Tag: Cormpilas v. Ioannidis
Occupation rent is an equitable remedy available in cases of unjust enrichment. It is a rebuttable presumption that one party shall pay reasonable compensation to another for occupying a premises, which may be rebutted if there is evidence proving that no compensation was to be paid.
In the recent decision of Cormpilas v. Ioannidis, 2020 ONSC 4831, Justice Kurz ordered occupation rent to be payable by the beneficiary of an estate. In this case, Gregory and Barbara owned a home as tenants in common. When Barbara died in 2012, her half-interest in the home was transferred to her grandchildren, as the beneficiaries of her estate. At this time, John, Gregory and Barbara’s son (and the grandchildren’s uncle) moved into the home with his family to help Gregory. Gregory died in November 2017 and his half-interest in the home was transferred to John, as the beneficiary of his estate. John and his family continued living at the home until April 30, 2020.
Despite lengthy negotiations between the grandchildren and John, no agreement could be reached for John to buy out the grandchildren’s half-interest in the home, nor did John and his family move out. The Court found that John had exclusive use of the home from November, 2017 to April, 2020 and that although he paid some expenses as a co-owner, he received a far greater benefit in the exclusive, rent-free occupation of the home. Accordingly, Justice Kurz found that John was unjustly enriched at the grandchildren’s expense and that occupation rent for the period of John and his family’s occupation of the home, was an appropriate remedy in the circumstances.
Interestingly, although the Court found in the grandchildren’s favour, because there was no proper request for rent prior to the commencement of the underlying proceeding, the grandchildren were only entitled to occupation rent from February 1, 2019 to April 30, 2020.
The Court further determined that $1,500/month for the above-noted period was a reasonable award for occupation rent after considering the value of the home, John’s half-interest in the home, the term of its occupation by John and his family, the fact that John maintained the home by paying certain carrying charges (such as taxes and insurance) during the period in question, the fact that the home was not maintained in the best of conditions, and the fact that the home value increased significantly during the period of John’s sole possession.
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A recent decision of the Superior Court of Justice, Cormpilas v Ioannidis, reaffirmed the importance of clarity of language in asserting legal or equitable claims particularly when such claims are asserted outside of formal litigation proceedings.
The decision concerned the remedies available to co-owners of a property arising as a result of the laissez-faire conduct of the other co-owner. The property in question had been owned by two separated spouses as tenants in common, each of whom devised their respective interests in the property to different parties. The wife, who died in 2012, left her interest in the property to the Applicants, being four of her grandchildren. The husband, who died in November 2017, left his interest to one of his sons, being the Respondent. The Respondent was the uncle of each of the Applicants.
The Respondent had moved into the property with his spouse and family to care for his father several years prior to his father’s passing, although he continued to reside there, rent-free, for a number of years thereafter. The Applicants had made overtures shortly after their grandfather’s passing about wishing to sell the property and threatening to move for partition and sale, but the Respondent remained. The Applicants commenced an application in February 2019 in which they asserted a claim of unjust enrichment against the Respondent arising from his continued sole occupation of the property despite the Applicants’ interest in it. The Applicants sought orders for retroactive payment of occupation rent, or damages in the alternative.
The Court agreed that the Respondent had been unjustly enriched to the detriment of the Applicants and held that an award for payment of occupation rent was an appropriate remedy. However, the Court’s opinion of the period for which such rent would be payable differed from that of the Applicants, primarily owing to the Applicants’ failure to clearly particularize their claim.
The Applicants asserted that they were entitled to payment of occupation rent from November 2017 until the date the Respondent vacated the property, which eventually came in April 2020. The Applicants’ position was based in part on the fact that they had purportedly conveyed to the Respondent, shortly after their grandfather died, that the property should be vacated and sold, or otherwise that the Respondent should buy out the Applicants’ interest. The Respondent did neither. As such, the Applicants claimed they were entitled to occupation rent from date of death onward.
The Court disagreed with the Applicants’ position and awarded occupation rent payable only from the date the Application was issued to the date the property was vacated. The Court declined to go further on the basis that the Applicants had not clearly conveyed their intention to assert a claim for occupation rent against the Respondent as a result of his possession of the property. Although the Applicants referred to a demand letter in which they specifically characterized the Respondent as a tenant, that letter also authorized the Respondent to continue residing there without making reference to an intention to seek payment of occupation rent. In the absence of specific evidence to the contrary, the Court held the notice of application to be the earliest claim by Applicants for payment of occupation rent. The Court was clear that it was not prepared to infer that the Applicants had asserted claim for payment of occupation rent.
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