



COURT OF APPEAL FOR ONTARIO

CITATION: Reiter v. Hollub, 2017 ONCA 186

DATE: 20170303

DOCKET: C61541

Feldman, Epstein and Miller JJ.A.

BETWEEN

Jessica Reiter

Applicant (Appellant)

and

Tiar Hollub

Respondent (Respondent)

J. Lester Davies, for the
    appellant

Elissa C.M. Boyle, for the
    respondent

Heard: September 30, 2016

On
    appeal from the order of Justice Andra Pollak of the Superior Court of Justice,
    dated December 9, 2015, with reasons reported at 2015 ONSC 6397.

Epstein J.A.:

A.

Overview

[1]

The appellant,
    Jessica Reiter, appeals from the dismissal of her application for an interest
    in the increase in equity of a home owned by the respondent, Tiar Hollub, which
    she shared during their six year common law relationship.

[2]

Ms. Reiter
    advanced her claim on the basis of unjust enrichment. She argued that she had
    contributed to the $410,000 increase in the net value of the home over the
    course of the relationship. She relied on contributions she made to common
    living expenses and to the maintenance and repair of the residence.  She also
    relied on the fact that she had given Mr. Hollub a one-time payment of $5,000
    toward the mortgage.

[3]

Ms. Reiter also
    took the position that her relationship with Mr. Hollub amounted to a joint
    family venture as defined in
Kerr v. Baranow
, 2011 SCC 10, [2011] 1
    S.C.R. 269.

[4]

The application
    judge held that Ms. Reiter was unable to establish a joint family venture to
    support the requested remedy. She found no evidence that would support a
    conclusion that Ms. Reiters contributions had led to an increase in the value
    of the property. The application judge also found that the evidence did not support
    a joint family venture as defined in
Kerr v. Baranow
. As to Ms. Reiters $5,000 payment toward the mortgage, the
    application judge held that although Mr. Hollub had been enriched to Ms.
    Reiters detriment as a result of this contribution, his retention of the
    payment was justified by the parties agreement to share living expenses.

[5]

I see no reason
    to interfere with the application judges rejection of Ms. Reiters claim for a
    proprietary interest in the house. The application judges conclusions about
    the circumstances of Ms. Reiters contribution to expenses and about the nature
    of the relationship are entitled to deference. I would therefore dismiss that
    aspect of Ms. Reiters appeal. However, I would allow the appeal on the
    treatment of the $5,000 lump sum payment to Mr. Hollub.

B.

FACTS

[6]

The facts were
    largely presented through the parties agreed statement. I summarize the
    relevant ones as follows:

·

In October 2015, Ms.
    Reiter was 29 years old. Mr. Hollub was 53.

·

The parties met
    in the spring of 2006.

·

The parties
    earned a similar salary throughout the period of cohabitation.

·

Mr. Hollub used
    $150,000 from the proceeds of sale of another house he owned to purchase the
    property. The balance came from a first mortgage on the property. Mr. Hollub
    took possession on July 31, 2006.

·

The parties lived
    together in the property in a conjugal relationship from September 1, 2008 to
    November 29, 2014.

·

Prior to moving
    in with Mr. Hollub, Ms. Reiter was paying more than $400 per month in rent.

·

While the parties
    lived together, Ms. Reiter gave Mr. Hollub $400 monthly.

·

Mr. Hollub had a monthly
    mortgage payment of $1,000.

·

In 2013, Ms. Reiter
    gave Mr. Hollub $5,000 towards the mortgage.

·

On September 1,
    2008, the value of the property was $420,000 and the amount outstanding on the
    mortgage was $156,000. On November 1, 2014, the amount outstanding on the
    mortgage was $29,000.

·

The increase in
    equity from September 1, 2008 to November 1, 2014 was $410,000.

·

During the period
    of cohabitation, Ms. Reiter saved approximately $105,000, exclusive of her
    pension. In addition to the increase in equity of $410,000, Mr. Hollub saved
    approximately $112,000, excluding his pension.

·

Ms. Reiter did
    not sacrifice her career in any way as a result of her relationship with Mr.
    Hollub.

·

Ms. Reiter purchased
    the maximum amount of RRSPs each year during the relationship.

·

At the time the
    application was heard, Ms. Reiter was paying more than double the $400 per
    month for her current rental residence.

C.

THE APPLICATION JUDGES REASONS

[7]

The application judge
    first considered whether the parties relationship amounted to a joint family
    venture as defined in
Kerr v. Baranow
. The Supreme Court, in examining
    remedies available when unjust enrichment is found in the context of a domestic
    relationship, identified the new concept of joint family venture. To receive a
    monetary award on a value survived basis, the claimant must show that there was
    a joint family venture and that there was a link between his or her
    contributions to the joint family venture and the accumulation of assets and/or
    wealth. The court made it clear that a global analysis of all the evidence,
    rather than a checklist of conditions, is required to determine whether the
    parties were engaged in a joint family venture.

[8]

The application
    judge reviewed the agreed facts and the parties evidence on the issue of joint
    family venture, including that:

·

Ms. Reiter had
    nothing to do with the acquisition of the house.

·

The parties
    maintained their own accounts and had no joint accounts.

·

The parties paid
    for their own utilities, groceries, and vacations.

·

Mr. Hollub paid
    the mortgage, property tax, and insurance.

·

The couple did
    not discuss their individual finances.

·

Ms. Reiter had
    her own personal savings. The parties did not save together.

·

Neither party
    named the other as the beneficiary of their RRSPs or included them as a
    beneficiary in their will.

·

The parties
    specifically discussed marriage and Mr. Hollub was clear he did not want to get
    married.

·

The parties used
    contraception to ensure that the relationship produced no children.

·

The parties did
    not prioritize their relationship over their individual interests.

·

There was no
    intention that Ms. Reiter would share a portion of Mr. Hollubs interest in the
    house.

·

There was no
    detrimental reliance by Ms. Reiter for the sake of the relationship.

·

The parties
    shared the domestic tasks.

·

While Ms. Reiter
    contributed to repairs and improvements of the home, there was no record of how
    much Ms. Reiter spent on repairs and improvements.

[9]

The application
    judge considered the evidence in the context of the four factors outlined in
Kerr
    v. Baranow
to determine whether a joint family venture existed  mutual
    effort, economic integration, actual intent and priority of family. She held
    that, on the basis of a global consideration of the evidence and the principles
    set out in
Kerr v. Baranow
, Ms. Reiter was unable to demonstrate that
    she and Mr. Hollub were engaged in a joint family venture.

[10]

After coming to
    this conclusion, the application judge, at para. 19, stated that for this
    reason alone, [Ms. Reiter] is not entitled to the remedy she seeks even if she
    can establish her claim that [Mr. Hollub] has been unjustly enriched.

[11]

The application
    judge went on, however, to consider Ms. Reiters argument that Mr. Hollub had
    been unjustly enriched as a result of her contribution to expenses and her participation
    in various home maintenance and improvement projects, as well as through the
    $5,000 payment toward the mortgage.

[12]

First, the
    application judge considered the $283,000 increase in equity in the house
    during the parties cohabitation that was attributable to market forces. She
    concluded that the evidence did not support a finding that Ms. Reiters (or Mr.
    Hollubs, for that matter) contribution to expenses and home maintenance and
    improvements efforts increased the value of the property.

[13]

The application
    judge then considered the increase in equity of $127,000 that resulted from payments
    made towards the propertys mortgage. The parties agreed that Ms. Reiter gave
    Mr. Hollub $400 monthly, an amount that was less than she had previously paid
    for rent, and that Mr. Hollubs monthly mortgage payments were $1,000. They
    also agreed that in 2013, Ms. Reiter paid $5,000 towards the mortgage. The
    application judge made no explicit finding about the $400 payments. She did, however,
    find that Mr. Hollub had been enriched and Ms. Reiter suffered a corresponding
    deprivation as a result of Ms. Reiters $5,000 contribution toward the mortgage.
    The application judge then turned to whether there was any juristic reason for
    the enrichment. She found that the parties agreement to share living expenses provided
    a basis for Mr. Hollubs entitlement to the $5,000.

[14]

The application
    judge therefore concluded that Ms. Reiter had no claim against Mr. Hollub in unjust
    enrichment.

D.

ISSUES

[15]

On appeal, Ms.
    Reiter argues that the application judge erred in finding no unjust enrichment
    and in concluding that her relationship with Mr. Hollub did not amount to a
    joint family venture.

E.

ANALYSIS

(1)

Applicable principles

[16]

In
Kerr v.
    Baranow
, at para. 31, Cromwell J. recognized that [a]t the heart of the
    doctrine of unjust enrichment lies the notion of restoring a benefit which
    justice does not permit one to retain. Since the Supreme Courts 1980 decision
    in
Pettkus v. Becker
, [1980] 2 S.C.R. 834, unjust enrichment
    principles have been available to support claims made by domestic partners upon
    the breakdown of their relationship.

[17]

The test for
    unjust enrichment is well-settled. To establish unjust enrichment, the person
    advancing the claim must prove three things:

1.

An enrichment of
    or benefit to the defendant;

2.

A corresponding
    deprivation of the plaintiff; and

3.

The absence of a
    juristic reason for the enrichment.

[18]

There are two
    steps to identifying whether there is a juristic reason for the responding
    party to retain the benefit incurred. First, the court must consider whether
    the case falls within a pre-existing category of juristic reason, including a contract,
    a disposition of law, donative intent, and other valid common law, equitable or
    statutory obligations:
Kerr
, at para. 43. If a case falls outside one
    of these established categories, the reasonable expectations of the parties and
    public policy considerations become relevant in assessing whether recovery
    should be denied:
Kerr
, at para. 44.

[19]

In
Kerr v.
    Baranow
, at para. 46, the Supreme Court outlined two possible remedies where
    unjust enrichment is established  a monetary award or a proprietary award. The
    court counselled, at para. 47, that the first remedy to consider is always the
    monetary award and that, in most cases, a monetary award is sufficient to
    remedy the unjust enrichment.

[20]

To obtain a
    proprietary award, the person advancing the claim based on unjust enrichment
    must demonstrate that monetary damages are insufficient and that there is a
    sufficiently substantial and direct causal connection between his or her
    contributions and the acquisition, preservation, maintenance or improvement of
    the disputed property:
Kerr
, at paras. 50-51. A minor or indirect
    contribution will not suffice.

[21]

The court held
    that there are two different approaches to valuation for a monetary award:
Kerr
,
    at para. 55. First, a monetary award may be based on a
quantum meruit
,
    value received or fee-for-services basis. Second, a monetary award may be based
    on a value survived basis. This is where the joint family venture analysis
    becomes relevant.

[22]

To receive a
    monetary award on a value survived basis, the claimant must show that there was
    a joint family venture and that there was a link between his or her
    contributions to the joint family venture and the accumulation of assets and/or
    wealth:
Kerr
, at para. 100. Whether there is a joint family venture is
    a question of fact to be assessed in light of all of the relevant
    circumstances, including the four factors noted above  mutual effort, economic
    integration, actual intent and priority of the family:
Kerr
, at para.
    100.

[23]

Justice Cromwell
    was careful to note that cohabiting couples are not a homogenous group:
Kerr
,
    at para. 88. The analysis must therefore take into account the particular
    circumstances of each relationship. The emphasis should be on how the parties
    actually lived their lives, not on their
ex post facto

assertions
    or the courts view of how they ought to have done so:
Kerr
, at para.
    88.

[24]

While the four factors
    identified above are helpful to determine whether the parties were engaged in a
    joint family venture, there is no closed list of relevant factors:
Kerr
,
    at para. 89. The factors Cromwell J. suggested were not a checklist of
    conditions, but a useful approach to a global analysis of the evidence and
    examples of relevant factors that a court may take into account:
Kerr
,
    at para. 89.

(2)

Principles applied

[25]

As previously
    indicated, I see no reason to interfere with the application judges disposition
    of the application except in her treatment of the $5,000. I will deal with that
    issue in a separate section below.

[26]

That said, in my
    view, it would have been preferable to first establish whether there was any
    unjust enrichment before considering the possibility of a joint family venture.
    The joint family venture inquiry concerns remedy. In
Martin v. Sansome
,
    2014 ONCA 14, at para. 52, this court set out the appropriate analysis for determining
    an unjust enrichment-based claim for an interest in property within the context
    of a domestic relationship and following the Supreme Courts decision in
Kerr
    v. Baranow
:

1) Have the elements of unjust
    enrichment  enrichment and a corresponding deprivation in the absence of a
    juristic reason  been made out?;

2) If so, will monetary damages
    suffice to address the unjust enrichment, keeping in mind bars to recovery and
    special ties to the property that cannot be remedied by money?;

3) If the answer to question 2
    is yes, should the monetary damages be quantified on a fee-for service basis or
    a joint family venture basis?; and,

4) If, and only if monetary
    damages are insufficient, is there a sufficient nexus to a property that
    warrants impressing it with a constructive trust interest?

[27]

In keeping with the
    approach identified in
Martin
,
I start by considering the
    application judges holding that with the exception of the $5,000 payment, Ms.
    Reiter suffered no corresponding deprivation. That is, in the application
    judges view the parties shared expense arrangement resulted only in financial
    enrichment on both sides.

[28]

This fact-based
    holding is entitled to deference:
Wharry v. Wharry
, 2016 ONCA 930,
    [2016] O.J. No. 6408, at para. 32;
Simonin Estate v. Simonin
, 2010
    ONCA 900, [2010] O.J. No. 5626, at para. 13. Absent palpable and overriding
    error, there is no basis to intervene.

[29]

The finding that
    the parties had a mutually beneficial agreement to share living expenses was
    available to the application judge on the record. The parties paid for their
    own utilities, their own groceries, and their own vacations. Ms. Reiter gave
    Mr. Hollub monthly payments of $400, which Ms. Reiter testified was paid toward
    rent. Ms. Reiter also agreed that this $400 was less than she paid for rent
    either before or after the relationship. Mr. Hollub made monthly mortgage
    payments of $1,000, and paid the property taxes and insurance. Given their
    annual incomes, both parties also had considerable savings at the
    relationships end.

[30]

I would not
    interfere with the application judges rejection of Ms. Reiters unjust
    enrichment claim advanced on this basis.

[31]

A conclusion that
    there is no reason to interfere with this finding would render it unnecessary
    to proceed further with the analysis:
Martin
,
at para. 52. As
Martin
shows
,
    a finding of unjust enrichment is fundamental to Ms. Reiters entitlement to
    any form of relief.

[32]

However, for
    completeness, I will comment on Ms. Reiters other ground of appeal  the
    application judges finding that the parties were not involved in a joint
    family venture.

[33]

This finding is also
    fact-based and entitled to deference:
Kerr
, at para. 100. In the light
    of factors such as the lack of integration of the parties finances, lack of
    combined contribution to a future together and lack of evidence of prioritizing
    family over individual interests, the application judge was entitled to
    conclude that there was no joint family venture in this case.

(3)

Treatment of the $5,000 Lump-Sum
    Payment

[34]

I now turn to the
    $5,000 payment Ms. Reiter made toward the mortgage. I consider this payment
    separately only because the application judge herself did. In relation only to
    this particular lump sum payment made in 2013, the application judge concluded
    that, unlike the other contributions to shared expenses which were beneficial
    to both sides, this payment did in fact constitute an enrichment and
    corresponding deprivation.

[35]

Ms. Reiters
    position was that the $5,000 constituted a contribution to the mortgage. Mr.
    Hollub argued that the money was outside the shared expense arrangement  it
    was given to him as a gift to help pay down the principal on the mortgage, with
    no strings attached.

[36]

With respect, on
    this record, I am of the view that the application judge erred by characterizing
    the $5,000 as having been paid as part of the common expense agreement  a
    characterization not advanced by either party and not supported by the
    evidence.

[37]

Given the laws
    presumption against a gift (
Pecore v. Pecore
, 2007 SCC 17, [2007] 1 S.C.R.
    795, at para. 24) and the absence of any evidence of donative intent, the payment
    should simply be returned.

F.

DISPOSITION

[38]

For these
    reasons, I would allow the appeal, in part. I would order Mr. Hollub to return
    to Ms. Reiter the $5,000 payment made to him in 2013, with interest.

[39]

I would strongly
    urge the parties to resolve the issue of costs, here and below. If a resolution
    cannot be reached, brief submissions as to costs (no more than 5 pages in
    total) may be made within 10 days of the release of these reasons.

Released:
    March 3, 2017 ("GE")

"Gloria
    Epstein J.A."

"I
    agree. K. Feldman J.A."

"I
    agree. B.W. Miller J.A."


