Trust claims play a significant role in family law, and more particularly in the context of property division upon a separation and divorce.
These claims are important legal doctrines that are typically advanced when one party believes there has been unjust enrichment or an unfair distribution of property, and legal ownership of that property does not accurately reflect their contributions.
A common scenario where a trust claim may be advanced is where one partner is a stay-at-home parent who raises the children and takes care of the home, while the other partner earns an income and has their assets registered solely in his or her name. Upon a separation and divorce, the non-working spouse may have a trust claim over certain property acquired during the marriage based on the argument that his or her contribution to the marriage enabled the acquisition of the property in question.
The two main types of trust claims are known as resulting trusts and constructive trusts.
Constructive Trust
A constructive trust is imposed by courts to ensure that property or assets are held in trust by a partner for the benefit of the non-owner spouse. In order to establish an entitlement to a constructive trust, a party must show that:
- The owner-spouse has been ‘unjustly enriched’ by demonstrating: (1) an enrichment to the owner-spouse; (2) a corresponding deprivation to the non-owner spouse (which often requires showing a connection between the non-owner spouse to the property that a constructive trust is claimed over); and (3) the absence of a juristic reason for the enrichment. Whether or not these elements are met depends largely on the specific facts of each case and requires legal analysis; and
- Show that an award of monetary damages to the non-owner spouse would be an inadequate remedy.
Resulting Trust
A resulting trust commonly arises when an individual holds legal title to a property, but it is presumed that they hold it in trust for the benefit of the other party due to their (often financial) contributions. A court must find that the legal owner never intended to own the property and it was clear between the parties that the property, or a portion of it, was being held in trust for the contributing party. However, the party who holds the property in his or her name may counter an argument for a resulting trust by proving that the property was given to him or her as a gift.
The law of trusts in Ontario is complex and highly fact dependent. It is important to obtain the advice of experienced lawyers in advancing or defending trusts claims in the family law context. Contact Kamalie Law for a free consultation.
Frequently asked questions
What is a breach of contract?
A breach of contract happens when one party under the contract fails to fulfill their obligations – either partially, or fully. This means that someone (a person or a corporation) either did something that they were not supposed to do or did not do something that they were supposed to do. Their conduct has shown that they are not honouring the contract.
While this is a broad definition, there are multiple types of breach of contract and multiple ways that a breach of contract can be resolved. While we may naturally think of one party simply failing to pay or someone failing to deliver goods or services, there are multiple different parts of a contract that can be breached, and the remedies may be different in different situations.
What are the remedies for a breach of contract?
There are two main remedies that litigants seek and are awarded in a breach of contract lawsuit.
An award of damages is one of the most well-known remedies. The innocent party may seek all out-of-pocket expenses and unquantified damages (i.e., loss of business, reputational losses, etc.) that it has suffered as a result of the defaulting party. However, the question of what damages may be claimed and awarded is not always met with a simple answer. Although most damages suffered can be claimed, courts will often exclude damage that it considers to be ‘remote’, or which was not a ‘reasonably foreseeable’ consequence of the breach of contract.
Another remedy is called specific performance, which is a court declaration requiring a contracting party to fulfill its contractual obligations. This remedy is typically only granted when courts determine that damages are an inadequate remedy. It must be noted, however, that a declaration for specific performance does not actually force a party to fulfill their contractual obligations. In other words, although a court may award specific performance, the defaulting party may choose to ignore the order and to continue acting in breach of contract. In such situations, the innocent party may proceed to seek damages and may seek an order that the defaulting party is in contempt of court.
How can Kamalie Law assist in contract disputes?
At Kamalie Law, our lawyers have extensive experience in litigating and resolving contract disputes. We have represented both the innocent party that wishes to commence a claim as well as the party who is alleged to be in breach of contract and is forced to defend a claim. In each scenario, our primary objective is to determine our client’s objectives and to formulate a strategy that will achieve that objective in the least time possible.
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