Pawluk v. Pawluk Date: 19990113 1999 BCCA 0012 Docket: CA V02946 Registry: Victoria COURT OF APPEAL FOR BRITISH COLUMBIA ORAL REASONS FOR JUDGMENT: Before: THE HONOURABLE MR. JUSTICE MACFARLANE January 13, 1999 THE HONOURABLE MADAM JUSTICE NEWBURY THE HONOURABLE MADAM JUSTICE HUDDART Victoria, B.C. BETWEEN: SUSAN LORRAINE PAWLUK PLAINTIFF (RESPONDENT) AND: RONALD DENNIS PAWLUK DEFENDANT (APPELLANT) R.F. Johnston appearing for the Appellant R.H.G. Holloway appearing for the Respondent [1] MACFARLANE, J.A.: This appeal concerns a claim for an alleged constructive trust. The trial judge ruled against that remedy and concluded that the plaintiff was entitled to the whole of the proceeds of the sale of a residential property. [2] The parties were not married but lived together as husband and wife from 1975 to 1986. [3] The property in question was purchased in 1980 for about $54,000. The purchase price, including closing expenses, consisted of the following: a) $40,000 mortgage; b) $2,500 B.C. home purchase grant as a first time purchaser received by the plaintiff; and c) $12,000 from the proceeds of sale of the condominium owned by the defendant. The property was registered solely in the name of the plaintiff in order to qualify for the $2,500 grant as a first time purchaser. [4] From 1980 to 1986 the defendant paid all the expenses, including taxes, repairs, maintenance, insurance and mortgage payments, and for improvements to the property. [5] From 1986 to 1990 the plaintiff paid all such expenses. [6] In 1990 the property was sold. The sale price was about $80,000. The net sale proceeds amounted to $40,148.43. [7] By order of Scarth J. made 17 August, 1990, the sum of $17,500 out of the net proceeds was deposited in the plaintiff's solicitor's trust account to be held as security for the claims of the defendant. The balance was paid to the plaintiff. [8] On 27 August, 1991, Robinson J. ordered that the said sum of $17,500 be used to defray certain expenses for which the defendant was liable or might become liable. [9] As a result, the fund was depleted. A sum of $4,216.16 was paid on account of the fees for the defendant's solicitor. At the time of the trial it appeared that the fund had been exhausted in paying monies to the credit of the defendant. On that basis a trial judge probably would be justified in concluding that there was no unjust enrichment. It now appears that the only payment made to the credit of the defendant was the sum of $4,216.16. The other monies were expended as child support pending the trial of this action, but have not been credited to the defendant. [10] The trial judge made the following findings: [19] Upon consideration of the evidence, I make the following findings: (1) I find the reason the property was registered in the plaintiff's name was primarily to obtain the sum of $2,500 by way of the said first-time home owner's grant; (2) when the parties separated in December 1986, while I do not find there was a gift made by the defendant to the plaintiff of his interest in the property, I find his conduct at that time and thereafter is consistent with an abandonment of any interest in and responsibility for the preservation of the asset. In this perspective, I find the support which he did regularly provide until 1990 would not realistically have been sufficient for the support of both a spouse and two infant children occupying such premises. In this regard, as he stated at trial, if following their separation, she needed more by way of support, he expected her to obtain employment and to contribute that income to the support of herself, the children and maintenance of the premises which she did. I accept as well the submission of counsel for the plaintiff that it is significant that the defendant did not say at that time that he wished the property held for the interests of the children. I find it was only by reason of the plaintiff obtaining employment as she did during this period that she was able to maintain and preserve this asset; (3) I find that the so-called seed money for the down payment made in relation to the property, apart from the sum of $2,500 - the grant money - was contributed to in substantial part by the discharge of the plaintiff's duties as spouse and mother and maintaining the family household during the years the family lived in the condominium unit in Alberta; (4) in my view, the circumstances here do not support the establishment of a constructive trust in relation to the interest of the defendant in the subject property based upon his providing of the "seed money" and the contribution made to enhance its value. [20] Section 43 of the Family Relations Act requires that the assets under consideration be divided equally subject, however, to re-apportionment pursuant to Section 51. Section 51 is predicated upon the basis of equal apportionment unless such an apportionment would be unfair. [21] The word "unfair" is not defined. There is no criteria regarding the fixing of appropriate shares when the decision has been made to re-distribute. What is unfair appears to be dependent upon the circumstances in the given case with the assistance of the factors set out in Section 51. [22] The circumstances here may be fairly described as unusual. [23] Having regard to the balancing of the appropriate factors, I consider under the provisions of Section 51 the plaintiff should be entitled to all the subject property which, in the circumstances here, are the net proceeds upon the sale of the property. [11] Counsel both agree that the Family Relations Act does not apply, for the reasons stated by the plaintiff in her factum: 1. The provisions in the Family Relations Act, R.S.B.C. 1979, c.121, as amended (now Family Relations Act, R.S.B.C. 1996, c.128), dealing with Part 3, the division of property, (now Part 5) and Part 3.1, the division of pensions (now Part 6) apply only to spouses as defined in the Act. 2. The definition of spouse excludes "Common Law" couples from the operation of Part 3, the division of property and Part 3.1, the division of pensions. 3. The parties are not spouses as defined in the Family Relations Act for the purposes of the division of property (Part 3) and the division of pensions (Part 3.1) under the Family Relations Act because they were not married. [12] Counsel ask that we do not remit the matter to the trial court but decide on the basis of the record whether an appropriate equitable remedy should be provided. [13] The defendant submits that the plaintiff was unjustly enriched by contributions that he made, that he suffered a corresponding deprivation by not being compensated for those contributions, and that there is no juristic reason for the enrichment. [14] The plaintiff submits that the trial judge was correct in holding the contribution of the plaintiff, both financially and by way of child raising and homemaking, outweighed the contribution of the defendant to the extent that the plaintiff was not unjustly enriched, and the defendant did not suffer deprivation. [15] Both parties acknowledge that the defendant did not give his interest to the plaintiff, and the registration was a matter of convenience. [16] The contributions of the parties to the property may be summarized as follows: The plaintiff (a) made contributions by discharge of domestic duties during the years the family lived in Mr. Pawluk's condominium; (b) used her status as a first time home buyer to apply for a $2,500 grant; (c) performed domestic duties from 1980 to 1986 (6« years); and (d) paid expenses related to the property, including the mortgage and property taxes from December 1986 to December 1990 (4 years). The defendant (a) paid $12,000 from the sale of a condominium which the defendant owned prior to the parties' relationship, less the plaintiff's contribution to that asset by performance of domestic duties; (b) paid expenses related to the property, including the mortgage and property taxes from 1980 to December 1986 (6« years); and (c) paid to the plaintiff $1,516 per month from 1987 to 1990 (4 years). [17] On the basis of the facts as I now understand them, I am persuaded the plaintiff would be unjustly enriched if she was allowed to retain 100% of the net proceeds from the sale of the property, that there would be a corresponding deprivation to the defendant, with no juristic reason for the enrichment. In my opinion these facts justify an equitable remedy. It is not appropriate to impose a constructive trust because, by agreement of the parties, the monies which otherwise would have been trust monies were applied as child support pending the trial of this action. In short, there is no existing corpus upon which to impose a constructive trust. In my view, the appropriate remedy is a monetary award. [18] The plaintiff submits that the mathematical approach in Harrison v. Kalinoch 90 B.C.L.R. (2d) 273 at 281 should be applied here to determine the amount of a monetary award. It became clear during argument that such an approach would not be appropriate. It is impossible, on the evidence in this case, to accurately assess and mathematically calculate the value of the respective contributions of the parties to the property. When the property was sold an amount to secure the defendant's claim had to be determined and it was thought that $17,500 was an appropriate figure. In broad terms, that appears to have been a fair estimate of the value of the defendant's interest in the property considering the value of the plaintiff's domestic duties. [19] As indicated above, the defendant received a benefit of $4,216.16. Notionally, a balance of $13,284 should now stand to his credit. [20] I would allow the appeal and order that the plaintiff pay to the defendant the sum of $13,284 to satisfy the defendant's interest in the property. No Court Order Interest is payable because of the use made of the funds pending trial. [21] I would order that the costs of the appeal be taxed, and each party bear one half of those costs. NEWBURY, J.A.: I agree. HUDDART, J.A.: I agree. MACFARLANE, J.A.: The appeal is allowed accordingly. "The Honourable Mr. Justice Macfarlane"