Gill v Gill 2022 BCCA 264 upheld the dismissal of a former spouse’s claim for unjust enrichment in and to the matrimonial property on the basis that a rental agreement of the property signed by her spouse and his father prior to their marriage was a juristic reason to defeat her claim.
Generally, “the doctrine of unjust enrichment applies when a defendant receives a benefit from a plaintiff in circumstances where it would be “against all conscience” for him or her to retain it. Where this is found to be the case, the defendant will be obliged to restore that benefit to the plaintiff”: Moore v. Sweet, 2018 SCC 52 at para. 35.
Peel (Regional Municipality) v. Canada, [1992] 3 S.C.R. 762 at 788; 1992 CanLII 21 (SCC), stated d “[a]t the heart of the doctrine of unjust enrichment … lies the notion of restoration of a benefit which justice does not permit one to retain.”
Under the unjust enrichment framework, a plaintiff will be successful if they can show that
(1) the defendant was enriched;
(2) the plaintiff suffered a corresponding deprivation; and
(3) the defendant’s enrichment and the plaintiff’s corresponding deprivation occurred in the absence of a juristic reason: see Pettkus v. Becker, [1980] 2 S.C.R. 834 at 848; 1980 CanLII 22 (SCC) [Pettkus]; Garland v. Consumers’ Gas Co., 2004 SCC 25 at para. 30 [Garland]; Kerr, at paras. 30–45.
The third element of an unjust enrichment claim is that the benefit and corresponding detriment must have occurred without a juristic reason; in other words, that there is no reason in law or justice for the defendant to retain the benefit conferred by the plaintiff, making its retention unjust: Kerr at para. 40.
In Garland, Iacobucci J., at paras. 44–46 outlined a two-step approach in determining whether there is no juristic reason for the retention of the benefit conferred.
At the first step, the plaintiff must prove there is no established category of juristic reason to deny recovery, including an intention to make a gift (donative intent), a contract, or a disposition of law: see also Kerr at para. 41. The plaintiff will have made out a prima facie case under the juristic reason component of an unjust enrichment analysis if they can demonstrate that no existing category is applicable. The prima facie case is rebuttable, however, where the defendant can show why the enrichment should be retained even though the case falls outside the established juristic reason categories.
At this second step, the defendant has a de facto burden of proof: Kerr at para. 43. It is at this step that a court may consider the legitimate expectations of the parties and moral and policy-based arguments about whether the retention of a particular benefit would be unjust: see Pettkus at 849; Peter v. Beblow, [1993] 1 S.C.R. 980 at 990; 1993 CanLII 126 (SCC); Kerr at paras. 44–45.
The trial judge found, as a fact, that a valid rental contract was in place throughout Gurinder’s residence in the Delta Property. Having come to this conclusion, the judge could not but otherwise conclude that there was a juristic reason for the benefit Gurinder (and Hardeep) conferred upon Gurmail. The judge was not wrong to consider whether the combined payment of rent and additional expenses attributable to the property exceeded its fair market rental value. Had the payments being made by Gurinder and Hardeep substantially exceeded the rent the property could reasonably be expected to attract on the open market, questions would arise as to whether the payments were, in fact, for rent or whether they were mortgage payment.
