COURT OF APPEAL FOR BRITISH COLUMBIA
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Citation: |
Blake v. Wells Estate, |
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2007 BCCA 617 |
Date: 20071214
Docket: CA034137
Between:
Patricia Ann Blake also known as Patricia Ann Wells
Respondent/Plaintiff
(Appellant by cross appeal)
And
Doreen Isabel Ross and Roger Donald Ross as Executors of the Estate of Isabel Wells
Appellants/Defendants
(Respondents on cross appeal)
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Before: |
The Honourable Chief Justice Finch |
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The Honourable Madam Justice Ryan |
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The Honourable Mr. Justice Chiasson |
| M.J. Hargreaves |
Counsel for the Appellant |
| M.R. Mark |
Counsel for the Respondent |
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Place and Date of Hearing: |
Vancouver, British Columbia |
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13 August 2007 |
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Place and Date of Judgment: |
Vancouver, British Columbia |
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14 December 2007 |
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Written Reasons by: |
| The Honourable Mr. Justice Chiasson |
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Concurred in by: |
| The
Honourable Chief Justice Finch |
Reasons for Judgment of the Honourable Mr. Justice Chiasson:
Background
[1] The appellant Doreen Ross is the daughter of Isabel Wells. The appellant Roger Ross is Doreen’s husband. The appellants are the executors of the estate of Isabel Wells. They appeal an award of $250,000 to the respondent and appellant by cross-appeal, Patricia Blake. The award was based on a finding that the estate of Isabel Wells was unjustly enriched by the respondent’s contribution of labour and money to property owned by Isabel Wells known as the “Malahat”. The respondent cross-appeals seeking a proprietary interest in a portion of the Malahat or, alternatively, an award of $350,000.
[2] The Malahat is a 14 acre property on Vancouver Island extending from the Trans-Canada Highway to the west shore of Finlayson Arm, north of Victoria, British Columbia. It is comprised of two parcels: a waterfront lot of just over two acres and a larger lot of approximately 12 acres. The 12 acre lot is referred to as “Lot 111”. The two residences on the Malahat are on Lot 111.
[3] Ms. Blake and Rowan Wells, the son of Roy and Isabel Wells, were reacquainted in 1971. At that time Rowan was building a house on Lot 111 proximate to the Highway. His parents’ home was on the lower part of Lot 111. The two houses, which were out of sight of each other, were joined by a long driveway that led to the Highway. The area of the Malahat was described by the trial judge as “secluded and, largely because of its topography, wild in appearance” (para. 3).
[4] Rowan did most of the work on his house himself with assistance both financially and physically from Ms. Blake, who had a full time job. Rowan and Ms. Blake started living in the house together in 1972. In 1990, Rowan’s health began to deteriorate and in 1992, he and Ms. Blake married. Rowan died in 1993.
[5] In 2003, Isabel Wells broke her arm. She was in her early 90s, but, until her injury, had been driving her own car. As a result of the fracture she was unable to drive and she moved to Victoria, ultimately living with Doreen Ross. Isabel Wells died in 2004.
[6] In her will, Isabel Wells left one-seventh of the residue of her estate to Ms. Blake. The residue had an approximate value of $300,000. The Malahat was left to Doreen Ross. Ms. Blake sued claiming that as a result of the 30 years’ labour and money she “put into the Malahat, she had a legitimate expectation and entitlement to, if not a promise by Isabel Wells of, an interest in the Malahat property”. She contended that the value of her interest should be sufficient for her to own a home in Victoria free of a mortgage (trial judgment, para. 12).
[7] The trial judge concluded Ms. Blake had established the estate of Isabel Wells was unjustly enriched, refused to order a constructive trust in favour of Ms. Blake and awarded her $250,000 in damages.
The trial judgment
[8] In para. 29 of his reasons for judgment (2006 BCSC 799, 25 E.T.R. (3d) 56), the judge quoted from Pacific National Investments Ltd. v. Victoria (City), 2004 SCC 75, [2004] 3 S.C.R. 575 in which the Court in para. 14 confirmed that the test for unjust enrichment has three elements: enhancement of the defendant; a corresponding deprivation of the plaintiff; and, the absence of a juristic reason for the enrichment. In para. 25, the Court noted that consideration of the reasonable expectations of the parties is part of the juristic reason analysis.
[9] In para. 13, the trial judge noted Ms. Blake:
. . . led evidence of her contributions of labour, materials and money to the Malahat property, as to the extent of those contributions, the need for those contributions, and whether they conferred any benefit upon Isabel Wells . . . within the context of establishing the requirements for unjust enrichment; benefit, deprivation, absence of juristic reason, and a legitimate expectation.
[10] The judge summarized Ms. Blake’s testimony that when Rowan’s health began to deteriorate in 1990 she began to undertake an increasing amount of maintenance of both “the home in which she lived and the land surrounding it” (para. 8); after Rowan died in 1993 she “assumed sole responsibility . . . for maintenance of her home, some of the maintenance of Isabel Wells’ home, and maintenance of the 14 acres surrounding the two homes” (para. 9).
[11] Ms. Blake said that in addition to labour, she contributed financially to the construction of her home from two sources: her income and the proceeds of the sale of three houses in Victoria and three trailers or mobile homes near Victoria. These were sold in the early 1970s. Ms. Blake could not remember whether there was “any appreciable equity in any of these properties”, but she asserted “whatever came out of these properties she put into the construction of the home on the Malahat” (paras. 17–19).
[12] The judge noted that the extent of Ms. Blake’s work on the property was contested hotly and stated that because she was employed at all relevant times “her contributions in labour have been largely confined to weekends and holidays” (paras. 22–23).
[13] Towards the end of 1993, Ms. Blake began to hire Mr. Steve Hallberg, a handyman, to work on the property, mostly on Saturdays and occasionally on Sundays. She contended she paid him $10 and $15 per hour, depending on the type of work, and that he received approximately $5,000 per year until either late 2000 or early 2001. In para. 85, the judge accepted Mr. Hallberg’s estimate of $2,500 per year and concluded that he worked “for between seven and eight years, between 1993 and 2001 or thereabouts”.
[14] Late in 1998 or early 1999, Ms. Blake’s former brother-in-law, Ron Blake, began to spend time working on the property. He was recovering from a heart attack, but as he worked he strengthened and took on work previously done by Mr. Hallberg, who gradually was easing his involvement with the property. The judge found that Mr. Blake eventually “was spending a great deal of time on the Malahat property working without pay” (para. 27).
[15] The judge began his analysis of the existence of enrichment in para. 30. He described the type of work undertaken by Ms. Blake, Mr. Hallberg and Mr. Blake in para. 36:
That type of work, that is clearing enough snow off the driveway to allow access, or removing limbs and trees for the same purpose, I find was accomplished either by the plaintiff, who testified that she would put chains on her vehicle and drag obstacles off the driveway, or by persons either hired by the plaintiff (Mr. Hallberg, the handyman), or exhorted by the plaintiff (Mr. Ron Blake on occasion). Where the services of Mr. Hallberg were employed to keep the driveway clear, I find that the plaintiff paid for those services.
[16] He concluded in para. 37 "[h]ad [Ms. Blake] not provided that type of service by doing the work herself or by paying Mr. Hallberg to do it . . . Isabel Wells would have been required to pay for the same work to be done. The alternative open to Isabel Wells was to move off the Malahat properly entirely”. In paras. 44–47 the judge discussed a water supply project undertaken by Ms. Blake and Ron Blake. He stated in para. 48:
These are not all of the benefits that I find accrued to Isabel Wells as a result of expenditures of money or efforts made by the plaintiff. I will return to those other benefits later. It is sufficient for present purposes that I am able to find and do find that the defendant's estate, through Isabel Wells, was enriched by expenditure of money or effort, or both, on the part of the plaintiff.
[17] He then turned to consider whether Ms. Blake had established deprivation and whether the deprivation corresponded to the enrichment.
[18] In para. 50 the judge referred to Ms. Blake’s sale of her properties and her work on the Malahat stating:
Some of that time and money was no doubt put toward her own home, some of it toward maintenance of the property as a whole, and perhaps some toward maintenance or improvement of Isabel Wells’ home. It is now difficult to sort out precisely where [Ms. Blake’s] money went after such a long time.
He concluded in para. 51:
At this stage of the analysis, however, it is not necessary to account for every penny. It is sufficient to find, and I do find, that the plaintiff has suffered a detriment in that she has given up an opportunity to acquire and maintain a home in her own name off the Malahat property and to establish equity in that home. Instead of putting her time, money and effort into acquiring her own home and building equity in her own home, the plaintiff has put it into the Malahat, at least to an extent sufficient to support a finding that she has suffered a detriment that corresponds to the benefit derived by Isabel Wells and her estate.
[19] The judge then turned in para. 52 to what he described as a more difficult question: “whether the plaintiff has shown a lack of juristic reason for the benefit and the detriment found to exist”.
[20] Following the analysis described in Pacific National Investments, the judge concluded there was no contract to support a juristic reason and no implied tenancy by which the benefit was supplied for an equivalent rent. He concluded there was no statutory or other legal compulsion obliging Ms. Blake to provide the benefit and no intention by her to gift the benefit to Isabel Wells or her estate (paras. 53–57).
[21] The judge then discussed issues of credibility, noting discrepancies in Ms. Blake’s case and the fact that Mr. Hallberg “was a witness very sympathetic to [Ms. Blake] and to her cause, although it is not clear he knew exactly what [Ms. Blake’s] cause was” (paras. 59–63).
[22] He placed the credibility inquiry into context stating in paras. 64 and 65:
By raising these credibility issues here I do not mean to suggest that they were overlooked when I considered the questions of benefit and deprivation. I was able to make findings of benefit and deprivation without placing any significant weight on matters of evidence where the credibility of either the plaintiff or Mr. Hallberg were essential. Having found benefit and deprivation however, it is my view that the frailties in the plaintiff's evidence can and should be considered closely, at this stage, in determining whether the defendant to whom the burden has shifted, can show valid reason to deny recovery, and, in considering the reasonable expectation of the parties.
This is a case where consideration of the reasonable expectation of the parties must be influenced by assessment of the credibility of witnesses. That is because one of the parties - Isabel Wells - is no longer available to tell the court what her expectations were.
[23] Ms. Blake testified that, as a result of the money and labour she expended on her Malahat residence, she expected to be a home-owner. The judge stated in para. 77: “I do not confuse what [Ms. Blake] seeks as a result of this litigation – a house in Victoria in her name free and clear of any mortgage, with what [she] reasonably expected while putting the work and money she did into the Malahat property”. The judge undertook a review of the reasonable expectations of the parties considering comments of Isabel Wells made to others and bequests in her previous wills (one in 1989 and two in 1993 after Rowan Wells’ death – all three revoked by the final 2002 will). He accepted the evidence of Ron Blake that Isabel Wells told him Ms. Blake would be “taken care of” if she and Isabel Wells were ever obliged to leave the Malahat (para. 81). This evidence, taken together with the judge’s interpretation of Isabel Wells’ previous wills, led him to conclude that “the reasonable expectation of both Isabel Wells and the plaintiff was that the plaintiff had, by reason of deprivation leading to enrichment, obtained the right to an interest in the Malahat property” (para. 81).
[24] The judge then turned to quantum stating in para. 83 that while he accepted Ms. Blake’s contention that she contributed money and labour to the Malahat, he was “unable to find that [she] put as much money into the property as she has claimed”. As noted, the judge held Ms. Blake had paid Mr. Hallberg $2,500 annually for seven or eight years. In para. 86 he gave some credit to Ms. Blake for work done on the Malahat by Ron Blake stating, “not all of Mr. Blake’s very valuable assistance to Isabel Wells is credited to [Ms. Blake]”. While he acknowledged the appellants’ argument that the Rowan Wells/Patricia Blake house was “of questionable benefit to the estate” (para. 87), the judge found “it has some value to the land as potential rental accommodation” (para. 90).
[25] In para. 91, the judge found there was a link between Ms. Blake’s contribution and the Malahat, on which a constructive trust was claimed, but decided damages was an adequate remedy to compensate her for “the benefit she conferred and the detriment she suffered”. He concluded in para. 92:
Bearing in mind that much of the early contribution made by [Ms. Blake] . . . did not create a substantial net benefit to Isabel Wells or her estate . . . unjust enrichment can in this case be fairly and properly compensated by an award of damages . . . in the amount of $250,000 . . .
Positions of the parties
[26] In their factum, the appellants assert six errors by the trial judge:
· finding the participation of Ms. Blake in the construction of her home constituted an unjust enrichment of Isabel Wells;
· finding Ms. Blake suffered detriment by giving up an opportunity to acquire and maintain a home of her own;
· treating the expenditure of time by Ms. Blake as a deprivation;
· failing to find a juristic reason for the enrichment of Isabel Wells;
· taking into account the services of Ron Blake in the assessment of a remedy;
· making an award of $250,000, which was disproportionate to the enrichment.
[27] The appellants also contend that taking into account the services of Ron Blake inflated the benefit conferred on the estate, which led to an inflated award. At the hearing of the appeal, the appellants stated the first and fourth alleged errors should be dealt with together.
[28] Ms. Blake asserts that the appellants now seek to have findings of fact overturned and that the judge committed no palpable and overriding error. For the most part, she seeks to have the reasons of the trial judge upheld, but joins the appellants in challenging the judge’s award of damages.
[29] Ms. Blake cross-appeals, contending damages are insufficient and that she is entitled to a one-half interest in Lot 111 or, alternatively, to damages of $350,000.
Discussion
[30] The appellants in their factum “recognize that they face an apparently uphill task in attacking a finding of fact”.
[31] At the outset it is useful to note the mandate of this Court in considering findings of fact of trial judges. The leading case on this issue is Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, Iacobucci and Major JJ. for the majority:
[21] . . . the standard of review is not to verify that the inference can be reasonably supported by the findings of fact of the trial judge, but whether the trial judge made a palpable and overriding error in coming to a factual conclusion based on accepted facts, which implies a stricter standard.
[22] . . . . Although we agree that it is open to an appellate court to find that an inference of fact made by the trial judge is clearly wrong, we would add the caution that where evidence exists to support this inference, an appellate court will be hard pressed to find a palpable and overriding error. . . . Where evidence exists which supports this conclusion, interference with this conclusion entails interference with the weight assigned by the trial judge to the pieces of evidence.
[23] We reiterate that it is not the role of appellate courts to second-guess the weight to be assigned to the various items of evidence. If there is no palpable and overriding error with respect to the underlying facts that the trial judge relies on to draw the inference, then it is only where the inference-drawing process itself is palpably in error that an appellate court can interfere with the factual conclusion. The appellate court is not free to interfere with a factual conclusion that it disagrees with where such disagreement stems from a difference of opinion over the weight to be assigned to the underlying facts. . . .
. . .
[25] . . . We conclude, therefore, by emphasizing that there is one, and only one, standard of review applicable to all factual conclusions made by the trial judge -- that of palpable and overriding error.
[Emphasis in original.]
[32] In H.L. v. Canada (Attorney General), 2005 SCC 25, [2005] 1 S.C.R. 401 Fish J. noted in para. 73 that “the majority reasons in Housen should not be taken to have decided that inferences of fact drawn by a trial judge are impervious to review though unsupported by the evidence”, but continued in para. 74:
I would explain the matter this way. Not infrequently, different inferences may reasonably be drawn from facts found by the trial judge to have been directly proven. Appellate scrutiny determines whether inferences drawn by the judge are “reasonably supported by the evidence”. If they are, the reviewing court cannot reweigh the evidence by substituting, for the reasonable inference preferred by the trial judge, an equally – or even more – persuasive inference of its own. This fundamental rule is, once again, entirely consistent with both the majority and the minority reasons in Housen.
[Emphasis in original.]
Benefit and detriment
[33] In their factum, the appellants “concede that Isabel Wells was enriched to some degree by the efforts and expenditure of monies by [Ms. Blake]”. They also concede that the expenditure of money by Ms. Blake “for the benefit of Isabel Wells, did constitute a deprivation of the plaintiff”, but they contend that the judge erred by taking into account Ms. Blake’s labour. They assert:
Counting the labour expended by [Ms. Blake] as part of her detriment unreasonably increases the extent of the benefits to which the appellants must point as offsetting the detriment.
. . . It is unclear how the learned trial judge came to his award of $250,000 but it is respectfully submitted that a misapprehension of the extent of deprivation suffered by [Ms. Blake] might have influenced the size of the award.
[34] In para. 50, the judge held that some of the money from the proceeds of selling Ms. Blake’s properties “was no doubt put toward . . . maintenance of the property as a whole, and perhaps some toward maintenance or improvement of Isabel Wells’ home”. In my view, these conclusions are not supported by the evidence and are not consonant with other factual conclusions of the judge, but I do not consider the error to be overriding, that is, to have been essential to the key determination that there was detriment to Ms. Blake.
[35] The appellants also contend that the evidence does not support the judge’s conclusion in para. 51 of his reasons that Ms. Blake suffered detriment by giving up an opportunity to acquire and maintain her own home. They contend that there is no evidence she intended to acquire and maintain her own home and she was never in a financial position to do so. Ms. Blake points to the fact that previously she owned property and says that the appellants are creating a non-realistic scenario because, in fact, she dedicated her efforts and resources to building a home on the Malahat. The appellants also assert that any detriment resulting from Ms. Blake’s support of the construction of the Malahat house, was not for the benefit of Isabel Wells and, in addition, the judge erred by considering Ms. Blake’s labour as a detriment.
[36] The evidence concerning the sale of Ms. Blake’s properties was sketchy. In para. 19, the judge noted Ms. Blake did not know whether there was any appreciable equity in the properties and he found “that whatever came out of these properties she put into the construction of the home on the Malahat”. The sale of the properties took place in the 1970s when construction of the home was underway.
[37] In para. 51, the judge made a specific finding – “[i]t is sufficient to find, and I do find” – that Ms. Blake gave up the opportunity "to acquire and maintain a home". It is clear on the evidence that she dedicated her resources, physical and financial, to the Malahat home. The judge concluded she did so rather than put time and money into a home of her own. I see no error in him reaching that conclusion, which seems to me to be a common-sense inference from the fact of her efforts on the Malahat property.
[38] I do not read the judge’s comments in para. 51 as limited to the labour and funds expended on the construction of Ms. Blake’s home. He said: “[i]nstead of putting her time, money and effort into acquiring her own home . . ., [Ms. Blake] has put it into the Malahat”. In my view, this comment must be read in light of the judge’s conclusion in paras. 47 and 48 that the money and efforts of Ms. Blake on the property at large were a clear benefit to Isabel Wells.
[39] The appellants rely on Wilcox v. Wilcox, 2000 BCCA 491, 79 B.C.L.R. (3d) 235. In that case, the plaintiff had contributed money, care and services to the deceased. Her claim was for a wills variation and was pleaded as such, not as a constructive trust case, but the Court considered the law of unjust enrichment, stating it was relevant to the extent of the variation that should be ordered. The trial judge in Wilcox relied on Clarkson v. McCrossen Estate (1995), 3 B.C.L.R. (3d) 80 (C.A.) and concluded there was a constructive trust in favour of the plaintiff. That determination was upheld by this Court.
[40] In their factum, the appellants assert Wilcox stands for the proposition that the provision of labour “does not generally result in a finding of economic deprivation unless the claimant can demonstrate that she restricted her economic activity in order to enable her to devote time to the benefit of the defendants”. I do not understand Wilcox as supporting such a proposition.
[41] Whether there is benefit and detriment in any given case depends on the facts. Both McLachlin J. (as she then was) and Cory J. in Peter v. Beblow, [1993] 1 S.C.R. 980 had no difficulty concluding that the provision of household services without compensation constituted a benefit and a corresponding detriment.
[42] Relying on Peter v. Beblow, the Court in Wilcox concluded that the question of detriment “is dealt with by the courts as an economic one” and concluded that the provision of care and services to the deceased was not part of the detriment in that case because there were “no findings of fact, and indeed no evidence from which one could conclude, that the transportation, care and service provided was an economic detriment to [the plaintiff]” (para. 45). The care and services were driving the deceased, the plaintiff’s mother, to medical appointments following an accident and doing household chores when she became ill.
[43] In Clarkson the Court stated in para. 45 that “the evidence established that the respondent suffered deprivation with respect to the services she rendered. . .”.
[44] As noted previously, in this case, the judge made a specific finding of fact that Ms. Blake expended time, money and effort on the Malahat instead of on a home of her own. There was evidence to support that conclusion. I see no basis on which this Court could interfere with it.
[45] I also place the judge’s comments into the context of the statement of Cory J. in Peter v. Beblow at p.1012, referred to by the Court in Pacific National Investments in para. 20:
. . . I would have thought that if there is enrichment, that it would almost invariably follow that there is corresponding deprivation suffered by the person who provided the enrichment. There is ample support for the proposition that once enrichment has been found, the conclusion that the plaintiff has suffered a corresponding deprivation is virtually automatic.
[46] The appellants assert the judge erred by taking into account the work of Ron Blake in assessing the benefit to Isabel Wells and that this inflated the award to Ms. Blake. They also say the judge erred because Ron Blake’s efforts were not a detriment to Ms. Blake. In my view, the appellants misconstrue how the judge dealt with the efforts of Ron Blake.
[47] In para. 36, the judge referred to the type of work done on the Malahat by Ms. Blake and Messrs. Hallberg and Blake, but his finding concerning benefit is contained in paras. 37 and 41 in which he refers to the work done by Ms. Blake and the work of Mr. Hallberg for which she paid. He concludes, but for that work and payment, Isabel Wells would have been obliged either to pay someone to have the work done or to leave the property.
[48] Concerning the water supply project undertaken by Ms. Blake and Ron Blake, after finding Ms. Blake contributed physical work to the project, but “not nearly the amount . . . contributed by Mr. Blake”, the judge concluded in para. 47:
. . . [Ms. Blake’s] effort nevertheless had a real economic value to Isabel Wells, and Isabel Wells would have had to pay someone else to do the work that [Ms. Blake] did on the second water supply project. Isabel Wells was thereby saved an expense that she would have otherwise been required to make.
In my view, the judge did not rely on the efforts of Ron Blake in the analysis of benefit and detriment.
[49] He did take them into account when considering the appropriate remedy. In para. 86 he concluded that Ms. Blake should get some “credit” for introducing Ron Blake to the Malahat. This is consonant with the approach taken by Mackenzie J. in Bebbington v. Carter (1997), 28 R.F.L. (4th) 305 (B.C.S.C.). In my view, the judge correctly dealt with the contribution of Ron Blake in this context.
[50] Finally, I suggest that the appellants approach the analysis of benefit and deprivation too narrowly. Cory J. addressed the matter at 1016 of Peter v. Beblow:
The balancing of benefits conferred and received in a matrimonial or common law relationship cannot be accomplished with precision. Although it may well be essential in a commercial relationship to closely scrutinize the contributions made by each of the business partners to the acquisition of property, such an approach would be unrealistic and unfair in the context of a family relationship. Ordinarily, the trial judge will be in the best position to assess all the evidence presented and to estimate the contribution made by each of the parties. The nature of the relationship, its duration and the contributions of the parties must be considered. Equity and fairness should form the basis for the assessment. There was ample evidence presented in this case to justify the finding of the trial judge that there had been a deprivation suffered by the appellant.
[51] Although the Court in Peter v. Beblow was considering the application of unjust enrichment in the context of a common law relationship, I see nothing in the judgment to exclude the analysis from a relationship such as existed between Ms. Blake and Isabel Wells. Apt are the words of Dickson J. writing for the majority of the Court in Pettkus v. Becker, [1980] 2 S.C.R. 834 at 847:
. . . "Unjust enrichment" has played a role in Anglo-American legal writing for centuries. Lord Mansfield, in the case of Moses v. Macferlan [(1760), 2 Burr. 1005] put the matter in these words: "…the gist of this kind of action is, that the defendant, upon the circumstances of the case, is obliged by ties of natural justice and equity to refund the money". It would be undesirable, and indeed impossible, to attempt to define all the circumstances in which an unjust enrichment might arise...
[Emphasis in original.]
[52] I would not accede to the grounds of appeal that concern the judge’s analysis of benefit and deprivation.
Juristic reason
[53] The Court in Pacific National Investments addressed juristic reason in paras. 23 and 25:
The use of the expression "juristic reason" in this connection emphasized that "unjust" is to be addressed as a matter of law and legal reasoning rather than a free-floating conscience that may risk being overly subjective… There are now two stages to the juristic reason inquiry. At the first stage, a claimant … must show that there is no juristic reason within the established categories that would deny it recovery. The established categories are the existence of a contract, disposition of law, donative intent, and "other valid common law, equitable or statutory obligatio[n]"…. The categories may be added to over time…. On proving that none of these limited categorical reasons exist to deny recovery, the plaintiff … will have made out a prima facie case of unjust enrichment. It will have demonstrated "a positive reason for reversing the defendant’s enrichment"….
At the second stage, the onus shifts to the defendant…,who must rebut the prima facie case by showing that there is some other valid reason to deny recovery. In the absence of a convincing rebuttal, the transfer of wealth will be reversed. According to [Garland v. Consumers’ Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629], it is at this stage that the court should have regard to the reasonable expectation of the parties and public policy considerations.
[54] In para. 52, the trial judge correctly stated the approach to the issue as articulated in Pacific National Investments. He then considered contract, tenancy, statutory or other legal compulsion and gift and concluded that Ms. Blake had met the onus on her to establish no reason within the established categories to deny recovery.
[55] The appellants say they do not contend there was a tenancy arrangement between Ms. Blake and Isabel Wells, but assert Ms. Blake was living on the Malahat “at a cost … far less than she would have incurred had she been living off of the Malahat”. They say:
The proper question was whether [Ms. Blake] was, economically, further ahead as a result of her relationship with Isabel Wells, and her decision to devote herself to the maintenance of the Malahat, or whether she was further behind as of January 2004. In addressing this question, the Court should surely have regard to savings that [Ms. Blake] was able to effect as a result of her virtually cost-free residence of the Malahat.
[56] They contend if Ms. Blake were not to have lived on the Malahat, she would have had “to have either paid rent elsewhere or to have spent a considerable portion of her earnings on the acquisition of a home”. The appellants say it is not possible to conclude that the “financial cost incurred by [Ms. Blake] outweighed the benefits accruing to her from her relationship with Isabel Wells”.
[57] The judge concluded that this element of cost-benefit was not something to which the parties put their minds. There does not appear to have been any evidence on which a careful analysis of the equation could have been undertaken, but, in my view, a flaw in the appellants’ approach is the fact that the judge found the detriment to Ms. Blake was her dedication to the Malahat in lieu of establishing a home apart from that property. The appellants’ approach ignores that detriment and would leave Ms. Blake with nothing and the estate of Isabel Wells with the full benefit of her contribution over the years, a contribution the judge held allowed Isabel Wells to retain the Malahat without otherwise depleting her resources. I reject that result.
[58] The judge then turned to the reasonable expectations of Ms. Blake and Isabel Wells. He began with a consideration of statements made by Isabel Wells and concerning credibility stated in para. 70:
On a matter such as the expectations of Isabel Wells and of the plaintiff…hearsay evidence, said to have originated with Isabel Wells, is obviously necessary but of arguable reliability because it was tendered by interested parties…
[59] The first statement was Ms. Blake’s evidence that she was told by Isabel Wells that if the property were sold, “she would purchase two houses in town for herself and [Ms. Blake]” (para. 66). The statement was made a “few years ago” on an occasion when two real-estate agents were looking at the Malahat.
[60] The judge quite rightly was concerned with the credibility of Ms. Blake. He stated she “tended to exaggerate in her evidence” (para. 61) and described her testimony as “often argumentative, and evasive” (para. 62). The judge stated he was “able to make findings of benefit and deprivation without placing any significant weight on matters of evidence where the credibility of … [Ms. Blake] … [was] essential”, but concluded credibility was relevant to his consideration of the reasonable expectations of the parties (para. 65). I agree with him.
[61] The second statement was made to Doreen Ross. She said Isabel Wells told her that if the property were sold Ms. Blake knew she would have to leave. Without completely rejecting her evidence, the judge noted in para. 69, “I got the impression that there was some resentment of the plaintiff on the part of Doreen Ross”. I also note that the statement does not support a denial of Ms. Blake’s interest in the Malahat: obviously she would have had to leave if the property were sold.
[62] The judge accepted the evidence of Ron Blake, a witness of “unimpeachable credibility” (para. 70), who testified that Isabel Wells told him that Ms. Blake would be taken care of if the Malahat were sold or the parties were unable to continue to live on it. Mr. Blake said: “[i]f both of them had to leave the Malahat, they'd be taken care of. I don't know what it meant, but that's the statement”. Mr. Hallberg also testified that Isabel Wells had stated Ms. Blake would be taken care of. The judge did not refer to Mr. Hallberg’s evidence on the point, but generally expressed concern with his credibility.
[63] The judge then considered wills made previously by Isabel Wells.
[64] In paras. 72–74 the judge described the wills as follows:
· 1989 after her husband died – Lot 111 to Rowan, provided that if Rowan predeceased her, Lot 111 went to his son, “subject to a life interest in [Ms. Blake] provided [she] pay all of the taxes and other costs associated with occupation of Lot 111" (para. 72);
· November 15, 1993 after Rowan died – Lot 111 to Doreen Ross, subject to a life interest in favour of Ms. Blake on the same terms as the 1989 will; if Ms. Blake were to decide not to live on Lot 111, she would receive 12 percent of the fair market value of Lot 111 (para. 73);
· November 30, a second 1993 will – Lot 111 to Doreen Ross subject to a life interest in favour of Ms. Blake, subject to her “paying one-half of the taxes associated with the property but all of the costs of keeping the house in which [she] lived in good repair”; the same 12 percent proviso was included (para. 74).
[65] In para. 75, he noted Ms. Blake’s position that the 1993 wills of Isabel Wells “establish a baseline, at least in the eyes of Isabel Wells, of [Ms. Blake’s] entitlement”. He commented in para. 75 Ms. Blake had no knowledge of the making of these wills. The judge considered the 1993 wills “demonstrated a genuine attempt by Isabel Wells to recognize [Ms. Blake’s] expectations at that time, and that is that [she] had “earned” a right to occupy her home as long as she wished” (para. 79). I do not share that conclusion. In my view, the judge overstated the interest left to Ms. Blake in these wills.
[66] The wills in fact provided:
· 1989 – Lot 111 was left to Rowan, provided that if Rowan predeceased her, it would pass to his son, who was “to hold the dwelling house including the parcel or parcels of land upon which the same is situate, and to permit [Ms. Blake], to have her personal use and occupation and enjoyment thereof as her place of residence during her life….” It was the express wish of Isabel Wells that Lot 111 “not be sold but remain in the family”. The residue was divided into six shares, none of which went to Ms. Blake;
· November 15,1993 - Lot 111 to Doreen Ross, provided that if Doreen predeceased Isabel, Lot 111 went to Doreen’s children, who were “to permit [Ms. Blake] to have the personal use and occupation of the house she is currently living in as her place of residence during her life”; Ms. Blake was obliged to pay certain expenses of the whole property; if Ms. Blake were to decide not to live on Lot 111, she would receive 12 percent of the fair market value of Lot 111. The residue was divided into six shares, none of which went to Ms. Blake;
· November 30, 1993 – to the same effect as the first 1993 will, but Ms. Blake’s contingent life interest was subject to her “paying one-half of the taxes associated with the property but all of the costs of keeping the house in which [she] lived in good repair”; the same 12 percent and share of the residue provisos were included (para. 74).
[67] The last will of Isabel Wells, which was not part of the appeal record, was made on April 28, 2002. She left Lot 111 to Doreen Ross and divided the residue of her estate into seven shares, one of which was left to Ms. Blake.
[68] In my view, reliance on the previous wills of Isabel Wells is problematic. As the judge noted in para. 80, there can be any number of reasons why a testator might leave an interest in property to a beneficiary – “partial recognition of the money and effort put into the construction of the Rowan/Patricia Wells’ house to that point, it may have been no more than Isabel Wells’ attempt to recognize a long-term common law relationship that had turned into a marriage shortly before Rowan Wells’ death, or it may have been a combination of factors”.
[69] In addition, the judge appears to have misconstrued the previous wills. In all of them the life interest left to Ms. Blake was contingent. At the time of the 1989 will she was in a long-term relationship with the direct beneficiary of Lot 111, Rowan Wells, but her interest vested only if Rowan Wells predeceased Isabel Wells. The 1993 will left the property to Doreen Ross. Again, Ms. Blake’s interest vested only if Doreen Ross predeceased Isabel Wells. If Doreen Ross survived Isabel Wells, Ms. Blake got nothing.
[70] It follows from my interpretation of the wills that I do not share Ms. Blake’s view of her “baseline” entitlement. In my view, the expression of Isabel Wells’ wishes through her statements and previous wills cannot support an inference that she considered Ms. Blake to have an entitlement to an interest in the Malahat. They do reflect some intention to “take care of” Ms. Blake. I would go no further than to conclude that as a result of her contribution to the Malahat and to the ability of Isabel Wells to remain there, the reasonable mutual expectation of the parties was that Ms. Blake would be “taken care of”. On this basis, I am satisfied that the judge was correct in concluding Ms. Blake established the elements necessary to find unjust enrichment.
Remedy
[71] In para. 81, the judge stated Ms. Blake had a right to an interest in the Malahat. He concluded she had established the elements of unjust enrichment in para. 82 and then turned to remedy. In para. 91 he found there was a link between Ms. Blake’s contribution and the property in which she claimed a constructive trust, but held in para. 92 that an appropriate remedy was a monetary award of $250,000. I agree with the judge’s conclusion that a monetary award was appropriate in the circumstances of this case, but in my view, that sum is excessive.
[72] Madam Justice McLachlin (as she then was) in Peter v. Beblow stated that the “value received” approach is appropriate for a monetary award (at 999). Cory J. described the approach at 1025:
. . . The first method is based upon the value received. This can be thought of as quantum meruit, that is the amount the defendant would have had to pay for the services on a purely business basis to any other person doing the work that was provided by the claimant. . . .
[73] The core of the judge’s determination of benefit was his conclusion that, but for the efforts and money expended by Ms. Blake, Isabel Wells would have had to pay someone else or leave the property. The judge found Ms. Blake paid Mr. Hallberg $2,500 annually for eight years. That totals $20,000. He also concluded that Ms. Blake expended a considerable amount of effort on the property, although not as much as she alleged. He stated Ron Blake put more effort into the property than Ms. Blake, but concluded Ms. Blake was entitled to some credit for introducing Ron Blake to the Malahat. I have stated I agree with him doing so.
[74] Although the judge found that the Rowan Wells/Patricia Blake house on Lot 111 was of questionable benefit to the estate, he recognized some rental potential (para. 90).
[75] This Court in Thomas v. Fenton, 2006 BCCA 229, 57 B.C.L.R. (4th) 204, 269 D.L.R. (4th) 376 held that consideration of unjust enrichment requires a “global analysis of the circumstances of [the] parties” (para. 25).
[76] Ms. Blake is entitled to one-seventh of the residue of the estate which was calculated to be approximately $300,000 before the onset of this litigation. That equalled approximately $42,800. There was evidence that the market value of Ms. Blake’s residence was between $150,000 and $350,000. There also was evidence that Lot 111 was valued at approximately $1.2 million.
[77] Assessing damages in the circumstances of a case like this cannot be precise. An expectation to be taken care of is highly subjective and dependent on the circumstances of the parties. The appellants contend that an award of $40,000 would amply compensate Ms. Blake. In my view, that sum would not take into account all of the factors of benefit to the estate of Isabel Wells or reflect an expectation that Ms. Blake would be taken care of. Considering that Ms. Blake is entitled to a sum reflecting the expectation that she would be taken care of, I would assess her recovery at $125,000 in addition to the one-seventh interest she has in the residue of the estate.
Cross-appeal
[78] My conclusion that the reasonable expectations of Isabel Wells and Ms. Blake were not that she was to have an interest in the Malahat but that she was entitled to be taken care of disposes of her cross-appeal seeking a constructive trust. Even if I were not to have reached the conclusion I did, I would agree with the trial judge’s decision to award damages rather than a constructive trust.
[79] A finding that a plaintiff is entitled to an interest in land does not lead automatically to the imposition of a constructive trust. It is but one remedy to redress an unjust enrichment and will be ordered only in appropriate circumstances (Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574 at 674-679). It is clear from the comments of the Supreme Court of Canada in Peter v. Beblow that the first step in determining a remedy is to decide whether a monetary award is sufficient. Only if it were not should recourse be had to a constructive trust (at 997).
[80] By cross-appeal, Ms. Blake sought an increase in the sum awarded to her. My conclusion on the appropriate amount to reflect the expectation that she would be taken care of disposes of this issue.
Conclusion
[81] I would allow this appeal to the extent of ordering the estate of Isabel Wells to pay to Ms. Blake $125,000 arising out of the unjust enrichment of the estate and would dismiss the cross-appeal.
“The Honourable Mr. Justice Chiasson”
I agree:
“The Honourable Chief Justice Finch”
I agree:
“The Honourable Madam Justice Ryan”