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Ex-spouses who sign separation agreements do not normally owe fiduciary or other equitable obligations to each other beyond their contractual commitments, says the British Columbia Court of Appeal.

In reversing a trial judgment which appeared to relax the established requirements for a “good conscience” remedial constructive trust, Justices Nicole Garson, David Frankel and Elizabeth Bennett ruled Sept. 8 that respondent plaintiff Julie Ladner’s remedial constructive trust claim against her ex-husband’s estate was not viable, notwithstanding that he breached his 1987 contractual obligation to buy life insurance to secure his monthly spousal support obligation of $2,340.

Because the ex-spouses’ duties to each other under their separation agreement were not fiduciary or trust-like, one of the four conditions for the imposition of a good conscience constructive trust (as articulated by Soulos v. Korkontzilas, [1997] S.C.J. No.

52) was not fulfilled, Justice Garson explained.

“I have found no authority for the proposition that continuing contractual obligations in a separation agreement are fiduciary as well as contractual in nature,” she wrote.

Ladner’s ex-husband’s estate is insolvent, but he purchased several life insurance policies which he made payable to his estate. To get priority over the estate’s other creditors, Ladner claimed a constructive trust over the insurance proceeds from those policies.

Both the Court of Appeal and
the trial judge rejected Ladner’s
contention that her ex-husband
undertook an equitable duty to
act in her best interests when he
pledged to life insure his support
obligation to her. But the trial
judge nevertheless held that Lad-
ner had a viable claim for a
remedial good conscience con-
structive trust. He relied on Rob-
erts v. Martindale, [1998] B.C.J.
No. 1509—in which the B.C.
Court of Appeal was prepared to
impose a good conscience con-
structive trust over insurance
proceeds — even though there
was no breach of an equitable
duty by the named beneficiary ex-
spouse in that case, only a breach
of contract.

However, in holding that Lad-
ner could not meet the require-
ments to establish a good con-
science constructive trust, Justice
Garson distinguished Roberts.
The issue arose in the context of
Ladner’s negligence action
against her former lawyer Harvey
Wolfson, and his then-firm Gana-
pathi Ashcroft and Co. of Van-
couver. While the trial judge
agreed with Ladner that her ex-
lawyer should have pursued a
constructive trust claim over the
insurance proceeds on her behalf,
the Court of Appeal allowed the

beyond contract

See Ladner Page 28

ALISTAIR EAGLE FOR THE LAWYERS WEEKLY

Bill MacLeod of MacLeod & Co. in Vancouver acted for the successful appellant in a B.C. Court of Appeal ruling on ‘good conscience’ constructive trusts.

THE LAWYERS WEEKLY

Vol. 22, No. 27 NEWS FOR THE LEGAL PROFESSION December 6, 2002

THE LAWYERS WEEKLY

VOL. 22, NO. 27 NEWS FOR THE LEGAL PROFESSION DECEMBER 6, 2002

PAGE 9

PAGE 14

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PAGE 22

Court finds surrogate mom is not child’s ‘mother’
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PAGE 25

CRISTIN SCHMITZ

For the first time in Saskatchewan, a court has issued a “ declaration of non-parentage” stating that a woman who gave birth to a same-sex couple’s child is not its mother.

Noting that such declarations
have been made by Ontario judges
in similar cases, Saskatchewan
Queen’s Bench Justice Jacelyn Ann
Ryan-Froslie granted the request
of “John” and “Bill,” (supported by
their “gestational carrier” “Mary”)
to declare, under s. 43( 3) of The
Children’s Law Act, 1997 (CLA)
that Mary is not two-year-old
Sarah’s “mother.”
At press time the applicants’
counsel, Rich Gabruch of Saska-
toon, Sask., could not be reached
for comment.

Mary gave birth to Sarah after
she signed a gestational carrier
agreement with John and Bill
and was implanted with the
embryo created from John’s
sperm and an anonymous donor’s
egg. Sarah has always lived with
her two dads, who have been her
legal parents since birth, along
with Mary.

“In this case, I am satisfied on
the balance of probabilities that
Mary, the gestational carrier, is
not Sarah’s biological mother,”
Justice Ryan-Froslie wrote. “I am
also satisfied that neither the
applicants nor Mary ever intended
that Mary would assume any par-
ental rights or obligations with
respect to Sarah. As such, a dec-
laration that Mary is not Sarah’s
mother is warranted.”
Justice Ryan-Froslie also
ordered, under s. 29(1) of The Vital
Statistics Act, 2009 (VSA) that the
Registrar of Vital Statistics amend
Sarah’s registration of live birth to
remove Mary’s designation as
See Mother Page 27
THE LAWYERS WEEKLY

VOL. 22, NO. 27 NEWS FOR THE LEGAL PROFESSION DECEMBER 6, 2002

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