Date of Release: August 16, 1996 No. C941917 Vancouver Registry IN THE SUPREME COURT OF BRITISH COLUMBIA BETWEEN: ) ) GRAHAM EDMUND WOOD ) REASONS FOR JUDGMENT ) PLAINTIFF ) ) OF ) AND: ) ) THE HONOURABLE LYNDA ISABELLA GOLD ) MR. JUSTICE MEIKLEM ) DEFENDANT ) ) Counsel for the Plaintiff: Richard P. Hamilton Counsel for the Defendant: Sandra A. Wilkinson Place and Date of Trial: Vancouver, B.C. April 15 and 16, 1996 INTRODUCTION 1 The parties lived together as common-law spouses from March 1989 to November 1993. Mr. Wood continues to reside in a home located in Maple Ridge which was purchased by them in July of 1989 and this action involves Mr. Wood's claim that Ms. Gold's registered undivided one-half interest in the home is held for him upon either an express, implied, resulting or constructive trust. 2 Although Mr. Wood's evidence goes to all the alternative pleadings, the submissions focussed primarily on the constructive trust claim on the basis that unequal economic contributions unjustly enriched the defendant. SUMMARY OF SALIENT FACTS 3 When the parties met in late 1988 Mr. Wood was separated from his previous wife and residing in their former matrimonial home which was registered in his previous wife's name and was the subject of a divorce proceeding. Ms. Gold joined Mr. Wood in this home in March of 1989 but they were forced out of it when his estranged wife obtained an order for possession. 4 In May of 1989 the parties made an offer in both their names on a house on Spring Crescent in Maple Ridge. Ms. Gold provided a $500.00 deposit cheque with the offer and the purchase agreement was concluded at a price of $129,000.00. The agreement provided that the deposit would be increased to $3,000.00 once the subject to financing condition was fulfilled and Mr. Wood provided $1,000.00 and his father Herbert Wood provided $1,500.00 to accomplish this. 5 Herbert Wood lived with the parties and provided $33,000.00 for the cash portion of the purchase price. There appears to have been no documentation in respect of this as a loan or otherwise. Mr. Wood said that his father indicated the down payment was an advance on his inheritance and the initial intention was that the offer would be made in his name and his father's name. 6 The house was registered in the name of Herbert Wood and Ms. Gold. Mr. Wood testified that there was discussion between himself and Ms. Gold and his father to the effect that Ms. Gold would hold the plaintiff's interest in trust for him so that it could not be attached in the divorce proceedings with his estranged wife. Ms. Gold agrees that the plaintiff's name was not placed on title initially because of the divorce proceedings but says that there was no discussion of her holding Mr. Wood's interest in trust. She says that his interest was held by his father who was living with them at the time and continued to do so for another year subsequent to the purchase. 7 Mr. Wood's version is inconsistent with the contract of purchase and sale and it is implausible that he would select Ms. Gold as a trustee of his beneficial interest rather than his father in the circumstances. I accept Ms. Gold's evidence on this point in preference to Mr. Woods'. 8 At the commencement of their co-habitation, Ms. Gold was employed as an office manager and controller at Coastline Auto Towing and Mr. Wood worked as a co-owner in a small video distribution company. Ms. Gold terminated her employment in December of 1990 and collected unemployment insurance for approximately one year until December 1991. In late 1991 Mr. Wood closed his video distribution business. Following the termination of her unemployment insurance benefits Ms. Gold had no reportable external income, but in April of 1992, she and Mr. Wood commenced operating a clothing store in New Westminster for cross-dressers known as "Masquerade", which she operated on a day-to-day basis from April of 1992 until the summer of 1993. Mr. Wood became more involved in the operation of the store in mid 1993 and continued to operate it by himself following the separation of the parties in November of 1993 until he found it not to be viable and closed it in July of 1995. 9 The parties did not prepare the usual bookkeeping records for "Masquerade" and although it does not appear to have generated a great deal of income, it did provide revenue which the parties applied to household and living expenses during the one year of joint operation. 10 The parties, after-tax reported incomes during the years of co-habitation were as follows: Mr. Wood Ms. Gold 1989 $ 6,172.00 1989 $28,947.00 1990 $14,380.00 1990 $23,695.00 1991 $13,433.00 1991 $12,392.00 1992 $ 4,620.00 TOTAL $65,034.00 1993 $ 8,201.00 TOTAL $46,806.00 11 The parties seemed to have enjoyed a pleasant life style including considerable travel for both business purposes and pleasure. There were frequent trips to Los Angeles and several other American destinations, and a Caribbean cruise. The above mentioned reported incomes obviously could not support that, but Mr. Wood received $25,000.00 from a life insurance policy on his wife in September 1989, the parties borrowed $40,000.00 in March of 1990 and Mr. Wood received $38,692.54 in a final settlement with his wife's estate in February 1992. In March 1993 the 1990 loan of $40,000.00 was consolidated into a new $49,000.00 loan secured by a second mortgage on the subject property and then this mortgage was paid off by Mr. Wood's father Herbert Wood shortly before his death. 12 Following the purchase of the house the mortgage payments were paid from the Royal Trust account maintained by Mr. Wood, but Ms. Gold contributed to that account from time to time. She has been able to document $800.00 paid to the Royal Trust account in December of 1989, $650.00 in May of 1990 and $1,300.00 in November of 1990. The plaintiff's evidence is that he made the majority of mortgage payments, and this is probably correct. Ms. Gold did deposit money to a joint account at the Royal Bank, and her credit cards were utilized extensively. 13 Ms. Gold was the billed party for B. C. Hydro service on the Maple Ridge home and she has documented payment of those accounts for the 1990 year. 14 Upon Herbert Wood's death the undivided one-half interest in the home that he held devolved to the plaintiff as his sole heir. The appraised value of the home as of July 1995 was $188,000.00. 15 The parties seem to be in agreement that there was a more or less equal division of labour and effort in the household although Ms. Gold suffered throughout from a chronic fatigue syndrome and occasionally Mr. Wood shouldered a greater share of grocery shopping and cooking. However, Ms. Gold clearly contributed nearly all of the work involved in operating the Masquerade business in New Westminster from April 1992 until mid 1993. 16 On my review of the evidence I conclude that during their period of co-habitation these parties were very generous with each other and thoroughly merged their incomes and shared equally in the expenditure of same and the enjoyment of their joint life style and the fruits of their business venture. 17 The residual assets of Masquerade held by Mr. Wood are valued by him at $5,500.00. ARGUMENTS OF THE PARTIES 18 The parties agree that the case should be decided in accordance with the principles set out in Peter v. Beblow, (1993) 44 R.F.L. (3d) 329 Supreme Court of Canada. 19 The plaintiff argues that any interest in the subject property to which Ms. Gold might otherwise be entitled should be offset by the life-style benefits received by her during the course of this relatively brief common-law marriage and that it would be unjust for her to retain any part of the one-half interest registered in her name. 20 The defendant agrees that unjust enrichment principles should be employed to bring fairness but that the plaintiff's case should be dismissed because the deprivation was not his but rather his fathers'. She counterclaims for a one hundred percent interest in $5,500.00 worth of assets remaining from Masquerade on the basis of her disproportionate contribution to that business and the plaintiff's unilateral action in disposing of the business. 21 The defendant has requested that if there is a finding of unjust enrichment the remedy should be a declaration of interest rather than a monetary award. This position coincides with the remedy sought by the plaintiff. ANALYSIS 22 In assessing enrichment and deprivation this case provides some difficulties arising out of the incompletness of the evidence. In particular it becomes difficult to value Ms. Gold's unsalaried fourteen months of work at Masquerade due to the absence of proper records of account. Mr. Wood concedes some household and living expenses were supported by that business during that period of time. I will resolve the valuation dilemma by seizing upon the defendant's submission in support of the counterclaim that 100% of the $5,500.00 worth of Masquerade assets should be declared hers as compensation for her extra effort, and I will assign $5,500.00 as the value of that component of her contributions, being her services over and above those matched by Mr. Wood. 23 I have already commented on the near equality of contributions to domestic duties. Apart from the work at Masquerade that I have now quantified, any enrichment or deprivation that has occurred here is as a result of disproportionate monetary contribution. It does not appear that either party acquired separate assets of significance during their co-habitation and in these circumstances, the relative contributions can be found to be directly proportionate to their relative incomes from employment and other sources, which in Mr. Wood's case includes life insurance proceeds, proceeds of his litigation settlement and, he argues, the advances on inheritance from his father which include the $33,000.00 down payment on the home and $50,000.00 paid to discharge the second mortgage. 24 I accept the plaintiff's argument that his father's contribution to this property represents a deprivation to him as he was in fact the only child and was sole beneficiary of his father's estate, which was still solvent upon his demise. 25 The reported income figures I have set out provide the only sound basis on the evidence for determining the relative proportionate monetary contributions of each of the parties. Mr. Wood's monetary contributions, including life insurance, estate settlements and inheritance advances totalled approximately $193,500.00. Ms. Gold's monetary contributions including reported income and the deemed value of her extra work at Masquerade totalled approximately $70,500.00 (I note that Mr. Wood used approximately $10,000.00 of the September 1989 life insurance payment for a Thunderbird automobile, but this was offset by the fact that he also at that time paid some of Ms. Gold's separate debts and by the fact that Ms. Gold's car loan was paid off in the sum of $4,276.90 from the March 1990 loan). Their combined contributions were approximately $264,000.00. 26 The present situation of the parties therefore is that they each are registered owner of a half interest in the home with an equity that has captured approximately $100,000.00 of the total contributed funds and they have shared equally in the dissipation of about $164,000.00. Ms. Gold has contributed approximately 1/4 and received approximately 1/2 whereas Mr. Wood has contributed approximately 3/4 and received about 1/2 (plus the residual business assets). I conclude therefore that there has been an enrichment of Ms. Gold and corresponding deprivation of Mr. Wood. I am also satisfied there is no juristic reason in this case to allow Ms. Gold to retain the benefit of the enrichment. DECISION 27 The position of the parties makes it unnecessary to consider the adequacy of monetary compensation, so the remedy shall take the form of a declaration that the plaintiff is entitled to an undivided 3/4 interest in the Maple Ridge home and the remaining assets of Masquerade and the defendant is entitled to a 1/4 interest in each. Orders to implement this decision might take various forms, one of which is a declaration that the defendant holds a 1/2 interest of her undivided l/2 interest in the home in trust for the plaintiff, and that he holds her 1/4 interest in the business assets in trust for the defendant. The parties will hopefully be able to agree on an appropriate implementation. COSTS 28 I am not sure I should conclude that the plaintiff has been substantially successful even though there is an adjustment in his favour. Counsel did not specifically address costs, and in any event, if the plaintiff recovers same they certainly should not be payable forthwith, unless Ms. Gold's interest in the home is purchased. I suggest that if either party wishes an order on costs, the issue may be spoken to. "I. C. Meiklem, J." Prince George, B.C.