Wilson v. Fotsch,

JurisdictionBritish Columbia
JudgeHuddart, Chiasson and Bennett, JJ.A.
Neutral Citation2010 BCCA 226
Citation(2010), 286 B.C.A.C. 276 (CA),2010 BCCA 226,319 DLR (4th) 26,81 RFL (6th) 241,286 BCAC 276,[2010] BCJ No 850 (QL),(2010), 286 BCAC 276 (CA),286 B.C.A.C. 276,319 D.L.R. (4th) 26,[2010] B.C.J. No 850 (QL)
Date10 May 2010
CourtCourt of Appeal (British Columbia)

Wilson v. Fotsch (2010), 286 B.C.A.C. 276 (CA);

    484 W.A.C. 276

MLB headnote and full text

Temp. Cite: [2010] B.C.A.C. TBEd. MY.020

Leigh Richard Wilson (respondent/plaintiff) v. Patricia Dale Elizabeth Fotsch (appellant/defendant)

(CA036138; 2010 BCCA 226)

Indexed As: Wilson v. Fotsch

British Columbia Court of Appeal

Huddart, Chiasson and Bennett, JJ.A.

May 10, 2010.

Summary:

The plaintiff brought a claim for unjust enrichment after the breakdown of the parties' seven year common law relationship.

The British Columbia Supreme Court, in a decision reported at [2008] B.C.T.C. Uned. 301, allowed the claim. The court awarded the plaintiff 20% of the defendant's net equity in a particular property, resulting in an award of $99,091.14. The defendant appealed.

The British Columbia Court of Appeal allowed the appeal. The court set aside the trial judge's order and substituted an award to the plaintiff of $7,310, less interest on $2,300 (the value of a carpet cleaner) from October 25, 2006 to May 1, 2008. Chiasson, J.A., dissenting, would have allowed the appeal and dismissed the plaintiff's action.

Family Law - Topic 695

Husband and wife - Property rights during and after common law marriage or relationship - Valuation (incl. time for) - [See first Family Law - Topic 1008 ].

Family Law - Topic 1008

Common law, same-sex or adult interdependent relationships - Monetary awards - The plaintiff brought a claim for unjust enrichment after the breakdown of the parties' seven year common law relationship - The trial judge found the plaintiff had contributed to the increase of the defendant's equity in the Gimse Road property and thus, indirectly to her acquisition of the Portage Road property after the Gimse Road property was sold - The trial judge found that despite the plaintiff's receipt of numerous benefits from the defendant, the defendant had been "minimally" enriched by the plaintiff's contributions, the plaintiff had suffered "minimal" detriment by reason of those contributions, and there was no juristic reason for the enrichment - The trial judge determined that a monetary award was the appropriate remedy and that it should be assessed on the value survived approach - She awarded the plaintiff 20% of the defendant's net equity in the Portage Road property, for an award of $99,091.14 - The defendant appealed - The British Columbia Court of Appeal allowed the appeal - The record supported the trial judge's finding that the plaintiff had established both benefit to the defendant and detriment to the plaintiff, primarily by way of his contribution of labour and services to the improvement of the Gimse Road property, and the absence of a juristic reason for that enrichment - However, the trial judge erred in her apportionment of the increased net value of the Portage Road property, which began with her approach to determining the plaintiff's contribution to the Gimse Road property - The most the evidence and the trial judge's findings of fact could support was an award of 7.5% - The court set aside the trial judge's order and substituted an award to the plaintiff of $7,310, less interest on $2,300 (the value of a carpet cleaner) from October 25, 2006, to May 1, 2008 - See paragraphs 94 to 136.

Family Law - Topic 1008

Common law, same-sex or adult interdependent relationships - Monetary awards - The British Columbia Court of Appeal stated that "It seems logical, if not self-evident, that a court which identifies legal debts between the parties in the course of finding unjust enrichment in the family context should adjust the amount of the final judgment to take that debt into account, whether or not set-off is pleaded as a defence or by way of counterclaim ... While legal set-off is a defence, in family proceedings for unjust enrichment, it will usually be practical to deal with legal set-off at the damages assessment stage. Only if a debt is larger than the total value of the claim and legal set-off would provide a complete defence to a claim for unjust enrichment would it be practical to deal with legal set-off at the defence stage. Where the legal debt is worth less than the total value of the claim, legal set-off is probably best incorporated into the determination of the final award" - See paragraphs 91 to 92.

Family Law - Topic 1008

Common law, same-sex or adult interdependent relationships - Monetary awards - The British Columbia Court of Appeal discussed the application of the doctrine of unjust enrichment to a common law relationship and how account was to be taken of benefits received by the claimant - The court stated, inter alia, that "a marriage-like relationship is infused with mutuality. This quality inherent in marriage-like relationships must inform the application of the unjust enrichment analysis. ... In a marriage-like relationship, it will be more difficult to say that a plaintiff has not received something in return for the defendant's enrichment. The mutuality of the relationship may mean that benefits conferred by one party on the other are compensated in some way - by the reciprocal receipt of shelter, food, or other things of value. The nature of the relationship is not as narrowly circumscribed and more things of value pass between the parties, meaning the inquiry must be about the totality of the value passing back and forth, and not focus solely on the defendant's benefit to the detriment of the plaintiff. In other words, regard must be had for reciprocal benefits. But that regard must respect the nature of the particular relationship. Express agreements must be respected ... and so must be the decision to remain unmarried ... the proper approach to reciprocal benefits can be found in Garland v. Consumers' Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629, where the Supreme Court explained that mutual enrichments should be considered at the juristic reason stage for the limited purpose of assessing the parties' legitimate expectations; otherwise, they should be considered at the remedy stage ..." - See paragraphs 1 to 9.

Practice - Topic 1841

Pleadings - Counterclaim and set-off - Set-off - General - The British Columbia Court of Appeal discussed legal and equitable set-off in unjust enrichment cases and particularly in family proceedings - See paragraphs 65 to 92.

Restitution - Topic 62

Unjust enrichment - General - What constitutes - [See first Family Law - Topic 1008 ].

Restitution - Topic 63

Unjust enrichment - General - Requirement of enrichment at plaintiff's expense - The British Columbia Court of Appeal discussed the second stage of the unjust enrichment analysis (detriment) - The court stated that "In a marriage-like relationship, the full-time devotion of one's labour and earnings without compensation or with less than complete remuneration can be viewed as a deprivation ... Where the benefits received by the defendant are unpaid household or domestic services, the deprivation is the fact that those services were uncompensated. Where the benefits received by the defendant are money or its equivalent, the deprivation is the transfer of that value from the plaintiff to the defendant. The precise quantum of the deprivation is not the focus; that is left for the assessment phase. But the identification and definition of the detriment corresponding to the enrichment is essential to this stage. As during the benefit analysis, courts must resist the temptation to evaluate the reciprocal exchange of benefits. Attempting to set-off or account for reciprocal benefits to show that the plaintiff has not suffered any detriment and is, in fact, better off than before, is not appropriate ... Such arguments belong at the third stage of the unjust enrichment analysis ... or at the remedy stage" - See paragraphs 17 to 20.

Restitution - Topic 64

Unjust enrichment - General - Juristic reason for enrichment - The British Columbia Court of Appeal stated that "Because the necessity to off-set reciprocal benefits arises out of the inherent nature of a marriage-like relationship, receipt of those benefits is not suited to constitute a juristic reason for enrichment" - Further, "while a court should be justifiably concerned with protecting a defendant from an excessive award where he or she has provided the plaintiff with benefits over the course of the relationship, that is not the question being asked at the juristic reason stage. The juristic reason analysis is intended to establish whether there is a reason for the defendant to retain a proven enrichment, not to determine its value or off-set reciprocal enrichment by the plaintiff. The issues of quantum and set-off are for the quantification of the award following a finding of unjust enrichment. By interposing the issue of extent into the juristic reason stage, the full unjust enrichment analysis is short-circuited ... A defendant can be preserved from any unfair effect of an unjust enrichment award by careful consideration of the value of the enrichment at the assessment phase, with appropriate deductions made for the benefits the defendant provided to the plaintiff ... the question of whether set-off (either legal or equitable) of mutual debts and mutual benefits is appropriate is better left for either the defence stage or the remedy stage. It makes the most sense to account for benefits received by the party claiming unjust enrichment only after an unjust enrichment has been established and that enrichment valued" - See paragraphs 21 to 38.

Restitution - Topic 65

Unjust enrichment - General - What constitutes enrichment - The British Columbia Court of Appeal stated that "A court must define the benefit at the outset because the definition informs each stage of the unjust enrichment analysis and is particularly relevant to the determination of the appropriate remedy. ... It will be unusual for a court to find that a defendant has not received some benefit in a marriage-like relationship. Given the breadth of the definition of 'benefit' and the sharing inherent in such a relationship, even one where the parties have carefully limited their contribution to joint expenses, something of value will usually have been received and retained not only by the defendant, but also by the plaintiff. This being so, courts must resist the urge to examine the flow of reciprocal benefits between the plaintiff and the defendant at this stage. The collapse of the three stages of analysis into one may result in an erroneous conclusion there has been no enrichment ... Courts should not focus on the fact that, while the defendant may have received some benefit from the plaintiff, the defendant suffered a net loss because he or she provided the plaintiff with more benefits in return. This kind of set-off or balancing of mutual enrichments is not appropriate at this stage ... If a benefit is found, then it is appropriate to proceed to the second stage of the unjust enrichment analysis" - See paragraphs 12 to 16.

Restitution - Topic 121

Unjust enrichment - Remedies - General - The British Columbia Court of Appeal discussed the choice of remedy when an unjust enrichment had been established, i.e., a monetary award or a proprietary interest - The court also discussed the "value received" and "value survived" approach to the quantification of an award - See paragraphs 46 to 64.

Restitution - Topic 124

Unjust enrichment - Remedies - Damages - [See second Family Law - Topic 1008 ].

Restitution - Topic 8000

Defences - General - The British Columbia Court of Appeal discussed the defences to an unjust enrichment claim and the application of those defences in family proceedings - See paragraphs 39 to 45.

Cases Noticed:

Pickelein v. Gillmore, [1997] 5 W.W.R. 595; 87 B.C.A.C. 193; 143 W.A.C. 193; 30 B.C.L.R.(3d) 44 (C.A.), refd to. [para. 2].

Nasser v. Mayer-Nasser (2000), 130 O.A.C. 52; 5 R.F.L.(5th) 100 (C.A.), leave to appeal refused (2000), 260 N.R. 395; 141 O.A.C. 200 (S.C.C.), refd to. [para. 2].

Kerr v. Baranow (2009), 266 B.C.A.C. 298; 449 W.A.C. 298; 2009 BCCA 111, refd to. [para. 2].

Ford v. Werden (1996), 78 B.C.A.C. 126; 128 W.A.C. 126; 27 B.C.L.R.(3d) 169 (C.A.), refd to. [para. 3].

Peter v. Beblow, [1993] 1 S.C.R. 980; 150 N.R. 1; 23 B.C.A.C. 81; 39 W.A.C. 81; 101 D.L.R.(4th) 621, refd to. [para. 4].

Rathwell v. Rathwell, [1978] 2 S.C.R. 436; 19 N.R. 91; [1978] 2 W.W.R. 101; 83 D.L.R.(3d) 289; 1 E.T.R. 307; 1 R.F.L.(2d) 1, refd to. [para. 4].

Hartshorne v. Hartshorne, [2004] 1 S.C.R. 550; 318 N.R. 1; 194 B.C.A.C. 161; 317 W.A.C. 161; 2004 SCC 22, refd to. [para. 8].

Nova Scotia (Attorney General) v. Walsh - see Walsh v. Bona.

Walsh v. Bona, [2002] 4 S.C.R. 325; 297 N.R. 203; 210 N.S.R.(2d) 273; 659 A.P.R. 273; 2002 SCC 83, refd to. [para. 8].

Garland v. Consumers' Gas Co., [2004] 1 S.C.R. 629; 319 N.R. 38; 186 O.A.C. 128; 2004 SCC 25, refd to. [para. 9].

Toth v. de Frias (1996), 78 B.C.A.C. 34; 128 W.A.C. 34 (C.A.), refd to. [para. 10].

Becker v. Pettkus, [1980] 2 S.C.R. 834; 34 N.R. 384, refd to. [para. 10].

Clarkson v. McCrossen Estate et al. (1995), 57 B.C.A.C. 101; 94 W.A.C. 101; 3 B.C.L.R.(3d) 80 (C.A.), refd to. [para. 10].

Roseneck v. Gowling (2002), 167 O.A.C. 203; 62 O.R.(3d) 789 (C.A.), refd to. [para. 10].

Sorochan v. Sorochan, [1986] 2 S.C.R. 38; 69 N.R. 81; 74 A.R. 67; 29 D.L.R.(4th) 1, refd to. [para. 12].

Peel (Regional Municipality) v. Ontario, [1992] 3 S.C.R. 762; 144 N.R. 1; 59 O.A.C. 81, refd to. [para. 12].

Garland v. Consumers' Gas Co. (2001), 152 O.A.C. 244; 57 O.R.(3d) 127 (C.A.), refd to. [para. 14].

Panara v. Di Ascenzo (2005), 361 A.R. 382; 339 W.A.C. 382; 250 D.L.R.(4th) 620; 2005 ABCA 47, refd to. [para. 14].

Peter v. Beblow, [1991] 1 W.W.R. 419; 29 R.F.L.(3d) 268; 50 B.C.L.R.(2d) 266; 39 E.T.R. 113 (C.A.), refd to. [para.19].

Hubar v. Jobling (2000), 146 B.C.A.C. 64; 239 W.A.C. 64; 2000 BCCA 661, refd to. [para. 19].

Thomas v. Fenton (2006), 228 B.C.A.C. 82; 376 W.A.C. 82; 2006 BCCA 299, refd to. [para. 24].

Vanasse v. Seguin (2009), 252 O.A.C. 218; 96 O.R.(3d) 321 (C.A.), refd to. [para. 24].

Bruyninckx v. Bruyninckx et al. (1995), 57 B.C.A.C. 1; 94 W.A.C. 1; 4 B.C.L.R.(3d) 341 (C.A.), refd to. [para. 26].

Waters v. Conrod (2007), 240 B.C.A.C. 208; 398 W.A.C. 208; 2007 BCCA 230, refd to. [para. 26].

Crick v. Ludwig et al. (1994), 49 B.C.A.C. 209; 80 W.A.C. 209; 95 B.C.L.R.(2d) 72; 117 D.L.R.(4th) 228 (C.A.), leave to appeal refused (1994), 188 N.R. 397; 63 B.C.A.C. 159; 104 W.A.C. 159 (S.C.C.), refd to. [para. 34].

International Corona Resources Ltd. v. LAC Minerals Ltd., [1989] 2 S.C.R. 574; 101 N.R. 239; 36 O.A.C. 57, refd to. [para. 36].

Mobil Oil Canada Ltd. v. Storthoaks (Rural Municipality), [1976] 2 S.C.R. 147; 5 N.R. 23, refd to. [para. 40].

Lawrence v. Lindsey (1982), 38 A.R. 462; 21 Alta. L.R.(2d) 141; 28 R.F.L.(2d) 356 (Q.B.), refd to. [para. 42].

Angeletakis v. Thymaras (1989), 95 A.R. 81; 65 Alta. L.R.(2d) 345 (Q.B.), refd to. [para. 42].

Harrison v. Kalinocha (1994), 90 B.C.L.R.(2d) 273 (C.A.), refd to. [para. 49].

Beard v. Beard (1980), 35 A.R. 448 (C.A.), affd. [1982] 1 S.C.R. 282; 41 N.R. 205; 35 A.R. 447, refd to. [para. 51].

Herman v. Smith (1984), 56 A.R. 74; 34 Alta. L.R.(2d) 90; 42 R.F.L.(2d) 154 (Q.B.), refd to. [para. 52].

Semelhago v. Paramadevan, [1996] 2 S.C.R. 415; 197 N.R. 379; 91 O.A.C. 379, refd to. [para. 55].

Bell v. Bailey (2001), 148 O.A.C. 333; 203 D.L.R.(4th) 589 (C.A.), refd to. [para. 56].

MacFarlane v. Smith (2003), 256 N.B.R.(2d) 108; 670 A.P.R. 108; 2003 NBCA 6, refd to. [para. 57].

Treanor v. Smith (1993), 44 R.F.L.(3d) 165 (Ont. Gen. Div.), refd to. [para. 58].

Boucher v. Koch (1988), 87 A.R. 78 (C.A.), refd to. [para. 58].

Shannon v. Gidden (1999), 129 B.C.A.C. 257; 210 W.A.C. 257; 1999 BCCA 539, refd to. [para. 66].

Telford v. Holt, [1987] 2 S.C.R. 193; 78 N.R. 321; 81 A.R. 385; [1987] 6 W.W.R. 383; 54 Alta. L.R.(2d) 193; 21 C.P.C.(2d) 1; 46 R.P.R. 234; 41 D.L.R.(4th) 385; 37 B.L.R. 241, refd to. [para. 68].

Royal Trust v. Holden (1915), 22 D.L.R. 660 (B.C.C.A.), refd to. [para. 68].

Irving Oil Ltd. et al. v. Blanchard (2002), 217 Nfld. & P.E.I.R. 74; 651 A.P.R. 74; 2002 PESCTD 52, refd to. [para. 70].

Cam-Net Communications v. Vancouver Telephone Co. (1999), 132 B.C.A.C. 52; 215 W.A.C. 52; 182 D.L.R.(4th) 436; 1999 BCCA 751, refd to. [para. 71].

Coba Industries Ltd. v. Millie's Holdings (Canada) Ltd. (1985), 65 B.C.L.R. 31; 20 D.L.R.(4th) 689 (C.A.), refd to. [para. 72].

Jamieson v. Loureiro (2010), 283 B.C.A.C. 103; 480 W.A.C. 103; 2010 BCCA 52, refd to. [para. 72].

Rawluk v. Rawluk, [1990] 1 S.C.R. 70; 103 N.R. 321; 38 O.A.C. 81, refd to. [para. 93].

Pegler v. Avio, [2008] B.C.T.C. Uned. 65; 2008 BCSC 128, refd to. [para. 127].

Blake v. Wells Estate (2007), 249 B.C.A.C. 177; 414 W.A.C. 177; 2007 BCCA 617, refd to. [para. 140].

Authors and Works Noticed:

Birks, Peter B.H., An Introduction to the Law of Restitution (2nd Ed. 1989), p. 415 [para. 44].

Fridman, Gerald Henry Louis, Restitution (2nd Ed. 1992), p. 469 [para. 42].

Klippert, George B., Unjust Enrichment (1983), pp. 242 to 244 [para. 42].

Maddaugh, Peter D., and McCamus, John D., The Law of Restitution (2nd Ed. 2004) (2009 Looseleaf), p. 3:500.30 [para. 10].

Palmer, Kelly, The Law of Set-off in Canada (1993), pp. 73, 74 [para. 78].

Counsel:

J.G. Dubas, for the appellant;

R.A. Anderson, for the respondent.

This appeal was heard on November 17 and 18, 2009, at Vancouver, B.C., before Huddart, Chiasson and Bennett, JJ.A., of the British Columbia Court of Appeal. The judgment of the Court of Appeal was delivered on May 10, 2010, including the following opinions:

Huddart, J.A. (Bennett, J.A., concurring) - see paragraphs 1 to 136;

Chiasson, J.A., dissenting - see paragraphs 137 to 164.

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