Supreme Court of Canada decisions in Kerr v. Baranow & Vanasse v. Seguin – Part 3 of 3

July 8, 2011 Hull & Hull LLP Common Law Spouses Tags: , , , , , , , 0 Comments

As has been my mantra all week, Justice Cromwell, who delivered the reasons for the Court in Kerr v. Baranow & Vanasse v. Seguin, commented that for unmarried persons in domestic relationships in most common law provinces, judge made law is the only option for addressing the property consequences of the breakdown of those relationships. 

A property interest by resulting trust arises where 1) there is a gratuitous transfer of property from one partner to the other, or 2) there is joint contribution by two partners to the acquisition of property, title to which is in the name of only one of them.

Added to this has been the “purely Canadian invention” of the “common intention” resulting trust, whereby a resulting trust could arise based solely on both partners having a common intention that one holds property for the beneficial interest of both. However, the Court declared that this concept was doctrinally unsound and should have no continuing role in the resolution of domestic property disputes. 

A far better approach was to apply the law of unjust enrichment and the remedial constructive trust, which provide a much less artificial, more comprehensive and more principled basis to address property claims on the breakdown of domestic relationships. To be successful, a plaintiff had to establish 1) an enrichment of the defendant by the plaintiff 2) a corresponding deprivation of the plaintiff, and 3) the absence of a juristic reason for the enrichment.

The appropriate remedy for unjust enrichment will most often be monetary though there may be some circumstances in which a monetary remedy will be inadequate and a proprietary remedy is required.  

When quantifying a monetary remedy, a quantum meruit approach should be applied and value assessed on a “value survived” basis, which is preferable to imposing a remedial constructive trust. To be entitled to a monetary remedy on a value survived basis, the claimant must show both that there was a joint family venture and that there was a link between his or her contributions and the accumulation of wealth.

This decision provides much guidance to courts in determining the property rights of unmarried partners and will no doubt prove instructive in cases where individuals die without having provided properly with respect to the property accumulated during their lifetime with a common law spouse.

Sharon Davis – Click here for more information on Sharon Davis

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