1988 S.K. No. 2422 IN THE SUPREME COURT OF NOVA SCOTIA TRIAL DIVISION BETWEEN: JEAN MAE KEDDY, and CARL VEN McGILL, Defendant HEARD: at Kentville, Nova Scotia before the Honourable Madam Justice Elizabeth Roscoe, Trial Division, on May 16, 17, 21, 23, 24, 29 and June 26, 1991. Final post‑trial submission filed August 6, 1991. DECISION: August 27, 1991 COUNSEL: David F. Walker, Solicitor for the Plaintiff Judith F. Ferguson and Leslie J. Dellapinna, Solicitors for the Defendant 1988 S.K. No. 2422 IN THE SUPREME COURT OF NOVA SCOTIA TRIAL DIVISION BETWEEN: JEAN MAE KEDDY, and CARL VEN McGILL, Defendant ROSCOE, J.: BACKGROUND The parties to this action cohabited for approximately twelve years from 1975 to 1988. The plaintiff, Jean Keddy, is now 53 years old and the defendant, Carl McGill, is 60. The plaintiff seeks an order under the Partition Act, R.S.N.S. 1985 c. 333, for the partition and sale of two properties owned jointly by the parties, a declaration of ownership regarding personal property and a division of other property owned by the defendant based on a constructive trust. The plaintiff also claims general and special damages and costs. The parties began cohabitation in December, 1975 when Mr. McGill moved into the mobile home, owned and occupied by Mrs. Keddy and her three children from prior marriage who were then aged 15, 16, and 18. From that, time until 1986, Mrs. Keddy was employed as medical records techinician at local hopsital. For most of the years during the relationship, Mrs. Keddy's employment was full time, but for some periods of time she worked part time. During their cohabitation Mr. McGill had various jobs, including driving trucks, maintenance work and painting until 1979 when he began working as truck driver for Coastal Van Lines which entailed weekly trip to Montreal. Mrs. Keddy ceased her employment in 1986 due to health difficulties and is now in receipt of Canada Pension Disability Pension. Mr. McGill owns thirty‑one residential rental properties in various locales in the County of Kings. Nine of these properties were inherited from his father and an additional fifteen other properties were acquired prior to meeting Mrs. Keddy. While the parties lived together, Mr. McGill acquired another six properties in his own name and he has purchased one since they separated. In addition, the parties owned four separate properties in their joint names, two of which were sold while they were still together. The parties lived together in Mrs. Keddy's mobile home until 1979, and during that period she paid all of the household expenses with the exception of $20.00 per week that Mr. McGill contributed towards the groceries. He also paid for his own personal expenses including his car. Until 1982 Mr. McGill continued to pay for utilities and maintenance at his own home on Thompson Road in Waterville, but he did not live there. In 1982 he began to rent out that property. In 1979 the parties purchased piece of property in their joint names and had log house constructed on it. Each party contributed one half of the down payment and the balance was financed through mortgage, on which they each paid one half of the monthly payments. They lived in the log house until 1982, and while they were there, Mr. McGill was responsible for the payment of the oil bills, the firewood, the insurance and the electricity in addition to his own personal expenses, and Mrs. Keddy paid for the groceries, the telephone and her own personal expenses. In addition, Mrs. Keddy paid for most of the furniture, dishes and linens for the log house. When the parties moved to the log house, Mrs. Keddy sold her mobile home to her daughter and took mortgage back for the full purchase price. Her daughter made monthly payments on the mortgage until 1986 when it was sold and the balance owing at that time, in the amount of $16,700.00, was paid to Mrs. Keddy. In 1982 the parties sold the log house and purchased another property called the Saunder's House in Millville, Kings County. The Saunder's property was acquired in joint names, using the proceeds of the sale of the log house and an additional $12,500.00 by way of mortgage financing. While they lived at the Saunder's property, they continued to split the household expenses in the same manner as at the log house. Mrs. Keddy used almost all of the proceeds of the sale of her mobile home to buy new furniture for the Saunder's home and to redecorate it. She saved approximately $5,000.00 which she later invested in the Saltzman property, joint venture which will be examined in more detail later in this decision. Since the parties separated, Mrs. Keddy has continued to reside in the Saunder's property by virtue of consent order taken out in the Family Court. In addition, Mr. McGill pays the sum of $700.00 per month support pursuant to an application made under the Family Maintenance Act. When the parties first began their cohabitation, Mrs. Keddy's total income was $8.443.00 for the year 1975. Her highest year of earning from her employment was in 1982 when she earned $17,409.00. In 1984, 1985 and 1986 her income diminished due to reduction in hours worked, and in 1986 she stopped her employment altogether. Her average earnings over the twelve years the parties cohabited were $10,162.00. Mr. McGill's income tax returns for the years 1975 to 1987 indicate that he had three main sources of income; his net rental income, his income from his employment and interest income. In 1975 his total income from all sources was $8,986.00, and in 1987 his total income was $62,856.00 consisting of $39,276.00 net rental income, $9,726.000 net employment income and $13,854.00 interest income. His average total income over the years the parties cohabited was $27,486.00. In 1979 Mr. McGill commenced employment with Coastal Van and Storage Limited. This job required Mr. McGill to leave his home in Kings County, travel to Halifax and then drive truck from Halifax to Montreal and return from Montreal to Halifax later in the week. There was dispute between the parties as to how long Mr. McGill was away each week, but find, based on the evidence of Mr. Stuart Dalton, an employee of Mr. McGill's, that normally Mr. McGill left the valley on Tuesday at noon and usually returned home on Thursday night, but sometimes Friday morning. Occassionally he made trip to Newfoundland which meant he would be away for longer. He continued with this employment until sometime after the parties separated in February, 1988. On his statement of property dated November 30, 1989, Mr. McGill values all of his properties at $806,900.00. However, one of those properties was acquired since their separation, and it is valued at $74,000.00 and two of the properties listed are owned jointly with Mrs. Keddy, and they are, together, worth $68,000.00, so at the time of their separation, the property owned by Carl McGill, in his own name, was valued by him at $664,900.00. Mrs. Keddy did not present any evidence contradicting these values. In addition to the real property Mr. McGill owns equipment used in his rental business which has net book value of $21,500.00. As well, as of November 30, 1989, he held bank accounts and various term deposits and R.R.S.P.'s worth $170,321.00. The mortgages on his real property, owned at the time of separation not including the one on the property held jointly with Mrs. Keddy total $53,109.52. Mr. McGill's net worth, therefore, is approximately $804,000.00, excluding his interest in jointly held property and after‑acquired property. Mrs. Keddy's counsel has, by using Mr. McGill's financial statements through the years, determined that Mr. McGill has enjoyed real increase in his net worth of $380,760.00. Mr. McGill's counsel does not take issue with this figure. When the parties first met, Mrs. Keddy was the owner of the mobile home, furniture and car. Her mobile home was subject to mortgage. At the time of separation her assets consisted of the half interest in the parties' residence and another vacant lot, furniture and car. She had debts, excluding the mortgage on the residence of approximately $45,000, leaving her in negative net worth situation. THE EXTENT OF MRS. KEDDY'S CONTRIBUTION Most of the evidence tendered over the seven‑day trial of this matter was directed to the issue of the extent of Mrs. Keddy's work and time devoted to Mr. McGill's business. Mrs. Keddy claims that she worked approximately thirty‑five hours per week over the period of the cohabitation on behalf of Mr. Keddy, and he submits that she did little more than take telephone messages and perform few other duties that did not extend beyond "the normal call of duty". In addition to her own evidence, in this respect, Mrs. Keddy presented the evidence of four former tenants of Mr. McGill, health inspector and the area fire chief. As well, she tendered numerous photocopies of ledger sheets showing that she had personally made entries indicating rent payments by various tenants. Mr. McGill, with respect to this major issue, presented the evidence of his employee, who carried out most of the maintenance work on the buildings and an employee of the Department of Consumer Affairs, whose duties included the processing of complaints to be heard by the Residential Tenancies Board. After considering all of the evidence on this issue and the able arguments of counsel, have come to the conclusion that Mrs. Keddy made major contribution to the business of Mr. McGill by being available while he was traveling to Montreal to take telephone messages from his tenants who had requests for repairs, some of which were emergencies, which required further involvement of Mrs. Keddy and to take numerous telephone calls when apartments were advertised for rent, at which time, she provided information about the available unit and if the party was interested, obtained information from the prospective tenant in order to assist Mr. McGill in the selection of tenant. She also showed apartments to prospective tenants from time to time. find that Mrs. Keddy also contributed by assisting Mr. McGill with his bookkeeping by making entries on his ledgers that he kept for each tenant. Of the 424 pages of ledger sheets that were tendered as exhibits that pertain to the relevant period, Mrs. Keddy's handwriting appears on 174 of them. That is 41%, although it must be noted that Mr. McGill's handwriting also appears on many of those sheets. The plaintiff, however, testified that many times she would call out the relevant information and Mr. McGill would write it on the appropriate sheets. also find that Mrs. Keddy assisted Mr. McGill by helping him prepare the annual notices of rental increase. Of the rental increase notices that were available for inspection during the trial, it is apparent that Mrs. Keddy prepared 14 of them. However, am not satisfied that all of the rental increase notices were presented by Mr. McGill. With respect to dealings with the Residential Tenancies Board concerning dates of hearings, find that Mrs. Keddy had minimal involvement in that aspect of Mr. McGill's business. am also satisfied that Mrs. Keddy was the person responsible for typing the notices to quit that were given from time to time, although neither party was able to remember the number that may have been necessary in any one year. In addition to the clerical work and telephone calls, am satisfied that Mrs. Keddy assisted Mr. McGill with painting, cleaning and carrying out minor repairs from time to time through the years, more so in the beginning of their relationship. As well, she was of assistance to him by being available when some action had to be taken on his behalf, for example, on one occassion when there was fire on property that Mr. McGill used as dump and on another occassion when the health inspector required immediate entry to one of the units. Although do not agree with Mrs. Keddy's estimate that all of these tasks required thirty‑five hours per week on regular basis, find that her energy expended in the business was considerable and left her little free time. In addition to this work which was directly related to Mr. McGill's business, throughout their relationship Mrs. Keddy was totally responsible for the household duties such as the cooking, cleaning, maintaining the vegetable garden, laundry, purchasing groceries and sundries required for the home and the decorating of the homes in which they resided. As well, Mrs. Keddy purchased almost all of the furniture they used with her own funds. Mr. McGill, on the other hand, purchased the motor vehicles required by the parties and undertook some repairs to their homes. ISSUES The issues for determination are as follows: 1. Whether or not Mrs. Keddy is entitled to an interest in the assets of Mr. McGill by virtue of unjust enrichment or constructive trust, and if so, the nature and extent of that interest; 2. With respect to the Saltzman property which had been owned jointly and which was sold in May, 1987 whether any amount is payable by Mr. McGill to Mrs. Keddy representing her share in the property; 3. What is the extent of the interests of the parties in the two properties owned in their joint names, and how should those interests be realized; 4. Whether or not any of the personal effects, including disputed automobile, should be accounted for or transferred from one party to the other. 1. UNJUST ENRICHMENT CONSTRUCTIVE TRUST Mrs. Keddy claims that Mr. McGill has been unjustly enriched by virtue of her contributions of time and money during the period of their cohabitation and that she should be compensated by way of either constructive trust imposed upon his assets or damages. She claims the sum of $177,650.00 in this respect. Mr. McGill contends that the work of Mrs. Keddy was minimal and no benefit was received by him. There are four decisions of the Supreme Court of Canada that must be examined to determine this issue: Rathwell v. Rathwell, 1978 CanLII (SCC), [1978] S.C.R. 436, Pettkus v. Becker, 1980 CanLII 22 (SCC), [1980] S.C.R. 834, Sorochan v. Sorochan, 1986 CanLII 23 (SCC), [1986] S.C.R. 38 and Rawluk v. Rawluk, 1990 CanLII 152 (SCC), [1990] S.C.R. 70. The evolution of the remedial constructive trust doctrine in Canada and its application in matrimonial cases is succinctly summarized by Cory, J. in Rawluk at pp. 81 to 86. He traces the development of the law from the dissent of Laskin, J., as he then was, in Murdoch v. Murdoch 1973 CanLII 193 (SCC), [1975] S.C.R. 423 through to the unanimous decision of the Supreme Court in Sorochan and explains the failure of the doctrine of resulting trusts to address inequities in spousal property disputes because of the necessity to find common intention between the parties. Cory, J. continues by referring to the minority decision in Rathwell where Dickson, J., as he then was, reviewed the equitable basis of the constructive trust doctrine at pp. 454 to 455 where he said: "The hallmark of the constructive trust is that it is imposed irrespective of intention; indeed, it is imposed quite against the wishes of the constructive trustee. .. The constructive trust is an obligation of great elasticity and generality. Where common intention is clearly lacking and cannot be presumed, but spouse does contribute to family life, the court has the difficult task of deciding whether there is any casual [sic] connection between the contribution and the disputed asset. The court will assess the contributions made by each spouse and make fair, equitable distribution having regard to the respective contributions. The relief is part of the equitable jurisdiction of the court and does not depend on evidence of intention. As expressed by Professor Scott in an article entitled 'Constructive Trusts' (1955), 71 L.Q.Rev.39 at p.41: 'The court does not give relief because constructive trust has been created; but the court gives relief because otherwise the defendant would be unjustly enriched; and because the court gives this relief it declares that the defendant is chargeable as constructive trustee.' ... The constructive trust, as so envisaged, comprehends the imposition of trust machinery by the court in order to achieve result consonant with good conscience. As matter of principle, the court will not allow any man unjustly to appropriate to himself the value earned by the labours of another. That principle is not defeated by the existence of a matrimonial relationship between the parties; but, for the principle to succeed, the facts must display an enrichment, a corresponding deprivation, and the absence of any juristic reason ‑ such as a contract or disposition of law ‑ for the enrichment." As Cory, J. points out in Rawluk at p. 84 the validity of the doctrine of constructive trust was accepted by majority in Pettkus v. Becker and the principle was extended to commonlaw relationship. Cory, J. says that the reasons of Dickson, J. in Pettkus "clearly demonstrate the broad and equitable nature of the remedial and constructive trust and its applicability to any property dispute". The evolution of the doctrine continued with the Supreme Court of Canada's decision in Sorochan where it was determined that constructive trust remedy will also apply to circumstances where spouse has contributed not to the acquisition of property but to its preservation, maintenance or improvement. Cory, J. concludes his summary by saying, at p. 86: "These cases show that in Canada the doctrine of remedial constructive trust has been accepted for almost decade as an important remedial device whose prime function is to remedy situations of unjust enrichment." In Rawluk the majority determined that the remedy of constructive trust was available to married parties and was not precluded by operation of the Family Law Act of Ontario, 1986, the effect of which was to allow the wife property interest in her husband's farm and business which meant that she shared in the increase in value due to inflation from the date of the separation to the date of the trial. In Maclnnis v. MacMillan (1989), 94 N.S.R. (2d) 271 Hallett, J., as he then was, indicates that Sorochan affirmed the principles of the Supreme Court in Pettkus v. Becker and further clarified the law with respect to unjust enrichment and said at p. 277: From the decision in the Sorochan case, draw the following conclusions: (1) The claim for unjust enrichment is now cause of action in itself. (2) For a plaintiff to prove an unjust enrichment, the plaintiff must meet three requirements:(a) an enrichment;(b) a corresponding deprivation;(c) the absence of any juristic reason for the enrichment. (3) 'The constructive trust constitutes one important judicial means of remedying unjust enrichment.' This is quotation from p. 236 of the R.F.L. report of Mr. Justice Dickson's decision in Sorochan. He further stated: 'Other remedies, such as monetary damages, may also be available to rectify situations of unjust enrichment.' (4) In order to establish constructive trust in addition to the three requirements to prove an unjust enrichment, there must be: (a) casual [sic] connection between the contribution and the property. For example, in the case of Mrs. Sorochan, she contributed labour and ran and preserved the farm for period of forty‑two years while she lived in common law relationship with Mr. Sorochan; (b) in addition to the causal connection, the evidence must establish that the plaintiff, that is the person alleging the unjust enrichment, had reasonable expectation of receiving an interest in the property and that the defendant knew or ought to have known of this expectation. In my opinion, this would be question of fact in each case. In short, this requirement calls for the trial judge to make an assessment or, to use the vernacular language, 'a judgment call' on the evidence; and (c) to determine the question of fact whether there is connection between the contribution and the disputed asset, the Court 'must ask whether the contribution is "sufficiently substantial and direct" to entitle the plaintiff to an interest in the property in question.' This phrase is contained at p. 237 of the Sorochan decision. So much for the elements necessary for plaintiff to establish an entitlement to have constructive trust imposed on property. (5) The fifth principle coming out of the decision of the Supreme Court of Canada in the Sorochan case (not particularly important for this case) is the importance of distinguishing family cases from commercial cases. In the latter, much more substantial burden or proof would be imposed. In family cases, the Court has stated at p. 238 of the R.F.L. Report of the Sorochan case that equity must be the guide in scrutinizing contributions between couples who are married or living together and much will turn on the facts of each case. The Sorochan case has clarified the law and made clear that one can have an action for unjust enrichment. The contructive trust is simply one of the remedies available to the Court to remedy an injustice as is the making of monetary award in the event constructive trust is established on the facts. Unjust enrichment cases decided before Sorochan must be looked at carefully in light of the decision in Sorochan; in particular, if the parties to the suit had been living in common law relationship and the dispute between them arises out of that relationship." (emphasis added) In applying this step‑by‑step analysis to this case I find that Mrs. Keddy has met the three requirements to prove an unjust enrichment. find that the benefit received by Mr. McGill was both direct and indirect. Her involvement in his business directly assisted in the preservation of it and its continuation in his absence. The payment of household expenses and provision of domestic services indirectly assisted his business by allowing him to save money to reinvest in the business. For the four years the parties resided in Mrs. Keddy's mobile home Mrs. Keddy paid all of the household expenses with the exception of the $20.00 per week that Mr. McGill contributed towards the food. doubt that the $20.00 he contributed even covered his proportionate share of the grocery bill given that he was eating all of his meals there, since this was before he started to travel to Montreal. Although Mr. McGill continued to maintain his Thompson Road property during this time, apparently in case the relationship did not continue, find that that does not reduce the benefit he received by residing at Mrs. Keddy's where she paid the majority of the expenses. In addition the provision of housekeeping and domestic services was benefit to Mr. McGill. There was corresponding deprivation to Mrs. Keddy in terms of her time committment and her financial resources contributed to the household. In an annotation to Herman v. Smith (1984), 1984 CanLII 1238 (AB QB), 42 R.F.L. (2d) 154, which was approved in Sorochan, Professor James G. MacLeod wrote: The initial point raised is: Has the man received benefit? In the case, the benefit resulted from the claimant performing the normal 'spousal' services. No attempt was made to state the issue on any other basis. The rendering of spousal services amounts to valuable service. Such conclusion clearly has past references, although few cases state the issue so boldly. The difficulty, in principle, is that services may not be benefit if they are not wanted: Nicholson v. St. Denis (1974), 1974 CanLII 544 (ON SC), O.R. (2d) 480, 48 D.L.R. (3d) 344, reversed on other grounds 1975 CanLII 393 (ON CA), O.R. (2d) 315, 57 D.L.R. (3d) 699, leave to appeal to S.C.C. refused 1974 CanLII 584 (ON SC), O.R. (2d) 315n, 57 D.L.R. (3d) 699n. Some request/free acceptance or special relationship has regularly been required. The attitude of the defendant seemed to imply no request/free acceptance with the knowledge an intention to pay/be paid: see Re Spears, supra; Re Jacques (1968), 1968 CanLII 691 (NS PR), 66 D.L.R. (2d) 447 (N.S.). This point is not even explored. Rather, the fact of cohabitation and performing the services inherent in the role will amount to benefit to the other cohabittee: as to such philosophy see the Family Law Reform Act, R.S.). 1980, c. 152, s. 4(5). The detriment to the plaintiff was tied simply to the use of her time and energy. It seems to follow from the reasons that no one should expect, in general, spousal services for free. They are given, in the absence of an indication to the contrary, with the expectation of something in return and should be received as such." (emphasis added) Professor Ralph Scane, in Relationships Tantamount to Spousal Unjust Enrichment and Constructive Trusts (1991), 70 C.B.R. 260 says at p. 271: "It now appears that supplying 'domestic' services in the operation of the household and the raising of the children of the union, standing alone, can constitute deprivation to the plaintiff and an enrichment to the defendant. Similarly, expenditures of money on supplies and services needed for day to day living on groceries and drycleaning, for instance and which, by the very nature of the object of the expenditure, are not now represented by property into which the money can be traced, can constitute deprivation and confer enrichment." For authority for these statements Scane cites Sorochan, Crisp v. Banton (1988), 18 R.F.L. (3d) 24 (Ont.H.C.) and Murray v. Roty (1983), 1983 CanLII 1942 (ON CA), 147 D.L.R. (3d) 438 (Ont.C.A.). similar finding was made in Pirie v. Leslie (1988), 1988 CanLII 7212 (MB QB), 29 E.T.R. 246, where during nine‑year cohabitation the petitioner was responsible for the operation of the household as well as providing some help on the small farm, while the respondent was otherwise employed. In that case there were no children involved, so disagree with Mr. McGill's counsel's suggestion that Sorochan can be distinguished on the basis of the length of the relationship and the fact that there were children of the union. Finally, find that since Mrs. Keddy was under no obligation, contractual or otherwise, to provide any services of either housekeeping or business nature to Mr. McGill during their relationship, there is no juristic reason for the enrichment. therefore find that Mrs. Keddy has established an unjust enrichment, and the next question is whether or not the unjust enrichment should be remedied by use of constructive trust or whether rectification by an award of monetary damages is more appropriate in this case. As pointed out in MacInnes v. MacMillan, in order to establish constructive trust, Mrs. Keddy must prove first of all that there is causal connection or nexus between her contribution and the property now in dispute which is registered in the name of Mr. McGill. Professor Scane, in his article on this subject (supra) at p. 287 says: "In Sorochan v. Sorochan, the Supreme Court of Canada reminded us that 'constructive trust' and 'unjust enrichment' are not synonymous expressions. The constructive trust is one remedy which may be found appropriate when finding of unjust enrichment is made. As this proprietary remedy, unlike mere money judgment, may give preference to plaintiff over other creditors of the defendant or, as Rawluk v. Rawluk, may cause readjustment in the financial positions of spouses as they enter upon statutory redistribution of wealth upon marriage breakup, the reasons for choosing such remedy should be articulated as fully as possible. Certainly present treatment of restitutionary theory in Anglo‑Canadian legal writing treats proprietary remedies as the exceptional cases, not as the general rule." In his article Professor Scane goes on to indicate the advantages to plaintiff who receives proprietary remedy instead of monetary remedy after establishing clear link between the contribution and specific property such as the priority over other creditors in cases of an insolvency of the defendant. Professor Scane goes on to question the process by which one concludes that there is causal connection to specific property and suggests, at p. 289: "...that unjust enrichment created by receipt of the benefit of services, which enables defendant to avoid expense and thus accumulate and maintain wealth, seeps throughout all of the assets of the defendant." In Causal Connection in Constructive Trusts (1986), Est. Tr. Q. 161, Professor Keith Farquhar, in examining the effect of the decision in Sorochan, says at p. 178: Implicit in the above ruling, is further laying to rest of the proposition that in order to succeed in constructive trust plaintiff must prove that his or her contributions resulted in an increase in the value of the defendant's holdings." and further at p. 180: Another particularly interesting ruling in Sorochan is that 'the reasonable expectation of the claimant in obtaining an actual interest in the property as opposed to monetary relief, constitutes another important consideration in determining if the constructive trust remedy is appropriate.' While the phraseology here is not as unambiguous as it might be, it strongly suggests that even if there is no causal connection between the plaintiff's contributions and the property in question, constructive truct may be imposed on the property if the plaintiff entertained reasonable expectations in that regard." The effect of the Sorochan case is also dealt with by Professor D.W.M. Waters in The Constructive Trust in Evolution Substantive AND Remedial (1991), 10 E. T.J. 334. He says that although Sorochan indicated that constructive trust is only one juducial means of remedying unjust enrichment, it did not answer the question of when is constructive trust the appropriate remedy. Waters says that that question was answered in Lac Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC), [1989] S.C.R. 574. He says, at p. 350: The second notable point about this judgment is the answer supplied to the question of when it is appropriate for the court to grant proprietary relief. constructive trust, LaForest, J. said, should be awarded only when it is appropriate and 'in the vast majority of cases' it will not be. The question is whether the plaintiff should have the additional rights that flow from his being awarded an interest in property and that he would not have with personal remedy. The learned judge thought the circumstances calling for the granting of proprietary remedy include and they are all familiar the bankruptcy of the defendant, the increase in value of the disputed assets, and the specific and unique character of those assets or the court's difficulty in putting value upon them. These circumstances, together or singly, go to the issue of awarding particular property to the plaintiff, but it may also and very occasionally be correct, he says, to have in mind the moral quality of the defendant's act. For instance, conscious wrongdoing by the plaintiff that on the facts of the case is offensive to the court would come within that last situation. However, there is one remark in this judgment which in my opinion could dominate the 1990s, and it is the substance of the first of the questions that it was earlier said would here be discussed. La Forest J. said this: 'The constructive trust awards right in property, but that right can only arise once right to relief [i.e., "a valid restitutionary claim"] has been established.'" Although Farquhar and Scane suggest that the courts should infer causal connection or reasonable expectations that result in the finding of constructive trust, agree with the conclusion of Waters that Lac Minerals supplies the answer as to whether remedy should be in rem or in personam in this type of case. It is not necessary, in this case, to make any inferences with respect to causal connection or reasonable expectations of the parties. The defendant, in this case, has sufficient assets, both liquid and immovable, to satisfy judgment for damages for unjust enrichment. This is not situation where bankruptcy, intervening creditors or third parties are involved which require the imposition of constructive trust. monetary award is the appropriate remedy for the unjust enrichment that have found, and the question then becomes what the amount of that award should be. With respect to the amount that should be awarded to remedy the unjust enrichment, am in agreement with the method used in Murray v. Roty (1983), 1983 CanLII 1942 (ON CA), 34 R.F.L. (2d) 404, decision of the Ontario Court of Appeal which was approved (at p. 45) in Sorochan. The trial judge, in case dealing with an eight‑year cohabitation, awarded the plaintiff forty percent increase in the value of the equity in the homes and twenty percent of the value of the increase in the equity of the farm. Cory, J.A., as he then was, in his conclusion, says at p. 418: The appellant contended that there was no relationship between. the value of the services performed by Murray and the award to her of her share in the increase of the value of the properties. Once again, cannot accept that submission. It would seem to be most appropriate to award Charlotte Murray portion of the increase in the value of these properties. Her work was directed towards their acquisition and improvement. In light of the relationship that existed between the parties, it was most fitting and equitable result. In the circumstances of this case it was reasonable to base the award on the increase in the value of the properties: see, for example, Cooke v. Head, [1972] W.L.R. 518 at 521, [1972] All E.R. 38 (C.A.). There is no doubt that the extent of the interest must be proportionate to the contribution of the claimant: see Pettkus v. Becker, supra; at pp. 852‑53. Here the contributions were unequal. However, the trial judge carefully considered the situation as whole and his award was correct and proper one. In relationship such as this one, as in matrimonial case, the court should not determine the issue of division solely on the basis of the money contributions of each of the parties." similar approach was taken in Everson v. Rich (1988), 1988 CanLII 5225 (SK CA), 53 D.L.R. (4th) 470 (Sask. C.A.). This case dealt with cohabitation of seven years during which the appellant worked for some periods and contributed most of her earnings to household expenses. She also provided domestic services. The respondent had increased his net worth during the relationship from $17,000.00 to $45,000.00. After determination that there was no sufficient nexus between the provision of the appellant's services in the acquisition of the property to entitle her to relief by way of constructive trust, Sherstobitoff, J.A. said at p. 475: While, as noted above, monetary damages in such cases have traditionally been measured by the market price of domestic services, there is no reason why they cannot be measured as suitable proportion of the increase in value of the assets of the person who has been unjustly enriched. It is at this point, assessment of damages, that one takes into account and values the benefits received by the appellant from the relationship. In this case, considering the value of the assets which each of the parties brought into the relationship; the value of the assets which each of the parties owned at the termination of the relationship; their respective contributions by way of services and money to the relationship; and the value of benefits received from the relationship by each of them, the appellant is entitled to damages in the amount of $10,000." The award, in that case, represented roughly thirty‑five percent of the increase in the value of the respondent's property. As indicated above, the value of Mr. McGill's property increased by the amount of $380,760.00 during the twelve‑year relationship with Mrs. Keddy. By her efforts in helping to support him during the years they lived in her mobile home, performing the household duties over the entire relationship, and through her contribution to his rental business, find that it is appropriate in the circumstances to award her damages representing twenty‑five percent of the increase in his assets, that is the amount of $95,190.00. 2. THE SALTZMAN PROPERTY In August, 1986 Mr. McGill and Mrs. Keddy purchased property in South Berwick in their joint names for the sum of $13,000.00 plus expenses of $256.50. The property was very run down and their intention was to renovate it and sell it for profit and divide the profit between them. Mrs. Keddy paid $5,000.00 of the purchase price with money she had received when her daughter paid out the mortgage on the mobile home. Mrs. Keddy borrowed the balance of $8,000.00 from her bank. There is no evidence of who paid the $256.50 legal fees. From August, 1986 through to May, 1987 Mr. McGill and his employee, Stewart Dalton, worked on the renovations which were very extensive. On May 8, 1987 the property was sold for $35,500.00. Although the original plan had been that Mrs. Keddy would also work on the property, she did not. At the time the property was being renovated, Mrs. Keddy had just been released from the Victoria General Hospital after having sufferred breakdown. Her evidence is that she didn't work on the property because it was too cold there, but Mr. McGill and Mr. Dalton indicated that the property was heated through the winter months. The net proceeds of the sale, after paying the real estate commission, legal fees and property tax adjustment, were $34,395.40. From that the bank loan of Mrs. Keddy was paid in the amount of $8,000.00, although no adjustment was made for the interest which was deducted from her bank account. The balance of the proceeds was retained by Mr. McGill, and portion of the proceeds was later lent to friend of the parties. That friend later paid $1,000.00 to Mrs. Keddy and the balance to Mr. McGill. Therefore, Mrs. Keddy has received only $1,000.00 from the proceeds of the sale of the Saltzman property. When Keith Forsyth, C.A. prepared Mr. McGill's 1987 tax return and financial statements, he showed that Mr. McGill owed debt of $14,712.00 to Mrs. Keddy as result of the Saltzman transaction. Mr. Forsyth arrived at that figure by deducting from the net proceeds of the sale after the loan of $8,000.00 was paid, the sum of $9,433.53 representing the expenses paid by Mr. McGill during the renovations including Stewart Dalton's wages, invoices for materials, electricity and fuel. He also deducted the sum of $1,000.00 which Mrs. Keddy had received from the repayment of the loan by their friend and further sum of $1,250.00 which he thought Mrs. Keddy had retained from the proceeds of the sale. However, the evidence of Mr. McGill, at the trial, indicates that Mrs. Keddy paid back that $1,250.00 to him. Therefore, the proper amount of the loan should have been $15,961.87. Mr. Forsyth testified that when he did the calculations to determine the amount of money owing to Mrs. Keddy, he had all of the receipts relating to expenses paid by Mr. McGill in relation to the renovations. He also had all of the information regarding Mr. Dalton's salary. However, in 1988 when Mr. McGill's tax return was prepared, his financial statement showed that the loan was no longer in existence. It had not been paid off. Mr. Forsyth and Mr. McGill did recalculation of the transaction and decided that not all of Mr. Dalton's time spent on the property had been included the previous year, not all of the materials supplied by Mr. McGill, from his own supply, had been included and that they had not calculated Mr. McGill's own labour. After the recalculation, they determined that the net result was that there had been loss on the sale of the building and, therefore, that eliminated the loan owing to Mrs. Keddy. In this action Mrs. Keddy is claiming the sum of $14,276.79 as her share of the proceeds of the Saltzman property. That figure was arrived at by allowing Mr. McGill the sum of $10,000.00 for the total cost of the repairs to the property, including labour, and dividing the "profit" equally after allowing Mrs. Keddy the balance of her deposit in the amount of $4,000.00. She has also claimed interest at ten percent for four years. Mr. McGill denies that there is any balance owing to Mrs. Keddy as result of the sale of the Saltzman property. In relation to this matter, find it quite incredible that Mr. McGill did not have all of the receipts and information with respect to his costs in renovating the property available for his accountant when his 1987 tax return was prepared. There is no doubt that the purchase of this property was intended to be joint venture. Mrs. Keddy put up the money and Mr. McGill performed the labour. Given all of the evidence with respect to Mr. McGill's financial dealings and his careful investing, do not believe that he would have sold this property at loss or that he failed to claim, on his income tax return, allowable expenses for 1987. find that both Mr. McGill and his accountant knew that there was an amount owing to Mrs. Keddy as result of the Saltzman transaction, and the books were changed in 1988 only as result of the difficulties in the parties' relationship that had arisen in that year. find, however, that Mr. McGill should be allowed to claim an amount for his labour on the property since Mrs. Keddy did not contribute any labour. The sheets he filed, showing his days worked on the property, indicate that he worked total of ninety‑two days. Although he had claimed the hourly rate of $10.00 per hour for his labour, it is more appropriate to use the same rate of pay he paid his handyman, Mr. Dalton, that is $7.00 an hour. Assuming eight‑hour days, he should be credited with the sum of $5,152.00 for his labour. The calculation of the profit, therefore, is as follows: Net proceeds received at closing $34,395.40 Less: Bank loan 8,000.00 Expenses paid by Mr. McGill 9,433.53 Mr. McGill's labour 5,152.00 Sub‑total $11,809.87 Less: Refund of balance of deposit to Mrs. Keddy 4,000.00 Profit 7,809.87 Therefore, each party is entitled to receive the sum of $3,904.93 as their share of the profit on the sale of the Saltzman property. Mrs. Keddy is entitled also to the return of the balance of the deposit she made in the amount of $4,000.00. The result is that Mrs. Keddy should now be paid the sum of $7,904.93 by Mr. McGill. will deal with the claim for interest at the conclusion of this decision. 3. JOINTLY HELD PROPERTY The parties currently own two properties as joint tenants. One of these is the Saunder's property at Waterville which they purchased in 1982 as their residence. The parties made an equal contribution to the down payment from the sale of their previous home, and they contributed equally to the mortgage and other expenses. Mrs. Keddy has been living in the property since shortly after the separation. The parties agree that the property has fair market value of $60,000.00, and was subject to mortgage of approximately $10,000.00. They agree that the equity in this property should be divided equally. They do not agree, however, on the method of division. Mr. McGill suggests that the property be sold, and after payment of expenses relating to the sale, that the proceeds be divided. Mrs. Keddy, however, wishes the option of remaining in the property and buying out Mr. McGill's interest. find that his interest is $25,000.00 and that it would be appropriate to allow Mrs. Keddy the option of purchasing his share for that amount. The option shall be open for thirty days after the date of this decision. If she does not elect to purchase the property, the property shall be sold in accordance with the provisions of the Partition Act. make the same finding with respect to the Millville lot, owned jointly by the parties and valued by them at $8,000.00. It is not subject to any encumbrances. If Mrs. Keddy wishes to buy Mr. McGill's interest in that property for the sum of $4,000.00, she shall have thirty days from the date of this decision to exercise that option. In respect to both properties, if Mrs. Keddy elects to purchase Mr. McGill's interest, she shall be entitled to do so by having the $29,000.00 deducted from the amount owing, by Mr. McGill, to her as result of the unjust enrichment award made above. 4. PERSONAL EFFECTS The major item of personalty that is in dispute is 1981 Cadillac which was purchased in 1982 or 1983 by Mr. McGill for $13,000.00. Mrs. Keddy claims that the Cadillac was gift from Mr. McGill to her. Mr. McGill submits that he retained ownership of the Cadillac and simply allowed her to use it during the time they resided together. The registration remained in Mr. McGill's name, and he paid for the insurance and maintenance, while Mrs. Keddy paid for the gas. After the parties separated Mrs. Keddy removed the Cadillac from Mr. McGill's storage barn, and after driving it for while, hid it in some unknown location for several months. It was later found in Stewart Dalton's driveway without tires or rims on the rear end. The car had rusted badly and was not in condition in which it could be driven. find that Mrs. Keddy has the onus of proving that gift was made and further find that she has failed to meet the onus of proving intention to make gift of the automobile. therefore declare that the automobile is owned by Mr. McGill. During the trial of this matter Mrs. Keddy presented list of items she said were in the possession of Mr. McGill that she claimed ownership of. Many of the items were of such small value that it would be ridiculous to make declaration of ownership. For example, she claims broken lawn rake which she estimates is worth $15.00 and Christmas tree stand she says is worth $5.00. Mr. McGill also claims an ownership interest in some of the items in possession of Mrs. Keddy. find that there is insufficient evidence in relation to any of the personal effects in dispute to make finding of ownership, and therefore it is appropriate to set off the claim that each has in relation to these items against the other and order that each party shall retain ownership of the items currently in their possession. CONCLUSION For these reasons the plaintiff shall be entitled to enter judgment against the defendant for the following amounts: On the claim for unjust enrichment $95,190.00 From the proceeds of Saltzman property sale 7,904.93 Sub‑total $103,094.93 Pre‑judgment interest 42,128.87 Total $145,223.80 The pre‑judgment interest is calculated from the date of separation, February 1, 1988 to September 1, 1991 at the rate of ten percent per annum, compounded yearly (see Hannah v. Canadian General Insurance Company (1989), 92 N.S.R. (2d) 270). If Mrs. Keddy elects to purchase the interests of Mr. McGill in the Saunder's property and the Millville property, she must signify in writing to Mr. McGill's counsel on or before October 1, 1991. If she does so elect, Mr. McGill may deduct the sum of $29,000.00 from the above‑noted total. Mr. McGill shall execute all documents required for the transfer of title which shall be prepared at the expense of Mrs. Keddy. Mrs. Keddy shall be responsible for any other costs associated with the transfers of the properties. From the date of the transfer Mrs. Keddy shall be responsible for all taxes and other encumbrances, but up to the date of the transfer, the parties shall be equally liable therefor. With respect to costs, since the total claim put forward by Mrs. Keddy, in her pre‑trial brief was approximately twice the amount ordered, she shall be entitled to one half of her party and party costs based on tariff "A", scale with the amount involved of $145,223.80 which would be $5,329.00 (one half of $10,658.00) plus disbursements to be taxed. This ruling on costs is subject to submissions which may be made by counsel respecting any pre‑trial offers to settle made by Mr. McGill or Mrs. Keddy. J. HALIFAX, NOVA SCOTIA August 27, 1991 1988 S.K. No. 2422 IN THE SUPREME COURT OF NOVA SCOTIA TRIAL DIVISION BETWEEN: JEAN MAE KEDDY, and CARL VEN McGILL,
The parties lived together for some 12 years before separating in 1988. The plaintiff was 53 and the defendant 60. The plaintiff sought an order under the Partition Act for the partition and sale of two properties owned jointly and a division of property owned by the defendant based on a constructive trust. The defendant owned and operated residential rental properties. The plaintiff, who had stopped working as a medical records technician in 1988, maintained the household and assisted in the business by answering phones, bookkeeping, showing apartments and helping with minor repairs. (1) that the plaintiff met the three requirements to prove an unjust enrichment by virtue of the plaintiff's contributions of time and money, namely (a) an enrichment, (b) a corresponding deprivation, and (c) the absence of any juristic reason for the enrichment. The proper remedy was an award of monetary damages representing 25% of the increase in the value of the defendant's assets during the relationship, not the imposition of a constructive trust; and (2) jointly held properties were to be sold pursuant to the Partition Act, unless the plaintiff elected to buy out the defendant's one half interest within 30 days. Prejudgment interest was calculated from the date of separation to September 1, 1991, at 10% per year.