The Lawyers Weekly - March 4, 2011

Kerr
Continued From Page 1

Recalls, not unexpected deaths, will be reported

extra punch in Ontario.

That is because the High Court overruled the Ontario Court of Appeal’s holding that monetary remedies granted to spouses who successfully claim unjust enrichment may only be calculated based on the dollar value of the services performed by the claimant which benefited the other spouse (i.e. quantum meruit or “value received”)—not based on how the claimant spouse’s efforts contributed to the defendant spouse’s increased wealth (i.e. “value surviving”).

“It’s a [positive] blow for claimants,” Gomery remarked, who noted this was already the common law in B.C., Alberta and some other provinces.

In Ontario more former common-law spouses are now likely to claim unjust enrichment as a result of the court’s expansion of the monetary remedy beyond quantum meruit, predicted Hunter Phillips of Ottawa’s MacKinnon & Phillips.

Phillips, who was counsel for respondent David Seguin of Ontario, told The Lawyers Weekly “the most important thing to remember about this judgment is that it effectively kills quantum meruit as a method of calculating a monetary award where unjust enrichment is found.

“Now where the court finds
that there is a ‘joint family ven-
ture’—which becomes the new
key phrase—and the court finds
that there has been a dispropor-
tionate allocation of assets—the
value of the monetary award will
be based on the value of the
increase in the assets during the
course of the relationship.”
Phillips suggested people who
otherwise might not have pro-
ceeded with their claims—
because a quantum meruit award
would likely not exceed the costs
of litigation—may now have
fresh wind in their sails.

He said he also anticipates a
spike in demand for cohabitation
agreements. “In determining
whether there is a joint family
venture, the court has said trial
courts are to give effect to the
actual intent of the parties,” Phil-
lips observed. “And the only really
reliable way to determine the
actual intent of the parties is
through cohabitation agree-
ments, so I think you will find an
increased emphasis on cohabita-
tion agreements.”
Appellant Michele Vanasse
succeeded in convincing the
Supreme Court that the Ontario
Court of Appeal erred in requir-
ing a strict, “value received”
approach to be used to quantify
the monetary award her ex-com-
mon-law spouse, and millionaire

Selick
Continued From Page 5

CRISTIN SCHMITZ / THE LAWYERS WEEKLY

Ottawa lawyer Hunter Phillips thinks this judgment will result in an increased emphasis on cohabitation agreements.

businessman, owes her for her
contributions during nearly four
years she spent raising their chil-
dren and running their house-
hold. The trial judge used the
“value survived” approach and
awarded her 50 per cent of the
increase in the value of the pair’s
assets — almost $1.3 million.
However the Court of Appeal
shipped the case back to the trial
judge to assess the monetary
award based on the “value
received” by Seguin at Vanasse’s
expense. Vanasse argued this
approach was “impractical,
demeaning and inconsistent with
the reasonable expectations of
the parties.”
In restoring the trial judge’s
order, Justice Cromwell held
that “a monetary award for
unjust enrichment need not, as a
matter of principle, always be
calculated on a fee-for-services
basis.” He rejected the Ontario
Court of Appeal’s conclusion
that the Supreme Court’s deci-
sion in Peter v. Beblow, [1993]
S.C.J. No. 36 mandates the fee-
for-services remedy.

“In my view, where both par-
ties have worked together for the
common good with each making
extensive, but different, contribu-
tions to the welfare of the other
and, as a result, have accumu-
lated assets, the money remedy
for unjust enrichment should
reflect that reality,” Justice Crom-
well explained. “The money rem-
edy in those circumstances
should not be based on a minute
totting up of the give and take of
daily domestic life, but rather
should treat the claimant as a co-
venturer, not as the hired help.”
Justice Cromwell said the law
of unjust enrichment does not

“The most important thing to remember about this judgment is that it effectively kills quantum meruit as a method of calculating a monetary award where unjust enrichment is found.

mandate a presumption of equal sharing, nor does the mere fact of cohabitation entitle one spouse to share in the other’s property.

Yet “where the unjust enrichment is most realistically characterized as one person retaining a disproportionate share of assets resulting from a joint family venture, and a monetary award is appropriate, it should be calculated on the basis of the share of those assets proportionate to the claimant’s contributions,” he said.

To be entitled to such a mon-
etary remedy, the claimant
must show that there was, in
fact, “a joint family venture”
and that “there is a link between
his or her contributions to it
and the accumulation of assets
and/or wealth.”
He said whether there was a
“joint family venture” is a ques-
tion of fact which may be assessed
“having regard to all the relevant
circumstances” including factors
relating to the former partners’
mutual effort, economic integra-
tion, actual intent and the prior-
ity they gave to their family.

To successfully claim unjust
enrichment, a plaintiff must
establish: (1) that the defendant
received a “benefit” or enrich-
ment, ( 2) as a result of which, the
plaintiff suffered a “deprivation,”
and ( 3) that there is no “juristic
reason” — such as a contract — for
the enrichment.

little cash by selling the clothes, toys and sports equipment their kids have outgrown will also be out of luck if Canada enacts U.S.-style regulations.

Used items aren’t the only merchandise affected. Small U.S. manufacturers of new toys, clothing, sporting goods, jewellery and crafts have reported that regulatory compliance costs are forcing them out of business. Large manufacturers can spread testing costs over millions of sales; little guys can’t. Many have already closed their doors — but you won’t find those stats touted by the U.S. government. Meanwhile, chalk up increasing corporate concentration as another unintended consequence of such laws.

And don’t forget increased corruption. Inspectors will have enormous discretionary power under the CCPSA, with little supervision. They can literally order a business to stop all its activities for an unlimited length of time while the inspector verifies compliance with the regulations. The temptation to offer the inspector a small gift in return for looking the other way, or for cracking down on one’s competitors, will be huge. A long-time professional home renovator in Toronto once told me that every building inspector he had ever encountered was accepting bribes within six months of starting the job. This will be no different.

But won’t it all be worthwhile to protect babies from dangerous cribs, as Health Minister Leona Aglukkaq argued last fall? Maybe not. When regulations increase the price of new cribs and make used cribs unavailable, more parents will choose to take their babies into their own beds. U.S. figures showed a four-fold increase in the number of infant deaths from suffocation between 1984 and 2004, a figure that experts attribute to the doubling of bed-sharing arrangements that occurred during this period. So the new law may kill more babies than it saves.

The sad thing is, we’ll never know. Rest assured that, just like their EU counterparts, Canadian health bureaucrats will only announce how many product recalls they’ve ordered, not how many unexpected deaths they’ve caused. n