Spousal Rights and Resulting Trusts in Matrimonial Property

Understanding Matrimonial Property Rights

Matrimonial property laws in Canada aim to ensure a fair distribution of assets acquired during the marriage. However, when a property is owned solely by one spouse, the non-titled spouse may need to explore legal avenues to claim a beneficial interest. This is where the concepts of resulting and constructive trusts become relevant.

In the context of Canadian law, the rights of a spouse in property owned by the other spouse, particularly when considering potential resulting trust claims, are well-explored in several key Supreme Court of Canada decisions.

Constructive Trust and Unjust Enrichment

The case of Rawluk v. Rawluk, [1990] 1 SCR 70, 1990 CanLII 152 (SCC) is pivotal in understanding how constructive trusts can be applied in matrimonial property disputes. The Supreme Court of Canada held that a constructive trust could be recognized when there is unjust enrichment, even if the non-titled spouse is not on the title. This means that if the current wife has contributed to the acquisition, maintenance, or improvement of the property, she may have a claim to a beneficial interest in the property through a constructive trust.

Resulting Trusts

A resulting trust arises when there is an implied intention that the non-titled spouse should have a beneficial interest in the property. This can occur when the non-titled spouse has contributed financially or through labor to the acquisition or maintenance of the property. The courts will look for evidence of such contributions and the intention to share ownership.

In Pettkus v. Becker, [1980] 2 SCR 834, 1980 CanLII 22 (SCC), the court clarified that a resulting trust requires an express or implied intention to create it. However, the court emphasized that unjust enrichment could lead to a constructive trust, where the enrichment of one spouse corresponds to a deprivation of the other, without a juristic reason for the enrichment. This principle could apply if the wife has made contributions that enriched the husband, such as through unpaid labor or financial contributions.

Contributions and Property Rights

The decision in Rathwell v. Rathwell, [1978] 2 SCR 436, 1978 CanLII 3 (SCC) illustrates that significant contributions by a spouse can lead to a claim of beneficial ownership, even if the property is registered in the other spouse's name. The court recognized both resulting and constructive trusts based on the wife's contributions to the property.

Recent Developments: The case of Anderson v. Anderson, 2023 SCC 13 (CanLII) highlights the importance of agreements between spouses regarding property division. The court emphasized that such agreements should be respected unless they are procedurally or substantively unfair. This underscores the autonomy of spouses in deciding property rights, provided there is no undue influence or lack of fairness.

Jessica Luong is the founder and principal lawyer of J. Luong Law, a boutique family law firm with offices in Toronto and Windsor, Ontario. With experience in both courtroom advocacy and out-of-court negotiation, she offers a comprehensive approach to resolving complex family law matters. Jessica is recognized for her skill in combining strong advocacy with a client-centered approach, ensuring that her clients’ needs and best interests are always at the forefront. She can be reached by phone at (226) 256-9988 or by email at Jessica@jluonglaw.com

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