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Rawluk v Rawluk [1990], 1 SCR 70. (Link)

Facts:

The Rawluks were married in 1955 and lived and worked together for twenty?nine years. They had a farm and a farm equipment sales and service business. In the early years of their marriage, the wife cared for their children and looked after farm chores. By the early 1960s, she was also assisting with customers in the shop of the farm implement business. In 1969, the wife assumed a major role in its operation and maintained her involvement in all aspects of the farming operation. She contributed to the assets the parties acquired during the marriage. At the time of separation in 1984, the Rawluks held a number of properties, all but one of which were registered in the name of the husband. The Family Law Act, 1986 provided that family assets be valued and divided equally. The valuation date here was the date of separation. In the years between separation and the trial of the action, the value of these properties increased dramatically. The trial judge and the Court of Appeal held that the property in question was impressed with a constructive trust which gave the wife a beneficial half interest in the property at the time of separation and therefore entitled her to participate as owner in the value of the property after separation.

Issue(s):

Whether or not the constructive trust finds application where the Family Law Act, 1986 already provides a remedy for the unjust enrichment complained of.

Ratio:

The constructive trust remedy can be utilized by unmarried cohabitants. It would not only be inequitable but would also contravene the provisions of s. 64(2) if married persons were precluded by the Family Law Act, 1986 from utilizing the doctrine of remedial constructive trust which is available to unmarried persons.

Analysis:

The imposition of a constructive trust recognizes that the titled spouse is holding property that has been acquired, at least in part, through the money or effort of another.

Under the Family Law Act (1986) a court is, as a first step,

(1) required to determine the ownership interests of the spouses. It is at that stage that the court must deal with and determine the constructive trust claims.

(2) The second step requires that the equalization be calculated.

(3)The third step requires that the court assess whether equalization is unconscionable, pursuant to s. 5(6). This step in the process must be kept distinct from the preliminary determinations of ownership.

Holding:

Appeal Dismissed.


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