Tag: supreme court of canada
In of Vanasse v. Seguin (the companion case to Kerr v. Baranow, heard at the same time) the common law couple was together for 12 years, from 1993 to 2005. For the first four years both parties pursued their careers. The common law wife (“wife”) then left her job to move to Halifax so the common law husband (“husband”) could pursue a business opportunity. Over the next three and a half years, their two children were born and the wife stayed at home to care for the family. The husband stepped down as CEO of the business he started and they returned to Ottawa in 1998, where they bought a home in both their names as joint tenants. In 2000, the husband received approximately $11 million for his shares in the business and from that time, until their separation in 2005, he participated more with the domestic chores.
The trial judge found that there was no unjust enrichment for the first and last periods of the couple’s cohabitation, but held that the husband had been unjustly enriched at the wife’s expense during the period in which the children were born and was entitled to half of the value of the wealth the husband accumulated during the period of unjust enrichment, less her interest in the home and RRSPs in her name.
The Ontario Court of Appeal set aside this award and directed that the proper approach to valuation was a quantum meruit calculation in which the value each party received from the other was assessed and set off, essentially treating the wife as an unpaid employee.
In the Vanasse appeal, the central problem was how to quantify a monetary award for unjust enrichment. The Supreme Court of Canada found that a monetary award for unjust enrichment need not, as a matter of principle, always be calculated on a fee-for-services basis, allowed the appeal, and restored the order of the trial judge.
Sharon Davis – Click here for more information on Sharon Davis.
The Supreme Court of Canada recently considered the property rights of common law spouses in the companion cases of Kerr v. Baranow & Vanasse v. Seguin. These cases required consideration of the following legal issues:
- The role of the “common intention” resulting trust in claims by domestic partners.
- Whether the monetary remedy for a successful unjust enrichment claim must always be assessed on a quantum meruit basis.
- Mutual benefit conferral in the context of an unjust enrichment claim and when this should be taken into account.
- The role the parties’ reasonable expectations play in the unjust enrichment analysis.
In Kerr v. Baranow, a common law couple in their late 60’s split after 25 years, during which time both partners worked and contributed to their mutual welfare. The common law wife (“wife”) claimed property on the basis of resulting trust and unjust enrichment. The common law husband (husband”) counterclaimed that the wife had been unjustly enriched by his housekeeping and personal assistance after she suffered a debilitating stroke.
The trial judge awarded the wife $315,000, (1/3 of the value of the home the couple shared, but which was in the husband’s name) by way of resulting trust and unjust enrichment, because the wife had provided $60,000 worth of equity and assets at the beginning of their relationship.
The B.C. Court of Appeal allowed the husband’s appeal because it found the wife did not make a financial contribution to the acquisition or improvement of the property, and ordered a new trial for the husband’s counterclaim.
The Supreme Court of Canada allowed the wife’s appeal from the dismissal of her unjust enrichment claim and ordered a new trial. Her appeal from the order dismissing her claim in resulting trust was dismissed. The order for a new hearing of the husband’s counterclaim was affirmed.
Tomorrow’s blog will cover the facts in Vanasse v. Seguin and in our last blog of the week we will explore the main issues discussed in relation to property rights of common law spouses in the context of these two cases.
Sharon Davis – Click here for more information on Sharon Davis.
I recently came across Osgoode Hall Law School’s blog site about the Supreme Court of Canada, The Court. Under the supervision of faculty, law student editors write on the upcoming decisions that are scheduled to be heard or have been recently decided by the Supreme Court of Canada.
There are a number of legal scholars who regularly comment on the decisions and readers are encouraged to post their own comments. The “exchange of ideas” format is designed to appeal to both legal practitioners and other interested citizens and makes for interesting reading. The archives go back to November 2006 and decisions are searchable by subject.
Aside from the commentary, there are a number of online resources related to the Supreme Court, including online texts and a statistical database of recent Supreme Court decisions. There is also a link to Top Court Talk where correspondents from around the world discuss the decisions of their highest court.
It is an interesting way to keep informed with what is going on with the Supreme Court.
Enjoy your day,
Both of the recent Supreme Court of Canada joint account/resulting trust decisions of Pecore v. Pecore,  SCC 17 and Madsen Estate v. Saylor,  SCC 18 involved joint accounts between deceased and child.
It is worth considering whether the decisions will impact cases involving joint accounts between deceased and non-children. (And please note I’m not addressing the impact on situations involving children, which is considerable and needs much more analysis than a blog).
The SCC’s strong statements confirming the presumption of resulting trust do not necessarily change the law as it pertains to non-children situations. However, the rarified source of the decisions could help Estate Trustees asserting resulting trusts over joint accounts with non-children. Consider:
The presumption of resulting trust therefore alters the general practice that a plaintiff (who would be the party challenging the transfer in these cases) bears the legal burden in a civil case. Rather, the onus is on the transferee to rebut the presumption of resulting trust. (Pecore, para 25)
Of course, the presumption of resulting trust means that it will fall to the surviving joint account holder to prove that the transferor intended to gift the right of survivorship to whatever assets are left in the account to the survivor. Otherwise, the assets will be treated as part of the transferor’s estate to be distributed according to the transferor’s will. (Pecore, para 54)
Not really different from pre-existing caselaw, but the SCC rarely enters the realm of Estates and Trusts law. When it does, lawyers pay rapt and lasting attention. Even confirmation of pre-existing common law can have quite an effect.
No doubt every Estate Trustees claiming resulting trusts over joint accounts by a deceased with non-children will be referring to these cases.
Thanks for reading.
As many of the readers will know, joint accounts are a hotly debated topic in estate litigation. When an account is held jointly between two individuals, both hold an equal, undivided share. If one of the joint owners dies, the other is left with the entire interest in the account.
Previous decisions on the issue of joint accounts have varied but courts typically approached the issue by presuming that if the account was held jointly between a parent and a child, the parent intended to gift the money to the child (the presumption applied even if the child was an adult and financially independent). It was then up to the challenger to prove otherwise.
In Saylor and Pecore, the Supreme Court essentially reversed the presumption in the case of adult children.
The Supreme Court ruled that because it is very common for elderly parents to hold accounts jointly with adult children for banking purposes, the starting presumption should be in favour of including the funds in the parent’s estate. The adult child will then have the onus of proving that the parent intended to gift the funds to him or her.
In the case of minor children, the old presumption of a gift will still apply, based on the assumption that parents intend to support their minor children.
While the clarity of a final ruling on how to approach joint accounts will likely be welcomed, there may remain some uncertain as to the evidence necessary to rebut the presumption. And hence, more litigation to come.
Have a nice weekend,