Schmutz v. Schmutz, 2026 ONSC 2024

CITATION: Schmutz v. Schmutz, 2026 ONSC 2024

COURT FILE NO.: FS-22-00000185-0000

DATE: 2026-04-07

BETWEEN:

Susan Denise Schmutz

Applicant

– and –

Madeleine Schmutz in her capacity as Estate Trustee of Christian Schmutz

Respondent

D. Willer, for the Applicant

G. Carpenter, for the Respondent

HEARD: March 31, 2026

the honourable justice A. Spurgeon

Reasons for judgment

Introduction

1Before the court is a trial of a single issue. It relates to whether the applicant, Ms. Susan Schmutz (“Susan”), has a claim of unjust enrichment with a remedy of a determination that she was engaged in a joint family venture related to a property legally owned by her late husband, Christian Schmutz (“Christian”), located at 225 Black Walnut Road, St. George, Ontario (the “Black Walnut property”).

2This family proceeding – which predominately related to net family property (“NFP”) equalization – was largely resolved but for the one issue before the court. The single matter for the court’s determination proceeded in a brief trial with an agreed statement of facts (“ASF”).

3The NFP resulted in a determination that Christian’s estate would pay Susan an equalization payment of $34,116.92. This has occurred.

4The value of the unjust enrichment/joint family venture claim Susan advances is for $97,106, which is 50 percent of the increase in the value of the Black Walnut property from the deemed date of separation to the date of ultimate sale.

The Agreed Facts

5The ASF enumerates the relevant dates and events. They are:

a. The parties began co-habitation in 1977.

b. The parties were married on August 30, 1980.

c. The parties first separated on September 7, 2017.

d. They had no children.

e. A court proceeding relating to divorce and resolution of economic issues was commenced on September 25, 2018.

f. The parties attempted a reconciliation. The proceeding was allowed to lapse and was administratively dismissed on December 24, 2019.

g. During the reconciliation period, the parties lived in separate households. Susan lived in the matrimonial home and Christian lived at the Black Walnut property.

h. The parties separated on a final basis on December 18, 2020.

i. The present application was commenced on July 19, 2022.

j. Christian died suddenly on March 12, 2023.

k. Susan elected on August 31, 2023 to receive an equalization of NFP rather than her entitlement under Christian’s will.

l. The NFP calculation issue was resolved on consent of the parties by order of Hilliard J. on October 27, 2025.

6The ASF discloses other facts which the parties agreed were material to the issue in dispute. They include:

a. Susan, in her application, sought exclusive possession of the matrimonial home (which she got) and a determination that she had a legal or beneficial ownership interest in the Black Walnut property.

b. Susan was a joint tenant of the matrimonial home with Christian, while Christian was the sole legal owner of the Black Walnut property.

c. There are certain undisputed facts concerning Susan’s involvement with the Black Walnut property. They are:

i. The original purchase was partly financed with a $3,000 loan jointly undertaken from the bank on June 1, 1988 by both Susan and Christian.

ii. Susan’s father loaned Christian $227,345.75 on August 29, 1996 to construct a building on the Black Walnut Road property. That loan bore interest, but no interest was actually paid. The principal was only paid off in 2017 to Susan’s father. The loan was paid after a portion of the Black Walnut property was severed and sold off to pay the debt.

iii. Christian, during the marriage, operated a fledgling automotive repair and restoration shop at the Black Walnut property. He was self-employed, earning a modest income and sometimes no income.

d. During the marriage, Susan was the breadwinner. She worked for a bank full-time throughout the marriage. She retired in 2012. Her employment and then retirement income was deposited into a bank account jointly held with Christian. That joint account was used to pay the majority of household expenses as well as utilities at the Black Walnut property.

e. The parties also secured a joint line of credit which was used to pay arrears of property taxes on the Black Walnut property which had accumulated over the 2010, 2011, and 2012 tax years.

7In the NFP calculation agreed upon by the parties on October 27, 2025:

a. The matrimonial home was valued at $720,000; and

b. The Black Walnut property was valued (as of December 18, 2020) at $870,000 with an assumed capital gains tax obligation of $178,034.

8The Black Walnut property ultimately sold for $1,250,000.

9Various expenses in relation to the Black Walnut property were incurred by the respondent (the estate trustee and beneficiaries) after Christian’s death. The parties agree upon their value. They include:

a. sweat equity deployed in improving the property;

b. specific expenses in improving the property for sale; and

c. transaction costs related to the sale of the property.

10Those efforts and the general accretion of value in the market over time resulted in an increase in value of the Black Walnut property from the date of valuation to the date of its sale in the amount of $194,212.

11It is a 50 percent share of the net increase in the value of the Black Walnut property that Susan seeks in this trial – $97,106.

The Applicant’s Position

12Susan submits the fact that, during their 40-plus year relationship, she:

a. was the primary earner funnelling money into a joint account paying for the utilities on the Black Walnut property;

b. underwrote a loan jointly with Christian to purchase the property;

c. had her father loan money to Christian to build a building on the property – effectively at no interest; and

d. underwrote a joint line of credit to pay tax arrears on the property;

supports the proposition that the Black Walnut property was a joint family venture.

13Susan argues that she directly and indirectly put a substantial amount of money into the Black Walnut property over an extended period of time and that Christian was enriched by this. Susan submits that her contributions in this regard constituted a corresponding financial deprivation or detriment to her. She further submits that there is no juristic reason for the enrichment.

14Susan then submits that there are two ways in which the value of the corresponding enrichment and detriment can be calculated: One is on a fee-for-service basis, and the other is on a joint family venture basis.

15The latter is the one that Susan pursues, as there is no real way to – on a dollar-for-dollar basis – determine exact quantum of the manifest contribution she made to Christian’s wealth reposed in the property. On this footing, she seeks a 50 percent share in the value of the property.

16Given that a monetary calculation of the overall enrichment is possible given the liquidation of the property, a specific global figure can be ascertained ($97,106) and a finding of constructive trust is unnecessary.¹ ²

The Respondent’s Position

17The respondent’s position is that this is not a case to which a remedy of joint family venture flowing from an unjust enrichment applies. The respondent submits that such legal and equitable doctrine is displaced by the NFP equalization regime under the Family Law Act, R.S.O. 1990, c. F.3. Counsel points to para. 66 of the case of McNamee v. McNamee³, which says:

[66] It must be stated that, in the vast majority of cases, any unjust enrichment that arises as the result of a marriage will be fully addressed through the operation of the equalization provisions under the Family Law Act; the spouse who legally owns an asset will ordinarily share half its value with the other spouse as a result of the equalization provisions under the Act. However, a fair and contextual reading of the equalization and net family property provisions of the Family Law Act ensures that married spouses are not deprived of equitable remedies they would otherwise have available to them because, as noted above, ownership issues -- equitable or otherwise -- are to be determined before the net equalization payment exercise is undertaken.

18It is to be noted that, within the NFP equalization regime, there is provision for a variation from equal division of the difference in value as between parties between marriage and separation date, which is found in s. 5(6). Moreover, s. 10 of the Family Law Act allows for the determination of questions of title as between spouses during or prior to the statutory equalization process.

19Counsel for the respondent further pressed the point that, in the vast majority of cases, any potential unjust enrichment that may arise in the marriage of two people will be fully addressed through the application of the equalization provisions of the Family Law Act as explained in s. 5(7) thereof. Cases which depart from this proposition are the exception, not the rule.⁴

20Counsel for the respondent pointed to such an exceptions to the general rule – which are unlike the case at bar. An example is Mullin v. Sherlock⁵. There, the court held that the equalization regime in s. 5 of the Family Law Act would do an injustice absent the application of a determination of unjust enrichment and remedy of joint family venture because of the juxtaposition of a long co-habitation presaging a very short marriage wherein the family wealth was substantially generated during the pre-marital co-habitation.

21On this point the Ontario Court of Appeal said:

… The parties were involved in a long term, cohabiting relationship followed by a very short marriage. In these circumstances, the fundamental goal of the equalization provisions of the FLA could not be achieved: see FLA, s. 5(7). Without a finding of unjust enrichment, the end result would only consider the difference in the value of the parties’ assets as at the date of marriage in 2012 and separation in 2013, only ten months later. This would not account for the reality that GS Medical’s most significant growth took place over the years the parties were cohabiting.

22In a nutshell, counsel for the respondent submits that the Family Law Act equalization scheme is a comprehensive remedial legislative framework which operates on the presumption that a marital partnership is presumptively an equal partnership and that both parties enter into marriage aware of this. It, for all intents and purposes, displaces the availability of all common law and equitable remedies such as unjust enrichment and joint family venture except in the most unusual circumstances as was the case in Mullin. Indeed, s. 5(6)(h) of the Family Law Act contains a provision which allows for an unequal division in circumstances that may mimic the cause of action of unjust enrichment and remedy of joint family venture.

Analysis

Threshold Availability – [Family Law Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-f3/latest/rso-1990-c-f3.html)

23The first issue that must be considered in assessing a claim for unjust enrichment and joint family venture is determining whether the parties are married. If the parties are cohabitating outside of a marriage, clearly, unjust enrichment/joint family venture in common law and equity can be in play. However, in the context of marriage, wise commentary suggests:

[T]he court cannot consider claims for unjust enrichment and equalization in separate silos, and must consider the interplay between the two claims, including whether the equalization payment obviates the need for the court to make an additional monetary or proprietary award to address the unjust enrichment. Given the Court of Appeal's decisions in McNamee, Martin and Li, referred to above, cases where the court finds the need to make a monetary or proprietary award to address unjust enrichment arising from the marriage should be the exception, rather than the rule.⁶

24On this issue, in the context of the case at hand, it appears that the respondent’s position is the preferrable position. The marriage between the parties was of a long duration. Their economic partnership was clearly governed by the Family Law Act. The NFP calculation protocol therein is controlling. There is no reason to depart from the presumptive equal division of increased value of the total family wealth as between the marriage date and the separation date as described in s. 5 of the Family Law Act.

25In the present case, grafting a separate unjust enrichment analysis – post facto – upon the pre-existing NFP calculations is inappropriate given the unexceptional nature of the economic dynamics as between Susan and Christian during their marriage. It is superfluous to embark upon an unjust enrichment/joint family venture analysis.

26In any event, if I am wrong on this threshold issue, time may nevertheless be profitably spent examining the matter through the lens of an unjust enrichment analysis.

Unjust Enrichment Examination

27The second issue to grapple with is whether Susan can prove unjust enrichment. The elements of unjust enrichment are:

a. First, the claimant must show that the respondent has been enriched. Specifically, that they gave something to the respondent that was retained by the respondent which is a tangible benefit them and could be restored to the claimant in specie or by money. The tangible benefit could be either positive – in the sense of the provision of money – or negative – in the sense of relief from a liability or avoidance of an expense.⁷

b. Second, the claimant must show that they have suffered a corresponding detriment. Specifically, Susan must show that her loss relationally corresponds to the enrichment of the respondent.⁸ Effectively, the gain and loss cannot be coincidental but connected.

c. Third, the court must conclude that there is no juristic reason for the enrichment. In other words, the court must be of the view that there is no reason in law or justice to maintain the relative position of the parties where the respondent retains a material benefit to the detriment of the applicant. The means by which this is determined is a two-step test⁹:

i. Step one – determine if there is categorical juristic reason to maintain the material benefit with the respondent to the detriment of the applicant such as:

a gift;
a contract;
a disposition of law; and/or
other valid common law, equitable, or statutory obligation.¹⁰

ii. Step two – if there are no categorical juristic reasons, the court may consider the reasonable expectations of the parties and public policy considerations to assess whether recovery should be denied.¹¹

28On the analysis of the equitable doctrine of unjust enrichment, with respect to the facts of this case, it is apparent that Christian may well have, in the course of the marriage, been materially enriched and that Susan has suffered a corresponding detriment. The unequal contributions of Susan in respect of household expenses, undertaking loans to buy the Black Walnut property and pay off tax arrears, as well as the non-payment of interest on the loan from Susan’s father are all indicative of a potential unjust enrichment.

29However, in step one of the juristic reason analysis, there clearly is a categorical juristic reason to maintain the respondent’s material benefit to Susan’s detriment; that is the statutory obligation of NFP equalization.

30The Family Law Act provisions related to NFP equalization manifest a public policy determination – in the statute – that marriage is an equal economic partnership and the net accretion of wealth gained between the date of marriage and the date of separation within that partnership should be divided equally, subject to specific exceptions provided in the statute. Thereafter, the parties are expected to move on and live their separate lives.

31It should be noted that within the NFP calculation table,¹² the Black Walnut property was listed as belonging exclusively to Christian. This had an impact on the relative value of the family wealth held as between the parties between the marriage and separation dates. Had Susan’s claim to a half-interest in the Black Walnut property been recognized within the NFP equalization framework, the obligation of the respondent to make an equalization payment to the Susan may have been diminished or otherwise reversed.

32Susan’s claim to capture value in the Black Walnut property beyond the NFP equalization process and post separation (valuation) day – absent exceptional circumstances, which do not exist in this case – defies the governing framework established in the Family Law Act. This constitutes a juristic reason to maintain the status quo.

33Within the framework of an unjust enrichment analysis, Susan’s claim must fail.

Conclusion and Disposition

34For the foregoing reasons, Susan’s claim for a judgment in the sum of $97,106 based upon unjust enrichment resulting in the Black Walnut property being a joint family venture is dismissed.

35If the parties are unable to agree on costs of this matter, they may, within two weeks of release of these reasons for judgment, provide the court with submissions consisting of:

a. written submissions of no more than three pages; and

b. a bill of costs in the proper form.

A. Spurgeon, J.

Date Released: April 7, 2026