The Supreme Court of Canada's decision in Kerr v
Baranow (2011 SCC 10) earlier this year changed the legal
landscape for unjust enrichment claims in domestic relationships.
While the case arose in a family law context, the principles in the
Court's decision will also apply to unjust enrichment claims in
The first major change resulting from this decision is the
elimination of the "common intention" resulting trust,
which was referred to as a "purely Canadian invention" by
one scholar. Prior to this decision, a "common intention"
resulting trust could be imposed over property, even in the absence
of a financial contribution to its acquisition by the claimant,
where the court was satisfied that it was the parties' common
intention that the defendant was not to have the sole beneficial
interest in the property, even if the defendant was the sole legal
owner, but rather the beneficial interest was to be shared between
the claimant and the defendant in some proportion.
The Court held that the "common intention" resulting
trust no longer had a role to play in resolving domestic cases. The
Court found that it was doctrinally unsound with the "common
intention" requirement being inconsistent with the legal
principles of resulting trusts, which do not require proof of the
intention of both parties, and that it actually evolved from a
misreading of early British authorities. Further, the Court held
that the notion of "common intention" may be highly
artificial, particularly in domestic cases. Finally, the Court held
that the principles of unjust enrichment, with the possible remedy
of a constructive trust, provide a more comprehensive and
principled basis to address claims arising out of domestic
The second notable aspect of this decision was its discussion of
unjust enrichment arising from a "joint family venture".
In domestic relationships, the parties often accumulate wealth
through joint efforts. When the relationship breaks down, if one
party retains a disproportionately large share of the assets that
were accumulated through this "joint family venture",
this would constitute unjust enrichment.
The Court noted that, when providing a remedy for unjust
enrichment, the courts had gravitated to imposing one of two
remedies: either a monetary remedy based on quantum
meruit, or a constructive trust. It held that this
"remedial dichotomy" was too rigid, as many unjust
enrichments arising between domestic partners do not fit neatly
into either mold. Calculating contributions on a
"fee-for-services" basis is often a difficult and
The Court held that the monetary remedy for unjust enrichment
was not restricted to awards based on a
"fee-for-services" approach. Rather, where unjust
enrichment results from a joint family venture and a monetary award
is appropriate, such an award should be calculated by determining
the value of the share of the assets in question that are
proportionate to the claimant's contributions. To be entitled
to such a monetary remedy, the claimant must show both that there
was a joint family venture, and a link between her/his contribution
to it and the accumulation of assets and/or wealth. Some portion of
the value of the asset or wealth (or of the increase in value of
the asset or wealth during the partnership, if appropriate) may
then be awarded to the claimant.
In an estate involving a domestic partnership, which does not
have all the same legislative rights as a marriage, the surviving
partner may raise a claim for unjust enrichment against the estate.
In such a case, the "joint family venture" approach may
make obtaining a monetary remedy easier for the claimant, in
contrast to the more rigid "fee-for-services" model. This
case is an important read for anyone involved in an unjust
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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On March 31, 2014, BC's new Wills, Estates and Succession Act1 ("WESA") will come into force. WESA introduces new protections for beneficiaries of estates that are in danger of being disputed or deemed ineffective by a court.
It is not uncommon for parents to provide monetary gifts to their adult children. Parents may wish to help their child with a down payment on a property, or help pay out their child's existing mortgage.
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