COURT FILE NO.: 18-66024 DATE: 2020-01-21

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

SERBIAN LEAGUE OF CANADA Applicant

Jordan Diacur and Kylie Weber, Counsel for the Applicant

• and -

MIHALO STOJANOVICH, JOVAN STETICH and MILTON BAJCETICH Respondents

Derek Fazakas, Counsel for the Respondents, through their representatives, Radmila Jokic, George Bajectich, Paul Bajecitch

HEARD: November 29, 2019

JUDGMENT The Honourable Mr. Justice H. S. Arrell

Introduction

[1] The applicant brings this application for a declaration that it is the beneficial owner of property located at 335 Britannia Avenue in Hamilton, (the “Britannia property”).

[2] The respondents seek to have the application dismissed with the result that their respective estates would be the owners of the property.

Facts

[3] The applicant is a charitable organization incorporated in 1952.

[4] The respondents are former officers of the applicant.

[5] The applicant initially owned a building located at 175 Barons Avenue in Hamilton. It sold that property, and in December of 1964 moved to the Britannia property.

[6] The three respondents, who are now deceased and represented by their estates, purchased the Britannia property from Ms. Mary Gaik in 1964 for the sum of $18,000 “in trust” as stated in the deed. The words “in trust” appear in the deed next to the names of the three respondents. There is nothing further in the deed indicating to whom or to what the words “in trust” refer. The deed does not contain the signatures of the respondents but only the signature of the vendor, Mary Gaik.

[7] It is alleged by the applicant that it paid the mortgage, and that the mortgage was paid in full on December 9, 1974. Despite the applicant alleging that the mortgage was paid in full in 1974, no discharge of the mortgage was ever filed on the title. The only evidence of the mortgage payments being made by the applicant is a newspaper article published by the applicant dated December 9, 1974 announcing that the applicant was now “debt free and all property had been paid in full.” There was no mention of the respondents in the article and supposedly in March 1975 the applicant held a ceremonial burning of the mortgage at its semi-annual meeting which was also reported in its newspaper. At that time, thanks were given to members of the applicant who donated to help pay off the debt.

[8] The City of Hamilton municipal taxes were allegedly paid by the applicant and indeed the Hamilton property tax roll indicates the owner to be the applicant.

[9] The applicant also says it paid all utilities related to the property.

[10] The Serbian newspaper, called The Canadian Srbobran, was published out of the offices located at the Britannia property and the masthead of that newspaper reflected the address of the applicant as being located at the Britannia property.

[11] Upon moving into the property, the applicant paid to build an addition on the back of the building to accommodate its printing equipment for its newspaper. The printing equipment was also owned by the applicant.

[12] The building had some upstairs apartments and the leases respecting these apartments were entered into between the tenants and the applicant. Rent was paid to the applicant, not the respondents.

[13] A computer printing system was purchased by the applicant in 1985 and the print shop was no longer needed and was renovated into another apartment. These renovations were paid for by the applicant.

[14] It is not disputed that all decisions affecting the property were voted on by the executive of the applicant and not by the respondents personally. Any repairs to the building were arranged through the applicant and allegedly paid for by the applicant.

[15] The respondent Bajcetich was the president of the applicant for almost 50 years. He died in 1994. The respondent Stetich died in 1997, and the respondent Stojanovich died in 1965. The evidence would indicate that upon their respective deaths, no family members or representatives of their respective estates came forward to claim any interest in the property. Also significant is the fact that there is no evidence that the surviving respondents, after the death of one or both of the others, came forward to indicate ownership.

[16] In 2017, the families of the respondents were contacted as the original mortgage was still outstanding and the applicant had decided to sell the building. It was at this point that the applicant realized the respondents were still on title as the owners. It was also at this point, upon being contacted, that the respondents’ families claimed an interest in the property.

[17] Upon consent, the property was sold on January 25, 2019, and funds were paid into court where they remain pending my decision.

[18] The applicant takes the position that a bare trust was established in 1964 in favor of the applicant. At the opening of this application, the applicant argued in the alternative, that if the court did not agree that there was a bare trust, then a constructive trust in favor of the applicant should be declared due to an alleged unjust enrichment of the respondents. This alternative position was never pleaded and initially counsel of the respondents took objection to this alternative position being argued. After further discussion, counsel for the respondents indicated that he wished the matter to be dealt with in total rather than granting an adjournment to amend the pleadings regarding this alternative claim.

[19] It is agreed by counsel that there are no documents whatsoever indicating a trust other than the deed.

[20] When the property was purchased from Mary Gaik in December of 1964 for $18,000, there was a down payment of $3,000, with a vendor take back mortgage on the balance of $15,000. There is no evidence before me as to who wrote the words “in trust” in the deed, or on whose instructions.

[21] There is no evidence in this record by anyone in any affidavit regarding the events surrounding the purchase in 1964 and there is no evidence as to the intentions of the respondents with regards to this property. Furthermore, there is no evidence before me that the respondents were ever called or referred to as trustees during the entire 53 years that the applicant occupied the property.

[22] Radmila Jokic, who is the daughter of the respondent Stetich, and is one of the estate trustees in this litigation, has sworn an affidavit that she has “a childhood recollection” that her father told her that the three respondents purchased the property for the purposes of providing the applicant organization with a place to print and distribute its newspaper.

[23] There is no direct evidence in this record that the mortgage of $15,000 was paid to Mary Gaik by the applicant, other than the anonymous newspaper article. It is difficult for this court to reconcile that the mortgage was paid in full by the applicant, when the record is clear that when the property was sold on January 25, 2019, a payment of $7,500 was made out of the closing funds to the estate of Mary Gaik respecting the outstanding amount on the mortgage.

[24] Likewise, the evidence of the applicant regarding all of the expenses it paid over the years, is weak, with one municipal tax bill but no evidence of payment, one Union Gas bill, one electricity bill and a bill for some emergency roof work but no evidence of payment. This court would have thought that the applicant would have had more extensive records available than what has been produced in this record.

[25] This is especially so considering that the current president, past president, and treasurer of the applicant have filed affidavits. Indeed, the treasurer has been treasurer since 2000 and he states in his affidavit that it is “my responsibility to keep financial records for the (applicant). I make records of all members’ donations and other income and I arrange for the payment of all expenses.” None of those records have been filed before me. What is before me is mostly anecdotal evidence when the applicant’s witnesses clearly had access to all of the applicant’s records.

[26] The families of the respondents agreed they did not know that their fathers had an interest in this property until they were approached by the applicant when attempting to sell the property. The respondents’ respective wills simply left the residue of their respective estates to beneficiaries, which they claim includes this property as investments their respective fathers had made some 53 years ago.

Position of the Applicant

[27] The applicant states that a bare trust was established in 1964 with regards to this property. It argues that the settlor of the trust was Mary Gaik with the respondents being the trustees and the applicant being the trust beneficiary. The applicant argues that the requirements of the trust are set out clearly in the record before the court.

[28] The applicant further argues that s. 9 of the Statute of Frauds, R.S.O. 1990, c. S.19, which states creations of trusts must be in writing, was satisfied when Mary Gaik signed the deed as the owner of the property and was thus the “party who is by law enabled to declare such a trust.”

[29] In the alternative, the applicant argues that the respondents will be unjustly enriched if they are found to be the owners of this property, and that it has proved the three elements required for a claim for unjust enrichment.

[30] The applicant further argues that since the respondents would be unjustly enriched, a constructive trust should thus be imposed on the entire property for the benefit of the applicant. Since the property has now been sold, the trust property encompasses the sale proceeds currently held in court.

Position of the Respondent

[31] The respondents argue that there are not sufficient grounds to find the existence of an express trust in favor of the applicant as the only document in support of such a claim is the deed where the words “in trust” appear. They argue that the respondents cannot be the settlors under the Statute of Frauds as they did not sign any document, never mind the deed. That leaves Mary Gaik as the only potential settlor and there is nothing in the record to indicate what her intentions were whatsoever.

[32] The respondents further argue that there is no certainty of objects or beneficiaries. Indeed, the respondents argue there are other possible beneficiaries and cite the possibility that Mary Gaik who signed the deed was intending to create a resulting trust as security for her vendor take-back mortgage. Another possible explanation, argue the respondents, would be that the word “in trust” may have referred to a mutual agreement among the three owners to hold the property in trust for their respective families in the event that one of them died. The deed does not indicate whether the respondents owned the property as tenants in common or as joint tenants.

[33] The respondents also argue that there are insufficient grounds for the court to impose a constructive trust on the basis of an unjust enrichment in favor of the applicant.

[34] Finally, the respondents argue that the applicant had free use of the property for over 50 years including the collection of rent from residential tenants and should not, 53 years later, be able to claim the property as its own when it was purchased through the generosity of the respondents.

Analysis

Express Trust Claim:

[35] It is generally accepted that a bare trust assumes two things: (1) that the beneficiary or beneficiaries are able to call for the property on demand; and (2) either that no active duties were ever required by the settlor or that the active duties have been preformed: Waters, Donovan W. M. (ed), Waters’ Law of Trusts in Canada, 4th ed. (Toronto: Thomson Reuters Canada Limited., 2012) at pg. 34.

[36] The record would appear to indicate that the respondents, being the trustees, had no responsibility regarding this property, other than their duties as part of the executive of the applicant. The respondents or trustees were certainly liable to Mary Gaik for the mortgage. The record indicates that there is no evidence the respondents paid the mortgage, while there is some weak evidence that this mortgage was indeed paid by the applicant.

[37] The applicant would have this court accept that the only reason the respondents remained on title was inertia. That is mere speculation with no evidence to support it.

[38] A bare trust is a form of an express trust. There are four requirements that must be satisfied before a court will find the existence of an express trust on the facts. The requirements are: (1) capacity of the parties; (2) satisfaction of the “three certainties”; (3) constitution of the trust; and (4) the requisite formalities must be met: Oosterhoff, A.H. et al., Oosterhoff on Trusts: Text, Commentary and Materials, 8th ed. (Toronto: Thomson Reuters Canada Limited, 2014) at pg. 189.

[39] There is no evidence that any party lacked the capacity necessary.

Necessity of the Three Certainties

[40] The applicant urges me to find that the three certainties have been met. That being the certainty of intention, the certainty of subject matter and the certainty of objects. I disagree.

[41] Simply because the deed has the words “in trust” appearing in it, does not establish the existence of a trust necessarily: Byers v. Foley (1993), 16 O.R. (3d) 641 (Ont. C.J.); Re Rispin (1912), 2 D.L.R. 644 (C.A.), at p. 651-652, aff’d Canada Trust Co. v. Davis (1912), 46 S.C.R. 649.

[42] There is simply no evidence before me as to what the words “in trust” meant or what the intention of the parties was at the time the property was purchased, as all are deceased.

[43] There is certainly no certainty of objects. Again, the applicant suggests that the surrounding circumstances in this case clarify the objects and the proper beneficiary. The case law submitted by the applicant is in my view distinguishable.

[44] In those cases, the court had access to information and evidence pertaining to the formation of the alleged trust from either parties who were involved from the inception: Byers; Melnychuk v. Susko, [1953] O.R. 127 (H.C.), aff’d Melnychuk v. Susko, [1954] O.R. 173 (C.A.); or other cogent evidence as in Melnychuk, where it was beyond dispute that an express trust had been set up and the only issue was that as the beneficiary had morphed into two groups, which of the two groups continued to be the beneficiary.

[45] I therefore find that I am not persuaded that the three certainties have been proven to establish an express trust in this case.

[46] I accept that the disputed property in this case was transferred to trustees, being the respondents, from Mary Gaik and so was properly constituted.

[47] The courts have held that s. 9 of the Statutes of Frauds deems that the trust of lands must be evidenced by writing. In other words, there must be evidence of “a writing” signed by the owner of the interest in land which is the subject matter of the trust. The respondents did not sign any document giving the property to the applicant: Melnychuk, at p. 133.

[48] I conclude that the applicant has not made out the requirements of a bare trust.

Unjust Enrichment Claim:

[49] The applicant argues that the respondents will be unjustly enriched if they are found to be the owners of the property and by extension the money held in court. Likewise, the respondents argue that the applicant will be unjustly enriched if they are found to be the owner of the property.

Relevant Legal Principles

[50] For a claim of unjust enrichment to succeed, an applicant must satisfy three criteria under the modern, principled approach: Becker v. Pettkus, [1980] 2 S.C.R. 834, at p. 848; Kerr v. Baranow, [2011] 1 S.C.R. 269, at paras. 30-45; Moore v. Sweet, [2018] 3 S.C.R. 303, at para. 37.

[51] The requisite elements are:

1. The respondent was enriched;
2. The applicant suffered a corresponding deprivation; AND
3. There is an absence of any juristic reason for the enrichment and corresponding deprivation.

[52] This approach is flexible and enables the courts to “identify circumstances where justice and fairness require one party to restore a benefit to another”: Moore, at para. 38. The onus is on the applicant to satisfy a prima facie finding of unjust enrichment, at which point the respondent may put forth defences or explanations: Granger v. Granger, 2016 ONCA 945, 133 O.R. (3d) 641, at para. 75.

The Estates are Clearly Enriched

[53] At this stage of the test, it must be shown that something of value – a tangible benefit – flowed from the applicant to the respondent: Kerr, at para. 38; Garland v. Consumers’ Gas Co., [2004] 1 S.C.R. 629, at para. 31. This is closely related to the deprivation analysis, and the Supreme Court has characterized these first two elements as being “two sides of the same coin”: Peter v. Beblow, [1993] 1 S.C.R. 980, at p. 1012. It is necessary to take a straightforward economic approach – moral and policy considerations are not relevant at this stage, but rather during the juristic analysis: Kerr, at para. 37.

[54] I accept, based on the evidence, that the applicant exercised total control over this property since its purchase. This included general maintenance, paying associated fees, and renovating the property.

[55] One of the applicant’s members, Mr. Dangubic, has acted as the maintenance manager for the past 15 years. It was his evidence that he would perform maintenance work and the applicant would reimburse him for the cost of supplies, or he would bear the cost himself. There was evidence that the building required repairs due to roofing problems which caused damage in the property. A contractor was retained, although there is no evidence of payment. The cost was not high, but it nonetheless shows evidence of the applicant incurring costs to maintain the building. Mr. Dangubic indicated that new windows were installed, new drywall was installed, and the walls were painted.

[56] As previously noted, there was evidence of bills paid by the applicant for the property including taxes and utilities. I pause to reiterate that the totality of evidence supporting the applicant’s position that it incurred significant costs was severely lacking. This is especially so given that the members of the applicant should have had all of the necessary records in their possession.

[57] When the applicant took possession of this property, renovations were made to facilitate the printing operations of The Canadian Srbobran. Later, this space was renovated again into residential apartments. Unfortunately, there is no evidence of how much these renovations cost.

[58] This maintenance and upkeep persisted well after the three respondents exited the League. The applicant clearly enhanced the value of this property through its stewardship over 53 years. As such, I believe that there is clear evidence that the estates of these three respondents have been enriched by the efforts of the applicant.

There was a Corresponding Deprivation to the League

[59] Flowing from the finding that there was an enrichment to the respondents there is the resultant finding that the applicant has suffered a deprivation. Here, the applicant must show that their loss corresponds to the gain of the respondent – there must be a causal connection between the two: Pettkus, p. 852. Money, effort, and time have all been expended on the mistaken belief that the applicant was the rightful owner of the property.

Absence of Juristic Reason

[60] A juristic reason is described by Cromwell J. in Kerr, at para. 40, as follows:

To put it simply this means that there is no reason in law or justice for the respondent’s retention of the benefit conferred by the applicant making its retention unjust in the circumstance of the case.

[61] The concept of proportionality plays a large role in determining the outcome of the inquiry: Kerr, at paras. 50, 53, 81.

[62] The juristic reason analysis proceeds in two stages: Moore, at para. 56. The court must first look to the “established” categories of juristic reasons justifying the enrichment and corresponding deprivation. The established categories are the existence of a contract, a disposition of law, a donative intent, and other valid common law, equitable or statutory obligations: Moore, at para. 57; Kerr, at para. 41. If the court finds that any of these categories justify the enrichment, the analysis ends. However, if the applicant can show that none of these established categories apply, then a prima facie case for unjust enrichment exists.

[63] None of the established categories apply to this case. Thus, the applicant has met the threshold burden of showing a prima facie claim for unjust enrichment.

[64] At the second stage, the respondent can rebut a prima facie claim by establishing some residual reason to deny recovery: Garland, at para. 45. The respondent bears the burden of proof to rebut a prima facie finding of unjust enrichment. At this stage in the test, the court considers the parties’ reasonable expectations and public policy: Garland, at para. 46. This approach to the juristic reason branch of the unjust enrichment test ensures the necessary level of flexibility while also retaining a level of predictability: Moore, at para. 59.

[65] The reasonable expectations of the parties may be informed by the evidence of one of the applicant’s gatherings, documented in The Canadian Srbobran. In a newspaper entry from February 20, 1975, a notice was sent out regarding an upcoming meeting and evening of entertainment. The itinerary for the evening entertainment specifically stated that the President of the Central Administration, Mr. Milutin Bajcetic, would provide a brief welcome. [1] Following the welcome, the paid-off mortgage of the centre of the Serbian League of Canada was to be burned.

[66] A subsequent newspaper article from March 20, 1975, summarized this mortgage burning event: “At the end of the speech given by brother Bajcetic, paid off mortgage for the Centre of the Serbian League of Canada was burnt, followed by a few appropriate words of brother Stojsic and joyous cheers and applause from those present.”

[67] I think it is unlikely that Mr. Bajcetich, the applicant’s President of the Central Administration at the time, would not review this article before it was published or at least be aware of its contents. Indeed, the entry from February 20, is sent on behalf of the “Office of the Central Administration of the Serbian League of Canada.” This lends support to the applicant’s reasonable expectation that it was expending time and effort on property it owned.

Mutual Conferral of Benefits

[68] The respondents submit that a mutual conferral of benefits should operate as a juristic reason to deny the applicant’s unjust enrichment claim. As the Court of Appeal for Ontario held in Granger, at para. 50, the correct application of Kerr requires that mutual conferral of benefits be considered at the defence/remedy stage: “…the principle in both family and non-family cases of mutual benefit conferral is that any alleged off-setting benefits should be considered at the defence/remedy stage of the analysis where the defendant bears the onus of proof.”

[69] The respondents in this case claim that the applicant benefitted from rent-free occupancy for in excess of 50 years and collected rent from tenants in the residential apartments. They say that these are grounds to reject a finding that they were unjustly enriched. In Granger, the court dealt with rent-free occupancy, and stated at paras. 81 & 84:

According to the framework Cromwell J. set out in Kerr, John having established a prima facie case of enrichment, Katarina bore the onus of establishing a valid defence, or a valid reason to limit the requested remedy. It is at this stage that the alleged offsetting benefit of rent-free accommodation ought to have been considered.

First, Katarina testified that she never expected to receive rent from John. This admission presents great difficulty for her in discharging the onus of proving a valid set-off. As noted by Maddaugh & McCamus, quoted above, if the expectation of the parties was that one party would provide personal services and the other would deduct from the value of those services the cost of room and board, then a valid set-off may be made out. But if the "parties' understanding was that the room and board was being provided gratuitously", then no deduction is appropriate.

[70] There was no evidence to support the finding that the various forms of enrichment provided by the applicant to the respondents were performed in exchange for rent-free occupancy. There is no evidence that any agreement existed. Accordingly, I do not find that there was a mutual conferral of benefits.

[71] In conclusion, there is an enrichment of the respondents, a corresponding deprivation of the applicant, and an absence of any juristic reason. To permit the respondents to retain the full value of the property would result in a windfall gain at the expense of the applicant, who reasonably believed that they owned the property.

MacKinnon is Distinguishable

[72] The respondents placed emphasis and specifically directed this court to the case of MacKinnon v. MacKinnon, 2010 ONCA 170, 260 O.A.C. 32. In it, the court dealt with a claim for possessory title and property which was being occupied by an overholding tenant at will. The overholding tenant attempted to acquire the property, and the property rights. The court found that in fact he was a licensee, quoting at para. 56 from Lord Denning in Facchini v. Bryson, [1952] 1 T.L.R. 1386 (Eng. C.A.):

In all cases where an occupier has been held to be a licensee, there has been something in the circumstances, such as a family arrangement, an act of friendship or generosity, or such like, to negative an intention to create a tenancy.

[73] The court further stated in MacKinnon, at para. 75:

I believe the modern approach makes good sense as a matter of policy, specifically, I see no reason why persons who have been permitted to occupy land pursuant to a family arrangement motivated by natural affection and generosity should turn around years later and repay the benefactor with a claim for possessory title.

[74] I would distinguish this case on the basis that the comments made here are in reference to a claim for possessory title. While MacKinnon also dealt with a claim of unjust enrichment, these quotes are taken from the court’s analysis on the possessory title claim in the context of a family arrangement. Here we have no evidence of any arrangement between the parties.

[75] Furthermore, in MacKinnon, at paras. 11-12, there was a specific oral agreement between the parties where the plaintiff would not pay the costs associated with a property and would receive a monthly stipend. There was an agreement that in exchange he would have rent-free occupancy of a home. In the current case there is no evidence of any agreement.

Remedy

The Appropriate Remedy – A Constructive Trust:

[76] Where a court finds unjust enrichment, the presumptive remedy is a monetary award of damages: Beblow; Martin v. Sansome, 2014 ONCA 14, 118 O.R. (3d) 522, at para. 58. As the Court of Appeal for Ontario held in Martin, at para. 58: “[i]n most cases, money will be sufficient; the challenge is in calculating the amount.” A monetary award of damages must be inadequate for a remedial constructive trust to be imposed, and “there must be link between the services rendered and the property in which the trust is claimed”: Beblow, at para. 29. The remedial constructive trust is an equitable remedy, imposed without reference to the intention of either party to specifically create a trust: Kerr, at para. 50.

[77] In Moore, at para. 93, the Supreme Court of Canada discussed whether a monetary award would be appropriate where the disputed money had already been paid into court. The court held:

… Ordinarily, a monetary award would be adequate in cases where the property at stake is money. In the present case, however, the disputed insurance money has been paid into court and is readily available to be impressed with a constructive trust. Furthermore, ordering that the money be paid out of court to Risa, and then requiring Michelle to enforce the judgment against Risa personally, would unnecessarily complicate the process through which Michelle can obtain the relief to which she is entitled.

[78] Similarly, in the current case, the disputed property has already been sold and the proceeds have been paid into court. There is a nexus between the work done by the applicant and the property over which they seek a constructive trust. It would be most efficient to simply impress the proceeds with a constructive trust in favour of the applicant rather than requiring it to enforce judgment against the respondents. In all the circumstances, a remedial constructive trust is the appropriate remedy.

Quantification of the Constructive Trust

[79] As the Supreme Court held in Kerr, at para. 50, the constructive trust is meant to be a broad and flexible equitable tool used to determine beneficial title to property. The court’s comments on quantifying the size of the constructive trust, at para. 53, are instructive:

The extent of the constructive trust interest should be proportionate to the claimant's contributions. Where the contributions are unequal, the shares will be unequal (Pettkus, at pp. 852-53; Rathwell, at p. 448; Peter, at pp. 998-99). As Dickson J. put it in Rathwell, "The court will assess the contributions made by each spouse and make a fair, equitable distribution having regard to the respective contributions" (p. 454).

[80] In an earlier decision of the Ontario Court of Appeal, Pelican v. Karpiel (1994), 20 O.R. (3d) 659 (C.A.), at para. 13, the court discussed a lack of evidence and the approach to quantifying a trust:

There was no evidence led at trial as to the value of the improvements and none as to the value of the sixplex at any point in time after the purchase. Because the value of his contribution is not measurable in precise dollars and cents on this sparse record, I think that the trial judge was limited to finding that the respondent was entitled to an interest in the property which would reflect his contribution to the property as compared with the contribution of the appellant.

[81] In Beblow, at para. 34, the court noted that in quantifying a constructive trust, on a “value survived” basis, the amount should reflect:

…the court’s best estimate of what is fair having regard to the contribution which the claimant's services have made to the value surviving, bearing in mind the practical difficulty of calculating with mathematical precision the value of particular contributions to the family property.

[82] I conclude it would indeed be unfair and inequitable for either party to receive the full benefit of the funds in court. As borne out by the governing law, quantifying a constructive trust is an equitable exercise which seeks to arrive at a fair result.

[83] Indeed, counsel agreed in their oral submissions before me that I had jurisdiction to determine how the funds in court should be divided in an equitable fashion if I found it would be unfair and unreasonable for one party to be the sole owner of the funds in court from the sale of the property. I so find.

[84] The value of the property grew from $18,000 at the time of its purchase, to $246,129.55 at the time of its sale.

[85] The applicant has maintained the property and more importantly improved it over the years, and they should be entitled to receive some return on their investment and good stewardship.

[86] The respondents made a relatively modest investment of $3,000 in some property for their community out of the goodness of their hearts. There is no evidence that this down payment was intended to be a charitable donation to the applicant. However, there is also no evidence before me that they expected significant return on their investment other than perhaps the initial down payment returned. Indeed, the estates were unaware of this potential asset, so clearly it could not have been top of mind of the three respondents.

[87] There can also be no doubt that they guaranteed the purchase price of the property to Mary Gaik. The affidavits before me state at the time this property was purchased, this was a very close-knit community of relatively recent immigrants to Canada from Serbia. Five of the six witnesses who provided affidavits to the applicant, and who were members of the applicant organization, confirmed that it was “like an extended family” for its members.

[88] The estates of the respondents are entitled to some return on the initial investment made by their fathers some 53 years ago.

Disposition

[89] I conclude that it would be fair and equitable to impress the funds paid into court with a constructive trust equalling approximately 75% of the net proceeds of sale, in favour of the applicant.

[90] The amount paid into court on January 25, 2019, was $233,718.66. This net amount, with the relevant expenses already deducted, is available for division. Thus, the funds in court shall be divided with $60,000 in total payable to the respondents’ estates equally, and the balance of the funds in court, $173,718.66, payable to the applicant and I so order.

Costs

[91] I assume the parties will be able to agree upon costs but if not, the applicant may file written submissions of no more than three pages double spaced plus any appropriate offers and draft bills of costs within 15 days after the release of this judgment. The respondent shall have 10 days thereafter to file a response of no more than three pages double spaced, in addition to any relevant offers and draft bills of costs.

Arrell, J. Released: January 21, 2020

Footnotes

[1] The respondents’ application record acknowledged that Mr. Milton Bajcetich sometimes went by the first name Milutin.