The farm, the break-up and unjust enrichment

Ms. D and Mr. L cohabited in a marriage-like relationship from in or about August 1992 until January 13, 2006. They did not have children together; however, Ms. D had a daughter who lived with the parties from the age of 12 until she turned 22. The plaintiff, Ms. D, sought a declaration from the B.C. Supreme Court that the defendant, Mr. L, was unjustly enriched through her efforts on his farm and financial contributions and that she has suffered a corresponding deprivation. In particular, Ms. D claimed an interest by way of constructive trust in respect of two properties registered solely in Mr. L’s name.

Under provincial family law statutes, spouses are entitled to a share of the "net family property" on the breakdown of marriage.  In this case, where the parties were not married, the division of property depends on the Common Law and principles of Equity. 

Mr. L opposed Ms. D’s claim for a division of assets based on unjust enrichment and constructive trust.  He maintained that Ms. D did not suffer any deprivation because she was enriched by the lifestyle she enjoyed while living on his property and was able to rent out her own property, provide her daughter with a residence, and ultimately sell her own property for a considerable profit. In the alternative, Mr. L argued there was a juristic reason for the deprivation because the parties had an agreement that her financial contribution and labour represented rent for Ms. D and her daughter while they resided in the Family Residence.  In the further alternative, Mr. L argued that if a division of assets is ordered, only the Family Residence should be divided and any interest accorded to Ms. D should be minimal.

In order to succeed in a claim for unjust enrichment, Ms. D had to demonstrate:

1. That Mr. L was enriched by her contributions;
2. That she was correspondingly deprived by contributing to Mr. L;
3. That there was no jurisitic reason for the enrichment.

In other words, Ms. D needed to show that she had provided, to her detriment, a benefit to L for no "juristic" or legal reason (e.g. under a contract or other legal obligation owed to him).  Perhaps there were non-legal reasons to justify her contribution and L's enrichment, but in this case the Court was concerned only with legal justifications.

In the end, the Court found not only that Mr. L was unjustly enriched and that the appropriate remedy was to provide Ms. D with a beneficial interest in his property (i.e. the constructive trust - a trust created by the Court), but that Ms. D was also unjustly enriched at the expense of Mr. L.  The Court found that there was a benefit conferred on Ms. D in the form of shelter and a contribution toward her living expenses.  Had Ms. D and her daughter lived on their own they would have incurred living expenses such as rent or mortgage payments, food, and clothing.  Mr. L’s home also afforded them an opportunity to live in a rural environment which was their preference. More directly, Mr. L’s provision of shelter permitted Ms. D to rent out her Apartment as a means of earning income and paying off the mortgage. Lastly, Mr. L provided some used appliances for the Apartment and recommended the installer that Ms. D hired to replace the floors.

Read the decision at: D v. L.

NS Court of Appeal upholds punitive damages claim against insurer in dairy barn case

At trial, a jury awarded Adrian and Kelly Ackermann of Nova Scotia $265,000 (the maximum payable under their insurance policy) in connection with damage caused to their dairy barn by Hurricane Juan in 2003.  The Ackermann's insurer, Kings Mutual, had denied coverage, although it was agreed that the hurricane was a "wind storm" within the meaning of the policy and was covered.  Kings Mutual denied that any damage had been caused to the barn.

In addition to the main damages award, the jury at trial also awarded $55,000 in punitive damages against Kings Mutual, having found that the denial of coverage was made in bad faith and that the insurer's conduct offended the jury's sense of decency (click on the link to the decision below to read the extensive report of the facts of the case).  Punitive damages are only awarded in rare and exceptional circumstances where a party’s actions are deserving of punishment, deterrence or denunciation.  Normally, damages are compensatory - designed to put the injured party back in the place they were before suffering the injury.  Punitive damages are about punishment for exceptionally wrongful conduct.

Kings Mutual did not appeal the main award of damages, but did appeal the award of punitive damages to the Nova Scotia Court of Appeal.  The Court of Appeal ruled with respect to the jury's decision on the issue:

The jury’s answers to the questions put to it clearly indicate its findings of bad faith in relation to Kings’ denial of coverage under the policy and that King’s conduct offended its sense of decency. This indicates the jury was satisfied Kings’ conduct of its investigation was outrageous. My review of the record satisfies me that this was a conclusion a reasonable jury could reach and that an award of punitive damages was a rational response on the jury’s part to its findings. It was not an inevitable or unavoidable response, but it was a rational response to what the jury saw and heard. Without an award of punitive damages, Kings would not have been required to pay more than its policy required it to pay and there would be nothing to deter it from acting similarly in the future; by not following up on all of the evidence relevant to a claim, withholding critical information from the adjuster engaged to investigate a claim and allowing the adjuster to present the results of his or her investigation in a partisan, biased and unobjective manner. The actions of Kings were exceptional, justifying an exceptional remedy.

Read the decision at: Kings Mutual Insurance Company v. Ackermann.

Cape Breton farm awarded to estate of son who came back from Ontario to help parents

Vinnie MacRae was one of eight siblings born to Dan Joe and Sadie MacRae in Cape Breton.  In the early 1970's, Dan Joe became ill with cancer and asked his son Vinnie to return from Windsor, Ontario, where Vinnie was working at a Chrysler plant.  Vinnie was about to be married.  He asked his other siblings if one of them would go, but no one else wanted to return.  So Vinnie and his soon to be wife, Theresa, moved back. 

Dan Joe died in 1975 and his entire estate went to his wife, Sadie.  Over the next 27 years, Vinnie and Theresa lived on and worked the farm, raising 4 children of their own.  Sadie lived with them.  Sadie fully expected that Vinnie would outlive her.  Therefore, in order to deal with the farm property, she became a joint tenant with Vinnie, so that when she died the property would go to Vinnie.  Unfortunately, Vinnie died in 2002, the year before Sadie's death.  Because they were joint tenants, the property vested entirely in Sadie's estate, meaning that the farm would likely be divided amongst all of the children of Dan Joe and Sadie (Sadie did not have a will). 

Theresa, Vinnie's widow, made a claim against Sadie's estate, arguing that there was a resulting trust in favour of her husband's estate.  Sadie had intended for the farm to go to him, and he and his wife had earned the farm through their work and dedication over the past 27 years.  The court agreed, finding that it would be unjust and contrary to Sadie's intention to deprive Vinnie's estate of full ownership of the farm.

Read the decision at: Re MacRae Estate.

BC Court rejects challenge of marketing board ruling that farmers cannot rent out milk quota

Lilian and Sandy Stewart (the “Stewarts”), are dairy farmers and owners of milk quota. They had a contract milking agreement with a third party, Steven Verdonk, to “milk” their lower mainland quota rather than milk it themselves, in contravention of the rules of the quota system in British Columbia.  The British Columbia Farm Industry Review Board (the “BCFIRB”) and the B.C. Milk Marketing Board (the “Milk Board”), became aware that many quota holders, like the Stewarts, were renting out their quotas contrary to the rules of the quota system, and therefore began a process of regularizing the system, including dealing with the non-compliant quota holders and those who rented from them.  On November 7, 2008, the Milk Board made a decision to retract the Stewarts’ milk quota due to their non-compliance with the rules and to allocate the quota to Mr. Verdonk. The Stewarts appealed the Milk Board’s decision to the BCFIRB.  In a decision released on February 26, 2009, the BCFIRB dismissed the Stewarts’ appeal.  The Stewarts then made an application for judicial review of the Board's decision.

In its hearing of the judicial review application, the B.C. Supreme Court found that:

• the treatment of the Stewarts' issues by the Board was not unfair;
• the procedural aspects of the hearing by the Board did not demonstrate unfairness; and,
• the decision itself of the Board was not patently unreasonable (or unreasonable at all).

On this basis, the judicial review application was dismissed. 

Read the decision at: Stewart v. British Columbia Farm Industry Review Board.

Butternut Trees on your Ontario farm? Be aware of the Endangered Species Act, 2007

The following is a notice posted yesterday on the Environmental Bill of Rights (EBR) Registry in Ontario in connection with the proposed removal of ONE butternut tree:

Title:
Permit under clause 17(2) (c) of the Endangered Species Act, 2007 for Removal of one Butternut tree by Hydro One
 
Members of the public are invited to submit their written comments by June 21, 2010 to the contact person listed in this notice.

Rationale for Exemption to Public Comment:
 
This proposal is not prescribed by Ontario Regulation 73/94 under the Environmental Bill of Rights as a classified proposal for an instrument.

Ministry of Natural Resources (MNR) is voluntarily posting this notice to advise the public of the proposal and to invite the public to submit written comments on this proposal to the contact person identified in this notice.

Description:

Hydro One (applicant) has applied for a permit for the removal of one Butternut tree (Juglans cinerea) for the purpose of clearing and maintaining a transmission corridor beneath a transmission line located in Ottawa, Ontario.

Butternut is listed on the Species at Risk in Ontario List, in Ontario Regulation 230/08 under the Endangered Species Act, 2007 (ESA), as an endangered species. Clause 9 (1)(a) of the ESA, provides that no person shall kill, harm, harass, capture or take a living member of a species that is listed on the Species at Risk in Ontario List as an extirpated, endangered or threatened species.

The health of the Butternut tree at this site has been assessed by a qualified Butternut Health Assessor and was determined not to be severely affected by Butternut Canker and therefore retainable. The identification of retainable trees is based on an assessment of crown dieback and the coverage of the stem and root flare by cankers conducted by a qualified Butternut Health Assessor. Retainable trees do not qualify for the exemption in section 5 of Ontario Regulation 242/08 under the ESA and can not be removed without an authorization. The retainable Butternut tree within this project area would be removed.

The Minister may issue a permit to an applicant under clause 17(2)(c) of the ESA that authorizes the person to engage in an activity that would otherwise be prohibited by section 9 or 10 of the ESA if the Minister is of the opinion that the main purpose of the activity authorized by the permit is not to assist in the protection or recovery of the species specified in the permit, but,

(i) the Minister is of the opinion that an overall benefit to the species will be achieved within a reasonable time through requirements imposed by conditions of the permit,

(ii) the Minister is of the opinion that reasonable alternatives have been considered, including alternatives that would not adversely affect the species, and the best alternative has been adopted, and

(iii) the Minister is of the opinion that reasonable steps to minimize adverse effects on individual members of the species are required by conditions of the permit;

The options of leaving the tree in its current location and avoiding or transplanting it have been examined. The location of the Butternut tree would cause it to come in contact with overhead hydro-electric lines and potentially cause a future safety risk. Transplanting the tree has been considered as an option, but the tree is too large to be transplanted successfully.

An overall benefit could be achieved for Butternut by planting and tending replacement trees. Based on the size of the Butternut tree threatened with removal (i.e. diameter at breast height), the Forest Gene Conservation Association guidelines recommend that the applicant plant 5 seedlings from a local seed source in suitable sites. The ratio of five seedlings planted per tree removed is intended to provide an overall increase to the seed production capacity of the species. Establishing and tending to these seedlings in a protected area will result in a net increase in the local reproductive potential for the species.

To achieve overall benefit for Butternut, the applicant is proposing to plant a total of five new Butternut seedlings in Coronation Park, owned by the City of Ottawa. Hydro One would plant, tend and monitor the seedlings for a period of five years from the time of planting. Under the supervision of a qualified professional biologist or forester, the five Butternut trees would be planted in locations suitable to support Butternut. Tending and monitoring of the Butternut seedlings on site would take place over a five year period to ensure that at least half of the planted trees will be alive (e.g., a minimum of three Butternut trees at the end of five years). These newly planted Butternut trees will receive protection under the ESA.

Purpose of the Notice:

The purpose of this notice is to ensure that the public is made aware of, and given an opportunity to comment on, the proposal, including the proposed conditions and outcomes of the permit for which the Hydro One is applying in order to remove one Butternut tree. The proposed permit would be issued under clause 17(2)(c) of the ESA.

Decision:

This notice will be updated when more information is available.

Other Information:

Please email comments to Esa.permits.agreements@ontario.ca and quote the registry number in the subject line.

The following web-links provide additional information about this notice:

Endangered Species Act, 2007 (Section 9 and 17 are sections of the Endangered Species Act that are referred to in this posting)

Butternut Tree Regulation  Section 5 of general regulation 242/08 addresses the exemptions pertaining to Butternut

Turkey farmer's appeal denied by the Agriculture, Food and Rural Affairs Tribunal

Ontario's Agriculture, Food and Rural Affairs Tribunal has dismissed an appeal by John Petropoulos of Smithville from a decision of the Turkey Farmers of Ontario (TFO) which denied his request for revision or revocation of an "over marketing penalty".

John Petropoulos, Angela Petropoulos and A & V Petropoulos of Smithville, Ontario are turkey producers and hold quota issued by the Turkey Farmers of Ontario (TFO) under two legal entities, 708022 Ontario Limited and A & V Petropoulos.  During the quota year which ended April 30, 2009, the Appellants discovered that 708022 Ontario Limited had not obtained the required lease and approval from TFO to produce turkeys on the property owned by A & V Petropoulos.

As a result of 708022 Ontario Limited not having the lease in place, A & V Petropoulos, producers themselves, committed an over marketing of their quota by 57,034 kgs. The Board did not allow A & V Petropoulos to cover the over marketed kilograms with the unused kilograms from 708022 Ontario Limited. The Board's decision included forgiveness of the 57,034 kilogram reduction that would have been deducted from the marketing quota in the 2009/2010 quota period, and a fine of 22 cents per kg for the over production assessed against A & V Petropoulos. The total fine levied was $13,174.85.

Since the error did not actually result in an over-production of turkeys into the marketing system, Petropoulos asked that the fine be waived and in its place a late filing fee be imposed.  The Tribunal refused this request, finding that TFO's treatment of the situation was fair and reasonable, especially in light of the fact that no leases were in place for 2005, 2006 and 2007 either.

Read the decision at: John Petropoulos v. Turkey Farmers of Ontario.

Same Season Relief Well issue before the NEB - What will be done in Canada to avoid a repeat of the BP disaster here?

Somewhat ironically, the National Energy Board had started a hearing process in February, 2010 to review its Same Season Relief Well (SSRW) policy, just weeks before the BP drilling rig explosion and oil spill in the Gulf of Mexico (relevant documents can be viewed at: MH-1-2010.  BP has been criticized for not having relief wells in place to reduce the pressure in its damaged well that is now spewing oil onto the Gulf coast. 

Here's what BP said in its submission to the NEB in March:

As will be discussed in greater detail below, for both technological and operational reasons, continuance of the SSRW capability is not required and is problematical for BP and other operators, and may well impede further exploration in the Beaufort Sea.

BP is advocating that the policy be changed by eliminating the requirement for same season relief well capability, and any time-of-year drilling restrictions associated with that policy. In BP's view, consistent with the on-going development of goal-oriented regulation, the Board should utilize a series of goals and objectives to enhance safety and protection of the environment.

That was in March.  Of course, in April, BP's operations in the Gulf of Mexico have initiated the worst environmental disaster in the United States since the Exxon Valdez.  Is "goal-oriented regulation", which is the NEB's policy in dealing with safety and the environment, right for Canada?  Where the goal is to avoid environmental disasters, does "goal-oriented" regulation (i.e. set the goal and let industry decide what needs to be done to achieve the goal) do any good?

For its part, Conoco Phillips wrote to the NEB on Monday to suggest that the hearing process be put on hold pending the investigation of the BP disaster: Conoco Phillips to NEB.

Construction underway on Manitoba's largest wind farm

CBC News - Manitoba - Construction underway on wind farm

An official groundbreaking for a wind farm near St. Joseph, MB was held on Thursday. The project proponent, Pattern Energy of San Francisco, expects the first turbines to be in operation by the end of this year. Read the CBC News story at the link above.

My original post about this project is at: Deal Struck to Build $345 million wind farm.