Mar 13, 2017

COURT OF APPEAL SUMMARIES (FEBRUARY 27-MARCH 3, 2017)

Reiter v. Hollub, 2017 ONCA 186 (CanLII)

Reiter v Hollub, 2017 ONCA 186

[Feldman, Epstein and Miller JJ.A.]

Counsel:

J. L. Davies, for the appellant

E.C.M. Boyle, for the respondent

Keywords: Family Law, Cohabitation, Constructive Trusts, Unjust Enrichment, Joint Family Ventures, Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269

Facts:

The appellant, Jessica Reiter, appeals from the dismissal of her application for an interest in the increase in equity of a home owned by the respondent, Tiar Hollub, which she shared during their six-year common law relationship.

Ms. Reiter advanced her claim on the basis of unjust enrichment. She argued that she had contributed to the $410,000 increase in the net value of the home over the course of the relationship. She relied on contributions she made to common living expenses and to the maintenance and repair of the residence. She also relied on the fact that she had given Mr. Hollub a one-time payment of $5,000 toward the mortgage.

Ms. Reiter also took the position that her relationship with Mr. Hollub amounted to a joint family venture as defined in Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269.

The application judge held that Ms. Reiter was unable to establish a joint family venture to support the requested remedy. She found no evidence that would support a conclusion that Ms. Reiter’s contributions had led to an increase in the value of the property. The application judge also found that the evidence did not support a joint family venture as defined in Kerr v. Baranow. As to Ms. Reiter’s $5,000 payment toward the mortgage, the application judge held that although Mr. Hollub had been enriched to Ms. Reiter’s detriment as a result of this contribution, his retention of the payment was justified by the parties’ agreement to share living expenses.

Issues:

(1) Did the application judge err in finding no unjust enrichment and in concluding that her relationship with Mr. Hollub did not amount to a joint family venture?

(2) Did the application judge err in the treatment of the $5,000.00 lump-sum payment?

Holding: Appeal allowed, in part.

Reasoning:

(1) No.

Unjust Enrichment

The test for unjust enrichment is well-settled. To establish unjust enrichment, the person advancing the claim must prove three things:

  1. An enrichment of or benefit to the defendant;
  2. A corresponding deprivation of the plaintiff; and
  3. The absence of a juristic reason for the enrichment.

There are two steps to identifying whether there is a juristic reason for the responding party to retain the benefit incurred. First, the court must consider whether the case falls within a pre-existing category of juristic reason, including a contract, a disposition of law, donative intent, and other valid common law, equitable or statutory obligations: Kerr, at para. 43. If a case falls outside one of these established categories, the reasonable expectations of the parties and public policy considerations become relevant in assessing whether recovery should be denied

In Kerr v. Baranow, the Supreme Court outlined two possible remedies where unjust enrichment is established – a monetary award or a proprietary award.

The court held that there are two different approaches to valuation for a monetary award. First, a monetary award may be based on a quantum meruit, value received or fee-for-services basis. Second, a monetary award may be based on a value survived basis. This is where the joint family venture analysis becomes relevant.

To receive a monetary award on a value survived basis, the claimant must show that there was a joint family venture and that there was a link between his or her contributions to the joint family venture and the accumulation of assets and/or wealth. Whether there is a joint family venture is a question of fact to be assessed in light of all of the relevant circumstances, including the four factors noted above – mutual effort, economic integration, actual intent and priority of the family.

Justice Cromwell was careful to note that cohabiting couples are not a homogenous group. The analysis must therefore take into account the particular circumstances of each relationship. The emphasis should be on how the parties actually lived their lives, not on their ex post facto assertions or the court’s view of how they ought to have done so. While the four factors identified are helpful to determine whether the parties were engaged in a joint family venture, there is no closed list of relevant factors.

In the application judge’s view the parties’ shared expense arrangement resulted in financial enrichment on both sides. This fact-based holding is entitled to deference. The finding that the parties had a mutually beneficial agreement to share living expenses was available to the application judge on the record. The parties paid for their own utilities, their own groceries, and their own vacations. Ms. Reiter gave Mr. Hollub monthly payments of $400, which Ms. Reiter testified was paid toward rent. Ms. Reiter also agreed that this $400 was less than she paid for rent either before or after the relationship. Mr. Hollub made monthly mortgage payments of $1,000, and paid the property taxes and insurance. Given their annual incomes, both parties also had considerable savings at the relationship’s end.

Joint Family Venture

In the light of factors such as the lack of integration of the parties’ finances, lack of combined contribution to a future together and lack of evidence of prioritizing family over individual interests, the application judge was entitled to conclude that there was no joint family venture in this case.

2. Yes. The application judge erred by characterizing the $5,000 as having been paid as part of the common expense agreement – a characterization not advanced by either party and not supported by the evidence. Given the law’s presumption against a gift (Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795) and the absence of any evidence of donative intent, the payment should simply be returned.

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