Haigh V. Kent: Unjust Enrichment And The Constructive Trust In The Context Of A Joint Venture

The facts of this case relates to a joint venture that collapsed after more than 20 years. A majority of the B.C. Court of Appeal upheld the trial judge's decision that an unjust enrichment had occurred, and upheld the trial judge's award of a 25 percent constructive trust interest in the appellant's property on which the joint venture had operated.

The parties to the action were brothers-in-law, with Mr. Kent married to Mr. Haigh's sister, Penny. In 1980 Mr. Kent invited Mr. Haigh and his wife to live on his property, and told him that it would always be available to them as a home.

Mr. Kent and Mr. Haigh worked together to get a resort running on the property, with Mr. Haigh's contribution including the construction of extensive upgrades and additions, repairs, and maintenance. He also constructed an A-frame house for himself and his wife that doubled as a manager's office. There was never any formal business arrangement between the two men, and Mr. Kent always ran the resort as a sole proprietorship.

In 2004, the two parties "fell out." Mr. Haigh stopped working at the resort, but continued to live with his wife in the A-frame house he had built on the property. Eventually, Mr. Kent sought to have Mr. Haigh and his wife removed from the property. At trial, Mr. Haigh took the position that Mr. Kent had been unjustly enriched by his years of work, and that he was entitled to a proprietary remedy through a constructive trust. Mr. Kent responded that there had been no unjust enrichment, and that in any event Mr. Haigh was only entitled to restitutionary damages.

Unjust Enrichment

The trial judge accepted the argument that Mr. Kent had been unjustly enriched by Mr. Haigh's years of work. Mr. Kent's business had clearly benefited from Mr. Haigh's assistance. The relationship between the two men did not constitute a partnership, in part because they had never shared in the resort's income, and in part because Mr. Kent's control of the business was inseparable from his ownership of the property.

The trial judge rejected Mr. Kent's argument that the years spent living in the cabin on the property could serve as compensation. Taking into account the reasonable expectations of the parties, he ruled that there could never have been a serious belief on the part of the either party that the provision of these living accommodations was intended to be any form of compensation. Mr. Kent had offered to let Mr. Haigh live on the property, and Mr. Haigh...

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