“The Supreme Court of Canada gave guidance on the approach to be taken to claims based on resulting and constructive trusts in Rathwell v. Rathwell (1978). In that case, the parties married in 1944 and for the next 30 years, engaged in farming. They opened a joint bank account into which they deposited all monies they received and from which they paid their expenses. They used the funds in the account to make a down payment on their farm, which was registered in Mr. Rathwell’s name alone. They did not discuss the beneficial ownership of the property, except to say that it was “ours”. They worked together as husband and wife in the farming business, Mrs. Rathwell doing the chores, gardening, preparing meals, providing transportation for hired help, keeping records, and raising and educating the parties’ four children.
The Supreme Court of Canada held that Mrs. Rathwell was entitled to succeed, whether based on the doctrine of resulting trust or the doctrine of constructive trust. The Court distinguished between the two forms of trust. It stated that to establish a resulting trust, a party must prove a common intention, manifested by words or acts, that the party not on title acquire a beneficial interest in the property. For constructive trusts, no intention is required.
Dickson J. noted that resulting trusts are as firmly grounded in the settlor’s intent as are express trusts, but with the difference that the intent is inferred or presumed as a matter of law from the circumstances. A constructive trust is imposed irrespective of intention:
Where a common intention is clearly lacking and cannot be presumed, but a spouse does contribute to family life, the court has the difficult task of deciding whether there is any causal connection between the contribution and the disputed asset. It has to assess whether the contribution was such as enabled the spouse with title to acquire the asset in dispute. That will be a question of fact to be found in the circumstances of the particular case. If the answer is affirmative, then the spouse with title becomes accountable as a constructive trustee. The court will assess the contributions made by each spouse and make a fair, equitable distribution having regard to the respective contributions. The relief is part of the equitable jurisdiction of the court and does not depend on evidence of intention.
The constructive trust, as so envisaged, comprehends the imposition of trust machinery by the court in order to achieve a result consonant with good conscience. As a matter of principle, the court will not allow any man unjustly to appropriate to himself the value earned by the labours of another. That principle is not defeated by the existence of a matrimonial relationship between the parties; but, for the principle to succeed, the facts must display an enrichment, a corresponding deprivation, and the absence of any juristic reason such as a contract or disposition of law, for the enrichment. [Emphasis added.]”