Wednesday, May 12, 2021
Article: The Canadian Answer to the English Dilemma: Contribution-based Approaches over a Common Intention Constructive Trust in Family Homes
Alexander Ng recently published an article entitled, The Canadian Answer to the English Dilemma: Contribution-based Approaches over a Common Intention Constructive Trust in Family Homes, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article:
Determining each other’s proprietary interests in the shared home after relationship breakdown remains hotly debated. In Stack v Dowden, Baroness Hale stated that it was possible to impute an intention that the parties could never have had, to achieve fairness. In Jones v Kernott, imputation could only operate in quantifying interests. Also, imputation is limited to (1) presumption of resulting trusts, or (2) absence of evidence to infer common intention. This clarification limited its use in legal practice, but imputation remains controversial since it practises the court’s standard of morality.
However, this can be resolved by focusing on how the defendant is benefited, rather than summoning a common intention. This is particularly important when the defendant is the sole legal owner. After Pettkus v Becker, Canada shifted from an intention-based resulting trust to a remedial constructive trust approach, based on unjust enrichment. This shift absolves the need to find or impute a common intention. Any of the claimant’s contribution received by the defendant in relation to the home, domestic or financial, already constitutes enrichment. Gender discrimination is avoided since the claimant’s contributions are not judged against a (gendered) threshold for detrimental reliance.
This approach may attract criticism, since remedial constructive trusts are rejected in FHR European Ventures LLP v Cedar Capital Partners LLC. However, the focus here is the merits of a contribution-based approach. Whether a remedial constructive trust should be imposed is only part of the question. Routes to reclaim assets discussed in this article include proprietary remedies from unjust enrichment, and conventional trusts law (resulting trusts and Quistclose trusts). Shifting one’s attention away from the common intention is expected to promote fairness in asset division.