What is the test for imposing a constructive trust?

Ontario, Canada


The following excerpt is from Endplex Investments Inc. v. Derrydale Golf Course Limited, 2008 CanLII 49330 (ON SC):

In Rathwell v. Rathwell, 1978 CanLII 3 (SCC), [1978] 2 S.C.R. 436, 83 D.L.R. (3d) 289, Dickson J.(as he then was) stated the principles which give rise to the imposition of a constructive trust. Dickson J. stated at p.455: 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.

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