 and high $579 per month. An indefinite support order at the low end of the range, $435 per month is appropriate given the fact that the relationship was relatively short, her health failed during the relationship and she became unemployable in the last year of it. The arrears from May 2018 up to and including December 2019 are fixed at $8,700, which shall be collected by FRO at the rate of $200 per month. Beginning on January 1, 2020. The respondent shall pay $435 per month subject to a material change in circumstances. Mr Kilian could receive a tax benefit from paying spousal support; however, because he declares very little income, he will not enjoy the benefit of it. A support deduction order shall issue.

Conclusion

[94] Mr. Kilian shall pay Ms. Sloniec $37,237.50.

[95] Mr. Kilian shall pay Ms. Sloniec spousal support from the commencement of the application. The arrears are fixed at $8,700 and shall be collected by FRO at the rate of $200 per month. Beginning January 1, 2020, he shall pay $435 per month.

Costs

[96] If the parties are unable to agree on costs, they may file brief written submissions. Ms. Sloniec’s are due by January 10, 2020. Mr. Kilian’s are due by January 17, 2020. Ms. Sloniec’s shall include the costs outline required by r. 57.01(6) and shall identify all lawyers on the file, their respective years of call and rates actually charged. It shall also provide calculations on a partial indemnity rate, including the rate applied, and if sought, the same on a substantial indemnity basis. Any written offers to settle on which a party intends to rely are to be included. If the parties intend to rely on caselaw, copies of the relevant cases shall be provided. Cost submissions shall be no more than 2 pages in length (14 pt. font size, regular 1-inch margins, 1.5 spacing), exclusive of the costs outline or offers to settle. All cost submissions shall be delivered to jennifer.smart@ontario.ca. If no submissions are received by January 17, 2020 the court will conclude that costs have been settled.

Vallee J.

Released: December 20, 2019

[^1]: R. v. White (1947), 1947 1 (SCC), [1947] S.C.R. 268 (S.C.C.).

[^2]: Mr. Kilian works in the construction industry. Most of his work is residential. He did not inquire of the municipal building department as to whether he needed a permit. The Chief Building Official (CBO) is the person who makes that decision, not Mr. Kilian’s friends. Section 1(1) of the Ontario Building Code Act, 1992 S.O. 1992 C 23 states that “demolish means to do anything in the removal of a building or any material part thereof.” Section 8(1) states that “No person shall cause a building to be constructed or demolished unless a building permit has been issued.” The Code sets out minimum standards for construction with a focus on public safety. A decision by the CBO that a permit was not required in these circumstances would be surprising. By not obtaining a permit, Mr. Kilian avoided the requirement to pay a permit fee for the house renovations as well as the related required inspections.

[^3]: Pettkus v. Becker 1980 22 (SCC), [1980] 2 S.C.R. 834 (S.C.C.).

[^4]: Peter v. Beblow (1993), 1993 126 (SCC), 1993 CarswellBC 44 (S.C.C.).

[^6]: Surerus Construction & Development Ltd. v. Rudiger (2000), 2000 CarswellBC 2513 (B.C. S.C.).

[^7]: Peter v. Beblow; Wandich v. Viele (2002), 2002 CarswellOnt 6 (Ont. S.C.J.).

[^8]: Kerr v. Baranow (2011), 2011 SCC 10, 2011 CarswellBC 240 (S.C.C.).

[^9]: Mellco Developments Ltd. v. Portage la Prairie (City) (2001), 2001 MBQB 236, [2001] 11 W.W.R. 282 (Man. Q.B.); affirmed (2002), 2002 MBCA 125, [2003] 1 W.W.R. 216 (Man. C.A.).

[^10]: Kerr v. Baranow.

[^11]: Sharwood & Co. v. Municipal Financial Corp. (2001), 2001 24066 (ON CA), 53 O.R. (3d) 470 (Ont. C.A.).

[^12]: Mellco Developments Ltd. v. Portage la Prairie (City) ; Rideout v. Kirkpatrick Estate (1992), 1992 5509 (NB KB), 125 N.B.R. (2d) 124 (N.B. Q.B.); affirmed (1992), 1992 4064 (NB CA), 130 N.B.R. (2d) 23 (N.B. C.A.).

[^13]: Citadel General Assurance Co. v. Lloyds Bank Canada, 1997 334 (SCC), [1997] 3 S.C.R. 805 (S.C.C.), at para. 30.

[^14]: PIPSC v. Canada (Attorney General), 2012 SCC 71, [2012] 3 S.C.R. 660 (S.C.C.), at para. 151;

[^15]: Peter v. Beblow, at p. 1012.

[^16]: Kerr v. Baranow, at para. 187.

[^17]: Mellco Developments Ltd. v. Portage la Prairie (City).

[^18]: Garland v. Consumers' Gas Co. (2004), 2004 SCC 25, 2004 CarswellOnt 1558 (S.C.C.).

[^20]: Toronto Dominion Bank v. Bank of Montreal (1995), 1995 7159 (ON SC), 22 O.R. (3d) 362 (Ont. Gen. Div.).

[^21]: Kerr v. Baranow (2011) ; Cloutier v. Francis (2011), 2011 CarswellOnt 15427 (Ont. S.C.J.).

[^22]: 1986 23 (SCC), [1986] 2 S.C.R. 38 (S.C.C.), at p. 46.

[^23]: Orobko v. Orobko (1992), 1992 12980 (MB CA), 39 R.F.L. (3d) 203 (Man. C.A.).

[^25]: Bell v. Bailey (2001), 2001 11608 (ON CA), 203 D.L.R. (4th) 589 (Ont. C.A.)

[^26]: McLean v. Danicic, 2009 28892 (ON SC), 2009 CarswellOnt 3289 (Ont. S.C.J).

[^27]: In McLean, the parties cohabitated for five years, the woman moved into a house owned by the man, and the parties renovated it together. Ms. McLean developed physical problems during this time (such as neck and shoulder paid as well as migraine headaches), attributing these symptoms to being tired as a result of the hard work and long hours involved with the construction of the house.

[^28]: Bracklow v. Bracklow, 1999 SCC 44.