Canada: Haigh V. Kent: Unjust Enrichment And The Constructive Trust In The Context Of A Joint Venture

The facts of this case relates to a joint venture that collapsed after more than 20 years.  A majority of the B.C. Court of Appeal upheld the trial judge's decision that an unjust enrichment had occurred, and upheld the trial judge's award of a 25 percent constructive trust interest in the appellant's property on which the joint venture had operated.

The parties to the action were brothers-in-law, with Mr. Kent married to Mr. Haigh's sister, Penny.  In 1980 Mr. Kent invited Mr. Haigh and his wife to live on his property, and told him that it would always be available to them as a home. 

Mr. Kent and Mr. Haigh worked together to get a resort running on the property, with Mr. Haigh's contribution including the construction of extensive upgrades and additions, repairs, and maintenance.  He also constructed an A-frame house for himself and his wife that doubled as a manager's office.  There was never any formal business arrangement between the two men, and Mr. Kent always ran the resort as a sole proprietorship. 

In 2004, the two parties "fell out." Mr. Haigh stopped working at the resort, but continued to live with his wife in the A-frame house he had built on the property.  Eventually, Mr. Kent sought to have Mr. Haigh and his wife removed from the property. At trial, Mr. Haigh took the position that Mr. Kent had been unjustly enriched by his years of work, and that he was entitled to a proprietary remedy through a constructive trust.  Mr. Kent responded that there had been no unjust enrichment, and that in any event Mr. Haigh was only entitled to restitutionary damages. 

Unjust Enrichment

The trial judge accepted the argument that Mr. Kent had been unjustly enriched by Mr. Haigh's years of work.  Mr. Kent's business had clearly benefited from Mr. Haigh's assistance.  The relationship between the two men did not constitute a partnership, in part because they had never shared in the resort's income, and in part because Mr. Kent's control of the business was inseparable from his ownership of the property.    

The trial judge rejected Mr. Kent's argument that the years spent living in the cabin on the property could serve as compensation.  Taking into account the reasonable expectations of the parties, he ruled that there could never have been a serious belief on the part of the either party that the provision of these living accommodations was intended to be any form of compensation.  Mr. Kent had offered to let Mr. Haigh live on the property, and Mr. Haigh had also worked on the resort; one had not had anything to do with the other. 

The Court of Appeal also recognized that Mr. Haigh understood that he would be benefiting from the business.  As the business could not be separated from the property itself, there was a strong rationale for vesting Mr. Haigh with a proprietary interest.  Because both parties had expected to benefit from their arrangement, these expectations were relevant both in determining that there had been an unjust enrichment, and in determining the appropriate remedy.

Upon the finding that an unjust enrichment had occurred, the Court of Appeal continued their analysis with the determination of the appropriate remedy in the circumstances.

The Constructive Trust Remedy

Both the Supreme Court of B.C. and the B.C. Court of Appeal relied on Justice Cromwell's statement in Becker v. Pettkus, [1980] 2 S.C.R. 834, that the existence of a joint venture, and the benefits it would create, was a rationale for granting a proprietary remedy in circumstances where the parties did not have a precise expectation of earning an interest in certain properties, but nevertheless expected to benefit from their contributions. 

Once the determination was made that a joint venture existed (the Court of Appeal did not comment on how this determination was made), the court ruled that, in the circumstances, Mr. Haigh was entitled to a proprietary reward. 

What is significant about this case is that a trust was granted over a percentage of the property as a whole, rather than against a particular subject such as a farm (as in Kerr v. Baranow, 2011 SCC 10) or house (as in Peter v. Beblow, [1993] 1 SCR 980) (which was the more typical result in other cases of unjust enrichment and constructive trusts). Justice McLachlin (as she then was), writing in Peter v. Beblow, stated that the plaintiff must establish a "direct link" to the property that is to be subject to the trust, and that their contribution must be substantial. 

By broadening this link to include all proprietary assets, the Court in Haigh v. Kent has made a significant contribution to the law of unjust enrichment in a joint venture situation.  It seems to have built on Justice Cromwell's ruling in Kerr v. Baranow, that where there is no link between the unjust enrichment and a specific property, there may still be a link between their joint efforts and the accumulation of wealth, or rather, between the "value received" and the "value surviving."  The "value surviving" in the instant case was deemed to be the entirety of the property, especially since this property was inseparable from the business as a whole, and the "value received" was Mr. Haigh's contribution to the land.

A direct link was effectively recognized between the parties' joint venture and the entirety of the land it had been directed towards.  The parties worked together on the land for decades, with no special link to any one element of the property over any other.  The failure on Mr. Kent's part to share assets acquired through the parties' joint efforts was sufficient for the Court to impose the trust, and consequently the trial judge determined that 25 percent of the total proprietary assets was the appropriate quantum for the remedy, which was upheld on appeal.

But why impose a proprietary remedy at all? The dissenting judge at the Court of Appeal, although agreeing on the issues of unjust enrichment and the joint venture, would have awarded restitutionary damages, the typical award in cases of unjust enrichment. The majority of the Court of Appeal accepted the trial judge's reasoning that a proprietary remedy was most appropriate.  They noted that Mr. Haigh had contributed to both the property and the business, creating a strong case for his interest to be retained in both.  The trial judge also pointed out that the creation of a trust would entitle him to a portion of the proceeds in the event that the land was sold.  Notably, the judge also noted that this remedy would hold Mr. Kent to the promises he had made when he invited Mr. Haigh to live on the property.


In affirming the trial judgment, the B.C. Court of Appeal has taken a significant step by applying the law of joint ventures as set out in Kerr v. Baranow to circumstances other than cohabitation. Whereas previously constructive trusts resulting from a joint venture in a commercial context were only hinted at in the jurisprudence, they now have an explicit jurisprudential basis.

This case is an excellent demonstration of the need to formalize business arrangements.  The informal, unstructured relationship between the parties here ultimately led to one of them losing 25% of his proprietary interest, and the other spending years battling in the courts. 

With the concept of a joint venture still technically undefined by the courts, all parties take a substantial risk by relying on their eventual intervention, to say nothing of the cost in both time and money that would be expended whichever way any litigation is, eventually, decided.  Once a court determines that a joint venture has existed, they may divide the "value survived" as they deem most appropriate.  Haigh v. Kent adds the possibility, or perhaps the uncertainty, that in addition to a monetary award, they may grant a proprietary interest in any property that had formed the basis of the joint venture.  

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions