Gauthier v Gauthier, 2013 ABQB 566

Court of Queen ’ s Bench of Alberta Citation: Gauthier v Gauthier, 2013 ABQB 566 Date: 20131016 Docket: 4803 144604 Registry: Edmonton Between: Donnalee Lillian Gauthier Plaintiff - and - Michel Joseph Pierre Gauthier Defendant Corrected judgment: A corrigendum was issued on October 29, 2013; the corrections have been made to the text and the corrigendum is appended to this judgment. _ ________________________________________ ______________ Reasons for Judgment of the Honourable Mr. Justice Donald Lee _________________________________________ ______________ I.

Introduction [ 1 ] On January 22, 2008, the Plaintiff [Donnalee] filed a Statement of Claim for Divorce and Division of Matrimonial Property seeking, inter alia , the following reliefs pursuant to the Matrimonial Property Act , RSA 2000, c M-8 [ MPA ]: (

a) an Order for the

distribution of all of the property acquired by the Plaintiff and the Defendant, either jointly or separately, as the Court deems just and equitable; (

b) a matrimonial home possession order; (

c) an Order declaring exempt from such property distribution the matrimonial property that would fall within the provisions of the MPA , s 7(2); (

d) an Order distributing such matrimonial property as would fall within the provisions of the MPA , s 7(3); and (

e) an Order distributing such matrimonial property acquired during the marriage, not otherwise referred to under MPA , ss 7(2) & (3). [ 2 ] In response, the Defendant [Michel] filed a Statement of Defence and Counterclaim on March 18, 2008, along with a Certificate of Lis Pendens (amended, July 7, 2009), contesting the reliefs sought by the Plaintiff. Michel seeks reliefs which include: (

a) a division of the matrimonial property, having consideration to his claim for constructive trust, resulting trust, and unjust enrichment against the Plaintiff arising before the date of marriage; (

b) an equitable division of the matrimonial property as the parties co-habited prior to the date of the marriage, during which period the defendant expended both money and labour towards the construction of a garage at the matrimonial home, as well as the extensive renovation of the interior of the matrimonial home, including basement, flooring, kitchen, bathrooms, and renovation of the exterior of the matrimonial home, which effort and expenditures form a claim for constructive and resulting trust, as well as unjust enrichment of the Plaintiff; and (

c) occupation rent payable by the Plaintiff to the Defendant for the exclusive use and possession of the matrimonial home from the date of separation to the date of trial or such other disposition of the within matter. [ 3 ] The Defendant counterclaimed for, inter alia : (

a) a declaration that Donnalee holds her personal and real property as a trustee for the benefit of the Defendant on the basis of a constructive and resulting trust; (

b) an Order (and a judgment) vesting title to one half (or such portion of) the personal and real property of Donnalee to the defendant (on the basis of a constructive trust); a judgment against Donnalee in an amount equal to the value of the enrichment of Donnalee as a result of the contribution of money and efforts by the Defendant on a quantum meruit basis; and an Order distributing the matrimonial property, and requiring Donnalee to pay monies in lieu of the distribution of properties pursuant to the MPA . [ 4 ] The Plaintiff responded to the counterclaim in which she: (

a) denied that the parties co-habited for approximately one year period to the date of marriage; (

b) stated that any contribution Michel made was done by virtue of gifts, or equal contribution to efforts expended by the Plaintiff for the benefit of Michel, on his assets; (

c) denied having expressed either directly or indirectly that Michel would receive an interest in Plaintiff’s home, instead the Plaintiff expressly stated that Michel would obtain no interest in her home; (

d) stated that any contribution by Michel was reciprocal to contributions made by the Plaintiff to property and assets owned by Michel, as the Plaintiff had renovated Michel’s home in October and November 2003 while he resided there; and (

e) stated that Michel was also enriched by virtue of being able to pay down substantial debts during the period of the relationship, for which only nominal contribution was made by Michel to the parties’ joint living expenses. II. Background facts [ 5 ] The evidence of both parties in regard to the factual circumstances of their relationship prior to marriage was different in material areas.

Thus at the onset, it is necessary for me to reconcile these conflicting renditions for coherent analysis and ultimate determination of the issues in this action. [ 6 ] The parties agree that the date of marriage was November 19, 2004; they ceased co-habiting on December 19, 2007; at the time of trial the parties had been living separate and apart in excess of one year; there is no possibility of reconciliation and there are no children of the marriage as defined under the Divorce Act , RSC 1985, c 3 (2nd Supp).

Thus, at the beginning of trial on February 25, 2013, I granted the divorce decree in this matter upon application. [ 7 ] The Plaintiff and the Defendant agree that they met at their place of employment early in 2003 and commenced a dating relationship on August 29, 2003. [ 8 ] Earlier in October, 1996, Donnalee bought her home with only her name on title; this position did not change throughout the marriage and these proceedings.

For all this period, she has lived in the home with her son, who at the time of trial was over 19 years of age. [ 9 ] Michel also had his first home bought in his name alone which he lived in, with his girlfriend of 10 years, for about three or four years before selling it in 2002. When he sold this house, he initially got approximately $50,000 and over a year later in January 2004, got another sum of approximately $41,000 after concluding a lawsuit with his girlfriend, who received none of the sale proceeds from this property. [ 10 ] Michel then bought his second home in 2002 for about $150,000.

For this purchase, he testifies that out of the first $50,000 sale proceeds from the first home he used approximately $20,000 for down-payment, and about $30,000 to pay credit card debts as well as “put a few thousand dollars in the bank.” He lived in the house with two friends who paid him monies for residing there as tenants (Trial Transcript [TT], 290/1-2). [ 11 ] The Defendant testifies that he started staying overnight at the Plaintiff’s home in the Fall (end of November) 2003; started cohabiting with the Plaintiff in her house after Christmas 2003; and fully moved in to the Plaintiff’s home in January 2004 to commence a common-law relationship.

The Plaintiff disputes that time period and testifies that the Defendant started moving in some clothes in July and August, 2004; met her son (as the Plaintiff’s boyfriend) in April 2004, prior to a ski trip; moved in all his furniture and started living with her on a full-time basis in her home in March 2005, after the Defendant sold his second home on February 25, 2005.

The parties agree that they became officially engaged to be married on August 29, 2004. [ 12 ] In October 2003, Donnalee arranged to have the basement in Michel’s second home comprehensively renovated as surprise birthday gift while he was out of town hunting for six days.

Donnalee testifies that she paid approximately $15,000 for the materials used for the renovations, while a number of both parties’ friends in the construction field worked on the renovations without any monetary charge. [ 13 ] Michel ultimately listed the second home for sale in December 2004; sold it in February, 2005, and received $27,216 from his

lawyer respecting the sale. [ 14 ] On or about June 21, 2004, Michel purchased a garage package for the sum of $7,454.98 which was constructed at Donnalee’s home (Defendant’s Exhibit Book #1, Tab 4). The parties agreed that the construction of the garage was done at no charge and with the help of friends and family, including Donnalee’s father and Michel’s brother. However, their evidence as to the construction period differed: June and July, 2004 (according to Donnalee, TT, 43/18); August and September, 2004 (according to Michel, TT, 297/5- 7).

The defendant’s expert estimates the value of Michel’s work on Donnalee’s home, prior to marriage, at $26,000 (TT, 323/23-324/37).

Donnalee testifies that she also paid approximately $15,000 for the permit on the garage, “the rebar, the concrete, the bobcat, the bin, the sleeving of the gas line, the paint, the electrical, and the grading on each side of the concrete pad and driveway and curb” (TT, 42/4-41, 43/10-41, 44/1-27, 48/37-39). [ 15 ] The evidence before me indicates that prior to marriage, in 2004 Michel did the following in Donnalee’s home: replaced some switches and cover plates; worked with one Cam Geiger to replace the fence boards on the east side of the home (although Donnalee paid for the boards and their disposal and Michel helped himself with the extra boards which he used to build a fence at his second home); and built a flowerbed and put in washed stones as decoration with the help of Donnalee and her son (and notably Donnalee paid for the stones and dirt). [ 16 ] Both parties agree that the market value of the original property on November 19, 2004 (the date of marriage) was $160,000.

They also agreed that the date of separation market value, as assessed on December 31, 2007, is $325,000. And that the agreed market value of the matrimonial property at the time of trial, which was last appraised by Jackson Real Estate Appraisals on January 9, 2013, is assessed at $333,000. III. Issues [ 17 ] The following issues are before me for determination: (

i) What is the nature of the parties’ pre-marriage relationship? (ii) Can a claim for unjust enrichment be sustained based on the pre-marriage relationship? (iii) How is the matrimonial property to be distributed between the parties? IV. Law [ 18 ] The following provisions of the Matrimonial Property Act are relevant to this matter: Distribution of property 7

(1) The Court may, in accordance with this section, make a distribution between the spouses of all the property owned by both spouses and by each of them.

(2) If the property is (

a) property acquired by a spouse by gift from a third party, (

b) property acquired by a spouse by inheritance, (

c) property acquired by a spouse before the marriage, ... the market value of that property at the time of marriage or on the date on which the property was acquired by the spouse, whichever is later, is exempted from a distribution under this section.

(3) The Court shall, after taking the matters in

section 8 into consideration, distribute the following in a manner that it considers just and equitable: (

a) the difference between the exempted value of property described in subsection (2), referred to in this subsection as the “original property”, and the market value at the time of the trial of the original property or property acquired ... (

c) property acquired by a spouse after a decree nisi of divorce, a declaration of nullity of marriage, a judgment of judicial separation or a declaration of irreconcilability under the Family Law Act is made in respect of the spouses; (

d) property acquired by a spouse by gift from the other spouse.

(4) If the property being distributed is property acquired by a spouse during the marriage and is not property referred to in subsections (2) and (3), the Court shall distribute that property equally between the spouses unless it appears to the Court that it would not be just and equitable to do so, taking into consideration the matters in

section 8 . Matters to be considered

8 The matters to be taken into consideration in making a distribution under

section 7 are the following: (

a) the contribution made by each spouse to the marriage and to the welfare of the family, including any contribution made as a homemaker or parent; (

b) the contribution, whether financial or in some other form, made by a spouse directly or indirectly to the acquisition, conservation, improvement, operation or management of a business, farm, enterprise or undertaking owned or operated by one or both spouses or by one or both spouses and any other person; (

c) the contribution, whether financial or in some other form, made directly or indirectly by or on behalf of a spouse to the acquisition, conservation or improvement of the property; (

d) the income, earning capacity, liabilities, obligations, property and other financial resources (

i) that each spouse had at the time of marriage, and (ii) that each spouse has at the time of the trial; (

e) the duration of the marriage; (

f) whether the property was acquired when the spouses were living separate and apart; (

g) the terms of an oral or written agreement between the spouses; (

h) that a spouse has made (

i) a substantial gift of property to a third party, or (ii) a transfer of property to a third party other than a bona fide purchaser for value; (

i) a previous distribution of property between the spouses by gift, agreement or matrimonial property order; (

j) a prior order made by a court; (

k) a tax liability that may be incurred by a spouse as a result of the transfer or sale of property; (

l) that a spouse has dissipated property to the detriment of the other spouse; (

m) any fact or circumstance that is relevant. V. Discussion Issue (

i) What is the nature of the parties’ pre-marriage relationship Michel’s position [ 19 ] Michel submits that prior to their marriage, he co-habited with Donnalee in the home she owned after Christmas of 2003 and began to reside with her in January 2004. He points to the evidence of his brother who testified that he and his wife were socializing with the Plaintiff and the Defendant in early 2004, had dinner at the Plaintiff’s home, and attended a fund raising event for the Plaintiff’s son Hockey team.

Michel argues that January 2004 is the proper date for the commencement of the parties’ cohabitation. [ 20 ] The testimony of Michel is that he had discussions with Donnalee to sell their individual residences and purchase a home together near Donnalee’s home. However, the joint purchase plan was shelved based on the mortgage amount, the state of their finances and Donnalee’s son’s attachment to the Plaintiff’s home.

Instead, they opted to reside in the Plaintiff’s home (TT, 300/37-41-301/1-16). [ 21 ] Michel states that the sum of $41,777.24, which he acknowledged during cross-examination, was spent to the benefit of both parties after he had paid his credit card bills and made payments towards his truck. The Defendant indicates that when Donnalee was unemployed and on Employment Insurance for about 3-4 months (i.e. between September 2004 and February 2005, which falls within the parties’ post-marriage period), he supported the family.

Michel admits that he had two room-mates who were each paying $300.00 per month as “tenants-at-will” in his home, in respect of which he was paying mortgage, property taxes and utilities. [ 22 ] In evidence, Michel acknowledges that during the pre-marriage period, they made certain wedding-related expenses which Donnalee financed and he respectively agreed to reimburse her. According to Donnalee’s evidence, the wedding purchases amounted to the sum of $20,000. At trial however, Michel objected to that amount; and both parties contested the nature of some associated money transfers which occurred between them.

Michel claims the transfer to Donnalee was partially for application to mortgage payments and not for the wedding expenses; while Donnalee insists the transfer was reimbursement for the wedding expenses which she financed. Donnalee’s position [ 23 ] Donnalee testifies that during her pre-marriage relationship with Michel they seldom went out in public as a couple. And during the ski trip they had in April, 2004, Michel paid separately for his expenses while she was responsible for her son, the son’s friend and herself.

She notes that throughout 2004, Michel had his own home with his furniture there and was spending time at both places. She notes that the evidence of Michel’s brother on the issue of the actual time Michel moved in to her home was “vague, unclear and not helpful” and does not corroborate Michel’s evidence as to the date of co-habitation. She notes that as of August 17, 2004, the evidence before this Court (Exhibit 3) demonstrates that Michel’s master bedroom suite was not in her home and neither was his dining

room table moved into her home as late as October 18, 2004.

And additionally, up till February, 2005, Michel was claiming his secondhome as his primary residence (TT, 412/16-18). [24] Donnalee submits that the undisputed evidence in this action is that there was no financial integration between Michel and heras they: had separate bank accounts and neither added the other to any of their bank accounts; had no joint credit cards or loans; did nothave a joint healthcare account prior to marriage; were not added onto each other’s benefit package; neither added each other onto title oftheir individual homes; neither bought anything together nor saved together for a holiday or special event; and never filed their taxestogether. [25] She further notes that the evidence before this Court indicates that Michel did not disclose his income or investments to her.Michel never told her how much equity he had in his second home; did not change his contact address on his banking accounts; neverasked about Donnalee’s finances, and neither did she ask Michel about his.

When Michel’s debt became an issue, they discussedgenerally about it but she never helped pay off any of Michel’s debts; none of them knew how much mortgage payments they weremaking in respect of their individual homes; and she did not know how much rent Michel was collecting from his roommates or “tenants-at-will.” Analysis [26] Manderscheid, J in Behiels v McCarthy, 2010 ABQB 281, 496 AR 327 [Behiels] stated that: [21] In Wright-Watts v. Watts, 2005 ABQB 708 at paras. 17-19, 387 A.R. 293, McMahon J., identifies factors first enumerated inMolodowich v.

Penttinen (1980), (ON SC), 17 R.F.L. (2d) 376 at 381-382, 2 A.C.W.S. (2d) 486 (Ont. Dist. Ct.) thatassist in determining the existence of a common-law relationship: 17. A useful list of factors to consider in determining the existence of a common law relationship was provided by Kurisko Dist. Ct. J. inMolodowich v. Penttinen (1980), (ON SC), 17 R.F.L. (2d) 376 at 381-382 (Ont. Dist. Ct.): 1. Shelter: (

a) Did the parties live under the same roof? (

b) What were the sleeping arrangements? (

c) Did anyone else occupy or share the available accommodation? 2. Sexual and Personal Behaviour: (

a) Did the parties have sexual relations? If not, why not? (

b) Did they maintain an attitude of fidelity to each other? (

c) What were their feelings toward each other? (

d) Did they communicate on a personal level? (

e) Did they eat their meals together? (

f) What, if anything, did they do to assist each other with problems or during illness? (

g) Did they buy gifts for each other on special occasions? 3. Services: What was the conduct and habit of the parties in relation to: (

a) preparation of meals; (

b) washing and mending clothes; (

c) shopping; (

d) household maintenance; and (

e) any other domestic services? 4. Social: (

a) Did they participate together or separately in neighbourhood and community activities?

(

b) What was the relationship and conduct of each of them toward members of their respective families and how did such families behavetowards the parties? 5. Societal: What was the attitude and conduct of the community toward each of them and as a couple? 6. Support (economic): (

a) What were the financial arrangements between the parties regarding the provision of or contribution toward the necessaries of life(food, clothing, shelter, recreation, etc.)? (

b) What were the arrangements concerning the acquisition and ownership of property? (

c) Was there any special financial arrangement between them which both agreed would be determinant of their overall relationship? 7. Children: What was the attitude and conduct of the parties concerning children? 18. In M. v. H., (SCC), [1999] 2 S.C.R. 3 at para. 59, a majority of the Supreme Court of Canada, per Cory andIacobucci JJ., said that the Molodowich factors are the "generally accepted characteristics of a conjugal relationship" and that not all arenecessary to establish a conjugal relationship. ...

Clearly, existence of a common-law relationship is highly dependent on the context of the circumstances and nature of the interactionsbetween two non-married persons. [27] The evidence before me, which I accept, demonstrates that both parties commenced a workplace dating relationship in August2003 which developed into an intimate relationship, with explicit plans to eventually marry each other; not to establish a common-lawrelationship. It is not unusual for parties to be involved in prolonged intimate, courting relationship of this type that was never intended tobecome a common-law relationship.

For example in Wright-Watts v Watts at para 19, McMahon J found that the relevant “parties’preceding intimate relationship spanning eight or nine years was merely “courting” or “dating” and not to be considered cohabitation forthe purpose of determining legal rights.” Significantly, the time period in which Michel and Donnalee were involved in a pre-marriagerelationship was approximately 15 months which was far less than that in Watts, calculating from August 29, 2003 when they startedtheir dating relationship,. [28] The Supreme Court admonishes that courts should respect personal and conscious choice of parties in how they organize theiraffairs: Nova Scotia (Attorney General) v Walsh, 2002 SCC 83 at para 55, [2002] 4 SCR 325. [29] The parties do not agree as to the time Michel moved in to Donnalee’s home.

There was no clear, corroborated evidence fromthe Defendant quantifying the amount of time he was spending in his second home vis-à-vis that spent in Donnalee’s home, prior to theofficial marriage date of November 19, 2004 (and/or the sale of Michel’s second home in February, 2005). The evidence of his brotheron this particular issue was largely equivocal in respect of material and relevant information (TT, March 1, 2013, 1-14). Although Michelbegan to move his personal items in to Donnalee’s home sometime during the period of their intimate relationship, the conflictingevidence as to the actual date(

s) was unhelpful to this Court in the task of clearly delineating the point at which the Defendant fullymoved his belongings into the Plaintiff’s home.

Notwithstanding this evidential difficulty, I am satisfied that Michel’s constant shuttlebetween his second home and Donnalee’s home coupled with the evidence that Michel claimed his second home as his primaryresidence for tax purpose constitute a logical basis for the conclusion that the parties here were only sharing the same accommodation inDonnalee’s home from time to time (TT, 412/12-18). [30] In my opinion, Michel’s overnight stays in and movement of some clothes into Donnalee’s home truly constituted anotherphase or extension of the relationship which started as a workplace dating relationship and evolved gradually into an intimate, courtingrelationship throughout the period up to August 29, 2004, when they became engaged.

Thus, I conclude that the evidence before thisCourt supports the conclusion that both parties did not share a single shelter on a full time basis, prior to their marriage. [31] And while during the pre-marriage period, they may have intermittently had sexual relations in the privacy of Donnalee’shome (and away from Michel’s second home, which was being shared with his room-mates), maintained a level of fidelity to each other,ate meals together and communicated on a personal level, those activities and interactions were not continuous: Behiels at paras 25, 29.In other words, there was no continuous cohabitation for the period that Michel shared his time between his primary residence andDonnalee’s home. [32] I do note that the evidence indicates that Michel had a close relationship with Donnalee’s son.

However, I also observe thatMichel dropped out of the boy’s life very abruptly following the strained relationship with his mother. [33] Further, based on the evidence before me, I am satisfied that during the pre-marriage period, there was no integration of the

financial affairs between Michel and Donnalee, except for the requirement that Michel contribute to the utility bills and groceries atDonnalee’s home; and this was not done on a clearly consistent basis by Michel, who alluded in his testimony to the occasional financialchallenges he encountered (TT, 375/6-41). [34] Having considered the Molodowich factors and the evidence before me, I conclude that in all the circumstances, there was nocommon-law relationship between the Plaintiff and the Defendant during the pre-marriage period; rather, it was an intimate, courtingrelationship with a plan for subsequent marriage: Behiels at para 42.

That intimate, courting relationship, while akin to a common-lawrelationship, did not fully rise to the level of one. Issue (ii) Can a claim for unjust enrichment be sustained based on the pre-marriage relationship? [35] Manderscheid J in Behiels at para 16, referred to the legal principle outlined by our Court of Appeal in Panara v Di Ascenzo,2005 ABCA 47 at para 22, 361 AR 382 [Di Ascenzo] where Russell JA said: In a common law relationship there is no presumed entitlement to property sharing.

However, remedies are available to unmarriedpartners who are unfairly disadvantaged upon breakdown of the relationship ... [emphasis added] He concluded that unlike persons divorcing after a marriage, any claim based on common-law relationship by parties who are unmarriedpartners, must therefore have a basis in equity. [36] The analytical significance of my conclusion that the pre-marriage relationship between Michel and Donnalee was not acommon-law relationship is that there is no legally presumed entitlement to property sharing between them.

However, in my opinion, tothe extent that the relationship between these unmarried partners was distinctively focused on their getting married on a later date, it wasakin to a common-law relationship. Given that context, I will proceed to consider their entitlement to remedies in equity which aregenerally available to unmarried partners who are unfairly disadvantaged upon breakdown of an intimate, courting relationship of thisnature: Di Ascenzo at para 22.

The question then becomes: Has any of the unmarried partners benefitted from the other unfairly orwithout reason? [37] Both the Plaintiff and the Defendant in this action have claimed unjust enrichment. Unjust enrichment has three elements: (a)an enrichment; (

b) a corresponding deprivation; and (

c) the absence of a juristic reason for the enrichment: Behiels at para 18, citing,Peter v Beblow, (SCC), [1993] 1 SCR 980 at 987-89, 101 DLR (4th) 621; Sorochan v Sorochan, (SCC), [1986] 2 SCR 38 at 44, 29 DLR (4th) 1; and Pettkus v Becker, (SCC), [1980] 2 SCR 834, 117 DLR (3d) 257. Is there an enrichment? [38] Michel submits that prior to their marriage, Donnalee was enriched by his works on the construction of a garage, landscapingand removal of a tree in the front yard of Donnalee’s home. He installed a rock border along the sidewalks front and back of Donnalee’shome, among other interior works done by him.

His expert states that the representative value of the improvements is $26,000. Micheldisputes any suggestion that all the materials he bought and the renovation works he did in Donnalee’s home were intended to repay herfor the basement renovation which Donnalee executed in his second home in October 2003. [39] Donnalee invites this Court to note that she obtained the permit for the garage construction and spent twice as much as Micheldid for related cement and electrical work in respect of the improvements which Michel claims she was enriched by.

She points out thatMichel was only one of about six people who constructed the garage. Donnalee says in the construction industry, where both partieswork, it is customary to help each other by providing free labour. And notes that it was the same people who had earlier helped her inthe renovation work she carried out on Michel’s basement in October, 2003 in respect of which she paid approximately $15,000 formaterials used.

Donnalee submits that there is no fair distinction between the renovations she did in October 2003 (with the help offriends and family) and the renovations done by Michel in 2004, prior to their marriage (with the help of friends and family). [40] She argues that first, Michel was enriched by having the basement of his second home comprehensively refinished at no costto him, and especially so as the finished basement was a selling feature on the Listing Agreement for that property.

Secondly, that sinceMichel was only one of about six people who used their labour on the improvements, including the garage construction, to her home,Michel is not entitled to claim full enrichment based on the alleged improvement value assessed by his expert at $26,000.

And finally,that any financial contributions made during the pre-marriage period by Michel were reimbursements of cost incurred by Donnalee whileMichel stayed or resided with her. [41] As I have indicated earlier, the basis for my consideration of the availability of equitable remedies to the parties in this matteris that Michel and Donnalee were, at that point, unmarried partners whose relationship started as a workplace dating relationship onAugust 29, 2003 and evolved gradually to become an intimate, courting relationship throughout the period up to August 29, 2004, whenthey became engaged.

Thus, the fact that in October 2003, Donnalee arranged to have the basement in Michel’s second home renovatedis a relevant consideration for the determination of the existence or absence of an enrichment during the pre-marriage period. [42] Based on the evidence, I am satisfied that Donnalee’s initiative which involved making arrangements to renovate Michel’sbasement in October 2003 improved Michel’s second home and I conclude that Michel was thereby enriched.

I also agree with Michelthat Donnalee was enriched by the renovations and improvements, including the construction of a garage, which were done on herproperty in 2004, prior to their marriage. [43] As such, in my view, there was mutual conferral of benefits on each other by both parties. They were both individually sparedof the expenses they would have had to undertake in order to obtain those improvements on their separate properties: Kerr v Baranow,2011 SCC 10 , [2011] 1 SCR 269 at para 38.

Is there a corresponding deprivation? [44] Michel argues that he suffered a deprivation in the sense that he could have used the money and efforts spent on Donnalee’s

home for improvements to his own home as a pre-marital asset. And that he “chose to carry out the improvements and construction of the Garage on [Donnalee’s] home as that was going to be the Matrimonial Home” (Michel’s Written Brief, March 21, 2013 at para 20). [ 45 ] Donnalee contends that aside the likelihood that Michel constructed the garage in her home in order to park his car in it whenever he stayed over at her place, the only other reason was that Michel intended the construction as a return or reciprocal gesture for the basement renovation which she did in his second home in October 2003.

As such, Donnalee submits that she similarly suffered a corresponding deprivation during the pre-marriage period because she spent monies that should have otherwise been spent on improving her own home on purchasing materials for refinishing and improving the basement in Michel’s second home. [ 46 ] In the circumstances of the facts and evidence before me, I am of the view that neither Donnalee nor Michel would have embarked on the projects which they executed for each other were it not for the relationship that was extant between them, starting from August 2003.

In other words, that relationship provided the basis for the mutual conferral of benefits between these parties and the corresponding mutual deprivations which they both suffered individually.

Given that background, it is logical to conclude that the mutual enrichment in this case corresponds to the mutual deprivation on the part of each of the parties here: Kerr v Baranow at para 39 . [ 47 ] In the result, I am convinced that both Michel and Donnalee have established that they both mutually enriched each other by their separate actions and there is a nexus or correspondence between those benefits and the deprivations suffered by each of them.

Is there a juristic reason for the enrichment? [ 48 ] Michel submits that the renovation or refinishing of the basement in his second home by Donnalee was a surprise birthday gift, which had no connection with the garage he constructed in her house. As such, the benefit conferred by Donnalee by that action is unrecoverable. [ 49 ] Donnalee argues that the improvements to her property by Michel were either gifts or reciprocal contributions from him in return for all the efforts she had expended on the basement of his second home.

She submits that the principle of fairness would not permit Michel to retain the enrichment she conferred on him and deny her entitlement to the retention of the benefit conferred on her by Michel. [ 50 ] In Kerr v Baranow at para 114 , the Supreme Court of Canada stated that the juristic reason analysis is intended to reveal whether there is a reason for the defendant to retain the enrichment.

Under that analysis, claimants must show that there is no juristic reason falling within any of the established categories, such as whether the benefit was a gift or pursuant to a legal obligation, to deny recovery. [ 51 ] In my view, the circumstances under which Donnalee and Michel made improvements to each other’s property point to the existence of donative intent or gift as the juristic reason for the retention of the mutual enrichment by both parties. [ 52 ] Alternatively, I note that the Supreme Court also indicated that “[t]he fact that the parties have conferred benefits on each other may provide relevant evidence of their reasonable expectations, a subject that may become germane when the defendant attempts to show that those expectations support the existence of a juristic reason outside the settled categories”: Kerr v Baranow at para 115 . [ 53 ] In view of this statement by the Supreme Court, the next question to ask is: Does the mutual conferral of benefits by the parties in this case constitute an evidence of a reasonable expectation which support the existence of a juristic reason outside the traditional categories? [ 54 ] The answer to the question posed in the preceding paragraph should be positive.

Given the nature of the pre-marriage relationship between Michel and Donnalee, it is neither unreasonable nor illogical for Donnalee to expect that Michel’s construction of a garage on her property in 2004 was his way of reciprocating the gestures which she had made earlier in October 2003, when she arranged for the refinishing of the basement of Michel’s second home (which was presented to him as a surprise birthday gift on his return from a hunting expedition). [ 55 ] Thus, even if I accept Michel’s argument that the construction of the garage on Donnalee’s property was neither a direct gift nor a reciprocal gift to Donnalee, I am nevertheless satisfied that the garage construction on her property and the circumstances which surrounded it, are relevant evidence of a reasonable expectation on Donnalee’s part, which support the existence of a juristic reason outside the settled categories: Kerr v Baranow at para 115 .

The nature of the relationship between these two parties, characterized earlier as one akin to a common-law relationship, would naturally and reasonably attract this kind of expectation between involved parties. Remedy in relation to unjust enrichment claim [ 56 ] Michel asserts that the improvements on Donnalee’s property enriched her to the tune of $26,000. And Donnalee testifies that she purchased materials valued approximately at $15,000 for the improvements on Michel’s property.

None of the parties dispute the fact that they were helped by friends and family members in the process of carrying out the various projects which they separately embarked on at different times on each other’s property. [ 57 ] The Supreme Court observed that in practical terms, crafting appropriate remedies in an unjust enrichment case after the breakdown of a domestic relationship is generally tricky when it comes to determining the respective contributions of the parties to the relationship.

The Court stated that “[w]hile determining the proportionate contributions of the parties is not an exact science, it generally does not call for a minute examination of the give and take of daily life.

It calls, rather, for the reasoned exercise of judgment in light of all of the evidence”: Kerr v Baranow at para 102 . [ 58 ] In my assessment, if the value of the enrichment claimed by Michel is discounted by the generous and free labour of the parties’ friends and family members who helped with the garage construction project on Donnalee’s property, the outstanding amount would approximately equal the value of the enrichment which Donnalee claims as costs for only the materials she bought for the 2003 basement renovations in Michel’s house.

[ 59 ] In the result, the unjust enrichment claim by Michel is offset by Donnalee’s unjust enrichment claim. None of which is legally recoverable in this case. Issue (iii) How is the matrimonial property to be distributed between the parties? Michel’s position [ 60 ] In terms of the distribution under the MPA , Michel acknowledges that Donnalee owned her home prior to the date of marriage which, to that extent, exempts the property from distribution under MPA , s 7(2).

However, he argues that the increased value of the property during the period of marriage to the date of trial is subject to a “just and equitable” distribution pursuant to the provisions of the MPA , s 7(3), taking the factors under

section 8 of the MPA into consideration. [ 61 ] Michel submits that he made financial contributions throughout the marriage and paid part of the food expenses and utilities, in addition to the labour and materials he provided to renovate Donnalee’s home. He contends that Donnalee told him that he would be put on title to her home. The Defendant draws the Court’s attention to the fact that he played a substantial parenting role in the life of Donnalee’s son. He requests this Court to make an equal division of the matrimonial property in accordance with the provisions of the MPA .

He also claims occupation rent payable by the Plaintiff for the exclusive use and possession of the matrimonial home from the date of separation to the date of trial. [ 62 ] Michel acknowledges that he is not advancing any claim to Donnalee’s pension as that was acquired through her independent efforts after their separation. He also indicates that he no longer pursues any claim in relation to the Plaintiff’s pre-marital property that was not part of the matrimonial regime.

Donnalee’s position [ 63 ] Donnalee submits that foremost, the parties here did not purchase any property together, and accordingly, distribution under MPA , s 7(4) is obviated. She notes that both parties agree that the value of her house at the date of marriage which represents the amount of her exemption under MPA , s 7(2) is $160,000.

She contends that in regard to the exempt property, the evidence before this Court is that any monies allegedly transferred to her by Michel were neither traceable to her property nor applied to her mortgage payments. [ 64 ] She acknowledges that they were both involved in domestic chores at home. However, while Michel acted as one of her son’s parents during the three years of marriage, he was very abrupt in “cutting off” contact and the relationship with her son after he left her home.

Donnalee invites this Court to note that given the fact that she owned her home for eight years prior to the marriage with Michel, her contribution to the acquisition, conservation and improvement of the house was significantly greater than Michel’s. She indicates that she spent a lot of money after April 2007 to conserve the property after an explosion and flooding in the basement. Donnalee observes that their marriage was for a very short period of three years and that they were separated for twice that period prior to trial and the grant of Divorce Judgment by this Court.

Analysis [ 65 ] It is apparent from the evidence before me that during the period of the marriage, Donnalee paid for the mortgage, property taxes and alarm system in the home, while Michel contributed to utilities and groceries through direct transfers of money and cash to Donnalee between March 2005 and April 2007.

Thereafter, Donnalee was primarily responsible for property related payments, including repair costs for damages which accrued from the flood in the basement of the property and the neighbourhood explosion. [ 66 ] I also observe that the marriage between Michel and Lee was approximately for a period of three years, which in my assessment is a short duration.

In this context, I note the comments of my colleague, Moen J that “[g]iven the short marriage and the complete separation of all financial matters after that short marriage, there is nothing to suggest that the parties should share in the equity of the house up until the day of trial”: Nasin v Nasin , 2008 ABQB 219 at para 104 , 443 AR 298 [ Nasin ]; and Watts . This statement reflects the facts of the present case before me in the sense that Donnalee has been solely responsible for mortgage and property related payments since the two parties separated.

In my view, it will be fair to limit distribution of the increased value of the Plaintiff’s home to the date of separation, rather than apply the date of trial, as provided under the MPA , s 7(3)(a). Further in KEW v CRM , 2005 ABQB 426 at para 127 , Coutu J held that based on the short duration of the marriage, “a distribution of 50% would be disproportionately large in relation to the length of the marriage.” [ 67 ] This Court is faced with conflicting evidence regarding the verbal agreement which Michel alleges was made with Donnalee that he would be placed on title of her property.

Donnalee vehemently denied the existence of such an agreement; instead she stated clearly in her evidence that the only verbal agreement she made with the Defendant is that “her home was hers and his home was his and that while [Michel] lived in her home, he was to pay for utilities and groceries.” In the result, given the absence of verifiable or corroborated evidence from the Defendant connecting the transfer of monies to the Plaintiff with mortgage or property tax payments on the Plaintiff' home, I find that there is no oral agreement between Michel and Donnalee that Michel would be added on title to the Plaintiff’s home. [ 68 ] In all the circumstances of this case, and based on my consideration of all the relevant factors enumerated in the MPA , s 8, I conclude that the Defendant, Michel will receive 25% of the increased value of the Plaintiff’s house to the date of separation, and none of the increases after the separation.

This represents about half of the normal presumptive award, which in my opinion is the fair amount in these circumstances. Occupation Rent [ 69 ] The legal principles governing the claim for occupation rent are relatively trite. Occupation rent is normally not payable simply because one owner has enjoyed exclusive possession: Busenius v Busenius , 2006 ABQB 162 at paras 44-46 . When the party in possession makes a claim for reimbursement for the payment of current expenses, a counterclaim for occupation rent may be entertained: Behiels v McCarthy at paragraphs 92 and 93 .

[ 70 ] Since Donnalee does not seek reimbursement for the expenses which she incurred in order to conserve and/or maintain the matrimonial home, there is no basis for Michel’s claim for occupation rent. Accordingly the Defendant’s claim for occupation rent following the separation is dismissed. VI. Conclusion [ 71 ] Based on the evidence before me, I conclude that in all the circumstances, there was no common-law relationship between the Plaintiff and the Defendant during the pre-marriage period. Instead, they had an intimate, courting relationship with plans for subsequent marriage.

That intimate, courting relationship, while akin to a common-law relationship, did not fully rise to the level of one. [ 72 ] Accordingly, both the Plaintiff and Defendant are entitled to remedies in equity which are generally available to unmarried partners who are unfairly disadvantaged upon the breakdown of such relationship. In that context, I find that, in the within action, the value of the unjust enrichment claim made by Michel is offset by the value of Donnalee’s unjust enrichment claim.

In the result, none of the parties’ unjust enrichment claims is legally recoverable in this case. [ 73 ] The Plaintiff, Donnalee is entitled to an exemption assessed in the sum of $160,000, being the agreed market value of her house at the date of marriage, pursuant to the MPA , s 7(2). The Defendant, Michel is entitled to receive 25% of the increased value of the Plaintiff’s house to the date of separation: MPA , s 7(3); and Nasin at para 104 . [ 74 ] The Defendant’s claim for occupation rent following the separation is dismissed. VII.

Costs [ 75 ] Costs may be spoken to by counsel within 60 days of these Reasons. Heard on the 25th day of February, 2013 to the 1st day of March, 2013. Final Submissions filed on the 25 th day of June, 2013. Dated at the City of Edmonton, Alberta this 16 th day of October, 2013. Donald Lee J.C.Q.B.A. Appearances: David S. Patterson Patterson Family Law Office for the Plaintiff Andrew L. Zebak Old Strathcona Law Offices for the Defendant

_______________________________________________________ Corrigendum of the Reasons for Judgment of The Honourable Mr. Justice Lee _______________________________________________________ Paragraph 43 amended to add full citation of Kerr v. Barranow