Unjust Enrichment Claims

unjust enrichment

Unjust Enrichment Claims

 

Barrett v. Derksen 2014 BCSC 2209 is a classic case of unjust enrichment made by a surviving common-law spouse after the death of her partner.

The claimant and the deceased live together for 17 years until 2009 in a house that the deceased had purchased with a friend “F” in 1987.

The claimant gave evidence that she made contributions to the maintenance and upkeep of the property, including taking out loans to assist in meeting the couple’s expenses, buying groceries and cooking, making garden improvements, cleaning, painting, purchasing bathroom fixtures, purchasing building materials, paying utility bills and home insurance, and contributing to mortgage payments and property taxes when due.

Just one day before the deceased died in 2011 the claimant commenced court action claiming unjust enrichment, seeking half of the proceeds of the sale of the property.

The deceased died leaving one son.

The court indeed found that the claimant made contributions to the relationship and property that entitled her to a remedy based on unjust enrichment.

The court valued her contributions at one third of the increase in the value of the deceased’s one half interest in the property that he co-owned with “F”, during the 17 years that the claimant and the deceased were together.

This increased was valued at $60,000.

 The Law of Unjust Enrichment

[15]         The authorities clearly establish that, in order for a claimant to succeed in a claim of unjust enrichment, three elements must be established:

(a)  By the claimant’s efforts and contributions, the respondent has been enriched;

(b)  The claimant has suffered a corresponding deprivation; and

(c)  There is an absence of any juristic reason for the enrichment.

(Pettkus v. Becker, [1980] 2 SCR 834 at 848, 117 DLR (3d) 257 [Pettkus]; Peter v. Beblow, [1993] 1 SCR 980 at 987, 101 DLR (4th) 621[Peter]; Kerr at para. 3).

 

The Court found there was no juristic reason to deny her claim:

The final element of the unjust enrichment test is that the enrichment and deprivation must have occurred in the absence of any juristic reason. The Court of Appeal in Wilson v. Fotsch, 2010 BCCA 226, laid out a comprehensive structure for examining the absence of a juristic reason at paras. 21-38, which I decline to repeat here. Suffice to say that at this stage of the analysis the court will examine whether an established category of juristic reason exists, namely a contract, a donative intent, a disposition of law, or some other valid common law, equitable or statutory obligation. In the absence of a finding under one of these categories or some other reason to deny recovery, the court will find the enrichment to be unjust.  In the present case, Ms. Barrett’s contributions do not fall under any of the established categories, nor do I find any other reasons sufficient to ground a finding of a juristic reason for the enrichment Mr. Derksen received. In the result, I am satisfied that Ms. Barrett has made out her claim for unjust enrichment.

]         One applicable rule is that there is no presumption that an entitlement, once established, must be to an equal share: Kerr at para. 62. The quantum of the share will reflect the contribution: Kerr v Barranow 2011 SCC 10, at para. 53. Additionally, the jurisprudence recognizes that there are different ways of valuing the contribution. Remedies for unjust enrichment may take the form of a constructive trust or a monetary award calculated either on a “value received” or “value survived” basis: Kerr at para. 55.

 

The Court did not award her half the gain, but instead 1/3:

Of course, any assessment of entitlement must also take into account that benefits flow both ways between the parties. Ms. Barrett received benefits from her participation in the relationship, just as she made contributions. While I am satisfied that what she did was sufficient to constitute the necessary benefit and deprivation that the doctrine requires, it was not of such a magnitude as would entitle her to a 50% share in the increase in value during the time the parties were together. In my view, to award her monetary judgment reflecting 33% of the value increase would constitute a fair and proper remedy for her contributions.

Trevor Todd

Trevor Todd is one of the province’s most esteemed estate litigation lawyers. He has spent more than 40 years helping the disinherited contest wills and transfers – and win. From his Kerrisdale office, which looks more like an eclectic art gallery than a lawyer’s office, Trevor empowers claimants and restores dignity to families across BC. He is a mentor to young entrepreneurs and an art buff who supports starving artists the world over. He has an eye for talent and a heart for giving back.

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