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30

Common law breakdown in Alberta (Part 11): unjust enrichment cases…

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Common law breakdown in Alberta

Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice with respect to a cohabitation agreement in Alberta, you should seek professional assistance.

This is a follow up to my last blog, where I started talking about the rights and obligations that may arise when two common law spouses in Alberta part ways. In addition to statutory rights of support, possession of the Primary Home, and distributions made under the Dependants Relief Act, common law spouses may also try to claim unjust enrichment in equity – so as to create an interest in the other spouse’s property.

Here are some real Alberta cases dealing with unjust enrichment:

Alberta unjust enrichment cases in the family law context

Sporring v. Collins: No Unjust Enrichment

In Sporring v. Collins, [2009] A.J. No. 944, the Alberta Court of Queen’s Bench had to decide whether Mr. Sporring and Ms. Collins – who had a relationship for 7 years and 9 months – owed anything to the other when they parted. Although they were found NOT to be in a common-law relationship, the Court still had to be determined whether Mr. Sporring had an unjust enrichment claim against Ms. Collins. The Court ruled that there was no unjust enrichment. K.L. Sisson J. held that, while there was an enrichment (Mr. Sporring’s efforts helped increase the value of Ms. Collins’ Midnapore and Nevis properties) and a corresponding deprivation, there WAS a juristic reason – the Cohabitation Agreement which the parties signed. That Agreement stated that each party waived any claim to assets acquired by the other party before, during or after the period of cohabitation and Ms. Collins wholly owned the property known as SE 3 1-39-22-W4th (the quarter section which contained the Nevis property). As discussed above, Mr. Sporring’s various attempts to challenge the validity of the Cohabitation Agreement failed.

Scherf v. Nesbitt: No Unjust Enrichment

In Scherf v. Nesbitt, [2009] A.J. No. 777, the Alberta Court of Queen’s Bench enforced a Cohabitation Agreement that gave Dr. Scherf a one-half interest in the net proceeds of the sale of a home which she and Mr. Nesbitt had bought together. The Cohabitation Agreement clearly stated that the parties were to have an equal interest in that property despite their unequal contribution to its acquisition, and the Court respected that Agreement. Importantly, the Court stated the following at paragraphs 26 and 27 with respect to any unjust enrichment claim:

26 Here, the contract between the parties could not have been clearer. In many ways and in many places, the parties emphasized that they were to have an equal interest in the property despite their unequal contribution to its acquisition. That contract should be respected by the court in this application. Dr. Scherf is entitled to one half of the net proceeds from the sale of the home despite the fact that she did not make an equal financial contribution to its acquisition.

27 The contract is also important because of its status in assessing equitable claims. As our Court of Appeal noted in Panora, 2005 ABCA 47, [2005] A.J. No. 95, a contract is a juristic reason which can prevent a litigant from establishing unjust enrichment. In the circumstances here, Mr. Nesbitt cannot advance any equitable argument in support of displacement of the contract between the parties.

Rubin v. Gendemann: No Unjust Enrichment

In Rubin v. Gendemann, [2011] A.J. No. 248, the Alberta Court of Queen’s Bench had to determine whether Glenna Jean Rubin could demand a share of the property owned by the Klaus Dieter Gendemann. The two were “adult interdependent partners” under the Adult Interdependent Relationships Act. The Court ultimately held that there was no unjust enrichment. The Court’s analysis and conclusions are as follows:

Rubin claimed 50% of the increase in value of certain realty owned solely by Gendemann (e.g. a house, a cottage, a cabin, and interests in other properties). Rubin claimed that she was not fully paid by Gendemann when he bought her property at Butchart Drive. Rubin also claimed that her activities (unpaid labour or “sweat equity”) directly contributed to the various properties owned or purchased by Gendemann. Rubin also claimed that her domestic contributions during the adult interdependent relationship indirectly allowed Gendemann to allocate time and resources to income generating activities that would otherwise have been consumed in less productive ways.

With respect to the Butchart Drive property transfer, the Court held that: “Rubin was well compensated for the sale of the Butchart Drive home to Gendemann…I therefore reject the Plaintiff’s claim that Gendemann was enriched by her in the transfer of the Butchart Drive property. Consequently, there was no concomitant deprivation on the part of Rubin. Rubin had no remaining interest in that house once it was purchased by Gendemann.”

With respect to the Rubin’s claims of contributing to the properties which Gendemann either brought into the relationship or bought during the domestic partnership, the Court rejected Rubin’s claims of unjust enrichment. The Court concluded as follows: “My conclusion is that Rubin made no significant contribution to the purchase, development or maintenance of any of Gendemann’s real properties, and thus Gendemann was not enriched by her efforts…The work she contributed to these properties was extremely limited, and certainly less than that of other persons… Any residual benefit Gendemann received from Rubin’s presence and contributions was very much outweighed by the benefit she received by the use of these properties, which I note were entirely funded and maintained from Gendemann’s wallet.”

The Court’s analysis is summarized as follows:

Duplex

Rubin never made an unjust enrichment claim on a duplex which Gendemann owned and there was no evidence that she made any contribution to the operation or maintenance of that property.

Pigeon Lake Cabin

Rubin contributed no more than would a “thoughtful guest” to the cabin at Pigeon Lake (Gendemann was not enriched by Rubin’s activities and Rubin was not deprived by any of the work she allegedly did).

George Court Cabin

Rubin did not participate in finding or acquiring a cabin, George Court, owned by Gendemann. Nor did Rubin contribute to the renovation of George Court in any way that enriched Gendemann or deprived Rubin. Rubin’s participation in the initial renovations was restricted to what were essentially friend helping friend. Rubin did not contribute to maintaining and operating George Court in any significant way, particularly in comparison to the efforts of other caretakers (both paid and unpaid). Her contributions were similar to what a “good guest” would do at someone’s cabin or cottage for the privilege of staying there free. Rubin claims she had a role in planning future developments for George Court, but Gendemann did not want to build on that property (which makes Rubin’s plans and intentions irrelevant). Finally, Rubin claimed she provided entertainment services at George Court, but the Court found that Rubin made guests feel uncomfortable (they did not want to return) and her domestic and meal-preparation contributions did not warrant an equitable claim on that property.

Seclusion Lake Property

Rubin claimed interest in Gendemann’s 1/3 interest in a private corporation which was formed to purchase a 150 acre property on Lake Okanagan called Seclusion Bay. Her contribution (allowing Gendemann to send e-mails through her email account, keeping a file of expenses for Gendemann, and assisting Gendemann with some of the paper work that relates to the Seclusion Bay) was incidental, de minimis, and did not enrich Gendemann nor did it deprive her.

Courtney, B.C. Property

Rubin claimed an interest in a property in Courtney, British Columbia on the basis that she found the realtor who assisted in the purchase of the property and went with Gendemann to look at the property. She also made the travel arrangements for Gendemann to look at several properties. But these actions did not amount to Rubin contributing to the property (either acquiring it, maintaining it, increasing its value, etc.). As such, Rubin had not contributed to the value of the property or enriched Gendemann.

Scottsdale, Arizone Property

Rubin claimed an interest in a home in Scottsdale, Arizona which Gendemann bought. Rubin operated a “Yahoo.com” caledar to assist various owners in coordinating their visits. But this did not amount to a real contribution to the purchase, operation, or maintenance of the Scottsdale property. Setting up a calendar would not amount to enrichment to Gendemann and a corresponding deprivation to Rubin.

FYI, if you’re looking for a Cohabitation Agreement for Alberta that avoids creating financial obligations (including unjust enrichment claims), then you’ve come to the right place:

Cohabitation Agreement – Terminates Upon Marriage

This legal form can be used by non-married couples in Alberta who wish to avoid creating obligations through their cohabiting (i.e. living together) with each other. This particular cohabitation agreement waives support obligations and divides property according to legal ownership (in other words, what’s mine is mine; what’s yours is yours). This cohabitation agreement terminates when the parties get married to each other. Here’s a sneak peak of the video guide that comes with this legal form:

If you want the cohabitation agreement to continue past marriage (i.e. continue to be valid and enforceable past marriage), then you can check out the cohabitation agreement below:

Cohabitation Agreement – Continues Past Marriage

This legal form can be used by non-married couples in Alberta who wish to avoid creating obligations through their cohabiting (i.e. living together) and their marriage to each other. It essentially becomes a Prenuptial Agreement or Marriage Contract when the parties marry each other. This particular cohabitation agreement waives support obligations and divides property according to legal ownership (in other words, what’s mine is mine; what’s yours is yours). This cohabitation agreement continues to be valid and enforceable past marriage.

Remember: all of our legal forms are lawyer-prepared, customizable (they come in .doc, .wpd, and .rtf formats), and affordable (prices range from $17 to $97, depending on the legal form packages). The legal forms are regularly updated. Best of all, they come with guidance in the form of a video tutorial (watch an example of how to customize the legal form) and two written guides (one that addresses the legal issues you should be aware of and a second which is entitled “Is My Legal Form Valid and Enforceable?”).

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