Remedial Tool or Instrument of Reform: Resulting Trusts, the Family Law Act, and the Launchbury Decision

• Author: Julie K. Hannaford
• Pages: 47-70

Remedial Tool

or

Instrument

of

Reform:

Resulting

Trusts,

the

Family

Law

Act,

and the

Launchbury

Decision

Julie

K.

Hannaford*

To

the

memory

of

Professor James

G.

McLeod

"II

miglior

fabbro"

This paper

is

inspired

by the

invaluable case commentaries

and

aca-

demic writings

of the

late Professor James

G.

McLeod.

The

annotation

to the

Ontario Court

of

Appeal's

decision

in

Launchbury

v.

Launchbury

is

one of the

last annotations Professor McLeod wrote

before

his

untimely

passing.

It is as

thoughtful

as it is

incisive,

as

critically analytical

as it

is

philosophical.

It

stands

as an

enduring tribute

to the

meaning

and

respect that Professor McLeod gave

to the

endeavour

of

lawyers

and

judges

who

strive

for

justice

and

equality

in the

stormy

and

inexplicable

vortex

of the

broken

family.

And it is for

this reason that

I

borrow

from

the

tribute paid

by

T.S.

Eliot

to

Ezra

Pound

and

dedicate this paper.

A.

INTRODUCTION

Had the

facts

in

Launchbury

v.

Launchbury1

never come before

the

trial

or

appellate courts

of

Ontario,

there

is no

doubt

but

that

a

thoughtful legal

*

Julie Hannaford engages

in

trial

and

appellate

work,

is

co-chair

of the

University

of

Toronto

Tribunal,

and is

adjunct

faculty

at the

University

of

Toronto.

i.

Launchbury

v.

Launchbury

(2005),

12

R.F.L.

(6th) 393, [2005] O.J.

No

1332 (C.A.),

aff'g

[2001]

O.J.

No.

1516

(S.C.J.)

[Launchbury].

47

48

JULIE

K.

HANNAFORD

analyst would have invented them

to

illustrate

any

number

of

points

of

family

law.

The

case

is

important,

not

just because

it

highlights

the op-

eration

of

section

14 of the

Family

Law

Act,2

but

because

the

underlying

facts

are

emblematic

of the

complex financial structure

of the

modern

matrimonial relationship

—

and the

challenges presented

to

lawyers

and

courts when

the

matrimonial knot

is

untied

at

this turn

of the

twenty-

first

century.

A

summary

of the

facts

is

provided

by Van

Melle

J. in her

trial decision

as

follows:

Wendy

and

Ronald

Launchbury

were married

on

March

22,

1980.

It

was a first

marriage

for her and a

third

marriage

for

him. During

the

marriage

the

wife

was

with

Bell

Canada

(later

she

joined

Bell

Mobil-

ity)

and the

husband

was a

Constable with

the

Metropolitan Toronto

Police

Force.

In

1989 they purchased

a

house

—

R.R.

#5,

Orangeville,

which

was put in Ms.

Launchbury's name alone.

At the

date

of

separa-

tion,

the

house

was

worth

$450,000.00

and

when

Ms.

Launchbury sold

it

some

two

years

later

(November

5,1999)

it was

sold

for

$586,000.00.

In

1993

Mr.

Launchbury's mother died

and

left

him

$86,000.00.

The

money

went

into

an

account

in Mr.

Launchbury's name alone

and was

then

transferred

to a

stock

portfolio

held

jointly

with

Ms.

Launchbury.

Mr.

Launchbury

retired

from

the

police

force

in

1996;

Ms.

Launchbury

took

a

retirement package

from

Bell

Mobility

in

1997.

The

plan

was

that they

would

buy a Pet

Valu

franchise which they would operate together.

The Pet

Valu

franchise

was

purchased

in

April

of

1997

(to

close

in

June

of

1997). While negotiating

the

purchase

of the

franchise,

Mr.

Launch-

bury

became

romantically

involved with

the

vendor,

a

woman named

Spring

Lemmon.3

In

essence,

the

case reminds

us

that,

because

of

section

14 of the

Fam-

ily

Law

Act,

title does

not

finally

dispose

of the

question

of

ownership:

the

spouse

who is

holding title

to a

property transferred

from

the

other

spouse

will

be put to the

proof

that

such

title

is

held

"free

and

clear."

Put

conversely,

she may be

obliged

to

share

or

transfer over

the

property

in

question

if she

cannot

positively

establish

that

she

obtained

it as a

gift.

In

practical terms,

the

case leaves

us

with

the

obligation

to

untangle

the

case

law

related

to the

"fugitive search

for

intention"

in the

context

of

resulting trusts

and

presumptions

of

advancement. What

do we

make

of

the

myriad

of

cases relating

to the

"intention

to

avoid creditors"?

Are

we

obliged

to

establish

that

there actually were creditors

or

"creditors

in

Family

Law

Act,

R.S.0.1990,

c.

F_3

[FLA].

Launchbury,

supra

note

i

at

para,

i

(S.C.J.).