



COURT OF APPEAL FOR ONTARIO

CITATION: Tsai v. Dugal, 2022 ONCA 81

DATE: 20220131

DOCKET: C68741

Strathy C.J.O., Harvison Young
    and Zarnett JJ.A.

BETWEEN

Wen-Chi
    Tsai

Applicant
(Appellant)

and

Lucien Dugal by his Estate
    Trustees,
Johanne Dugal Roussee and Luc Dugal

Respondent
(Respondent in Appeal)

Michael S. Deverett, for the appellant

Alexandra Carr and Simran Dosanjh, for
    the respondents

Heard: January 17, 2022, by video conference

On
    appeal from the order of Justice Elizabeth M. Stewart of the Superior Court of
    Justice, dated October 7, 2020.

REASONS FOR DECISION

[1]

The appellant, Wen-Chi Tsai, and the respondent, Lucien Dugal,
    now deceased, began a romantic relationship in 2001 which progressed to
    cohabitation and ended in separation in July 2014. Shortly after their
    separation, the appellant commenced litigation making claims against all
    properties owned by Mr. Dugal at the time of separation. Mr. Dugal died in
    November 2017, and his two children, his estate trustees, have continued to
    defend the claim.

[2]

The litigation has continued since 2014 but, by the time of the
    hearing in 2019, the only issue for the hearing was whether the appellant was
    entitled to an interest in the proceeds of one of these properties (123
    Morse) based upon the doctrine of unjust enrichment. The application judge
    dismissed the appellants claim and the appellant appeals that judgment on the
    basis that the application judge made numerous palpable and overriding errors
    of fact leading to her erroneous conclusion that the appellant had not made out
    a claim in unjust enrichment. She further claims that the application judge
    erred in failing to find that she was entitled to a share in the proceeds of
    the home that the parties lived in on the basis that it was a joint family
    venture.

[3]

For the following reasons the appeal is dismissed.

[4]

When the couple began their romantic
    relationship, Ms. Tsai owned a condo and was operating a golf club. Mr. Dugal
    owned two properties on Morse Street in Toronto, 123 and 133, both purchased
    over ten years before the couple began to cohabit. During the initial portion
    of their cohabitation, the couple spent some of their time together in Ms.
    Tsais condo but for most of the time during the relationship they resided at
    123 Morse. Ms. Tsais son lived in the basement for extended periods.

[5]

In 2007, Mr. Dugal sold 133 Morse at a significant profit and
    used some of the proceeds to pay down the mortgage on 123 Morse. Ms. Tsai never
    made any direct contribution toward paying off the mortgage or securing any
    equity stake in 123 Morse.  At all times during the relationship, title to 123
    Morse remained in Mr. Dugals name alone. Ms. Tsai held sole title to her
    condo. She rented it out for about five years and sold it in 2010. Her proceeds
    of sale were approximately $80,000. The application judge found as a fact that
    neither the rent she collected, nor the proceeds of sale, was shared with Mr.
    Dugal.

[6]

The appellant submits that the application
    judge made numerous errors and failed to take adequate account of the evidence
    in many ways, for example by not accounting for Ms. Tsais contributions to two
    commercial properties, her domestic services and non-pecuniary contributions,
    and a list of other alleged pecuniary contributions. In essence, the claim is
    that she erred in finding no unjust enrichment and in failing to find that
    there was a joint family venture. We do not agree with either argument.

[7]

First, the application judge found that there was no unjust
    enrichment of Mr. Dugal. She applied the correct test, asking whether there was
    (a) an enrichment of Mr. Dugal; (b) a corresponding deprivation of Ms. Tsai;
    and (c) the absence of any juristic reason for the enrichment. She went on to
    say that once an unjust enrichment has been established, the concept of joint
    family venture comes into play when considering a remedy. She noted that
    interwoven with [the appellants] argument of unjust enrichment is the concept
    of joint family enterprise which she submits entitles her to share in the value
    of 123 Morse. She also correctly noted that the appellant bears the onus of
    proving both unjust enrichment and the existence of a joint family venture.

[8]

We see no palpable and overriding error in the application
    judges conclusion that the appellant failed to show unjust enrichment. In
    finding that they did not organize their finances or their relative
    contributions to their livelihoods in such a way as to unjustly enrich one to the
    deprivation of the other,  the application judge summarized her findings of
    facts as set out in the following extracts from the reasons for decision:

Each party maintained a residence for all or some of the time
    they were together. Each earned a separate income from employment or
    investments. To the extent Tsai may have made contributions to the parties
    living expenses, such contribution was modest and are amply offset by being
    able to live with her son rent-free at 123 Morse.

To the extent they may have had commercial property rental
    investments, Tsai was repaid her contributions to same and accepted a share of
    the sale proceeds in full satisfaction of all claims she may have had to a
    financial right to participate in the profits.

Accordingly, Dugal was not
    financially enriched by their relationship. This finding means that Tsais
    claim must fail.

[9]

The application judge continued to say that, in any event, she
    was not satisfied that the appellant had suffered any deprivation during of the
    relationship. She pointed out that the parties had no children together, the
    appellant was free to pursue her career full time and to seek out her own
    investment opportunities.

[10]

Again, we see no palpable and overriding errors on the part of
    the application judge. She was alive to the record and to the fact that Ms.
    Tsai did make some contributions. Concerning the investments in Jones Ave. and
    Queen St. East properties (both of which were held in Mr. Dugals name alone),
    she clearly found that the appellant was compensated in the amount of $300,000
    that Mr. Dugal directed be paid to her from the proceeds of their sale around
    the time of their separation. This amount represented roughly half of the net
    proceeds of their sale. As far as 123 Morse is concerned, it is certainly true
    that the property was worth much more when it was sold in May 2019 than when
    the parties first began their cohabitation, but this benefit to Mr. Dugal was
    not achieved at the expense of the appellant. The application judge found that
    any contributions she made were modest and offset by the fact that she lived
    rent-free at 123 Morse, as did her son for significant periods of time. It is
    worth noting that prior to the parties cohabitation, Mr. Dugal lived in the
    basement of 123 Morse and rented out the upper two floors, so he lost the
    rental income that he had received before.

[11]

It is also significant that the application judge did not accept
    all of the appellants evidence as to her contributions. For example, she did
    not accept her claim to have earned over $100,000 annually for most of the
    relationship because her tax returns showed a far lower amount, in most years
    amounting to half of what she asserted. In addition, it is clear from the
    record that her evidence as to the amounts she contributed changed over the
    various affidavits she swore between 2014 and 2019, which served as her
    evidence in chief at the hearing.

[12]

In short, we would not give effect to the appellants argument
    that the application judge made numerous palpable and overriding errors of fact.
    The record as a whole provides ample support for the findings of fact that she made.

[13]

Nor do we find any error in the application judges part in
    concluding that, even if there had been unjust enrichment, the appellant had
    not discharged her onus of establishing a joint family venture. The appellant
    does not argue that she did not apply the right test as set out in
Kerr v. Baranow
, 2011 SCC 10, [2011] 1 SCR 269.  She was
    not satisfied that there was mutual effort, economic integration, actual
    intent, and priority of the family. Despite the fact that the couple lived
    together and apparently made some real estate investments cooperatively, she
    found that the evidence indicates that they did not go so far as to be able to
    be described as having pooled their efforts and worked toward a common goal.
    They did not fully integrate their finances. None of the properties were held
    jointly. They had no joint bank accounts or separate vehicles and seem to have
    kept much of their respective assets separate from each other.

[14]

The appeal is dismissed. The funds held in trust by the estates
    real estate lawyer shall be paid forthwith to the estate trustees, to be
    distributed according to the terms of the will. If the parties are unable to
    agree as to costs, they may file brief submissions to the court within 7 days
    (the respondent) and 10 days (the appellant) respectively.

G.R.
    Strathy C.J.O.

A. Harvison Young J.A.

B.
    Zarnett J.A.


