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PAGE 6 COMMENT Law Times Group Publisher ....... Karen Lorimer Editorial Director ....... Gail J. Cohen Editor .................. Glenn Kauth Intern .................. Matt Powell Staff Writer ............. Robert Todd Copy Editor ......... Heather Gardiner CaseLaw Editor ...... Jennifer Wright Art Director .......... Alicia Adamson Account Co-ordinator ...... Ryan Rogers Electronic Production Specialist ............. Derek Welford Advertising Sales .... Kimberlee Pascoe . . . . . . . . . . . . . . . . . . . . . . . . . . Kathy Liotta Sales Co-ordinator ......... Sandy Shutt ©Law Times Inc. 2010 All rights reserved. No part of this publication may be reprinted or stored in a retrieval system without written permission. The opinions expressed in articles are not necessarily those of the publisher. Information presented is compiled from sources believed to be accurate, however, the publisher assumes no responsibility for errors or omissions. Law Times Inc. disclaims any warranty as to the accuracy, completeness or currency of the contents of this publication and disclaims all liability in respect of the results of any action taken or not taken in reliance upon information in this publication. Editorial Obiter Banning fast-food chains: at least towns have a say L ocal politicians in Tofino, B.C., raised eyebrows recently when they passed a motion directing municipal staff to prepare a report on banning new fast-food franchises and chain restaurants. The idea is to preserve the popular Vancouver Island surf town's image by limiting the presence of corporate eat- eries beyond those already there. Lo- cal councillors feel they have the right to do so under its official plan, which emphasizes developments that reflect Tofino's character. Of course, there are concerns about whether such a move would survive a court challenge. But it's good to see a municipality raising an important issue about the rights of town councils to determine their own destiny and shape their communities in a way they feel is right over the objections of corporate interests. It's a question that has come up in Ontario in recent years with poli- ticians in places like Owen Sound and Guelph saying no to Wal-Mart. In Guelph, community and lo- cal council opposition to the store prompted a long battle that ended with a compromise allowing Wal-Mart to build there in exchange for mitigat- ing measures that protected a neigh- bouring Jesuit retreat. More recently, Owen Sound councillors blocked the retailer's bid to expand its presence with a so-called Supercentre based on the need to maintain the viability of the downtown, in particular by limit- ing the impact on an existing grocery store there. In that case, the city's offi- cial plan emphasizing downtown pres- ervation bolstered its arguments. Fortunately, changes to Ontario's Planning Act now give greater weight to municipal decisions, a fact that makes it harder for companies to challenge them before the Ontario Municipal Board. That's a good thing because communities should have substantial control over how they de- velop. Already, we've seen a similar story play out in Toronto, where the OMB turned down a bid by Smart- Centres to build a big-box retail com- plex in the Leslieville neighbourhood. The city had argued that allowing the development would disrupt its plans to spur the growth of film and media jobs in the area. It's good, then, that Ontario law has now provided for a better balance between community and business in- terests. The Tofino case, meanwhile, is an interesting one. Whether a ban will pass legal muster depends on how the municipality frames it. An outright prohibition, for example, might fail the test. Alternatives include exclud- ing chain restaurants from particularly sensitive areas of the community that merit preservation rather than pro- scribing them altogether. At the same time, businesses could at least have the chance to demonstrate that they could build their developments in a way that adheres to Tofino's character. The case, therefore, could shape up as an important legal development if Tofino comes down heavily on chain restaurants. In the meantime, it's posi- tive that in Ontario at least, towns and cities now have more power to deter- mine their future. — Glenn Kauth C Surprising judgment on constructive trust claim Family onstructive trust issues come up often in family law. But while the case law often doesn't consider the test in any great depth anymore, the B.C. Court of Appeal had just such an opportunity recently by clarifying or at the very least giv- ing us a much-needed reminder of how to assess the criteria for "absence of a juristic reason" with respect to the enrichment of one party by another. In Harraway v. Harraway, Colinda and Matthew Harraway received approximately $30,000 from his mother, Constance Fournier, to purchase a farm that became their matrimonial home. A year later, Fournier received a large personal injury settlement and paid down a further $65,000 on their mort- gage. At that time, however, she was put on title to the property, sharing a one-third interest with each spouse, presumably to se- cure her loan or investment as she later argued it was. Although the facts aren't clear, it appears Fournier advanced approximately $150,000 in total to the cou- ple with respect to the farm property. In addition to be- ing on the title, Fournier had both spouses sign promissory notes. Eventually, the parties separated, which brings us to the constructive trust claim. Following the separation, arrears mortgage prompted foreclosure proceedings on the farm property. Fournier came to the rescue and paid off all of the arrears. She then had her- self added to the matrimonial proceedings, seeking a con- structive trust interest in the farm property. Her son sup- ported her claim. What is interesting in how this all played out is the fact that there were several promis- sory notes in favour of Fourni- er, that she was already on title with a one-third interest, and that her son actually claimed Law By Marta Siemiarczuk $95,000 as a date-of-separa- tion debt to his mother on his financial statement related to the funds she had advanced to him and his wife. Notwithstanding the prom- issory notes, the trial judge found the spouses were unjustly enriched without any juristic reason for the enrichment be- cause the lack of specificity of the terms in the purported loan documents made it impossible to enforce them. As a result, the trial judge awarded Fournier an 80-per-cent interest in the farm as a constructive trust remedy. Presumably, this was based on a calculation of the equity in the home versus how much Fourni- er had actually put into it. www.lawtimesnews.com The appeal court swiftly overturned the remedy, al- though it confirmed there was in fact an unjust enrichment. Writing for a unanimous court, Chief Justice Lance Finch proceeded to review the analysis to take once a judge determines an enrichment and a corresponding depriva- tion have occurred. In order to make the prima facie case, litigants must show that the enrichment didn't occur as a result of a contract, a disposi- tion of law, a donative intent or another valid common law, eq- uitable or statutory obligation. The evidence seemed over- whelming that the funds ad- vanced were loans and that all the parties worked on that as- sumption. The appeal court confirmed, however, that not- withstanding that intention, there was an unjust enrichment because the loan documents were too vague to be enforce- able. Instead of maintaining march 22, 2010 • Law Times Law Times Inc. 240 Edward Street, Aurora, ON • L4G 3S9 Tel: 905-841-6481 • Fax: 905-727-0017 www.lawtimesnews.com President: Stuart J. Morrison Publications Mail Agreement Number 40762529 • ISSN 0847-5083 Law Times is published 40 times a year by Law Times Inc. 240 Edward St., Aurora, Ont. 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Please recycle this newspaper. the constructive trust interest of 80 per cent, however, the court gave Fournier what appeared to be a remedy on the basis of contractual obligations, grant- ing her judgment for $154,000 and going as far as removing her from the title to the property. While the analysis of con- structive trust claims was very useful, at the end of the day, the result seems a bit surprising given all of the facts. It seems Fournier may have been better off not bringing her construc- tive trust claim but instead re- maining as a one-third interest holder in the property as now she has a judgment with no security to ensure enforcement of its terms. LT Marta Siemiarczuk is a lawyer practising family law litigation and collaborative family law at Kathleen Chapman & Associ- ates in London, Ont. She can be reached at msiemiarczuk@ gmail.com.