II. LAW REVIEW: CASES AND OTHER LEGAL REVIEWS
Three recent decisions concerning constructive trusts provide further clarification of what a court will accept as a relationship requiring an equitable remedy. The decisions of Thomas v. Wales; Mildren v. Mildren; and Best v. Hill are three recent decisions on constructive trusts which warrant review
Additionally, a BC Appeal Court gives us pause for consideration of this constructive and secret trust decision in Scholz v Scholz.
1. Thomas v. Wales, 2013 ONSC 794 (CanLII)
In Thomas v. Wales the plaintiff asked for an order vesting and conveying title to him of all or some of 18 acres of a home property owned by his parents, the business on the property, a scrap yard.
The plaintiff claimed that he was promised the property and the business by his parents.
The plaintiff contended that he had relied on the promises made by his parents and the expectations that the scrap yard and the land would be his. He accordingly contended that he had worked on the land, assisted his parents, cared for them and shared his business revenues with his father over a number of years.
The plaintiff's claim/interest was characterized as a constructive trust according to the principles discussed by the Supreme Court of Canada in Soulos v. Korkontzilas, 1997 CanLII 346 (SCC),  2 S.C.R. 217.
At paragraph 41, referencing paragraph 17 of the Reasons in the Soulos decision, the court summarized the history of the constructive trust remedy:
 At paragraph 17 of its Reasons, the court summarized the history of the constructive trust remedy:
[T]he constructive trust is an ancient and eclectic institution imposed by law not only to remedy unjust enrichment, but to hold persons in different situations to high standards of trust and probity and prevent them from retaining property which in "good conscience" they should not be permitted to retain. This served the end, not only of doing justice in the case before the court, but of protecting relationships of trust and the institutions that depend on these relationships. These goals were accomplished by treating the person holding the property as a trustee of it for the wronged person's benefit, even though there was no true trust created by intention. In England, the trust thus created was thought of as a real or "institutional" trust. In the United States and recently in Canada, jurisprudence speaks of the availability of the constructive trust as a remedy; hence the remedial constructive trust.
At paragraph 42, the decision further references the following observations:
 Observing that Canadian courts had maintained and modified the common law, McLachlin J. (as she then was) stated that a constructive trust may be imposed in the absence of wrongful conduct where: (1) there is an unjust enrichment of a party; (2) with a corresponding deprivation of the other party, and; (3) the absence of a juristic reason for the enrichment (e.g. a contract or other legal basis): Soulos, at para. 20. It was no longer necessary to have specific wrongful conduct such as the breach of a fiduciary duty. For example, the principle has been developed and applied in family law cases where parties live in a relationship tantamount to spousal. Where one party to the relationship prejudices herself in the reasonable expectation of receiving an interest in property, and the other party freely accepts the benefits thus conferred by the first in circumstances where he knows or ought to know of the reasonable expectation, a constructive trust may apply where it would be unjust to let that person retain the benefits: Pettkuss v. Becker, 1980 CanLII 22 (SCC),  2 S.C.R. 834.
Moreover, the plaintiff claimed that a constructive trust may even be imposed where there has been no unjust enrichment. In this regard, paragraphs 43 through 46 are instructive and reproduced below:
 Quoting D.M. Paciocco, MacLachlin J. acknowledged that a constructive trust may even be imposed where there has been no unjust enrichment (at para. 22):
[I]n the largest traditional category, the fiduciary constructive trust, there need be no deprivation experienced by the particular plaintiff. The constructive trust is imposed to raise the morality of the marketplace generally, with the beneficiaries of some of these trusts receiving what can only be described as a windfall.
 Justice McLachlin thus concluded that the law of constructive trust in the common law provinces of Canada embraced situations in which English courts of equity traditionally found a constructive trust as well as the situations of unjust enrichment recognized in recent Canadian jurisprudence: Soulos, at para. 25. Citing American jurist, Cardozo J., she further acknowledged (at para. 29) that "good conscience" was the unifying principle of the constructive trust doctrine:
A constructive trust is the formula through which the conscience of equity finds expression. When property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him into a trustee. [Emphasis added.]
 Observing that good conscience not only addresses fairness between the parties but also the larger public interest of maintaining the integrity of institutions traditionally supervised by the courts, such as fiduciary relationships, Justice McLachlin concluded (at para. 34):
It thus emerges that a constructive trust may be imposed where good conscience so requires. The inquiry into good conscience is informed by the situations where constructive trusts have been recognized in the past. It is also informed by the dual reasons for which constructive trusts have traditionally been imposed: to do justice between the parties and to maintain the integrity of institutions dependent on trust-like relationships. Finally, it is informed by the absence of an indication that a constructive trust would have an unfair or unjust effect on the defendant or third parties, matters which equity has always taken into account. Equitable remedies are flexible; their award is based on what is just in all the circumstances of the case.
 There are generally two categories of situations in which Canadian courts recognize and may impose a constructive trust. The first is where a defendant has obtained property by some wrongful act, such as fraud, breach of a fiduciary duty or other duty of loyalty. The second is where the defendant has not acted wrongfully in obtaining the property, but would be unjustly enriched to the plaintiff's detriment if he were allowed to keep it. The two categories are not mutually exclusive. There may be wrongful acquisition without unjust enrichment: Soulos, at paras. 36 to 39.
Justice Whelan and in his decision was not satisfied on a balance of probabilities that the promises alleged were made, and that if made, they were sufficiently clear, specific and authoritative. The court did not find any unjust enrichment. The parents, who were owners of the property, paid the taxes and the insurances on the property. The court accepted the evidence presented that the parents tried to be even-handed with all of their children. The court had trouble with the vagueness of the alleged promise and in the result determined that such undermined the probability and credibility of the plaintiff's position.
The court opined that the relationship between the plaintiff and his parents was one of mutual enrichment and there was no evidence of a fiduciary-type relationship.
The court at paragraph 82 opined that the relationship was a normal, healthy family one.
"It was based on mutual affection and respect. Families help each other. In this relationship I do not see anyone as having been taken advantage of in the many years of close association...I do not see enrichment or deprivation entering the picture. It is not a situation like Petkis where the nature of the relationship imported expectations of mutual obligation or dependency, i.e. spouse-like, where a partner gave years of life and work without the security that a legally married spouse might reasonably expect and that public policy advocates".
Indeed the court went further at paragraph 84 and stated as follows:
 It is difficult to regard family dynamics and activities of this kind involving any of the trust-like relationships traditionally supervised by the courts for the greater social good. In fact, such supervision might be dangerous as family generosity and interaction might then be construed to imply a more general legal obligation. This is the responsibility of legislatures, which have enacted family law measures defining the boundaries of rights and obligations in the family context. Therefore, I do not regard that James and Lois were under an equitable obligation of the type that courts have enforced in relation to the kinds of activities involved here, especially in the absence of a clear promise, unjust enrichment, or wrongful conduct.
The court in the end determined that the plaintiff did not meet the Soulos test and that the plaintiff had not met the burden of proof upon him in establishing him on a balance of probabilities either the factual or legal basis of the claim, and therefore the claim was dismissed.
2. Mildren v. Mildren, 2013 ONSC 1435 (CanLII)
This decision came after a 10 day trial where the issues included equalization of property; spousal support; child support and divorce. Included in the claim for spousal support was a request to impute income to the applicant and an order for a lump sum payment. Included in the claim for equalization was a request to declare the parties' rental business, a joint venture and to find that the respondent held certain properties by way of constructive trust.
By way of background, the parties were married and had separated. They had cohabitated a few years before marriage. They had children. Justice McLaren reviewed substantial case law including the following cases:
Rawluk v. Rawluk,  1. S.C.R. 70, 23 R.F.L. (3d) (S.C.C.)
Klimm v. Klimm, 2010 ONSC 1479 (CanLII), 2010 ONSC 1479 (S.C.J.)
Joy v. Mullins, 2010 ONSC 1742 (CanLII), 2010 ONSC 1742,  W.D.F.L. 1070 (S.C.J.)
Ramlochan v. Ramlochan, 2010 ONSC 4323 (CanLII), 2010 ONSC 4323,  W.D.F.L. 466 (S.C.J.)
McLeod v. McLeod, 1998 CarswellOnt 3058 (C.J.)
Wilson v. Wilson, 2011 ONCJ 103 (CanLII), 2011 ONCJ 103, 2 R.F.L. (7th) 233 (C.J.)
Davis v. Crawford, 2011 ONCA 294 (CanLII), 2011 ONCA 294, 95 R.F.L. (6th) 257 (C.A.)
The case of Rawluk v Rawluk was provided as support for a finding of unjust enrichment and constructive trust as well as to demonstrate the concept of a constructive trust working with a claim under the Family Law Act for married parties. Specifically at paragraph 58, attention was drawn to the case law as follows:
 Counsel for the husband specifically drew my attention to paragraph 54 wherein Justice Cory said as follows:
54. The review of the cases decided by this Court from Murdoch v. Murdoch, supra, to Sorochan v. Sorochan, supra, demonstrates the importance that has been attached to the use of the remedy of constructive trust to achieve a division of property that is as just and equitable as possible. A marital relationship is founded on love and trust. It brings together two people who strive and sacrifice to attain common goals for the benefit of both partners. When it is terminated and acquired assets are to be divided, then in this of all relationships the concept of fairness should predominate in making decisions as to ownership. This was the fundamental equitable principle underlying the application of the constructive trust remedy to matrimonial cases. Where the application of the principle would achieve the goal of fairness it should not be discarded unless the pertinent legislation makes it clear that the principle is to be disregarded.
The recent Supreme Court of Canada decision of Kerr v. Berinow and Vanass v. Segan was also referenced at paragraph 68 as follows:
 Kerr v. Baranow and Vanasse v. Seguin, 2011 SCC 10 (CanLII), 2011 SCC 10,  1 S.C.R. 269 was referred to by the husband. In this 2011 Supreme Court of Canada, case law was made in the area of constructive trusts. Ms. Kerr and Mr. Baranow were a common-law couple, as were Ms. Vanasse and Mr. Seguin. The court ruled that the previous law on common intention with a resulting trust was no longer valid. These cases hold that:
A constructive trust can be established by finding an unjust enrichment. To demonstrate the existence of an unjust enrichment the party making the claim must show that there has been,
(a) An enrichment;
(b) A corresponding deprivation; and
(c) The absence of a juristic reason for the deprivation (such as a contract).
This decision did not change the law of constructive trust, but did add a new category of consideration - the 'Joint Family Venture'.
In reviewing the law, the court noted that with a proprietary award, the plaintiff must demonstrate a link or causal connection to the partners' contributions and an acquisition, preservation, maintenance or improvement of disputed property. In particular, the court noted at paragraph 72 through 76 as follows:
 In providing a monetary award the court can consider a "value received" claim which is like a payment for services provided. In the alternative they can provide a "value survived claim" which involves determining an appropriate amount to be awarded based on the value of property. The court said that this second approach could be provided when an unjust enrichment arises from a situation where a "joint family venture" has been found. In order to find a joint family venture, the court needs to consider:
(a) Whether there has been a mutual effort between the parties to work towards common goals. They could be by way of money or household responsibilities.
(b) Whether or not the parties had an economic integration of their financial and economic interests.
(c) Whether or not the parties actually intended to equally share in any wealth created.
(d) Whether or not the family unit has been given priority in their decision making. This could be an employment or re-location decision for the benefit of the family unit.
 In the Vanasse v. Seguin case the Supreme Court held that there was an unjust enrichment and a corresponding joint family venture and they took a value survived approach which meant that the plaintiff was given a proportionate share of the accumulated wealth.
 In Kerr v. Baranow a new trial was ordered.
 The case of Straub v. Straub 2012 ONSC 3819 (CanLII), (2013) O.J. No. 138, 2012 ONSC 3819, is a Superior Court case that dealt with constructive trust claims between married parties. The husband made this claim over the increase in the value of the matrimonial home and the wife made the claim over the increase in the husband's investment portfolio. The judge noted that neither party were able to point to any specific contribution either party made to the property in question after separation. He also noted that both parties would have assets upon separation and that there is a difference between the Kerr v. Baranow case. That case dealt with two common law relationships where the statutory equalization of matrimonial assets would not apply.
 Justice McKelvey concluded the following in paragraphs 109 and 110:
109 In my view, the statutory framework for equalization should be applied routinely, and it will be a rare case where a court will apply the constructive trust doctrines in situations which are governed by the statutory framework. There should be a high threshold before departing from the statutory guidelines. I also feel it is significant that the provisions of the Family Law Act have provisions which allow for an unequal distribution in cases where an equal distribution would be unreasonable. This reinforces my view that the law relating to constructive trusts has little relevance in cases which are governed by the statutory framework.
110 I do not view this case as holding any extraordinary circumstances which would suggest that there is any inherent unfairness in the equalization payment based on the valuation date. I therefore dismiss both of the constructive trust claims.
Ultimately, however, the court opined that a constructive trust was not established in this case by the applicant husband and the court opined as follows:
 I am of the view that a constructive trust has not been established by the husband. I understand his argument about the joint venture. The parties bought and sold several properties together and only began to put them in the wife's name alone upon advice from a friend who was a lawyer.
 Each party performed some minor duties in the other's businesses. Incomes from both businesses were split for many years in the parties income tax returns. The three properties in the wife's name alone appear to have gone up in value since separation. For example, both parties show the Bowman Street property on their N.F.P. statements being worth $760,000.00 as of the date of separation, being March 31st, 2007. A letter of opinion dated August 29th, 2012 shows it having a market value for resale purposes of between $800,000.00 to $820,000.00.
 Both showed the Main Street West property on their N.F.P. statements as being worth $295,000.00 as of March 31st, 2007. A letter of opinion dated August 29th, 2012 shows it as having a market value for resale purposes of between $310,000.00 and $325,000.00.
 The wife shows an increase in value for the matrimonial home on her financial statement of about $24,000.00.
 However, I do not believe that a constructive trust has been established. While the 1990 Supreme Court case of Rawluck v. Rawluck did lead the way for constructive trusts being found between married persons, it is the 2011 Supreme Court case of Kerr v. Baranow and Vanasse v. Seguin that set out the steps that must be followed in finding a constructive trust. I referred to those steps earlier herein and I cannot say that there has been an unjust enrichment, which would need to be found.
 The only enrichment on the part of the wife might be that the properties went up in value since separation somewhat, but her evidence was that she struggled financially to pay the bills on these properties and had no help from the husband in maintaining the properties after separation. She received help from her mother in paying expenses.
 The wife was not unjustly enriched in my view and it cannot be said that the husband had a corresponding deprivation. Both the enrichment and deprivation must be found before I need to consider whether or not there was a joint venture.
 As of May 2012 the wife owed $21,896.98 for tax arrears on the Main Street West property. She owed $11,479.24 for tax arrears on the Watchgate Court property as of May 2012. She owed $102,609.33 in tax arrears on the Bowman Street property as of May 2012. There were no tax arrears as of separation on these properties.
 If the husband likely felt that he had a trust interest following separation, he might have shown some interest in how these properties were being maintained, and there was no evidence that he did. The wife stated that she asked him for help in paying taxes numerous times.
 The tax arrears that accumulated are greater than the estimated increase in values of the properties. The husband has failed to show that he has suffered a deprivation in my view.
 In addition, I see no reason why the provisions of the Family Law Act (R.S.O.. 1990, c.F.3, as am.) cannot apply. This legislation provides the parties with a fair method of equalizing their property as of separation. They made a decision to place the real property in the name of the wife alone and this has created consequences for both parties.
3. Best v. Hill, 2013 ONSC 3034 (CanLII)
In this decision, the applicant commenced an application against the respondent who had lived with him for 12 years prior to their separation and were not married. The parties had no children together. They both had children from prior relationships. The applicant admitted that he stood in loco parentis to the children during the cohabitation with the respondent.
The parties enjoyed a comfortable lifestyle while together. The respondent was the primary breadwinner and largely supported the applicant financially. The parties owned a home jointly. The applicant had significant debt. The respondent, on the other hand, had significant savings and investments.
The respondent testified that she did not understand the consequences of placing the matrimonial home in the names of the parties as joint tenants as she had always intended that her children would inherit through her Will her half-interest in that home. Indeed the respondent's father also lived in the home.
The applicant made various claims and sought spousal support as well as the sale of the matrimonial home with the proceeds being divided equally as between them. The applicant disputed that the respondent had any valid constructive trust claim against the land or business interests which he held separately. The respondent asserted a constructive trust claim against the parcel of land of Best Contracting Company owned by the applicant. The respondent stated that she contributed significantly to the company and that the business was a joint venture.
Although this decision involved various claims for spousal support and child support, on the constructive trust claims the court dismissed the claims and rendered the following decision:
 This claim is dismissed as Ms. Hill has failed to prove on a balance of probabilities that she is entitled to a constructive trust against the business, one-third of which is owned by Mr. Best.
 The test is well known: a benefit to or enrichment of Mr. Best; a corresponding loss or deprivation to Ms. Hill; and no juristic reason for the benefit or loss. Kerr v. Baranow, 2011 SCC 10 (CanLII),  1 S.C.R. 269.
 Constructive trusts are designed as equitable remedies to combat unjust enrichment.
 I am satisfied that Ms. Hill's employment with Chapman's benefitted Best Contracting and Mr. Best himself.
 I am not satisfied that Ms. Hill suffered any corresponding loss. In fact, she also benefitted from her common law husband's success in 2009 and 2010, up until the date of separation.
 Further, I am not satisfied that Best Contracting was in any way a joint venture between Mr. Best and Ms. Hill.
Ms. Hill's Claim for a Constructive Trust Regarding the 50 Acres
 Although this issue was effectively abandoned during the closing submissions by counsel for Ms. Hill, for her sake I will address it in any event.
 This claim is dismissed as Ms. Hill has failed to prove on a balance of probabilities that she is entitled to a constructive trust against the land owned solely by Mr. Best.
 None of the elements of this equitable remedy have been established.
 Further, I accept the evidence of the Applicant and Shirley Best that there was never any intention for Ms. Hill to have any interest in the 50 acres.
 Counsel for Ms. Hill was responsible and exemplified high standards of advocacy in withdrawing this claim based on the evidence at trial.
4. Scholz v. Scholz, 2013 BCCA 309
This case involved an appeal by the defendant who was the second wife, from a decision declaring that she held her interest in a family trust for the benefit for or in trust for the plaintiffs in this action. The plaintiffs were the children of the deceased from his first marriage.
Interestingly, the deceased had an interest in mineral rights pursuant to a family trust.
There was an interest in that the trust agreement provided that on the death of a beneficiary, in this case, the deceased, his interest would be delivered to his surviving spouse. However, the deceased did not wish to convey his interest in the mineral rights to his second wife, but rather to his children of his first marriage.
Correspondence as between the deceased and his lawyer evidenced an intention to bequeath the mineral rights to his children.
Accordingly, the plaintiff children claimed that the deceased created a secret trust whereby the second wife would hold the mineral rights in trust for their benefit.
As time passed, the defendant second wife denied knowledge of any such agreement.
When the deceased died, the second spouse obtained the deceased's interest in the trust and learned that she held an interest in their condominium as a tenant-in-common. She attempted to negotiate the condominium and the trust interest.
The mineral rights trust interest began to produce significant income and the defendant second spouse accordingly refused to transfer the rights and denied the existence of any agreement.
The court granted a declaration that the defendant held the deceased's interest in the family trust in trust for the plaintiffs, the children. Moreover, the second spouse was ordered to account for all monies received from the trust.
The plaintiffs, the children, were found to be entitled to damages in the amount of the cost of the accounting and to a tracing.
Interestingly, the court found that the deceased and the defendant had made an agreement by way of secret trust that on his death, she would hold the mineral rights in trust for the plaintiff children.
The court moreover found that the second spouse breached that agreement. On appeal, the defendant second spouse sought various relief which was allowed in part.
The trial judge was found to have erred in finding that the defendant's interest in the family trust was subject to a secret trust.
The rationale: Since the deceased only had a life interest in the family trust, he was not in a position to have created a secret trust because upon his death the interest was no longer within his control. What is even more interesting is that the evidence supported the finding that the second spouse contracted with the children to transfer her interest in the family trust to them and that she breached her contract with them by failing to do so. The fact that there was no written contract with respect to the transfer did not affect its enforceability.