COURT OF APPEAL FOR ONTARIO

CITATION: Junker v. Hughes, 2016 ONCA 81

DATE: 20160128

DOCKET: C60137

Gillese, MacFarland and van Rensburg JJ.A.

BETWEEN

Michael Lorne Junker

Applicant/Respondent

and

Lisa Ann Hughes

Respondent/Appellant

Michelle Kropp (agent for Tony Sferruzzi, lawyer on
    record) and Kenneth Peacocke, for the appellant

Joseph A. Irvine, for the respondent

Heard: January 20, 2016

On appeal from the judgment of Justice Alissa K. Mitchell
    of the Superior Court of Justice, dated February 13, 2015.

ENDORSEMENT

[1]

The parties, who never married, separated in November 2007 after a
    relationship of seven years. The action proceeded to trial in 2015 on two claims
    that remained to be resolved: the respondents constructive trust claim against
    the proceeds of sale of the appellants property (a house they lived in
    together during the relationship), and the appellants claim for child support
    (which included the determination of the respondents income, s. 7 expenses and
    a claim for retroactive child support).

[2]

Two issues were raised on appeal.

(1)

Retroactive Child Support Claim

[3]

The first issue concerns the trial judges determination that the
    respondent had overpaid child support by $8,211, and her consequent dismissal
    of the appellants claim for retroactive support. The appellant asserts that
    the trial judge erred in her findings, in particular with respect to the amount
    of the overpayment. She says that there are entries in the bank records
    produced by the respondent that correspond to payments made in respect of his
    other childrens expenses. The trial judge ought not to have credited those
    expenses as support for their child.

[4]

It emerged during oral argument on the appeal that the appellants real concern
    here is that the respondent might take steps to recover the overpayment from
    her, or to credit such amount against his future child support obligations.

[5]

The respondent did not pursue any such claim at trial. The trial judge
    observed that the respondent did not ask for repayment of amounts overpaid, and
    she stated that no such order will be made. From this, we conclude that the
    issue of the overpayment, as well as its possible effect, are
res judicata.
The respondent is not entitled to claim any relief, whether by credit or
    otherwise, in respect of such overpayment. The respondents counsel did not attempt
    to argue otherwise.

[6]

In these circumstances, the appellants counsel advised that she would
    not proceed with this ground of appeal.

(2)

Constructive Trust Claim

[7]

The remaining issue is whether the trial judge erred in awarding the
    respondent damages for a constructive trust claim against the appellants
    property.

[8]

The property in question is the house where the couple (and their son
    after his birth in 2001) lived together until their separation in 2007. The
    house was purchased in 2000 by the appellant for $272,000. The appellant made
    the down payment of $147,000, and title was taken in her name. The respondent
    did not contribute to the down payment. The balance of the purchase price was
    financed by the appellant with a mortgage in the sum of $125,000, with monthly
    payments of $1,604.45, maturing in July 2007. The house was sold in 2010 for
    $445,000. There was no evidence of the value of the house at the time of
    separation.

[9]

The respondent, who is a contractor, asserted that he made improvements
    to the property, including finishing the basement area and installing a patio.
    He did not have any documents to support his claim, and did not provide a
    breakdown of the cost of the work. It is not disputed, however, that he did the
    work. The respondent also contended that he made financial contributions,
    including cash payments, payments for household bills, and contributions to the
    payment of the mortgage. He estimated the total value of his contributions at $86,500.
[1]

[10]

The
    appellant testified at trial as to the parties intentions regarding the house
    and their finances. She was to be sole owner of the house. The respondent
    agreed to pay rent of $550 per month, but only started paying this amount in
    2005, after he had paid back some $55,000 in loans the appellant made to him
    from her line of credit to meet his various personal obligations. She asserted
    that any contribution the respondent made, whether financial or in services
    provided, was in lieu of rent. The appellant also testified that the parties
    agreed they would not assert a claim against each others property after
    separation, including their respective business interests.

[11]

The
    trial judge concluded that the respondent had proven his claim for unjust
    enrichment. She found enrichment of the appellant by the increase in value of
    the property during the period the parties lived together. She observed that,
    during this period, the mortgage was repaid and the value of the property
    significantly increased in part as a result of the contributions of the
    respondent, including the improvements he made to the property. She further
    found that, based on information in the parties financial statements, neither
    party earned sufficient income on their own which would have permitted early
    repayment of the mortgage.

[12]

The
    trial judge found a corresponding deprivation, accepting that the respondent
    made the contributions without compensation and with the expectation he was
    doing so for the maintenance, preservation and improvement of the property for
    the collective benefit of the family. She concluded that there was no juristic
    reason for the deprivation. She specifically rejected the appellants
    characterization of the respondent as a renter, especially after their child
    arrived, and the appellants contention that they agreed to retain ownership of
    their respective property. This was belied by the fact that the respondent gave
    each of the appellant and the child an interest in his holding company. The
    trial judge concluded that there was a nexus between the efforts of the parties
    and the accumulation of equity in the property.

[13]

As
    for remedy, the trial judge noted that a monetary restitutionary award was
    impossible to quantify based on the evidentiary record. After considering
    various aspects of the evidence (which she listed at para. 36 of her reasons),
    she found that the parties were involved in a joint family enterprise, a
    common venture in which they expected to share the benefits flowing from the
    wealth that they jointly created. She awarded the respondent the lesser of (i)
    one-half the net proceeds of sale of the property, less repayment to the
    appellant of $147,000 (the amount of her down payment), and (ii) $86,500, the
    amount claimed by the respondent.

[14]

On
    appeal, the appellant says that there was no evidence of deprivation by the
    respondent as a result of his contributions to the house, as he contributed no
    more than his share of joint expenses. She also contends that the trial judges
    finding that there was a joint family venture was not supported by the evidence,
    and that the evidence was in fact all to the contrary. The appellant further asserts
    that the evidence did not support the damages award, as the respondent could
    not prove that he contributed the amount he claimed.

[15]

All
    of these arguments seek to challenge the trial judges findings of fact.

[16]

As
    a preliminary matter, we note that the parties were self-represented at trial.
    The record was less than ideal. However, the trial judge, who was in the best
    position to do so, concluded that the trial should proceed notwithstanding
    certain deficiencies in financial disclosure.

[17]

While
    it would have been desirable for the parties to have supplied documentary
    evidence relating to their financial affairs and the house in particular (for
    example, there were no records respecting repayment of the mortgage, and only
    some bank records were produced), the trial judge was entitled to assess the
    respondents claim based on the parties testimony and the limited records that
    were available. In our view, the conclusions she reached in her unjust
    enrichment analysis and in finding a joint family venture were supported by the
    evidence.

[18]

The
    trial judge accepted the respondents evidence about the contributions he had
    made. On the question of deprivation, she concluded that the respondent made
    the contributions without compensation and with the expectation he was
    contributing to the property for the collective benefit of the family. This
    finding was open to her on the evidence, particularly after she rejected the
    contention that the respondents contributions were in lieu of rent.

[19]

On
    the question of joint family venture, the trial judge considered how the
    parties had conducted themselves during their cohabitation. She considered,
    among other things, the improvements to the property without expectation of
    compensation, the granting of minority interests in the respondents company to
    the appellant and their son when it was incorporated in 2004, the fact that the
    appellant wrote cheques on the respondents bank account for his share of
    household expenses, and the fact that both parties worked full-time and
    contributed their earnings to the joint expenses of the household, including
    the cost of childcare. While the trial judge did not expressly consider the
    evidence under the various headings in
Kerr v. Baranow
, 2011 SCC 10,
    [2011] 1 S.C.R. 269, at para. 100 (mutual effort, economic integration, actual
    intent and priority of the family), she clearly considered all of these factors.
    The finding that there was a joint family venture in this case was open to the
    trial judge on the evidence.

[20]

Further,
    we do not accept the appellants submission that the evidence was that the only
    payments the respondent made, other than loan repayments, were in the final two
    years of the relationship. Bank statements were only available for that period,
    and the trial judge accepted the respondents testimony that he had contributed
    to household expenses throughout the relationship, including some payments in
    cash. Further, having regard to the parties incomes, the only way the mortgage
    could have been paid down early was if both had contributed.

[21]

Finally,
    the appellant contends that the finding of joint family venture did not remove
    or lessen the burden on the respondent to quantify and prove his contributions.
    She says that there was no evidence to support the award of damages by the
    trial judge, and that after finding that there was a joint family enterprise,
    she simply awarded the respondent the lesser of one half of the net proceeds
    from the sale of the property after repayment to the appellant of $147,000, and
    $86,500 (the amount of his claim). She ought to have determined the
    respondents proportionate contribution before making the order she did.

[22]

We
    do not find reversible error here. The appropriate remedy in a joint family venture
    case is a share of the wealth accumulated through the parties joint efforts
    proportionate to the claimants contributions:
Kerr
, at para. 102.
    Contrary to the appellants submissions, that would not entail a detailed
    review of the respondents contributions (akin to a
quantum meruit
approach);
    indeed, as the court stated in
Kerr,
also at para. 102,

[w]hile
    determining the proportionate contributions of the parties is not an exact
    science, it generally does not call for a minute examination of the give and
    take of daily life. It calls, rather, for the reasoned exercise of judgment in
    light of all of the evidence.

[23]

It
    would have been preferable for the trial judge, after concluding that there was
    a joint family venture, to have specifically addressed the proportionate
    contribution of the respondent to the increase in value of the house. That
    said, implicit in her decision is the finding that the parties had contributed equally
    to the increase in value of the house during their cohabitation. In any event,
    the sum of $86,500 (which was the amount ultimately awarded to the respondent) may
    be regarded as 29% of the net proceeds of the house, after crediting the
    appellant for her down payment. In all of the circumstances of the case, an
    award of damages reflecting such a contribution by the respondent is justified
    on the evidence.

[24]

In
    the course of her argument respecting the evidence, the appellants counsel
    referred to the fact that the trial judge used the value of the house when it
    was sold in 2010, rather than at the time of separation. As already noted, the
    record in this case was not ideal, and neither party tendered evidence of the
    value of the house at the time of separation. The trial judges use of the sale
    price in 2010 in the circumstances of this case is not a reversible error.

[25]

The
    appeal is accordingly dismissed. Costs to the respondent fixed at $10,000,
    inclusive of disbursements and applicable taxes.

E.E.
    Gillese J.A.

J. MacFarland J.A.

K. van Rensburg J.A.

[1]
This amount happens to correspond to one half of the difference between the
    purchase price of the property ($272,000) and its sale price ($445,000), although
    this fact is not mentioned in the reasons for judgment, and did not form part
    of the parties arguments on appeal.