Citation: Medley v. Medley Date: 19990224 1999 BCCA 0113 Docket: CA022895 Registry: Vancouver COURT OF APPEAL FOR BRITISH COLUMBIA BETWEEN: URSULA MEDLEY PLAINTIFF (RESPONDENT) AND: DOUGLAS GENE MEDLEY DEFENDANT (APPELLANT) Before: The Honourable Mr. Justice Goldie The Honourable Mr. Justice Donald The Honourable Mr. Justice Hall M. Clemens, Q.C. Counsel for the Appellant P.M. Daykin and T. Clarke Counsel for the Respondent Place and Date of Hearing Vancouver, British Columbia February 3, 1999 Place and Date of Judgment Vancouver, British Columbia February 24, 1999 Written Reasons by: The Honourable Mr. Justice Goldie Concurred in by: The Honourable Mr. Justice Donald The Honourable Mr. Justice Hall Reasons for Judgment of the Honourable Mr. Justice Goldie: [1] This is an appeal in what may fairly be termed a family law matter. [2] The parties were in a spousal relationship from 1976 to 1 August 1987 when they separated in disputed circumstances. Despite the absence of the formal indicia of marriage and divorce I shall for convenience refer to the appellant as the husband and the respondent as the wife. [3] The sole issue is the disposition of what was the matrimonial home for a period of some 17 months prior to the separation on 1 August 1987. The trial took place before Mr. Justice Parrett over a period of four days. In a 24 page judgment he thoroughly canvassed the contentions of the parties. He succinctly stated the issue: This action is one in which the plaintiffs seek relief by way of a declaration that the defendant, Douglas Gene Medley, holds his interest in a piece of real property in trust for them, together with claims for unjust enrichment and partition. As these matters arise this is a somewhat unusual claim for constructive trust. The plaintiff Ursula Medley and the defendant cohabited in a common law relationship from 1976 until 1987. In July 1985 the plaintiffs entered into an agreement to purchase property located at 2369 Kings Avenue in West Vancouver. Upon completion of the purchase the property was registered in the name of Elsa Mina Binkert (Ursula Medley's mother) as to an undivided half interest and in the names of Ursula Medley and Douglas Gene Medley as to the remaining undivided half interest. The two half interests were held as tenants in common whereas Ursula Medley and David Gene Medley held their interests vis a vis each other as joint tenants. This joint tenancy has since been severed. [4] The residence at Kings Avenue was purchased for $123,653 in 1985. At the time of the trial it had appreciated in value to $495,000. The principal issue before this Court was whether the judgment appealed from adequately recognized the husband's interest in this appreciation. [5] The value of the mother's half interest, agreed to be $247,500, is not in question in this Court. She did not appear by counsel in this Court and we were told she is no longer a party in this cause. [6] The formal order directs that the value of the husband's interest in the Kings Avenue residence is $33,691.03. By subtraction, the balance is the wife's interest. It is evident there has been an adjustment in the values of the two one- quarter interests. After a careful analysis the trial judge concluded: Ms. Medley is entitled to a lien for her disproportionate contribution against the interest of the defendant. Taking the numbers from the table previously set out it can be seen that vis-a-vis each other Ursula Medley has paid $123,161.45 and Douglas Medley has paid $26,040.50, a total of $149,201.95. Under the agreement reflected by the registered interest each was obligated to pay one half or $74,600.97. The defendant has underpaid by $48,560.47 and Ms. Medley is entitled to an offsetting lien in that amount. [7] The "table previously set out" I reproduce below. It summarizes the results of the facts the trial judge found and the law he applied: PAYMENTURSULAELSADOUGMortgage Payments 91,413.31 4,968.92 13,919.73Property Taxes 6,020.56 10,160.28 6,852.94West Van Utility Bills 2,230.33 1,950.66 83.34House Insurance 2,499.77 3,060.35 478.50Repairs/ Maintenance 17,147.48 0.00 0.00Renovations 2,850.00 108,191.13 3,705.99Purchase Price 1,000.00 30,226.79 1,000.00TOTAL$123,161.45$158,558.13$26,040.50 ("Ursula" is the wife; "Elsa" is the mother, and "Doug" is the husband.) [8] I do not propose to go into the evidence in detail. We were invited to re-try the case. That is not the function of this Court, sitting as a court of error. Mr. Justice Parrett's judgment fully records the history of the spousal relationship; the mother's contributions to the purchase of the property and to its renovation and the events which succeeded the breakup in 1987. It should be read to understand why the trial judge arrived at his conclusion. [9] In this Court the husband contended the wife had obtained an income from the rental of space in the matrimonial home for which he was entitled to an occupational rent reflecting the use of his one-quarter interest. He put that figure at $77,000 and contended he was entitled to one-half or $38,500. Additionally, he claims that upon renewal of the mortgage the principal amount was increased by $7,000 to discharge a debt owed by the wife. In total these two sums come to $45,500. The trial judge dismissed the claim for occupational rent and, with respect, I think he was correct to do so. In the view I take of this matter the increase in the mortgage upon its renewal is not a relevant factor. [10] The entered judgment provides the plaintiffs (effectively, the wife) with the option of obtaining his interest upon paying the husband the sum of $33,691.03 less the costs incurred by the wife and the mother in a foreclosure proceeding provoked by the husband's refusal to consent to the renewal of the mortgage. The latter aspect of the order below was not questioned here. Analysis [11] It will be apparent from an examination of the table reproduced above that no attempt was made to arrive at a valuation of the husband's interest other than through the process adopted by the trial judge of recognizing the wife's entitlement in full to recompense her for mortgage payments and the expense of repairs and maintenance. But, as the trial judge noted, the mortgage payments, particularly in the early years, did little more than pay interest on the loan in question. These payments protected the interests of the owners from the consequences of default but did little to enhance their equity. [12] To arrive at the respective contributions of land and improvements to the appraised value in 1996 it is instructive to note the assessed values in 1987: 1987 Assessments: Land $106,850 Improvement 64,400 Total $171,250 [13] These may be compared with the 1996 appraisal of $495,000, which used several approaches to ascertaining value. One was a cost approach with the following results: 1996 Appraisal: (cost approach) Land $385,000 Improvements replacement cost new $141,100 less: depreciation of 25% 35,275 $105,825 Additions 4,000 $109,825 Total: (indicated value by cost approach) $494,825 [14] There was an appreciation in value in the improvements between 1997 and 1996. In large measure that reflected the substantial renovations funded primarily by the mother and the inflationary trend in construction costs. [15] On the other hand the appreciation in the land which required no contribution by the owners, other than the payment of property taxes, was in the order of $278,150 over a nine year period. This suggests an average annual increase in the value of the land of $30,805 of which the owner of a one- quarter interest would receive the unearned benefit of approximately $7,700 a year. [16] In my view, having regard to the sources and character of the increase in value, the husband has some claim to benefit from this increase. But since the husband did not contribute to expenses beyond that recognized by the trial judge I would make no adjustment on account of rents received. [17] A difficulty arises because there can be no adjustment of the mother's interest nor is it possible, with the material before us, to review the adjustments as between the husband and wife in the same careful detail as did the trial judge. On the other hand, to return this cause to the trial court to obtain evidence of values in the circumstances of this case would delay an already protracted proceeding and would result in disproportionate costs to both parties. [18] For a period of some 17 months the husband made the contributions expected of him for the interest he was given in the property. Thereafter his contributions fell sharply except in respect of property taxes. I have suggested the average annual increase in a one-quarter interest in this property due to the increase in land value alone was in the order of $7,700 a year. I think justice would be done in this case if the increase in his equity was valued at $20,000. To achieve this I would allow the appeal to the extent of substituting the sum of $53,691.03 in paragraph 4 of the formal order, and to extend the period within which the option may be exercised to 120 days from the entry of the order of this Court. The wife has exercised this option to the extent of $33,691.03. [19] The husband made an application to adduce evidence of circumstances he said were relevant to his departure from the Kings Avenue residence on 1 August 1987. The evidence was not recent nor was it conclusive as to the husband's contention that he was ousted from the matrimonial home. I would dismiss that application. [20] As success was divided on this appeal, I would allow the husband 25% of his assessed costs and the wife 75% of her assessed costs, the one to be set off against the other. I would not disturb the order for costs in the court below. "The Honourable Mr. Justice Goldie" I AGREE: "The Honourable Mr. Justice Donald" I AGREE: "The Honourable Mr. Justice Hall"