Judge rules there was no 'unjust enrichment' of matriarch in multigenerational living arrangement
A mother-and-son dispute over how to divide the proceeds of a house sale in a multigenerational household was resolved with the Superior Court of Justice for Ontario recently ruling that the mother was entitled to it all.
In Sidhu v Sidhu, Parminder Sidhu and his wife Amandeep argued that they are entitled to 50 percent of the proceeds of the Brampton house purchased in 2004 for $374,884 by Parminder’s mother, Sukhminder, based on their contributions to the mortgage payments and house maintenance costs. They said the parties were involved in a “joint family venture” that entitled them to a monetary remedy on a “valued survived” basis.
This claim was a response to Sukhminder making an application for 100 percent of the proceeds, which amounted to $753,233 of the $1.185 million sale price. Sukhminder argued that to the extent that Amandeep and Parminder made financial contributions to the home, those payments were rent.
Justice Renu Mandhane wrote in the Aug. 10 decision that she did not find unjust enrichment, and noted both parties benefited from the joint living situation throughout their relationship and “knowingly and intentionally organized their affairs to meet their own unique needs.”
Sukhminder benefited from Parminder’s role as house manager and was able to live on the property at a minimal cost after falling ill in 2014. Amandeep and Parminder, in turn, benefited from the arrangement. “By living with Sukhminder, they were able to save money that would have otherwise been spent on occupational rent and business expenses.”
Also, Parminder, a licensed real estate agent, and Amandeep, a home stager, ran their business, Adeas Marketing Group (“AMG”), out of the den.
“In short, there was a meeting of the minds as to the essential bargain that lay at the heart of the parties’ joint-living situation – that Parminder and Amandeep would provide consideration for their use of the property pending a future inheritance. The parties never intended that Parminder and Amandeep would acquire the Property during Sukhminder’s lifetime.”
For many immigrant families in Canada, several generations of one family living in the same household is not uncommon. So, Justice Mandhane noted it was not unusual that when Parminder married Amandeep in 2004, she would move into Sukhminder’s house.
Amandeep testified that “after marriage, it is common practice in South Asian culture for the woman to move into the family home of the husband and reside with the parents of the husband.” Parminder and Amandeep eventually had two children who also lived in the house, along with Sukhminder’s other sons, Manjinder and Harminder.
Both parties agree that Parminder acted as the de facto house manager. He was solely responsible for managing the family’s pooled resources to meet their day-to-day needs. Parminder managed the renting of the basement and received about $850 per month from the tenant. He was also responsible for keeping the property in good repair.
Parminder managed the “family bank account,” into which monthly contributions were made by Sukhminder and each married son living in the house. (Harminder married in 2008). The family used the funds for communal expenses such as the mortgage, insurance, repairs, maintenance, groceries, personal car insurance payments, phone, internet, and, in later years, purchases at retailers like Toys R Us, the Gap, and Costco.
The setup worked well until 2015, when Parminder argued with Harminder, who moved out of the house. That same year, the parties began arguing about property, with Parminder threatening to move out or stop making payments. Parminder said that in response to these threats, Sukhminder promised she would only retain a $250,000 interest in the property if the couple stayed. Sukhminder denied making such a promise.
By 2020, the situation in the household was untenable, Justice Mandhane wrote. “The parties barely spoke to one another, and when they did, they argued.” Matters came to a head in 2022 when Sukhminder proposed that Harminder move back into the house.
Parminder and Amandeep would not agree. When Sukhminder asked Parminder and Amandeep to vacate the property, they refused and claimed they had a 50 percent interest in it.
In determining an unjust enrichment of one party and the corresponding loss experienced by another in a case such as this, Justice Mandhane referred to a Supreme Court of Canada decision that says the concept of “loss” captures a benefit that was never in the plaintiff’s possession but that would have accrued for their benefit had it not been received by the defendant instead.
Parminder and Amandeep estimated they contributed $439,578 to the property via housekeeping, renovations and repairs, and contributions to the family account.
However, the judge was skeptical that their cooking and cleaning were worth the $20,000 claimed and noted that these tasks were as much for the benefit of Amandeep, Parminder and their children as for Sukhminder.
The couple also argued that they contributed $29,396 towards renovations and maintenance, but no receipts or accounting ledgers exist. Parminder says, “he either completed the work himself or missed the deadline to submit the accompanying receipts to the court.”
Sukhminder admitted that Parminder replaced a toilet, re-stained the stairs, installed hardwood flooring, replaced the blinds, painted the basement, repaired the furnace, installed light fixtures, did light landscaping, and replaced the back fence, and paid for pest removal. However, she claimed, “that the work was shoddy and did not increase the property value.” Photos attached to her affidavit show incomplete work and a home generally in disrepair.
On a balance of probabilities, Justice Mandhane wrote that Parminder and Amandeep were not satisfied that Sukhminder was unjustly enriched “by their contributions towards maintenance and repairs to the house.” She added that she found it “much more likely” that Parminder and Amandeep paid for these expenses via the family account rather than personally.
The parties acknowledge that there is no way of knowing exactly how much money was pooled in the family account throughout the parties’ relationship. Therefore, it is impossible to know how much Parminder and Amandeep contributed as a proportion of the total amount pooled. This is because Parminder did not keep any records regarding transactions into and out of the family account.
Brothers Supinder and Manjinder both testified that when Supinder asked Parminder to see the books, he refused. While there are bank records for some of the years, they only partially show how the family account operated in practice.
“Suffice it to say, Parminder and Amandeep were never the sole contributors to family expenses throughout the relevant time period,” the judge wrote. “What I know is that Sukhminder and Manjinder both contributed to the family account while living in the house.”
The judge accepted that Parminder and Amandeep contributed $348,726 to the family account during the relevant period rather than what they claimed. She considered Parminder and Amandeep’s contributions to the family account regardless of whether they originated from their personal or corporate accounts.
Justice Mandhane found that Sukhminder paid most of the property-related costs in the early years of Parminder and Amandeep’s marriage (from 2004 until about 2007). She continued to be a significant contributor until she was diagnosed with cancer (between 2007 and 2014) and continued to pay the monthly property insurance after she stopped working (between 2014 and 2022). The judge estimated that her contributions totalled at least $100,000.
“I find that Parminder and Amandeep did not suffer a deprivation equal to the amount that they deposited into the family account. This is because they benefited from the pooling of resources. They could keep their living costs low, run their business at minimal expense, claim valuable corporate tax credits, and likely save a significant amount of money in the process. I also draw the reasonable inference that their childcare costs were low or nonexistent on account of Sukhminder’s in-kind care.”
Sukhminder also benefitted from the arrangement because she could rely on Parminder to maintain the house and continued living there despite contributing minimally to the family account after she fell ill and stopped working. Also, “while not quantifiable, it was clear from her testimony that she derived pleasure from watching her grandchildren grow up.”
To accurately account for the benefits that Parminder and Amandeep received by living with Sukhminder, the judge reduced the amount of their claim by $183,600 to reflect the $850 that Parminder took from renting the basement apartment and a similar amount for their own “rent” for living with Sukhminder for 18 years.
“Neither Parminder nor Amandeep paid occupation rent despite occupying the den, two bedrooms, and the common areas,” she wrote in determining the benefit of living rent-free in the house as equal to $183,600 “and likely much more.”
Parminder and Amandeep were also claiming some of their contributions to the family account as business expenses for tax purposes. “This is an obvious explanation for why the majority of their deposits into the family account originated from the . . . corporate account.”
Given Amandeep and Parminder’s refusal to provide disclosure regarding the corporation, Justice Mandhane said she valued the benefit that accrued to their corporation at $145,196, “which is the total amount of money that flowed from [the corporate account] into the family account.
“Therefore, while Parminder and Amandeep contributed $348,726 to the family account, I find that they were not deprived in any way. I arrive at this conclusion by taking their total contribution to the family account of $348,726, subtracting $183,600 from the basement rent, deducting $183,600 from their rent, and subtracting $145,196 for benefits that accrued to their corporation.
“Overall, I find that Amandeep and Parminder benefited from the multi-generational living arrangement such there was no unjust enrichment to Sukhminder.“
