“Justice D.C. Shaw set out an excellent and thorough review of the law in McKay v. Langstaff, 2015 ONSC 5223 commencing at paragraph 46:
(i) The Law of Unjust Enrichment
[46] 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. 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.
[47] 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.
[48] The Court has taken a straightforward economic approach to the first two elements – enrichment and corresponding deprivation: Kerr, para. 37.
38. For the first requirement — enrichment — the plaintiff must show that he or she gave something to the defendant which the defendant received and retained. The benefit need not be retained permanently, but there must be a benefit which has enriched the defendant and which can be restored to the plaintiff in specie or by money. Moreover, the benefit must be tangible. It may be positive or negative, the latter in the sense that the benefit conferred on the defendant spares him or her an expense he or she would have had to undertake (citations omitted).
39. Turning to the second element — a corresponding deprivation — the plaintiff’s loss is material only if the defendant has gained a benefit or been enriched (Peel, at pp. 789-90). That is why the second requirement obligates the plaintiff to establish not simply that the defendant has been enriched, but also that the enrichment corresponds to a deprivation which the plaintiff has suffered (citations omitted).
[49] The provision of domestic services can support a claim for unjust enrichment: Kerr para. 42.
[50] During both the benefit analysis and the deprivation analysis, the court must resist the temptation to evaluate the reciprocal exchange of benefits. “Attempting to set-off or account for reciprocal benefits to show that the plaintiff has not suffered any detriment and is, in fact, better off than before is not appropriate” Wilson v. Fotsch, 2010 BCCA 5 (CanLII), [2010] B.C.J. No. 8 (B.C.C.A.), at para. 19. “The receipt of benefits by a plaintiff does not mean ipso facto that the defendant has not been unjustly enriched”: Wilson, para. 31.
[51] Although mutual conferral of benefits should not be addressed at the benefit/detriment stage of the analysis, that is not to say that mutual benefits are to be ignored. Rather, as stated by Cromwell J. in Kerr, at para. 109:
109. As I noted earlier, my view is that mutual benefit conferral can be taken into account at the juristic reason stage of the analysis, but only to the extent that it provides relevant evidence of the existence of a juristic reason for the enrichment. Otherwise, the mutual exchange of benefits should be taken into account at the defence and/or remedy stage. It is important to note that this can, and should, take place whether or not the defendant has made a formal counterclaim or pleaded set-off.
[52] At para. 124 of Kerr, Cromwell J. summarized the role of the parties’ reasonable expectations in the domestic context:
124. To summarize:
1. The parties’ reasonable or legitimate expectations have little role to play in deciding whether the services were provided for a juristic reason within the existing categories.
2. In some cases, the fact that mutual benefits were conferred or that the benefits were provided pursuant to the parties’ reasonable expectations may be relevant evidence of whether one of the existing categories of juristic reasons is present. An example might be whether there was a contract for the provision of the benefits. However, generally the existence of mutual benefits flowing from the defendant to the claimant will not be considered at the juristic reason stage of the analysis.
3. The parties’ reasonable or legitimate expectations have a role to play at the second step of the juristic reason analysis, that is, where the defendant bears the burden of establishing that there is a juristic reason for retaining the benefit which does not fall within the existing categories. It is the mutual or legitimate expectations of both parties that must be considered, and not simply the expectations of either the claimant or the defendant. The question is whether the parties’ expectations show that retention of the benefits is just.
[53] The concept of a “joint family venture” comes into play at the remedy stage, after it has been determined that there has been an unjust enrichment
[55] At para. 80, Cromwell J. held:
Where the unjust enrichment is best characterized as an unjust retention of a disproportionate share of assets accumulated during the course of what McLachlin J. referred to in Peter (at p. 1001) as a “joint family venture” to which both partners have contributed, the monetary remedy should reflect that fact.
[56] At para. 81, Cromwell J. described the appropriate remedy:
In such cases, the basis of the unjust enrichment is 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 claimant’s contributions to the joint venture and the accumulation of wealth. Irrespective of the status of legal title to particular assets, the parties in those circumstances are realistically viewed as “creating wealth in a common enterprise that will assist in sustaining their relationship, their well-being and their family life” (McCamus, at p. 366). The wealth created during the period of cohabitation will be treated as the fruit of their domestic and financial relationship, though not necessarily by the parties in equal measure. Since the spouses are domestic and financial partners, there is no need for “duelling quantum meruits”. In such cases, the unjust enrichment is understood to arise because the party who leaves the relationship with a disproportionate share of the wealth is denying to the claimant a reasonable share of the wealth accumulated in the course of the relationship through their joint efforts. The monetary award for unjust enrichment should be assessed by determining the proportionate contribution of the claimant to the accumulation of the wealth.”
Peters v. Swayze, 2017 ONSC 1779 (CanLII) at 22