Court of Appeal for Ontario

Date: 20220218 Docket: C68475

Strathy C.J.O., Roberts and Sossin JJ.A.

Between

Tony Corvello and Gino Colucci Plaintiffs (Respondents)

and

Arthur Colucci Defendant (Appellant)

Counsel: Bradley Phillips, for the appellant Fredrick R. Schumann, for the respondents

Heard: February 15, 2022 by videoconference

On appeal from the judgment of Justice Tracey Nieckarz of the Superior Court of Justice, dated June 11, 2020, with reasons reported at 2020 ONSC 3679.

Reasons for Decision

[1] The appellant, Arthur Colucci, appeals the judgment granting the motion brought by the respondents, Tony Corvello and Gino Colucci, for a declaration that the appellant holds a land use permit in trust for himself and the respondents as beneficial owners.

[2] At the conclusion of the appellant’s submissions, we dismissed the appeal with reasons to follow. These are those reasons.

[3] Arthur and Gino Colucci are brothers. Tony Corvello is Arthur’s brother-in-law. At issue is the ownership of a land use permit which was obtained from the Ontario government in 1974 (“the permit”). The permit allows the holders to build on and use the property for recreational purposes. The permit does not confer any rights of ownership over the land or any interest in the land to which it applies.

[4] Since obtaining the permit, the parties and their families had harmoniously enjoyed the use of a recreational property on Lac Seul in the District of Kenora, Ontario (“the property”). As the trial judge noted, the parties described the property as a place “where their families gathered to build, work, relax and enjoy each other’s company”. Sadly, these “happier times” came to an end in 2016 when Arthur took the position that the permit belonged to him alone and he locked out the respondents and their families from the property. Litigation ensued.

[5] After a meticulous review of the evidence from the three-day trial of this matter, the trial judge determined that Arthur held the permit in trust for himself and the respondents as beneficial owners. She declined to award the general damages sought by the respondents.

[6] Arthur raises the following single issue on appeal: Did the trial judge err in law and in fact in determining that an undocumented trust agreement existed when the alleged settlor provided an alternate explanation as to what his intention was?

[7] It is well established that the creation of a valid trust requires “three essential characteristics” or three certainties: certainty of intention to create a trust; certainty of subject matter; and certainty of objects: Byers v. Foley (1993), 16 O.R. (3d) 641 (Gen. Div.), at para. 13, citing D.M.W. Waters, Law of Trusts in Canada, 2nd ed. (Toronto: Carswell, 1984), at p. 107.

[8] Arthur does not dispute that there was certainty of subject matter and object, but he submits that there was no certainty of intention to create a trust. He bases his submission on the argument that, in the absence of documentation evidencing a trust agreement among the parties and the fact that the permit was in his name alone, his evidence that he never intended to create a trust and that he alone owned the permit should have been given primary consideration and accepted by the trial judge. He argues that the trial judge’s analysis was flawed because she determined Arthur’s intention as settlor of the trust through the lens of the other parties’ intentions and therefore misapprehended the evidence supporting Arthur’s intention not to create a trust.

[9] We do not agree.

[10] It was open to the trial judge to accept some, all, or none of any witness’s evidence. Certainly, she was not obliged to accept all or any of Arthur’s evidence. Nor was the absence of a formal trust agreement or the fact that the permit was in Arthur’s name alone determinative. Rather, to ascertain certainty of intention in the absence of a written trust agreement, the trial judge was required to look at “the surrounding circumstances and the evidence as to what the parties intended, as to what was actually agreed, and as to how the parties conducted themselves”: Byers, at para. 15. She was also required to make findings based on her assessment of the credibility and reliability of the evidence presented at trial. Findings open to the judge based on the evidentiary record and credibility findings attract deference from this court: Chechui v. Nieman, 2017 ONCA 669, 136 O.R. (3d) 705, at para. 33.

[11] We disagree that the focus of the trial judge’s inquiry should have been on Arthur’s subjective intentions. Rather, she was required to apply an objective standard to ascertain the certainty of intention not just from Arthur’s own acts, but also from the acts of the other parties: Ontario (Training, Colleges and Universities) v. Two Feathers Forest Products LP, 2013 ONCA 598, 368 D.L.R. (4th) 714, at para. 24. Nor did she misapprehend the evidence. The trial judge was not limited to considering Arthur’s denials, but was entitled to consider the “evidence as a whole” from which she could infer Arthur’s intention and the common intention of the parties to hold the permit in trust for himself and the respondents: Byers, at para. 26.

[12] This is precisely what the trial judge did. The only three witnesses at trial were Arthur, Gino and Tony. The trial judge reviewed the evidence of each at some length. She gave detailed reasons for her acceptance of Gino and Tony’s evidence and her conclusion that “from the beginning it was intended that they were ‘partners’ in and ‘co-owners’ of the [permit].” She made comprehensive findings based on a thorough review of all the evidence. The evidence supported her conclusion that Arthur held the permit in trust for himself and the respondents as beneficial owners. Deference is owed to her findings of fact.

[13] The trial judge’s findings support the existence of a trust. She found that the permit was in Arthur’s name because the government at the time of issuance would not permit it to be put into more than one name. She also found that Arthur, Gino and Tony had all contributed to the property, that all costs of the property were shared three ways, and the three of them discussed and agreed on any improvements to the property. Once it was permitted by the government to do so, they agreed to put the permit in their three names and Arthur wrote to the government asking for this change. All three referred to themselves as owners of the property, are named insureds on the insurance for the property, and had use of the property without asking Arthur for permission. Until 2016, Arthur never asserted ownership of the property to the exclusion of Tony and Gino.

[14] All the trial judge’s findings were open to her. Her findings support her conclusion that Arthur held the permit in trust for himself, Tony and Gino. Arthur has not persuaded us that the trial judge made any error in her findings and analysis. We see no basis to intervene.

Disposition

[15] For these reasons, we dismissed the appeal.

[16] The respondents are entitled to their costs from the appellant in the agreed upon amount of $6,000, inclusive of disbursements and applicable taxes.

“G.R. Strathy C.J.O.”

“L.B. Roberts J.A.”

“L. Sossin J.A.”