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Procedural History:

The TJ awarded Miss Becker 40 beehives, without bees, together with $1,500 representing earning from those hives for 1973 and 1974.  The Ont CA varied the judgment of the TJ by awarding Miss Becker a one-half interest in the lands owned by Mr. Pettkus and in the bee-keeping business.

 

Parties:

The appellant, Lother Pettkus

The respondent, Rosa Becker

 

Facts:

The appellant Lother Pettkus, developed a successful be-keeping business.  It was not his efforts alone, however, that success can be attributed.  The respondent Rosa Becker, through her labour and earnings, contributed substantially to the good fortune of the common enterprise. She lived with Mr. Pettkus from 1977 to 1974, save for a separation in 1972.  They were never married.  When the relationship ended in late 1974, Miss Becker commenced this action in which she sought a declaration of entitlement to a one-half interest in the lands and share in the bee-keeping business.

 

Justice for the Majority:

Dickson CJ

 

Issue:

Is Miss Becker, through the doctrine of constructive trust, entitled to an equitable half share in the bee-keeping business?

 

Holding:

Appeal dismissed.

 

Rule:

Where one person in a relationship tantamount to spousal prejudices herself in the reasonable expectation of receiving an interest in property and the other person in the relationship freely accepts benefits conferred by the first person in circumstances where he knows or ought to have know of that reasonable expectation, it would be unjust to allow the recipient of the benefit to retain it.

 

Reasoning:

·      Dickson CJ first considered the doctrine of resulting trust.  To a establish a resulting trust, Dickson CJ stated that it is necessary to show that there was a “common intention” on the part of the titleholder as well as the claimant that the property be shared.  After reviewing the cases and some of the academic literature that showed the artificiality of such a concept in the family context.  Dickson CJ note that the trial judge had found, as a fact, that there was no common intention in this case on the basis of Mr. Pettkus’s testimony. This left Miss Becker with the constructive trust option as the sole juridical foundation for her claim.

·      The principle of unjust enrichment lies at the heart of the constructive trust. Lord Mansfield, in the case of Moses v MacFerlan (1760), put the matter in these words: “The gist of this kind of action is that the defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity to refund the money.”

·      In Rathwell, Dickson CJ suggested that there are three requirements to be satisfied before an unjust enrichment can be said to exist: 1) an enrichment, 2) a corresponding deprivation and 3) absence of any juristic reason for the enrichment.  Thus, it is not enough for the court simply to determine that one spouse has benefited at the hand of another and then to require restitution.  It must, in addition, be evident that the retention of the benefit would be “unjust” in the circumstances of the case. 

·      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.

 

Notes:

·      The award of a constructive trust in Pettkus v Becker was not the only issue to be raised in relation to unjust enrichment principles and cohabiting relationships.  In Sorochan v Sorochan, [1986], for example, the SCC held that a trust could be awarded where the non-titled cohabitee had contributed to the maintenance of property already owned by the other cohabitee at the beginning of the cohabiting relationship (this, not requiring a claimant’s contribution to the acquisition of property, as identified in Pettkus v Becker).

·      In 2011, the SCC once again considered the appropriate remedy for unjust enrichment in the context of a cohabiting relationship.  In Kerr v Baranow (and Vanasse v Seguin] [2011], the court reviewed in detail the remedial context for unjust enrichment claims in the context of cohabiting couples and identified a third possible remedy, a monetary award bases on a “joint family venture.” In Vanasse (on appeal from Ontario, while Kerr was on appeal from British Columbia), the opposite-sex couple had cohabited for 12 years.  For the first four years, they each successful independent careers in Ottawa, but when the male partner decided to relocate to Halifax, that woman took leave from her employment to move there. In Halifax, the partners agreed to start family, and the woman had two children and remained at home to care fro them in the context of the man’s very successful business, one that required him travel a great deal. Eventually, the man sold his shares in the business for about $11 million and the couple moved back to Ottawa, where both were involved in childcare and household work for a few years, but they the separated. The SCC held that money damages payment would not compensate the woman for her significant contribution, but a constructive trust remedy was not available because she could not show a connection between her contributions and property owned at separation. In this context, Cory J identified a new remedy based on the joint family venture:

“There are cases in which the contributions of both parties over time have resulted in an accumulation of wealth.  The unjust enrichment occurs following the breakdown of their relationship when one party retains a disproportionate share of the assets which are the product of their joint efforts.  The required link between the contributions and a specific property may not exist [negating the possibility of a constructive trust].  However, there may clearly be a link between the joint efforts of the parties and the accumulation of wealth.” 

The court identified 4 factors to consider in determining whether a joint family venture exists: mutual effort, economic integration, actual intent, and priority of the family. In Vanasse, the court held that Ms. Vanasse had been “an equal contributor to the family enterprise,” and ordered a monetary payment amounting to one-half of the prorated increase in Mr. Seguin’s net worth during the “period of unjust enrichment” (mainly the years in Halifax), less the value of some other family assets held by Ms. Vanasse.  (The Kerr decision was sent back for a new trial in BC).

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