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Son’s Vancouver Estate Law Claim Denied due to Benefits Received Through the Years

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  • Son’s Vancouver Estate Law Claim Denied due to Benefits Received Through the Years

In a recent Vancouver estate law matter, Grewal v. Litt, 2019 BCSC 1154, a son claimed that he should receive $400,000 from his parents’ estate to compensate him for his work and improvements to the family farm. The son asserted that his contributions to the farm unjustly enriched his parents’ estate, and that he was therefore entitled to compensation. The court dismissed the son’s unjust enrichment claim, finding that even if his parents’ estate had benefited from his efforts and he had suffered a corresponding deprivation, the benefits he received in farming the land rent-free for 20 years provided a juristic reason for the unjust enrichment.

Facts underpinning the Vancouver estate law claim

In the Grewal v. Litt matter, the father died in February 2016 at age 88 and the mother died in March 2016 at age 89, leaving six adult children. As of the date of death of the parents, the two primary assets of the estates were the family home on East 62nd Avenue in Vancouver, BC and farm property on Cambie Road in Richmond, BC (the “Cambie Farm”). As of trial, both properties had been sold. The current net value of the combined estates was approximately $9 million to $9.3 million. The Grewals’ sons, Kasar Singh Litt (“Kasar”) and Terry Mukhtiar Singh Litt (“Terry”), were named as executors in the Wills, but Kasar renounced because of a potential conflict of interest, leaving Terry as the sole executor.

Vancouver estate law claim and counterclaim

In his role as executor, Terry commenced an action seeking repayment to the estate of $240,000 that Kasar had borrowed from his parents while they were alive. In turn, Kasar filed a counterclaim, asserting that his work on the Cambie Farm unjustly enriched the parents’ estates, and that he was entitled to compensation in respect of that claim before any division of the parents’ estate. He asserted that his improvements to the farm should be valued at over $400,000. During the trial, it was agreed that Kasar would repay the $240,000 debt (without interest), and this would be brought into the father’s estate by way of hotchpot. That left Kasar’s claim for unjust enrichment to be determined at trial. The executor acknowledged that Kasar made improvements to the Cambie Farm, for which he is entitled to compensation.  However, the Executor argued that this compensation was limited by the various benefits that Kasar received through the years, and would ultimately be extinguished by what Kasar received under the Wills.

Legal principles that apply to an unjust enrichment claim

In the Grewal v. Litt Vancouver estate law matter, Madam Justice Adair the affirmed that the legal principles that apply to an unjust enrichment claim are well-settled: 

[104]      A plaintiff must prove that:  the defendant has been enriched; the plaintiff has suffered a corresponding deprivation; and the benefit and corresponding detriment occurred without a juristic reason.  The court takes a straightforward economic approach to the first two elements – enrichment and corresponding deprivation.  Other considerations, such as moral or policy questions, are dealt with at the juristic reason stage of the analysis.  See Kerr v. Baranow, 2011 SCC 10, at paras. 32-41.

[105]     Mutual conferral of benefits can be considered at the juristic reason stage of the analysis, but only to the extent that it provides evidence of a juristic reason (or lack thereof).  In determining whether there is a juristic reason to deny recovery, a court may look at all of the circumstances of a transaction, including the reasonable expectations of the parties and public policy considerations.  The fact that parties have conferred benefits on each other may provide relevant evidence of their reasonable expectations.  Otherwise, mutual benefit conferrals are to be considered at the defence and/or remedy stage.  Kerr, at paras. 104, 114-116 and 122.

[106]     If a plaintiff establishes an unjust enrichment claim, the court may award a constructive trust or a monetary award:  Kerr, at para. 52.  Here, the Estate assets have been converted to cash, and a monetary remedy is the only appropriate remedy. 

[107]     The quantum of a monetary remedy may be assessed either on a “value received” or a “value survived” basis.  As Groberman J.A. (for the court) explained in McDonald v. McDonald, 2017 BCCA 255, at para. 84:

[84]      . . . Both bases of assessment begin with a valuation of the benefit conferred on the defendant.  For a “value received” assessment, the court must determine the economic value of the benefit conferred by the plaintiff on the defendant at the time of the enrichment.  For a “value survived” assessment, the court must determine what proportion of an asset was acquired or preserved as a result of the plaintiff’s conferral of a benefit on the defendant.

Application of the law in the Grewal Vancouver estate law matter

Applying a straightforward economic approach, it was not disputed that there was a benefit to the farm and a detriment to Kasar. Where the claim failed was at the juristic reason stage of the analysis. Madam Justice Adair agreed with the Executor’s submission that Kasar and his family received a number of benefits from the parents that should be accounted for in the juristic reason analysis. The largest benefit that Kasar received was all of the profits from 35 acres of the farm, for a period of about 20 years, without having to pay any rent for the use of the land.  This included the profits from the strawberry crop in 1997, which Kasar did not plant. Moreover, the evidence established that for six years between 1978 and 1984 while Kasar, Kasar’s wife and their two children lived with the parents at East 62nd, they had no household expenses. Kasar and his family then moved to an apartment within the parents’ home and did not pay rent for the almost 20 years that they lived there.  While the accommodations were spartan, Kasar received a benefit by not having to pay for somewhere for his family to live. Additionally, it was virtually certain that Kasar’s unjust enrichment claim would be extinguished by what he received under his parents’ Wills.

Vancouver estate law claim rooted in unjust enrichment dismissed   

In the result, Kasar failed to establish that he was entitled to a remedy for unjust enrichment and his Vancouver estate law claim in that regard was dismissed. That did not end the matter, however, as Kasar’s four sisters had brought a wills variation action seeking a larger share of their parents’ estate than provided in their Wills. In dismissing Kasar’s unjust enrichment claim, the court noted that his contributions could still be taken into account in the context of his siblings’ wills variation claim. Check back – we will discuss that aspect of the Grewal Vancouver estate law matter in a coming post.

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