Holowa Estate, 2011 ABQB 23

Court of Queen ’ s Bench of Alberta Citation: Holowa Estate, 2011 ABQB 23 Date: 20110118 Docket: ES01 105248 Registry: Calgary Court File Number ES01 105248 Court Court of Queen’s Bench of Alberta (Surrogate Matter) Judicial District Calgary Estate Name James Anderson Holowa Applicant Rosanne Joan Andrusiak, Personal Representative of the Estate of James Anderson Holowa Respondent Judith Stell-Holowa and Alberta Pensions Services Corporation _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice R.E.

Nation _______________________________________________________ [ 1 ] An application was brought by Rosanne Andrusiak, the executor of the estate of James Holowa (the "executrix"), asking for advice and direction in relation to the rights of the estate to claim an interest in a death benefit payment. [ 2 ] James Holowa ("Holowa") was employed by the City of Calgary for over 38 years until his death. He paid into the Local Authorities Pension Plan ("LAPP"). Upon his death, the LAPP indicated that there was a lump sum death benefit of approximately $729,000 (the "Pension Benefit").

As Holowa when he died was still legally married to Judith Stell-Holowa who is now known as Judith Hanrahan ("Hanrahan"), under the LAPP rules, Hanrahan is a "pension partner" and would receive the whole Pension Benefit.

[ 3 ] The Alberta Pension Services Corporation (the "APS") provides services relating to the administration of several Government of Alberta pension plans including the LAPP . The APS, in addition to Hanrahan, is a respondent to this application. [ 4 ] The executrix takes the position that the whole Pension Benefit should be paid to the estate, and ultimately, through the will, to the two beneficiaries named in the will, the deceased's son and daughter. The executrix argues that Holowa had designated those two same children as the beneficiaries of the LAPP .

The executrix argues equitable principles, as Hanrahan had earlier signed two matrimonial property agreements, waiving her interest in the LAPP. [ 5 ] The essence of the question before the Court, is whether the Pension Benefit goes to Hanrahan under the plain

interpretation of the LAPP rules, or whether, by operation of equitable principles, it should be impressed with a trust in favour of the estate, and thus the beneficiaries. 1. The Facts [ 6 ] This decision is driven by the facts, which were not contested. Because of their uniqueness, the relevant facts are set out in detail, before a discussion of the law and its application to the facts. [ 7 ] Holowa was born in 1947. He died at age 60 on May 15, 2007, at which time he was employed with the City of Calgary.

He had approximately 38 years of pensionable service at the time of his death. [ 8 ] Holowa married Hanrahan on December 29, 1998, when he was 41 and she was 44 years old. After the marriage, but well before separation, on December 20, 2001, they entered into a contract entitled a "Marriage Agreement and Matrimonial Property Agreement" (the “2001 agreement”) in which they agreed, inter alia , that any division of matrimonial property between them would exclude certain scheduled property, as well as any increase in the value of that property during the marriage. The LAPP was expressly referenced in

schedule A. The wording of the contract that related to

schedule A property was that it: ... shall belong to James and shall be retained solely by him without any claim by Judith. Judith does give up any claim she may have now or in the future to James's property mentioned....and any increase in the value of the same during the marriage, and she will not be entitled to receive in any said distribution or equalization more of James's other property to make up for the value of James's property which he retains as mentioned in

Section A [...] [ 9 ] The 2001 agreement was signed by both parties with independent legal advice, in full compliance with

Section 37 of the Matrimonial Property Act , R.S.A. 2000 c. M-8 (the " MPA "). By that marriage agreement, Holowa released his rights to certain property of Hanrahan set out in

schedule B, which included investments in excess of $105,000 and real estate with an equity in excess of $70,000. [ 10 ] After four years of marriage, the couple separated December 1, 2002, and a Statement of Claim for Divorce was filed by Hanrahan January 3, 2003. [ 11 ] The parties entered into a contract dated January 3, 2003 entitled an "Amending Agreement to Marriage Agreement and Matrimonial Property Agreement" (the “2003 agreement”). It was again signed with legal advice to each party.

It referenced the 2001 agreement, leaving it in full force and effect but amending specifically paragraph 13, which had expressly indicated that the parties were not giving up any of their interest in the estate of the other in the event of the death of the other party, which might be apart from any bequest set out in either parties will. That clause was replaced with the following terms in the 2003 agreement: 13.

Judith and James, in consideration of this agreement for themselves, their heirs, executors, administrators and assigns, hereby and forever RENOUNCE AND SURRENDER all their respective right, title, dower interest or interest in and to the property or estate of the other, and hereby forever RELEASE AND SURRENDER any interest which he or she may now have or subsequently acquire by reason of the law or in equity or any statute of the country or state in which the whole or any part of their respective estates may be situate at the time of their death, including, but without restricting the generality of the foregoing, all right, title and interest given by the Intestate

Succession Act , The Family Relief Act and The Dower Act , as amended or replaced from time to time. 13.1 The parties further covenant and agree that neither party shall by virtue of their marriage or of any Act of the Province of Alberta have or acquire any right, title or claim in or to the other party's real or personal estate upon separation, dissolution of marriage or death.

The estate of that party shall descend to or vest in such of the other party's heirs, successors, administrators or assigns and in such manner as may be prescribed by his or her Will and in default of existence of a Will, by law as though no marriage had ever taken place between the parties. (Capitalization and bolding as in the written agreement) [ 12 ] The parties proceeded with an uncontested divorce application, but reconciled in the spring of 2005.

A court order was obtained on March 24, 2005, to obtain a return to counsel of the affidavit of the applicant and request for a divorce, which had been submitted to the clerk on February 15, 2005, but not yet processed. Thus, a divorce judgement was never granted. [ 13 ] The parties lived together until December 2005, and thereafter on and off, as set out in the time line in Exhibit A to the affidavit of the executrix sworn November 12, 2010.

Holowa was diagnosed with cancer and was hospitalized from November 6, 2006 to January 3, 2007. [ 14 ] On February 13, 2007, Holowa signed a designation of beneficiary form to designate his children, Darren and Robin Holowa as his beneficiaries for the LAPP , on a form that indicated the effect that the presence of a pension partner would have on the designation. [ 15 ] Holowa met with his lawyer, Garry Courtney in March, 2007 and instructed him to file a Statement of Defence and Counterclaim for Divorce, which indicated the period of separation commenced on February 2, 2007. Mr.

Courtney advised Holowa he could not apply for the divorce until February 2, 2008. [ 16 ] In April, 2007 various exhibits to the executrix's affidavit indicate an attempt by Holowa to get information about the LAPP and to advise the APS of the fact he and Hanrahan intended to divorce. [ 17 ] In May, 2007, Holowa died leaving a will whereby he left all his assets to his children, Darren and Robin Holowa.

The Inventory of Property and Debts attached to the application for probate shows the net value of the estate having a deficit value of -$22,809.61. [ 18 ] The LAPP provides that as payment of Holowa’s pension had not commenced before the date of his death, the Death Benefit, which is a pre-pension commencement death benefit is therefor payable. Under the LAPP legislative scheme, a "Pension Partner" has priority over this pension benefit.

The APS described this priority scheme as: Pursuant to the LAPP Plan Rules in effect as of the date of the Deceased's death, the Deceased's Death Benefit is payable in the following order of priority: To any "Pension Partner" of the Deceased; subject to the terms of any (MPO) obtained from a Court ; or To any subsisting designated beneficiaries (named via a designation of beneficiary or via the deceased's Will); or To the deceased's Estate, to be distributed in accordance therewith. [emphasis in APS brief] [ 19 ] Under this regime, an MPO is a Court order under the MPA .

A matrimonial property agreement that complies with the

provisions of the MPA is not recognized, only a Court order. [ 20 ] The commencement of any proceeding under the MPA , is precluded after the death of a party, so no application can be made post humously on behalf of Holowa to attempt to confirm the 2001 or 2003 agreements under the MPA in a Court Order. [ 21 ] Hanrahan provided no affidavit, so there is no evidence of dependence, or need.

Her position is simply that by operation of law she is entitled to the Pension Benefit, notwithstanding the 2001 and 2003 agreements, as there never was an order under the MPA , incorporating any release of the LAPP . [ 22 ] LAPP opposes any relief that would interfere with its legislated obligations under the Local Authorities Pension Plan , Alta. Reg. 366/1993 and Public Sector Pension Plans (Legislative Provisions) Regulation , Alta. Reg. 365/93 which are pursuant to the Public Sector Pension Plans Act , R.S.A. 2000 c. P-41.

LAPP claims that its legislated obligations are to pay the Pension Benefit to Hanrahan, as the deceased's surviving pension partner, in priority to the designated beneficiaries, Holowa’s children, who are also the sole beneficiaries of his estate. 2. The Positions of the Parties [ 23 ] The applicant executrix advanced a request that the court impose a constructive trust on any funds to be received by Hanrahan, so as to give effect to the 2001 and 2003 agreements.

The executrix argues that equity should provide a remedy so that even if the funds must be paid under the LAPP scheme to Hanrahan, they are impressed with a trust in favour of the estate of Holowa. [ 24 ] The respondent Hanrahan's position is that Holowa could only have re-directed the Pension Benefit by obtaining a Matrimonial Property Order and he chose not to do so.

Hanrahan further submits that the executrix cannot satisfy the requirements for a constructive trust on the Pension Benefit due to the "clear juristic reason" vesting the pension to Hanrahan and the lack of an unjust enrichment. [ 25 ] The respondent APS submits that Hanrahan should take the interest in the Pension Benefit in accordance with the LAPP rules. The APS further contends that if Hanrahan's interest is displaced by the Court, the relief issued should be against Hanrahan personally after her receipt of the Pension Benefit rather than against the LAPP. 3.

The Relevant Law [ 26 ] The executrix is asking for an equitable remedy. Such a remedy is generally described by D.W.M.

Waters, The Constructive Trust (London: The Athlone Press, 1964) at p. 7: Equity imposes trust obligations upon the party who has acquired title to something to which in fairness he is not entitled as against another, and she does this in order to compel the first person to convey it or reconvey it to the other. [ 27 ] In essence, the applicant argues that it is only the lack of a matrimonial property order that means the Pension Benefit goes to Hanrahan, and equity should intervene to effect the plain intention from the 2001 and 2003 agreements. [ 28 ] There are only two sources of a trust obligation, first the intention of a property owner to create a trust and second the imposition of a trust obligation upon persons by the law of trusts: D.

W. M. Waters, Waters' Law of Trusts in Canada (Toronto: Thomson Carswell, 2005) [" Waters "] at p. 19. It is the second of the two, the law of constructive trust that was argued in this case. In Canada, this embraces both the concepts of a constructive trust founded in equity as well as unjust enrichment.

[29] In Soulos v. Korkontzilas, (SCC), [1997] 2 S.C.R. 217 McLachlin J. (as she then was) held at para. 25: I conclude that the law of constructive trust in the common law provinces of Canada embraces the situations in which English courts ofequity traditionally found a constructive trust as well as the situations of unjust enrichment recognized in recent Canadian jurisprudence. 3.1 Unjust Enrichment [30] The term "unjust enrichment" is broadly defined as profit acquired through wrongdoing: Waters at p. 507.

Unjust enrichmentis commonly used in disputes involving property after the breakdown of a cohabitational relationship. Becker v. Pettkus, (SCC), [1980] 2 S.C.R. 834 confirmed the requirements for a claim of unjust enrichment as:

(1) Enrichment of the defendant

(2) A corresponding depravation of the plaintiff; and

(3) Absence of any juristic reason for the enrichment. 3.1.1 Enrichment of the Defendant [31] In Becker v. Pettkus the parties had cohabitated for 19 years. Pettkus had a successful beekeeping business to which Beckermade a substantial contribution during the years of cohabitation. The Supreme Court found that the elements of unjust enrichment weresatisfied. [32] The law of unjust enrichment was revisited by the Supreme Court in Peter v. Beblow, (SCC), [1993] 1S.C.R. 980.

Peter cohabitated with Beblow for 12 years and did domestic work and some home improvement without compensation.During this time, Beblow paid off his mortgage and purchased a houseboat and van. The Supreme Court held that the test for unjustenrichment is flexible and that "[e]quity finds a role where an injustice without a legal remedy exists." The elements of unjustenrichment were satisfied. [33] The majority in Peter v.

Beblow appears to have set out a threshold requirement that the plaintiff or applicant have made asubstantial contribution to the asset claimed: Waters at p. 508. 3.1.2 Depravation of the Plaintiff [34] In Sorochan v. Sorochan, (SCC), [1986] 2 S.C.R. 38 at p. 46 the Supreme Court concluded that a causalconnection, or a sufficient nexus, is required between the plaintiff's (or applicant’

s) deprivation and the property in question through hercontribution. The plaintiff "had a reasonable expectation of receiving some benefit in return for her forty-two years of domestic and farmlabour": Sorochan at p. 85. The longevity of the relationship was relevant to whether to impose a constructive trust. 3.1.3 Absence of any Juristic Reason [35] The Supreme Court held in Becker v. Pettkus that the absence of a statutory scheme directing equal division of assets acquiredby common law spouses, at the time, was not a bar to the availability of an equitable remedy. [36] In Zaidan Group v.

London (City) (1990), (ON CA), 71 O.R. (2d) 65, 64 D.L.R. (4th) 514 (C.A.); aff'd (SCC), [1991] 3 S.C.R. 593, the Ontario Court of Appeal held that unjust enrichment does not apply where a valid

statutory scheme stipulates that interest on tax refunds will be returned if a municipality passes a bylaw, and the municipality in questiondoes not. The Court held that the taxes in question were a statutory creation and that there was no gap in the legislation to be filled by thecommon law: Zaidan at para. 11. [37] A claim for unjust enrichment was denied due to a juristic reason in Spence v. Michel (1993), (ON SC), 1R.F.L. (4th) 28 (Ont. Gen. Div.); aff'd 33 R.F.L. (4th) (C.A.). The plaintiff sought a declaration for a half interest in a property registeredin the name of the defendant, his former partner.

The plaintiff continued to make mortgage payments on the property after the dissolutionof his relationship with the defendant. The Court held that the property in question was a gift to the defendant and that the plaintiffcontinued to make mortgage payments due to the "very good juristic reason" that he was a guarantor on the mortgage: Spence at para. 46. [38] In

summary, unjust enrichment is a flexible doctrine intended for situations where property is unjustly acquired without alegal remedy. The three elements necessary for a claim of unjust enrichment are set out in Becker v. Pettkus as the enrichment of thedefendant, depravation of the plaintiff and the absence of any juristic reason for the enrichment. Sorochan required a sufficient nexusbetween the plaintiff's depravation and the property claimed. A statutory scheme was a juristic reason in Zaidan and a benefit to theclaimant was a juristic reason in Spence. The Supreme Court in Peter v.

Beblow further required that the plaintiff have made a substantialcontribution to the property claimed. 3.2 Constructive Trust [39] A constructive trust in an equitable remedy, a trust imposed by law. It has been described by Lord Denning in Hussey v.Palmer, [1972] W.L.R. 1286, [1972] All E.R. 744 at p. 1290 as: [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 tohave the property or the benefit of it or a share in it. [40] In Soulos, the Supreme Court of Canada reviewed the concept of a constructive trust. A real estate agent had breached hisfiduciary duty in misrepresenting a sale to a client. The Court awarded the property to the client on the basis of a constructive trust.

Itfound that a constructive trust may be used "under the broad umbrella of good conscience" to remedy wrongful acts like fraud and breachof duty of loyalty as well as unjust enrichment: Soulos at para. 43. McLachlin J. held at para. 43: I conclude that in Canada, under the broad umbrella of good conscience, constructive trusts are recognized both for wrongful acts likefraud and breach of duty of loyalty, as well as to remedy unjust enrichment and corresponding deprivation.

While cases often involveboth a wrongful act and unjust enrichment, constructive trusts may be imposed on either ground: where there is a wrongful act but nounjust enrichment and corresponding deprivation; or where there is an unconscionable unjust enrichment in the absence of a wrongfulact, as in Pettkus v. Becker, supra.

Within these two broad categories, there is room for the law of constructive trust to develop and forgreater precision to be attained, as time and experience may dictate. [41] The Court reviewed the development of constructive trust and stated generally in para. 34: It thus emerges that a constructive trust may be imposed where good conscience so requires. The inquiry into good conscience isinformed by the situations where constructive trusts have been recognized in the past.

It is also informed by the dual reasons for whichconstructive trust have traditionally been imposed: to do justice between the parties and to maintain the integrity of institutions dependenton trust-like relationships. Finally, it is informed by the absence of an indication that a constructive trust would have an unfair or unjusteffect on the defendant or third parties, matters which equity has always taken into account.

Equitable remedies are flexible, their awardis based on what is just in all the circumstances of the case. [42] The majority in Soulos went on to identify four conditions that should be satisfied in order to impose a constructive trust basedon wrongful conduct, at para. 45:

(1) The defendant must have been under an equitable obligation, that is, an obligation of the type that courts of equity have enforced, in

relation to the activities giving rise to the assets in his hands;

(2) The assets in the hands of the defendant must be shown to have resulted from deemed or actual agency activities of the defendant inbreach of his equitable obligation to the plaintiff;

(3) The plaintiff must show a legitimate reason for seeking a proprietary remedy, either personal or related to the need to ensure thatothers like the defendant remain faithful to their duties and;

(4) There must be no factors which would render imposition of a constructive trust unjust in all the circumstances of the case; e.g., theinterests of intervening creditors must be protected. [43] There is certainly precedent for using constructive trust in matrimonial actions, which do not involve “wrongful conduct” perse, but where a party has waived a right to an asset, but proper designations have not been signed. These cases largely deal with insurancepolicies or RRSP plans. [44] In Roberts v.

Martindale (1998), (BC CA), 162 D.L.R. (4th) 475, [1999] 1 W.W.R. 778 (B.C.C.A.) a wifeintended, but failed, before her death to switch her life insurance beneficiary designation, which named her ex-husband as herbeneficiary. The deceased wife and her former husband had signed a matrimonial property agreement relinquishing all rights in eachother's estates. Southin J.A. ordered a constructive trust against the life insurance policy in favour of the deceased's sister. The Court ofAppeal held that equity will not permit even

an Act of Parliament to be used as an instrument of fraud and that constructive trusts may beused in cases where the defendant's acts were not fraudulent: Roberts at paras. 20 and 24. [45] Roberts was cited as authority in Hemmerling Estate v. Hemmerling, 2000 ABQB 808, 275 A.R. 171 at para. 26 to order aconstructive trust over the proceeds of an RRSP account. The proceeds were made payable to the deceased husband's estate since thehusband's ex-wife had waived her interest in her former husband's pension and RRSP in a matrimonial property agreement.

The minutesof the matrimonial property agreement were found to be final and conclusive of the matter and, in the alternative, a constructive trust wasfound based on the settlement bargain. The Court affirmed para. 25 from Roberts: For the appellant, Mr. Martindale, to claim from the insurer the proceeds was a breach of the separation agreement and such a breach issufficient, in my opinion, to call in aid the doctrine of the remedial constructive trust. To put it another way, it is not the mistaken beliefof Mrs. Martindale which gives rise to a remedy; it is the bargain which Mr.

Martindale made. [Emphasis added] [46] There are also cases in the matrimonial context where this relief was not given, particularly where the release of the asset wasargued to result from general contractual language, not specific to the asset. In Baker v. Hall (1985), 1985 ABCA 31 , 59 A.R.272 (C.A.) a husband and wife entered into a matrimonial property settlement releasing each other from all present and future claims.The husband died after the dissolution of the marriage leaving his life insurance designation in favour of his ex-wife in place.

The AlbertCourt of Appeal held the designation was a revokable designation under the Insurance Act, R.S.A. 1980, c. I-5 and that revocation canonly be achieved by compliance with the statute. There was insufficient evidence that the deceased husband intended to deprive hisex-wife. The Court concluded that clear intention is required and the deceased husband could have revised his insurance. [47] Master Mason denied imposing a constructive trust in Perry v. Perry, 2009 ABQB 687, 481 A.R. 60 for lack of "clear andspecific" language in the separation agreement.

The deceased’s estate had applied to court to waive his ex-wife's spousal support andinsurance entitlements. The deceased did not specify which insurance he was referring to and the resulting order was silent on insurance.The Insurance Act, R.S.A. 2000, c I-5 required a declaration to change a beneficiary. [48] In Perry, Master Mason cited Richardson Estate v. Mew, 2009 ONCA 403, 96 O.R. (3d) 65 for the principle that a generalrelease in a matrimonial property agreement does not trump a beneficiary's entitlement.

In Richardson the deceased agreed to name hisex-wife as the beneficiary in a matrimonial property agreement. The deceased's, comparatively wealthier, second wife benefited from twoother insurance policies worth approximately $400,000. The Ontario Court of Appeal rejected a claim of unjust enrichment by the secondwife and characterised Roberts as an "extreme case" distinguishable based on the clear intention of the deceased.

4. The Application of the Law to the Facts of this Case 4.1 Unjust Enrichment [ 49 ] In both Becker v. Pettkus and Peter v. Beblow an individual was unjustly enriched due to the unpaid domestic work of their partner over a number of years. In this case, the applicant executrix is the personal representative of the Estate of James Holowa. The respondent Hanrahan is the former wife of Holowa. The issue at this stage is whether Hanrahan was unjustly enriched in receiving the LAPP death benefit. I will address each of the three elements of unjust enrichment identified in Becker v.

Pettkus in turn. 4.1.1 Enrichment of Judith Hanrahan [ 50 ] Here there has been enrichment of Hanrahan. She could hardly have more explicitly waived her right to the LAPP , she did it both in the context of the 2001 agreement during her marriage, and again in the 2003 agreement on separation, where she expressly released any rights arising on death, or out of any Act of the Province of Alberta. [ 51 ] Hanrahan argued that the agreement may not survive the reconciliation, relying on the case of Hulleman v. Hulleman , 1999 ABCA 366 , 2 R.F.L. (5th) 406.

However, this case involves a reconciliation of the same marriage where Hanrahan released her claims to the LAPP as part of a marriage agreement relating to that very marriage, for good and valuable consideration. There is nothing to suggest that the 2001 contract was reconsidered, or she had any issue with it. She offered no evidence about the facts of the reconciliation. [ 52 ] Hanrahan argued that the 2001 agreement was void from inception due to the: "way it purported to deal with the Pension Benefit without recognizing the nature of the asset or the legislative scheme in which it could be realized".

There is no evidence before the Court of what was known or not known about the asset, and no evidence at all from Hanrahan to support that type of suggestion or allegation. Rather, on the face of the 2001 agreement, each party was carefully carving out their major assets, acquired before marriage, and clearly delineating their claims against the other under the MPA . Hanrahan protected substantial assets for herself and Holowa waived his claim to these assets. 4.1.2 Depravation of James Holowa [ 53 ] The second consideration for unjust enrichment requires a depravation of the applicant.

Holowa had over 38 years of pensionable service in the LAPP , and upon his death, his estate received nothing, nor was his designation of beneficiary effective. The denial of any benefit to Holowa in any form after a long term of pensionable service is tantamount to the concept of work without compensation described in Beck v. Pettkus and Peter v. Beblow . [ 54 ] In effect, the entire benefit of that pension goes to a party who released any right to a claim on that asset as a result of the marriage, Holowa's death, and the provisions of any Act of Alberta.

There is a strong nexus between Holowa's depravation and the Pension Benefit in question; the latter is a direct result of Holowa’s years of pensionable service. 4.1.3 Absence of a Juristic Reason [ 55 ] The third consideration is that there is absence of a juristic reason for this to occur. The respondent argued that there is a juristic reason, the operation of the regulations that are set to apply to the LAPP .

At first blush, this argument appears attractive. [ 56 ] However, the operation of the pension plan and regulations specifically provide that the pension partner receives the pension, subject to the terms of any Matrimonial Property Order. Thus, the statutory scheme recognizes the ability of the MPA to influence the position of the pension partner. This is not a pension or statutory scheme that does not allow interference because of matrimonial property rights. The Pension Benefit accrued after a long term of service and cannot be described as a "statutory creation" like tax refunds in Zaidan .

Unlike Spence , where there was a juristic reason for a plaintiff to contribute to a property gifted to the defendant, Holowa intended and took steps to try to insure that the Pension Benefit would go to his children.

[ 57 ] In Roberts , the Court of Appeal addressed an argument that the exact terms of the Insurance Act , R.S.B.C. 1979 c. 200 should decide the case. However, the court held that equity will not permit even

an Act of Parliament to be used as an instrument of fraud and allowed a constructive trust where the strict application of the statutory regime would have dictated another result. [ 58 ] Here, then, the juristic reason relied on by the respondent, is a regime that would not have forced this result, if there was a matrimonial property order, rather than a matrimonial property agreement.

There is no method to change the designated beneficiary after the death of a contributor to the LAPP , and there is no ability of Holowa’s estate to start an action under the MPA , to obtain an order confirming the 2001 and 2003 agreements. [ 59 ] In Becker v.

Pettkus , and subsequent cases, the absence of a statutory scheme directing the equal division of matrimonial property amongst common law spouses did not bar an equitable remedy. [ 60 ] In the circumstances of this case, I do not find the terms of the plan, which recognize the ability of the parties under the MPA to change the requirement that a spouse is a pension partner, to be a juristic reason barring a claim in unjust enrichment.

This is especially so where the parties had two contracts pursuant to the MPA , which did exactly that, but were in contractual form, not a court order. 4.1.4 Conclusion on Unjust Enrichment [ 61 ] The elements of unjust enrichment are satisfied in this case and as a result, any Pension Benefit received by Hanrahan should be impressed with a trust in favour of Holowa. 4.2 Constructive Trust [ 62 ] A claim has also been advanced under constructive trust principles, independent of unjust enrichment.

The applicant argues that under the more expansive view of this remedy in the Soulos case, any funds received by Hanrahan should be impressed with a constructive trust in favour of the applicant. [ 63 ] Although this Court’s finding of unjust enrichment, allows a constructive trust to be imposed, this separate argument should be explored in its own right. This is pursuant to the reasoning found in Soulos after para. 39 , where the majority addressed the availability of constructive trust where property is wrongfully acquired, even in the absence of unjust enrichment.

Expansive language is used in relation to the ability of this equitable remedy to develop: Soulos at para. 43 . [ 64 ] The four conditions that the Supreme Court identified to impose a constructive trust in Soulos related to wrongful conduct. This is not such a case. But the Supreme Court of Canada stressed the constructive trust has to be interpreted with the flexibility of equity in mind. This is not an agency case, it is not a case which looks at the integrity of institutions dependent on trust-like relationships.

It arises as Hanrahan holds a benefit, directly from an asset to which she waived her entire interest, vis-à-vis her spouse. She obtains this Pension Benefit by operation of the terms of and regulations pertaining to the LAPP , because she is still married, although separated from Holowa.

Holowa's estate (or his beneficiaries) would receive no benefit from this asset, which arises from his 38 plus years of pensionable service. [ 65 ] Surely it would be against good conscience for Hanrahan to retain this benefit, when there is no evidence to show any equitable basis for her to receive the benefit, or be entitled to it in contravention of the two matrimonial contracts between the parties. She specifically waived her right to the LAPP , it was a specific contractual agreement, during the marriage, affirmed again on separation.

Good conscience is to address not only fairness between the parties before the court, but the larger public concern of the courts, to maintain the integrity of institutions which the courts of equity supervise. Surely, the integrity of a system where parties can decide and regulate their rights contractually under the MPA and to uphold those intentions is a system in which society has an interest.

[ 66 ] To allow the funds to remain in the hands of Hanrahan would be to allow a breach of two agreements of the parties after the death of one party to those agreements.

There are no factors that would mitigate against imposition of a constructive trust, for example, that Hanrahan was: in need of funds; left in an unfair position as a result of the separation; unable to support herself; or that she had contributed to the pension, or been part of a marriage that lasted over a substantial period of its accrual. [ 67 ] The constructive trust cases cited by the parties turn on the sufficiency and specificity of a person's waiver of rights to a benefit.

In Roberts and Hemmerling the release of a former spouses' right to a specific benefit in a matrimonial property agreement was found sufficient. Conversely, in Baker and Richardson more general releases to all present and future claims were insufficient. In this case, the parties signed two agreements whereby Hanrahan specifically released her rights to the LAPP pension and to any rights accruing to her by operation of law after Holowa’s death.

Holowa completed beneficiary designation forms with the City of Calgary and wrote to APS specifically to redirect his LAPP Pension Benefit to his children. [ 68 ] Counsel for the respondent argued that the benefit that Hanrahan received was not property of Holowa, but rather she was the holder of the interest in the survivor benefit of the LAPP . It was argued the survivor benefit was not matrimonial property, and it is quite different than RRSP's or life insurance which are property of the holder. It was argued that only Hanrahan could divest herself of this unique asset.

However, the analogy fails when one considers the LAPP scheme clearly anticipated that one could divest oneself of the entitlement to be a pension partner under the terms of the MPA . The issue here is that the divestment was under a contract, not under an order. [ 69 ] In my view, that the divestiture of entitlement was effectively done by contract, but not by order, is exactly the type of situation that equity is designed to address, and a constructive trust is a concept that can be used to effect that equitable result. 5.

Conclusion [ 70 ] The APS shall pay the Pension Benefit in accordance with the LAPP rules to Hanrahan, as the pension partner of the deceased. That payment shall be made in care of her solicitors. The total benefit shall be impressed with a constructive trust, in favour of the estate of Holowa. The funds shall be paid by the solicitors of Hanrahan to the solicitors of the applicant, to be dealt with by the executrix in her capacity as executrix of the estate of Holowa. [ 71 ] Any party shall be entitled to address costs, if they cannot be dealt with by consent. Heard on the 16 th day of November, 2010.

Dated at the City of Calgary, Alberta this 18 th day of January, 2011. R.E. Nation J.C.Q.B.A.

Appearances: Norman D. Anderson Shea Nerland Calnan LLP for the Applicant Michele H. Hollins, Q.C. Dunphy Best Blocksom LLP for the Respondent, Judith Stell-Holowa Gregory A. Harding, Q.C. Field LLP for the Respondent, Alberta Pensions Services Corporation