September 8, 2025 – Constructive Trusts

“The relevant principles surrounding a claim for constructive trust were succinctly set out in Stec v. Blair, 2021 ONSC 6212, at paras. 79-81:

[79]     In order to succeed in her request for an interest in the Property, Hana must first show that Shawn was unjustly enriched.  Unjust enrichment is found when the claiming party can show that the other party is enriched by his or her contributions, that he or she has suffered a corresponding deprivation, and there is no juristic reason for this result: Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, at para. 32.

[80]   If an unjust enrichment is established, the court must then determine the appropriate remedy. The first remedy the court should consider is a monetary remedy.  A monetary remedy can be calculated not only on the basis of value received or a quantum meruit calculation, but where a joint family venture is found, the “value survived” approach may be used.  In the later case, the unjust enrichment is the retention of inappropriately disproportionate amount of wealth by one party when the parties have engaged in a joint family venture and there is a clear link between the claimant’s contributions to the joint venture and the accumulation of wealth. The monetary award for unjust enrichment should be assessed by determining the proportionate contribution of the clamant to the accumulation of the wealth: Kerr, paras. 47, 55, 80-87, Lesko v. Lesko, 2021 ONCA 369, 57 R.F.L (8th) 305, at para. 14, Martin v. Sansome, 2014 ONSC 14, 118 O.R. (3d) 522, at para. 52.

[81] Finally, if and only if monetary damages is inappropriate or insufficient and here is a sufficient substantial and direct link or casual connection between the contributions and the acquisition, preservation, maintenance or improvement of the property, the court may make a proprietary award by impressing the property with a constructive trust. The onus is on the claimant to show that the monetary award is insufficient. The constructive trust interest should be proportionate to the claimant’s contributions: Lesko at para. 14, Martin at para. 58, Kerr at paras. 50- 51, Moore v. Sweet, 2018 SCC 52, [2018] 3 S.C.R 303, at para. 91.

Hence, a claim of unjust enrichment can be established when the following three elements are found: (i) an enrichment of or benefit to Susan; (ii) a corresponding deprivation of Jaime; and (iii) the absence of a juristic reason for the enrichment.  The remedy for unjust enrichment is a monetary award, before imposing a constructive trust: Martin v. Sansome, 2014 ONCA 14, 118 O.R. (3d) 522.

As set out in McNamee v. McNamee, 2011 ONCA 533, 106 O.R. (3d) 401, at para. 66, “in the vast majority of cases, any unjust enrichment that arises as a result of the marriage will be fully addressed through the operation of the equalization provisions of the Family Law Act” and that mechanism is by way of an equalization payment.”

Davidson v. Davidson, 2022 ONSC 4375 (CanLII) at 35-37

Leave a Reply

Your email address will not be published. Required fields are marked *