19 August 2012

Kerr v. Baranow 2.0: Supreme Court Releases Second Trial Decision

Ms. Kerr and Mr. Baranow are one of those unfortunate couples, like Mr. and Mrs. Hartshorne and Ms. Rick and Mr. Brandsema, whose legal battles have doomed them to fame within the family law bar. The Supreme Court has just published its second trial judgment addressing the matters arising from their 2006 separation.

At the original trial in 2007, Ms. Kerr applied for spousal support and a trust interest in property owned by Mr. Baranow. As the parties were unmarried, Ms. Kerr could not avail herself of the property provisions of the Family Relations Act and was forced to rely on the awkward and general unsatisfactory equitable principles of unjust enrichment. The trial judge made an order for retroactive spousal support, and, finding that Mr. Baranow had been unjustly enriched by Ms. Kerr's contributions, gave her a one-third interest in a property owned by Mr. Baranow worth about $950,000 for a total cash award of $315,000 plus costs.

Mr. Baranow appealed. The appeal judgment was released in 2009, and allowed Mr. Baranow's appeal from the cash award and the retroactive aspect of the order for spousal support.

This time, Ms. Kerr appealed. The Supreme Court of Canada released its judgment in 2011, restoring the trial judge's decision on spousal support, ordering a new trial on Ms. Kerr's unjust enrichment claim, and giving Ms. Kerr her costs of the proceedings to date. The reasons of Mr. Justice Cromwell are a masterful restatement and modernization of the law on unjust enrichment and are required reading for law students throughout Canada.

The second trial judgment was released last week. The court applied Justice Cromwell's decision with rigour and exactitude, and reached almost the same conclusion as the original trial judge: Mr. Baranow had been unjustly enriched by Ms. Kerr's contributions, and she would be entitled to a one-quarter interest in Mr. Baranow's property, for a total cash award of $240,000 plus costs. 

The money likely spent over five years, two trials and a trip to the Supreme Court of Canada to achieve a result $75,000 off the original judgment is worth some reflection... as are the costs awards owing by Mr. Baranow to Ms. Kerr.