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Kerr v Baranow, 2011 SCC 10 (Link)

Facts:

Vanasse and Seguin lived in a common-law relationship for 12 years. They had two children, aged 10 and 8. When the relationship ended, Vanasse claimed spousal support, child support and compensation for unjust enrichment. While they were in a relationship, Seguin was developing a network operating system. Vanasse resigned her position at CSIS and relocated to Halifax, where the husband moved his business. She devoted herself full-time to running the household and raising the children. The trial judge concluded that the husband could not have built up the company as he did but for the wife's efforts. The husband had received $11,000,000 from the sale of the company. It was agreed that Seguin was unjustly enriched by the contributions of his partner, Vanasse, during their 12-year common law relationship. At trial, she was awarded $5,472 per month in child support and $3,800 per month in spousal support until June 2015. She was also awarded a monetary award for unjust enrichment in the amount of $996,500. The Court of Appeal set aside that award and, while ordering a new trial, directed that the proper approach to valuation was to place a monetary value on the services provided by Vanasse to the family, taking due account of Seguin's contributions by way of set-off.

Issue(s):

Is a monetary reward restricted to quantum meruit?

Ratio:

Monetary damages are not restricted to quantum meruit.

To demonstrate a joint family venture, the complainant must adduce evidence of:
-mutual effort
-economic integration
-actual intent
-priority of the family

If a joint family venture can be proven, then if the complainant can demonstrate a link between their contributions and that a monetary award would be insufficient, they are entitled to a share of the assets proportionate to their contributions.

In a business joint venture, the 4th consideration is eliminated.

Analysis:

Cromwell, writing for the majority, held that with respect to the nature of the monetary remedy, the remedy for unjust enrichment was not restricted to an award based on a fee-for-services approach. Where the unjust enrichment was most realistically characterized as one party retaining a disproportionate share of assets resulting from a joint family venture, and a monetary award was appropriate, it should be calculated on the basis of the share of those assets proportionate to the claimant's contributions. For the claimant to prove there was a joint family venture, they must provide evidence of:
mutual effort;
economic integration;
actual intent; and
priority of the family.
Once a joint family venture has been established, the plaintiff must demonstrate a link or causal connection between his or her contributions and the acquisition, preservation, maintenance or improvement of the disputed property, and that a monetary award would be insufficient, at which point a share of the property proportionate to the claimant's contribution could be impressed with a constructive trust in his or her favour. Where the contributions of both parties over time resulted in an accumulation of wealth, an unjust enrichment occurred when one party retained a disproportionate share of the assets that were the product of their joint efforts following the breakdown of their relationship.
In the case at bar, there was a clear link between Vanasse's contribution and the accumulation of wealth. The trial judge took a realistic and practical view of the evidence and took into account Seguin's non-financial contributions and periods during which Vanasse's contributions were not disproportionate to Seguin and thus her judgment should be restored.

Holding:

Appeal allowed, trial judgement restored.

Comments:

Contracts, gifts, and other juristic reasons would allow the individual on maintain the acquired property and uphold the unjust enrichment.


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