Tuesday, November 01, 2005

Unjust Enrichment: Claims by Stepchildren

The law of unjust enrichment is a vital, flexible and evolving branch of Canadian common law. It allows the courts to remedy injustices for which other, older branches of law do not apply.

The basic principles of an unjust enrichment claim are as follows:

1. The person making the claim must have benefited or enriched the defendant;
2. The person making the claim must have suffered a corresponding deprivation;
3. There is no juristic reason for the enrichment.

In my October 30 post, I wrote about Schnogl v. Blazicevic, 2004 BCSC 1335, a case in which the Supreme Court of British Columbia awarded the plaintiff, who was a tenant and friend of the deceased, a 90 percent interest in the deceased’s house by imposing a constructive trust on the house. The court found that the plaintiff had provided extensive services to the deceased and the deceased’s spouse in the legitimate expectation that the plaintiff would be left the house in the deceased’s will.

Today I am writing about my favorite unjust enrichment case, Moyes v. Ollerich Estate, 2005 BCCA 518.

Joan Moyes was Marjorie Ollerich’s stepdaughter. Mrs. Ollerich had married Joan’s father when Joan Moyes was 18 years old. Over the years, they developed a close bond, and a mother and daughter relationship. When Joan Moyes father Andrew Ollerich died in 1966, he left his assets to Mrs. Ollerich.

As Marjorie Ollerich got older, her health deteriorated, and Joan Moyes provided a great deal of comfort and care to her. Although Joan Moyes lived a few hours away from Kelowna, where Marjorie Ollerich lived, Mrs. Moyes spent days and weeks at a time, away from home, caring for Mrs. Ollerich. After Mrs. Ollerich went to live in nursing homes, Mrs. Moyes continued to visit her and assist her.

Mrs. Ollerich had told Mrs. Moyes on two occasions that she would be leaving a significant share of her estate to Mrs. Moyes.

However, Mrs. Ollerich’s last will left Mrs. Moyes $25,000 out of an estate of about $700,000. There were a number of other specific financial gifts, and the residue was left to Mrs. Ollerich’s brother.

After Mrs. Ollerich died, Mrs. Moyes brought a claim against her estate on the basis of unjust enrichment. The case was heard as a summary trial, on affidavit evidence.

Madam Justice Beames, of the Supreme Court of British Columbia, awarded Mrs. Moyes $125,000 plus interest in addition to the $25,000 bequest.

In reaching her decision, Beames J. cited another case brought by a stepdaughter who advanced a claim to a larger share of her stepparent’s estate: Clarkson v. McCrossen (1995), 3 B.C.L.R. (3d) 80 (B.C.C.A).

Clarkson is a significant case because the British Columbia Court of Appeal held that the in determining the amount of a monetary award for unjust enrichment, the court may consider the supportive relationship between the plaintiff and her stepparent. Mr. Justice Hinds in Clarkson said:

In the particular circumstances of this case, where a stepdaughter had been treated for a period in excess of 40 years - almost her entire life - as a natural daughter by her stepfather, where a close relationship existed between them and each became somewhat dependent on the other and where there was a reasonable expectation, I am of the view that the supportive relationships between the respondent and her stepfather, above described, are compensable. The value of them, to a moderate degree, should be included in the determination of the value received approach to the monetary award.

In his concurring judgment in Clarkson, Chief Justice McEachern wrote:

This leads me to conclude that, in principle, no distinction should be drawn between services rendered under a reasonable expectation of fair treatment between a stepdaughter, as in this case, and a wife or common-law partner. The enrichment must be viewed appropriately in the context in which it is created. Many years of loving care and companionship furnished by a devoted stepdaughter, for example, where there is a reasonably based expectation of tangible benefit, should not always be equated to the per diem cost of employed homemakers at minimum wages.

The defendants in the Moyes case appealed to the British Columbia Court of Appeal, both on the finding of unjust enrichment, and second on the amount of the award. The Court of Appeal found that the first ground was “misconceived,” finding that the Chambers judge properly considered Mrs. Moyes evidence of Mrs. Ollerich's statements to her that she would leave a significant share of her estate to Mrs. Moyes in the context of the surrounding circumstances.

With respect to the amount of the award, the defendants argued that the nature and extent of the services that Mrs. Moyes rendered were not as extensive as the plaintiff in Clarkson, and, therefore, the amount of the award should be lower.

The plaintiff argued before the Court of Appeal that the nature and extent of the services was one of several factors, and not the only factor, that the court could consider. The court could also consider the nature of the relationship between the parties, the plaintiff’s sacrifices, the reciprocal benefits the plaintiff received from the deceased, and the size of the estate.

The Court of Appeal upheld the amount of the award. Madam Justice Prowse, for the court, said in respect of Clarkson,

While it may be fair to say that the nature and extent of the services provided by the stepdaughter in Clarkson was greater than that here, that case does not purport to set an upper limit. It was simply a case in which this Court determined that it was inappropriate to interfere with the quantum of the award.
Prowse J.A. also said, “[I]t is clear from the authorities that trial judges have considerable discretion in that regard to take into account the specific circumstances before them.”

I intend to discuss the differences between the remedies of constructive trust and monetary awards in a future post. But, for now, I think that both Clarkson and Moyes are significant cases in the evolution of unjust enrichment in that they tend to narrow the gap between cases in which the court chooses the remedy of constructive trust, and gives the plaintiff an interest in property that may have a substantial value, and monetary awards that were traditionally quite modest.

I would like to thank Joan Moyes for her decision a couple of years ago to retain me. It was an honor to represent her in both the Supreme Court of British Columbia, and in the Court of Appeal.

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