Margaret Patricia Kerr Appellant v. Nelson Dennis Baranow, 2011 SCC 10

SUPREME COURT OF CANADA Citation: Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269 Date: 20110218 Docket: 33157, 33358 Between: Margaret Patricia Kerr Appellant and Nelson Dennis Baranow Respondent And Between: Michele Vanasse Appellant and David Seguin Respondent Coram: McLachlin C.J. and Binnie, LeBel, Abella, Charron, Rothstein and Cromwell JJ. Reasons for Judgment: (paras. 1 to 221): Cromwell J. (McLachlin C.J. and Binnie, LeBel, Abella, Charron and Rothstein JJ. concurring) Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269 Margaret Patricia Kerr Appellant v. Nelson Dennis Baranow Respondent

- and - Michele Vanasse Appellant v. David Seguin Respondent Indexed as: Kerr v. Baranow 2011 SCC 10 File Nos.: 33157, 33358. 2010: April 21; 2011: February 18.

Present: McLachlin C.J. and Binnie, LeBel, Abella, Charron, Rothstein and Cromwell JJ. on appeal from the courts of appeal for british columbia and ontario Family law — Common law spouses — Property — Unjust enrichment — Monetary remedy — Whether monetary remedy restricted to quantum meruit award — Whether evidence of joint family venture should be considered in conferring remedy — Whether mutual benefit conferral and reasonable expectations of parties should be considered in assessing award.

Family law — Common law spouses — Property — Resulting trust — Whether evidence of common intention should be considered in context of resulting trust — Whether resulting trust principles apply to property or monetary award in resolution of domestic cases. Family law — Common law spouses — Support — Parties separating after living together for more than 25 years — Female partner commencing proceedings for a share of property and support — Whether support should be payable from date of trial or date on which proceedings commenced.

In the Kerr appeal, K and B, a couple in their late 60s separated after a common law relationship of more than 25 years. They both had worked through much of that time and each had contributed in various ways to their mutual welfare. K claimed support and a share of property in B’s name based on resulting trust and unjust enrichment principles. B counterclaimed that K had been unjustly enriched by his housekeeping and personal assistance services provided after K suffered a debilitating stroke.

The trial judge awarded K $315,000, a third of the value of the home in B’s name that they had shared, both by way of resulting trust and unjust enrichment, based on his conclusion that K had provided $60,000 worth of equity and assets at the beginning of their relationship. He also awarded K $1,739 per month in spousal support effective the date she commenced proceedings. The Court of Appeal concluded that K did not make a financial contribution to the acquisition or improvement of B’s property that was the basis for her award at trial, and dismissed her property claims.

A new trial was ordered for B’s counterclaim. The Court of Appeal further held that the commencement date of the spousal support should be the date of trial. In the Vanasse appeal, it was agreed that S was unjustly enriched by the contributions of his partner, V, during their 12-year common law relationship. For the first four years of cohabitation, both parties pursued their respective careers. In 1997, V took a leave of absence from her employment and the couple moved to Halifax so that S could pursue a business opportunity.

Over the next three and a half years, their children were born and V stayed at home to care for them and performed the domestic labour. S worked long hours and travelled extensively for business. In 1998, S stepped down as CEO of the business and the family returned to Ottawa where they bought a home in joint names. In 2000, S received approximately $11 million for his shares in the business and from that time, until their separation in 2005, he participated more with the domestic chores.

The trial judge found no unjust enrichment for the first and last periods of their cohabitation, but held that S had been unjustly enriched at V’s expense during the period in which the children were born. V was entitled to half of the value of the wealth S accumulated during the period of unjust enrichment, less her interest in the home and RRSPs in her name. The court of appeal set aside this award and directed that the proper approach to valuation was a quantum meruit calculation in which the value each party received from the other was assessed and set off.

Held : In Kerr , the appeal on the spousal support issue should be allowed and the order of the trial judge should be restored.

The appeal from the order dismissing K’s unjust enrichment claim should also be allowed and a new trial ordered. The appeal from the order dismissing K’s claim in resulting trust should be dismissed. The order for a new hearing of B’s counterclaim should be affirmed. Held : In Vanasse , the appeal should be allowed and the order of the trial judge restored. These appeals require the resolution of five main issues. The first concerns the role of the “common intention” resulting trust in claims by domestic partners.

The second issue is whether the monetary remedy for a successful unjust enrichment claim must always be assessed on a quantum meruit basis. The third area relates to mutual benefit conferral in the context of an unjust enrichment claim and when this should be taken into account. The fourth concerns the role the parties’ reasonable expectations play in the unjust enrichment analysis. Finally , in the Kerr appeal, this Court must also decide the effective date of the commencement of spousal support.

For unmarried persons in domestic relationships in most common law provinces, judge-made law is the only option for addressing the property consequences of the breakdown of those relationships. The main legal mechanisms available have been the resulting trust and the action in unjust enrichment. Resulting trusts arise from gratuitous transfers in two types of situations: the transfer of property from one partner to the other without consideration, and the joint contribution by two partners to the acquisition of property, title to which is in the name of only one of them.

The underlying legal principle is that contributions to the acquisition of a property, which were not reflected in the legal title, might nonetheless give rise to a property interest. In Canada, added to this underlying notion was the idea that a resulting trust could arise based solely on the “common intention” of the parties that the non-owner partner was intended to have an interest. This theory is doctrinally unsound, however, and should have no continuing role in the resolution of domestic property disputes.

While traditional resulting trust principles may well have a role to play in the resolution of property disputes between unmarried domestic partners, parties have increasingly turned to the law of unjust enrichment and the remedial constructive trust. Since the decision in Pettkus v. Becker , the law of unjust enrichment has provided a much less artificial, more comprehensive and more principled basis to address claims for the distribution of assets on the breakdown of domestic relationships.

It permits recovery whenever the plaintiff can establish three elements: an enrichment of the defendant by the plaintiff, a corresponding deprivation of the plaintiff, and the absence of a juristic reason for the enrichment. This Court has taken a straightforward economic approach to the elements of enrichment and corresponding deprivation. The plaintiff must show that he or she has given a tangible benefit to the defendant that the defendant received and retained. Further, the enrichment must correspond to a deprivation that the plaintiff has suffered.

Importantly, provision of domestic services may support a claim for unjust enrichment. The absence of a juristic reason for the enrichment means that there is no reason in law or justice for the defendant’s retention of the benefit conferred by the plaintiff. This third element also provides for due consideration of the autonomy of the parties, their legitimate expectations and the right to order their affairs by contract. There are two steps to the juristic reason analysis.

First, the established categories of juristic reason must be considered, which could include benefits conferred by way of gift or pursuant to a legal obligation. In their absence, the second step permits consideration of the reasonable expectations of the parties and public policy considerations to assess whether particular enrichments are unjust. The object of the remedy for unjust enrichment is to require the defendant to reverse the unjustified enrichment and may attract either a “personal restitutionary award” or a “restitutionary proprietary award”.

In most cases, a monetary award will be sufficient to remedy the unjust enrichment but two issues raise difficulties in determining appropriate compensation. Where there has been a mutual conferral of benefits, it is often difficult for the court to retroactively value every service rendered by each party to the other. While the value of domestic services is not questioned, it would be unjust to only consider the contributions of one party.

A second difficulty is whether a monetary award must invariably be calculated on a quantum meruit , “value received” or “fee-for-services” basis or whether that monetary relief may be assessed more flexibly, on a “value survived basis” by reference to the overall increase in the couple’s wealth during the relationship. In some cases, a proprietary remedy may be required.

Where the plaintiff can demonstrate a link or causal connection between his or her contributions and the acquisition, preservation, maintenance or improvement of the disputed property, and that a monetary award would be insufficient, a share of the property proportionate to the claimant’s contribution can be impressed with a constructive trust in his or her favour. Three areas in the law of unjust enrichment require clarification. Once the choice has been made to award a monetary remedy, the question is how to quantify it.

If a monetary remedy must invariably be quantified on a quantum meruit basis, the remedial choice in unjust enrichment cases becomes whether to impose a constructive trust or to order a monetary remedy calculated on a quantum meruit basis. This dichotomy of remedial choice should be rejected, however, as the value survived measure is a perfectly plausible alternative to the constructive trust. Restricting the money remedy to a fee-for-service calculation is inappropriate for four reasons. First, it fails to reflect the reality of the lives of many domestic partners.

The basis of all domestic unjust enrichment claims do not fit into only two categories — those where the enrichment consists of the provision of unpaid services, and those where it consists of an unrecognized contribution to the acquisition, improvement, maintenance or preservation of specific property. Where the contributions of both parties over time have resulted in an accumulation of wealth, the unjust enrichment occurs when one party retains a disproportionate share of the assets that are the product of their joint efforts following the breakdown of their relationship.

The required link between the contributions and a specific property may not exist but there may clearly be a link between the joint efforts of the parties and the accumulation of wealth. While the law of unjust enrichment does not mandate a presumption of equal sharing, nor does the mere fact of cohabitation entitle one party to share in the other’s property, the legal consequences of the breakdown of a domestic relationship should reflect realistically the way people live their lives.

Second, the remedial dichotomy is inconsistent with the inherent flexibility of unjust enrichment and with the Court’s approach to equitable remedies . Moreover, the Court has recognized that, given the wide variety of circumstances addressed by the traditional categories of unjust enrichment, as well as the flexibility of the broader, principled approach, its development requires recourse to a number of different sorts of remedies depending on the circumstances.

There is no reason in principle why one of the traditional categories of unjust enrichment should be used to force the monetary remedy for all present domestic unjust enrichment cases into a remedial strait-jacket. What is essential is that there must be a link between the contribution and the accumulation of wealth. Where that link exists, and a proprietary remedy is either inappropriate or unnecessary, the monetary award should be fashioned to reflect the true nature of the enrichment and the corresponding deprivation. Third, the remedial dichotomy ignores the historical basis of quantum meruit claims.

Finally, a remedial dichotomy is not mandated, as has been suggested, by the Court’s judgment in Peter v. Beblow.

Where the unjust enrichment is best characterized as an unjust retention of a disproportionate share of assets accumulated during the course of a “joint family venture” to which both partners have contributed, the monetary remedy should be calculated according to the share of the accumulated wealth proportionate to the claimant’s contributions. Where the spouses are domestic and financial partners, there is no need for “duelling quantum meruits ”.

The law of unjust enrichment, including the remedial constructive trust, is the preferable method of responding to the inequities brought about by the breakdown of a common law relationship, since the remedies for unjust enrichment “are tailored to the parties’ specific situation and grievances”. To be entitled to a monetary remedy on a value-survived basis, the claimant must show both that there was a joint family venture and a link between his or her contributions and the accumulation of wealth.

To determine whether the parties have, in fact, been engaged in a joint family venture, the particular circumstances of each particular relationship must be taken into account. This is a question of fact and must be assessed by having regard to all of the relevant circumstances, including factors relating to mutual effort, economic integration, actual intent and priority of the family.

The pooling of effort and team work, the decision to have and raise children together, and the length of the relationship may all point towards the extent to which the parties have formed a true partnership and jointly worked towards important mutual goals. The use of parties’ funds entirely for family purposes or where one spouse takes on all, or a greater proportion, of the domestic labour, freeing the other spouse from those responsibilities and enabling him or her to pursue activities in the paid workforce, may also indicate a pooling of resources.

The more extensive the integration of the couple’s finances, economic interests and economic well-being, the more likely it is that they have engaged in a joint family venture. The actual intentions of the parties, either express or inferred from their conduct, must be given considerable weight. Their conduct may show that they intended the domestic and professional spheres of their lives to be part of a larger, common venture, but may also conversely negate the existence of a joint family venture, or support the conclusion that particular assets were to be held independently.

Another consideration is whether and to what extent the parties have given priority to the family in their decision making, and whether there has been detrimental reliance on the relationship, by one or both of the parties, for the sake of the family. This may occur where one party leaves the workforce for a period of time to raise children; relocates for the benefit of the other party’s career; foregoes career or educational advancement for the benefit of the family or relationship; or accepts underemployment in order to balance the financial and domestic needs of the family unit.

The unjust enrichment analysis in domestic situations is often complicated by the fact that there has been a mutual conferral of benefits. When the appropriate remedy is a money award based on a fee-for-services provided approach, the fact that the defendant has also provided services to the claimant should mainly be considered at the defence and remedy stages of the analysis but may be considered at the juristic reason stage to the extent that the provision of reciprocal benefits constitutes relevant evidence of the existence (or non-existence) of a juristic reason for the enrichment.

However, given that the purpose of the juristic reason step in the analysis is to determine whether the enrichment was just, not its extent, mutual benefit conferral should only be considered at the juristic reason stage for that limited purpose. Otherwise, the mutual exchange of benefits should be taken into account only after the three elements of an unjust enrichment claim have been established. 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.

It is then open to the defendant to show that a different juristic reason for the enrichment should be recognized, having regard to the parties’ reasonable expectations and public policy considerations. Mutual benefit conferral and the parties’ reasonable expectations have a very limited role to play at the first step of the juristic reason analysis. In some cases, the fact that mutual benefits were conferred or that the benefits were provided pursuant to the parties’ reasonable expectations may be relevant evidence of whether one of the existing categories of juristic reasons is present.

The parties’ reasonable or legitimate expectations have a role to play at the second step of the juristic reason analysis, where the defendant bears the burden of establishing that there is a juristic reason for retaining the benefit that does not fall within the existing categories. The question is whether the parties’ mutual expectations show that retention of the benefits is just.

In the Vanasse appeal, although not labelling it as such, the trial judge found that there was a joint family venture and that there was a link between V’s contribution to it and the substantial accumulation of wealth that the family achieved. She made a reasonable assessment of the monetary award appropriate to reverse this unjust enrichment, taking due account of S’s substantial contributions.

Her findings of fact and analysis indicate that the unjust enrichment of S at the expense of V ought to be characterized as the retention by S of a disproportionate share of the wealth generated from a joint family venture. Several factors suggested that, throughout their relationship, the parties were working collaboratively towards common goals. They made important decisions keeping the overall welfare of the family at the forefront. It was through their joint efforts that they were able to raise a young family and acquire wealth.

S could not have made the efforts he did to build up the company but for V’s assumption of the domestic responsibilities. Notably, the period of unjust enrichment corresponds to the time during which the parties had two children together, a further indicator that they were working together to achieve common goals. The length of the relationship is also relevant, and their 12-year cohabitation is a significant period of time. There was also evidence of economic integration as their house was registered jointly and they had a joint bank account.

Their words and actions indicated that there was a joint family venture, to which the couple jointly contributed for their mutual benefit and the benefit of their children. There is a strong inference from the factual findings that, to S’s knowledge, V relied on the relationship to her detriment. She left her career, gave up her own income, and moved away from her family and friends. V then stayed home and cared for their two small children. During the period of the unjust enrichment, V was responsible for a disproportionate share of the domestic labour.

There was a clear link between V’s contribution and the accumulation of wealth. The trial judge took a realistic and practical view of the evidence and took into account S’s non-financial contributions and periods during which V’s contributions were not disproportionate to S and her judgment should be restored. The Court of Appeal was right to set aside the trial judge’s findings of resulting trust and unjust enrichment in Kerr and in ordering a new hearing on B’s counterclaim.

On the basis of the unsatisfactory record at trial, which includes findings of fact tainted by clear error, K’s unjust enrichment claim should not have been dismissed but a new trial ordered. The Court of Appeal erred in assessing B’s contributions as part of the juristic reason analysis and prematurely truncated K’s prima facie case of unjust enrichment.

The family — property approach is rejected, and for K to show an entitlement to a proportionate share of the wealth accumulated during the relationship, she must establish that B has been unjustly enriched at her expense, that their relationship constituted a joint family venture, and that her contributions are linked to the generation of wealth during the relationship. She would then have to show what proportion of the jointly accumulated wealth reflects her contributions.

With regard to B’s counterclaim, there was evidence that he made very significant contributions to K’s welfare such that his counterclaim cannot simply be dismissed. The trial judge also referred to various

other monetary and non-monetary contributions which K made to the couple’s welfare and comfort, but he did not evaluate them, letalone compare them with the contributions made by B. There are few findings of fact relevant to the key question of whether the parties’relationship constituted a joint family venture. Further, the Court of Appeal ought not to have set aside the trial judge’s order for spousalsupport in favour of K effective on the date she had commenced proceedings. It is clear that K was in need of support from B at the dateshe started her proceedings and remained so at the time of trial.

K should not have been faulted for not bringing an interim application inseeking support for the period in question. She suffered from a serious physical disability, and her standard of living was markedly lowerthan it was while she lived with B. B had the means to provide support, had prompt notice of her claim, and there was no indication inthe Court of Appeal’s reasons that it considered the judge’s award imposed on him a hardship so as to make that award inappropriate. Cases Cited Applied: Peel (Regional Municipality) v. Canada, (SCC), [1992] 3 S.C.R. 762; Peter v.

Beblow, (SCC), [1993] 1 S.C.R. 980, rev’g (1990), (BC CA), 50 B.C.L.R. (2d) 266, rev’g [1988] B.C.J. No. 887(QL); Sorochan v. Sorochan, (SCC), [1986] 2 S.C.R. 38; Garland v. Consumers’ Gas Co., 2004 SCC 25, [2004] 1S.C.R. 629; considered: Pettkus v. Becker, (SCC), [1980] 2 S.C.R. 834; Rathwell v. Rathwell, (SCC),[1978] 2 S.C.R. 436; Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795; D.B.S. v. S.R.G., 2006 SCC 37, [2006] 2 S.C.R. 231;referred to: Dyer v. Dyer (1788), 2 Cox Eq. Cas. 92, 30 E.R. 42; Murdoch v. Murdoch, (SCC), [1975] 1 S.C.R. 423;Gissing v. Gissing, [1970] 2 All E.R. 780; Pettitt v.

Pettitt, [1970] A.C. 777; Reference re Goods and Services Tax, (SCC), [1992] 2 S.C.R. 445; Mack v. Canada (Attorney General) (2002), 60 O.R. (3d) 737; Nova Scotia (Attorney General) v. Walsh,2002 SCC 83, [2002] 4 S.C.R. 325; Lac Minerals Ltd. v. International Corona Resources Ltd., (SCC), [1989] 2 S.C.R.574; Bell v. Bailey (2001), (ON CA), 203 D.L.R. (4th) 589; Wilson v. Fotsch, 2010 BCCA 226, 319 D.L.R. (4th) 26;Pickelein v. Gillmore (1997), (BC CA), 30 B.C.L.R. (3d) 44; Harrison v. Kalinocha (1994), (BCCA), 90 B.C.L.R. (2d) 273; MacFarlane v. Smith, 2003 NBCA 6, 256 N.B.R. (2d) 108; Shannon v.

Gidden, 1999 BCCA 539, 71B.C.L.R. (3d) 40; Herman v. Smith (1984), (AB KB), 42 R.F.L. (2d) 154; Clarke v. Clarke, (SCC),[1990] 2 S.C.R. 795; Cadbury Schweppes Inc. v. FBI Foods Ltd., (SCC), [1999] 1 S.C.R. 142; Soulos v. Korkontzilas, (SCC), [1997] 2 S.C.R. 217; Pacific National Investments Ltd. v. Victoria (City), 2004 SCC 75, [2004] 3 S.C.R. 575;Birmingham v. Ferguson, ; McDougall v. Gesell Estate, 2001 MBCA 3, 153 Man. R. (2d) 54; Nasser v. Mayer-Nasser(2000), (ON CA), 5 R.F.L. (5th) 100; Panara v. Di Ascenzo, 2005 ABCA 47, 361 A.R. 382; Ford v. Werden (1996), (BC CA), 27 B.C.L.R. (3d) 169; Thomas v.

Fenton, 2006 BCCA 299, 269 D.L.R. (4th) 376; Giles v. McEwan (1896),1896 CanLII 108 (MB CA), 11 Man. R. 150; Garland v. Consumers’ Gas Co., (SCC), [1998] 3 S.C.R. 112; Nance v.British Columbia Electric Railway Co., (UK JCPC), [1951] A.C. 601; MacKinnon v. MacKinnon (2005), (ON CA), 75 O.R. (3d) 175; S. (L.) v. P. (E.) (1999), 1999 BCCA 393 , 67 B.C.L.R. (3d) 254. Statutes and Regulations Cited Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.). Family Relations Act, R.S.B.C. 1996, c. 128, ss. 1(1) “spouse”, 93(5)(d). Authors Cited Birks, Peter. An Introduction to the Law of Restitution. Oxford: Clarendon Press, 1985.

Birks, Peter. Unjust Enrichment, 2nd ed. Oxford: Oxford University Press, 2005. Davies, J. D. “Duties of Confidence and Loyalty”, [1990] L.M.C.L.Q. 4. Fridman, G. H. L. Restitution, 2nd ed. Scarborough, Ont.: Carswell, 1992. Gordon, Marie L. “Blame Over: Retroactive Child and Spousal Support in the Post-Guideline Era” (2004-2005), 23 C.F.L.Q. 243. Lord Goff of Chieveley and Gareth Jones. The Law of Restitution, 7th ed. London: Sweet & Maxwell, 2007. Maddaugh, Peter D., and John D. McCamus. The Law of Restitution. Aurora, Ont.: Canada Law Book, 1990. Maddaugh, Peter D., and John D. McCamus. The Law of Restitution.

Aurora, Ont.: Canada Law Book, 2004 (loose-leaf updated August2010, release 6). Matrimonial Property Law in Canada, vol. 1, by James G. McLeod and Alfred A. Mamo, eds. Toronto: Carswell, 1993 (loose-leafupdated 2010, release 8). McCamus, John D. “Restitution on Dissolution of Marital and Other Intimate Relationships: Constructive Trust or Quantum Meruit?”,in Jason W. Neyers, Mitchell McInnes and Stephen G. A. Pitel, eds., Understanding Unjust Enrichment. Portland: Hart Publishing,2004, 359. Mee, John. The Property Rights of Cohabitees: An Analysis of Equity’s Response in Five Common Law Jurisdictions.

Portland: HartPublishing, 1999. Oosterhoff on Trusts: Text, Commentary and Materials, 7th ed. by A. H. Oosterhoff et al. Toronto: Carswell, 2009. Parkinson, Patrick. “Beyond Pettkus v. Becker: Quantifying Relief for Unjust Enrichment” (1993), 43 U.T.L.J. 217. Pettit, Philip H. Equity and the Law of Trusts, 11th ed. Oxford: Oxford University Press, 2009. Scane, Ralph E. “Relationships ‘Tantamount to Spousal’, Unjust Enrichment, and Constructive Trusts” (1991), 70 Can. Bar Rev. 260.

Waters, Donovan. Comment (1975), 53 Can. Bar Rev. 366. Waters’ Law of Trusts in Canada, 3rd ed. by Donovan W. M. Waters, Mark R. Gillen and Lionel D. Smith, eds. Toronto: Thomson,2005. Youdan, Timothy G. “Resulting and Constructive Trusts”, in Special Lectures of the Law Society of Upper Canada 1993 — FamilyLaw: Roles, Fairness and Equality. Scarborough, Ont.: Carswell, 1994, 169. APPEAL from a judgment of the British Columbia Court of Appeal (Levine, Tysoe and Smith JJ.A.), 2009 BCCA 111, 93B.C.L.R. (4th) 201, 266 B.C.A.C. 298, [2009] 9 W.W.R. 285, 66 R.F.L. (6th) 1, [2009] B.C.J.

No. 474 (QL), 2009 CarswellBC 642,reversing in part a decision of Romilly J., 2007 BCSC 1863, 47 R.F.L. (6th) 103, [2007] B.C.J. No. 2737 (QL), 2007 CarswellBC 3047. Appeal allowed in part. APPEAL from a judgment of the Ontario Court of Appeal (Weiler, Juriansz and Epstein JJ.A.), 2009 ONCA 595, 252O.A.C. 218, 96 O.R. (3d) 321, [2009] O.J. No. 3211 (QL), 2009 CarswellOnt 4407, reversing a decision of Blishen J., , [2008] O.J. No. 2832 (QL), 2008 CarswellOnt 4265. Appeal allowed. Armand A. Petronio and Geoffrey B. Gomery, for the appellant Margaret Kerr. Susan G.

Label and Marie-France Major, for the respondent Nelson Baranow. John E. Johnson, for the appellant Michele Vanasse. H. Hunter Phillips, for the respondent David Seguin. The judgment of the Court was delivered by Cromwell J. — I. Introduction [1] In a series of cases spanning 30 years, the Court has wrestled with the financial and property rights of parties on thebreakdown of a marriage or domestic relationship. Now, for married spouses, comprehensive matrimonial property statutes enacted inthe late 1970s and 1980s provide the applicable legal framework.

But for unmarried persons in domestic relationships in most commonlaw provinces, judge-made law was and remains the only option. The main legal mechanisms available to parties and courts have beenthe resulting trust and the action in unjust enrichment. [2] In the early cases of the 1970s, the parties and the courts turned to the resulting trust. The underlying legal principlewas that contributions to the acquisition of a property, which were not reflected in the legal title, could nonetheless give rise to a propertyinterest.

Added to this underlying notion was the idea that a resulting trust could arise based on the “common intention” of the partiesthat the non-owner partner was intended to have an interest. The resulting trust soon proved to be an unsatisfactory legal solution formany domestic property disputes, but claims continue to be advanced and decided on that basis. [3] As the doctrinal problems and practical limitations of the resulting trust became clearer, parties and courts turnedincreasingly to the emerging law of unjust enrichment.

As the law developed, unjust enrichment carried with it the possibility of aremedial constructive trust. In order to successfully prove a claim for unjust enrichment, the claimant must show that the defendant hasbeen enriched, the claimant suffered a corresponding detriment, and there is no “juristic reason” for the enrichment. This claim hasbecome the pre-eminent vehicle for addressing the financial consequences of the breakdown of domestic relationships.

However,various issues continue to create controversy, and these two appeals, argued consecutively, provide the Court with the opportunity toaddress them. [4] In the Kerr appeal, a couple in their late 60s separated after a common law relationship of more than 25 years. Bothhad worked through much of that time and each had contributed in various ways to their mutual welfare. Ms. Kerr claimed support and ashare of property held in her partner’s name based on resulting trust and unjust enrichment principles.

The trial judge awarded her one-third of the value of the couple’s residence, grounded in both resulting trust and unjust enrichment claims (2007 BCSC 1863, 47 R.F.L.(6th) 103). He did not address, other than in passing, Mr. Baranow’s counterclaim that Ms. Kerr had been unjustly enriched at hisexpense. The judge also ordered substantial monthly support for Ms. Kerr pursuant to statute, effective as of the date she applied to thecourt for relief.

However, the resulting trust and unjust enrichment conclusions of the trial judge were set aside by the British ColumbiaCourt of Appeal (2009 BCCA 111, 93 B.C.L.R. (4th) 201). Both lower courts addressed the role of the parties’ common intention andreasonable expectations. The appeal to this Court raises the questions of the role of resulting trust law in these types of disputes, as wellas how an unjust enrichment analysis should take account of the mutual conferral of benefits and what role the parties’ intentions andexpectations play in that analysis.

This Court is also called upon to decide whether the award of spousal support should be effective asof the date of application, as found by the trial judge, the date the trial began, as ordered by the Court of Appeal, or some other date. [5] In the Vanasse appeal, the central problem is how to quantify a monetary award for unjust enrichment. It is agreedthat Mr. Seguin was unjustly enriched by the contributions of his partner, Ms. Vanasse; the two lived in a common law relationship forabout 12 years and had two children together during this time.

The trial judge valued the extent of the enrichment by determining whatproportion of Mr. Seguin’s increased wealth was due to Ms. Vanasse’s efforts as an equal contributor to the family venture (). The Court of Appeal set aside this finding and, while ordering a new trial, directed that the proper approach to valuation was toplace a monetary value on the services provided by Ms. Vanasse to the family, taking due account of Mr. Seguin’s own contributions byway of set-off (2009 ONCA 595, 252 O.A.C. 218). In short, the Court of Appeal held that Ms. Vanasse should be treated as an unpaidemployee, not a co-venturer.

The appeal to this Court challenges this conclusion. [6] These appeals require us to resolve five main issues. The first concerns the role of the “common intention”

resulting trust in claims by domestic partners. In my view, it is time to recognize that the “common intention” approach to resulting trusthas no further role to play in the resolution of property claims by domestic partners on the breakdown of their relationship. [7] The second issue concerns the nature of the money remedy for a successful unjust enrichment claim. Some courtstake the view that if the claimant’s contribution cannot be linked to specific property, a money remedy must always be assessed on a fee-for-services basis. Other courts have taken a more flexible approach.

In my view, where both parties have worked together for thecommon good, with each making extensive, but different, contributions to the welfare of the other and, as a result, have accumulatedassets, the money remedy for unjust enrichment should reflect that reality. The money remedy in those circumstances should not bebased on a minute totting up of the give and take of daily domestic life, but rather should treat the claimant as a co-venturer, not as thehired help. [8] The third area requiring clarification relates to mutual benefit conferral.

Many domestic relationships involve themutual conferral of benefits, in the sense that each contributes in various ways to the welfare of the other. The question is how and atwhat point in the unjust enrichment analysis should this mutual conferral of benefits be taken into account? For reasons I will developbelow, this issue should, with a small exception, be addressed at the defence and remedy stage. [9] Fourth, there is the question of what role the parties’ reasonable or legitimate expectations play in the unjustenrichment analysis.

My view is that they have a limited role, and must be considered in relation to whether there is a juristic reason forthe enrichment. [10] Finally, there is the issue of the appropriate date for the commencement of spousal support. In my respectful view,the Court of Appeal erred in setting aside the trial judge’s selection of the date of application in the circumstances of the Kerr appeal. [11] I will first address the law of resulting trusts as it applies to the breakdown of a marriage-like relationship. Next, Iwill turn to the law of unjust enrichment in this context.

Finally, I will address the specific issues raised in the two appeals. II. Resulting Trusts [12] The resulting trust played an important role in the early years of the Court’s jurisprudence relating to property rightsfollowing the breakdown of intimate personal relationships. This is not surprising; it had been settled law since at least 1788 in England(and likely long before) that the trust of a legal estate, whether in the names of the purchaser or others, “results” to the person whoadvances the purchase money: Dyer v. Dyer (1788), 2 Cox Eq. Cas. 92, 30 E.R. 42, at p. 43.

The resulting trust, therefore, seemed apromising vehicle to address claims that one party’s contribution to the acquisition of property was not reflected in the legal title. [13] The resulting trust jurisprudence in domestic property cases developed into what has been called “a purely Canadianinvention”, the “common intention” resulting trust: A. H. Oosterhoff, et al., Oosterhoff on Trusts: Text, Commentary and Materials (7thed. 2009), at p. 642. While this vehicle has largely been eclipsed by the law of unjust enrichment since the decision of the Court inPettkus v.

Becker, (SCC), [1980] 2 S.C.R. 834, claims based on the “common intention” resulting trust continue to beadvanced. In the Kerr appeal, for example, the trial judge justified the imposition of a resulting trust, in part, on the basis that the partieshad a common intention that Mr. Baranow would hold title to the property by way of a resulting trust for Ms. Kerr.

The Court of Appeal,while reversing the trial judge’s finding of fact on this point, implicitly accepted the ongoing vitality of the common intention resultingtrust. [14] However promising this common intention resulting trust approach looked at the beginning, doctrinal and practicalproblems soon became apparent and have been the subject of comment by the Court and scholars: see, e.g., Pettkus, at pp. 842-43;Oosterhoff, at pp. 641-47; D. W. M. Waters, M. R. Gillen and L. D. Smith, eds., Waters’ Law of Trusts in Canada (3rd ed. 2005)(“Waters’”), at pp. 430-35; J.

Mee, The Property Rights of Cohabitees: An Analysis of Equity’s Response in Five Common LawJurisdictions (1999), at pp. 39-43; T. G. Youdan, “Resulting and Constructive Trusts”, in Special Lectures of the Law Society of UpperCanada 1993 — Family Law: Roles, Fairness and Equality (1994), 169, at pp. 172-74. [15] In this Court, since Pettkus, the common intention resulting trust remains intact but unused.

While traditionalresulting trust principles may well have a role to play in the resolution of property disputes between unmarried domestic partners, thetime has come to acknowledge that there is no continuing role for the common intention resulting trust. To explain why, I must first putthe question in the context of some basic principles about resulting trusts. [16] That task is not as easy as it should be; there is not much one can say about resulting trusts without a well-groundedfear of contradiction.

There is debate about how they should be classified and how they arise, let alone about many of the finer points:see, e.g., Rathwell v. Rathwell, (SCC), [1978] 2 S.C.R. 436, at pp. 449-50; Waters’, at pp. 19-22; P. H. Pettit, Equity andthe Law of Trusts (11th ed. 2009), at p. 67. However, it is widely accepted that the underlying notion of the resulting trust is that it isimposed “to return property to the person who gave it and is entitled to it beneficially, from someone else who has title to it. Thus, thebeneficial interest ‘results’ (jumps back) to the true owner”: Oosterhoff, at p. 25.

There is also widespread agreement that, traditionally, resulting trusts arose where there had been a gratuitous transfer or where the purposes set out by an express or implied trust failed toexhaust the trust property: Waters’, at p. 21. [17] Resulting trusts arising from gratuitous transfers are the ones relevant to domestic situations. The traditional viewwas they arose in two types of situations: the gratuitous transfer of property from one partner to the other, and the joint contribution bytwo partners to the acquisition of property, title to which is in the name of only one of them.

In either case, the transfer is gratuitous, inthe first case because there was no consideration for the transfer of the property, and in the second case because there was noconsideration for the contribution to the acquisition of the property. [18] The Court’s most recent decision in relation to resulting trusts is consistent with the view that, in these gratuitoustransfer situations, the actual intention of the grantor is the governing consideration: Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R.795, at paras. 43-44.

As Rothstein J. noted at para. 44 of Pecore, where a gratuitous transfer is being challenged, “[t]he trial judge willcommence his or her inquiry with the applicable presumption and will weigh all of the evidence in an attempt to ascertain, on a balance

of probabilities, the transferor’s actual intention” (emphasis added). [19] As noted by Rothstein J. in this passage, presumptions may come into play when dealing with gratuitous transfers. The law generally presumes that the grantor intended to create a trust, rather than to make a gift, and so the presumption of resulting trustwill often operate. As Rothstein J. explained, a presumption of a resulting trust is the general rule that applies to gratuitous transfers.When such a transfer is made, the onus will be on the person receiving the transfer to demonstrate that a gift was intended.

Otherwise,the transferee holds that property in trust for the transferor. This presumption rests on the principle that equity presumes bargains and notgifts (Pecore, at para. 24). [20] The presumption of resulting trust, however, is neither universal nor irrebuttable.

So, for example, in the case oftransfers between persons in certain relationships (such as from a parent to a minor child), a presumption of advancement — that is, apresumption that the grantor intended to make a gift — rather than a presumption of resulting trust applies: see Pecore, at paras. 27-41.The presumption of advancement traditionally applied to grants from husband to wife, but the presumption of resulting trust traditionallyapplied to grants from wife to husband. Whether the application of the presumption of advancement applies to unmarried couples maybe more controversial: Oosterhoff, at pp. 681-82.

Although the trial judge in Kerr touched on this issue, neither party relies on thepresumption of advancement and I need say nothing further about it. [21] That brings me to the “common intention” resulting trust. It figured prominently in the majority judgment inMurdoch v. Murdoch, (SCC), [1975] 1 S.C.R. 423. Quoting from Lord Diplock’s speech in Gissing v.

Gissing, [1970]2 All E.R. 780 (H.L.), at pp. 789 and 793, Martland J. held for the majority that, absent a financial contribution to the acquisition of thecontested property, a resulting trust could only arise “where the court is satisfied by the words or conduct of the parties that it was theircommon intention that the beneficial interest was not to belong solely to the spouse in whom the legal estate was vested but was to beshared between them in some proportion or other”: Murdoch, at p. 438. [22] This approach was repeated and followed by a majority of the Court three years later in Rathwell, at pp. 451-53,although the Court also unanimously found there had been a direct financial contribution by the claimant.

In Rathwell, there is, as well,some blurring of the notions of contribution and common intention; there are references to the fact that a presumption of resulting trust issometimes explained by saying that the fact of contribution evidences the common intention to share ownership: see p. 452, per DicksonJ. (as he then was); p. 474, per Ritchie J.

This blurring is also evident in the reasons of the Court of Appeal in Kerr, where the court said,at para. 42, that “[a] resulting trust is an equitable doctrine that, by operation of law, imposes a trust on a party who holds legal title toproperty that was gratuitously transferred to that party by another and where there is evidence of a common intention that the propertywas to be shared by both parties” (emphasis added). [23] The Court’s development of the common intention resulting trust ended with Pettkus, in which Dickson J. (as hethen was) noted the “many difficulties, chronicled in the cases and in the legal literature” as well as the “artificiality of the commonintention approach” to resulting trusts: at pp. 842-43.

He also clearly rejected the notion that the requisite common intention could beattributed to the parties where such an intention was negated by the evidence: p. 847. The import of Pettkus was that the law of unjustenrichment, coupled with the remedial constructive trust, became the more flexible and appropriate lens through which to view propertyand financial disputes in domestic situations. As Ms. Kerr stated in her factum, the “approach enunciated in Pettkus v.

Becker has becomethe dominant legal paradigm for the resolution of property disputes between common law spouses” (para. 100). [24] This, in my view, is as it should be, and the time has come to say that the common intention resulting trust has nofurther role to play in the resolution of domestic cases. I say this for four reasons. [25] First, as the abundant scholarly criticism demonstrates, the common intention resulting trust is doctrinally unsound. It is inconsistent with the underlying principles of resulting trust law.

Where the issue of intention is relevant to the finding of resultingtrust, it is the intention of the grantor or contributor alone that counts. As Professor Waters puts it, “In imposing a resulting trust uponthe recipient, Equity is never concerned with [common] intention” (Waters’, at p. 431). The underlying principles of resulting trust lawalso make it hard to accommodate situations in which the contribution made by the claimant was not in the form of property or closelylinked to its acquisition.

The point of the resulting trust is that the claimant is asking for his or her own property back, or for therecognition of his or her proportionate interest in the asset which the other has acquired with that property. This thinking extendsartificially to claims that are based on contributions that are not clearly associated with the acquisition of an interest in property; in suchcases there is not, in any meaningful sense, a “resulting” back of the transferred property: Waters’, at p. 432.

It follows that a resultingtrust based solely on intention without a transfer of property is, as Oosterhoff puts it, a doctrinal impossibility: “. . . a resulting trust canarise only when one person has transferred assets to, or purchased assets for, another person and did not intend to make a gift of theproperty”: p. 642. The final doctrinal problem is that the relevant time for ascertaining intention is the time of acquisition of theproperty.

As a result, it is hard to see how a resulting trust can arise from contributions made over time to the improvement of an existingasset, or contributions in kind over time for its maintenance. As Oosterhoff succinctly puts it at p. 652, a resulting trust is inappropriate inthese circumstances because its imposition, in effect, forces one party to give up beneficial ownership which he or she enjoyed before theimprovement or maintenance occurred. [26] There are problems beyond these doctrinal issues.

A second difficulty with the common intention resulting trust isthat the notion of common intention may be highly artificial, particularly in domestic cases. The search for common intention mayeasily become “a mere vehicle or formula” for giving a share of an asset, divorced from any realistic assessment of the actual intention ofthe parties.

Dickson J. in Pettkus noted the artificiality and undue malleability of the common intention approach: at pp. 843-44. [27] Third, the “common intention” resulting trust in Canada evolved from a misreading of some imprecise language inearly authorities from the House of Lords. While much has been written on this topic, it is sufficient for my purposes to note, as didDickson J. in Pettkus, at p. 842, that the principles upon which the common intention resulting trust jurisprudence developed are found inthe House of Lords decisions in Pettitt v. Pettitt, [1970] A.C. 777, and Gissing.

However, no clear majority opinion emerged in thosecases and four of the five Law Lords in Gissing spoke of “resulting, implied or constructive trusts” without distinction. The passagesthat have been most influential in Canada on this point, those authored by Lord Diplock, in fact relate to constructive rather than resultingtrusts: see, e.g., Waters’, at pp. 430-35; Oosterhoff, at pp. 642-43. I find persuasive Professor Waters’ comments, specifically approved

by Dickson J. in Pettkus, that where the search for common intention becomes simply a vehicle for reaching what the court perceives tobe a just result, “[i]t is in fact a constructive trust approach masquerading as a resulting trust approach”: D. Waters, Comment (1975), 53Can.

Bar Rev. 366, at p. 368. [28] Finally, as the development of the law since Pettkus has shown, the principles of unjust enrichment, coupled with thepossible remedy of a constructive trust, provide a much less artificial, more comprehensive and more principled basis to address the widevariety of circumstances that lead to claims arising out of domestic partnerships. There is no need for any artificial inquiry into commonintent. Claims for compensation as well as for property interests may be addressed. Contributions of all kinds and made at all times maybe justly considered.

The equities of the particular case are considered transparently and according to principle, rather than masqueradingbehind often artificial attempts to find common intent to support what the court thinks for unstated reasons is a just result. [29] I would hold that the resulting trust arising solely from the common intention of the parties, as described by theCourt in Murdoch and Rathwell, no longer has a useful role to play in resolving property and financial disputes in domestic cases. Iemphasize that I am speaking here only of the common intention resulting trust.

I am not addressing other aspects of the law relating toresulting trusts, nor am I suggesting that a resulting trust that would otherwise validly arise is defeated by the existence in fact ofcommon intention. III. Unjust Enrichment A. Introduction [30] The law of unjust enrichment has been the primary vehicle to address claims of inequitable distribution of assets onthe breakdown of a domestic relationship. In a series of decisions, the Court has developed a sturdy framework within which to addressthese claims. However, a number of doctrinal and practical issues require further attention.

I will first briefly set out the existingframework, then articulate the issues that in my view require further attention, and finally propose the ways in which they should beaddressed. B. The Legal Framework for Unjust Enrichment Claims [31] At the heart of the doctrine of unjust enrichment lies the notion of restoring a benefit which justice does not permitone to retain: Peel (Regional Municipality) v. Canada, (SCC), [1992] 3 S.C.R. 762, at p. 788. For recovery, somethingmust have been given by the plaintiff and received and retained by the defendant without juristic reason.

A series of categories developedin which retention of a conferred benefit was considered unjust. These included, for example: benefits conferred under mistakes of factor law; under compulsion; out of necessity; as a result of ineffective transactions; or at the defendant’s request: see Peel, at p. 789; see,generally, G. H. L. Fridman, Restitution (2nd ed. 1992), c. 3-5, 7, 8 and 10; and Lord Goff of Chieveley and G. Jones, The Law ofRestitution (7th ed. 2007), c. 4-11, 17 and 19-26. [32] Canadian law, however, does not limit unjust enrichment claims to these categories.

It permits recovery wheneverthe plaintiff can establish three elements: an enrichment of or benefit to the defendant, a corresponding deprivation of the plaintiff, andthe absence of a juristic reason for the enrichment: Pettkus; Peel, at p. 784.

By retaining the existing categories, while recognizing otherclaims that fall within the principles underlying unjust enrichment, the law is able “to develop in a flexible way as required to meetchanging perceptions of justice”: Peel, at p. 788. [33] The application of unjust enrichment principles to claims by domestic partners was resisted until the Court’s 1980decision in Pettkus. In applying unjust enrichment principles to domestic claims, however, the Court has been clear that there is andshould be no separate line of authority for “family” cases developed within the law of unjust enrichment.

Rather, concern for clarity anddoctrinal integrity mandate that “the basic principles governing the rights and remedies for unjust enrichment remain the same for allcases” (Peter v. Beblow, (SCC), [1993] 1 S.C.R. 980, at p. 997). [34] Although the legal principles remain constant across subject areas, they must be applied in the particular factual andsocial context out of which the claim arises.

The Court in Peter was unanimously of the view that the courts “should exercise flexibilityand common sense when applying equitable principles to family law issues with due sensitivity to the special circumstances that canarise in such cases” (p. 997, per McLachlin J. (as she then was); see also p. 1023, per Cory J.).

Thus, while the underlying legalprinciples of the law of unjust enrichment are the same for all cases, the courts must apply those common principles in ways that respondto the particular context in which they are to operate. [35] It will be helpful to review, briefly, the current state of the law with respect to each of the elements of an unjustenrichment claim and note the particular issues in relation to each that arise in claims by domestic partners. C. The Elements of an Unjust Enrichment Claim

(1) Enrichment and Corresponding Deprivation [36] The first and second steps in the unjust enrichment analysis concern first, whether the defendant has been enrichedby the plaintiff and second, whether the plaintiff has suffered a corresponding deprivation. [37] The Court has taken a straightforward economic approach to the first two elements — enrichment and correspondingdeprivation. Accordingly, other considerations, such as moral and policy questions, are appropriately dealt with at the juristic reasonstage of the analysis: see Peter, at p. 990, referring to Pettkus, Sorochan v.

Sorochan, (SCC), [1986] 2 S.C.R. 38, andPeel, affirmed in Garland v. Consumers’ Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629, at para. 31. [38] For the first requirement — enrichment — the plaintiff must show that he or she gave something to the defendantwhich the defendant received and retained. The benefit need not be retained permanently, but there must be a benefit which has enrichedthe defendant and which can be restored to the plaintiff in specie or by money. Moreover, the benefit must be tangible. It may be

positive or negative, the latter in the sense that the benefit conferred on the defendant spares him or her an expense he or she would havehad to undertake (Peel, at pp. 788 and 790; Garland, at paras. 31 and 37). [39] Turning to the second element — a corresponding deprivation — the plaintiff’s loss is material only if the defendanthas gained a benefit or been enriched (Peel, at pp. 789-90). That is why the second requirement obligates the plaintiff to establish notsimply that the defendant has been enriched, but also that the enrichment corresponds to a deprivation which the plaintiff has suffered(Pettkus, at p. 852; Rathwell, at p. 455).

(2) Absence of Juristic Reason [40] The third element of an unjust enrichment claim is that the benefit and corresponding detriment must have occurredwithout a juristic reason.

To put it simply, this means that there is no reason in law or justice for the defendant’s retention of the benefitconferred by the plaintiff, making its retention “unjust” in the circumstances of the case: see Pettkus, at p. 848; Rathwell, at p. 456;Sorochan, at p. 44; Peter, at p. 987; Peel, at pp. 784 and 788; Garland, at para. 30. [41] Juristic reasons to deny recovery may be the intention to make a gift (referred to as a “donative intent”), a contract,or a disposition of law (Peter, at pp. 990-91; Garland, at para. 44; Rathwell, at p. 455).

The latter category generally includescircumstances where the enrichment of the defendant at the plaintiff’s expense is required by law, such as where a valid statute deniesrecovery (P. D. Maddaugh and J. D. McCamus, The Law of Restitution (1990), at p. 46; Reference re Goods and Services Tax, (SCC), [1992] 2 S.C.R. 445; Mack v. Canada (Attorney General) (2002), 60 O.R. (3d) 737 (C.A.)). However, just as theCourt has resisted a purely categorical approach to unjust enrichment claims, it has also refused to limit juristic reasons to a closed list.

This third stage of the unjust enrichment analysis provides for due consideration of the autonomy of the parties, including factors such as“the legitimate expectation of the parties, the right of parties to order their affairs by contract” (Peel, at p. 803). [42] A critical early question in domestic claims was whether the provision of domestic services could support a claimfor unjust enrichment. After some doubts, the matter was conclusively resolved in Peter, where the Court held that they could.

A spouseor domestic partner generally has no duty, at common law, equity, or by statute, to perform work or services for the other. It follows, ona straightforward economic approach, that there is no reason to distinguish domestic services from other contributions (Peter, at pp. 991and 993; Sorochan, at p. 46). They constitute an enrichment because such services are of great value to the family and to the otherspouse; any other conclusion devalues contributions, mostly by women, to the family economy (Peter, at p. 993).

The unpaid provisionof services (including domestic services) or labour may also constitute a deprivation because the full-time devotion of one’s labour andearnings without compensation may readily be viewed as such. The Court rejected the view that such services could not found an unjustenrichment claim because they are performed out of “natural love and affection” (Peter, at pp. 989-95, per McLachlin J., and pp. 1012-16, per Cory J.). [43] In Garland, the Court set out a two-step analysis for the absence of juristic reason.

It is important to remember thatwhat prompted this development was to ensure that the juristic reason analysis was not “purely subjective”, thereby building into theunjust enrichment analysis an unacceptable “immeasurable judicial discretion” that would permit “case by case ‘palm tree’ justice”: Garland, at para. 40.

The first step of the juristic reason analysis applies the established categories of juristic reasons; in their absence,the second step permits consideration of the reasonable expectations of the parties and public policy considerations to assess whetherrecovery should be denied: First, the plaintiff must show that no juristic reason from an established category exists to deny recovery. . . .

The established categoriesthat can constitute juristic reasons include a contract (Pettkus, supra), a disposition of law (Pettkus, supra), a donative intent (Peter,supra), and other valid common law, equitable or statutory obligations (Peter, supra). If there is no juristic reason from an establishedcategory, then the plaintiff has made out a prima facie case under the juristic reason component of the analysis. The prima facie case is rebuttable, however, where the defendant can show that there is another reason to deny recovery.

As a result,there is a de facto burden of proof placed on the defendant to show the reason why the enrichment should be retained. This stage of theanalysis thus provides for a category of residual defence in which courts can look to all of the circumstances of the transaction in order todetermine whether there is another reason to deny recovery.

As part of the defendant’s attempt to rebut, courts should have regard to two factors: the reasonable expectations of the parties, andpublic policy considerations. [paras. 44-46] [44] Thus, at the juristic reason stage of the analysis, if the case falls outside the existing categories, the court may takeinto account the legitimate expectations of the parties (Pettkus, at p. 849) and moral and policy-based arguments about whether particularenrichments are unjust (Peter, at p. 990).

For example, in Peter, it was at this stage that the Court considered and rejected the argumentthat the provision of domestic and childcare services should not give rise to equitable claims against the other spouse in a marital orquasi-marital relationship (pp. 993-95). Overall, the test for juristic reason is flexible, and the relevant factors to consider will depend onthe situation before the court (Peter, at p. 990). [45] Policy arguments concerning individual autonomy may arise under the second branch of the juristic reason analysis.

In the context of claims for unjust enrichment, this has led to questions regarding how (and when) factors relating to the manner in whichthe parties organized their relationship should be taken into account. It has been argued, for example, that the legislative decision toexclude unmarried couples from property division legislation indicates the court should not use the equitable doctrine of unjustenrichment to address their property and asset disputes. However, the court in Peter rejected this argument, noting that itmisapprehended the role of equity.

As McLachlin J. put it at p. 994, “It is precisely where an injustice arises without a legal remedy thatequity finds a role.” (See also Nova Scotia (Attorney General) v. Walsh, 2002 SCC 83, [2002] 4 S.C.R. 325, at para. 61.)

(3) Remedy [46] Remedies for unjust enrichment are restitutionary in nature; that is, the object of the remedy is to require thedefendant to repay or reverse the unjustified enrichment. A successful claim for unjust enrichment may attract either a “personal

restitutionary award” or a “restitutionary proprietary award”. In other words, the plaintiff may be entitled to a monetary or a proprietaryremedy (Lac Minerals Ltd. v. International Corona Resources Ltd., (SCC), [1989] 2 S.C.R. 574, at p. 669, per La ForestJ.). (

a) Monetary Award [47] The first remedy to consider is always a monetary award (Peter, at pp. 987 and 999). In most cases, it will besufficient to remedy the unjust enrichment. However, calculation of such an award is far from straightforward. Two issues have givenrise to disagreement and difficulty in domestic unjust enrichment claims. [48] First, the fact that many domestic claims of unjust enrichment arise out of relationships in which there has been amutual conferral of benefits gives rise to difficulties in determining what will constitute adequate compensation.

While the value ofdomestic services is not questioned (Peter; Sorochan), it is unjust to pay attention only to the contributions of one party in assessing anappropriate remedy. This is not only an important issue of principle; in practice, it is enormously difficult for the parties and the court to“create, retroactively, a notional ledger to record and value every service rendered by each party to the other” (R. E. Scane,“Relationships ‘Tantamount to Spousal’, Unjust Enrichment, and Constructive Trusts” (1991), 70 Can. Bar Rev. 260, at p. 281).

Thisgives rise to the practical problem that one scholar has aptly referred to as “duelling quantum meruits” (J. D. McCamus, “Restitution onDissolution of Marital and Other Intimate Relationships: Constructive Trust or Quantum Meruit?”, in J. W. Neyers, M. McInnes and S.G. A. Pitel, eds., Understanding Unjust Enrichment (2004), 359, at p. 376).

McLachlin J. also alluded to this practical problem in Peter,at p. 999. [49] A second difficulty arises from the fact that some courts and commentators have read Peter as holding that when amonetary award is appropriate, it must invariably be calculated on the basis of the monetary value of the unpaid services. This is oftenreferred to as the quantum meruit, or “value received” or “fee-for-services” approach. This was followed in Bell v. Bailey (2001), (ON CA), 203 D.L.R. (4th) 589 (Ont. C.A.).

Other appellate courts have held that monetary relief may be assessed moreflexibly — in effect, on a value survived basis — by reference, for example, to the overall increase in the couple’s wealth during therelationship: Wilson v. Fotsch, 2010 BCCA 226, 319 D.L.R. (4th) 26, at para. 50; Pickelein v. Gillmore (1997), (BCCA), 30 B.C.L.R. (3d) 44 (C.A.); Harrison v. Kalinocha (1994), (BC CA), 90 B.C.L.R. (2d) 273 (C.A.); MacFarlanev. Smith, 2003 NBCA 6, 256 N.B.R. (2d) 108, at paras. 31-34 and 41-43; Shannon v. Gidden, 1999 BCCA 539, 71 B.C.L.R. (3d) 40, atpara. 37.

With respect to inconsistencies in how in personam relief for unjust enrichment may be quantified, see also MatrimonialProperty Law in Canada (loose-leaf), vol. 1, by J. G. McLeod and A. A. Mamo, eds., at pp. 40.78-40.79. (

b) Proprietary Award [50] The Court has recognized that, in some cases, when a monetary award is inappropriate or insufficient, a proprietaryremedy may be required. Pettkus is responsible for an important remedial feature of the Canadian law of unjust enrichment: thedevelopment of the remedial constructive trust. Imposed without reference to intention to create a trust, the constructive trust is a broadand flexible equitable tool used to determine beneficial entitlement to property (Pettkus, at pp. 843-44 and 847-48).

Where the plaintiffcan demonstrate a link or causal connection between his or her contributions and the acquisition, preservation, maintenance orimprovement of the disputed property, a share of the property proportionate to the unjust enrichment can be impressed with aconstructive trust in his or her favour (Pettkus, at pp. 852-53; Sorochan, at p. 50).

Pettkus made clear that these principles apply equallyto unmarried cohabitants, since “[t]he equitable principle on which the remedy of constructive trust rests is broad and general; its purposeis to prevent unjust enrichment in whatever circumstances it occurs” (pp. 850-51). [51] As to the nature of the link required between the contribution and the property, the Court has consistently held thatthe plaintiff must demonstrate a “sufficiently substantial and direct” link, a “causal connection” or a “nexus” between the plaintiff’scontributions and the property which is the subject matter of the trust (Peter, at pp. 988, 997 and 999; Pettkus at p. 852; Sorochan, at pp.47-50; Rathwell, at p. 454).

A minor or indirect contribution will not suffice (Peter, at p. 997). As Dickson C.J. put it in Sorochan, theprimary focus is on whether the contributions have a “clear proprietary relationship” (p. 50, citing Professor McLeod’s annotation ofHerman v. Smith (1984), (AB KB), 42 R.F.L. (2d) 154, at p. 156).

Indirect contributions of money and directcontributions of labour may suffice, provided that a connection is established between the plaintiff’s deprivation and the acquisition,preservation, maintenance, or improvement of the property (Sorochan, at p. 50; Pettkus, at p. 852). [52] The plaintiff must also establish that a monetary award would be insufficient in the circumstances (Peter, at p.999).

In this regard, the court may take into account the probability of recovery, as well as whether there is a reason to grant theplaintiff the additional rights that flow from recognition of property rights (Lac Minerals, at p. 678, per La Forest J.). [53] The extent of the constructive trust interest should be proportionate to the claimant’s contributions. Where thecontributions are unequal, the shares will be unequal (Pettkus, at pp. 852-53; Rathwell, at p. 448; Peter, at pp. 998-99).

As Dickson J.put it in Rathwell, “The court will assess the contributions made by each spouse and make a fair, equitable distribution having regard tothe respective contributions” (p. 454). D. Areas Needing Clarification [54] While the law of unjust enrichment sets out a sturdy legal framework within which to address claims by domesticpartners, three areas continue to generate controversy and require clarification.

As mentioned earlier, these are as follows: the approachto the assessment of a monetary award for a successful unjust enrichment claim, how and where to address the mutual benefit problem,and the role of the parties’ reasonable or legitimate expectations. I will address these in turn. E. Is a Monetary Award Restricted to Quantum Meruit?

(1) Introduction [55] As noted earlier, remedies for unjust enrichment may either be proprietary (normally a remedial constructive trust)

or personal (normally a money remedy). Once the choice has been made to award a monetary rather than a proprietary remedy, thequestion of how to quantify that monetary remedy arises. Some courts have held that monetary relief must always be calculated based ona value received or quantum meruit basis (Bell), while others have held that monetary relief may also be based on a value survived (i.e.by reference to the value of property) approach (Wilson; Pickelein; Harrison; MacFarlane; Shannon).

If, as some courts have held, amonetary remedy must invariably be quantified on a quantum meruit basis, the remedial choice in unjust enrichment cases becomeswhether to impose a constructive trust or order a monetary remedy calculated on a quantum meruit basis. One scholar has referred to thisapproach as the false dichotomy between constructive trust and quantum meruit (McCamus, at pp. 375-76). Scholars have also notedthis area of uncertainty in the case law, and have suggested that an in personam remedy using the value survived measure is a plausiblealternative to the constructive trust (McCamus, at p. 377; P.

Birks, An Introduction to the Law of Restitution (1985), at pp. 394-95). As Iwill explain below, Peter is said to have established this dichotomy of remedial choice. However, in my view, the focus in Peter was onthe availability of the constructive trust remedy, and that case should not be taken as limiting the calculation of monetary relief for unjustenrichment to a quantum meruit basis. In appropriate circumstances, monetary relief may be assessed on a value survived basis. [56] I will first briefly describe the genesis of the purported limitation on the monetary remedy.

Then I will explain why,in my view, it should be rejected. Finally, I will set out my views on how money remedies for unjust enrichment claims in domesticsituations should be approached.

(2) The Remedial Dichotomy [57] As noted, there is a widespread, although not unanimous, view that there are only two choices of remedy for anunjust enrichment: a monetary award, assessed on a fee-for-services basis; or a proprietary one (generally taking the form of a remedialconstructive trust), where the claimant can show that the benefit conferred contributed to the acquisition, preservation, maintenance, orimprovement of specific property. Some brief comments in Peter seem to have spawned this idea, which is reflected in a number ofappellate authorities.

For instance, in the Vanasse appeal, the Ontario Court of Appeal reasoned that since Ms. Vanasse could not showthat her contributions were linked to specific property, her claim had to be quantified on a fee-for-services basis. I respectfully do notagree that monetary awards for unjust enrichment must always be calculated in this way.

(3) Why the Remedial Dichotomy Should Be Rejected [58] In my view, restricting the money remedy to a fee-for-services calculation is inappropriate for four reasons. First, itfails to reflect the reality of the lives of many domestic partners. Second, it is inconsistent with the inherent flexibility of unjustenrichment. Third, it ignores the historical basis of quantum meruit claims. Finally, it is not mandated by the Court’s judgment in Peter.For those reasons, this remedial dichotomy should be rejected.

The discussion which follows is concerned only with the quantification ofa monetary remedy for unjust enrichment; the law relating to when a proprietary remedy should be granted is well established andremains unchanged. (

a) Life Experience [59] The remedial dichotomy would be appropriate if, in fact, the bases of all domestic unjust enrichment claims fit intoonly two categories — those where the enrichment consists of the provision of unpaid services, and those where it consists of anunrecognized contribution to the acquisition, improvement, maintenance or preservation of specific property. To be sure, those twobases for unjust enrichment claims exist. However, all unjust enrichment cases cannot be neatly divided into these two categories. [60] At least one other basis for an unjust enrichment claim is easy to identify.

It consists of cases in which thecontributions of both parties over time have resulted in an accumulation of wealth. The unjust enrichment occurs following thebreakdown of their relationship when one party retains a disproportionate share of the assets which are the product of their joint efforts. The required link between the contributions and a specific property may not exist, making it inappropriate to confer a proprietaryremedy.

However, there may clearly be a link between the joint efforts of the parties and the accumulation of wealth; in other words, alink between the “value received” and the “value surviving”, as McLachlin J. put it in Peter, at pp. 1000-1001.

Thus, where there is arelationship that can be described as a “joint family venture”, and the joint efforts of the parties are linked to the accumulation of wealth,the unjust enrichment should be thought of as leaving one party with a disproportionate share of the jointly earned assets. [61] There is nothing new about the notion of a joint family venture in which both parties contribute to their overallaccumulation of wealth. It was recognition of this reality that contributed to comprehensive matrimonial property legislative reform inthe late 1970s and early 1980s. As the Court put it in Clarke v.

Clarke, (SCC), [1990] 2 S.C.R. 795, at p. 807 (inrelation to Nova Scotia’s Matrimonial Property Act), “. . . the Act supports the equality of both parties to a marriage and recognizes thejoint contribution of the spouses, be it financial or otherwise, to that enterprise. . . . The Act is accordingly remedial in nature.

It wasdesigned to alleviate the inequities of the past when the contribution made by women to the economic survival and growth of the familywas not recognized” (emphasis added). [62] Unlike much matrimonial property legislation, the law of unjust enrichment does not mandate a presumption ofequal sharing.

However, the law of unjust enrichment can and should respond to the social reality identified by the legislature thatmany domestic relationships are more realistically viewed as a joint venture to which the parties jointly contribute. [63] This reality has also been recognized many times and in many contexts by the Court.

For instance, in Murdoch,Laskin J. (as he then was), in dissent, would have imposed constructive trust relief, on the basis that the facts were “consistent with apooling of effort by the spouses” to establish themselves in a ranch operation (p. 457), and that the spouses had worked together forfifteen years to improve “their lot in life through progressively larger acquisitions of ranch property” (p. 446). Similarly, in Rathwell, amajority of the judges agreed that Mr. and Mrs. Rathwell had pooled their efforts to accumulate wealth as a team.

Dickson J.emphasized that the parties had together “decided to make farming their way of life” (p. 444), and that the acquisition of property in Mr.Rathwell’s name was only made possible through their “joint effort” and “team work” (p. 461). [64] A similar recognition is evident in Pettkus and Peter.

[65] In Pettkus, the parties developed a successful beekeeping business, the profits from which they used to acquire realproperty. Dickson J., writing for the majority of the Court, emphasized facts suggestive of a domestic and financial partnership.

Heobserved that “each started with nothing; each worked continuously, unremittingly and sedulously in the joint effort” (p. 853); that eachcontributed to the “good fortune of the common enterprise” (p. 838); that Wilson J.A. (as she then was) at the Court of Appeal had foundthe wealth they accumulated was through “joint effort” and “teamwork” (p. 849); and finally, that “[t]heir lives and their economic well-being were fully integrated” (p. 850). [66] I agree with Professor McCamus that the Court in Pettkus was “satisfied that the parties were engaged in a commonventure in which they expected to share the benefits flowing from the wealth that they jointly created” (p. 367).

Put another way, Mr.Pettkus was not unjustly enriched because Ms. Becker had a precise expectation of obtaining a legal interest in certain properties, butrather because they were in reality partners in a common venture. [67] The significance of the fact that wealth had been acquired through joint effort was again at the forefront of theanalysis in Peter where the parties lived together for 12 years in a common law relationship. While Mr. Beblow generated most of thefamily income and also contributed to the maintenance of the property, Ms.

Peter did all of the domestic work (including raising the sixchildren of their blended family), helped with property maintenance, and was solely responsible for the property when Mr. Beblow wasaway. The reality of their joint venture was acknowledged when McLachlin J. wrote that the “joint family venture, in effect, was nodifferent from the farm which was the subject of the trust in Pettkus v. Becker” (p. 1001). [68] The Court’s recognition of the joint family venture is evident in three other places in Peter.

First, in reference to theappropriateness of the “value survived” measure of relief, McLachlin J. observed, “it is more likely that a couple expects to share in thewealth generated from their partnership, rather than to receive compensation for the services performed during the relationship” (p.999).

Second, and also related to valuing the extent of the unjust enrichment, McLachlin J. noted that, in a case where both parties hadcontributed to the “family venture”, it was appropriate to look to all of the family assets, rather than simply one of them, to approximatethe value of the claimant’s contributions to that family venture (p. 1001). Third, the Court’s justification for affirming the value ofdomestic services was, in part, based on reasoning that such services are often proffered in the context of a common venture (p. 993). [69] Relationships of this nature are common in our life experience.

For many domestic relationships, the couple’sventure may only sensibly be viewed as a joint one, making it highly artificial in theory and extremely difficult in practice to do adetailed accounting of the contributions made and benefits received on a fee-for-services basis. Of course, this is a relationship-specificissue; there can be no presumption one way or the other. However, the legal consequences of the breakdown of a domestic relationshipshould reflect realistically the way people live their lives.

It should not impose on them the need to engage in an artificial balance sheetapproach which does not reflect the true nature of their relationship. (

b) Flexibility [70] Maintaining a strict remedial dichotomy is inconsistent with the Court’s approach to equitable remedies in general,and to its development of remedies for unjust enrichment in particular. [71] The Court has often emphasized the flexibility of equitable remedies and the need to fashion remedies that respondto various situat

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