Nova Scotia Court of Appeal provides detailed unjust enrichment analysis
I recently read the decision in Reid v. Reid, 2020 NSCA 32, a case heard by the Nova Scotia Court of Appeal on January 22, 2020.
This is an appeal from a lower Court decision involving unjust enrichment, an eviction, and an award for punitive damages. The original decision of Justice Gerald R. P. Moir is found here: Reid v. Reid, 2019 NSSC 229.
The Appellant was Brenda Reid and the Respondent was Kathleen Reid, Brenda’s mother-in-law.
Kathleen and her husband, John David Reid had four sons and one daughter. John died in 1996 leaving Kathleen isolated from the family at a property they had purchased in Tatamagouche, Nova Scotia. One of Kathleen’s sons, Michael Reid, lived in a house in Ellershouse, Nova Scotia with his wife Brenda. They had a spare room and Kathleen visited from time to time.
In 1999, Michael and Kathleen agreed that Kathleen would build an apartment at the house in Ellerhouse. She was to be allowed to live in the apartment rent free for as long as she wanted. Kathleen would pay for the the materials and other family members would build the apartment. After the apartment was built, Michael and Brenda agreed that they would pay for the utility charges. Kathleen sold her home in Tatamagouche and moved into the apartment. She had spent at least $25,000 on the construction of the apartment.
Michael died unexpectedly in 2010. The Ellerhouse home passed to Brenda by joint tenancy. Not many details are given, but the relationship between Brenda and Kathleen deteriorated in 2014. This may have been in part due to Kathleen’s grandson and great-grandson moving in to the apartment. Brenda resented this move and their use of the apartment. Brenda wanted Kathleen to move out as she told her she intended to sell the house. Kathleen refused.
According to the decision, a campaign of harassment ensued leading to the grandson and great-grandson moving out in May of 2017. Eventually Kathleen moved out into another apartment and commenced litigation.
At trial, she was awarded the payment of $64,200 representing five years of rent on the apartment she moved into in lieu of a constructive trust on the apartment that was built with her funds at the Ellerhouse property. She was also awarded punitive damages in the amount of $10,000 as a result of Brenda’s egregious conduct which included:
- Serving a trespassing notice on Kathleen in the winter to prohibit her from occupying the apartment that she had built and notifying her that she was subject to arrest and detention and attempting to have the police do so;
- Changing the locks intending to put her elderly mother-in-law out of her home in the middle of winter;
- Shutting off the water to the apartment in February 2107 leaving Kathleen to melt snow and buy bottled water for consumption;
- Threatening to shut off the electricity to the apartment and eventually carrying out the threat in May 2017
It should be noted that when the above events transpired, Kathleen was in her mid-eighties and had lived in the apartment for almost two decades.
Reid v. Reid Appeal
Brenda argued that the trial Judge erred in finding unjust enrichment, or alternatively, that the trial Judge erred in his assessment of the remedy (paragraph 12 of the Appeal decision).
The Honourable Justice Peter M. S. Bryson set out the analysis for unjust enrichment as follows:
“ A party seeking a remedy for unjust enrichment must establish:
1. An enrichment of the defendant;
2. A corresponding deprivation of the plaintiff;
3. An absence of juristic reason for the enrichment.
 Unjust enrichment awards are restitutionary. The plaintiff’s deprivation is not limited to out-of-pocket expenses and so may not equal the defendant’s enrichment. A benefit conferred may far exceed the initial deprivation suffered (see for example Moore v. Sweet, 2018 SCC 52 at 44). The nature and the quantum of the remedy may vary depending on the circumstances. It can be an amount equal to what a plaintiff gave or paid. Alternatively it may be an amount representing the “value retained” by the defendant. In some cases a proprietary remedy may be preferable to a monetary award (Kerr v. Baranow, 2011 SCC 10, at 49-50).”
Justice Bryson considered the facts and circumstances in detail and upheld the decision of the lower Court to make a monetary award $64,200.
Justice Bryson also considered whether a constructive trust with respect to the apartment would have been appropriate and affirmed that Justice Moir “did not err in granting the relief awarded”. (paragraph 74 of the Appeal decision)
Additionally, the Court award punitive damages based on Brenda’s conduct in attempting to evict Kathleen in the middle of winter:
“ Punitive damage awards should be “reasonably proportionate to the blameworthiness of the defendant, the plaintiff’s vulnerability, the harm or potential harm directed specifically at the plaintiff and the need for deterrence”. The judge should take into account other sanctions to which the defendant is subject, and the advantages gained by the defendant’s misconduct” (Industrial Alliance Insurance and Financial Services Inc. v. Brine, 2015 NSCA 104, at 171, quoting from the Supreme Court in Whiten v. Pilot Insurance Co., 2002 SCC 18, at 43). A discretionary award of punitive damages should be reserved for exceptional cases. They focus on the defendant’s conduct, not the plaintiff’s loss, to address the former’s egregious conduct (National Bank Financial Ltd. v. Barthe Estate, 2015 NSCA 47).
 One only need review the shocking mid-winter attempts to evict her elderly mother-in-law, to be convinced that Brenda Reid’s conduct satisfied the principles described by the Supreme Court, cited above.”
Although the amount of $10,000 is not a large amount, it is easy to see how under a different set of facts the Courts may award higher punitive damages. Notwithstanding the hostility, this case serves as a reminder that the Courts will analyze and punish egregious and harassing conduct.
The appeal was dismissed and Justice Bryson awarded costs of $5,000 inclusive of disbursements (paragraph 74 of the Appeal decision).
This case is an egregious example of elder abuse. It certainly could be argued that the award of punitive damages was too low.