March 29, 2023 – Resulting Trusts & Unjust Enrichment

“A resulting trust may be imposed to return property to the person who paid for the purchase and is beneficially entitled to it, from the person who has title to it: Rathwell v. Rathwell, 1978 CanLII 3 (SCC), [1978] 2 S.C.R. 436.  In family law, the cases generally deal with situations of gratuitous transfers between spouses.

In Kerr v. Baranow, 2009 BCCA 111, the Court of Appeal said, at para. 42: “a resulting trust is an equitable doctrine that, by operation of law, imposes a trust on a party who holds legal title to property that was gratuitously transferred to that party by another and where there is evidence of a common intention that the property was to be shared by both parties.”

The Supreme Court of Canada in Peter v. Beblow, 1993 CanLII 126 (SCC), 101 D.L.R. (4th) 621 (S.C.C.) held that the following three elements must be proven on a balance of probabilities to succeed in a claim for unjust enrichment: (a) an enrichment; (b) a corresponding (causally connected) deprivation; and (c) an absence of juristic reason for the enrichment: at page 630.

In Kerr v. Baranow 2011 SCC 10, Justice Cromwell sets out the Court’s analysis of the remedies for unjust enrichment at para. 100:

a.   The monetary remedy for unjust enrichment is not restricted to an award based on a fee-for-services approach.

b.   Wherethe unjust enrichment is most realistically characterized as one party retaining a disproportionate share of assets resulting from a joint family venture, and a monetary award is appropriate, it should be calculated on the basis of the share of those assets proportionate to the claimant’s contributions.

c.   To be entitled to a monetary remedy of this nature, the claimant must show both (a) that there was, in fact, a joint family venture, and (b) that there is a link between his or her contributions to it and the accumulation of assets and/or wealth.

d.   Whether there was a joint family venture is a question of fact and may be assessed by having regard to all of the relevant circumstances, including factors relating to (a) mutual effort, (b) economic integration, (c) actual intent and (d) priority of the family.

Where the contributions of both parties over time have resulted in an accumulation of wealth, unjust enrichment occurs when one party retains a disproportionate share of assets that are a product of their joint efforts following the breakdown of the relationship.  While the law of unjust enrichment does not mandate a presumption of equal sharing, the decision whether to award a party a proprietary interest or monetary payment must reflect the true nature of the enrichment and the corresponding deprivation.”

         Westlake v. Ellicock, 2022 ONSC 1980 (CanLII) at 34-35, 38-40