January 25 – Genesis of the Constructive Trust Remedy

“The distinction between a share in ownership and a share in property value through an equalizing transfer of money is more than an exercise in judicial formalism.  This distinction not only follows the two-step structure of theFamily Law Act, 1986but reflects conceptual and practical differences between ownership and equalization.  Ownership encompasses far more than a mere share in the value of property.  It includes additional legal rights, elements of control and increased legal responsibilities.  In addition, it may well provide psychological benefits derived from pride of ownership.  Where the property at issue is one to which only one spouse has contributed, it is appropriate that the other spouse receive only an equalizing transfer of money.  But where both spouses have contributed to the acquisition or maintenance of the property, the spouse who does not hold legal title should be able to claim an interest in that property by way of a constructive trust and realize the benefits that ownership may provide.  The imposition of a constructive trust recognizes that the titled spouse is holding property that has been acquired, at least in part, through the money or effort of another.  The non-titled spouse’s constructive trust interest in this property is distinct from the right to an equalizing share of property value that is derived not from an independent property right but from the status as a married person.”

Rawluk v. Rawluk, [1990] 1 SCR 70, 1990 CanLII 152 (SCC) per Cory J.