The Supreme Court of Canada (the “SCC”) in Moore v. Sweet[1], 2018 SCC 52 (“Moore”), quoting Waters’ Law of Trusts in Canada,[2] defined a constructive trust as a “vehicle of equity through which one person is required by operation of the law, regardless of intention, to hold certain property for the benefit of another”.[3]  Designed as an equitable remedy, a constructive trust enables the court to recognize property rights where legal title does not.

In other words, a constructive trust is a flexible remedy, which may be imposed at the court’s discretion “where good conscious so requires it”.[4]  A constructive trust may be grounded in unjust enrichment, fraud, or a breach of fiduciary duty, amongst other things. The court in Moore asserted the following:

The constructive trust is an ancient and eclectic institution imposed by law not only to remedy unjust enrichment, but to hold persons in different situations to high standards of trust and probity and prevent them from retaining property which in “good conscience” they should not be permitted to retain.[5]

A court may impose a constructive trust where a proprietary interest is involved, and a remedy for monetary relief would be inadequate. There must be a sufficient link between the individual’s contributions and the property in dispute over which a constructive trust is claimed.[6] In a circumstance where a personal remedy, which is defined as a debt or a monetary obligation, such as a cost award, would suffice, a constructive trust is not appropriate.[7]

In order for a constructive trust to apply regarding unjust enrichment, one must meet the elements for unjust enrichment, which the court in Pettkus v. Becker, 1980 CanLII 22 (SCC), sets out as follows:

1. That the defendant was enriched;
2. That the plaintiff suffered a corresponding deprivation; and
3. That the defendant’s enrichment and the plaintiff’s corresponding deprivation occurred in the absence of a juristic reason.

In Webb v. Webb,[8] 2025 ONSC 7030 (“Webb”) the court determined that the doctrine of unjust enrichment was applicable through the elements set out in Moore.

In Webb, the court determined that a claim for resulting trust was not applicable where Ms. Webb (the “Plaintiff”) allegedly loaned her son (the “Defendant”) approximately $300,000 (the “Funds”). The Plaintiff claimed these Funds were a gift from the Defendant. As the Funds were no longer traceable, the court denied the resulting trust claim. Instead, the court applied the doctrine of unjust enrichment to seek “monetary restitution” for the Plaintiff. [9]

In Webb, the court applied the doctrine of unjust enrichment, even though the Plaintiff did not explicitly plead it. The court found that its application would not result in any unfairness to the Defendant.[10]

In estate litigation, constructive trusts are often applied to remedy unjust enrichment. The Supreme Court of Canada in Soulos v. Korkontzilas, 1997 CanLII 346 (SCC), calls to mind that  this equitable remedy is applicable in other instances.[11] The SCC asserted the following:

While Canadian courts in recent decades have developed the constructive trust as a remedy for unjust enrichment, this should not be taken as expunging from Canadian law the constructive trust in other circumstances where its availability has long been recognized.  Under the broad umbrella of good conscience, constructive trusts are recognized both for wrongful acts like fraud and breach of duty of loyalty, and to remedy unjust enrichment and corresponding deprivation.  While cases often involve both a wrongful act and unjust enrichment, constructive trusts may be imposed on either ground.

In the recent decision of Thompson v. Swietlinski Estate, 2019 ONSC 7310, the court applied and confirmed the three-element test set out in Pettkus v. Baker when determining unjust enrichment for the imposition of a constructive trust.[12]

Concluding Remarks

Constructive trusts remain a vital equitable remedy in Canadian law, operating as a judicial response to circumstances where it would be unjust for one party to retain property.  The remedy has a restitutionary goal of providing relief where monetary compensation is an inadequate remedy or fails to provide a fair outcome for the burdened party.

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[1] Moore v. Sweet, 2018 SCC 52 (CanLII), [2018] 3 SCR 303 (“Moore”)

[2] Waters Law of Trust in Canada, 3rd ed. (Toronto: Thomson Carswell), 2005

[3] Moore at para 32.

[4] Ibid.

[5] Soulos v. Korkontzilas, 1997 CanLII 346 (SCC), [1997] 2 SCR 217

[6] Ibid at para 90.

[7] Ibid at para 89.

[8] Webb v. Webb, 2025 ONSC 7030

[9] Ibid at para 18.

[10] Ibid at para 21.

[11] Soulos v. Korkontzilas, 1997 CanLII 346 (SCC), [1997] 2 SCR 217

[12] Thompson v. Swietlinski Estate, 2019 ONSC 7310 at para 13.