Date: 19970320 Docket: 95/2560 Registry: Victoria IN THE SUPREME COURT OF BRITISH COLUMBIA BETWEEN: MICHAEL REGNIER PLAINTIFF AND: CHRISTINE O'REILLY and THE ESTATE OF THE LATE ROBERT GABRYCH, DECEASED DEFENDANTS REASONS FOR JUDGMENT OF THE HONOURABLE MADAM JUSTICE QUIJANO Counsel for the Plaintiff: Richard Heiser Counsel for the Defendant: Christine O'Reilly Russell C. MacKay Date and Place of Hearing: Victoria, B.C. November 15, 1996; November 19, 1996; January 13, 1997 and January 17, 1997 [1] Michael Regnier and Robert Gabrych lived together in a same sex committed relationship from the spring of 1991 until Mr. Gabrych died in June of 1994. In August 1992 a house was purchased on Denman Island in the name of Mr. Gabrych and shortly after its purchase Mr. Regnier moved to the Denman Island property and began improvements to it while Mr. Gabrych stayed in Vancouver in the apartment he had shared with Mr. Regnier. Mr. Gabrych moved to the Denman Island property in March of 1993 and resided there with Mr. Regnier until his death in June of 1994. In his will Mr. Gabrych left Mr. Regnier his household furnishings and personal items and a life interest in the Denman Island property on certain conditions. [2] Mr. Regnier believed he had an interest in the property beyond a life interest and that there was an understanding that they would share the property equally. Mr. Regnier seeks a declaration that he is entitled to a one-half interest in the property either on the basis that it was the common intention of the parties that the property would be shared equally or by virtue of a constructive trust arising out of his contributions to the maintenance and improvement of the property. [3] This application is brought pursuant to Rule 18A. ISSUES [4] 1. Was there a common understanding or an express intention that the property would be shared equally? If not, 2. Did Mr. Regnier contribute money or moneys worth to the acquisition, preservation and improvement of the property sufficient to support a constructive trust in his favour? If so, 3. What is the appropriate quantification of the interest of Mr. Regnier in the Denman Island property? NARRATIVE AND FINDINGS OF FACT [5] Mr. Regnier and Mr. Gabrych began living together in 1991 when Robert Gabrych moved into Mr. Regnier's apartment in Vancouver in April of that year. Both of them were HIV positive. There is no dispute that they lived together in a committed relationship. In February of 1991 Mr. Regnier had stopped working due to ill health. Mr. Gabrych was employed as a grain handler. [6] In February of 1992 the pair took a holiday to the South Pacific and discussed plans to purchase a house on one of the Gulf Islands where they would live together. After their return they began to look for property and in June of 1992 Mr. Gabrych, who was still working and who had recently received an inheritance from his father's estate, made an offer to purchase 9850 Green Hill Road on Denman Island. Mr. Regnier and Mr. Gabrych had discussed their common intention to purchase Gulf Island property in order to improve their quality of life and, possibly, to run a Bed and Breakfast. They made three visits to this particular property in June of 1992 before Mr. Gabrych made the offer to purchase which was accepted. The purchase price was $124,000, of which Mr. Gabrych paid approximately $39,000 in cash and the balance was obtained by way of a mortgage. The mortgage was life insured and upon Mr. Gabrych's death it was paid out. [7] At the time of purchase the house was only partly finished: there were no coverings on the floors, no kitchen cabinets or appliances, the plumbing fixtures had not been installed, and many of the inside walls were not in place, leaving insulation and rafters exposed. In addition, it appears that the property surrounding the dwelling was largely uncleared. [8] It was agreed between Mr. Regnier and Mr. Gabrych that Mr. Regnier would move to the Denman Island property and work on completing the dwelling and clearing the land while Mr. Gabrych would stay in Vancouver and continue to work and earn an income. Thus, in August of 1992 Mr. Regnier moved to Denman Island and took possession of the Green Hill Road property. Mr. Gabrych visited on weekends until, finally, in April of 1993 Mr. Gabrych was forced to quit his employment due to his deteriorating health and he left Vancouver and took up full-time residence on Denman Island. [9] Mr. Regnier produced a detailed list of the work that he had done on the Green Hill Road property. While Christine O'Reilly, the sister of Robert Gabrych and the executor of his estate, disputes the extent of the contributions Mr. Regnier claims to have made to the improvement of the property, it is clear that he made a substantial contribution to the completion of the dwelling and clearing the land far beyond the effort required to merely maintain the property. There was work remaining to be done on the house at the time of Mr. Gabrych's death and there remained work to be done by the time of this application. [10] As to financial contribution, Mr. Gabrych had far more resources than did Mr. Regnier. Until he quit working Mr. Gabrych had employment income of approximately $40,000 per year and in 1991 he had received an inheritance from his father's estate of approximately $100,000. Mr. Regnier had no accumulated assets and little money to contribute to the purchase price or costs of improvement to the property. He had pension and disability income of approximately $1,250 per month. Nevertheless, he did contribute financially to some extent, although the documentary evidence is lacking in this regard. His major financial contribution appears to have been by way of a trade of his motorcycle to a woodworker in return for which certain interior wood finishing was to be provided. He estimates the value of the motorcycle to have been $3,000. Mr. Regnier also continued to pay rent and utilities on the Vancouver apartment in which Mr. Gabrych lived from August of 1992 until March of 1993. Mr. Gabrych contributed the bulk of the cash to the acquisition of the property and to the purchase of materials and supplies for the completion of it. Mr. Regnier did the vast bulk of the work on completing the dwelling and the landscaping. [11] After Mr. Gabrych gave up his employment and moved to live on Denman Island, his health continued to deteriorate and he began to require more and more personal care. That care was provided by Mr. Regnier alone until the week or so prior to Mr. Gabrych's death, during which time the care was provided by both Mr. Regnier and the defendant Christine O'Reilly, who is a registered nurse. [12] In June of 1994, shortly before his death, Mr. Gabrych executed a will in which he left his household furnishings and personal effects to Mr. Regnier, along with a life interest in the Denman Island property. He had also named Mr. Regnier as the beneficiary/survivor under his pension plan. On July 1, 1994 Mr. Gabrych died. ANALYSIS [13] There is no independent evidence to support the plaintiff's contention that it was understood between himself and Mr. Gabrych that they each had a one-half interest in the property. The mere fact of their relationship is not sufficient to support such an inference and in the absence of any corroborating evidence that claim cannot stand. [14] That leaves for determination the issue as to whether the contributions made by Mr. Regnier in terms of money and labour to the acquisition, maintenance and improvement of the Denman Island property and his contribution to the care of Mr. Gabrych in the year or so before his death are sufficient to support his claim to an interest in the Denman Island property by virtue of a constructive trust. [15] In order to support a finding of constructive trust three elements must be satisfied: 1. An enrichment; 2. A corresponding deprivation; and 3. The absence of a juristic reason for the enrichment. [16] This test has been applied to what are described as quasi- matrimonial situations by the Supreme Court of Canada in Pettkus v. Becker (1980), 117 D.L.R. (3d) 257 and subsequently in Peter v. Beblow, [1993] 1 S.C.R. 980, 117 D.L.R. (3d) 257 and 77 B.C.L.R. (2d) 1. [17] In Peter v. Beblow (supra) Madam Justice McLachlin, speaking for the court, said at p. 13: For these reasons, I hold the view that in order for a constructive trust to be found, in a family case as in other cases, monetary compensation must be inadequate and there must be a link between the services rendered and the property in which the trust is claimed. Having said this, I echo the comments of Cory J. at p. 28 [p. 32] that the courts should exercise flexibility and common sense when applying equitable principles to family law issues with due sensitivity to the special circumstances that can arise in such cases. The next question is the extent of the contribution required to give rise to a constructive trust. A minor or indirect contribution is insufficient. The question, to quote Dickson C.J. in Pettkus v. Becker, supra, at p. 852, is whether "[the plaintiff's] contribution [was] sufficiently substantial and direct as to entitle her to a portion of the profits realized upon sale of the .... property." Once this threshold is met, the amount of the contribution governs the extent of the constructive trust. As Dickson C.J. wrote in Pettkus v. Becker, supra, at pp. 852-53: Although equity is said to favour equality, as stated in Rathwell, it is not every contribution which will entitle a spouse to a one-half interest in the property. The extent of the interest must be proportionate to the contribution, direct or indirect, of the claimant. Where the contributions are unequal, the shares will be unequal. [Emphasis added.] [18] I can see no reason to distinguish this case on the basis that Mr. Regnier and Mr. Gabrych were same sex partners: The fundamental principles remain applicable. This has been recognized in previous cases of this court. (Henderson v. Luoma (1986), 50 R.F.L. (2d) 127 and Forrest v. Price (1992), 48 E.T.R. 72.) [19] It was argued on behalf of the defendants that the relatively short duration of the relationship should render insignificant any contribution made by Mr. Regnier in the context of the relationship, independent of the direct contributions to the improvement of the property, in relation to the question of an entitlement to an interest in the Denman Island property. [20] In Crick v. Ludwig, 95 B.C.L.R. (2d) 72 Madam Justice Proudfoot of the British Columbia Court of Appeal, considering the effect of a two- to three-year relationship on a claim for an interest in property in a quasi-matrimonial situation said, at pp. 77-78: The respondent argues that this was a short relationship. I do not disagree that the length of a relationship is of some significance but that is not necessarily the most important aspect. The intensity of the contribution during a shorter period can surely be of equal value as a lesser contribution over a longer period. While the intensity of Mr. Regnier's contribution to the care of Mr. Gabrych in the last months of his life was of such magnitude that it may be relevant to the question as to whether, and if so to what extent, Mr. Regnier has an interest in the Denman Island property, it must be considered in the context of the evidence as a whole. Considering that Mr. Regnier did receive some portion of Mr. Gabrych's estate and that he is the beneficiary of Mr. Gabrych's pension plan in the context of the relatively short duration of the relationship, the care provided to Mr. Gabrych is not a factor I have considered in determining Mr. Regnier's claim to an interest in the Denman Island property. [21] I have no hesitation in finding that Mr. Regnier made a significant contribution to the improvement of the Denman Island property with a corresponding increase in value to the property independent of any increase due to market forces. The increase in value was an enrichment to Mr. Gabrych's estate. [22] The next question to be answered is, was there a juristic reason for the enrichment. At its most basic, the test for an absence of juristic reason is simply whether the party deprived was under any obligation, contractual, statutory or otherwise, to enrich the other party (Clarkson v. McCrossen Estate) (1995), 3 B.C.L.R. (3d) 80 at 91 (B.C.C.A.). Though the test must be flexible and the factors considered will vary with the situation before the court, the fundamental concern throughout will be the legitimate expectations of the parties. In Peter v. Beblow (supra) at p. 645, McLachlin, J. suggests three questions, the answers to which may be of assistance in determining legitimate expectations of the parties: 1. Did the plaintiff confer the benefit as a valid gift or in pursuance of a valid common law, equitable or a statutory obligation which he or she owed to the defendant?; 2. Did the plaintiff submit to, or compromise, the defendant's honest claim?; 3. Does public policy support the enrichment? In the present case question 2 does not arise and the answer to questions 1 and 3 is "no". As a consequence, I find that there was an absence of juristic reason for the enrichment. [23] The remaining question is the determination of the appropriate compensation. [24] The defendant argues that the provision of a life interest in the property was sufficient recognition of the value of the contributions made by Mr. Regnier to the improvement of the property and therefore Mr. Regnier has not suffered any corresponding deprivation. [25] In Coddington v. Hubbert Estate (1993), 49 E.T.R. 9, Tysoe, J. of this Court, dealing with the role of the court in considering the question of a sufficiency of provisions in a will in circumstances similar to this, said, at p. 25: It is my view that the Court should utilize an objective standard when deciding whether the benefactor of the contributions has fulfilled his or her obligations arising from the constructive trust. Even if the benefactor had a genuine belief that the obligations had been fulfilled, the court should decide what a reasonable person would have done in the circumstances. The constructive trust arises by operation of law and the extent of the interest in property that is held in trust should not be affected by the opinions of the person holding title to the property unless the parties had discussed the topic and had agreed on the extent of the interest that was appropriate in the circumstances. [26] While it was argued on behalf of the estate that the provision of a life interest was sufficient compensation to Mr. Regnier for the contribution he made to the improvement of the property, applying the test as to what a reasonable person would have done in the circumstances, I cannot agree. The life interest in the property is conditional on Mr. Regnier continuing to reside at the property and paying the property taxes. Mr. Regnier himself is now ill with AIDS and even if he wished to reside on Denman Island for the rest of his life, the quantifiable benefit of the restricted use of the property is insufficient compensation to him for the enrichment to Mr. Gabrych's estate resulting from his contributions to the improvement of the property. [27] Mr. Regnier, in his evidence, calculated the value of his labour at $36,800 based on 40 hours per week at $10 per hour, from August of 1992 to June of 1994. In addition, he estimated cash contributions made by him either to labour or material costs, payment on the Vancouver apartment or payment of loan and mortgage payments and property taxes, to be a further $18,000. There was little documentary evidence to support these figures and it was acknowledged that there were some errors in the estimate and that, in some ways, it was exaggerated. [28] I have no doubt that the value of Mr. Regnier's contribution is something less than the $54,000 which he originally estimated. The nature of the contributions made by Mr. Regnier to the improvement of the property, both indirect and direct, are such that the appropriate determination of the quantification of Mr. Regnier's entitlement to compensation for his contributions should be by an allocation of an interest in the property based on the "value survived" approach described by McLachlin, J. in Peter v. Beblow, (supra). CONCLUSION [29] Using the value survived approach, I find that Mr. Regnier is entitled to a 30 per cent interest in the present value of the Denman Island property net of the $39,000 contribution made by Mr. Gabrych to the purchase price. I am mindful of the fact that the mortgage was paid out by the life insurance, but Mr. Regnier had contributed directly and indirectly to payment of premiums on that life insurance. Therefore, the benefit conferred on Mr. Gabrych's estate by the payout of the mortgage by life insurance ought also to be shared between Mr. Regnier and the Estate in the same proportion. [30] The issue of costs was not argued. Costs will follow the event at Scale 3 with liberty to either party to apply if they wish to make further submissions on the question of costs. "G.M. Quijano, J." THE HONOURABLE MADAM JUSTICE QUIJANO