Sunday, December 23, 2007

Blake v. Wells Estate

A mother allows her son and her son’s spouse to build a house on her land. She lives in another house on the land. The land is not subdivided, and remains in the mother’s name. This kind of circumstance is not unheard of. It can create a host of problems.

In Blake v. Wells Estate, 2007 BCCA 617, Isabel Well’s son, Rowan Wells and his then common law spouse, Patricia Blake (they later married), built a house on Ms. Well’s 14 acre land (the “Malahat”). They moved in together in their new house in 1972. Isabel Wells had her own house on the Malahat. Ms. Blake put some funds, and her labour into the construction of the house, and later to the maintenance of the property.

Rowan Wells died in 1993. Ms. Blake continued to live in the house. Ms. Wells lived in her house, independently, until 2003, when she moved to Victoria after breaking her arm. Ms. Wells died in 2004.

While they were living on the Malahat, Ms. Wells told at least one person that if they ever had to sell the Malahat, Ms. Blake would be looked after.

In her will, Ms. Wells left the Malahat to daughter, Doreen Ross. She left Ms. Blake one-seventh of the residue of her estate. Ms. Blake’s share was worth a little over $40,000. The Malahat was worth approximately $1.2 million.

Ms Blake sued the executors of Ms. Wells’ will, claiming that Ms. Wells had been unjustly enriched. To succeed, Ms. Blake was required to prove that Ms. Wells or her estate benefitted from Ms. Blake’s labour and money, that Ms. Blake suffered a corresponding deprivation, and that there was no juristic reason for the benefit.

Ms. Blake sought either an interest in the Malahat through the imposition of a constructive trust, or alternatively a sum of money.

The trial judge found that Ms. Blake established an unjust enrichment. He found that a monetary award would adequately compensate her, and awarded her $250,000.

On appeal, the Court of Appeal agreed that Ms. Wells had been unjustly enriched, but reduced the award to Ms. Blake to $125,000 (in addition to the funds Ms. Blake receives under Ms. Well’s will).

Why did the Court of Appeal reduce the award? It is apparent that they did not consider the notional costs of Ms. Blake’s labour and expenditures, or the value received by Ms. Wells, to be in the neighbourhood of $250,000 to $300,000. Mr. Justice Chiasson did not elaborate on why the Court of Appeal interfered with the trial judge’s decision. He wrote,

Assessing damages in the circumstances of a case like this cannot be precise. An expectation to be taken care of is highly subjective and dependent on the circumstances of the parties. The appellants contend that an award of $40,000 would amply compensate Ms. Blake. In my view, that sum would not take into account all of the factors of benefit to the estate of Isabel Wells or reflect an expectation that Ms. Blake would be taken care of. Considering that Ms. Blake is entitled to a sum reflecting the expectation that she would be taken care of, I would assess her recovery at $125,000 in addition to the one-seventh interest she has in the residue of the estate.
But, Ms. Blake gave up the opportunity to build equity in her own home and property. If she had bought her own home back in the 1970s, she would have ended up with significantly more than what the Court of Appeal awarded her.

The Court of Appeal could have considered the value of the Malahat (the “value survived” approach), as well as the “value received” approach to a monetary award. See Pickelein v. Gillmore, (1997) 30 B.C.L.R. (3d) 44 (CA), in which the Court of Appeal held that the value survived approach was appropriate to a monetary award in an unjust enrichment claim by a common law spouse. But, it does not appear that the Court of Appeal took the value of the Malahat into consideration when the Court reduced the award.

I note that in other cases, the Court of Appeal has said that trial judges have considerable discretion in determining the quantum of unjust enrichment awards. It would have been helpful if the Court of Appeal had more fully articulated its reasons for interfering with the trial judge’s award in this case.

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