Law Times

Law Times • march 26, 2018 Page 7 www.lawtimesnews.com Unjust enrichment claims in common law relationships BY MARTA SIEMIARCZUK E ver since the Supreme Court's 2011 decision in Kerr v. Baranow, un- just enrichment claims based on a joint family venture have grown rather exponentially. For the first few years after this de- cision, I tried keeping up with how the courts were going to treat this concept and how it would evolve over time. Of late, it has seemed to become the f lavour of the month in common law spousal re- lationships. Truthfully, it was frustrating to see just how much litigation ensued around this, testing the concept's applicability. The concept of joint family venture is an extension of the long-standing rem- edies with respect to unjust enrichment in common law relationships. The difference is you no longer need to prove enrichment vis-a-vis a specific asset, but, rather, you can look at the re- lationship as a whole, and if the legal test is met for a joint family venture, you can claim a remedy against the general net worth increase of the other common law spouse. Earlier this year, the Court of Ap- peal for Ontario heard an unjust enrich- ment claim with respect to equity built up in a family residence in Peters v. Swayze, 2018 ONCA 189. The facts are fairly straightforward. Deanna Lynn Peters was in a 15-year, common law rela- tionship with Howard James Swayze. At first, she and her daugh- ter moved into his apartment. Two years into the relation- ship, he acquired his old home, which he had shared with his first spouse. He was solely on title. As the years passed, both parties amassed debt, which they consolidated into a sin- gle joint loan. However, those loan payments became tough to manage. So, Swayze refinanced his home and rolled that debt into the mortgage. Peters was not put on the mortgage, although she contributed toward half of the month- ly mortgage payments and she paid the phone, internet and cable expenses for the household. She also engaged in the normal activi- ties one would typically engage in when living in a house, such as cleaning and gardening. When the couple separated, she claimed that she was entitled to half of the equity accumulated in the home. The trial judge dismissed her claim and so she pur- sued the issue on appeal. After reviewing all of the evidence, the Court of Appeal agreed with the trial judge — there was no unjust enrichment. While the court accepted Peters' evidence that she paid half the mortgage as well as all of the cable, internet and telephone bills and that she did the cleaning and the gardening, the court was not prepared to accept her sub- mission that this either in- creased the value of the prop- erty or that her former spouse was "enriched" by her efforts, with a corresponding deprivation on her end. Instead, and quite rightly, the court confirmed that she herself got a benefit from living in the home, her $500-per- month contribution toward the mortgage increased the equity and was essentially the equivalent of her paying rent some- where else. While she paid for the internet, phone and cable, she also used these services. In a nutshell, Peters was paying ex- penses and likely at a lower amount than she would have had to pay if she lived else- where. Her contributions to the mortgage payments did increase the equity Swayze would have, but the court concluded she was not on the mortgage and had no re- sponsibility to the bank for that obliga- tion; only Swayze did. If someone were injured on the prop- erty, such as in a slip and fall in the drive- way, only Swayze would be responsible for that. Given the breadth of litigation on these issues, I think this decision is an impor- tant one to keep in mind. There are certain expenses in life that — generally speaking — one is going to incur whether they are living alone or cohabiting. Just because those costs are incurred in the context of a common law relationship where only one spouse owns property does not lead to the conclusion that the property owner is being unjustly enriched. The key to the concept lies in the word "unjustly." There needs to be some recognition that, whatever the circumstances, people will incur living expenses. But to fall within the Supreme Court's test on joint family venture, there has to be quite a bit more. So, for the family law- yers out there, this is a good case to keep in mind. LT uMarta Siemiarczuk is a lawyer practis- ing family law litigation and collabora- tive family law at Nelligan O'Brien Payne LLP in Ottawa. She can be reached at marta.siemiarczuk@nelligan.ca. Shorten timelines and improve perverse system BY RYAN HANDLARSKI O n a recent occasion, I listened to a fam- ily lawyer colleague talk about the cir- cumstances of a case where the parties seemed to be really intransigent. The case had had a number of twists and what seemed to me to be some bad behaviour on both sides. I was curious enough to ask how long the case had been going on. The answer shocked me and left me feeling a sense of disgust. Seven years. I do not need to know anything about the case to know that a system that permits a case to have a shelf life of seven years (and sometimes more) is a perverse system. This can be easily deduced by thinking about the incentives that such a system creates. In civil law — in every area from commercial litiga- tion to family to personal injury — cases may go on for years with no resolution and no trial. Cases that are set for trial, after many years of wait- ing, often or usually settle at the last moment, rather than the parties risking the cost consequences of a trial and paying the fees of civil lawyers for trial (who are basing their fees partly on the amount they get paid for simpler and less stressful tasks that occur during the years before trial). How is it that, in criminal law, the lawyers are paid to go to trial, yet in civil litigation, the lawyers are some- how frequently paid not to go to trial? The answer to the above question is simple and ob- vious: The Rules of Civil Procedure and the system it- self permit cases to go on for years. Therein lies the problem. I was skeptical when the Supreme Court of Canada released R. v. Jordan, set- ting timelines in criminal matters, but I have been a convert after seeing how the behaviour of the actors in the criminal justice system has changed since the re- lease of the decision. Judges and Crown attorneys do not adjourn pro- ceedings without very good reasons. Judges especially understand that if there is a crimi- nal case that does not resolve at an early stage, it has to run within the timelines set by the Supreme Court and must be set down for trial. The attitude among all parties is: Either you plead guilty or you set the matter down for a trial and this decision has to occur quickly. It is my contention that this attitude, by and large, produces the most just result for the accused and the complainants and witnesses in a criminal proceed- ing. The unnecessary lengthening of proceedings in civ- il law has another perverse effect, perhaps worse than the fact that it has terrible mental and financial conse- quences for the parties involved in the litigation: It al- lows a party with deep pockets that is in the wrong to avoid paying for its wrongful conduct. A party that is permitted to keep bringing motions, even ones with questionable merit, and avoid setting a trial date is able to potentially cost a party out of the litigation just by continuing to bring motions. This cannot be the intention of a functioning court system dealing with civil disputes. The legal buzz term "access to justice" rather should be thought of as simplifying and shortening proceed- ings. To achieve this, civil litigants must be forced, at an early stage, to either resolve the case or set it down for trial. The cost of a claim can and should be put to better use with trial preparation and a real review and consid- eration of the issues and not delay tactics. This will not result in fewer cases resolving and more cases going to trial, as is the case in criminal law. To the contrary, setting a case down for trial is the best way a legal system can incentivize a resolution. Facing down a trial focuses attention on whether the litigant has a good or bad case and what the risks are. It is precisely the exercise of preparing for trial that will focus a party's attention on whether a person has a better chance of achieving their objectives at trial or by resolving with the other party. Permitting a party to extend the litigation without going to trial allows a party to kick that issue down the road. Criminal cases frequently resolve at or just be- fore trial, either with a guilty plea, a plea to a lesser offence or a withdrawal of the charges. It would be the same in the civil system, except that likely a greater percentage of cases would resolve because of the cost consequences and because the stakes to the litigants do not involve the liberty of the parties. There is an easy way to improve access to justice in all realms of civil disputes in the province. Learn from criminal lawyers and the Supreme Court's attitude in R. v. Jordan: There should be no more mandatory mediation, the parties should be free to pick up the phone and engage with each other at any time and the court or a judge does not need to be in- volved. There should be no more motions; any issues that skirt the main issue can be addressed with a pre-trial motion argued just before the trial. The system must force the parties to set the case down for trial as soon as possible. Lawyers will not be able to bill to not go to trial and their fees will be ad- justed. Litigants with deep pockets will not be able to "motion" (and motion and motion) a party into sub- mission. Cases will resolve more quickly as the parties will not be permitted to delay bad facts too far into the fu- ture. The process will be shortened and simplified. The system, as currently constituted, may be a good system for a small percentage of lawyers and a great system for deep-pocketed litigants, but it is the worst possible system for everyone else. The rules that have allowed a system of endless motions and mediations might have been well inten- tioned, but it has not worked. If people truly want to improve access to justice, the solution is simple: There should be no more motions and no more mandatory mediations. Just do as we do in criminal law (especially since Jordan) and set the damn thing down for trial and argue it. LT uRyan Handlarski is a criminal lawyer practis- ing in Toronto and surrounding areas since 2009. He can be reached at ryan@rhcriminaldefence.com or 416-837-4500. u SPEAKER'S CORNER COMMENT Family Law Marta Siemiarczuk

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