In a recent case, the court had to determine who was entitled to a home built on a father’s property after he died without a will.
Son Constructs Home on Father’s Property
The mother and father had two sons.
In 1987, the elder son joined the father in his framing business as an hourly employee. At that time, the elder son and his wife were either renting or staying with friends or family.
The elder son knew that the father was interested in buying some vacant land on which to build some houses. The elder son located some property for sale and told his father about it.
The father purchased the property on August 3, 1988 for $160,000 and took title in his name alone.
The father had hoped to be able to sever the land into lots, build houses and sell them for a profit. Despite this, shortly after purchasing the land, the father told the elder son to take a small section of the property for himself and build a home for his family. While the father had purchased the land, the elder son and his wife funded the construction of the home themselves.
In February 1989, the father applied to formally sever a parcel from the property, where the house was being constructed, with the intention of conveying it to the elder son and keeping the rest for himself.
In March 1989, they learned that the local Land Division Committee had denied their request to sever a lot.
By the summer of 1989, the elder son was running out of money for the construction. Accordingly, the father and mother mortgaged their own home again for $80,000 and made the funds available to the elder son and his wife to finish construction.
At the end of June 1989, the elder son and father learned that they were denied the development permit because the lot had already been severed to the maximum allowed. They were devastated by the news, but continued construction.
The elder son claimed that soon after, the father told him not to worry because it would all become his when the father passed away.
On July 17, 2004, the father passed away without a will.
The surviving family members believed that everything that belonged to the father would automatically go to the mother and carried on as before with respect to the property: the elder son and his wife continued to reside on the property, pay all the taxes and insurance premiums and make improvements, with the mother’s full knowledge. The elder son believed that the property would be ultimately conveyed to him upon the mother’s death.
Son and Wife Separate
The elder son and his wife separated in March 2011. They continued to reside in the home, separately, until 2018, when the wife moved out.
It was subsequently discovered that title to the property did not automatically vest in the mother’s name, but that the rules of intestacy governed.
The elder son and his wife claimed that they had a beneficial interest in the property either through an unjust enrichment claim, which would entitle them to a constructive trust or monetary compensation, or through the principles of proprietary estoppel. The wife also argued there was an oral agreement between her and the elder son on one hand, and the father on the other hand, to convey the property to them.
The father’s estate maintained that the elder son and his wife’s claim of an agreement and a beneficial interest in the property, or even a compensatory claim, had not been made out on the facts or in law.
Court Finds Estate was Unjustly Enriched
The court began by finding thatit was difficult to distill, objectively, what the intention of the parties was with regard to the evidence presented about an oral agreement between the father and the elder son. As a result, the court did not find that an oral contract to convey the property to the elder son and his wife has been made out.
Regarding the unjust enrichment claim, the court found that there was no contract between the father and the elder son and his wife that would deny them any benefit or compensation for their contributions to the property. Additionally, the court did not find that there was any evidence to support the finding that the elder son and his wife intended that their expenditures and labour were a gift to the father so that he alone could benefit from it. Accordingly, the court found that the elder son and his wife had satisfied their burden to prove that there was no juristic reason for the benefit they conveyed. The court stated:
“It is reasonable for the [elder son] and Wife to expect to receive some benefit for their ongoing improvement and upkeep of the Property. It is true that they were able to live on the Property at a lower cost than if they had purchased the Property themselves. However, the [elder son] and Wife were both clear that they would have never expended the time and money that they did on the Property had they believed they would not receive an interest in it.”
As a result, the court found that the estate had been unjustly enriched by the elder son and his wife with respect to the construction, improvement and maintenance of the house. It ordered that theland and home be sold, with 75% of the money going to the elder son and his wife to divide, and the remaining 25% to go to the estate.
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