Remedies for Unjust Enrichment
Introduction
Unjust enrichment is a principle of law that occurs when one person is unjustly or by chance enriched at the expense of another, and an obligation to make restitution arises, regardless of liability for wrongdoing. Once unjust enrichment is proven, the court has to decide on appropriate remedies, which could be either a monetary award or a proprietary remedy.
Monetary Awards
Monetary awards are the first remedy that the court considers in cases of unjust enrichment. The awarding of a monetary sum involves ordering the defendant to pay the claimant an amount that would remedy the unjust enrichment. However, quantifying a monetary award can be challenging. This is not only due to the difficulty in determining the value of the benefit conferred but also the approach to be taken in valuing the award. The Supreme Court of Canada in Kerr v. Baranow clarified that a monetary award is not restricted to a value received approach, but should rather focus on the nature of the unjust enrichment that gave rise to the claim.
Proprietary Remedies
Proprietary remedies, also known as constructive trust remedies, are limited to situations where a monetary award would be insufficient or inappropriate, and where the claimant can demonstrate a link between the contributions and the acquisition, preservation, maintenance, or improvement of the specific property. If a constructive trust is deemed the appropriate remedy, the extent of the trust should be proportionate to the claimant’s contributions. However, if the subject of a viable proprietary claim is real estate property located in another province or country, an Ontario court should not exercise jurisdiction to determine the claim.
Quantifying a Monetary Award
The practical outcome of the Supreme Court’s decision in Kerr v. Baranow is that most common-law relationships will fall under a joint family venture (“JFV”). This means that the claimant will likely be able to show a link between their contributions and the accumulation of assets, negating the need to do a detailed, artificial accounting of the services provided. Instead, the court will make a more holistic determination of the claimant’s proportionate contributions to the wealth. However, there is no presumption that the wealth should be shared equally. When contributions to tangible assets are the subject of an unjust enrichment claim, photographs may assist the court in quantifying the award.
Conclusion
Understanding remedies for unjust enrichment is crucial for claimants seeking justice in the Canadian legal system. Both monetary and proprietary remedies have their place, and the court's decision largely depends on the nature of the unjust enrichment and the circumstances surrounding each case. As always, legal advice should be sought when navigating these complex issues.
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