Date of Release: April 11, 1996 No. 08350 Nanaimo Registry IN THE SUPREME COURT OF BRITISH COLUMBIA ) BETWEEN: ) ) LINDA LORETTA BOOMHOWER )REASONS FOR JUDGMENT ) PLAINTIFF) )OF THE HONOURABLE AND: ) ) RONALD DALE KALICUM )MR. JUSTICE R.M.J. HUTCHINSON ) DEFENDANT) ) Counsel for the Plaintiff: Leonard E. Krog Counsel for the Defendant: Sheila M. Anderson Dates and Place of Trial: February 5, 6, 7 8 and 9, 1996 at Nanaimo, B.C. 1 The plaintiff and the defendant lived together as husband and wife from April 1987 to July 1994; they never married. A child of the relationship, Derrick, was born on April 8, 1992. The plaintiff (mother) seeks permanent custody of the child, defined access for the defendant (father), maintenance for herself and the child and a monetary award based on the equitable principles of unjust enrichment. 2 The plaintiff was a waitress when she met the defendant. She is now 40 years old and has a Grade 12 education, but no specialized skills other than those acquired raising a child and working as a clerk and a waitress. The defendant owns all the shares in a company, Kalicum Drilling Ltd.; he operates this company which drills water wells in the central Vancouver Island area. The company was started by the defendant in December 1980 and now has four employees. The defendant is 41 years old and has built up a successful enterprise, though in the last year it has been plagued with labour problems. The Claim in Unjust Enrichment: 3 The plaintiff and defendant started to cohabit soon after they met. The plaintiff had some furniture and household goods. The defendant had just taken title to a small house on Juniper Street in Nanaimo and the parties lived there until they separated. This home was only 551 square feet but it was livable. It had no cooking stove and was heated by a woodstove. Over the years they lived there, the parties improved it. Its cost to the defendant when he purchased it was $12,500. He then spent $2,500 improving it before the plaintiff moved in. When she left, its value was $75,000. 4 The defendant continued to live in the home until recently. It is registered in his name. The plaintiff worked on the home and the efforts of both parties made it a reasonably comfortable place in which to live and raise their child. I find that, with respect to the home, the plaintiff has established the nexus between the services she rendered in improving the home, and the spousal services she rendered in the home, and the property on which she makes this claim. Her contribution was not a minor one, and was sufficiently substantial and direct as to entitle her to a share of the increased value of $60,000. She and the defendant pooled their resources and energies in improving the property and they both looked on it as their home. They shared decisions in furnishing and decorating it, and the plaintiff cleaned and tended to the inside and the outside of the home during their cohabitation. The home was the focal point of their shared aspirations. Once Derrick was born, it became the centre for this family. Because of the plaintiff's direct contribution to the home, and her spousal services to the defendant, a fair division in these circumstances would be for each to recover one-half of its increased value. I find the plaintiff is entitled to the remedy of a constructive trust regarding this property and I quantify the value of her interest at $30,000. 5 The plaintiff worked for Kalicum Drilling Ltd. in 1987 and 1988. Her wages in 1988 amounted to $11,800. She then collected unemployment insurance. I find however that she continued to work in many ways for Kalicum Drilling Ltd. She picked up parts, ran errands, answered telephone calls, wrote cheques and paid bills: much of the company's administrative work was processed from the home. She described her work as that of a "girl Friday". 6 For a short time in 1990, and for all of 1991, the plaintiff worked for Weston Bakeries. In 1991 she earned $8,700 from Weston. She left that employment as she was pregnant and has not worked for wages since the birth of Derrick. However, she continued to do some work for Kalicum Drilling Ltd., both from inside the home as well as outside the home, after Derrick's birth. This was to a lesser degree than before, as she was occupied with the child. 7 In the period that she cohabited and worked with the defendant the fortunes of Kalicum Drilling Ltd. improved considerably. For the year ending January 31, 1987, the book value of the company's assets was $67,784; in the year ending January 31, 1994, it was $343,700. Revenue in the same period rose from $239,173 to $545,301; and net income rose from a debt position of Ä($524) to $234,491. No appraisal was made of the value of the company or its shares but the defendant agreed that he estimates the value of the company has risen over that period from $150,000 to between $300,000 and $400,000. He said he would not sell it unless he could realize $750,000, but there are tax considerations which could have inflated that figure. 8 While the parties cohabited, the defendant took $4,000 per month for his wages. He says that the company is now undergoing difficulties so this year he is only taking $28,000. In the same period from 1987 to 1994, the defendant contributed $48,000 to R.R.S.P.s, which now have a value of $72,000 and his other savings are now close to $7,000. He had none when the parties started to cohabit. Kalicum Drilling Ltd. bought a Honda Accord in 1993 and this vehicle has been used exclusively by the plaintiff. It has a present value of $16,000. 9 Kalicum Drilling Ltd. has now hired an office manager who does some of the work previously handled by the plaintiff. That person is paid $2,500 per month. In the years from 1989 to 1994 the plaintiff received no income from Kalicum Drilling Ltd. and her only source of revenue from 1992 on has been the defendant. When she entered the relationship, she had savings of $1,000 and when she left, she had $3,000. She brought a vehicle into the relationship which was sold for $2,000. She kept that sum. 10 The plaintiff's direct contribution to Kalicum Drilling Ltd. has enriched the defendant. Furthermore, her spousal services to the defendant, which were given without compensation, enabled the defendant to devote his energies to improving the company's fortunes. She had a reasonable expectation of sharing the wealth that she was helping to create. There is no juristic reason for the enrichment. There has been a corresponding deprivation to the plaintiff. Her claim meets the test propounded in Peter v. Beblow, [1993] 1 S.C.R. 980 at 987; (1993), 77 B.C.L.R. (2d) 1. 11 I find that in 1989, 1990 and 1991, the value of the plaintiff's services to the company was in the neighbourhood of $12,000 per year, totalling $36,000 for the three years she received no remuneration but continued to provide her services to the company. In 1992, 1993 and until July 1994, she continued to provide services to the company on a diminished scale. I place a value to the company for these unremunerated services for that period at $15,000. The defendant was enriched by these services as they contributed to the financial health of the company and enhanced the value of its shares which he owns. 12 In addition, the plaintiff provided spousal services by keeping the home, cooking meals and attending to the defendant's needs, which in turn permitted him to devote more of his time and energy to the affairs of his business. This contribution is unquantifiable, but was a real one, and should also be taken into account when assessing whether she is entitled to the remedy of unjust enrichment. 13 In Peter v. Beblow, supra, McLachlin J. said at p. 12 (B.C.L.R.): In Canada the concept of the constructive trust has been used as a vehicle for compensating for unjust enrichment in appropriate cases. The constructive trust, based on analogy to the formal trust of traditional equity, is a proprietary concept. The plaintiff is found to have an interest in the property. A finding that a plaintiff is entitled to a remedy for unjust enrichment does not imply that there is a constructive trust. As I wrote in Rawluk, supra, for a constructive trust to arise, the plaintiff must establish a direct link to the property which is the subject of the trust by reason of the plaintiff's contribution. This is the notion underlying the constructive trust in Pettkus v. Becker, supra, and Sorochan v. Sorochan, supra, as I understand those cases. It was also affirmed by La Forest J. in Lac Minerals, supra. 14 In this case the plaintiff has established a direct link to the company and she worked for the company without compensation except for one year. In this case I am satisfied that a monetary award is appropriate respecting the company. McLachlin J. said in Peter v. Beblow at p. 13: Where a monetary award is sufficient, there is no need for a constructive trust. Where a monetary award is insufficient in a family situation, this is usually related to the fact the claimant's efforts have given her a special link to the property, in which case a constructive trust arises. and, at p. 14: To summarize, it seems to me that the first step in determining the proper remedy for unjust enrichment is to determine whether a monetary award is insufficient and whether the nexus between the contribution and the property described in Pettkus v. Becker has been made out. If these questions are answered in the affirmative the plaintiff is entitled to the proprietary remedy of constructive trust. In looking at whether a monetary award is insufficient the court may take into account the probability of the award's being paid as well as the special interest in the property acquired by the contributions. 15 For a monetary award, the value received is the appropriate measure, and so in considering the quantum I must look, not only at the value of the plaintiff's services, but also the extent to which those services benefitted the company. It is a greater amount than what she would have earned were she paid. Taking all the above factors into account, I assess her claim against the defendant for the benefits his company received at $75,000. 16 The property has been vacated by the defendant and has depreciated in value as a result. The defendant is presently living with his parents and is likely to sell the house. Had he remained in the house, it is probable it would have held its value. I conclude that a monetary award for the plaintiff's interest in the house would also be the most satisfactory solution for both parties. 17 The plaintiff will then recover $105,000 for her interest in those assets. The defendant will cause the company to transfer the Honda to her and this will represent a payment of $16,000 towards the total recovery, leaving $89,000 to be paid. Interest will be paid on the sum of $89,000 from January 10, 1995, the date of the issue of the writ which I find is sufficient time after the separation to determine whether the separation was final. The parties had separated for a short period once before in 1992. Maintenance: 18 The defendant is paying the plaintiff $600 per month for the maintenance of Derrick and $800 per month for the maintenance of the plaintiff, pursuant to an order made on July 28, 1995. The plaintiff could work for a few hours a week to supplement her maintenance but has chosen not to do so. She has been able to live at a modest level on the income she receives, together with a tax credit of $102.00. She indicates she has encroached on her savings and cannot provide for the child in the manner she would like. 19 When the parties cohabited they lived frugally, and the defendant did not provide maintenance for some months after they separated. The defendant can afford to pay more, though his capacity to do so will be affected by the order made to pay the plaintiff $89,000. Once the plaintiff's debts have been paid, including the cost of this litigation, she will have a capital sum to invest which can yield a monthly income. Furthermore, the plaintiff will be able to work again once her son is in school. Her decision not to work until then is a reasonable one, though I am satisfied she could earn some money during the day caring for other children with her son, or putting to use her other skills. Her plans in the long term are vague but do not include returning to be a waitress. 20 For the present, taking into account the income she will receive from her capital, I find a reasonable figure for her support is $600. The maintenance for Derrick will continue at $600 per month, making a total of $1,200. In addition, the defendant will maintain medical and dental insurance coverage on Derrick and the plaintiff and will pay one-half of the medical, dental and prescription expenses incurred by Derrick. Custody and Access: 21 Counsel, at the inception of the trial, informed me that the issue of custody would be set over. The plaintiff has had day-to- day care of Derrick since the separation. She has an apartment in which she lives with him and he sees his father on a regular basis. The defendant does not have separate accommodation for Derrick since he lives with his parents and is working long hours every day. 22 The plaintiff is clean and tidy in her habits and attends assiduously to all Derrick's needs. She is perhaps overly protective and insisted on regular telephone contact with Derrick when he went on a holiday with the defendant last year. She is concerned that the defendant not drink when he has access, as she believes he is an alcoholic. The defendant does not believe the plaintiff properly attends to the child's health needs and does not have confidence in her ability to raise the child. These attitudes on the part of both parties have led to difficulties over access and, as a result, access was defined by the court. 23 During the trial I indicated to counsel that I could see no good reason for setting over the issue of custody. The mother has had de facto custody since the separation and the relationship of the parties does not justify making a joint custody award at this stage. I award custody to the plaintiff. 24 The issue of access requires to be resolved. At present, Derrick visits his father every weekend from 9:00 a.m. on Saturday to 9:00 p.m. on Sunday. He attends a nursery school on Mondays, Wednesdays and Fridays from 9:00 a.m. to 11:00 a.m. The defendant has been taking him to gym on Thursday nights and the plaintiff takes him swimming. He has an active life and the plaintiff finds there is no time set aside for him to meet with her parents and relatives who also live in Nanaimo. 25 To accommodate those needs I propose to vary access so that the defendant will have Derrick from 9:00 a.m. Saturday to 7:00 p.m. on Sunday on alternate weekends. On the other weekend, he will have Derrick from 4:00 p.m. on Friday to 4:00 p.m. on Saturday. If Derrick is to continue with gym on Thursdays, the defendant will take him in the week that his access starts on Saturday and the plaintiff will take him on the week the defendant's access is to start on Friday. The defendant will be responsible for the cost of the gym program if he wishes it to continue. 26 The plaintiff is concerned that the defendant has taken Derrick to a doctor without consulting her and that drugs have been prescribed in the past without her knowledge. If Derrick requires medical attention during an access visit, then the plaintiff is to be notified forthwith and Derrick is to be taken to his regular physician or his or her associate. I can see no good reason for the plaintiff to contact Derrick while access is being exercised and so direct that she not contact him or the defendant or his parents unless there is an emergency. 27 Regarding vacations, the defendant will have access in the summer of 1996 for 10 consecutive days and access in the summer of 1997 for two consecutive weeks (15 days) and the plaintiff will not communicate with Derrick or his father in that period. The plaintiff made numerous telephone calls to the defendant and to Derrick during the access of 1995. Derrick needs to be able to interact freely and without maternal restraints while visiting with his father and his father's family. If issues arise from this order, or there is good reason to vary this order and consent cannot be achieved, I declare myself seized of the issue of access until June 30, 1996. 28 The issue of costs may be spoken to by counsel. Signed: "Mr. Justice R.M.J. Hutchinson" Nanaimo, British Columbia April 11, 1996