KIMBERLY GINTHER APPELLANT AND: BRENDAN GAULTON RESPONDENT, 2022 NLCA 51

IN THE COURT OF APPEAL OF NEWFOUNDLAND AND LABRADOR Citation : Ginther v. Gaulton , 2022 NLCA 51 Date : August 25, 2022 Docket Number : 202001H0071 BETWEEN: KIMBERLY GINTHER APPELLANT AND: BRENDAN GAULTON RESPONDENT Coram: Welsh, Goodridge and Butler JJ.A. Court Appealed From: Supreme Court of Newfoundland and Labrador, General Division 201101G3716 ( 2020 NLSC 134 ) Appeal Heard: June 16, 2022 Judgment Rendered: August 25, 2022 Reasons for Judgment by: Welsh J.A. Concurred in by: Goodridge and Butler JJ.A. Counsel for the Appellant: Stephen P. Orr Counsel for the Respondent: Daniel W. Bennett Authorities Cited:

CASES CITED: Kerr v. Baranow , 2011 SCC 10 , [2011] 1 S.C.R. 269. STATUTES REFERENCED: Family Law Act , RSNL 1990, c. F-2 . Welsh J.A. : [ 1 ] At issue in this appeal is whether several thousand dollars that Kimberly Ginther gave to Brendan Gaulton was a gift or a loan, and whether certain chattels are the property of Ms. Ginther for which Mr. Gaulton owes her compensation. The trial judge dismissed Ms. Ginther’s claim in its entirety. Ms. Ginther appeals that decision. BACKGROUND [ 2 ] Although the parties had been in a common-law relationship from approximately May 2004 to March 2007, at trial, Ms.

Ginther’s claim was neither pled nor argued on the basis of family law principles, and no reference was made to the Family Law Act , RSNL 1990, c. F-2 . Rather, based on the statement of claim and submissions, legal principles regarding gift and loan were engaged. The law of unjust enrichment was also raised in the statement of claim, but not dealt with by the trial judge. [ 3 ] The parties lived in a number of residences owned or rented by Mr. Gaulton. In the autumn of 2005, Ms.

Ginther, who owned a house where the parties had lived for a short time, sold the house and received approximately $54,000 as proceeds from the sale. At about the same time, Mr. Gaulton purchased a house. Ms. Ginther testified that she gave Mr. Gaulton $40,000 in two installments, that is, bank drafts of $35,000 on October 7, 2005 and $5,000 on October 14, 2005, to be used for the down payment for the purchase of his house. Ms. Ginther claimed that this was a loan to be repaid in six weeks. Mr. Gaulton claimed that the money was a gift. Ms. Ginther’s name was not included in the title to any of Mr.

Gaulton’s properties, including this house. [ 4 ] In rejecting Ms. Ginther’s claim in debt against Mr. Gaulton for $40,000, the trial judge opined ( 2020 NLSC 134 ): [34] In that continuing support of each other [Ms. Ginther] chose to make available to [Mr. Gaulton’s] last purchase before their move to Alberta proceeds from the sale of her home.

She appears to have done that without any form of acknowledgment of debt or the taking of any security to protect those significant advances. [35] In the context of this relationship as I have described it above, the advance of the $35,000 and $5,000 does not have with it an acknowledgment as a debt or independent proof of any several ( sic ) debt upon which demand payment could be made and enforced. [ 5 ] Ms. Ginther also claimed that Mr.

Gaulton owes her approximately $20,000 to compensate her for chattels she claims belonged to her but which were not returned, together with the cost of airline tickets she purchased for Mr. Gaulton. In rejecting that claim, the trial judge opined: [41] These represent comingled assets and liabilities during cohabitation. Again, for the same reasons as above I cannot find a basis of several ( sic ) debt acknowledged, owing and enforceable as between the parties. [ 6 ] In reaching his conclusions, the trial judge assessed Ms.

Ginther’s claim on the basis of family law deferred sharing principles that did not apply to the parties and which had not been pled or argued. ISSUES [ 7 ] The issues on appeal are:

(1) Did the trial judge err by assessing Ms. Ginther’s claims by means of family law principles of contribution when the statement of claim was based on debt and unjust enrichment principles; and

(2) What is the role of this Court when the trial judge fails to make findings of fact and credibility? ANALYSIS Settlement and Gift Letters [ 8 ] The parties did not appeal the trial judge’s decision in which he properly excluded from consideration a letter from Mr. Gaulton to Ms. Ginther which the judge found to be a privileged communication intended for purposes of settlement. [ 9 ] Mr. Gaulton produced a letter, entitled “Gift Letter”, which he relied on as proof that $35,000 given to him by Ms. Ginther for purchase of the house in 2005 was a gift.

He testified that the letter was required by the bank for purposes of the mortgage. Ms. Ginther testified that the letter was fabricated and that she did not sign it. The trial judge did not determine the validity of the letter, but stated: [37] In coming to this conclusion [rejecting Ms. Ginther’s claim for repayment of a loan of $40,000] I would note that I have not had to assess or weigh the proposed gift letter.

That said, had it been necessary to consider it, I offer that I would have had difficulty giving effect to its contents absent the context of its background, independent confirmation of its requirement [by the bank], its preparation and its use, irrespective of any assessment of whether or not [Ms. Ginther] subscribed to it. Ms. Ginther’s Payment of $40,000 to Mr. Gaulton

The $5,000 Payment [10] Mr. Gaulton conceded in his testimony that $35,000 given to him by Ms. Ginther was for the down payment for the house hewas purchasing. He testified that he could not remember the purpose of the second payment of $5,000, which was made just one weekafter the first. Ms. Ginther testified that she gave Mr. Gaulton a total of $40,000 as a loan for the purchase of the house. The trial judgerejected Ms.

Ginther’s claim for repayment of all or a portion of the $40,000, without separate consideration of the $5,000 payment. [11] In the absence of a finding by the trial judge, I am satisfied that the evidence supports the inference that Ms. Ginther made the$5,000 payment to Mr. Gaulton for purposes of the down payment on the house. The two payments were made by way of bank draftsmade out to Mr. Gaulton, the second within a week of the first and both at the time Mr. Gaulton was purchasing the house. Mr.

Gaulton,in his testimony, rather than providing an explanation regarding the $5,000 payment, continued simply to rely on the Gift Letter, whichspecified an amount of $35,000.

When asked about the $5,000 payment during cross-examination, he stated: “I don’t know what that$5,000 is, but I probably got it.” And further, “She gave me a gift letter for 35-, and the 5- came in after for something else.” Heanswered “No” when asked, “But you don’t remember what that “something else” was for?” (transcript, at page 97). [12] The only reasonable inference to be drawn is that the $5,000 payment formed part of a total $40,000 payment that Ms. Ginthergave to Mr. Gaulton either as a loan or a gift when she sold her house in 2005.

The $40,000 Payment [13] The trial judge approached his assessment of Ms. Ginther’s $40,000 payment to Mr. Gaulton from the perspective ofcontribution of the parties during their cohabitation. He referred to the parties’ “continuing support of each other”, commenting that Ms.Ginther “chose to make available” to Mr. Gaulton proceeds from the sale of her house for Mr. Gaulton’s “last purchase before theirmove to Alberta” (decision of the trial judge, at paragraph 34).

Based on these considerations, the judge concluded: [36] It may well be that a fully disclosed and assessed contribution of both parties may present rights and obligations of both;however, in the context of this relationship as presented to me, I cannot find authority upon which I could base a specific stand-alonetransaction permitting separate relief. [14] The trial judge erred in adopting this approach in assessing Ms. Ginther’s claim because he relied on family law principlesregarding the sharing of property by cohabiting parties.

Those principles do not apply to the determination of a claim in debt or unjustenrichment as pleaded in the statement of claim, and as addressed and argued by the parties. Further, as referenced by the trial judge, theevidence necessary to determine a division of property based on family law principles was not adduced by either party. [15] In the result, the trial judge did not find that the $40,000 payment was either a loan or a gift. In rejecting Ms.

Ginther’ssubmission that it was a loan, the judge found that she had not provided “any form of acknowledgement of debt or the taking of anysecurity to protect those significant advances” that would support a conclusion that the payment was a loan (decision of the trial judge, atparagraph 34). On the other hand, the trial judge did not find that the payment was intended as a gift, and, indeed, found that additionalinformation, which was not adduced by Mr. Gaulton, would be required in order to find that Ms.

Ginther intended to give him a gift of$40,000. [16] Since the trial judge erred in applying family law principles and did not find that the $40,000 payment was a loan or a gift, it isnecessary to consider whether principles of equity are engaged, and in particular, the equitable doctrine of unjust enrichment. Indiscussing the doctrine of unjust enrichment in Kerr v.

Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, Cromwell J., for the Court,described the fundamental premise: [31] At the heart of the doctrine of unjust enrichment lies the notion of restoring a benefit which justice does not permit one to retain:Peel (Regional Municipality) v. Canada, (SCC), [1992] 3 S.C.R. 762, at p. 788. For recovery, something must havebeen given by the plaintiff and received and retained by the defendant without juristic reason. ... [17] Further, Cromwell J. explained: [34] ...

Thus, while the underlying legal principles of the law of unjust enrichment are the same for all cases, the courts must applythose common principles in ways that respond to the particular context in which they are to operate. [18] The analysis involves three elements. First, “there must be a benefit which has enriched the defendant and which can berestored to the plaintiff in specie or by money” (Kerr, at paragraph 38). That requirement is met in this case. Ms. Ginther gave $40,000to Mr. Gaulton, a benefit that enriched Mr. Gaulton, and which can be restored to Ms.

Ginther by repayment of the money. [19] The second element in the analysis requires the plaintiff to establish, not only that the defendant has been enriched by thebenefit, “but also that the enrichment corresponds to a deprivation which the plaintiff has suffered” (Kerr, at paragraph 39). Again, thiselement has been established in this case. The $40,000 benefit to Mr. Gaulton deprived Ms. Ginther of that amount. [20] The third element in the analysis is whether the benefit and corresponding deprivation occurred without a juristic reason. InKerr, Cromwell J. explained: [40] ...

To put it simply, this means that there is no reason in law or justice for the defendant’s retention of the benefit conferred bythe plaintiff, making its retention “unjust” in the circumstances of the case: [citations omitted]. ... [43] In Garland [2004 SCC 25], the Court set out a two-step analysis for the absence of juristic reason. ... 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 whether recovery should be denied: ... [ 21 ] Established categories of juristic reasons would include contract, an intention to give a gift, or “other valid common law, equitable or statutory obligations” ( Kerr , at paragraph 43 ).

If no established category is identified, the second step permits the court to take into account the legitimate expectations of the parties and “moral and policy-based arguments about whether particular enrichments are unjust” ( Kerr , at paragraph 44 ). [ 22 ] As applied to this case, for the following reasons, I am satisfied that no juristic reason has been established to deny Ms. Ginther recovery of the $40,000 payment to Mr. Gaulton. There was no dispute that Ms. Ginther gave Mr. Gaulton $35,000 to be used for the down payment on a house purchased by him.

I have concluded that the additional $5,000 payment was for the same purpose. Accordingly, the total amount of $40,000 is the subject of the unjust enrichment analysis. [ 23 ] Ms. Ginther was not given an interest in the house. When she gave Mr. Gaulton the money, she had few financial resources. Further, the $40,000 payment amounted to a significant portion of the proceeds of approximately $54,000 that she received from the sale of her house. [ 24 ] Ms. Ginther brought her action in court based on debt and unjust enrichment. Mr.

Gaulton did not adduce evidence that would challenge the basis of that action by claiming distribution of assets according to family law principles that would engage consideration of the contribution of the parties to their relationship. Mr. Gaulton relied on, but did not adduce sufficient evidence to establish that the money was a gift. Nor did he provide any moral or policy-based reason to establish a juristic reason for his retention of the money. [ 25 ] In the result, I am satisfied that Ms. Ginther has established the elements of the doctrine of unjust enrichment.

It follows that she is entitled to restitution by way of payment of $40,000 to her by Mr. Gaulton. Other Claims [ 26 ] The trial judge identified additional claims by Ms. Ginther in respect of a motorcycle, kitchen appliances, a car and airline tickets. He concluded that these “represent comingled assets and liabilities during cohabitation” for which he could not assign an enforceable debt owing as between the parties (decision of the trial judge, at paragraph 41).

In taking this approach, while the trial judge set out the conflicting testimony of the parties regarding these items, he made no findings of fact or credibility regarding which testimony he accepted. [ 27 ] As discussed above, the trial judge erred by approaching Ms. Ginther’s claim from the perspective of family law contribution principles. The statement of claim does not support that analytical approach. Nor does the evidence, which is directed to a claim for particular items, support an analysis based on contribution or comingling of assets by the parties during their cohabitation.

Finally, the trial judge made no findings of fact or credibility assessments on which this Court could rely in order to assess the appeal regarding the validity of these claims by Ms. Ginther. [ 28 ] In the result, counsel for Ms. Ginther conceded that a new trial would be necessary in order to determine the validity and valuation of these various claims.

SUMMARY AND DISPOSITION [ 29 ] In

summary, the trial judge erred in his analytical approach to Ms. Ginther’s claims by applying family law contribution principles. [ 30 ] I am satisfied that the evidence supports the conclusion that the $5,000 payment by Ms. Ginther to Mr. Gaulton in 2005 formed part of the total $40,000 payment made by her for purposes of the purchase of a house by Mr. Gaulton. [ 31 ] Applying the doctrine of unjust enrichment, Ms. Ginther is entitled to restitution in the amount of $40,000, the amount she gave to Mr. Gaulton related to his purchase of a house. [ 32 ] Regarding Ms.

Ginther’s remaining claims for compensation for chattels and airline tickets, in the absence of findings of fact and credibility by the trial judge, the only available remedy is to remit those claims to the Supreme Court, General Division for determination. [ 33 ] Accordingly, I would allow the appeal and order:

(1) Mr. Gaulton shall pay to Ms. Ginther the sum of $40,000;

(2) The remaining claims shall be remitted to the Supreme Court, General Division for determination; and

(3) As the successful party, Ms. Ginther shall have her costs under column 3 of the Scale of Costs in this Court and in the court appealed from. ____________________________ B.G. Welsh J.A.

I concur: ____________________________ W.H. Goodridge J.A. I concur: ____________________________ G.D. Butler J.A.