“The law on unjust enrichment arising out of the relationship between unmarried spouses has been comprehensively addressed by the Supreme Court of Canada in Kerr v. Baranow, 2011 SCC 10 (CanLII), 2011 S.C.C. 10. In Elkaim v. Markina 2011 ONSC 2586 (CanLII), at para. 9, Sachs J. summarized the framework set out in Kerr to assess property claims in common law relationships:
The law surrounding the resolution of property claims in common law relationships has recently been clarified by the Supreme Court of Canada in Kerr v. Baranow, 2011 SCC 10 (CanLII). In that case the Court found that the “common intention” approach to resulting trust has no “useful role to play” in the resolution of property claims by domestic partners on the breakdown of their relationships: at para. 29. The Court also found that the role of the parties’ reasonable or legitimate expectations in the unjust enrichment analysis was a limited one. Rather, the framework to be used can be summarized as follows:
(a) First, the court must determine if there has been an unjust enrichment.
In doing so, the questions are:
• Has the defendant been enriched?
• Has the plaintiff suffered a deprivation?
• Is there “no reason in law or justice for the defendant’s retention of the benefit conferred by the plaintiff?”: at para. 40.
It is in the consideration of the third stage, “if the case falls outside the existing categories” of juristic reasons for the retention of the benefit, then the court may consider looking to “the reasonable expectation of the parties and public policy considerations to assess…whether particular enrichments are unjust”: at paras.43-44.
(b) If the court finds that there is a basis for the unjust enrichment claim the court must then turn its mind to the question of what remedy is appropriate to “reverse the unjustified enrichment.” This may include either a “monetary or proprietary remedy”: at para. 46.
(c) On the question of remedy, the first remedy to consider is “always a monetary award. In most cases it will be sufficient to remedy the unjust enrichment”: para. 47.
(d) A proprietary award may be required if:
(i) the plaintiff has demonstrated a sufficiently substantial and direct link between his or her contributions and the property, in which case “a share of the property proportionate to the unjust enrichment can be impressed with a constructive trust in his or her favour”: at para 50; and,
(ii) the plaintiff has established that a monetary award would be insufficient in the circumstances. This involves considering the probability of recovery of such an award and considering whether “there is a reason to grant the plaintiff the additional rights that flow from recognition of property rights”: at para. 52.
(e) If a monetary award is appropriate, the question then becomes how to quantify that award.
• To do so, the court must first characterize the nature of the unjust enrichment claim. Is the basis of the “unjust enrichment…the retention of an inappropriately disproportionate amount of wealth by one party when the parties have been engaged in a joint family venture and there is a clear link between the plaintiff’s contributions to the joint venture and the accumulation of wealth”: at para. 81.
• If so, “a monetary award for unjust enrichment should be calculated according to the share of the accumulated wealth proportionate to the claimant’s contributions”: at para. 87.
(f) To determine whether a joint family venture exists, the court should have regard to the following factors as set out in Kerr v. Baranow at paras. 87-99:
(i) Mutual Effort: Did the parties pool their efforts and work together towards common goals?
(ii) Economic Integration: This involves considering how extensively the parties’ finances were integrated.
(iii) Actual Intent: What did the parties actually intend? Did they intend to have their lives economically intertwined or did they make the choice not to? This intent may be expressed or inferred from conduct.
(iv) Priority of the Family: This factor asks the court to consider to what extent the parties gave priority to the family in their decision making. “A relevant question is whether there has been in some sense detrimental reliance on the relationship, by one or both of the parties, for the sake of the family.”
If the monetary award should not be quantified on a “joint family venture” basis, then the court should consider a “fee for service” or quantum meruit calculation. It is generally at this stage that the court will consider whether the claim should be discounted because of a mutual conferral of benefits.
At the heart of the doctrine of unjust enrichment lies the notion of restoring a benefit that justice does not permit one to retain: Peel (Regional Municipality) v. Canada, 1992 CanLII 21 (SCC), [1992] 3 S.C.R. 762, at para. 788.”