Occupational Rent

Having been mentioned recently, without any apparent criticism, in the British Columbia Court of Appeal decision of Estate of Anna Klonaraksis v. Sparks 2015 BCCA 121 the law with respect to the responsibility to pay occupational rent is set out in the decision of Dacyshyn v. Semeniuk, 2007 BCSc 71 at paragraphs http://canlii.ca/t/1q8kp as follows:


[13]           The plaintiff bases her claim for occupation rent on the principle as set out in Bernard v. Bernard (1987), 1987 CanLII 2721 (BC SC), 12 B.C.L.R. (2d) 75, and in the alternative made short arguments on ouster and unjust enrichment.  I will discuss Bernard below, but the crucial conclusion of that case for the plaintiff’s purposes is: an occupying owner will not be charged for his occupation unless he claims an allowance for his expenses.

[14]           The defendant says the plaintiff’s claim for occupation rent should be defeated on laches alone, as twelve years have gone by since the plaintiff became co-owner and no steps have been taken to advance the present claim.  Although she has written two letters, these have been in the context of negotiations, and should not be construed as a true demand for occupation rent.  If not successful on that basis, the defendant says the cases relied on by the plaintiff can be distinguished.  They are matrimonial cases, and even though Bernard purports to be decided on general principles, it is also a matrimonial situation in which the property at issue was the matrimonial home where both parties lived together until the departure of one of them.

[15]           I will deal with the claims in ouster and unjust enrichment first.

[16]           All of the cases presented by the plaintiff and nearly all those referred to by the defendants involved matrimonial situations, or at least shared property.  Claims by a person who has never lived in the subject property are rare.  In Re Kostiuk, (2002), 2002 BCCA 410 (CanLII), 215 D.L.R. (4th) 78 (C.A.) the court said at paras. 42 – 43:

Most of the cases in which these matters are considered concern co-owners who have, at one time, shared possession of the property, and one co-owner subsequently either leaves or is excluded.  Many arise in cases of matrimonial disputes.  There are few cases where, as here, the co-owners are strangers and one co-owner has never been in possession.

The fact that a co-owner had sole possession does not prove ouster because one co-owner is entitled to be in possession of the entirety, but if possession is demanded and refused, on the grounds that the co-owner in possession claims the whole property as his own, “such possession is adverse and ouster enough” (Doe v. Prosser (1774), 1 Cowp. 217 [at 218], 98 E.R. 1052 [at 1053]).  The co-owner alleging ouster must prove that the other co-owner is in possession with the intention of ousting her (Allison v. Smith (1877), 17 N.B.R. 199 (C.A.)).


30]           I do not read Bernard as requiring payment of occupation rent just because expenses are claimed.  However, where expenses are claimed, it opens the door for a claim to occupation rent.

[31]           I note the comments of McEachern C.J.B.C. in Pidluberg v. Maslasz, [1993] B.C.J. No. 999 at para 12 (C.A.), which, while not directly applicable to the peculiar circumstances before me, support the proposition that claims for occupation rent should be approached with caution:

….while I would not preclude the trial court from considering the question of occupation rent, I have considerable misgivings about the application of that somewhat ancient conveyancing concept in cases where persons acquire property out of a marriage and who live together on the property and one of them leaves for personal reasons leaving the other to continue living in the former co-habitation home.  Parties who mix personal relations with business arrangements should not expect the court automatically to charge occupational rent to the person continuing to live in her or his own home.

[32]           While the factual situation alluded to in this passage is not similar to the one before me, the caution expressed is even more apt where the person claiming occupation rent attained a half interest in the property through a gift, never lived in the premises, paid some expenses only for a short time, and other than that has never contributed to maintaining the integrity of the property, nor even sought to enter it, let alone live in it.

[33]           The circumstances under which Ms. Semeniuk came to possess an interest in half the condominium are found in the affidavit of Arthur Dacyshyn, and are set out in more detail in the decision of Mackenzie J. under the Wills Variation Act.  There, the judge found that Ms. Semeniuk had persuaded her father to start divorce proceedings, and had persuaded him that Mrs. Dacyshyn did not want him back.  The judge specifically found that that was not true, and Mrs. Dacyshyn at all times wanted her husband back.  The judge also found that John Dacyshyn was persuaded by Ms. Semeniuk, although not coerced in law, into giving Ms. Semeniuk half the condominium, and that he did this during his lifetime with the intent of frustrating a wills variation action by Mrs. Dacyshyn in respect of his interest.  While unable to set aside the transfer, the judge took it into consideration as an important factor in deciding that John Dacyshyn had failed to make adequate, just and equitable provision for Mrs. Dacyshyn.  The judge gave Mrs. Dacyshyn the entire estate, which he clearly felt was a poor and inadequate solution, but the only one open to him.

[34]           I add to the general circumstances surrounding the claim for occupation rent Ms. Semeniuk’s demand letter to her mother in 2004, in which she claimed occupation rent in an amount above the half interest she was willing to buy from her mother.  An acceptance of this “offer” would have left her mother owing Ms. Semeniuk money in order to stay in her own home, even though Mrs. Dacyshyn (or Arthur Dacyshyn on her behalf) had paid all the expenses associated with maintaining it since 1995.

[35]           There has been a long delay in the plaintiff seeking to enforce a claim for occupation rent, and the claim ostensibly arose now because the defendant instituted the claim for expenses in the partition action, but the inflated demand letter of 2004 pre-dated the partition petition.  All of this underscores the ridiculousness and mean-spiritedness of this entire series of disputes.

[36]           The claim for occupation rent is brought in equity.  It is trite law that a person seeking equitable relief must come to court with clean hands.  Counsel for the plaintiff attempted to raise the issue of Arthur’s Dacyshyn’s role in the unhappy history of this family, and it is true that Mackenzie J. was very critical of him in his reasons in the wills variation proceeding.  Based on the facts he found, this criticism was deserved, but the circumstances under which Ms. Semeniuk acquired her half interest in the condominium were also disgraceful.  However, there are more compelling reasons to consider her claim with scepticism.

[37]           The plaintiff says the amount of rent is easily determined:  she has obtained an appraisal setting out market rents in the area, and in her Statement of Claim, claims rent from 1993.  The appraisal would put her claim for rent well over $100,000.  It is only the limitation period that reduces the figure, in her calculation, to $58,000.  This approach shows a basic misunderstanding of the nature of a claim for occupation rent.

[38]           First, simply looking at practicalities, this condominium cannot be rented, so a market value approach is not helpful.  Even if it could be rented, trying to assess the value of rent of a half interest of a condominium, which half interest originally belonged to the husband of a married couple, which was gifted out of spite to a child who inspired and shared that spite and who never wanted or intended to live in it, and which necessarily entails sharing it with the elderly wife and her son is a fruitless exercise.

[39]           Second, a review of the case law demonstrates that occupation rent is not the same as ordinary rent.  Paris J. set out the basic principles behind occupation rent in Donovan v. Donovan (1986), 1986 CanLII 774 (BC SC), 7 B.C.L.R. (2d) 221 at 225:

(1)      In the first instance, a co-tenant out of possession could not claim occupational rent because he normally had the right to go back into possession.

(2)      However, such a claim would be considered by the court if he had been required to vacate or was ousted from the property.

(3)      Furthermore, if the occupying tenant put forward a claim for expenditures made to the benefit of the property, … he was required as a condition of that equitable relief to submit to a claim for occupational rent…regardless of whether or not the non-resident tenant had vacated the property voluntarily.

[40]           This is basically the position accepted by Huddard J. in Bernard.   The conclusion she came to, “an occupying owner will not be charged for his occupation unless he claims an allowance for his expenses”, is not an absolute rule to be applied automatically without regard to all the circumstances.  What is just and equitable depends on the circumstances of each case.

[41]           A useful discussion of the background to a claim for occupation rent is found in Baker v. Baker 1976 CanLII 1512 (BC SC), [1976] 3 W.W.R. 492, a case also referred to in Bernard.  Baker was a case of partition and sale of a property held in joint tenancy, as was Bernard.  It concerned the break-up of a marriage, as do nearly all the cases referred to by either party before me, in which both parties had lived in the property together.  The only case submitted by the plaintiff where the parties had not lived together in the subject property was a case where the property was rental premises to begin with (Horsburgh v. Lavis [1991] B.C.J. No. 3541 (S.C.)).  The other cases put forward by the plaintiff involve specific and distinguishable factual situations: in Henderson v. Henderson (2000) 2000 BCCA 6 (CanLII), 73 B.C.L.R. (3d) 124 (C.A.), the wife and mother-in-law had an ongoing arrangement which was found to unjustly enrich the mother-in-law but where the plaintiff was reluctant to seek partition.  In Coupar v. Coupar, [1998] B.C.J. No. 2673 (C.A.), the parties had lived together in the matrimonial home, but the wife moved into an apartment in the garage and rented out the home.  The parties were ordered to account to each other for expenses, but the wife was not required to account for rent as it had been set off against spousal support.

As he was then, Chief Justice of the Supreme Court of British Columbia McEachern had it about right when he said “claims for occupation rent should be approach