Rathwell v. Rathwell, [1978] 2 SCR 436

SUPREME COURT OF CANADA

Rathwell v. Rathwell, [1978] 2 S.C.R. 436

Date: 1978-01-19

Lloyd William Thomas Rathwell

(Defendant) Appellant;

and

Helen Marie Rathwell (Plaintiff) Respondent.

1977: May 10, 11; 1978: January 19.

Present: Laskin C.J. and Martland, Judson, Ritchie, Spence, Pigeon, Dickson, Beetz and de Grandpré JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR SASKATCHEWAN

Husband and wife — Matrimonial property — Farmlands registered in husband's name — Purchases paid for in part out of joint account — Contribution by wife of both money and labour to farming operation — Intention of parties to treat operation as joint venture — Wife's claim to half-interest — Application of doctrine of resulting trust — Constructive trust,

The appellant and the respondent (Mr, and Mrs. Rathwell) were married on July 4, 1944. He was a soldier, 24 years of age. She was an administrative clerk in the Royal Canadian Air Force, 21 years of age. Six months later she left the Air Force and went to live with her husband's parents on their farm. He was posted overseas. Following his return to Canada and discharge from the Army, the appellant and his wife decided to make farming their way of life.

They opened a joint bank account in which their wartime savings (about $700 each) were deposited. It was the only account they ever had. During their mar­ried life all the moneys they received, or to which they became entitled, went into the joint account and all payments, for whatever purpose, were made therefrom.

In 1946, moneys from the joint account were used to provide the $780 initial payment on two quarter-sections of land purchased under the Veterans' Land Act . The balance of the purchase price, amounting to $4,020, was paid by delivery each year of one-sixth of the grain harvested.

A second land purchase, also under the Veterans' Land Act , was made in 1947 and consisted of two adjoining quarter-sections. The down payment of $1,000 again came from the joint account and the balance of $6,000 was met by crop share payments.

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A third purchase (in excess of a section) was made in 1958. The price was $7,000 of which $4,000 was paid from the joint account. The balance was satisfied through farm work, such as combining, seeding and summer fallowing, done by Mr. Rathwell for the vendor of the land.

Title to all of the above lands issued in Mr. Rathwell's name, in 1957 and 1959. There was no discussion be­tween him and his wife concerning beneficial ownership of the land, apart from the statement by him from time to time that the lands were "ours". According to Mr. Rathwell, they were "working together as a husband and wife in the farming business". The venture was a "joint effort" in which, Mr. Rathwell said, he and his wife "worked as a team, to start with". Mr. Rathwell acknowledged that his wife contributed "to an extent". In fact, it was to a considerable extent. Mrs. Rathwell did the chores when her husband was busy on the land; she looked after the garden and canned the produce; she milked cows and sold the cream; she drove machinery, bailed hay, provided meals and transportation for hired help and kept the books and records of the farming operation. Often, while Mr. Rathwell worked the fields, she fulfilled his obligations under a contract to drive the school bus. She raised and educated four children.

Marital difficulties led to the separation of Mr. and Mrs. Rathwell in 1967. Thereafter, Mr. Rathwell, with the agreement of his wife, leased the lands to their son, Duane, and mortgaged part of the lands to raise money for the purchase of other property for Duane. Mrs. Rathwell, to further her son's interests, released her homestead rights to the mortgagee.

Although Mr. Rathwell ceased farming in 1970, he acquired from his mother, in 1971, two further quarter-sections of land for $2,000. The acquisition was largely by way of gift, as the value of the land far exceeded the price paid.

An action was commenced by Mrs. Rathwell for a declaration that she had an interest in one-half of all real and personal property owned by her husband, and for an accounting of all income and benefits returned by the property. Both the trial judge and the Court of Appeal for Saskatchewan rejected any claim by Mrs. Rathwell in respect of the lands purchased in 1971. The trial judge rejected her claim entirely. Two of the judges, who constituted the majority of the Court of Appeal, declared that Mrs. Rathwell had an undivided one-half interest in all the other lands. Brownridge J.A. was of the opinion that Mrs. Rathwell was entitled to an undivided one-half interest in the lands which were

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purchased in 1946 and 1947, but not in the lands purchased in 1958.

Mr. Rathwell appealed from the judgment of the Court of Appeal to this Court.

Held (Martland, Judson, Beetz and de Grandpré JJ. dissenting in part): The appeal should be dismissed.

Per Laskin C.J. and Spence and Dickson JJ.: The respondent must succeed whether one applies either the doctrine of resulting trust or the doctrine of constructive trust. Each is available to sustain her claim. The pre­sumption of common intention from her contribution in money and money's worth entitles her to succeed in resulting trust. Her husband's unjust enrichment entitles her to succeed in constructive trust.

The appellant advanced, in support of the position that the presumption that a resulting trust had been rebutted, the following points: (i) Mrs. Rathwell had never questioned the registration of title in his name; (ii) she had delayed inordinately in advancing a claim; (iii) the filing of homestead caveats against two of the quarter-sections and a further caveat against a third quarter-section; in the last-mentioned caveat she claimed a one-tenth interest in the quarter-section on the ground that she had advanced one-tenth of the purchase price. The caveats were filed following a threat by Mr. Rathwell to sell all the lands; they were filed for the purpose of giving notice of her claim to an interest in the three quarter-sections. Her assertion at that time to a claim something less than her present entitlement does not defeat the latter. None of the three grounds had merit.

The submission that the courts will limit the applica­tion of the doctrine of resulting trust to the "matrimoni­al property", and not extend it to "business property", because to do otherwise is, in effect, to declare a part­nership between the husband and wife, failed. What was being dealt with here was not the husband's business property. It was matrimonial property in the true sense. While most of the cases in which the wife has succeeded in establishing her interest in land have been concerned with matrimonial homes, this was not exclusively so: Nixon v. Nixon, [1969] 3 All E.R. 1133 (market stall); Re Cummins, [1971] 3 All E.R. 782 (vegetable shop); Dillon v, Dillon, [1956] N.Z.L.R. 162 (combined dwell­ing and service station).

The submission also failed that the Court of Appeal erred in law in overruling a finding of fact by the trial

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judge that the presumption of resulting trust in favour of the respondent had been rebutted on the evidence. There was no evidence capable of rebutting the presumption that the respondent, as a contributor to the purchase price, would take an interest in the lands. Although an appellate court should be slow to reverse findings of fact below, there is no doubt as to the right to do so when, after full consideration, the court concludes that the judgment below is plainly wrong.

In the absence of agreement to the contrary, a one-half interest in any investment purchased by a husband from a common pool of funds, in the circumstances of the present case, will be considered to be held by him for the benefit of his wife. Legal title will be held in trust for both parties jointly. As to the first land purchase, the respondent's direct financial contribution was clear. As to the second and third purchases, the respondent's claim to a beneficial interest can rest on her continuing one-half interest in the joint bank account and the use of funds therefrom to effect the purchase. Moneys deposited to the account represented the proceeds from the sale of the produce from land of which she was a one-half owner. The proceeds were impressed with a trust in her favour.

The proper quantum inference to make in respect of the second and third purchases, as with the first, is a half-share held on resulting trust. No presumption of resulting trust arises with respect to the purchase from the appellant's mother. This purchase was made subse­quent to severance of the joint bank account and separa­tion of the parties. The respondent cannot, therefore, be taken to have contributed to its acquisition either by capital or labour.

Analyzing the facts from the remedial perspective of constructive trust, it was clear that only through the efforts of the respondent was the appellant able to acquire the lands in question. Assuming, arguendo, that the respondent had made no capital contribution to the acquisitions, it would be unjust, in all of the circum­stances, to allow the appellant to retain the benefits of his wife's labours. His acquisition of legal title was made possible only through "joint effort" and "team work" as he himself testified; he cannot now deny his wife's beneficial entitlement.

There is no reason on the authorities, or in principle, why the application of a constructive trust should be confined to a homestead, or to a matrimonial home. The property which is subject to the trust in the respondent's favour is all of the property acquired in whole, or in

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part, from the contributions, direct and indirect, of the respondent,

The argument that the respondent should be denied a proprietary interest because she was awarded $250 per month maintenance was rejected. As held by the Court of Appeal in the present case, an order for alimony and maintenance in her favour does not bar a wife from seeking a further order declaring that she has an equita­ble proprietary interest. The two forms of relief are obtained in separate actions based on different legal rights. They are related only to the extent that the wife's success in the latter proceeding may permit the husband to seek a change in the award of alimony and mainte­nance in the earlier proceeding.

Per Ritchie and Pigeon JJ.: The initial contribution made by the respondent to the joint account which was used in making the first payment on the two quarter-sec­tions of land which were registered in the husband's name in 1946 constituted evidence of the intention of the parties to treat the farming operation on which they were embarking as a joint venture, The two subsequent purchases which added to the farm lands were paid for in part out of the same joint account and in part from the produce of the lands, and they were impressed with a resulting trust in favour of the wife stemming from the intention of the parties evidenced by her original contribution.

In view of this conclusion, it was not found that any determination as to the application of the doctrine of constructive trusts or unjust enrichment was necessary to the determination of the questions raised in this appeal which are controlled by the fact of the respond­ent's financial contribution.

Per Martland, Judson, Beetz and de Grandpré JJ., dissenting in part: There was evidence upon which the Court of Appeal could properly determine that the respondent was entitled to some interest in the lands. However, the fact that the respondent was entitled to some interest did not necessarily mean that she should have an equal interest.

There was clear evidence that the respondent did not consider that there had been any common intention that she should have an equal share with her husband in all of the lands which he acquired. In 1971, some four years after the parties separated, the appellant indicated to the respondent the possibility that he might dispose of the lands. The respondent thereupon consulted a solicitor and later filed homestead caveats against two quarter-sections, each of which had been, at one time, the

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parties' homestead. She also filed a caveat against a third quarter-section, claiming, in respect of that land, an interest under a trust for a one-tenth interest, she having advanced to the appellant ten per cent of the purchase price of that land. The caveat was accom­panied by the respondent's affidavit that the allegations in the caveat were true in substance and in fact, to the best of her knowledge, information and belief. No caveat was filed by the respondent against any of the other lands.

As to what the respondent's share should be, the evidence showed that the appellant's efforts in acquiring and farming the various lands were greater than the respondent's contribution to the farming operation. He worked the lands and thus produced the means of payment of the major portion of the purchase price for the first two land purchases. The bulk of the funds which went into the joint bank account was provided by the sale of his share of the produce from the lands.

Brownridge J.A. determined on an apportionment which gave the respondent an undivided one-half interest in the lands obtained by the first two purchases. Two of those four quarter-sections, for a time, became the homestead of the parties. His determination of the respective interests of the parties was a reasonable one and should be accepted.

There should be no application, in cases of this kind, of a doctrine of constructive trust as a means of prevent­ing unjust enrichment. The areas to which the doctrine of constructive trust have been applied heretofore are those in which a trustee or a fiduciary takes advantage of his position to make a profit for himself contrary to his duty as a trustee or fiduciary. It has also been applied in cases where a person, having knowledge of an existing trust, acquires legal title to the trust property. It has not been extended to enable a court to allocate property between a husband and a wife on the basis of a broad discretion as to what the court considers would be just and equitable. The circumstances in which such an allocation could be made, if they are to be extended beyond the scope of existing law, should be determined, as a matter of public policy, by legislation.

[Rimmer v. Rimmer, [1953] I Q.B. 63; Pettitt v. Pettitt, [1970] A.C. 777; Gissing v. Gissing, [1971] A.C. 886; Murdoch v. Murdoch, [1975] 1 S.C.R. 423; Thompson v. Thompson, [1961] S.C.R, 3; Deglman v. Guaranty Trust Co., [1954] S.C.R. 725; Appleton v. Appleton, [1965] 1 W.L.R. 25; Balaberda v. Mucha (1960), 25 D.L.R. (2d) 760; In re Vandervell's Trusts (No. 2), [1974] Ch. 269; Hili v. Bishop of London (1738), 1 Atk. 618; Dyer v. Dyer (1788), 2 Cox Eq. Cas. 92; Barton v. Muir (1874), 44 L.J.P.C. 19; The Venture (1908), 77 L.J.P.C. 105;

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Rider v. Kidder (1805), 10 Ves. 360; Re Taylor, [1971] 1 O.R. 715; Fribance v, Fribance, [1957] 1 W.L.R. 384; Re Cummins, [1971] 3 All E.R. 782; Fiedler v. Fiedler, [1975] 3 W.W.R. 681; Barnes v. Addy (1874), 9 Ch. App. 244; Soar v. Ash-well, [1893] 2 Q.B. 390; Hussey v. Palmer, [1972] 1 W.L.R. 1286; Peter Kiewit Sons' Co. of Canada v. Eakins Construction Ltd., [1960] S.C.R. 361; Coghlan v. Cumberland, [1898] 1 Ch. 704; Annable v. Coventry (1912), 46 S.C.R. 573; Jones v. Maynard, [1951] 1 All E.R. 802; National Provincial Bank Ltd. v. Bishop, [1965] Ch. 450; Daly v. Brown (1907), 39 S.C.R. 122; Re Rogers, [1948] 1 All E.R. 328; Truman v. Trueman, [1971] 2 W.W.R. 688; Hine v. Hine, [1962] 1 W.L.R. 1124, referred to.]

APPEAL from a judgment of the Court of Appeal for Saskatchewan[1], allowing an appeal from a judgment of Disbery J. who dismissed the respondent wife's action for a declaration that she had an interest in one-half of all real and personal property owned by her husband and for an accounting. Appeal dismissed, Martland, Judson, Beetz and de Grandpré JJ. dissenting in part.

R. Thompson and G. A. Maurice, for the defendant, appellant.

M. C. Shumiatcher, Q.C., and E. J. Neufeld, for the plaintiff, respondent.

The judgment of Laskin C.J. and Spence and Dickson JJ. was delivered by

DICKSON J.—

 

I

This appeal affords the Court an opportunity of again considering the juridical basis for the resolu­tion of matrimonial property disputes. The settlement of such disputes has been bedevilled by con­flicting doctrine and a continuing struggle between the "justice and equity" school, with Rimmer v. Rimmer[2], the leading case and Lord Denning the dominant exponent, and the "intent" school, re­flected in several of the speeches delivered in the House of Lords in Pettitt v. Pettitt[3] and Gissing v.

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Gissing[4], and in the judgment of this Court in Murdoch v. Murdoch[5]. The charge raised against the former school is that of dispensing "palmtree" justice; against the latter school, that of meaning-less ritual in searching for a phantom intent. In England, in spite of apparent reversal in Pettitt and in Gissing, the justice and equity tide flowed unabated until, in 1970, Parliament effectively removed matrimonial property disputes in England from the common law by enacting the Matrimoni­al Proceedings and Property Act, 1970, c. 45, the relevant provisions of which are now contained in the Matrimonial Causes Act, 1973, c. 18.

In earlier days the view was taken that on marriage "man and woman are one and that one is the man." The introduction generally of Married Women's Property Acts made it possible for wives to hold separate property but did little otherwise to improve the lot of married women. The custom by which real estate acquired by a married couple was taken in the name of the husband, coupled with the reverence paid to registered title, militat­ed against wives. The view expressed in Rimmer that matrimonial property ought not to be gov­erned by the strict considerations commonly applied between strangers survived Gissing and Pettitt, but was coldly received by this Court in Thompson v. Thompson[6].

Many factors, legal and non-legal, have emerged to modify the position of earlier days. Among these factors are a more enlightened attitude toward the status of women, altered life-styles, dynamic socio-economic changes. Increasingly, the work of a woman in the management of the home and rearing of the children, as wife and mother, is recognized as an economic contribution to the family unit.

Canadian legislatures generally have given little or no guidance for the resolution of matrimonial property disputes, with the result that laws applied are perforce judge-made laws. An exception will

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be found in an amendment (1974-75 (Sask.), c. 29) to The Married Women's Property Act of Saskatchewan, R.S.S. 1965, c. 340, which came into force on May 19, 1975, after the trial in the present case.

On the legal front, acceptance of the notion of restitution and unjust enrichment in Canadian jurisprudence (Deglman v. Guaranty Trust Company[7]) has opened the way to recognition of the constructive trust as an available and useful remedial tool in resolving matrimonial property disputes. Lacking that, a court is reduced to searching for actual, inferred or, possibly, imputed agreement (common intent) when the plain fact is that there rarely is agreement because the parties do not turn their minds to the eventuality of separation and divorce. With these prefatory observations I turn to the facts of the instant appeal.

II

Mr. and Mrs. Rathwell were married on July 4, 1944. He was a soldier, 24 years of age. She was an administrative clerk in the Royal Canadian Air Force, 21 years of age. Six months later she left the Air Force and went to live with his parents on their farm in the Tompkins District in the Province of Saskatchewan. He was posted overseas. Follow­ing return to Canada and discharge from the Army, he and his wife decided to make farming their way of life.

They opened a joint bank account in which their wartime savings (about $700 each) were deposited. It was the only account they ever had. During their married life all the moneys they received, or to which either became entitled, went into the joint account and all payments, for whatever purpose, were made therefrom.

In 1946, moneys from the joint account were used to provide the $780 initial payment on two quarter-sections of land (SE ¼ Section 20; SW Section 21: Township 13, Range 20, West 3rd) purchased under the Veterans' Land Act,  R.S.C. 1970, c. V-4 . The balance of the purchase price,

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amounting to $4,020, was paid by delivery each year of one-sixth of the grain harvested.

A second land purchase, also under the Veter­ans' Land Act, was made in 1947 and consisted of two adjoining quarter-sections (NW Section 17, SW ½ Section 20: in the same Township and Range). The down payment of $1,000 again came from the joint account and the balance of $6,000 was met by crop share payments.

A third purchase was made in 1958 (S½ Section 12; N½ Section 1; Part SE¼ Section 1: Township 13, Range 21, West 3rd). The price was $7,000 of which $4,000 was paid from the joint account. The balance was satisfied through farm work, such as combining, seeding and summer fallowing, done by Mr. Rathwell for the vendor of the land.

Title to all of the lands to which I have referred issued in Mr. Rathwell's name, in 1957 and 1959. There was no discussion between him and his wife concerning beneficial ownership of the land, apart from the statement by him from time to time that the lands were "ours".

It is clear from the evidence that Mr. and Mrs. Rathwell worked hard; they saved their money and they bought land. According to Mr. Rathwell, they were "working together as a husband and wife in the farming business." The venture was a "joint effort" in which, Mr. Rathwell said, he and his wife "worked as a team, to start with." Mr. Rathwell acknowledged that his wife contributed "to an extent." It was to a considerable extent. Mrs. Rathwell did the chores when her husband was busy on the land; she looked after the garden and canned the produce; she milked cows and sold the cream; she drove machinery, bailed hay, provided meals and transportation for hired help and kept the books and records of the farming operation. Often, while Mr. Rathwell worked the fields, she fulfilled his obligations under a contract to drive the school bus. She raised and educated four chil­dren. Mr. Justice Woods, of the Saskatchewan Court of Appeal, made the observation, which I think correct that, to grain-belt farmers, the kitchen

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was just as much an integral part of the farm­ing operation as the feed lot, or the machine shed.

Marital difficulties led to the separation of Mr. and Mrs. Rathwell in 1967. Thereafter, Mr. Rathwell, with the agreement of his wife, leased the lands to their son, Duane, and mortgaged part of the lands to raise money for the purchase of other property for Duane. Mrs. Rathwell, to further her son's interests, released her homestead rights to the mortgagee.

Although Mr. Rathwell ceased farming in 1970, he acquired from his mother, in 1971, two further quarter-sections of land (NW ¼ Section 6, Township 15, Range 22, W. 3rd; NE Section 35, Township 14, Range 23, W. 3rd) for $2,000. The acquisition was largely by way of gift, as the value of the land far exceeded the price paid.

III

Mrs. Rathwell commenced an action in the Sas­katchewan Courts for a declaration that she had an interest in one-half of all real and personal property owned by her husband, and for an accounting of all income and benefits returned by the property. Disbery J. dismissed the action and, in doing so, made the following significant findings of fact: (i) that the joint bank account was "a common purse intended for the use of both of them"; (ii) that Mrs. Rathwell made no contribu­tion to the acquisition of the real or personal farm assets by way of labour; (iii) that there was no agreement between the parties that Mrs. Rathwell was to have a proprietary interest in the farm assets; (iv) that taken as a whole the evidence rebutted any presumption of interest of the wife created by the fact of her contribution to the joint account.

The Court of Appeal for Saskatchewan reversed the trial judge. Woods J.A, noted that it was "very clear to me that there was an agreement to share at the start and that it carried through until the

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marital differences developed"; on that basis he was prepared to award Mrs. Rathwell a one-half interest in all the lands—excepting those acquired from Mr. Rathwell's mother—and an accounting. Hall J.A. agreed with that result, but his reasoning differed from that of Mr. Justice Woods. He was of the opinion that there was no evidence as to intention at the time the joint bank account was opened, nor at the time the first land purchase was made; that through her monetary contribution Mrs. Rathwell acquired an interest in subsequent deposits to the joint account and in all purchases of land made from the joint account. Brownridge J.A. found evidence of an agreement to share in the assets Mrs. Rathwell helped create; alterna­tively, if common intention were lacking, Mrs. Rathwell could assert an equitable claim in con­structive trust against the two purchases made in 1946 and 1947. Mr. Justice Brownridge did not explain why he differed from the other members of the Court in failing to find a trust in favour of Mrs. Rathwell in respect of the land, the subject of the third purchase.

IV

In broad terms matrimonial property disputes are much alike, differing only in detail. Matrimonial property, i.e. property acquired during matrimony (I avoid the term "family assets" with its doctrinal connotations) is ordinar­ily the subject-matter of the conflict. One or other, or both, of the spouses may have contributed financially to the purchase. One or other may have contributed freely given labour. The contribution may have been direct, or indirect in the sense of permitting the acquisition of an asset which would otherwise pot have been acquired. Such an indirect contribution may have been in money, or it may have been in other forms as, for example, through caring for the home and family. The property is acquired during a period when there is marital accord. When this gives way to discord, problems arise in respect of property division. There is seldom prior express agreement. There is rarely

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implied agreement or common intention, apart from the general intention of building a life to­gether. It is not in the nature of things for young married people to contemplate the break-up of their marriage and the division, in that event, of assets acquired by common effort during wedlock.

It would be wrong to think that the long line of cases on these matters is thoroughly consistent. It is not, as many distinguished academic commentators have been at pains to point out. One cannot help but notice as well the number of successful appeals. All of this suggests an uncertain and unstable state of law, but there is a certain inevita­bility about this in family law matters. The eco­nomic and human variables in a society are bound to be diffuse.

The need for certainty in matrimonial property disputes is unquestionable, but it is a certainty of legal principle hedging in a judicial discretion capable of redressing injustice and relieving oppression.

One limit to the exercise of that discretion is clear. If the husband and wife have agreed from the time of acquisition to hold the property in distinct shares on the basis of their contribution to the purchase price, or on some other basis, the plain duty of the court is to give effect to this agreement.

Another limit is equally clear. There is not, in the absence of legislative enactment, any such doctrine as "family assets" as was contended for in Appleton v. Appleton[8]. The mere fact of marriage does not bring any pre-nuptial property into com­munity ownership, or give the courts a discretion to apportion it on marital breakdown.

A third limit: Although equity is said to favour equality, it is not every contribution which will entitle a spouse to a one-half interest in the matrimonial property. The extent of the interest will be proportionate to the contribution, direct or indirect, of the spouse. Where the contributions are unequal, the shares will be unequal. A spouse

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who fails to make a contribution has no claim in justice to assets acquired wholly by the efforts of the other spouse.

Canadian common law does not recognize the concept of community of property, resulting from the sole fact of marriage. In the absence of legisla­tive provision to that effect, it is not proper for a court to upset current matrimonial property prac­tice by acting as if such an institution existed. This is a point of great importance and needs re-empha­sis here. See Pettitt v. Pettitt, supra, at p. 803. But it must also be noted that there is a considerable distinction between judicial legislation of commu­nity of property and judicial enforcement of the equitable doctrines of resulting and constructive trust. It is understandable that confusion between the two should arise in matrimonial property disputes for the apparent net effect of each is normal­ly a divestiture of property, or an interest in it, and transfer from the titled to the non-titled spouse. The essential difference, however, is that the dives­titure from community of property has as its source the fact of marriage; the divestiture in trust arises out of a common intention (resulting trust), or out of inequitable withholding resulting in an unjust enrichment (constructive trust).

V

In the well-known work, Underhill's Law Relat­ing to Trusts and Trustees (12th ed.), it is said (at p. 9) that trusts may be created:

(i) intentionally by the act of the settlor, in which case they are called express trusts, or

(ii) by implication of a court of equity, where the legal title to property is in one person and the equita­ble right to the beneficial enjoyment thereof is in another, in which case they are called constructive trusts.

Resulting trusts are treated under the head of constructive trusts, for the reason, it is said, that it would be extremely confusing to divide them into such as depend on intention, and such as do not.

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Notwithstanding the reluctance, the distinction is of practical importance. Constructive trusts are analyzed by the author as either resulting trusts, in which the equitable interest springs back or results to a settlor or his representatives, or non-resulting trusts; a resulting trust will be presumed in favour of a person who is proved to have paid the purchase money for real property in the character of purchaser if the real property is conveyed to another.

Maitland, on the other hand, suggested a divi­sion into trusts and quasi-trusts, thereby reflecting what is certainly true, that particular trusts arise by will of the settlor, and others arise independent­ly of that will, by operation of law: Maitland, Equity (1936), at p. 74. This latter division is particularly important where trusts of land are concerned, for by s, 7 of the English Statute of Frauds (received in Saskatchewan in 1870: Bala­berda v. Mucha[9]) trusts created by operation of law are exempt from the requirement of being evidenced by writing. Quasi-trusts are further div­isible into resulting trusts and constructive trusts.

In England whenever the resolution of property disputes falls to be decided according to trust law, the phrase "implied, resulting or constructive trust" is used, with little apparent effort to distin­guish the several types. Yet, they are different. Except in situations where there is a failure to exhaust the beneficial interest on the transfer of property, which is not the case in matrimonial property disputes, a resulting trust is concerned with the intent of the transferor: see In re Vandervell's Trusts[10] (No. 2), at pp. 294-5. In construc­tive trust the court imposes, irrespective of the intention of the parties but in accordance with good conscience, a duty upon A to hold title for B.

In the United States, where the concept of unjust enrichment enjoys a much greater acceptance than in England, the constructive trust, regarded as remedial, appears to have afforded a

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more flexible and satisfactory doctrinal base than the classical English institutional approach. Dean Roscoe Pound has referred to constructive trust as "purely a remedial institution" (33 Harv. L.Rev. 421).

VI

Resulting trusts are as firmly grounded in the settlor's intent as are express trusts, but with this difference—that the intent is inferred, or is pre­sumed as a matter of law from the circumstances of the case. That is very old doctrine, stated by Lord Hardwicke in Hill v. Bishop of London[11]. The law presumes that the holder of the legal title was not intended to take beneficially. There are certain situations—such as purchase in the name of another—where the law unfailingly raises the presumption of resulting trust: Dyer v. Dyer[12]; Barton v. Muir[13]; The Venture[14]. The presumption has always been regarded as rebuttable: Rider v. Kidder[15].

If at the dissolution of a marriage one spouse alone holds title to property, it is relevant for the court to ask whether or not there was a common intention, or agreement, that the other spouse was to take a beneficial interest in the property and, if so, what interest? Such agreements, as I have indicated, can rarely be evidenced concretely. It is relevant and necessary for the courts to look to the facts and circumstances surrounding the acquisi­tion, or improvement, of the property. If the wife without title has contributed, directly or indirectly, in money or money's worth, to acquisition or improvement, the doctrine of resulting trusts is engaged. An interest in the property is presumed to result to the one advancing the purchase moneys, or part of the purchase moneys. The principle is expressed thus in 19 Halsbury (3rd. ed.) para. 1372:

1372. Property purchased wholly or partly with wife's money. Where property is bought with money

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belonging to a wife and conveyed to her husband, there is a resulting trust in favour of the wife in the absence of proof by the husband of a contrary intention on her part.

…

Where property is purchased in the name of the husband or the wife, as a continuing provision for them during their joint lives, and both the husband and wife contribute towards the purchase price, the property belongs beneficially to the husband and wife in equal shares, in the absence of evidence justifying a determi­nation that the beneficial interests belong to them in some other shares.

To the same effect, see Thompson v. Thompson, supra, in which Cartwright J., although in dissent, did not differ from other members of the Court in saying, at p. 9:

When the husband used moneys of which the wife was joint owner with him to purchase a property and took the deed thereof in his .own name there arose a rebuttable presumption that he held as trustee for himself and his wife jointly.

The position is the same in respect of both spouses. In present social conditions the old pre­sumption of advancement has ceased to embody any credible inference of intention: see Pettitt v. Pettitt, supra, at pp. 793, 811, 815 and 824.

The presumption of a resulting trust is sometimes explained as the fact of contribution evidenc­ing an agreement; it has also been explained as a constructive agreement. All of this is settled law: Murdoch v. Murdoch, supra; Gissing v. Gissing, supra; Pettitt v. Pettitt, supra. The courts are looking for a common intention manifested by acts or words that property is acquired as a trustee.

If there is a contribution in money or money's worth, but absence of evidence of an agreement or common intention as to the quantum of the interest, doubts may arise as to the extent of the share of each spouse in the property. Lord Reid, in Pettitt's case, supra, at p. 794, said that the respective shares might be determined in this manner: "... you ask what reasonable people in the shoes of the spouses would have agreed if they

[Page 453]

had directed their minds to the question of what claim the contributing spouse ought to have." This is a sensible solution and I would adopt it.

The difficulty experienced in the cases is the situation where no agreement or common intention is evidenced, and the contribution of the spouse without title can be characterized as performance of the usual duties growing out of matrimony. There are many examples of this. There is the class of case where one spouse spends week-ends or evenings making small repairs to the family home: Appleton v. Appleton, supra; Pettitt v. Pettitt, supra, or contributes money to such repairs: Re Taylor[16]. There is the case where one spouse may go out to work, making contributions to family expenses enabling the other spouse to acquire and pay for the matrimonial home: Rimmer v. Rimmer, supra; Fribance v. Fribance[17]; or the case where one spouse may work in a family business and receive no wage or title to property: Re Cummins[18]. There is also the case where a busi­ness may be a joint effort, such as a farm and, though title may issue to one spouse only, the business only succeeds through the efforts of both husband and wife: Trueman v. Trueman[19]; Mur­doch v. Murdoch, supra; Fiedler v. Fiedler[20] Some of these situations may be analyzed as agreement or common intention situations. Such intention is generally presumed from a financial contribution. The doctrine of resulting trusts applies. In others a common intention is clearly lacking and cannot be presumed. The doctrine of the resulting trust then cannot apply. It is here that we must turn to the doctrine of constructive trust.

VII

The constructive trust encompasses a more uncertain amplitude than the resulting trust. Eng­lish law has long treated it as an analogous institu­tion to the express trust arising in certain definite

[Page 454]

situations such as the assumption of trustee duties by a stranger to a trust, the participation in the fraud of a trustee by a stranger, and reception and dealing with trust property by a stranger in ways inconsistent with the trust: Barnes v. Addy[21]; Soar v. Ashwell[22]. The hallmark of the constructive trust is that it is imposed irrespective of intention; indeed, it is imposed quite against the wishes of the constructive trustee.

The examples mentioned above are situations where a man against his will is brought within the express trusteeship institution, but in the United States the constructive trust has never been so limited. Its amplitude oversteps the substantive trust machinery. It is a remedial mechanism.

The constructive trust amounts to a third head of obligation, quite distinct from contract and tort, in which the court subjects "a person holding title to property . . , to an equitable duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain it"; Mur­doch v. Murdoch at p. 455, per Laskin J., citing Scott, Law of Trusts (3d), Vol. 5, at p. 3215. The constructive trust is an obligation of great elastici­ty and generality.

Where a common intention is clearly lacking and cannot be presumed, but a spouse does contribute to family life, the court has the difficult task of deciding whether there is any casual con­nection between the contribution and the disputed asset. It has to assess whether the contribution was such as enabled the spouse with title to acquire the asset in dispute. That will be a question of fact to be found in the circumstances of the particular case. If the answer is affirmative, then the spouse with title becomes accountable as a constructive trustee. The court will assess the contributions made by each spouse and make a fair, equitable distribution having regard to the respective contri­butions. The relief is part of the equitable jurisdiction

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of the court and does not depend on evidence of intention. As expressed by Professor Scott in an article entitled "Constructive Trusts" (1955), 71 L.Q.Rev. 39 at p. 41:

The court does not give relief because a constructive trust has been created; but the court gives relief because otherwise the defendant would be unjustly enriched; and because the court gives this relief it declares that the defendant is chargeable as a constructive trustee.

Or, as expressed by Lord Denning, M.R. in Hussey v. Palmer[23], at pp. 1289-90:

... it is a trust imposed by law whenever justice and good conscience require it. It is a liberal process, founded upon large principles of equity to be applied in cases where the legal owner cannot conscientiously keep the property for himself alone, but ought to allow another to have the property or the benefit of it or a share in it. The trust may arise at the outset when the property is acquired, or later on, as the circumstances may require. It is an equitable remedy by which the court can enable an aggrieved party to obtain restitution.

Lord Diplock, in a passage quoted with approval in this Court in Murdoch v. Murdoch, at p. 438, said that a trust is created "whenever the trustee has so conducted himself that it would be inequit­able to allow him to deny to the cestui que trust a beneficial interest in the land acquired".

The constructive trust, as so envisaged, com­prehends the imposition of trust machinery by the court in order to achieve a result consonant with good conscience. As a matter of principle, the court will not allow any man unjustly to appropri­ate to himself the value earned by the labours of another. That principle is not defeated by the existence of a matrimonial relationship between the parties; but, for the principle to succeed, the facts must display an enrichment, a corresponding deprivation, and the absence of any juristic rea­son—such as a contract or disposition of law—for the enrichment. Thus, if the parties have agreed that the one holding legal title is to take beneficial­ly an action in restitution cannot succeed: Peter

[Page 456]

Kiewit Sons' Co. of Canada v. Eakins Construc­tion Ltd.[24] at pp. 368-9; see also Restatement of the Law of Restitution, (1936), s. 160.

The emergence of the constructive trust in matrimonial property disputes reflects a diminish­ing preoccupation with the formalities of real property law and individual property rights and the substitution of an attitude more in keeping with the realities of contemporary family life. The manner in which title is registered may, or may not, be of significance in determining beneficial ownership. The state of legal title may merely reflect conformity with regulatory requirements, such as those under the Veterans' Land Act , which stipulate that the veteran must make the applica­tion; it may, on the other hand, be a matter of utmost indifference to the spouses as to which name appears on the title, so long as happy mar­riage subsists; the manner in which title is recorded may simply reflect the conveyancing in vogue at the time as, for example, the practice in Western Canada of placing title to farmland in the name of the husband. The state of title may be entirely fortuitous; it should not be taken as decisive against the non-titled party.

VIII

It seems to me that Mrs. Rathwell must succeed whether one applies classical doctrine or construc­tive trust. Each is available to sustain her claim. The presumption of common intention from her contribution in money and money's worth entitles her to succeed in resulting trust. Her husband's unjust enrichment entitles her to succeed in con­structive trust.

Mr. Rathwell advanced, in support of the posi­tion that the presumption that a resulting trust had been rebutted, the following points: (i) Mrs. Rathwell had never questioned the registration of title

[Page 457]

in his name; (ii) she had delayed inordinately in advancing a claim; (iii) the filing of homestead caveats against the SW¼ Section 21 and NW¼ Section 17 and a further caveat against the SE¼ Section 20; in the last-mentioned caveat she claimed a one-tenth interest in the SE¼ Section 20 on the ground that she had advanced one-tenth of the purchase price. The caveats were filed follow­ing a threat by Mr. Rathwell to sell all the lands; they were filed for the purpose of giving notice of her claim to an interest in the three quarter-sec­tions. Her assertion at that time to a claim something less than her present alleged entitlement does not defeat the latter. None of the three grounds has merit.

Counsel for Mr. Rathwell submits that the courts will limit the application of the doctrine of resulting trust to the "matrimonial property", and not extend it to "business property", because to do otherwise is, in effect, to declare a partnership between the husband and wife. I do not think that what we are dealing with here is the husband's business property. It is matrimonial property in the true sense. It is fair to say that most of the cases in which the wife has succeeded in establishing her interest in land have been concerned with matrimonial homes, but this is not exclusively so: see Nixon v. Nixon[25] (market stall); Re Cummins, supra, (vegetable shop); Dillon v. Dillon[26] (com­bined dwelling and service station). I do not know what term one might properly apply to the Rathwell properties—"family farm", or "farming busi­ness", and with all respect to those of a contrary view, I do not think it matters. In one sense, it was a family farm, in another a business, in another it was a way of life. The property was all operated as one family unit by Mr. and Mrs. Rathwell working together.

An attempt was made to analogize a law firm to a farming operation and the in terrorem argument was advanced that if the interest of a wife is given recognition in what was said to be a farming business operation, why not also in respect of a law practice. I am not much persuaded by that line of

[Page 458]

argument. If and when a case is presented in which a wife has worked continuously and effectively with her husband in the development of a law practice, the respective rights and obligations of husband and wife can be considered. I must say, though, that I cannot think of any reason in princi­ple why a wife should not, in the proper case, share in the proceeds of the sale of a law practice, if she worked together with her husband in the development of the practice.

In the present case all three justices of appeal reversed the findings of Disbery J. as to the absence of common intention. Two of the justices found positive evidence of an agreement that Mrs. Rathwell was to acquire an interest. Halt LA. found no evidence capable of rebutting the pre­sumption of resulting trust occasioned by purchase from the joint account. The findings in both lower Courts are concurrent that the joint account was a common pool.

It was contended by Mr. Rathwell that the Saskatchewan Court of Appeal erred in law in overruling a finding of fact by the trial judge that the presumption of resulting trust in favour of Mrs. Rathwell had been rebutted on the evidence. I can find no evidence capable of rebutting the presumption that Mrs. Rathwell, as a contributor to the purchase price, would take an interest in the lands. Although an appellate court should be slow to reverse findings of fact below, there is no doubt as to the right to do so when, after full consider­ation, the court concludes that the judgment below is plainly wrong. Coghlan v. Cumberland[27]; Annable v. Coventry[28].

IX

It is conceded by Mr. Rathwell that the down payment for the first acquired property came from the joint bank account to which Mrs, Rathwell contributed one-half of the initial funds.

[Page 459]

Where a husband and wife have a joint bank account, the beneficial ownership of money in it, and of assets acquired from it, will depend upon the intention of the parties. Jones v. Maynard[29] is authority for the proposition that when the inten­tion is that the account is to be a pool of their resources, or in the words of the trial judge in the present proceedings, "a common purse", the money in it will be treated as belonging to them jointly and if investments are purchased out of the account in the name of the husband, he holds a one-half interest in them as trustee for the wife. It is true that in Re Bishop, National Provincial Bank Ltd. v. Bishop[30], Stamp J. said that so far as the decision in Jones v. Maynard related to invest­ments, it was based on its own particular facts and, in general, where spouses open a joint account on terms that cheques may be drawn by either, then (unless the account is kept for some specific or limited purpose) each spouse can draw on it for his or her own benefit, and any investment purchased out of the account belongs to the spouse in whose name the purchase was made. I have difficulty in understanding the basis upon which it can. be said that the joint owner who reaches the bank first can divert jointly-owned funds to the purchase of investments upon which the other joint owner will have no claim. In a decision of this Court Re Daly; Daly v. Brown[31], at p. 148, a joint bank account case, McLellan J. said: "In a case of joint tenancy neither party is exclusive owner of the whole. Neither can appropriate the whole to himself."

Mr. Rathwell gave the following evidence with respect to the opening of, and the operation of, the joint account:

Q. And you purchased these through the Veterans' Land Act , did you?

A. Right.

[Page 460]

Q. It was in the neighbourhood of $700.00 you had to pay as down payment then? A. Mhm.

Q. Where did you get that money from? A. We had a joint account.

Q. With your wife? A. With my wife.

Q. And who had deposited money in that account? A. Both of us, as far as I'm concerned.

Q. So this was a joint effort between you and your wife?

A. This was a joint effort.

In the absence of agreement to the contrary, a one-half interest in any investment purchased by a husband from a common pool of funds, in the circumstances of the case at bar, will be considered to be held by him for the benefit of his wife. Legal title will be held in trust for both parties jointly. As to the first land purchase, Mrs. Rathwell's direct financial contribution is clear. As to the second and third purchases, Mrs. Rathwell's claim to a beneficial interest can rest on her continuing one-half interest in the joint bank account and the use of funds therefrom to effect the purchase. Moneys deposited to the account represented the proceeds from the sale of the produce from land of which she was a one-half owner. The proceeds were impressed with a trust in her favour. I agree with the views expressed by Hall J.A. on this point in the following passage from his judgment:

All of the remaining payments on the first parcel of land purchased were made from the produce of the land itself. All of the deposits subsequently made to the joint account came from the proceeds of the farming opera­tion. The appellant, therefore, had a proprietary interest in all of the subsequent deposits that were made, and all of the subsequent purchases made out of the joint account. To state it briefly, the fact that all of the subsequent cash flow which passed through the joint account was generated by the initial investment supports the claim of the appellant that she had an interest in the assets held by the respondent.

It is well established that an accretion to property held in trust forms part of the capital of the trust property for the benefit of those beneficially inter­ested in it.

[Page 461]

The proper quantum inference to make in respect of the second and third purchases, as with the first, is a half-share held on resulting trust. No presumption of resulting trust arises with respect to the purchase from Mr. Rathwell's mother. This purchase was made subsequent to severance of the joint account and separation of the parties. Mrs. Rathwell cannot, therefore, be taken to have con­tributed to its acquisition either by capital or labour.

X

Analyzing the facts from the remedial perspec­tive of constructive trust, it is clear that only through the efforts of Mrs. Rathwell was Mr. Rathwell able to acquire the lands in question. Assuming, arguendo, that Mrs. Rathwell had made no capital contribution to the acquisitions, it would be unjust, in all of the circumstances, to allow Mr. Rathwell to retain the benefits of his wife's labours. His acquisition of legal title was made possible only through "joint effort" and "team work" as he himself testified; he cannot now deny his wife's beneficial entitlement.

In a similar argument to that advanced in respect of resulting trust it was urged that if Mrs. Rathwell was accorded any interest in the land by the application of constructive trust, such interest should be limited to the homestead, or failing that, to the two quarter-sections comprised in the first purchase. It is difficult to find a rational basis for any such limitation. The Rathwells worked on and operated all of the land as one farm, a family farm in which husband and wife shared control and operating responsibilities. Although the causal connection may be clearer when the couple save money to buy the house in which they reside, there is no reason on the authorities, or in principle, why the application of a constructive trust should be confined to a homestead, or to a matrimonial home. The outcome in a matrimonial property case should not depend upon the nature of the property in dispute. The principles should apply to any real estate, or interest therein, and as well to personal property. The property which is subject to the trust in Mrs. Rathwell's favour is all of the

[Page 462]

property acquired in whole, or in part, from the contributions, direct and indirect, of Mrs. Rathwell.

XI

It was argued that Mrs. Rathwell should be denied a proprietary interest because she was awarded $250 per month maintenance. I agree with the Saskatchewan Court of Appeal in the present case that an order for alimony and mainte­nance in her favour does not bar a wife from seeking a further order declaring that she has an equitable proprietary interest. The two forms of relief are obtained in separate actions based on different legal rights. They are related only to the extent that the wife's success in the latter proceed­ing may permit the husband to seek a change in the award of alimony and maintenance in the earlier proceeding.

XII

The crucial question remains whether Mrs. Rathwell can succeed in this appeal in the face of the Thompson and Murdoch decisions of this Court. The judgment in Thompson v. Thompson was generally regarded as rejecting the line of lower court decisions that followed Rimmer v. Rimmer. In Thompson, Judson J., for a majority of the Court, (Kerwin C.J. and Cartwright J. dissenting) stated that the Rimmer case, and those which followed it, stood for the proposition that, at p. 13: "... if it is found that the wife makes any contribution to the purchase of the matrimonial home, she is the owner of a one-half interest and not merely of an interest proportionate to her contribution as in Re Rogers[32]." Mr. Justice Judson continued with these words, at p. 13:

But no case has yet held that, in the absence of some financial contribution, the wife is entitled to a proprie­tary interest from the mere fact of marriage and cohabi­tation and the fact the property in question is the matrimonial home. Yet, if the principle is sound when it

[Page 463]

is based on a financial contribution, no matter how modest, there seems to be no logical objection to its application and the exercise of the same discretion when there is no financial contribution when the other attrib­utes of the matrimonial partnership are present. However, if one accepts the finding of the learned trial judge, [no financial contribution by the wife] the basis for the application of the rule at its present stage of development in England is not to be found in the present case.

The present Chief Justice of this Court, then Laskin J., dissenting in Murdoch v. Murdoch, considered that three points emerged from the reasons of Judson J. in Thompson: (i) rejection of the view that any financial contribution by the wife entitled her to a one-half interest; (ii) a joint assets doctrine cannot be founded on the discre­tionary power given by s. 12 of the Ontario Mar­ried Women's Property Act (s. 22 of the Saskatch­ewan Married Women's Property Act, R.S.S. 1965, c. 340); (iii) the passage quoted above emphasized the illogic of an arbitrary half-interest division in favour of a wife who has made little, or no financial contribution. I would not take issue with any of these points.

The Thompson case was considered by this Court in Murdoch v. Murdoch, supra. The majori­ty judgment in Murdoch was delivered by Martland J., who had this to say, at p. 433:

Reverting to the Thompson case, it was decided that, on the finding of the trial judge that it was the husband who had provided the purchase money, and who took title in his own name, there was no basis for the imposi­tion of a trust. The finding of the trial judge in the present case rebuts the appellant's contention that the respondent accepted contributions from her toward the purchase price of the property. The finding is that the funds received from her bank account were regarded by the respondent as loans from Mrs. Nash, which he recognizes as payable, and there is ample evidence on which that finding could properly be made. If a finan­cial contribution is necessary in order to found the appellant's claim, it has not been established on the facts of this case. (Emphasis added.)

[Page 464]

The absence of a financial contribution was con­sidered to be important by the majority of the Court in Murdoch. in the present case financial contribution is undisputed.

Mrs. Murdoch also founded her argument on the Alberta appellate decision in Trueman v. Trueman[33], in which a wife was awarded a one-half interest in matrimonial property notwith­standing the absence of any direct financial contri­bution by her. Mrs. Murdoch contended that her claim could rest, apart from financial contribution, on the work performed by her in connection with her husband's ranching activities. Mr. Justice Martland reviewed the Trueman case in detail and concluded, at p. 436:

Assuming that the conclusion reached in the Truman case was, on its facts, correct, it does not follow that the appellant should succeed in the present appeal. The English decisions in Pettitt and Gissing, as well as those to which reference was made in the Thompson case, were all concerned with the determination of interests in what has been called the matrimonial home. The Trueman case dealt with a claim for an interest in the family "homestead". The present case involves a claim to an interest in three quarter-sections of land and in all the other assets of the respondent. It is, in substance, a claim to a one-half interest in the respondent's ranching business and it is probably for that reason that the action, as formulated, sought a declaration of a partnership interest.

The above discussion by Martland J. is directed to the claim advanced by Mrs. Murdoch for a decla­ration of a partnership interest. Such a claim is not put forward in the present case. It is also worthy of note that Murdoch did not overrule Trueman.

In Murdoch, a distinction was drawn between a family "homestead" (at issue in the Trueman case) and the claim advanced by Mrs. Murdoch to a one-half interest in three quarter-sections of land and all the other assets, referred to by Martland J. as the "respondent's ranching business".

[Page 465]

As I have stated earlier, if resulting or construc­tive trust applies, there is no reason in principle why it should be limited to the homestead. Mrs. Rathwell's contribution was to the entire farm, not merely to one hundred and sixty acres of homestead. Homestead legislation was introduced to protect a wife, not to be used arbitrarily for deny­ing her rights to which she would otherwise be entitled.

Another point of difficulty in Murdoch arises through the adoption of common intention as the central test, and what might be regarded as implic­it rejection by the majority of the Court of the concept of constructive trust of which Laskin J. spoke. The issue of constructive trust was not advanced by counsel in any Court during the Murdoch litigation. At trial the claim was based on equal partnership, or in the alternative, on the contractual doctrine of quantum meruit. In the Court of Appeal, and in this Court, the case for Mrs. Murdoch was based on resulting trust and partnership. The issue of constructive trust never had a thorough airing before either of the lower Courts or in this Court. To this extent Murdoch did not deny the possibility of an action in con­structive trust. In the present case the issue of constructive trust was thoroughly argued before the Court of Appeal and this Court, and it con­stituted one of the express grounds of decision in the Court of Appeal.

However, having recognized that the Murdoch decision is distinguishable in various ways, I wish also to say this: to the extent that Murdoch stands for the proposition that a wife's labour cannot constitute a contribution in money's worth and to the extent that Murdoch stands in the way of recognition of constructive trust as a powerful remedial instrument for redress of injustice, I would not, with utmost respect, follow Murdoch.

I would dismiss the appeal with costs.

The certified copies of the certificate of title filed as exhibits in the action show several encum­brances not referred to in the formal judgment in

[Page 466]

the Court of Appeal for Saskatchewan. The interest of Mrs. Rathwell should be made subject to those encumbrances, if still extant.

The judgment of Martland, Judson, Beetz and de Grand pré JJ. was delivered by

MARTLAND J. (dissenting in part)—The facts which gave rise to this action have been outlined in the reasons of my brother Dickson and it is unnecessary for me to repeat them. The claim of the respondent wife was for a declaration of her interest in all of the real and personal property standing registered in and/or owned by the appellant hus­band. The lands which were in issue had been acquired by the appellant as a result of four purchases, as follows:

Both Courts below rejected any claim by the respondent in respect of the lands purchased in 1971, which was some years after the parties had separated in 1967.

The trial judge rejected the respondent's claim entirely. Two of the judges, who constituted the majority of the Court of Appeal, declared that the respondent had an undivided one-half interest in all the other lands. Brownridge J.A., was of the opinion that the respondent was entitled to an undivided one-half interest in the lands which were purchased in 1946 and 1947, but not in the lands purchased in 1958.

The respondent's claim to an interest in the lands acquired by and registered in the name of the appellant depends upon her being able to establish the existence of a trust under which the appellant, as trustee, holds the lands in trust and

[Page 467]

under which she has a beneficial interest. In determining whether a claim of this kind has been established this Court, in 1973, in the case of Murdoch v. Murdoch[34], adopted the view expressed by Lord Diplock, in the case of Gissing v. Gissing[35], at p. 909:

Difficult as they are to solve, however, these problems as to the amount of the share of a spouse in the beneficial interest in a matrimonial home where the legal estate is vested solely in the other spouse, only arise in cases where the court is satisfied by the words or conduct of the parties that it was their common inten­tion that the beneficial interest was not to belong solely to the spouse in whom the legal estate was vested but was to be shared between them in some proportion or other.

In the present case the trial judge decided that this test had not been met. The Court of Appeal took a different view, as indicated in the following passage from the reasons for judgment of Woods J.A. in that Court:

The question left for decision in the present case, as the learned trial Judge stated, was as to what common intention the Court should find from the words and conduct of the parties.

Here the parties married and decided to go farming. There are those who farm as a business, but to these people farming was a way of life. After reading the evidence, one is left with the picture of two people whose time and effort was spent in pursuing their chosen way of life as an integrated operation. The husband, by and large, looked after the outside work, while the wife looked after the house. However, to both of them their daily tasks were directed in a mutual effort of producing good crops and livestock for sale, and caring for the wants of the family. The wife seems to have done her full share. In addition to what might be called ordinary household tasks, she took meals to the fields, helped move machinery, raised poultry, acted as back-up driver for the bus contract, milked cows, grew a garden, and did chores. In a word, each of them spent their time and effort contributing to their farming operation. This pattern of life is not now followed by many farmers in the grain belt. However, as it was carried out here, the kitchen was just as much an integral part of the opera­tion as was the feed lot or the machine shed. They started out, as the respondent stated, in a joint effort to

[Page 468]

make a life for themselves on the farm and they worked as a team. It is not to be expected that, in circumstances such as these two found and created, that they would sit down together and list or agree upon their legal rights inter se, or in the property amassed by their efforts. From the start their intention was to live together to share, and to establish a farming operation in which they would have equal rights. They pooled their somewhat meagre resources to start with and both worked successfully to the end of having them develop and grow. It seems very clear to me that there was an agreement to share at the start, and that it carried through until the marital differences developed. They commenced farm­ing as a joint effort, fully intending that it would be a joint effort for their mutual advantage, and in which they would have mutual rights.

The learned trial Judge, however, found that such an intention is not shown by the evidence. With great respect, the evidence as a whole proves clearly that each made his or her contribution to the joint undertaking. The statements relied on in the cases of Thompson v. Thompson, [1961] S.C.R. 3, and Murdoch v. Murdoch (1974), 41 D.L.R. (3d) 367, do not stand in the way of such a conclusion because in those cases there was no direct financial contribution. There is, in my view, real substance to the claim of the wife. The question remains however, as to just what she is entitled.

Hall J.A., in the Court of Appeal, stressed the fact that a portion of the purchase price of the lands acquired by the appellant had been paid for out of the joint bank account of the parties to which the respondent had initially contributed. Receipts from the farm operations were placed in the account. The first purchase was made by means of a cash payment of $1,000 from the account. The balance was paid by an advance under the Veterans' Land Act , which was paid off by turning over grain tickets representing a share of the crop produced from the land. The second purchase was financed similarly. The third purchase was made by a cash payment of $4,000 from the joint account, the balance being met by the appellant receiving credit for work done by him on the vendor's behalf.

[Page 469]

Brownridge J.A., in the Court of Appeal, expressed the following view:

With deference to the learned trial Judge, I have difficulty in concluding from the evidence that there was no common intention that the wife should share in the assets which she helped to create. I think counsel for the appellant is correct in his submission that the financial contribution by the wife, and her work and services, and the admissions by the respondent that his wife did make some contribution toward the creation of the assets and that they "worked as a team, to start with", all support her claim. The evidence as a whole, in my opinion, is consistent with the submission that the wife was intended to have some share, but it falls short of establishing her claim that she is entitled to a one-half share.

Having reached this conclusion, he went on to say that he would make a declaration that the respondent was entitled to a one-half interest in those lands which had been acquired by the first and second purchases.

The law applicable in this case was not in dispute in the Courts below. The division of opin­ion was as to its application to the facts of this case. As there was evidence upon which the Court of Appeal could properly determine that the respondent was entitled to some interest I would not interfere with that conclusion. However, that still leaves in issue the extent of the respondent's interest, a matter upon which there was a division of opinion in the Court of Appeal. The fact that the respondent was entitled to some interest does not necessarily mean that she should have an equal interest. This is clear from the passage from Lord Diplock's reasons in the Gissing case previously quoted, which ends with the words "in some proportion or other".

Lord Reid, in the same case, at p. 897, had this to say:

It is perfectly true that where she does not make direct payments towards the purchase it is less easy to evaluate her share. If her payments are direct she gets a share proportionate to what she paid. Otherwise there must be a more rough and ready evaluation. I agree that this does not mean that she would as a rule get a half-share. I think that the high-sounding brocard "equality is equity" has been misused. There will of course be cases where a half-share is a reasonable

[Page 470]

estimation, but there will be many others where a fair estimate might be a tenth or a quarter or sometimes even more than a half.

In the present case there is clear evidence that the respondent did not consider that there had been any common intention that she should have an equal share with her husband in all of the lands which he acquired. In 1971, some four years after the parties separated, the appellant indicated to the respondent the possibility that he might dispose of the lands. The respondent thereupon con­sulted a solicitor and later filed homestead caveats against S.W. S21 T13 R20 W3 and against N.W. S17 T13 R20 W3, each of which quarter-sections had been, at one time, the parties' homestead. She also filed, on June 28, 1971, a caveat against S.E. S20 T13 R20 W3, claiming, in respect of that land, an interest under a trust for a one-tenth interest, she having advanced to the appellant ten per cent of the purchase price of that land. The caveat was accompanied by the respondent's affidavit that the allegations in the caveat were true in substance and in fact, to the best of her knowledge, information and belief. No caveat was filed by the respondent against any of the other lands.

In view of the fact that, while the Court of Appeal has found a common intention that the respondent should share in the lands acquired by the appellant, it is clear that there was no common intention that that share should be a one-half interest in all the lands acquired, it is necessary to determine what the respondent's share should be. In my opinion, on the evidence, the appellant's efforts in acquiring and farming the various lands were greater than the respondent's contribution to the farming operations. He worked the lands and thus produced the means of payment of the major portion of the purchase price for the first two land purchases. The bulk of the funds which went into the joint bank account was provided by the sale of his share of the produce from the lands.

Brownridge J.A. determined on an apportionment which gave the respondent an undivided one-half interest in the lands obtained by the first two purchases. Two of those four quarter-sections, for a time, became the homestead of the parties. I

[Page 471]

would accept his determination of the respective interests of the parties as being a reasonable one.

In my opinion the appeal should be allowed and the judgment of the Court of Appeal varied by deleting from para. 1, thereof, the whole of sub-paras. (5) to (9) inclusive. The appellant should have his costs in this Court.

I wish to add that I do not accept the applica­tion, in cases of this kind, of a doctrine of con­structive trust as a means of preventing unjust enrichment. In my opinion the judgments of this Court in Thompson v. Thompson[36], and in Mur­doch v. Murdoch, supra, stand in the way of such a course.

The case of Deglman v. The Guaranty Trust Company of Canada[37] does not support this con­tention of the respondent. It did not involve a matrimonial property dispute. In that case the plaintiff sought to enforce an oral agreement made with his aunt whereby if he performed certain services for her during her lifetime, she would make adequate provision for him in her will, and, in particular, would leave him a certain parcel of land. The plaintiff fulfilled his part of the bargain. His aunt died intestate and he brought action against her estate. This Court held that s. 4 of the Statute of Frauds was a bar to obtaining specific performance of the contract, as to the parcel of land, but also held that, as the plaintiff had fully performed his oral contract, he could recover for his services on a quantum meruit basis. The basis of the decision is found in the reasons of Cart­wright J., (as he then was) at p. 735:

In my opinion when the Statute of Frauds was pleaded the express contract was thereby rendered unenforce­able, but, the deceased having received the benefits of the full performance of the contract by the respondent, the law imposed upon her, and so on her estate, the obligation to pay the fair value of the services rendered to her.

There was no suggestion that the executor of the estate was a constructive trustee for the benefit of the plaintiff, of any part of the estate assets.

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Reference has been made to Rimmer v. Rimmer[38], a judgment of the Court of Appeal in England. That was a case in which the home of a married couple had been purchased by contribu­tions made by both the husband and the wife. Title was in the name of the husband who, after desert­ing his wife, sold the property. The wife sought a share of the proceeds of sale and was awarded one-half of the proceeds, this being what the Court considered to be "fair and just".

The wife's application for relief in Rimmer was made under s. 17 of the Married Women's Prop­erty Act, 1882, the relevant portion of which provided:

17. In any question between husband and wife as to the title to or possession of property, either party . may apply by summons or otherwise in a summary way to any judge of the High Court of Justice in England or in Ireland ... who may make such order with respect to the property in dispute, and as to the costs of and consequent on the application, as he thinks fit.

At the time Rimmer was decided the courts had taken the view that this provision gave to the court a free hand to do whatever it thought just in respect of the title to family assets. As stated by Lord Denning, M.R., (who also sat in the Rimmer case) in Hine v. Hine[39], at pp. 1127-8:

It seems to me that the jurisdiction of the court over family assets under section 17 is entirely discretionary. Its discretion transcends all rights, legal or equitable, and enables the court to make such order as it thinks fit.

This view of the broad scope of s. 17 was rejected by the House of Lords in Pettitt v. Pettitt[40], which held that the section was a proce­dural provision only and did not entitle the Court to vary the existing proprietary rights of the parties. Judson J., in this Court, had taken a similar view of the effect of the Ontario equivalent of s. 17, i.e. s. 12, The Married Women's Property Act,

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R.S.O. 1950, c. 238, when he stated, at p. 14 of the Thompson case:

If a presumption of joint assets is to be built up in these matrimonial cases, it seems to me that the better course would be to attain this object by legislation rather than by the exercise of an immeasurable judicial discretion under s. 12 of The Married Women's Prop­erty Act.

I take the same view of an attempt to exercise an immeasurable judicial discretion in matrimoni­al disputes of the kind which has arisen in this case by means of a broad expansion of the equitable rules concerning constructive trusts to remedy what a court, in its discretion, considers to be an unjust enrichment.

I am in agreement with the views expressed by Lord Reid in the Pettitt case, supra, at pp. 794-5, where, after having rejected the broad interpreta­tion of s. 17 of the Married Women's Property Act, he went on to say:

We must first have in mind or decide how far it is proper for the courts to go in adapting or adding to existing law. Whatever views may have prevailed in the last century, I think that it is now widely recognised that it is proper for the courts in appropriate cases to develop or adapt existing rules of the common law to meet new conditions. I say in appropriate cases because I think we ought to recognise a difference between cases where we are dealing with "lawyer's law" and cases where we are dealing with matters which directly affect the lives and interests of large sections of the community and which raise issues which are the subject of public controversy and on which laymen are as well able to decide as are lawyers. On such matters it is not for the courts to proceed on their view of public policy for that would be to encroach on the province of Parliament.

I would therefore refuse to consider whether property belonging to either spouse ought to be regarded as family property for that would be introducing a new conception into English law and not merely developing existing principles. There are systems of law which recognise joint family property or communio bonorum. I am not sure that those principles are very highly regarded in countries where they are in force, but in any case it would be going far beyond the functions of the court to attempt to give effect to them here.

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The areas to which the doctrine of constructive trust have been applied heretofore are those in which a trustee or a fiduciary takes advantage of his position to make a profit for himself contrary to his duty as a trustee or fiduciary. It has also been applied in cases where a person, having knowledge of an existing trust, acquires legal title to the trust property. It has not been extended to enable a court to allocate property between a husband and a wife on the basis of a broad discre­tion as to what the court considers would be just and equitable. In my opinion the circumstances in which such an allocation could be made, if they are to be extended beyond the scope of existing law, should be determined, as a matter of public policy, by legislation.

The judgment of Ritchie and Pigeon JJ. was delivered by

RITCHIE J.—I have had the advantage of read­ing the reasons for judgment prepared for delivery by my brother Dickson and I would dispose of this appeal in the manner which he has proposed, but as I take a somewhat different approach to certain aspects of the matter, I think it desirable to express my views separately.

In my view, the initial contribution made by the respondent to the joint account which was used in making the first payment on the two quarter-sec­tions of land which were registered in the hus­band's name in 1946 constituted evidence of the intention of the parties to treat the farming opera­tion on which they were embarking as a joint venture. The two subsequent purchases which added to the farmlands were paid for in part out of the same joint account and in part from the produce of the lands, and in my opinion they were impressed with a resulting trust in favour of the wife stemming from the intention of the parties evidenced by her original contribution. As I understand it, this conclusion flows from the cases of Pettitt v. Pettitt[41], and Gissing v. Gissing[42], which were cited with approval in this Court in Murdoch v. Murdoch[43].

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In view of the above conclusion, and with the greatest respect for those who may hold a different view, I do not find that any determination as to the application of the doctrine of constructive trusts or unjust enrichment is necessary to the determina­tion of the questions raised in this appeal which are in my view controlled by the fact of the respondent's financial contribution.

Appeal dismissed with costs, MARTLAND, JUDSON, BEETZ and DE GRANDPRÉ JJ. dissenting in part.

Solicitors for the defendant, appellant: Hagemeiser, Wilson, MacBean & Maurice, Swift Current.

Solicitors for the plaintiff respondent: Shu­miatcher & Associates, Regina.