constructive trust continues to be available in view of the
Supreme Court of Canada’s decision in Soulos v. Korkontzilas (1997), 32 O.R. (3d) 716, [1997] 2 S.C.R. 217, [1997]
S.C.J. No. 52.
Discussion and Analysis
Equitable assignment
[27] The application judge held that the oral contract
described took the form of an equitable assignment to Ms. Moore
of Mr. Moore’s equitable interest in the proceeds of the policy, or
alternatively, of his entire interest in the policy, in return for her
agreement to pay the premiums in the future.
[28] Respectfully, he erred in doing so. I say this for two
reasons.
[29] First, it was procedurally unfair to found his decision on a
principle that was neither put in play nor relied on by Ms. Moore
on the application, and on which the parties had not joined issue.
[30] Second, in addition to the fairness concerns arising from
the foregoing, the introduction of a new theory of liability in the
reasons for decision raises concerns about the inherent unreliability of any finding based on that untested theory: see Rodaro v.
Royal Bank of Canada (2002), 59 O.R. (3d) 74, [2002] O.J. No.
1365 (C.A.), at paras. 60-63; Labatt Brewing Co. v. NHL Enterprises Canada (2011), 106 O.R. (3d) 677, [2011] O.J. No. 3207,
2011 ONCA 511, at paras. 5-7. In respect of this analysis, it is
not a matter of determining whether the application judge made
a palpable and overriding error in his findings of fact or of mixed
fact and law regarding the assignment. By introducing the equitable assignment issue himself in the course of arriving at
his decision, he erred in law by depriving the parties — and
Ms. Sweet in particular — of the ability to make a proper record
relating to it, thereby rendering the result unreliable and justifying appellate intervention.
Procedural fairness
[31] Equitable assignment was not before the court on the
application. Ms. Sweet had no notice that it was in play. It was
not asserted in the notice of application. It was not “pleaded” in
any other way or raised as such in the evidence presented or
other materials filed by Ms. Moore. It was not addressed or in
any way argued by counsel on her behalf. Not surprisingly, it
was not met or addressed by Ms. Sweet either.
[32] Ms. Moore’s position was essentially that ( i) there was
a contract and ( ii) she was entitled to the funds based on the
