Date: 19970220 Docket: 4822 Registry: Cranbrook IN THE SUPREME COURT OF BRITISH COLUMBIA BETWEEN: KIM AGNES LAZARK PLAINTIFF AND: DAVID WILLIAM BELCHER DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE MR. JUSTICE MELNICK Counsel for the Plaintiff: Randall A. Levine Counsel for the Defendant: Ron Buddenhagen Dates and Place of Trial: January 20-24, 1997 Cranbrook, B.C. [1] Kim Agnes Lazark, who lived in a common-law relationship with David William Belcher for many years, now claims an interest in certain real property owned by him pursuant to an express, resulting or constructive trust. Alternatively, she advances a claim in quantum meruit. I. Analysis: [2] Ms. Lazark and Mr. Belcher met in October 1978 and almost immediately started living together in a common-law relationship. At the time, she was 18, he was 17. He left school after the ninth grade to work in the logging industry. She had completed high school. [3] At first, they lived in rented accommodation. After a short time, they moved into a trailer with rudimentary facilities located on the farm property north of Canal Flats which is the subject of this litigation. At the time, the property was owned by Mr. Lorne Belcher, Mr. Belcher's father. For a couple of years they lived in the trailer in the spring, summer and fall, moving to other accommodation for the winter. In 1980, with the consent of Mr. Lorne Belcher, they constructed what was, essentially, a basement on the farm, living in it for some time. [4] In 1983, Mr. Belcher's parents asked if they wished to live in a cabin or shack on the property (formerly occupied by Mr. Belcher's sister and her husband). Mr. Lorne Belcher had a number of cattle on the property and wished to have someone resident on the farm to look after things, including the cattle. Ms. Lazark and Mr. Belcher agreed to do this. They continued to reside in the shack until their separation in 1993, although this was broken from time to time with their living in Parson while Mr. Belcher was working at a mine near there. [5] Sometime during 1984 to 1986, Mr. Lorne Belcher decided that he was tired of the responsibility of owning the farm and the financial losses he incurred from it, and let Mr. Belcher know that if he was interested in buying the farm, he would sell it to him. When the approach was initially made, Mr. Belcher was still logging and did not have the level of income necessary to buy the farm from his father. However, by 1987, he felt that he was in a position to do so. Thus, in 1988, Mr. Lorne Belcher sold the farm (which he had originally bought from his own father) to Mr. Belcher. [6] Various negotiations took place between Mr. Belcher and his father at the farm, for some of which Ms. Lazark was present. She says that she took part in the negotiations, although Mr. Lorne Belcher indicated in his evidence that, although she was present, her participation was not welcomed by him and his son as he did not regard her as a party to the transaction. [7] Ms. Lazark says that she signed the original, handwritten memorandum of agreement entered into between Mr. Lorne Belcher and Mr. Belcher, but Mr. Lorne Belcher maintains that she signed only as a witness. It was agreed that one of the original terms was that Mr. Belcher would carry an insurance policy on his life in the amount of $100,000 made payable to his father in the event of his death. This was to ensure that his father was paid for the farm if he should die and to permit him to leave the property to whomever he wished in his will. This insurance was only maintained for one year after the agreement was ultimately finalized because, said Mr. Belcher, he could not afford to pay the premium. [8] Ms. Lazark also maintained that there was an agreement whereby, should Mr. Belcher die, she would be able to continue the payments on the property and keep the farm for herself. This was stoutly denied by both Mr. Belcher and his father. Such a provision would be, I conclude, inconsistent with the requirement to place a life insurance policy. [9] I have no doubt that Mr. Belcher and his father negotiated an agreement which was intended to provide title to the farm only to Mr. Belcher. On a balance of probabilities, I am satisfied that there was no agreement between Ms. Lazark and Mr. Belcher by way of an express trust whereby he took title to the farm on behalf of them both. [10] Nor was there the element of a common intention to acquire or own the property which is one of the required elements to establish a resulting trust (see Pettkus v. Becker (1980), 19 R.F.L. (2d) 165 (S.C.C.) at pp. 174-177). Ms. Lazark did say that "they" planned on buying the farm, but the evidence falls short of establishing that Mr. Belcher shared that view. [11] I then turn to a consideration of Ms. Lazark's claim for a constructive trust by way of the unjust enrichment of Mr. Belcher. [12] In Dixon v. Adams (23 October, 1996) Cranbrook 5071 (B.C.S.C.), I reviewed the principles of law applicable to a claim for constructive trust by way of an unjust enrichment: The law relating to the claim by a common-law spouse for compensation for unjust enrichment and for an interest in property owned by the other is expressed in the decisions of the Supreme Court of Canada in Pettkus v. Becker, [1980] 2 S.C.R. 834; Sorochan v. Sorochan, [1986] 2 S.C.R. 38, 29 D.L.R. (4th) 1; and Peter v. Beblow, [1993] 1 S.C.R. 980, 77 B.C.L.R. (2d) 1. I need not set out the ratios of those cases in detail here. All of these cases involved relationships where the common-law husband was the breadwinner and the common-law wife was financially dependent upon him. ... In Ford v. Werden (11 July, 1996), Vancouver CA19795, Madam Justice Newbury of our Court of Appeal reviewed the applicable principles at pp. 8-15. Her Ladyship reminds us that the mere fact that two parties have a common-law relationship is not sufficient in itself to demonstrate an unjust enrichment (p. 17). If there is an unjust enrichment, the next question is what should the proper remedy be. Specifically, a constructive trust should only be awarded if monetary compensation is inadequate and there is a link between the services rendered and the property in which the trust is claimed (see Peter at p. 13). In determining whether a monetary judgment is adequate, the court may consider the probability of the award's being paid (see Peter at pp. 14-15). Also, there is a sufficient link between the services rendered and the property in which the trust is claimed if the plaintiff's contribution related to the acquisition, preservation, maintenance or improvement of the property (see Sorochan at p. 10 of D.L.R.). Finally, if a constructive trust is appropriate, the court must determine the extent of the trust by ascertaining the portion of the property that is attributable to the plaintiff's efforts, i.e., the "value survived" approach (see Peter at pp. 14-15). In performing this calculation, the court need not be absolutely precise. As Mr. Justice Taylor noted in Harrison v. Kalinocha (1994), 1 R.F.L. (4th) 313 (B.C.C.A.) at pp. 320-1, judges only need to do the best they can on the basis of the evidence put before them, taking judicial notice of those things which are common knowledge with respect to the realities of spousal relationships and the property and financial markets. [13] To find an unjust enrichment, I must be satisfied of three requirements: (a) the enrichment of Mr. Belcher; (b) a corresponding deprivation of Ms. Lazark; and (c) the absence of any juristic reason for the enrichment. [14] Throughout their relationship, the parties lived, essentially, as man and wife, although each owned his or her own motor vehicle and, except for the first year or two of their relationship, maintained separate bank accounts. [15] Ms. Lazark was not one to spend money on clothing or frivolities. She was content to wear used clothing and live a very frugal, basic lifestyle. When they accepted the responsibility to look after the farm in exchange for living rent free in the shack, a substantial amount of the maintenance was done by Ms. Lazark, particularly during times when Mr. Belcher was away working. [16] Mr. Belcher and his sister, Ms. Lorna Norris, did their best to portray Ms. Lazark as a very poor housekeeper who contributed very little to the maintenance of the farm. It was suggested that the work she did do could well have been done more efficiently, and to a much higher standard, and in much less time than Ms. Lazark claimed. However, other witnesses, including some called by Mr. Belcher, stressed that a lot of work was done by both Mr. Belcher and Ms. Lazark on the farm. [17] The central problem throughout most of their relationship was that both Mr. Belcher and Ms. Lazark were heavy users of alcohol and marijuana. I accept that neither one was a particularly neat person and each was content to live in circumstances that would not be acceptable to many other persons. [18] However, I do find that Ms. Lazark worked hard on the farm doing everything from chopping wood, raising animals and birds (including slaughtering and cleaning the birds) to maintaining a reasonably large garden and doing a certain amount of canning and preserving in the fall. [19] In fact, I am satisfied that even though Ms. Lazark and Mr. Belcher were doing the work on the farm in exchange for free rent, the work done by both of them put Mr. Belcher in a position to be the one first approached by Mr. Lorne Belcher with the opportunity of purchasing the farm on favourable terms. [20] I do not doubt that Mr. Lorne Belcher would never have knowingly sold the farm to Ms. Lazark. He did not particularly like her and was of the view that the relationship between his son and Ms. Lazark would not last. He was critical of the way they maintained the farm and of their lifestyle. In fairness to Mr. Lorne Belcher, he was critical of both Ms. Lazark and his son in this regard. [21] Throughout the relationship, Ms. Lazark worked in various positions outside the home from time to time. Undoubtedly, however, Mr. Belcher was the significant income earner. Although they maintained separate accounts, I am satisfied that the funds of each party were used to maintain their common lifestyle and pay their common household expenses. As unsatisfactory as it may have often been to Mr. Belcher, it was Ms. Lazark who did most of the housework, laundry and meal preparation. [22] Ms. Lazark says she saw herself as living out her life on the farm with Mr. Belcher, eventually getting married to him and having children. This somewhat flies in the face of the evidence that in 1988, Mr. Belcher suggested that they get married jointly with his brother and his fianc‚e, but Ms. Lazark was not interested in doing so at that time. Further, Ms. Lazark maintains that in 1980, Mr. Belcher proposed to her and gave her an engagement ring, although he denied that that was so, saying the ring was simply a friendship ring. If it was true that Mr. Belcher proposed to Ms. Lazark in 1980 (and for the purposes of these reasons, I do not have to decide that question) then they certainly did not, in the subsequent years, evidence much interest in proceeding with formalizing their relationship in a marriage. [23] Mr. Bruce Smith, to me a most credible witness, indicated that, on different occasions, he heard both Ms. Lazark and Mr. Belcher say that what was his was his and what was hers was hers. In cross-examination he said that he didn't know if they were referring to specific things when those statements were made or not. [24] Ultimately, the relationship of the parties came apart and they separated either in the spring or fall of 1993 (the parties differ as to when the final separation took place). [25] The farm in question comprises approximately 216 acres and is legally described as: Lot 2, DL 1065A & 4596, Kootenay District, Plan 10405 [26] Mr. Ken Yeager, an appraiser called by Ms. Lazark, gave evidence that in September 1993, the land and improvements had a value of $305,000. He said that presently, the land and improvements are worth $585,000. [27] Mr. Scott Frank, the appraiser for Mr. Belcher, said that in May 1996, when he did his appraisal, he found the farm to have a value of $175,000. [28] Mr. Lorne Belcher was of the view that, although he would have asked $225,000 had he listed the property on the open market, at the time it was sold to Mr. Belcher, the purchase price of $100,000 was fair market value. I accept that that was so and I also accept that, at the time of separation in 1993, a reasonable and fair market value for the land and very modest improvements was $175,000. [29] Mr. Yeager's appraisal is, I find, coloured by erroneous assumptions such as that the property contained approximately 100 acres of cultured (planted) Christmas trees and a like acreage of merchantable timber. The property contained no cultured Christmas trees (although there were a number of acres of natural trees that had been pruned and developed for harvesting as Christmas trees) and the remaining merchantable timber may have amounted to 10 or 20 acres. Further, Mr. Yeager's assumptions were based on developing the property as recreational land, perhaps for a golf course. He provided no information as to the profitability of golf courses in that area, nor the costs of development. In any event, at the present time, the farm is within the agricultural land reserve. Although one can be critical of a few of Mr. Frank's comparables, on the whole, I conclude that his estimate is much more realistic. It may well be, of course, that inasmuch as the property was sold for $100,000 in 1988 and $175,000 is the value effective May 1996, a value for the spring or fall of 1993 would have been somewhere in between. However, I do not have any evidence before me on which to extrapolate such a figure. [30] Other than the rather significant sums that these two individuals spent on alcohol and drugs, I find that their long- term, common-law relationship was like many such relationships where the husband is the significant breadwinner, the wife also contributes income from occasional employment and, as well, provides most of the housekeeping or "spousal services". It is true that, for certain portions of her contributions, such as helping with the harvesting of Christmas trees or helping organize and run the "mud bogs" which were held on the farm from 1988 through to 1992, she was paid an hourly wage for her time. However, as I stated earlier in these reasons, the "spousal services" provided by Ms. Lazark, as well as her work in maintaining the cattle and making significant contributions to the farm maintenance as well, helped to put Mr. Belcher into the position where he was able to have the opportunity to purchase the farm. It was clear from the evidence that neither Mr. Belcher nor Ms. Lazark were model farm operators. But they both contributed to the enterprise before and after the purchase of the farm. [31] There is no evidence that, as a consequence of her commitment to the relationship, Ms. Lazark was deprived of the opportunity to better herself in higher education or employment. However, undoubtedly, had she not been maintaining the farm property, she was capable of being otherwise gainfully employed (and was during certain portions of these years). [32] However, on all of the evidence, I am satisfied that Ms. Lazark's contributions to her relationship with Mr. Belcher over the 15 year period enriched Mr. Belcher although she, too, received enrichment from Mr. Belcher. I do find that, given the long-term relationship between the parties that was tantamount to a spousal relationship, Ms. Lazark was correspondingly deprived. [33] I also find that there was no obligation existing between Mr. Belcher and Ms. Lazark which would justify the unjust enrichment, and thus there are no juristic reasons for the enrichment. Consequently, I find that Mr. Belcher was unjustly enriched by Ms. Lazark. [34] Ms. Lazark claims a 50 percent interest in the farm by way of constructive trust. Undoubtedly, her contributions had a sufficient link to the farm property. [35] However, the significant reason why Mr. Belcher was able to buy the property was because his father wished it to stay in the family and decided to give him the first opportunity to purchase it. His father also sold it to him on very favourable terms, including a mortgage for all but $4,500 of the purchase price payable without interest. Neither can it be said that Ms. Lazark's contributions were a major factor in enabling Mr. Belcher to save what little money he did accumulate for the down payment. It was Mr. Belcher's switching from the logging industry to the mining industry that allowed him to earn a higher income that eventually enabled him to be in a position to take on the obligation of a mortgage, even one with such nominal payments as he eventually agreed to. [36] Ms. Lazark and Mr. Belcher were not given to saving money. What they didn't need for a nearly subsistence lifestyle, they drank or smoked. Until 1987 or 1988, no effort was made to save any money for a downpayment on the farm. [37] Given the above circumstances, it is not easy to apply a "value survived" approach. However, doing the best I can, and assuming a constructive trust to be appropriate, I conclude that Ms. Lazark's efforts dictate that Mr. Belcher holds an interest in the farm by way of constructive trust for her to the extent of 20 percent of the value of the property at the time of their separation. [38] I conclude, in fact, that the award of a constructive trust, rather than a monetary award, is the appropriate award in this case. I say that because although Mr. Belcher earns an annual income in the range of $50,000, he has been in arrears with the nominal mortgage payments to his father on a number of occasions, and was in arrears of those payments at the time of trial according to the evidence of Mr. Lorne Belcher. I therefore conclude that a monetary award would not be sufficient in this case because of the high likelihood that Mr. Belcher would not pay such an award. II. Conclusion: [39] I find that Ms. Lazark is entitled to an interest by way of constructive trust in the farm property owned by Mr. Belcher to the extent of 20 percent of its value as at September 1993. Thus, her interest in the farm property has a value of $35,000. III. Costs: [40] Counsel requested the opportunity to make submissions as to costs. I will hear those submissions on a date to be fixed. "T.J. Melnick J"