BNSF Railway Company v. Teck Metals Ltd.

BNSF Railway Company v. Teck Metals Ltd.

The Court held that the substantive (institutional) constructive trust has not been expunged from Canadian law and may be recognized where good conscience requires; although all constructive trusts require proof of a proprietary nexus and inadequacy of monetary relief, those facts need not be established at the...

Source-derived case information.

Citation
2016 BCCA 350
Parties
Appellant (plaintiff): BNSF Railway Company; Respondent (defendant): Teck Metals Ltd.; Respondent (defendant): 6317057 Canada Ltd.; Respondent (defendant): Canadian National Railway Company
Court
British Columbia Court of Appeal
Jurisdiction
Canada
Judgment Date
15 August 2016
Procedural Posture
Civil Appeal From Supreme Court of British Columbia Concerning Restitution, Unjust Enrichment and Constructive Trust Pleadings / Appeal to Court of Appeal — Judgment Allowing Appeal and Permitting Amendment of Pleadings
Outcome
Appeal allowed; both orders below set aside; plaintiff permitted to amend pleadings to clarify constructive trust claim
Legal Topics
Constructive Trust, Substantive Vs Remedial Trust, Unjust Enrichment, Money Had and Received, Limitation Periods (limitation Act S.3(3)), Tracing, Proprietary Remedy, Pleadings/rule 9 5(1)(a)
Source Language
english
Civil Law Equity Restitution Trusts Limitation Law Procedural Law (pleading/striking) Constructive Trust Substantive Vs Remedial Trust +6 more

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Parties

BNSF Railway Company

Appellant (plaintiff)

Teck Metals Ltd.

Respondent (defendant)

6317057 Canada Ltd.

Respondent (defendant)

Canadian National Railway Company

Respondent (defendant)

Procedural Posture

Civil Appeal From Supreme Court of British Columbia Concerning Restitution, Unjust Enrichment and Constructive Trust Pleadings / Appeal to Court of Appeal — Judgment Allowing Appeal and Permitting Amendment of Pleadings

Legal Issues

  1. 1 Whether the substantive (institutional) constructive trust remains available in Canadian law or has been supplanted by the remedial constructive trust
  2. 2 Whether a pleading asserting a constructive trust is bound to fail absent pleaded proprietary nexus and inadequacy of monetary damages at the pleading stage
  3. 3 Whether monies paid by mistake can give rise to a constructive trust and be traced into defendant property

Ratio Decidendi

The Court held that the substantive (institutional) constructive trust has not been expunged from Canadian law and may be recognized where good conscience requires; although all constructive trusts require proof of a proprietary nexus and inadequacy of monetary relief, those facts need not be established at the pleading stage so long as the claim is arguable and capable of being established on evidence; it is not necessary to plead a separate requirement of a "serious breach" to invoke s.3(3) of the Limitation Act; accordingly the chambers orders striking constructive trust references and denying amendment were set aside and BNSF permitted to amend.

Court Disposition

Appeal allowed; both orders below set aside; plaintiff permitted to amend pleadings to clarify constructive trust claim

Orders

  • Permit plaintiff to amend its Amended Notice of Civil Claim to plead substantively the constructive trust, to explain why monetary relief may be inadequate and to plead identifiable property or, alternatively, to reserve tracing rights