IN THE SUPREME
COURT OF BRITISH COLUMBIA
|
Citation: |
Bergen v. Bergen, |
|
|
2009 BCSC 1099 |
Date:
20090811
Docket:
8466
Registry: Rossland
Between:
Charlotte Dora Bergen and Walter Theodore
Bergen
Plaintiffs
And:
Robert Walter Bergen and Tamsin Jane Bergen
Defendants
And:
Charlotte Dora Bergen and Walter Theodore Bergen
Defendants by Counterclaim
- and -
Docket:
13104
Registry: Nelson
Between:
Robert Walter Bergen
Plaintiff
And:
Charlotte Dora Bergen and Walter Theodore Bergen
Defendants
Before: The Honourable Mr. Justice McEwan
Reasons for Judgment
|
Counsel for the Plaintiffs: |
B.
Cromarty |
|
Appeared on own behalf: |
R. W.
Bergen |
|
Appeared on own behalf: |
T. J.
Bergen |
|
Place and Date of Trial: |
Rossland, B.C.
July 6, 7, and 8, 2009 |
|
Place and Date of Judgment: |
Nelson,
B.C.
August 11, 2009 |
I
[1]
The plaintiff, Charlotte Bergen, is 79 years old.
Her husband, Walter Bergen, died on December 3, 2007, after these
proceedings had commenced. She continues as the successor in title to
her husband’s interest in the property that is the subject of these
proceedings.
[2]
The defendant, Robert Bergen is their son. Tamsin
Jane Bergen is his wife.
[3]
The lands and premises at issue are located south of
Rossland, British Columbia, near Paterson. They are more particularly
described as: Parcel A (See 85781I) Sublot 140, Township 9A, Kootenay
District, Plan X63 Except Part included in Plan 16065 and NEP22074. The
current title shows the plaintiff and her deceased husband as holders of
an undivided 2/3 interest as joint tenants, with Robert Bergen holding
an undivided 1/3 interest as tenant-in-common.
[4]
The plaintiffs brought a Petition in Rossland in
April of 2006 seeking sale and distribution of the proceeds, after all
necessary deductions, solely to them. They sought certain other relief,
some of which should have been brought by an action.
[5]
The defendants responded with an action of their own,
filed at the Nelson Registry of the Supreme Court, claiming that the
plaintiffs held their interest in the property in trust for Robert
Bergen and seeking transfer of the property to him.
[6]
The procedural difficulties created by these
pleadings were addressed by Davies J. on September 18, 2006. He
directed that the matters be “joined” and proceed in the Rossland
Registry, with the plaintiffs’ Petition and Affidavit standing as the
originating proceedings and the plaintiffs’ Writ and Statement of Claim
standing as a counterclaim. He also ordered that there be a trial of
the matter. He directed the defendants to vacate the property in favour
of the plaintiffs in the interim, and ordered a sale of the property,
with the proceeds held in trust pending further order of the Court.
[7]
This Order was subsequently modified on November 26,
2007 by Hinkson J., who removed the requirement that possession of the
house be delivered to the plaintiffs but continued the order that the
property be sold. These directions have been ignored, and the property
remains in the possession of the defendants.
II
[8]
How this came to be requires some background. The
plaintiffs were married for 52 years. They had two sons, the defendant,
Robert, now 49, and William, now 45. They lived in Kitchener, Ontario,
where Walter operated an electrical and lighting business that had
passed to him from his father. Walter offered both of his sons the
opportunity to work in the business. Robert was not interested but
William was, and the business and the building in which it was located,
as well as the house owned by Walter’s father, eventually devolved to
William. William still resides in Kitchener.
[9]
Robert lived a more peripatetic life. While it is
unnecessary to go into detail, both Robert and William, during their
adult lives, had financial assistance from the plaintiffs. They
substantially paid for Robert’s university education and helped pay for
his acrimonious divorce and custody proceedings with his first wife, for
example. By 1991 Robert had come out to Greenwood, British Columbia,
where he worked as a carpenter and also as a substitute teacher. He had
custody of his son Spencer, who was born in 1987. The plaintiffs came
out to British Columbia periodically to visit with the defendant and
Spencer.
[10]
The plaintiffs retired in about 1995. They sold their
home and moved to Lions Head, Ontario, where they had built another
home. According to Charlotte Bergen, their trips to British Columbia
got them thinking that after a lifetime in Ontario, it might be good to
do something different, and they began to take an interest in purchasing
property in this province. They asked Robert to look for something
suitable.
[11]
After looking at some properties in the Grand Forks area,
the plaintiffs were shown the property in issue, a 23.9 acre parcel near
Paterson. They purchased it in June of 1995. By this time Robert was
living in Rossland with the defendant Tamsin Bergen, in a home that she
owned. They subsequently married.
[12]
The property was purchased for $89,000.00. The funds
were provided by the plaintiffs. In about 1997 the plaintiffs began to
think it would be good to put a house on the property. In 1998 they
decided to put Robert on the title as to a 1/3 interest in joint
tenancy. The intention was that Robert would eventually inherit the
property and this would ensure that the property by-passed probate. It
is apparent there was some sentiment that since William had already had
some benefit from the arrangements made in Ontario, this would be fair
to Robert.
[13]
The parties’ versions of what happened at this point
diverge significantly. Charlotte Bergen’s evidence is that once she and
Walter decided to move to British Columbia, they thought it would be
good to give the job of managing and building the house to Robert. He
had been living by renovating houses and increasing their equity, and
they thought the project would be helpful to him in developing his
skills.
[14]
Robert’s evidence is that the understanding was that his
parents had offered to buy him a home. He chose a post and beam design,
chose the site, and set about building a road, seeing that a well was
drilled, and logging the property in order to supply the materials with
which to build the house. He arranged for this timber to be milled in
Meadow Creek and transported back to the site. He says he devoted
himself full time to the task. He acknowledges that he sought the
approval of the plaintiffs at several junctures, as the work proceeded.
[15]
All of this was financed by the plaintiffs. They sent
money out to Robert as he requested it. Between June 4, 1997 and
November 7, 2002, Walter and Charlotte Bergen transferred a total of
$552,475 to Robert according to their records. This was in addition to
the amount paid to purchase the property in the first place.
[16]
By June of 1999 the plaintiffs had run out of money and
needed to register a mortgage on the property in order to complete the
house. This mortgage had a balance of $175,000 at the time this
litigation commenced. Robert Bergen was obliged to sign this mortgage
as part owner. The plaintiffs made the payments under the mortgage with
no assistance from the defendant, until after they had left the property
in 2006.
[17]
According to Charlotte, the plaintiffs came out from
Ontario in November of 1999, expecting to move into the house. It was
not ready for occupancy, and after staying with the defendants briefly,
the plaintiffs moved into an apartment in Warfield, waiting for the
house to be completed.
[18]
This is quite at odds with Robert’s version which is that
it was a surprise to him when his parents called to advise that they had
a deal on a moving vehicle and wanted to fly him out to drive back with
them with their furniture. He says he did not expect them to move in,
and that this amounted to his parents reneging on the understanding that
they had bought him a property and were buying him the house he was
building.
[19]
Despite the amounts that had been advanced, the house was
still not finished when the plaintiffs moved in the spring of 2000.
They hired a contractor to complete some work they considered necessary
at a cost of $8,243.54. Robert explained that he was unable to stay on
the job because he had to make a living.
[20]
The plaintiffs lived in the house until January of 2006.
During that time the relationship with Robert deteriorated seriously.
Apart from refusing to complete the job, the plaintiffs complained that
he repeatedly came on the property, watching them and wandering about.
He sometimes entered their home. This led them eventually to change the
locks and later to install an alarm system. In 2001 they severed the
joint tenancy. In October of 2004 the plaintiffs obtained a quote for
some $36,000 for what it would cost to complete the house to the stage
where they could get an occupancy permit. They could not afford to pay
for this work.
[21]
In December of 2003 the defendant had a solicitor write
the plaintiffs, setting out his understanding that the plaintiffs
intended to give him the property and asking for confirmation that that
was the arrangement.
[22]
Charlotte wrote back:
We want you to know that we had a verbal agreement
and that was, “eventually or some day” this would become his.
The house, at this time, is not finished and will
probably be put up for sale at some time as we are in debt to the bank
for $175,000.00 which would have to be settled. If it comes to this,
Robert owns 1/3rd of the property and this is all he would get as Walter
and I each own 1/3rd jointly.
We have sold our homes in Ontario and the proceeds
were applied here at this place. We have paid for everything involving
construction etc. and have copies of the cheques and this includes wages
etc.
Sorry, but he will have
to wait until we make a decision, meanwhile he will just have to wait.
[23]
The solicitor wrote back that the defendant “[did] not
accept that an open ended time frame to complete the transfer of
property [was] reasonable”. The letter went on to say that the
defendant “[would] expect possession of the property on or before July
1st, 2004”.
[24]
Nothing further happened, although lawyers continued to
be involved.
[25]
On January 19, 2006 the plaintiffs travelled to
Kitchener to visit their other son, William, and his family. This was a
trip they had made most years. Charlotte suggested that they were also
happy to get away from the stress of dealing with Robert’s incursions,
and the essentially uncommunicative unpleasantness that had come to
characterize their relationship.
[26]
The day after the plaintiffs left, the defendants moved
into the house. When the plaintiffs discovered this a few days later,
they demanded that the defendants move out. The defendants refused and
the plaintiffs initiated their petition. Despite an order to vacate
that was extant for over a year, the defendants have never left, nor
have they cooperated with the continuing court direction that the
property be sold.
[27]
In light of the occupation of the house by the
defendants, the plaintiffs ceased paying the mortgage as of May 1,
2006. The Toronto-Dominion Bank initiated foreclosure proceedings in
October 2006. Robert paid out the mortgage for $185,300 using money
derived from property owned by his wife. The defendant complains that
he was not notified that his parents had ceased to pay. He appears to
have expected that they would continue to do so, while he lived in the
house against their wishes.
[28]
The defendant asserts that his brother William had,
during this time, run into financial difficulties, closing the
electrical business in 2002, and assigning rents from the building he
owned to creditors. He asserts that the plaintiffs provided ongoing
financial assistance to William which is what ultimately put them in
debt. There is certainly some evidence that they may have assisted
William to some extent. The defendant suggests that given the problems
over his divorce from his first wife and after he declared bankruptcy in
1994 and remarried in 1996, the proper characterization of the
arrangement is that his parents had agreed to hold the property in
trust for him in the event of further matrimonial or financial
strife.
[29]
Robert suggests that when the mortgage was placed on the
residence he was unaware that the plaintiffs were experiencing changes
in their financial situation due to the problems at Bergen Electric
Ltd. He testified that he believed his parents were wealthy and that,
in effect, the property and the advances to build the house were all
gifts to him. He characterizes the transaction in paragraph 30 of his
statement of defence in the following terms:
Defendant, Robert Walter
Bergen, has acted as the sole owner, with the Plaintiff’s knowledge and
consent from the time the property was purchased, throughout the
planning, permitting and construction of the home. The Plaintiffs
simply deposited money in the Defendant’s bank account as it was needed.
[30]
The defendant’s claim is, accordingly, that there ought
to be an order that the plaintiffs transfer their interest to him.
[31]
Robert says this despite the evidence, which he does not
dispute, that his mother now lives in a small apartment in Kitchener,
and that her sole means of support is her Canada Pension Plan and an Old
Age supplement. He and his wife, on the other hand, have substantial
equity in another home in Rossland which they acknowledge they share.
III
[32]
At the heart of this case there appears to be a terrible
failure of communication. It is regrettable that Walter was not
available to testify, although the evidence is that he may have been
suffering from the onset of Alzheimer’s disease during, if not
throughout, the period during which the dealings over this property took
place.
[33]
There is no question that the defendant feels that his
brother has had, during his lifetime, more than his share of his
parent’s bounty. The plaintiffs, however, appear to have made every
effort to maintain good relations with both of their sons. It is
evident that there are complexities to the relationships that drive some
of what happened, and that even the plaintiffs’ generosity has sometimes
been grounds for resentment. It is very difficult to understand, for
example, how to square Robert’s behaviour toward his parents with the
fact that for four years of the time they lived in the house they were
also caring for his son, Spencer, with no assistance from him.
[34]
What is clear is that Robert wanted to build a home and
that he felt entitled to draw on his parents as he believed his brother
had. He seems to have developed some notion that his parents’ assets
were effectively held in trust for their children, at least to the
extent of what he supposed had been given to William. His pleadings and
his testimony only reinforce this impression. He suggests it was his
house and his parents only contributed the money. This notion is
manifest as well in his demand through his solicitors, that the
promise of a gift be converted to a gift on a peremptory deadline.
[35]
Robert’s notion that there was a gift of the entire
property to him is simply, on the facts, and in law, incorrect. A
promise to make a gift is not enforceable. Robert’s demand for delivery
of title in 2004, on the grounds that it was unreasonable for his
parents to retain their assets beyond July 1, 2004 had no viable legal
foundation.
[36]
Moreover, the mere transfer of title — or, as in this
case, the fraction of title Robert was given — does not lead to a
presumption of gift but to a presumption of resulting trust. Because
equity presumes bargains, the onus of proving a gift falls upon the
defendant. In Waters, Law of Trusts in Canada, Second Edition
(Toronto: Cornwell, 1984) at p. 308, this is explained:
Where a person transfers
his property into another’s name, or into the names of himself and
another, and does so gratuitously, the principle underlying Dyer v. Dyer
(1788), 30 E.R. 42, would seem logically to apply to this situation
also. Since Equity assumes bargains, and not gifts, he who has title
gratuitously put into his name must prove that a gift was intended. In
the case of purchase by one person taking title in the name of another,
the resulting trust produces this effect, namely, of putting the onus of
proof of a gift upon the transferee. It is not enough for the
transferee to show that the transfer was “complete and perfect”, in the
sense that the transferee is fully vested with title to the property, he
must also show that a gift was intended.
[37]
Here the defendant is quite unable to show that there was
a gift. He, himself, suggests that somehow the “gift” was made without
an alienation of the property to him, on a theory that the gift was then
subject to a sort of reverse trust so that 2/3 remained in his parents’
names to protect it from claims by his (then) new wife. This is hardly
an outright gift or transfer of the property.
[38]
Charlotte’s evidence is far more cogent and fits with the
surrounding facts. She acknowledges that her general intention and that
of her husband was to purchase property and to build a home in British
Columbia, and that that property would be Robert’s when the time came,
because William had had the benefit of the property in Ontario. The
plaintiffs took the concrete step of placing the property in Robert’s
name as a 1/3 joint tenant, which was a more secure way of ensuring that
he would succeed in title than leaving it to the hazards of testamentary
disposition.
[39]
It is reasonable to infer, in the circumstances, that the
plaintiffs’ election to allow Robert to select the kind of house that
would be built on the property was partly a recognition of an intention
that someday it would be his. Nothing in evidence, however, displaces
the presumption that the property and improvements purchased entirely
with funds advanced by the plaintiffs is held on a resulting trust in
their favour as to the 1/3 title held by the defendant.
[40]
Beyond that starting point there is the question of the
defendant’s efforts. The house was clearly a labour of love on his
part. His extraordinary attachment to the property was obvious as he
gave his evidence. It was clear from his reaction when the mortgage
went into default. He took extraordinary steps to pay it out in order
to salvage the possibility of keeping the property. It was also evident
in the haste with which he moved in when his parents left for Kitchener,
and in his willingness to defy explicit court orders to vacate and to
cooperate with a sale.
[41]
There is no question that if Robert could show that his
labours enhanced the value of the property over and above what his
parents put into it, he (and his wife, to the extent her contribution
could be shown), would be entitled to an accounting in his favour to
reflect the value of their contributions. The fact that he is quite
unable to establish that there was a gift leaves him in a position
where, as I understand his evidence, he feels he was induced to put a
great deal of effort into this project in the expectation that upon
completion somehow it would become his. It would obviously be
manifestly unfair for the plaintiffs to benefit from his efforts in such
circumstances, if he conferred value on the property, even if his
motivation was his own mistaken understanding of the plaintiff’s
intentions, rather than anything arising out of their representations to
him.
[42]
It is also obvious that, to the extent the amount of
money the plaintiffs provided to the defendant for the construction of
the house is not accounted for in the material costs, but reflects
compensation for his efforts, such a claim would be diminished.
[43]
The defendant is unable to provide accurate records as to
what he spent on materials and other building costs and how much he took
out as “living expenses”. The plaintiffs have not kept an itemized
accounting, although certain specific expenditures can be identified.
By and large, however, it appears that they pretty much paid on demand
until their money was gone (and then went into debt by way of mortgage),
while the defendant made demands as and when he needed to, apparently in
the belief that his parents had money to spare. There is scant evidence
that the project had a budget or an expected total cost, or that there
were any controls in place as it went along. The plaintiff says that
she and her husband proceeded on the basis that the total cost would be
around $300,000, while Robert says that he had estimated the cost to be
$150 per square foot, or $450,000 for a 3000 square foot house. It is
not possible to reconcile these estimates, as between the parties’
assertions.
[44]
The only objective evidence of value is to be derived
from tax assessments and appraisals.
[45]
Charlotte Bergen submits that the amount the plaintiffs
put into the property was $552,476, in addition to the $89,000 they paid
to buy the lot. They put another $8,243 into it after Robert left the
job and had an estimate of $36,823 left to pay, in order to complete.
[46]
Robert says that, in fact he only got about $450,000 from
the plaintiffs. For present purposes it is not necessary to reconcile
the difference. This is because either way the amount that went into
the project is a long way out of line with the appraised value of the
property.
[47]
In April of 1999, Strand and Godfrey Appraisals found the
market value “upon completion” to be $355,000. This appraisal was
commissioned for the purpose of obtaining the Toronto Dominion Bank
Mortgage. Of significant interest is the evaluation found under “Cost
Approach”. After allocating $100,000 to land value, the appraiser
estimated the building costs at $227,124, calculated as 2949 square feet
at $76.00 per square foot, or half the amount the defendant
suggests he was quoted. A little over $50,000 was allocated to extras
for a total under the cost approach of some $375,000.
[48]
In 2005 Strand and Godfrey appraised the property at
$420,000. The cost approach reflected an escalation in the price per
square foot to $150 for a new cost value of $442,350.
[49]
In 2006 the property was assessed by Richard Turner,
another local appraiser. He used the same per square foot cost of $150
but measured the building at 2776 square feet, or $416,000. His market
appraisal was $515,000.
[50]
The 2009 tax assessment values the property at $521,000.
[51]
All of these figures suggest that it cost the plaintiffs
considerably more for the defendant to build this house than it would
have cost to pay someone to provide the materials and labour to build
it. Robert’s estimate of the cost, valuing his time appropriately in
his terms, approaches one million dollars. He says that he intended to
live in the house for a long time and that the immediate actual value
was not a matter of concern to him.
IV
[52]
There are a great number of imponderables in this case.
I have alluded to the unfortunate matter of Walter’s death. The fact
that he may have been suffering from Alzheimer’s disease for a
considerable period of time, and whether that had any influence on the
course of this project or the apparent lack of oversight, is now only a
matter of speculation.
[53]
Despite the fact that a promise to the effect that “all
this will be yours someday” does not give rise to a legal right, it
seems clear that some
over-estimation of entitlement, and of his parents means, led the
defendant to imagine that it was appropriate for him to build the house
he wanted at his parents’ expense, both as to the cost of the building
and as to his “living expenses” while he did so. It is very telling
that when there was not enough to do to justify significant advances
from the plaintiffs, he found himself in need of other work to maintain
himself and his family, and unable to complete the project. I simply do
not accept his suggestion that he worked all the time for little or no
remuneration. The numbers do not come close to supporting such a
position.
[54]
It appears that had the work been performed with any
efficiency at all the plaintiffs would never have had to borrow the
money they did to advance the project to its ultimate incomplete state.
This gives rise to an issue as to whether the defendants are entitled to
credit in full or at all for the mortgage payout.
V
[55]
In summary, there is no question that the defendant,
Robert Bergen, holds his 1/3 interest in the property on a resulting
trust for the plaintiffs who advanced all of the money to purchase the
lot and to build the house. They grossly overpaid for it. The
plaintiff is entitled to an order vesting title in her name alone. I so
order.
[56]
It follows that she is entitled to immediate possession
of the house and conduct of sale. I so order.
[57]
The defendants are directed to vacate the house by August
31, 2009.
[58]
The plaintiff provided a list of items which she says
were in the house when the defendants took possession. The defendant’s
evidence as to what was in his possession was rather unclear. It
appears that he has not ascertained which of the plaintiffs’ personal
belongings remained in the home when the defendant and his wife started
to occupy it. I think the appropriate direction is that the defendants
shall leave anything belonging to the plaintiffs in the house when they
go. There shall be liberty to apply further if there are significant
discrepancies between what remains now and what the plaintiff says was
left behind.
[59]
The plaintiff claims damages for wrongful entry and
trespass. It has been established that several significantly upsetting
incursions took place, founded in the defendant’s misapprehension as to
his legal position and his resentment over his parents’ refusal to give
him their remaining assets while they were still alive. As noted, this
caused the plaintiffs to change locks, put in an alarm system, and led
to an atmosphere that made getting a respite from the unpleasantness
with the defendants one of the incentives for their leaving in January
2006.
[60]
This was regrettable behaviour. As has been noted, even
if the plaintiffs had reneged on a promise to “give” him the property,
the defendant had no enforceable right to it. The equities all favour
his parents: they not only paid for everything, but they paid sums that
are so far above anything that can be accounted for by value that the
defendant must have taken the direct benefit of that money, or been
responsible for a degree of inefficiency that amounts to the same thing.
[61]
The state of the pleadings after the order for joinder
leaves the plaintiff’s claims for damages appended to a petition and not
really properly framed. It was clearly the intention of the Order of
Davies J., however, to get the issues that could be gleaned from both
parties’ pleadings before the Court expeditiously. At an interlocutory
stage, the Court is sometimes called up on to assess procedural
requirements in light of a rough estimate of what the case is “really”
about. Here it was clear that this case was primarily about the
ownership and right of possession of the property at issue. The claims
for damages for trespass and aggravated damages, while apparently
ancillary, are nevertheless matters which cannot be addressed without
the specific analysis required for such claims. The Court cannot simply
“throw something in” for trespass.
[62]
The question of whether there is a trespass at all, where
the claim is against a 1/3 owner, the question of when the license the
defendant had to enter on the property terminated, and the question of
what effect Hinkson J.’s Order might have upon the concept of trespass
in this case are all at large, as are a number of other matters I might
consider. I do not think the pleadings or the submissions have really
been directed to this aspect of the claim. I am also concerned, in view
of the equities that remain to be assessed, whether a claim in trespass
— except as to the conduct that should more properly described as a
nuisance — essentially overlaps the concept of adjustments for use and
occupation. I simply adjourn the claim in trespass pending the sale of
the property, and the further orders set out in these reasons.
[63]
If there were any obvious relationship between the value
in the property and the amount the house cost to build, a credit to the
defendant for the amount he spent to pay out the mortgage would go
without saying. He simply took out the bank’s position, which the
plaintiffs would have been obligated to pay, had he not done so. It
seems apparent, however, that claims for use and occupation, and for
money paid in excess of value may have some impact on whether the
defendant is entitled to all of that money or whether the Court should
allow an offset. I therefore direct that from the net proceeds,
otherwise payable to the plaintiffs, the sum of $185,000 be held back,
and paid into Court. I then direct that there be an accounting before
the Registrar as to the actual amounts spent by the plaintiffs, the
value of the defendants’ occupation of the property and any other
accounts the parties submit to the Registrar, upon notice to each other,
for consideration and for a Report and Recommendation as to how the
funds remaining in court ought to be distributed.
[64]
Charlotte Bergen is entitled to special costs.
[65]
This matter shall be put over to the court list on
September 21, 2009, to ensure compliance with the order that the
defendants vacate the premises. There has been significant,
unexplained, non-compliance with court orders to date. Any further
failure to comply may result in proceedings for contempt, the penalty
for which, it should be understood, may include incarceration.
[66]
Nothing in this Order should be interpreted as
discouraging the parties from attempting to settle matters between
themselves. This is a very unfortunate case and anything that may bring
it to an end amicably is to be encouraged.
[67]
Nothing before the Court at the hearing of this matter
suggested any independent claim against Tamsin Jane Bergen. She appears
to have been supportive of her husband, but not to have had any direct
role in the issues between the plaintiff and Robert Bergen. The Orders
made so far are not joint and several, unless there are matters that
arise concerning her on the further accounting. There shall be liberty
to make further submissions should that turn out to be the case.
“T.M. McEwan”
_______________________________
The Honourable Mr. Justice McEwan
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