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Equitable Remedies. Boothe v. CUPE Local 4400
In Boothe v. CUPE Local 4400 (Div Court, 2023) the Divisional Court identifies judicial review as an equitable procedure:[13] The decision whether to grant an extension of time under s. 5(2) of the JRPA is discretionary. Indeed, judicial review itself is an equitable and discretionary remedy which can be refused in appropriate cases. Considering all the factors here, I see no merit in allowing this application to proceed and would dismiss the motion on that basis as well. . Soleimani v. Karimi
In Soleimani v. Karimi (Div Court, 2023) the Divisional Court comments on it's equitable remedy jurisdiction:[25] Puya submits that his claims on appeal that rely on equitable principles may fall outside of the jurisdiction of the Divisional Court under s. 19(1)(a.1). He cites the decision of Finlayson, J. in M.P.A.N. v. J.N., 2018 ONCJ 769. At para. 75 of that decision, Finlayson, J. noted that the Ontario Court of Justice does not have the jurisdiction to make an order of equitable set-off.
[26] M.P.A.N. is not helpful in determining our case. The Superior Court of Justice has jurisdiction to grant equitable relief, as confirmed in ss. 11(2) and 96 of the CJA. The Divisional Court is a branch of the Superior Court of Justice: CJA, s.18(1).
[27] Sections 11(2) and 96 of the CJA provide as follows:Superior Court of Justice
11 (1) The Ontario Court (General Division) is continued as a superior court of record under the name Superior Court of Justice in English and Cour supérieure de justice in French.
Same
(2) The Superior Court of Justice has all the jurisdiction, power and authority historically exercised by courts of common law and equity in England and Ontario.
Rules of law and equity
96 (1) Courts shall administer concurrently all rules of equity and the common law.
Rules of equity to prevail
(2) Where a rule of equity conflicts with a rule of the common law, the rule of equity prevails.
Jurisdiction for equitable relief
(3) Only the Court of Appeal and the Superior Court of Justice, exclusive of the Small Claims Court, may grant equitable relief, unless otherwise provided. . Kerr v. Baranow
In Kerr v. Baranow (SCC, 2011) the Supreme Court of Canada canvasses the remedial options for restitution, both monetary personal remedies and constructive trust ones:(3) Remedy
[46] Remedies for unjust enrichment are restitutionary in nature; that is, the object of the remedy is to require the defendant to repay or reverse the unjustified enrichment. A successful claim for unjust enrichment may attract either a “personal restitutionary award” or a “restitutionary proprietary award”. In other words, the plaintiff may be entitled to a monetary or a proprietary remedy (Lac Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC), [1989] 2 S.C.R. 574, at p. 669, per La Forest J.).
(a) Monetary Award
[47] The first remedy to consider is always a monetary award (Peter, at pp. 987 and 999). In most cases, it will be sufficient to remedy the unjust enrichment. However, calculation of such an award is far from straightforward. Two issues have given rise to disagreement and difficulty in domestic unjust enrichment claims.
[48] First, the fact that many domestic claims of unjust enrichment arise out of relationships in which there has been a mutual conferral of benefits gives rise to difficulties in determining what will constitute adequate compensation. While the value of domestic services is not questioned (Peter; Sorochan), it is unjust to pay attention only to the contributions of one party in assessing an appropriate remedy. This is not only an important issue of principle; in practice, it is enormously difficult for the parties and the court to “create, retroactively, a notional ledger to record and value every service rendered by each party to the other” (R. E. Scane, “Relationships ‘Tantamount to Spousal’, Unjust Enrichment, and Constructive Trusts” (1991), 70 Can. Bar Rev. 260, at p. 281). This gives rise to the practical problem that one scholar has aptly referred to as “duelling quantum meruits” (J. D. McCamus, “Restitution on Dissolution of Marital and Other Intimate Relationships: Constructive Trust or Quantum Meruit?”, in J. W. Neyers, M. McInnes and S. G. A. Pitel, eds., Understanding Unjust Enrichment (2004), 359, at p. 376). McLachlin J. also alluded to this practical problem in Peter, at p. 999.
[49] A second difficulty arises from the fact that some courts and commentators have read Peter as holding that when a monetary award is appropriate, it must invariably be calculated on the basis of the monetary value of the unpaid services. This is often referred to as the quantum meruit, or “value received” or “fee-for-services” approach. This was followed in Bell v. Bailey (2001), 2001 CanLII 11608 (ON CA), 203 D.L.R. (4th) 589 (Ont. C.A.). Other appellate courts have held that monetary relief may be assessed more flexibly — in effect, on a value survived basis — by reference, for example, to the overall increase in the couple’s wealth during the relationship: Wilson v. Fotsch, 2010 BCCA 226, 319 D.L.R. (4th) 26, at para. 50; Pickelein v. Gillmore (1997), 1997 CanLII 3147 (BC CA), 30 B.C.L.R. (3d) 44 (C.A.); Harrison v. Kalinocha (1994), 1994 CanLII 212 (BC CA), 90 B.C.L.R. (2d) 273 (C.A.); MacFarlane v. Smith, 2003 NBCA 6, 256 N.B.R. (2d) 108, at paras. 31-34 and 41-43; Shannon v. Gidden, 1999 BCCA 539, 71 B.C.L.R. (3d) 40, at para. 37. With respect to inconsistencies in how in personam relief for unjust enrichment may be quantified, see also Matrimonial Property Law in Canada (loose-leaf), vol. 1, by J. G. McLeod and A. A. Mamo, eds., at pp. 40.78-40.79.
(b) Proprietary Award
[50] The Court has recognized that, in some cases, when a monetary award is inappropriate or insufficient, a proprietary remedy may be required. Pettkus is responsible for an important remedial feature of the Canadian law of unjust enrichment: the development of the remedial constructive trust. Imposed without reference to intention to create a trust, the constructive trust is a broad and flexible equitable tool used to determine beneficial entitlement to property (Pettkus, at pp. 843-44 and 847-48). Where the plaintiff can demonstrate a link or causal connection between his or her contributions and the acquisition, preservation, maintenance or improvement of the disputed property, a share of the property proportionate to the unjust enrichment can be impressed with a constructive trust in his or her favour (Pettkus, at pp. 852-53; Sorochan, at p. 50). Pettkus made clear that these principles apply equally to unmarried cohabitants, since “[t]he equitable principle on which the remedy of constructive trust rests is broad and general; its purpose is to prevent unjust enrichment in whatever circumstances it occurs” (pp. 850-51).
[51] As to the nature of the link required between the contribution and the property, the Court has consistently held that the plaintiff must demonstrate a “sufficiently substantial and direct” link, a “causal connection” or a “nexus” between the plaintiff’s contributions and the property which is the subject matter of the trust (Peter, at pp. 988, 997 and 999; Pettkus at p. 852; Sorochan, at pp. 47-50; Rathwell, at p. 454). A minor or indirect contribution will not suffice (Peter, at p. 997). As Dickson C.J. put it in Sorochan, the primary focus is on whether the contributions have a “clear proprietary relationship” (p. 50, citing Professor McLeod’s annotation of Herman v. Smith (1984), 1984 CanLII 1238 (AB KB), 42 R.F.L. (2d) 154, at p. 156). Indirect contributions of money and direct contributions of labour may suffice, provided that a connection is established between the plaintiff’s deprivation and the acquisition, preservation, maintenance, or improvement of the property (Sorochan, at p. 50; Pettkus, at p. 852).
[52] The plaintiff must also establish that a monetary award would be insufficient in the circumstances (Peter, at p. 999). In this regard, the court may take into account the probability of recovery, as well as whether there is a reason to grant the plaintiff the additional rights that flow from recognition of property rights (Lac Minerals, at p. 678, per La Forest J.).
[53] The extent of the constructive trust interest should be proportionate to the claimant’s contributions. Where the contributions are unequal, the shares will be unequal (Pettkus, at pp. 852-53; Rathwell, at p. 448; Peter, at pp. 998-99). As Dickson J. put it in Rathwell, “The court will assess the contributions made by each spouse and make a fair, equitable distribution having regard to the respective contributions” (p. 454). . Reiter v. Hollub [monetary v. proprietary remedies]
In Reiter v. Hollub (Ont CA, 2017) the court discusses principles of the restitutionary doctrine of unjust enrichment, particularly whether the remedy should be monetary or proprietary, in the context of a joint family venture:[19] In Kerr v. Baranow, at para. 46, the Supreme Court outlined two possible remedies where unjust enrichment is established – a monetary award or a proprietary award. The court counselled, at para. 47, that the first remedy to consider is always the monetary award and that, in most cases, a monetary award is sufficient to remedy the unjust enrichment.
[20] To obtain a proprietary award, the person advancing the claim based on unjust enrichment must demonstrate that monetary damages are insufficient and that there is a sufficiently substantial and direct causal connection between his or her contributions and the acquisition, preservation, maintenance or improvement of the disputed property: Kerr, at paras. 50-51. A minor or indirect contribution will not suffice.
[21] The court held that there are two different approaches to valuation for a monetary award: Kerr, at para. 55. First, a monetary award may be based on a quantum meruit, value received or fee-for-services basis. Second, a monetary award may be based on a value survived basis. This is where the joint family venture analysis becomes relevant.
[22] To receive a monetary award on a value survived basis, the claimant must show that there was a joint family venture and that there was a link between his or her contributions to the joint family venture and the accumulation of assets and/or wealth: Kerr, at para. 100. Whether there is a joint family venture is a question of fact to be assessed in light of all of the relevant circumstances, including the four factors noted above – mutual effort, economic integration, actual intent and priority of the family: Kerr, at para. 100.
[23] Justice Cromwell was careful to note that cohabiting couples are not a homogenous group: Kerr, at para. 88. The analysis must therefore take into account the particular circumstances of each relationship. The emphasis should be on how the parties actually lived their lives, not on their ex post facto assertions or the court’s view of how they ought to have done so: Kerr, at para. 88.
[24] While the four factors identified above are helpful to determine whether the parties were engaged in a joint family venture, there is no closed list of relevant factors: Kerr, at para. 89. The factors Cromwell J. suggested were not a checklist of conditions, but a useful approach to a global analysis of the evidence and examples of relevant factors that a court may take into account: Kerr, at para. 89. . Ontario v. Madan [remedies]
In Ontario v. Madan (Ont CA, 2023) the Court of Appeal states several remedies (one in restitution and constructive trust) sought by the provincial Crown in a notorious fraud case against an IT employee:[7] In the Amended Amended Statement of Claim (the “Statement of Claim”), Ontario alleged fraud, theft and conversion against the appellants. Ontario sought:. damages;
. a constructive trust over all monies obtained from the frauds and any assets acquired with money obtained from the frauds;
. an accounting of, and restitution of, all funds obtained from the frauds;
. a tracing order; and
. a Mareva injunction. . Moore v. Sweet
In Moore v. Sweet (SCC, 2018) the Supreme Court of Canada considered the appropriate remedy in a successful restitution (unjust enrichment) case (here it was a constructive trust):[32] A constructive trust is a vehicle of equity through which one person is required by operation of law — regardless of any intention — to hold certain property for the benefit of another (Waters’ Law of Trusts in Canada (4th ed. 2012), by D. W. M. Waters, M. R. Gillen and L. D. Smith, at p. 478). In Canada, it is understood primarily as a remedy, which may be imposed at a court’s discretion where good conscience so requires. As McLachlin J. (as she then was) noted in Soulos:... under the broad umbrella of good conscience, constructive trusts are recognized both for wrongful acts like fraud and breach of duty of loyalty, as well as to remedy unjust enrichment and corresponding deprivation. . . . Within these two broad categories, there is room for the law of constructive trust to develop and for greater precision to be attained, as time and experience may dictate. [Emphasis added; para. 43.] [33] What is therefore crucial to recognize is that a proper equitable basis must exist before the courts will impress certain property with a remedial constructive trust. The cause of action in unjust enrichment may provide one such basis, so long as the plaintiff can also establish that a monetary award is insufficient and that there is a link between his or her contributions and the disputed property (Peter v. Beblow, 1993 CanLII 126 (SCC), [1993] 1 S.C.R. 980, at p. 997; Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, at paras. 50-51). Absent this, a plaintiff seeking the imposition of a remedial constructive trust must point to some other basis on which this remedy can be imposed, like breach of fiduciary duty.[3]
....
B. Appropriate Remedy: Imposition of a Constructive Trust
[89] The remedy for unjust enrichment is restitutionary in nature and can take one of two forms: personal or proprietary. A personal remedy is essentially a debt or a monetary obligation — i.e. an order to pay damages — that may be enforced by the plaintiff against the defendant (Sorochan v. Sorochan, 1986 CanLII 23 (SCC), [1986] 2 S.C.R. 38, at p. 47). In most cases, this remedy will be sufficient to achieve restitution, and it can therefore be viewed as the “default” remedy for unjust enrichment (Lac Minerals, at p. 678; Kerr, at para. 46).
[90] In certain cases, however, a plaintiff may be awarded a remedy of a proprietary nature — that is, an entitlement “to enforce rights against a particular piece of property” (McInnes, The Canadian Law of Unjust Enrichment and Restitution, at p. 1295). The most pervasive and important proprietary remedy for unjust enrichment is the constructive trust — a remedy which, according to Dickson J. (as he then was), is imposed without reference to intention to create a trust, and its purpose is to remedy a result otherwise unjust. It is a broad and flexible equitable tool which permits courts to gauge all the circumstances of the case, including the respective contributions of the parties, and to determine beneficial entitlement.
(Pettkus, at pp. 843-44) [91] While the constructive trust is a powerful remedial tool, it is not available in all circumstances where a plaintiff establishes his or her claim in unjust enrichment. Rather, courts will impress the disputed property with a constructive trust only if the plaintiff can establish two things: first, that a personal remedy would be inadequate; and second, that the plaintiff’s contribution that founds the action is linked or causally connected to the property over which a constructive trust is claimed (PIPSC, at para. 149; Kerr, at paras. 50-51; Peter, at p. 988). And even where the court finds that a constructive trust would be an appropriate remedy, it will be imposed only to the extent of the plaintiff’s proportionate contribution (direct or indirect) to the acquisition, preservation, maintenance or improvement of the property (Kerr, at para. 51; Peter, at pp. 997-98).
[92] The application judge concluded that Michelle had established an entitlement to the entirety of the proceeds of the life insurance policy on the basis of unjust enrichment, and he accordingly ordered that Risa held those proceeds on constructive trust for Michelle (para. 52). He specifically found that Michelle had demonstrated a “clear ‘link or causal connection’ between her contributions and the proceeds of the Policy that continued for the entire duration of the Policy” (para. 50).
[93] While my analysis of Michelle’s right to recover for unjust enrichment differs from that of the application judge, I see no reason to disturb his conclusion regarding the propriety of a remedial constructive trust in these circumstances. Ordinarily, a monetary award would be adequate in cases where the property at stake is money. In the present case, however, the disputed insurance money has been paid into court and is readily available to be impressed with a constructive trust. Furthermore, ordering that the money be paid out of court to Risa, and then requiring Michelle to enforce the judgment against Risa personally, would unnecessarily complicate the process through which Michelle can obtain the relief to which she is entitled. It would also create a risk that the money might be spent or accessed by other creditors in the interim.
[94] Moreover, the application judge found that Michelle’s payment of the premiums was causally connected to the maintenance of the policy under which Risa was enriched. Because each of Michelle’s payments kept the policy alive, and given that Risa’s right as designated beneficiary necessarily deprived Michelle of her contractual entitlement to receive the entirety of the insurance proceeds, I would impose a constructive trust to the full extent of those proceeds in Michelle’s favour.
[95] This disposition of the appeal renders it unnecessary to determine whether this Court’s decision in Soulos should be interpreted as precluding the availability of a remedial constructive trust beyond cases involving unjust enrichment or wrongful acts like breach of fiduciary duty. Similarly, the extent to which this Court’s decision in Soulos may have incorporated the “traditional English institutional trusts” into the remedial constructive trust framework is beyond the scope of this appeal. While recognizing that these remain open questions, I am of the view that they are best left for another day.
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