In the context of common law relationships in British Columbia, property disputes often arise when the couple breaks up. The previous method of resolving these disputes was through the determination of a resulting trust or unjust enrichment complaint. The Supreme Court of Canada has made a decision which clarifies the differences between these two legal concepts.
Unjust Enrichment
The elements of unjust enrichment are that the defendant was enriched by the plaintiff, who was correspondingly deprived, and that there is no legal or moral justification for the defendant to keep that enrichment. The aim of an unjust enrichment remedy is to repay or reverse the benefit. The plaintiff may be entitled to a monetary payment or an entitlement to property.
In the case of a monetary payment, the Supreme Court decided that it should not be limited to value received or quantum meruit. This restriction would be similar to a fee-for-services calculation and would not accurately reflect the lives of many domestic partners. The Supreme Court found that unjust enrichment is a more appropriate tool to use in the resolution of property disputes in the breakdown of common law relationships.
Quantum Meruit
The term Quantum Meruit is often used in the context of contracts and is based on the principle of fairness and justice. The term literally means “what one has earned” and is used to determine the value of services or goods provided when there is no agreement or contract in place. In other words, it is a method of calculating the amount that should be paid for services or goods based on what is fair and reasonable in the circumstances. This concept is commonly used in situations where there has been an implicit or express agreement to pay for services or goods but there is no written agreement, or when a contract has been terminated before it is completed.
What’s the difference between Unjust Enrichment and Quantum Meruit?
While both are used in the context of property disputes or contracts, they have some distinct differences.
Unjust enrichment refers to a situation where one person has been enriched at the expense of another, and there is no legal or moral justification for that person to keep the enrichment. This principle is based on the idea that it is not fair for someone to receive a benefit without paying for it. Unjust enrichment can be remedied through a monetary payment or an entitlement to property.
Quantum meruit, on the other hand, is a method of calculating the value of services or goods provided when there is no agreement or contract in place. It is based on the principle of fairness and justice and is used to determine what one has earned or is entitled to. Quantum meruit is often used in situations where a contract has been terminated before it is completed, or where there has been an implicit or express agreement to pay for services or goods but there is no written agreement.
Case Study #1: Kerr v. Baranow
In the case of Kerr v. Baranow, the couple had been together for over 25 years when they separated. Mr. Baranow paid off Ms. Kerr’s debts and took early retirement to care for her when she had a stroke. When Ms. Kerr sought division of their property, both parties claimed unjust enrichment, and Ms. Kerr claimed a resulting trust. The Supreme Court found problems with the previous decisions and ordered a new trial for both parties to argue their unjust enrichment claims.
Case Study #2: Vanasse v. Seguin
In Vanasse v. Seguin, the parties lived together for 12 years and had two children. Ms. Vanasse had relocated with Mr. Seguin for his work and took care of domestic labour and child care. This allowed Mr. Seguin to develop his business. At the time of separation, Ms. Vanasse’s assets were much less than Mr. Seguin’s. The trial judge found unjust enrichment over a period of 3.5 years and made a monetary award representing half of the earnings during those years. The court of appeal reversed this decision, but the Supreme Court reinstated the trial judge’s order.
Final Thoughts
The Supreme Court of Canada has clarified the differences between unjust enrichment and quantum meruit in British Columbia law. Unjust enrichment is a more appropriate tool in the resolution of property disputes in the breakdown of common law relationships and is not limited to value received or quantum meruit. The two case studies, Kerr v. Baranow and Vanasse v. Seguin, demonstrate the application of unjust enrichment in property disputes.
