



COURT OF APPEAL FOR ONTARIO

CITATION: Holtby v. Draper, 2018 ONCA 231

DATE: 20180309

DOCKET: C61476

Weiler
*
,
    van Rensburg and Huscroft JJ.A.

BETWEEN

Kenneth Holtby

Applicant/Respondent

and

Cheryl Draper
and
    Knapton Farms Ltd.

Respondents/
Appellant

Aaron M. Franks and Michael Zalev, for the appellant

William R. Clayton, for the respondent

Heard: By written submissions

REASONS FOR DECISION

[1]

Cheryl Draper and Ken Holtby were married and co-owned property. The
    appellant, Cheryl Draper, appealed the trial judges decisions on property
    ownership. This courts decision on the appeal was released on December 1,
    2017:
Holtby v. Draper
, 2017 ONCA 932.

[2]

These supplementary reasons concern only one of the properties,
    namely a
50 acre parcel, referred to as Lot 8. At the date
    of separation, Ms. Draper was the sole registered owner of Lot 8. The trial
    judge determined that, by way of resulting trust, Mr. Holtby was the beneficial
    owner of the entirety of Lot 8.

[3]

On appeal, this court concluded instead that the
    parties were joint beneficial owners of the property. It followed from this, as
    reasonable and appropriate, that Ms. Draper was entitled to occupation rent for
    her half of the property during the lengthy period of time that Mr. Holtby had
    sole use of the property in its entirety (and Ms. Draper made mortgage and
    property tax payments). Given the finding of joint beneficial ownership and
    entitlement to occupation rent, we also  set aside the trial judges award 
    reimbursing Ms. Draper for the payments she made toward the property in its
    entirety,  while noting that Ms. Draper may be entitled to reimbursement from
    Mr. Holtby for certain payments she made.

[4]

The parties were invited to make further
    submissions, in the absence of agreement, on the following:

(1)

the adjusted equalization payment owing to
    reflect Ms. Drapers  joint beneficial interest in Lot 8, as well as  the
    adjusted value of Mr. Holtbys company, Knapton (a calculation error that both
    parties conceded on appeal);

(2)

prejudgment interest on the equalization
    payment and occupation rent;

(3)

payments, if any, owing to Ms. Draper in
    respect of Lot 8;

(4)

trial costs; and

(5)

costs of the appeal.

[5]

The parties resolved the first two issues. On
    consent, Mr. Holtby shall pay Ms. Draper an equalization payment of $121,729.43
    as well as prejudgment interest of $14,081.93 on the equalization payment and
    $4,663.53 on the occupation rent.

[6]

We turn to the remaining issues in dispute, as
    well as one other issue raised by Ms. Draper  that she should receive an
    additional amount for occupation rent on Lot 8 for the post-trial period of
    2016 to 2017.

Payments on Lot 8

[7]

Ms. Draper made all mortgage and property tax
    payments on Lot 8 from May 1996 to December 2015. She claims $30,788.51, which
    is one-half of the total amount she paid. The basis for the claim is that Mr.
    Holtby was unjustly enriched by Ms. Drapers payment of his share of the
    mortgage and property tax payments on his one-half interest in the property.

[8]

Mr. Holtby resists the claim on the basis that
    he incurred all of the input costs and did all of the work, or paid for the
    work, to generate income from Lot 8. He says there is no unjust enrichment as
    Ms. Draper will benefit from receiving 50% of the net proceeds from the
    eventual sale of Lot 8, the value of which has appreciated considerably since
    its acquisition in 1999.

[9]

We disagree with Mr. Holtbys position on this
    issue. Because we have found that the basis for Ms. Drapers entitlement to
    half of Lot 8 is not by way of constructive trust but rather a resulting trust
    interest, her entitlement to 50% of the proceeds of its sale does not
    compensate her for the payments she made towards Mr. Holtbys share of the
    property.  The law of unjust enrichment entitles Ms. Draper to recovery
    provided she can establish that Mr. Holtby was enriched by these payments to
    her detriment in the absence of a juristic reason:
Kerr v. Baranow
, [2011] 1 S.C.R. 269 at para. 32.

[10]

As the trial judge found at para. 110, Ms.
    Draper was under no obligation to make out-of-pocket payments towards the
    mortgage and property taxes for Mr. Holtbys property. To allow him to retain
    such payments would unjustly enrich Mr. Holtby at Ms. Drapers expense.  Given
    our conclusion that Ms. Draper was already entitled to half of the property as
    a  joint owner, it follows from the trial judges findings  absent extenuating
    circumstances  that she is now entitled to reimbursement for the payments she made
    in relation only to Mr. Holtbys half-interest. Mr. Holtby has raised no such
    extenuating circumstances.

[11]

Mr. Holtby shall therefore pay Ms. Draper the
    sum of $30,788.51 plus pre-judgment interest for the amounts she paid in
    relation to Mr. Holtbys half of Lot 8.

Trial Costs

[12]

Ms. Draper was ordered by the trial judge to pay
    Mr. Holtby all-inclusive costs of $100,000. The trial judge characterized Mr.
    Holtby as much more successful in the litigation. He reduced the quantum of
    costs below the $185,000 sought by Mr. Holtby, on account of Mr. Holtbys
    conduct in the litigation and less reasonable settlement efforts.

[13]

Ms. Draper submits that, since she was
    successful on the ownership of Lot 8 issue, that, plus the trial judges
    reasons to significantly reduce Mr. Holtbys costs, mean that she should
    receive $100,000 in costs from him. She claims that the case was ultimately
    about the money she would receive, and that in concluding that she was a joint
    beneficial owner of Lot 8, this courts decision increased the money she will
    receive by more than $200,000.

[14]

Mr. Holtby argues that the trial judges costs
    decision should stand, asserting that he was more successful because he
    recovered the bulk of the farm assets held in Knapton without having to pay Ms.
    Draper. He also contends that Ms. Drapers offers to settle were problematic.

[15]

Mr. Holtby was successful at trial and on appeal
    on the issue of ownership of Knapton. Ms. Draper gained joint beneficial
    ownership of Lot 8 on appeal. By comparison, the other issues at trial were
    minor, or depended on these determinations of ownership. (This was also the
    view of the trial judge who observed that the trials raison d
ê
tre was whether Ms. Draper was a real owner
    of Knapton and/or [Lot 8]:
Holtby v. Draper
,

[2016] O.J. No. 4595.) The relative
    success of the parties, after appeal, was evenly balanced. In the
    circumstances, the parties should bear their own costs of the proceedings in
    the court below, and we so order.

Costs of the Appeal

[16]

Ms. Draper claims partial indemnity costs of
    $42,000. Mr. Holtby claims $16,811.58 in costs. Both claim to be the successful
    party on appeal. The two main issues on appeal were the ownership of Lot 8 and
    Knapton. Success was divided. In the circumstances there will be no order as to
    costs on the appeal, including the costs of the additional submissions made by
    the parties.

Additional Claim for Occupation Rent

[17]

Ms. Draper claims an additional $7,125 in
    occupation rent for the years 2016 to 2017 (post-trial). While he does not
    contest the amount of the claim, Mr. Holtby responds that these years were not
    before the court, and that no such award should be made.

[18]

It is this courts well-established practice not
    to entertain issues raised for the first time on appeal where the parties have
    not had an opportunity, in such circumstances, to focus on and prepare a record
    in that context:
Rosenberg v. Gold
, 2016 ONCA
    565 at para. 26.

[19]

At the same time, the late timing of this claim
    would not necessarily foreclose recovery since, given the nature of the claim
    for beneficial ownership in Lot 8, Mr. Holtby could be presumed to have been on
    notice of a claim for ongoing occupation rent: see

Frick
    v. Frick
, 2016 ONCA 799 at paras. 34-40.

[20]

Here, Mr. Holtby was on notice since trial that
    Ms. Draper was claiming occupation rent in the event that she was found to be a
    part-beneficial owner. Accordingly, we award Ms. Draper the additional amount
    of $7,125 in occupation rent.

K.
    van Rensburg J.A.

Grant
    Huscroft J.A.





*

Weiler J.A. took no part in this decision.


