Quantifying damages for unjust enrichment

Quantifying damages for unjust enrichment remains difficult. Today's Court of Appeal decision in Vanasse v.  Seguin, 2009 ONCA 595 makes clear that the quantum is to be determined based on "value received". The Court holds:

[4]               Having found a period of unjust enrichment and that monetary compensation was in order, the trial judge acknowledged that the "value received" approach was appropriate.  The value received approach determines the value of the services rendered by the claimant to the common law spouse.  However, at para. 117 of her reasons, she relied on Nasser v. Nasser-Mayer (2000), 5 R.F.L. (5th) 100 (Ont. C.A. ) for the proposition that, in general, this court has endorsed a blurring of the "value received" and "value survived" approach at the quantification stage.  The "value survived" approach, which looks at what the increase in value of the assets was during the period of the unjust enrichment, is used when a constructive trust is established because a link has been demonstrated between the contribution that founds the action and the assets themselves.

[5]               As a result, the trial judge did not use the "value received" approach to quantification but instead determined the increase in the value of Seguin's property during the period of unjust enrichment, namely the second period of cohabitation, and awarded Vanasse a monetary amount equal to half the increase in Seguin's assets during this period less the benefits received by Vanasse as a result of the relationship.  After subtracting Seguin's gifts to Vanasse of a half-interest in the matrimonial home worth approximately $215,000 and a spousal RRSP worth approximately $44,486 from Vanasse's half-interest in the increase in Seguin's net worth during the period of unjust enrichment, she ordered that Seguin pay Vanasse $996,500 as compensation for unjust enrichment. 

[6]               The appellant did not appeal the trial judge's finding of unjust enrichment during the second period of their cohabitation.  The only aspect of the trial judge's award that Seguin appeals is her approach to calculating the amount Seguin should pay Vanasse.  Seguin argues that the trial judge erred in the approach she used to quantify the compensation owed due to unjust enrichment.

[7]               We agree with Seguin's submission.  The approach adopted by the trial judge to quantify the compensation owed to Vanasse on the basis of unjust enrichment is precisely the approach this court held was incorrect in Bell v. Bailey (2001), 20 R.F.L. (5th) 272 (Ont. C.A.) at para. 35, and Wylie v. Leclair (2003), 38 R.F.L (5th) 227 (Ont. C.A. ) at para. 19.

[8]               Nasser does not stand for the general proposition that the "value received" and "value survived" approaches can be blurred.  Rather, the result in Nasser was driven by the facts of that case.  Ms. Mayer-Nasser worked directly for her common law husband's company for a period of time and spent virtually all the money she made outside the home on the household expenses enabling Mr. Nasser to keep a greater proportion of his assets.  That is not this case. 

[9]               The decision of this court in Yackobeck v. Hartwig (2000), 138 O.A.C. 131, on which Vanasse relies, also does not support the proposition that the two approaches may ordinarily be blurred in calculating the amount owed upon a finding of unjust enrichment.  In that case the trial judge gave Ms. Yackobeck 30% of the value of the property based on her contribution to the domestic undertaking over fifteen years in which she worked both on and off the farm property including in Hartwig's harness shop.  Any blurring of the "value survived" and "value received" approaches was again specific to the facts of that case: that case featured a direct connection to the property in question, but the strict application of the "value survived" approach would not have recognized Ms. Yackobeck's contribution given the deterioration of the farm property after she left.  The main issue on appeal was the trial judge's order for support.  In relation to the amount awarded for unjust enrichment the court simply endorsed the result arrived at by the trial judge.

[10]          Given that the correct approach was to determine the "value received" and perform a quantum meruit calculation, the value that each party received from the other should have been assessed and set-off.  See generally Peter v. Beblow, [1993] 1 S.C.R. 980, Bell v. Bailey (2001), 20 R.F.L. (5th) 272, (Ont. C.A. ), and Wiley v. Leclair (2003), 38 R.F.L. (5th) 227, (Ont. C.A. ).  In addition to Seguin's financial contribution, the trial judge should have considered relevant evidence pertaining to Seguin's non-financial contributions to the relationship during the second period of cohabitation.  For example, she did not appear to take into account that shortly after the birth of their first child, Seguin cut back his hours and resigned his position as President of the company which resulted in him losing the opportunity to obtain any further stock options.  Within a year after their first child was born, the family returned to Ottawa at Vanasse's urging.  The move resulted in a diminution of Seguin's commitment to the business, friction with his partners, and reduced the amount he ultimately received from the sale of the business. 

James Morton
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