Vancouver BC Occupation Rent

[73]         The nature of and conditions necessary for the awarding of occupational rent appear to be evolving in the law. In this regard, I note Re Bankruptcy of Kostiuk 2002 BCCA 410, in which this court quoted from Dennis v. MacDonald [1981] 1 W.L.R. 810 (Fam. Div), aff’d [1981] 2 W.L.R. 275 (C.A.); L.M.R. v. J.F.R. 2010 BCSC 363 at paras. 28–9; and Oyama v. Oyama 2009 BCCA 114 at para. 34. In Re Crate Marine Sales Ltd. 2016 ONCA 433, the Court took a less technical approach than that taken in Kostiuk concerning the necessity for a co‑owner claiming occupation rent to show that he or she had been “put out of” his or her right of occupation. Mr. Justice Blair reasoned as follows in Crate Marine:

As the jurisprudence referred to above establishes, there is a long-standing principle that where a person occupies the property of another, that occupation gives rise to a rebuttable presumption, based on an implied contract, that the occupier will pay rent to the owner for the use of the property. Receivers, liquidators and trustees in bankruptcy and others with similar obligations who occupy the premises of the debtors are bound by that principle: … 

I agree that the jurisprudence does not support the view – to the extent it may have been adopted by the motion judge – that the obligation to pay occupation rent requires “some form of deprivation of use” in addition to occupation of the premises. However, the notion of “deprivation of use” led to considerable discussion on the appeal about the interaction between it and the concepts of “occupation” and “possession” raising several questions. Is deprivation of use the equivalent of occupation, or one of the indicia of occupation, or something in addition to occupation, for these purposes? Is possession the same as occupation for these purposes? Does taking possession constitute a sufficient deprivation of use to constitute occupation for these purposes? 

While these questions may generate an interesting debate at a certain esoteric level, they need to be kept in perspective for purposes of determining whether a trustee or receiver has occupied premises in the context of liability for occupation rent. The threshold test for occupation rent is “occupation”. It is not deprivation of use or possession. However, deprivation of the right of use, or possession, to the exclusion of the landlord will no doubt – in most cases at least – be tantamount to occupation for these purposes. [At paras. 22, 24–5; emphasis added.] 

[74]         In the family law context, courts have long taken the view that “the object of an award of occupation rent is to do equity between the parties.” (See Donovan v. Donovan (1986) 7 B.C.L.R. 221 (S.C.), per Paris J.) In Stasiewski v. Stasiewski 2007 BCCA 205, Mr. Justice K. Smith quoted with approval the following passage from Donovan:

… Furthermore, if the occupying tenant put forward a claim for expenditures made to the benefit of the property (as in the case at bar), [the co-tenant out of possession] was required as a condition of that equitable relief to submit to a claim for occupational rent – and this, apparently, regardless of whether or not the non-resident tenant had vacated the property voluntarily.

Smith J.A. then continued:

Continuing, he [Paris J.] observed that “ouster” would be irrelevant in the case before him, since the husband made a claim for expenditures to the benefit of the property, and that, in any event, the wife’s claim for occupation rent was not made as a cause of action under ordinary property law, but rather as a factor to be considered in the division of family assets. He concluded that the claims for expenses and for occupation rent should be considered relevant to the division of family assets.

More recently, in Dacyshyn v. Semeniuk, 2007 BCSC 71, a case in which occupation rent was claimed as a cause of action in itself, Humphries J. canvassed the case law on the subject, including Donovan. She dismissed the action as unsupported on the evidence but, in her useful review of the law, she came to the same conclusion as had Paris J., that occupation rent is awarded when it is just and equitable to do so. [At paras. 28–30 of Stasiewski; emphasis added.]

Factors to be considered on a Vancouver BC Occupation Rent case can include:

• The conduct of both spouses, 
• Whether the children reside in the family home and who is supporting them; 
• Financial difficulty experienced by the non-occupying spouse; 
• Who paid for the expenses associated with the home; 
• Whether the home went up or down in value;
• Whether the  resident spouse has increased or decreased the selling value of the property; and
• Other competing claims in the litigation that may offset an award of occupational rent

The area is complicated, so feel free to meet with us if you have questions on Vancouver family property issues.