For Love or Money: Unjust Enrichment & the Quantum Meruit Remedy in the Estates Context

Introduction

In estates disputes, unjust enrichment claims generally arise where a claimant seeks compensation against a deceased’s estate for services rendered for the deceased during the deceased’s lifetime. Where a plaintiff’s labour enriches the deceased or the deceased’s estate, without a reason justifying the enrichment, courts may provide the plaintiff with a form of relief. Quantum meruit, meaning fee for services, is one way courts will redress unjust enrichment in the estates context, providing the plaintiff with monetary compensation for their services.

In determining whether a claimant’s labour merits compensation under this framework, that is, whether a plaintiff’s labour constitutes a service worthy of a fee, courts must discern the tricky boundary between acts of service and acts of love. While the former presupposes a right to adequate compensation (i.e. a “fee for service”), courts understand the latter to be provided gratuitously, out of the simple goodness of one’s heart.

The nature of estates disputes—which typically arise between members of a family—makes parsing between acts of service and acts of love a tricky, if not entirely arbitrary exercise; in any act of service, a motivating kernel of love can be gleaned.

Assessing a Plaintiff’s Entitlement

A claimant must satisfy the following elements to establish that an Estate has been unjustly enriched:

1. The claimant provided a benefit to the deceased/the Estate;
2. The claimant suffered a corresponding deprivation; and
3. There is no juristic reason for the deprivation.¹

This test functions to determine whether a claimant’s actions merit financial compensation; courts have developed some factors that assist in distinguishing those actions from the routine assistance provided by loved ones.

Benefits

The courts’ approach to this stage of the unjust enrichment test suggests that the distinction in motivation—between an act of service and a routine act of familial love—is largely irrelevant.  Courts generally conceive of domestic services, specially, work done within the home for one’s own family, as benefits.², The Supreme Court has repeatedly acknowledged the immense value of domestic labour to a family.³  Recent decisions from Ontario courts appear to affirm this value in the context of child-parent relationships, as well.⁴ In Granger v Granger, for example, the Ontario Court of Appeal reasoned that because there is no duty on children to provide domestic care to their parents, the services have value and constitute a benefit.⁵  In this sense, the value of domestic labour does not depend on the nature of the relationship of the donor and recipient of the service, or even the utility of the services in the traditional marketplace; the value is innate.

On the other hand, the apparent universality of this value is attenuated somewhat by two considerations. Services will not constitute a benefit where (a) there was no request for the services and (b) the services did not incontrovertibly benefit recipient.⁶ Both these considerations reframe the analysis of these services within the traditional marketplace.

Juristic Reason

Courts may deny recovery by a claimant who has established a benefit and corresponding deprivation, if there was a juristic reason for same, justifying the deceased’s estate retaining the benefit.⁷ There are two stages in determining whether there is a juristic reason for enrichment.⁸ The first requires the plaintiff to show that the enrichment does not fall in an established category of juristic reason, including donative intent or equitable obligations.⁹  If no established category applies, the claimant has made out a prima facie case; however, the Estate may rebut this by showing another reason to deny recovery. At this second stage, courts will consider the parties’ reasonable expectations and public policy.¹⁰

At the juristic reason of analysis, lower courts have attempted to carve out exceptions for the apparently voluntary services or gifts conferred between family members. While the law generally implies compensation for a gratuitous transfer of services,¹¹ in a few cases, courts held that where services are rendered between family members, no presumption of reasonable compensation arises, as it otherwise would, placing the onus on the family member to prove an implied or express contract, rather than voluntary services.¹² that  In McBride v McBride Estate, for example, evidence that the defendant assisted with her mother’s care “out of love” served partly to defeat an unjust enrichment claim.¹³

Further, Maddaugh and McCamus note that where the benefit is one where the plaintiff would be expected to provide the benefit out of a sense of “moral obligation” and “irrespective of…securing compensation” the benefit may be construed as a gift.¹⁴ Where a plaintiff, however, provides the questioned services as their profession, gratuitous intent will not be inferred.¹⁵

But, other jurisprudence troubles this presumption.¹⁶ In Stanhope v Stanhope, the court held that, “plaintiffs are entitled to fair and reasonable compensation for services provided to a family member or someone in a particular personal or care relationship when that person (and subsequently their estate) directly and substantially benefits.”¹⁷ The British Columbia Court of Appeal recently held that a ”family arrangement”— wherein a mother provided funds to her daughter and son-in-law to purchase a home and would be welcome to reside in the home indefinitely—did not constitute a juristic reason justifying the daughter and son-in-law retaining the “entire benefit of…the funds.”¹⁸ Recent Ontario decisions appear to align with this principle.¹⁹

The State of the Law in Ontario: Tarantino v Galvano

In the recent decision of the Superior Court of Ontario, Tarantino v Galvano, a daughter sought compensation on a quantum meruit basis against her late mother’s Estate for care services she provided to her elderly mother in her final years.²⁰  The Court held that the daughter established her quantum meruit claim on the following bases:

1. The daughter conferred a benefit because the mother received “excellent care” from her daughter;
2. The daughter suffered a corresponding deprivation, sacrificing her career to fulfill her mother’s wish of living in her home, rather than a nursing home; and
3. There was no juristic reason – the daughter believed she had entered into a bargain whereby she would inherit her mother’s house and receive some funds in exchange for her services.²¹

Significantly, the Court did not consider the implications of the familial relationship between the donor and recipient of the care services. The Court emphasizes the value of the services rendered, entitling the claimant to fair compensation, regardless of any moral duty she may have to provide those services.

However, the Court also relies on the fact of the parties’ bargain in its analysis. In doing so, it only justifies assigning monetary value to services by placing those services within a traditional contractual framework. This indicates, perhaps, that while courts are willing to reward acts of love for one’s family, ultimately, those acts must be recognizable within established legal norms.

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¹ Kerr v Baranow, 2011 SCC 10 at para 36-40; Granger v Granger, 2016 ONCA 945.
² Kerr, ibid at para 42.
³ Ibid.
⁴ Granger v Granger, supra note 1; Tarantino v Galvano, 2017 ONSC 3535.
⁵ Granger, ibid at para 68.
⁶ Hodgins v Grover, 2011 ONCA 72 at para 72, citing Maddaugh and McCamus, Law of Restitution, loose-leaf (Aurora: Canada Law Book, 2010) at p 3-17. Incontrovertible benefit is defined by Maddaugh and McCamus as “an expenditure the defendant would otherwise have sustained.”^6
7 Kerr v Baranow, supra note 1 at paras 40-41.
⁸ Garland v Consumers’ Gas Co, 2004 SCC 25 at para 44.
⁹ Ibid.
¹⁰ Ibid.
¹¹ Deglman v Guaranty Trust Co. of Canada [1954] SCR 725 at 728.
¹² Reid Estate v Reid 2010 ONSC 2320 at para 136; Re Reid (1964)  46 DLR (2d) 32: both quoting Mooney v Grout: services were held to be those of a “volunteer” rather than pursuant to a contract. NB – both cases are rarely cited.
¹³ McBride Estate v McBride, 2010 BCSC 443 at para 67. Note: case reversed on appeal on other grounds.
¹⁴ Maddaugh and McCamus, The Law of Restitution, 3-43.
¹⁵ Ibid.
¹⁶ Stanhope v Stanhope Estate, 1991 CarswellSask 182 at para 50.
¹⁷ Ibid.
¹⁸ MacKinnon v Donauer 2017 BCCA 437 at para 37
¹⁹ Granger, supra note 4 and Tarantino, supra note 4.
²⁰ Tarantino, supra note yy
²¹ Ibid at para 126.