Case Law Minutes #18- Rawluk v Rawluk: constructive trust in divorce situations

This video is one of our series Case Law Minutes, which focuses on the often cited cases in family court in Ontario, as listed here: https://www.ontariocourts.ca/scj/practice/practice-directions/list/

This series is presented by Osgoode Hall Law School students.

This video highlights Rawluk v. Rawluk, [1990] 1 S.C.R. 70 (equalization of net family property, resulting trusts, constructive trusts)

https://scc-csc.lexum.com/scc-csc/scc-csc/en/item/561/index.do

Speaker: Mark Veloso
JD 2023 Osgoode Hall Law School

In previous cases on property division for unmarried spouses, such as Petkus v Beker, the court applied the doctrine of constructive trust to property equalization. For married couples, the Family Law Act applies to property division, where the equalization is applied to the value of family property calculated on "valuation date" (usually the date of separation).
Now, in this case, some of the family properties increased significantly AFTER the date of separation. So, can the untitled spouse apply constructive trust to claim an equalization in the family property? In other words, can the doctrine of constructive trust can be applied to determine the ownership of assets of married spouses under the provisions of the Family Law Act, 1986, S.O. 1986, c. 4.

Taken from the headnotes on CanLII: "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. At issue here is whether or not the constructive trust finds application where the Family Law Act, 1986 already provides a remedy for the unjust enrichment complained of."

Passage highlighted is from the Conclusion paragraph
"The Family Law Act, 1986 does not constitute an exclusive code for determining the ownership of matrimonial property. The legislators must have been aware of the existence and effect of the constructive trust remedy in matrimonial cases when the Act was proposed. Yet neither by direct reference nor by necessary implication does the Act prohibit the use of the constructive trust remedy."

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