NS Supreme Court rejects unjust enrichment claim over in-law suite renovations

Retired man paid for renovations of an in-law suite on his sister’s property, but abandoned it

NS Supreme Court rejects unjust enrichment claim over in-law suite renovations

The Nova Scotia Supreme Court has rejected the unjust enrichment claim of a man who paid for the renovations of an in-law suite on his sister’s property but later decided to abandon it.

In King v. Raftus, 2023 NSSC 160, Brandon King sought an order from the Nova Scotia Supreme Court for the repayment of money on the ground of unjust enrichment. He gave money to his sister, Cynthia Raftus, and her husband, Andrew Raftus, to renovate an in-law suite on their property where he could live for the rest of his life. Brandon is a retired project manager whose wife passed away in 2018.

Brandon agreed to pay for all materials and labour to renovate an outbuilding on Cynthia and Andrew's property. Andrew, a contractor by trade, would supply his labour and coordinate other trades without cost to Brandon. Cynthia and Andrew renovated the suite, and Brandon moved into the suite in 2019.

After several months of living in the in-law suite, Brandon raised concerns such as sewage issues, animals in the attic pounding on the roof, and undelivered mail, among others. Brandon moved out of the suite without discussing it with Cynthia or Andrew. After his departure, Brandon instructed his lawyer to send a letter to Cynthia and Andrew demanding payment of $138,000, the amount Brandon allegedly spent on the renovation. Cynthia and Andrew did not have the money to pay Brandon, and the renovation did not result in a large increase in the property's fair market value. Brandon commenced a lawsuit based on unjust enrichment.

Unjust enrichment

The NS Supreme Court noted from case law that unjust enrichment is "an equitable principle, a notion that equity will intervene to protect against an unfairness that is not recognized by the common law or legislation." Enrichment connotes a tangible economic benefit given to the defendant.

The court found that the same appraiser appraised the property two years before the renovation and again shortly after Brandon vacated the property. The property's fair market value before the renovation was $282,000. After the renovation, the property was valued at $374,000, resulting in an increase of $92,000. The court, however, found that this increase was primarily attributable to inflation, and only $29,960 of the increase in the fair market value was attributable to the renovation.

Further, the court found that Andrew spent 653 hours working on the renovation without compensation. The value of Andrew's contribution to the renovation was $42,455. Brandon agreed to pay all renovation costs except Andrew's labour.

The court noted that when considering the issue as to whether there was an enrichment at all, the court needs to look at the project as a whole. The court found that Brandon left Cynthia and Andrew with an empty in-law suite. The suite has only added $29,960 to the property, and Andrew put in labour worth $42,455. The court concluded that Cynthia and Andrew were not enriched. The court found that they suffered a net loss on the renovation project.

Reasonableness of leaving

The court considered the reasonableness of Brandon leaving because if he was forced out and prevented from returning, that could affect the court's unjust enrichment analysis.

The court found that Andrew took a reasonable method for resolving the sewage issues and animals in the attic. He addressed the problems within a reasonable timeframe. Brandon blamed Cynthia for his missing mail, but the court pointed out that she delivered it to Brandon once she found the letter. The court found this is not a valid reason to abandon the in-law suite.

Brandon also raised the issue of the absence of business permits and insurance. But the court found that Brandon knew there would be no building permit at the outset. There was no evidence that Cynthia and Andrew tried to conceal from Brandon that there would be no building permit. The court found that Brandon moved into the in-law suite unconcerned about insurance status or lack of a building permit. Consequently, these were invalid reasons for vacating the suite without notice or expressing that Brandon was rethinking his living situation. The court said that Brandon should have discussed these issues with Cynthia and Andrew before abandoning the suite.

The court concluded that while Brandon had the right to live in the in-law suite, he chose to leave. There was no claim for unjust enrichment. Cynthia and Andrew did nothing to impact his living situation in the in-law suite that would result in his decision to abandon it. His conversations with Andrew and Cynthia were amicable and non-confrontational. They had resolved all of Brandon's issues by the time he decided to leave.

Further, the court found that despite Brandon's complaints about various issues, he never indicated to Andrew or Cynthia that any of the problems were so severe that he was considering leaving the in-law suite. The court ultimately held that none of the issues raised would justify Brandon's abandonment of the suite.

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