Typically, when a spouse or child has not been adequately provided for under a testator’s will, the remedy has been to make a claim under the British Columbia Wills Variation Act (the “WVA“). In many circumstances, however, the WVA does not provide an adequate remedy. For example, a party who is not a spouse or child of the deceased may have a claim against the estate, but, given that the relief provided under the WVA is limited to children and spouses, this person is precluded from making a WVA claim. Similarly, a spouse or child may have a claim that exceeds the remedies available under the WVA. In these types of cases, the aggrieved party may wish to consider an unjust enrichment claim against the testator’s estate.
An unjust enrichment claim arises against an estate when a party can establish the following:
- an enrichment that was enjoyed by the testator;
- a corresponding deprivation to the party making the claim; and
- an absence of juristic reason for the enrichment.
In 2004, in the decision of Garland v Consumers’ Gas Co., the Supreme Court of Canada found that the word “enrichment” meant a tangible benefit which had been conferred to the party receiving it. This benefit can include either a positive benefit, such as the payment of money, or a negative benefit such as the sparing of an expense. The enrichment and deprivation must be economic in nature, creating a monetary claim against the estate.
In the 2007 decision of Blake v Wells Estate, the British Columbia Court of Appeal confirmed that once enrichment is found, corresponding deprivation will almost invariably follow. As a result, the court need only consider whether or not there is a juristic reason for the enrichment which was received by the testator.
In order for a claim to qualify as an unjust enrichment claim, however, the benefit bestowed and the detriment suffered must be substantial before a party will meet the threshold for an unjust enrichment claim.
In the past, British Columbia courts have found that the following examples have met this threshold:
- paying the deceased’s monthly living and medical expenses;
- a child performing household work for her parents, thereby allowing them to work outside the home without paying someone else to be a housekeeper and after-school caregiver for their younger children;
- performing renovations;
- performing general upkeep on property when the time spent on the upkeep could have been spent elsewhere;
- the payment of rent on behalf of and the provision of services to the testator;
- helping with minor tasks around the house that were insufficient to create an equitable claim in the house; and
- taking care of elderly parents which resulted in having to cut down the number of days worked and making sacrifices in one’s career.
On the other hand, British Columbia courts have found that the following examples have not satisfied the threshold to create a substantial enough enrichment and deprivation to create an unjust enrichment claim:
- the performance of household work by a sister that saved her siblings from worse legal trouble but did not result in them acquiring any property or experiencing an increase in the value of their property;
- an arrangement whereby a couple lived in a home in return for their making the ongoing mortgage and maintenance payments; and
- working on the family farm (this would, however, be fact-dependent).
Once a party has established enrichment and corresponding deprivation, the burden shifts to the defendant to establish that there was a juristic reason. Juristic reasons can include a contract or other legal reasons, charitable and loving intent and other valid common law, equitable or statutory obligations. While the test for the absence of juristic reason is flexible, the court must consider the reasonable expectations of the parties and public policy considerations. This review requires a global analysis of the circumstances of the parties involved.
Generally speaking, should the court find unjust enrichment, the aggrieved party will be awarded monetary damages. If, however, the court concludes that monetary damages are not sufficient and, provided that there is a sufficient nexus between the services rendered and the property being claimed, a constructive trust may be declared over some part or all of the testator’s assets.
It is also important to note that a successful unjust enrichment claim is to be paid out prior to distribution of any assets under the will. In other words, like any other debt owed by the estate, a judgment for unjust enrichment creates a priority over any of the beneficiaries under the will.
Finally, it should be noted that a spouse or child may have both an unjust enrichment claim and a WVA claim at the same time. Neither of these claims are mutually exclusive and, generally speaking, evidence tendered in support of an unjust enrichment claim is generally the same evidence that would be put forward in a WVA claim. If there is a benefit to be realized from making these two separate claims, both the unjust enrichment claim and the WVA claim can be made at the same time.