NEWMARKET COURT FILE NO.: FC-18-55276

DATE: 20210317

ONTARIO SUPERIOR COURT OF JUSTICE FAMILY COURT

BETWEEN:

Maryna Hutsul Applicant

– and –

Dmitri Kostikov Respondent

COUNSEL: Alexandra Abramian, for the Applicant Dmitri Kostikov, Self-Represented

HEARD: May 29, 30 and 31, 2019; January 25, 26 and February 25, 2021

REASONS FOR JUDGMENT

MCKELVEY J.:

Introduction

[1] The Applicant, Maryna Hutsul, is originally from the Ukraine and emigrated to Canada in 2001. At that time, Ms. Hutsul was married to her former husband and had a son, Zakhar Hutsul, who was seven years old.

[2] Shortly after coming to Canada, Ms. Hutsul and her former husband separated and divorced.

[3] The Respondent, Dmitri Kostikov, who was originally from Russia was also previously married and had a son from that marriage, Alexander.

[4] Ms. Hutsul and Mr. Kostikov met in around 2004. In May, 2005, the couple decided to move in together and looked for a home to purchase for themselves and their two children. At the time this decision was taken, Mr. Kostikov owned a home in Mississauga which was subsequently sold.

[5] In July, 2005, the couple moved into 105 Cherry Hills Road, Vaughan (“the family home”). This property was registered in the Respondent’s name. The purchase price for the family home was $412,000.

[6] Starting in the fall of 2014, a series of investment properties were purchased as follows:

1. 20850 Dalton Road, Georgina. This property was purchased on October 15, 2014 for $320,000. The Applicant was listed as the registered owner. She sold this property in August 2016. The net equity in the home was $83,762.83 which was invested in a home at 15 Michael Power Place, Toronto.
2. 118 The Queensway North, Keswick. This property was purchased on December 1, 2014 for $375,000. It was registered in the Respondent’s name. It was subsequently sold by the Respondent on March 15, 2017 for the sum of $530,000. The equity in the home at the time of sale was $221,963.
3. 125 Burton Avenue, Barrie. This property was purchased on July 6, 2015 for $451,000. It was registered in the Respondent’s name and was subsequently sold in December 2019. The equity in the home at the time of sale was $91,278.32.
4. 21 Michelle Drive, Barrie. This property was purchased on August 17, 2015 for $377,000. It was registered in the Respondent’s name. The property was sold in October 2019. The equity in the home at the time of sale was $160,049.
5. 302 Livingstone Street West, Barrie. This property was purchased on February 10, 2016 for $432,000 and it was registered in the Respondent’s name. This home was subsequently sold in October 2019. The net equity in the home was $144,290.
6. 15 Michael Power Place, Toronto. This is a condominium unit which was purchased for $475,000 on August 22, 2017 and was registered in the name of the Applicant and her son (with the Applicant taking a 1% interest and her son 99%). The proceeds to purchase this property were in part funded by the sale of 20850 Dalton Road, which was sold on August 30, 2016 for $383,000.

[7] According to the Applicant, the relationship with Mr. Kostikov started to deteriorate in the spring of 2016. They decided to separate in October 2017 and the Applicant moved out of the family residence in December, 2017. Mr. Kostikov continues to live in the family residence on Cherry Hills Road. Ms. Hutsul currently lives in the condominium unit at 15 Michael Power Place.

Issues

[8] In her application, Ms. Hutsul seeks a declaratory order that she holds a 50% interest in the properties or the net proceeds set out above, “by way of a resulting trust and in the alternative by way of a constructive trust”.

[9] In his answer, the Respondent sought an order for exclusive possession for the home at 105 Cherry Hills Road, 125 Burton Avenue, 21 Michelle Drive and 302 Livingstone Street West. At the commencement of trial he also advised that he wanted to assert a claim for support against the Applicant. He was advised that he would need to bring a motion to amend his answer to assert such a claim. Given that this had not previously been raised, the Applicant made it clear that if this amendment were granted, the trial would have to be adjourned for further discovery. Mr. Kostikov elected not to proceed with a claim for support. Both parties agreed that the trial should proceed and that the court should address the following two issues:

1. The Applicant’s request for a declaratory order that she is entitled to a percentage interest in the properties held by the Respondent in his name as described above; and
2. The request by the Respondent for a declaration that he is entitled to a percentage interest in the property owned in the name of the Applicant.

[10] The position of the Applicant is that she is entitled to an order for a 50% interest in the properties held in the Respondent’s name. She acknowledges that if granted, the Respondent should be entitled to a 50% interest in the property at 15 Michael Power Place.

[11] The position of the Respondent is that he is entitled to a 100% interest in the properties which are registered in his name. He does not claim any interest in the proceeds of sale of the Dalton Road property, nor does he claim any interest in the condominium unit at 15 Michael Power Place. Mr. Kostikov also seeks an order lifting the certificates of pending litigation which were filed on the properties which are currently registered in his name.

[12] Subsequently, during the course of final submissions, the Applicant sought an amendment to her application in order to plead and rely upon the doctrine of joint family venture. For reasons given separately, this amendment was permitted. In the end, therefore, the Applicant’s submissions proceeded on the basis that the Applicant was seeking a 50% interest in the properties owned by the Respondent during their cohabitation on the basis of a joint family venture.

Credibility of the Parties

[13] The only witnesses called at trial were Ms. Hutsul and Mr. Kostikov.

[14] I found Ms. Hutsul to be a generally credible and reliable witness. Much of her evidence was supported by the records which were filed as exhibits at trial. She also conceded points on her cross-examination with respect to the Respondent’s contributions to the properties in question. For example, she did not hesitate to recognize that for the most part, it was the Respondent who made the mortgage payments as well as the property expenses after the joint account was abandoned. She also acknowledged the Respondent’s work to develop the properties.

[15] There was, however, a major inconsistency in her evidence. In her financial statement dated December 19, 2017, she does not list her ownership of the property at 15 Michael Power Place. When cross-examined about this, Ms. Hutsul testified that she did not want the Respondent to know where she lived. While that might be a reason for not disclosing the address of the property, it does not excuse the failure of Ms. Hutsul to disclose the asset in her financial statement.

[16] Further, in a subsequent financial statement dated April 25, 2019, Ms. Hutsul did disclose the existence of the condominium (without giving an address), but included only 1% of the value of the condominium consistent with her only holding a 1% interest in the property. In her evidence at trial, however, she testified that the property was beneficially owned by her. The evidence is clear in any event that all of the funds used to purchase the property came from the Applicant. It may be significant to note that in the financial statement of April 25, 2019, someone has made a handwritten correction to the financial statement which states that, “$113,900 to be added to Maryna’s net worth”. This appears to be a correction designed to reflect Ms. Hutsul’s beneficial ownership of the condominium.

[17] This lack of candor on the part of Ms. Hutsul caused me concern.

[18] Mr. Kostikov, however, did not give his evidence in a straightforward manner. In cross-examination his answers were often unresponsive to the questions asked. He was also reluctant to acknowledge that the Applicant made any significant contributions to the maintenance and development of the properties. There were significant gaps in the supporting documentation which he presented to the court. For example, in his evidence he only produced notices of assessment for his income until 2013. His explanation was that he did not receive the actual returns from his accountant. As a result, however, it is not possible to determine how much income he received up to 2013 as employment income and what he received as rental income. Mr. Kostikov was also asked on cross-examination about the rental of the basement in the family home. He acknowledged that he received the rental payments in cash but could not recall if any of this income was reported to the Canada Revenue Agency. His response on this issue appeared evasive to me. Mr. Kostikov also claimed that he spent $84,000 in repairs and renovations to the family home on Cherry Hills Road. However, he did not produce any receipts or records to document these expenses. He initially claimed this was because it was a principal residence which was exempt from tax. However, when it was pointed out to him on cross-examination that he had produced other receipts for the family home such as the purchase of a mattress, he claimed that there were no receipts relating to the renovations because he paid cash to the contractors. Having said that, Mr. Kostikov did not produce any banking records to document withdrawals which would support these rather substantial expenses.

[19] Mr. Kostikov also claimed that he fully repaid the Applicant’s initial contribution of $17,000 to the family home. His accounting of what he claimed were repayments occurred between 2008 to 2010 was unsatisfactory. He was not able to explain why he was unable to repay this “loan” after the closing from his Mississauga home. In addition, his explanation of the “repayments” which he said occurred between 2008 to 2010 were contrived. In cross-examination he was forced to acknowledge that some of the payments he claimed as repayment for the loan were in fact related to payments that he made to the Applicant for reimbursement of medical expenses which he had earlier received from his employer’s insurance plan.

[20] It is significant to note that on some important points, the evidence of Ms. Hutsul was not challenged either in cross-examination or by the evidence of Mr. Kostikov. For example, Ms. Hutsul testified that she contributed $17,000 to the purchase price of the family home. The home itself was registered in the name of the Respondent. When questioned about this she testified,

We always had discussions, and in particular for this property, he said, “don’t matter on which name the property would be, and the property’s ours, and you have rights for the property, its just a matter of financing the title, that’s why you just understand that its not important”, and I said, “ok”.

[21] Another issue which went unchallenged was the Applicant’s evidence that there was discussion about getting married. In her evidence, the Applicant testified,

We had discussion about the marriage, but we decided finally to stay out of the paper, and I agreed as he was saying, “I love you”, and no need to be, kind of, written on the paper, just love each other, we cherish each other, and this will be forever. Just don’t worry about the paper created by people, its just us, and this I fully agreed and said, “ok”.

[22] This evidence is further supported by photographs and other evidence provided by the Applicant of what appears to be a close, loving relationship between the couple during their cohabitation. There are photographs of trips to Europe and visits to Mr. Kostikov’s family in Russia.

[23] In general, I prefer the evidence of the Applicant, especially when it is supported by documentary records or if it went unchallenged in the evidence at trial.

Legal Principles

[24] In Ontario, the provisions of Part I of the Family Law Act, RSO 1990, c F.3, deal with the division of property between married spouses. These provisions do not apply to the division of property upon separation of unmarried cohabitants. As a result, unmarried parties must resort to the common law if they seek a division of property on separation. The common law principles of unjust enrichment have developed to address this situation. These are the principles which must be applied in the present case as the Applicant and Respondent were never married.

[25] The leading case on the principles of unjust enrichment are set out in the Supreme Court of Canada decision in Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269. In this case, the court sets out the elements of an unjust enrichment claim. These are as follows:

1. An enrichment;
2. A corresponding deprivation; and
3. An absence of juristic reason for the enrichment.

[26] In Kerr as well, the court concluded that the resulting trust doctrine had no further role to play in the resolution of property claims by domestic partners on the breakdown of their relationship (see para. 6).

[27] The Supreme Court found that the doctrine of a constructive trust continues to be available where a claimant can show that a benefit conferred contributed to the acquisition, preservation, maintenance or improvement of a specific property (see para. 58). 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. The plaintiff in a claim for unjust enrichment may be entitled to a monetary or a proprietary remedy. The court in Kerr references the Supreme Court of Canada decision in Lac Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC), [1989] 2 S.C.R. 574, in support of this principle. In the Lac Minerals case, however, Justice La Forest comments that the usual remedy for unjust enrichment is monetary compensation. However, the remedy for constructive trust may continue to be employed in situations where other remedies would be inappropriate or injustice would result. This view was echoed in the Kerr decision where the court states at para. 47,

The first remedy to consider is always a monetary award... In most cases, it will be sufficient to remedy the unjust enrichment. However, calculation of such an award is far from straightforward.

[28] At para. 50 of the Kerr decision, the court goes on to comment when a beneficial entitlement to property may be appropriate. The court states,

The Court has recognized that, in some cases, when a monetary award is inappropriate or insufficient, a proprietary remedy may be required. Pettkus is responsible for an important remedial (p. 300) feature of the Canadian law of unjust enrichment: the development of the remedial constructive trust. Imposed without reference to intention to create a trust, the constructive trust is a broad and flexible equitable tool used to determine beneficial entitlement to property (Pettkus, at pp. 843-44 and 847-48). Where the plaintiff can demonstrate a link or causal connection between his or her contributions and the acquisition, preservation, maintenance or improvement of the disputed property, a share of the property proportionate to the unjust enrichment can be impressed with a constructive trust in his or her favour (citations omitted). Pettkus made clear that these principles apply equally to unmarried cohabitants, since “[t]he equitable principle on which the remedy of constructive trust rests is broad and general; its purpose is to prevent unjust enrichment in whatever circumstances it occurs” (pp. 850-51).

[29] In Kerr, at para. 51, the Court goes on to note that the nature of the link required between the contribution and the property is an important element and that the plaintiff must demonstrate a sufficiently substantial or direct link or nexus between the plaintiff’s contributions and the property which is the subject matter of the trust. The plaintiff was also required to establish that a monetary award would be insufficient in the circumstances. The extent of the constructive trust interest must be proportionate to the claimant’s contributions. As a result where the contributions are unequal, the respective shares will also be unequal.

[30] In the Kerr decision, the Supreme Court goes on to expand the potential remedy for unjust enrichment in cases relating to domestic partners. It cautions, however, at para. 58, that their discussion, “is concerned only with the quantification of a monetary remedy for unjust enrichment; the law relating to when a proprietary remedy should be granted is well established and remains unchanged”.

[31] The court then proceeds to outline a monetary remedy arising from a joint family venture. At para. 85 the Court notes that cohabitation does not in itself, entitle one party to a share of the other party’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. The court then proceeds to define a joint family venture where a claimant’s contribution are linked to the generation of wealth. Justice Cromwell goes on to identify factors which are relevant to identifying whether a joint family venture is present. These factors are as follows:

1. Mutual effort: This involves the parties working collaboratively towards common goals.
2. Economic integration: This involves the degree of independence and integration which characterizes the relationship.
3. Actual intent: This reflects the actual intention of the parties as expressed or manifested by their conduct.
4. Priority of the family: This reflects the parties priority to their family in their decision making, the focus being on their respective contributions to domestic and financial partnership and on sacrifices made by them.

Analysis of the Evidence in this Case

[32] I have concluded that Ms. Hutsul did make a contribution to the acquisition of the properties which were acquired during the couple’s cohabitation. With respect to the purchase of 105 Cherry Hills Road, which was purchased on October 3, 2005, the initial deposit of $10,000 was paid by Mr. Kostikov. On closing, there was a further payment of $40,500, which included a contribution of $17,000 from Ms. Hutsul. The balance of $23,500 was paid by the Respondent. Ms. Hutsul’s contribution of $17,000 therefore represents a contribution of approximately one third to the down payment. It is documented in a withdrawal from her personal line of credit and a transfer to the Respondent, both of which are contained in Exhibit 9, at Tab 1.

[33] In addition to the down payment, Mr. Kostikov paid for furniture, appliances and renovations to the home after it was purchased. A number of these expenses are documented in the Respondent’s document brief, Exhibit 5, at Tab 2. In addition, Mr. Kostikov testified that he paid approximately $84,000 to contractors for work which was performed on the family home. None of these expenses are documented. In cross-examination, Ms. Hutsul was asked how much of the total down payment, including initial repairs her contribution of $17,000 represented. She responded that her contribution represented 10%. I am prepared to accept her evidence on this point.

[34] Ms. Hutsul also testified that it was agreed between her and Mr. Kostikov that the title for the family home would be in his name, but that the property would be “ours”. As noted previously, this evidence went unchallenged. Ms. Hutsul had never owned property before and trusted Mr. Kostikov. Ms. Hutsul also testified that she opened a joint account with Mr. Kostikov at the Toronto Dominion Bank. This account paid for the mortgage, utilities and property tax. However, the joint account was eventually abandoned after a year or so when the Respondent stopped making contributions to the joint account. After that point, the Respondent took full responsibility for payment of the mortgage, utilities and property tax. It is also undisputed that after the purchase of the home, the Respondent did renovations which included making rental apartments in the basement.

[35] It is undisputed that in October, 2020, Mr. Kostikov paid $15,000 to Ms. Hutsul. It is not clear to me whether this amount was paid as partial repayment of her initial contribution to the family home. On the one hand the couple had a practice of repaying money for expenses which were incurred for the other. Thus, for example, when they took trips together, Ms. Hutsul would often pay for the trip and get reimbursed by 50% from Mr. Kostikov at a later time. This would suggest that the sum of $15,000 may have been repaid to Ms. Hutsul by the Respondent on account of her initial contribution to the down payment required to purchase the family home. On the other hand, the Respondent suggested that some additional payments were made to the Applicant for the balance of the Applicant’s original contribution to the family home. As previously noted, I was not satisfied by his evidence on this point. Ms. Hutsul testified that the $15,000 was placed into a RRSP account which was later used to purchase the Dalton Road property which was registered in her name. This evidence does not directly contradict Mr. Kostikov’s evidence that the $15,000 was meant to repay Ms. Hutsul for her initial contribution to the family home. In the end, I am convinced that the Applicant’s initial contribution to the down payment was “modest”, but made the purchase of the family home possible. Overall, I conclude that the Applicant made a small but important contribution to the purchase and financing of the family home.

[36] Both the Applicant and the Respondent continued to work during their cohabitation. There was no evidence that the Applicant sacrificed her career or income earning capacity for the Respondent. From the income records which have been produced, it appears that the Respondent’s income was significantly greater than the Applicant’s. Over the 12 years of their cohabitation, Mr. Kostikov earned, according to his tax returns, a total of $1,006,893, while Ms. Hutsul earned $742,643. However, there were periods of time while Mr. Kostikov was unemployed. He initially worked as an electrician and then decided to take a course on securities. He subsequently joined The Investors Group, but this does not appear to have worked out well for him. In 2009 he took a job working for Bruce Power in Kincardine, Ontario. This position was a contract position and lasted until approximately 2015. Having taken this job, Mr. Kostikov started to rent a room in Kincardine. Much of the time between 2009 to 2015 was spent by Mr. Kostikov in Kincardine while Ms. Hutsul took care of the home in Vaughan, as well as the two children. The Applicant’s son was not continuously living at the family home in Vaughan. At one point in time he returned to live with his father and then split his time between living with his mother and father.

[37] The Respondent would return home for several months a year between his contracts at the Bruce Power Station.

[38] I accept that the Applicant’s taking care of the family home and the children during the period of time between 2009 to 2015 allowed the Respondent to earn income from the contracts he had with the Bruce Power Station and which in turn contributed to the accumulation of wealth by the Respondent.

[39] At the time that the home in Vaughan was purchased, the Applicant testified that Mr. Kostikov told her that the next home purchased would be in her name. By 2014, the couple started to accumulate more real estate. The next property purchased was 20850 Dalton Road in Georgina. The purchase closed on October 15, 2014. The Applicant made an initial deposit of $10,000 and a further down payment of $24,200 at the time of the purchase. No contribution to the purchase price was made by the Respondent. The property was put in the name of the Applicant. Ms. Hutsul’s evidence which was not contradicted by the Respondent was that it was Mr. Kostikov who worked with the real estate agent and selected the property to be purchased.

[40] The next property which was purchased was 118 The Queensway North in Keswick. This was purchased for $375,000. The initial deposit was paid by the Respondent in the sum of $10,000 and the down payment on closing was $70,650. The property was registered in Mr. Kostikov’s name. However, the down payment on closing of $70,650 was financed by a loan which was taken out from Mr. Kostikov’s line of credit and which was secured against the family home on Cherry Hills Road. Thus, I have concluded that the Applicant did make an indirect contribution to the purchase of this home given that in my view she did have a proprietary interest in that home. Ms. Hutsul also testified that the Respondent told her that these additional properties were being purchased for the family as a retirement plan. The plan contemplated that in their retirement, the properties could be sold to finance their retirement. All of the investment properties were rented and it appears that there was either a neutral or positive cash flow from the rented properties.

[41] Ms. Hutsul agreed that Mr. Kostikov did do repairs and renovations on the properties. For her part, she did cleaning of the properties and managed the tenant relationships.

[42] The next property which was purchased was at 125 Burton Avenue in Barrie. The purchase closed on July 6, 2015, with a purchase price of $451,000. The Respondent was once again responsible for paying a $10,000 down payment. The balance of the down payment on closing was $86,600, which was taken from the Respondent’s line of credit, which was secured against the family home. As with the property in Keswick, Ms. Hutsul was responsible for cleaning of the property, while her husband did repairs and renovations. She was also responsible for managing the tenants.

[43] The next property which was purchased was at 21 Michelle Drive in Barrie. The purchase closed on August 17, 2015, for a purchase price of $377,000. The initial deposit of $10,000 was paid by the Respondent while the remaining down payment due at closing of $70,750 was secured against the family home on Cherry Hills Road.

[44] The next property which was purchased was 302 Livingstone Street West in Barrie. This purchase closed on February 10, 2016, with a purchase price of $432,000. As with the other properties, the deposit of $10,000 was paid by the Respondent and the final down payment of $81,850 was paid from the Respondent’s line of credit secured against the family home.

[45] The home on Dalton Road, which was in the Applicant’s name, was sold by Ms. Hutsul on August 30, 2016. The sale price of $383,000. The net proceeds received by Ms. Hutsul were $83,762.83. These were subsequently re-invested in a condo unit at 15 Michael Power Place. The purchase price for the condo was $475,000. The registered owners for the condo were Ms. Hutsul (1%) and her son (99%). The total down payment on the Michael Power Place condo was $107,073.22. Apart from the funds received from the sale of the Dalton Road property, Ms. Hutsul also cashed in some of her savings to finance this purchase.

[46] I have concluded that the criteria for unjust enrichment have been satisfied in this case. Ms. Hutsul made an initial contribution of $17,000 to the down payment on the family home. She was told that the property would be “ours”. In addition, financial contributions through a joint account were made by Ms. Hutsul for a year or so after the property was purchased. These contributions went to payment of the mortgage as well as taxes on the property. All of this leads me to conclude that Ms. Hutsul made a small but important contribution to the acquiring and maintenance of the property.

[47] With respect to the other properties, Ms. Hutsul did not make any direct financial contribution. However, the down payments came from a line of credit which was secured on the family home. In addition, the Applicant did cleaning of the properties and managed the tenant relationships. I conclude in the circumstances that the Applicant did make contributions to the maintenance of these other properties.

[48] Finally, the Applicant took responsibility for maintenance of the family home and the children while the Respondent worked in Kincardine on contracts which spanned a period of approximately six years. This allowed the Respondent to earn a substantial income during the time that he was employed at the Bruce Power Station. This represented a significant benefit to the Respondent.

[49] As the Applicant was not given any interest in the properties owned by the Respondent, there has been a corresponding detriment to her. Finally, there are no juristic reasons to deny her recovery for the contributions that she has made. All of this leads to the conclusion that the criteria for unjust enrichment have been satisfied by the Applicant in this case.

[50] There has been an unjust enrichment because the Respondent has retained a disproportionate share of the assets that were the product of their joint efforts. In their financial disclosure statements, the Applicant lists assets which total $253,552.96 at the time of separation. This includes the value of the condominium owned by the Applicant at 15 Michael Power Place, Toronto. In the Respondent’s Affidavit with respect to his assets accumulated during the relationship, the total assets are listed at $1,178,500. There is, however, an error in the calculation by the Respondent in the calculation of the property he owned on the date cohabitation commenced. In this regard he failed to include the property he owned in Mississauga prior to his relationship with Ms. Hutsul. In his cross-examination, Mr. Kostikov stated that he received $65,000 from the sale of the Mississauga property. However, I am satisfied that this amount underestimates the amount he actually received. The property was initially purchased for $271,000 and was sold in October, 2005 for $350,000. A commission of $11,235 was paid on the sale of the property. We do not have any documentary evidence with respect to the amount of the outstanding mortgage at the time of the sale. In his submissions, Mr. Kostikov estimates that his net recovery from the sale was $177,000. If this figure is correct, it would reduce the amount accumulated by the Respondent during their relationship from $1,178,500 to $1,001,500. This contrasts with the Applicant’s net growth during the relationship of $253,552. All of this leads to the conclusion that the Respondent has retained a disproportionate amount of wealth accumulated during the course of the relationship.

[51] I have also concluded that the criteria for a joint family venture have been satisfied in this case.

[52] Turning to the criteria set out by the Supreme Court of Canada in the Kerr decision, the first consideration is whether there has been mutual effort by the parties working collaboratively towards common goals. Indicators such as the pooling of effort and teamwork, the decision to have and raise children together and the length of the relationship may all point towards the extent, if any, to which the parties have formed a true partnership and jointly worked towards important mutual goals. The Court notes that the 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. In the present case, the evidence does point to a pooling of effort and teamwork. The evidence which supports this conclusion includes the length of the relationship, which lasted for approximately 12 years and involved the raising of two children from the partners’ previous marriages. In addition, there were contributions by the Applicant to the expenses of the family home. Finally, Ms. Hutsul took on full responsibility for maintaining the family home during lengthy periods of time between 2009 to 2015 while the Respondent was working at the Bruce Nuclear Power Plant in Kincardine. This in turn allowed the Respondent to earn a substantial income from those contracts.

[53] With respect to the issue of economic integration, the Court in Kerr notes that the more extensive the integration of the couple’s finances, economic interests and economic well-being, the more likely it is that they should be considered as having engaged in a joint family venture. In the present case, I have already noted the joint bank account which was initially set up by the couple. The joint bank account was, however, abandoned after a year or so. From that point forward, however, the parties each took responsibility for payment of household expenses. The Respondent, for example, took responsibility for payment of the mortgage and property taxes. The Applicant took responsibility for payment of groceries and other day to day expenses of the family, especially during the time that Mr. Kostikov was working in Kincardine. This supports a conclusion that there was an integration of the couple’s finances in this case.

[54] The next criteria identified by the Supreme Court in the Kerr decision is whether there was an actual intent to share in the wealth they created. As the Court notes at para. 95 of the decision, the stability of the relationship may be a relevant factor as may be the length of the cohabitation. The Court states,

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.

[55] I am satisfied that the parties in this case did intend to share in the wealth they jointly created. The evidence satisfies me that they were engaged in a stable relationship for a lengthy period of time. While it is impossible to engage in a precise weighing of the benefits conferred within their relationship, I am satisfied that they intended to share in the wealth they jointly created. In this regard, I also rely on the evidence of Ms. Hutsul who gave unchallenged evidence that the properties were “ours”. She also gave unchallenged evidence that the couple engaged in discussions about marriage but finally decided to stay “out of the paper” and that the relationship would be “forever”. I also accept the evidence of Ms. Hutsul that there was discussion between the parties that the real estate would be for the benefit of both of them as part of their retirement plan. This is further supported by the fact that the purchase of the property on Dalton Road was put in the name of the Applicant, even though it was the Respondent who worked with the real estate agent and selected the property for purchase.

[56] The final category identified by the Court in Kerr is the priority of the family. The Court states that 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. The Court notes that 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. This could occur in a number of ways including leaving the workforce for a period of time to raise children or relocating for the benefit of the other party’s career.

[57] In the present case I have concluded that there are no facts which suggest that the Applicant relied on the stability of the relationship for future economic security to her own economic detriment. There is, for example, no evidence that the Applicant sacrificed her career for the sake of the family. There is no evidence that the breakdown of the relationship left her in a worse position than she would have otherwise been.

[58] Taking all of the factors into account, however, I am satisfied that the parties were proceeding on the understanding of a shared future and that the criteria for a joint family venture have been satisfied in this case.

Remedies

[59] On the question of remedy, the first remedy to consider is “always a monetary award. In most cases it will be sufficient to remedy the unjust enrichment” (See para. 47 of Kerr). “Where the plaintiff can demonstrate a link or causal connection between his or her contributions and the acquisition, preservation, maintenance or improvement of the disputed property, a share of the property proportionate to the unjust enrichment can be impressed with a constructive trust in his or her favour”. (See para. 50 of the Kerr decision).

[60] In my view, however, there is no reason why a monetary award cannot adequately address the issue of unjust enrichment in this case. The difficulty lies in the fact that the Applicant has not provided any evidence with respect to the current valuation of the family home or the condominium owned by the Applicant. In her submissions, the Applicant seeks a proprietary interest. At para. 63 of her closing submissions she states,

With respect to the family residence, it is not possible to grant a monetary award as the court has not been provided with any confirmation of the property’s value and, therefore, the equity in the property cannot be quantified.

[61] In my view, the Applicant ought not to be able to rely on her own failure to provide an independent valuation for the properties in question as an excuse for demanding a proprietary remedy.

[62] We are therefore left in a situation where a monetary award is appropriate but the calculation of this award is made difficult due to the Applicant’s failure to provide a reliable, independent opinion about the value of the family home or the condominium currently owned by the Applicant.

[63] Matters are made even more difficult due to the fact that the condominium “owned” by the Applicant is in fact only owned 1% by her and 99% by her son who has not been named as a party in the application. The Applicant’s invitation to award a 50% interest in this property to the Respondent is therefore rendered problematic due to the fact that the Applicant only owns 1% of the property and the son has not been named as a party to the application.

[64] I have concluded that a monetary award is appropriate in this situation. I have also concluded that the most equitable remedy, in the absence of any other independent evidence, is to use the most current valuations of the assessments for municipal tax purposes to arrive at the current value of the family home and the condominium at 15 Michael Power Place.

[65] The next question which must be addressed is to what extent is the Applicant entitled to a share of the properties owned by the Respondent. As noted by the Court of Appeal in Martin v. Sansome, 2014 ONCA 14 (at para. 65), the calculation of monetary damages under the principles in the Kerr is an imprecise exercise. Under Kerr there is no presumption that wealth will be shared equally; unlike the Family Law Act, Kerr does not presume an equal contribution to the property acquired in the course of the family venture. Nor is it clear that Kerr contemplates special treatment where the property at issue is a matrimonial home.

[66] With respect to the matrimonial home, it is apparent that the Applicant’s financial contribution was modest in comparison to the Respondent’s. The Applicant’s original contribution to the down payment was approximately 10%. The Respondent was responsible for the balance of the down payment and most of the mortgage and property tax payments. It must also be borne in mind that the Respondent took all the risk for a default in purchasing the family home as he became solely responsible for the mortgage and that the Applicant may have been repaid for a large portion of her initial contribution.

[67] With respect to the other properties, the down payment was exclusively made by the Respondent (although they were secured against the family home in which Ms. Hutsul had an interest) and the mortgage payments were also made exclusively by the Respondent. The Respondent also took all of the risk of a default associated with the purchases and was solely responsible for the mortgage.

[68] However, for a period of approximately six years the Applicant took primary responsibility for the care of the family home while the Respondent was working in Kincardine and therefore allowed the Respondent to generate wealth which in turn was used to finance his properties.

[69] I am mindful of the direction given by the Supreme Court in Kerr at para. 81, where it is stated that there must be a clear link between the claimant’s contributions to the joint venture and the accumulation of wealth. At para. 81, the Court states,

The wealth created during the period of cohabitation will be treated as the fruit of their domestic and financial relationship, though not necessarily by the parties in equal measure. Since the spouses are domestic and financial partners, there is no need for “duelling quantum meruits”. 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.

[70] In the present case, the Respondent was mainly responsible for payment of the down payment on the family home. He was also primarily responsible for payment of the mortgage and property taxes on the family home. The Respondent was also solely responsible for the down payment on the other properties as well as payment of the mortgage and property taxes. The Applicant, as noted previously, was responsible for a contribution to the original purchase of the family home and also took care of the family home and the children while the Respondent was working in Kincardine.

[71] Having considered their respective contributions, I have concluded that the Applicant should be entitled to a 35% interest in the family home as well as the other properties owned by the Respondent. These values should be based on their current values as of the date of trial. (See para. 233 of Gonsalves v. Scrymgeour, 2016 ONSC 6659). As noted above, the family home should be valued based on the latest available assessment for municipal tax purposes. From this amount, should be deducted any mortgage or other financial encumbrances on the property. The Applicant should also be entitled to 35% of the net equity of the other properties which have been sold based on the net equity available for distribution to the parties.

[72] From the above amount, should be deducted the equity in the home at 15 Michael Power Place. Again, because there is no current known value for the property, the assessment should be based on the latest assessment done for municipal assessment purposes.

[73] The deduction of the net equity in the Michael Power Place property is to reflect the fact that the Applicant cannot expect both to get back something given to the Respondent and retain something received from the relationship (see para. 101 of the Kerr decision).

[74] If there are any issues arising out of these Reasons or the Judgment I have ordered, I may be spoken to.

[75] With respect to the costs of the application, if the parties are not able to resolve the issue of costs, then an appointment should be made with the trial coordinator within thirty days of the release of this decision to address the issue of costs. In such event, the parties will deliver concise briefs at least two days before their attendance. If no arrangements are made within 30 days for an appointment to speak to costs, there will be no order for costs.

Justice M. McKelvey

Released: March 17, 2021