Afatmirni v. Sharifi, 2024 ONSC 3471

Court File and Parties

Court File No.: FC-22-2148-00 Date: 2024-06-17 Ontario Superior Court of Justice

Between: Amin Afatmirni, Applicant Husband And: Marjan Sharifi, Respondent Wife

Counsel: Debora Lyons and Inesa Buchyn, for the Applicant Husband Ash Mazinani, for the Respondent Wife

Heard: May 21 and 24, 2024

Justice: Alex Finlayson

PART I: OVERVIEW OF THIS TRIAL OF AN ISSUE

1These proceedings concern certain financial issues between the parties arising out of the breakdown of their short relationship and marriage. There are no children of this relationship.

2The husband initially claimed a divorce and exclusive possession of the matrimonial home that he solely owns. His exclusive possession claim was a more contentious issue at the outset of these proceedings, but the wife vacated the property in August of 2023. The husband did not originally claim an equalization of the parties’ net family properties. He later amended his Application on April 18, 2024. If this Court determines that the wife would be entitled to an equalization payment, the husband now says there should be an unequal division.

3The wife initially claimed an equalization payment, spousal support, and relief in connection with a Maher that the parties entered into. But according to the Endorsements of Justice Daurio dated July 20, 2023 and December 14, 2023, the wife has since withdrawn her spousal support claim. The wife also concedes that an unequal division of net family property is appropriate in view of the short relationship. How the unequal division should be calculated, is not agreed. There may be claims for post-separation adjustments, occupation rent and other financial issues to deal with as well, when the conclusion of this matter is heard.

4To determine what the unequal division should be, it is necessary to begin by calculating each party’s Net Family Property. But for her concession that there should be an unequal division, and the need to quantify it, it appears that prima facie the husband would be the payor of an equalization payment. That is due in part to the fact that shortly before the parties’ short marriage, the husband purchased the property that would become the matrimonial home. He does not get a date of marriage deduction for it. This focused trial concerns whether a different property should form part of the wife’s Net Family Property, which if included might partially offset the husband’s prima facie equalization payment, before determining the extent of any unequal division.

5Many facts are not in dispute. For example, the property in question is a mixed use commercial and residential condominium in Richmond Hill, title to which was put into the wife’s name prior to the marriage. It is not disputed that the Agreement of Purchase and Sale to buy this condominium, pre-construction, was entered into on January 26, 2014. It is not disputed that it was the wife’s mother, Roya Souzankari (“Roya”), who entered into the Agreement of Purchase and Sale, originally. It is not disputed that in August of 2015 and again in June of 2018, the wife and Roya signed amendments to the Agreement of Purchase and Sale with the builder, to assign the contract to the wife and to make a change to the wife’s name. It is not disputed that Roya paid the deposits over time, amounting to just under $140,000.00, both prior to and after the first amendment, up to the closing date on March 21, 2019. It is not disputed that upon closing the wife became the sole titled owner of the property, consistent with the amendments to the Agreement of Purchase and Sale.

6It is not disputed that money was needed to close in 2019. It is not disputed that the initial mortgage balance was $557,456.00, and that the wife was the sole mortgagor. Who paid the mortgage and the carrying costs after the closing, is disputed. The closing documentation reveals that in addition to the mortgage, the wife supplied $46,722.19 to the real estate lawyer.

7It is not disputed that the property was sold in the spring of 2022. The sale closed on May 21, 2022. This was 4 to 5 months before the date of separation, depending on which party’s position about the date of separation prevails.

8It is not disputed that there were net proceeds of just over $340,000.00, or that those proceeds went into the wife’s bank account. Immediately thereafter, the wife obtained a bank draft and turned the funds over to her mother.

9Finally, it is also not disputed that Roya used the funds to purchase a cottage property, title to which is in her and her partner’s names. Roya testified that she knew the parties’ relationship was in decline, when this transaction occurred.

PART II: THE PARTIES’ POSITIONS

10The husband’s position is that the property should be included in full, in the calculation of the wife’s Net Family Property, before determining the extent of the unequal division. In part relying on an incomplete appraisal that the wife obtained, the husband would effectively have the Court value the equity in the condominium at $0 as of that date of marriage. He says that 100% of the net proceeds of sale should form part of the wife’s assets on the date of separation.

11By contrast, the wife’s position is that this is a “classic case of purchase money resulting trust”. She says that she held this property in trust for her mother throughout. The explanation I was given for the wife taking title, was that Roya was unable to obtain a mortgage at the time of the purchase. The wife would have the Court calculate her Net Family Property prior to any unequal division, by completely excluding any interest in the condominium altogether, on either date.

PART III: THE CONDUCT OF THIS FOCUSED TRIAL

12The parties agreed to resolve this dispute by way of a focused trial of an issue, to be followed by a Binding Judicial Dispute Resolution (the “JDR”) to resolve the remaining issues. Paragraphs 6 and 7 of Daurio J.’s Endorsement dated December 14, 2023 frame the issues for this focused trial as follows:

6. There shall be a focused hearing on the issue of the Respondent’s ownership interest in the condominium at the date of marriage.
7. If it is found that she was the beneficial owner (solely or in part), the value of the condominium on the DOM and date of disposition, as well as any corresponding mortgages, shall be determined at the hearing if determined to be appropriate by the presiding Justice.

13Each party filed an affidavit and other documentary evidence. Both parties supplemented their affidavits with examination in chief, and they were cross examined.

14The wife tendered an affidavit from Roya, too. Roya testified and was cross-examined. The wife also called the real estate agent who was acted on the purchase of the condominium. She gave both affidavit and oral evidence, and was subjected to cross-examination.

PART IV: SUMMARY OF THIS COURT’S JUDGMENT

15At the conclusion of this case, I do not adopt either of the parties’ positions. I do not adopt the husband’s position about legal and beneficial ownership. I also do not find that his calculations about the property’s equity on the date of marriage to be sound. I do not find the wife’s position, that the entirety of this asset is beneficially owned by Roya, to be supported by the evidence, either.

16Rather, I find that Roya was a beneficial owner of part of the condominium at the date of marriage and at the date of disposition, in proportion to her contributions. I determine that interest to be worth 64%. The wife owns the rest. Having determined her percentage interest, calculating the wife’s interest at the date of marriage and the valuation date, becomes a simple mathematical exercise.

17At the end of the focused hearing, I advised the parties that I would schedule a zoom attendance to follow the release of this Judgment, to have a case management discussion about what additional preparation is required for the next step in this case. Unless either counsel or one of the parties is not available, that shall proceed on July 2, 2024 at 2 PM by zoom, with the JDR to be scheduled to proceed at some point thereafter.

PART V: BACKGROUND

A. Relationship History

18The husband is 38 years old. He is an aviation technician, employed at a company called Aerocopter. The wife is 36 years old. She is self-employed in the beauty industry, providing hair and make-up services. The wife and her mother have worked together in this industry for many years.

19The total length of the parties’ relationship is either 30 or 31 months, depending on whose date of separation prevails. The parties agree that they began living together in April of 2020. The husband did not say with absolute precision when he bought the matrimonial home, but it appears that he moved into the home at some point in 2020, apparently not too long before the parties started living together in it.

20The parties married on January 11, 2021. The husband says the parties separated on September 11, 2022. The wife says the parties separated on October 13, 2022. It is not clear to me how material this month of difference will be, in the eventual equalization determination. In any event, both sides have provided some evidence about the reasons for the separation and what happened after it. This is not particularly relevant to the decision that I must now make.

21The parties continued living together separate and apart in the matrimonial home for a few months after these dates of separation. The husband moved out in January of 2023; the wife remained. The husband’s exclusive possession claim that he later launched, is probably now resolved, in that the wife left on August 1, 2023.

22There are allegations in this case about the parties’ behaviour, both pre- and post-separation. For example, in asserting that the wife was the sole owner of the condominium at both the date of marriage and its date of disposition (and perhaps relevant to his unequal division claim), the husband testified that he paid for all expenses associated with the matrimonial home, whereas the wife used her own resources to pay for her condominium’s expenses, in addition to spending on herself. He also says that the wife would not initially leave the matrimonial home, and she then launched a series of claims geared at enriching herself. The wife says that she was not prepared to leave the matrimonial home, without some sort of financial settlement so that she had funds to leave. It is her view that the husband does not want to pay her anything, and that is motivating his positioning now.

23For context, according to the husband’s financial statement sworn December 16, 2022, the matrimonial home was worth $1,000,000.00 on the date of marriage, with a mortgage balance then owing of $568,745.06. [1] He says it had the same value on the date of separation, but the mortgage balance has reduced somewhat, to $546,574.91. [2] On the assumption that these numbers are agreed to (exclusive of notional costs of disposition, if any, and subject of course to adjustments for other assets and liabilities), this asset contributes $453,415.09 to his Net Family Property.

B. The Condominium’s Agreement of Purchase and Sale dated January 26, 2014

24The condominium’s Agreement of Purchase and Sale dated January 26, 2014, to which only Roya and the builder were parties, was for the purchase of a mixed use pre-construction condominium unit, and an associated parking space and locker unit. The purchase price was $696,820.00. The Statement of Adjustments later prepared when the properly closed in 2019, reveals that with tax, less the HST rebate, the total purchase price was in fact $727,734.92.

25The original Agreement of Purchase and Sale provided for a series of deposits to be made over a number of years up until the closing, which Roya paid. The parties’ affidavits and some of the documentary evidence contains different figures of the aggregate of Roya’s payments. In his trial affidavit sworn April 19, 2024, the husband says that the deposits totaled $149,067.92. In her trial affidavit sworn May 6, 2024, the wife says they totaled $141,647.41. The Agreement of Purchase and Sale states the deposits totaled $139,299.00. The Statement of Adjustments, upon which I intend to rely, reveals that in fact $139,364.00 was paid.

C. The Amendments to Agreement of Purchase and Sale

26On August 11, 2015 and June 1, 2018, Roya, the wife and the builder signed amendments to the Agreement of Purchase and Sale. As early as August of 2015, the wife became the intended purchaser. According to the lengthier document, the wife was credited with the deposits that Roya had already made. Roya continued to pay the deposits after 2015, until the $139,364.00 was paid in full.

D. The Wife Takes Title on Closing on March 21, 2019

27Occupancy came in June of 2018. The actual closing occurred on March 21, 2019, with the wife taking title. According to the Statement of Adjustments, the amount due on closing was $590,582.90. According to the real estate lawyer’s trust ledger statement dated March 26, 2019, the wife obtained a mortgage in the amount of $557,456.00 to close. The statement also indicates that the additional sum of $46,722.19 was “Received from you – Marjan SHARIFI”. The aggregate of these two amounts covered the amount needed to close, land transfer tax, registration fees, title and insurance and legal fees. A small amount of overage, of $341.21 was refunded. That entry says, “Paid to you following closing – Marjan SHARIFI”.

28The source of the $46,722.19 given to close is not clear to me. The wife’s bank statements covering the period January 23, 2019 to January 23, 2023 were included in the husband’s Exhibit Book. I do not know what was in the bank before January 23, 2019. There were no significant deposits in February, 2019, the first month for which I have complete statements. Leading up to the closing in March, there were a series of deposits totaling $9,200.00 and a “cash withdrawal BR TO BR – 4462” on March 20, 2019, the day before the closing, of $9,008.50. At the same time of the withdrawal, there was also a withdrawal called “Investment Special Deposit” for $25.00. Another $1,000.00 was deposited on March 22, 2019, the day after the closing.

E. The Mortgage Payments and Other Carrying Costs

29It is both disputed who paid the mortgage payments and the other carrying costs, and how those payments should be treated in the Court’s analysis, once a determination about who made the payments is made. The wife’s and Roya’s evidence is that Roya paid for the mortgage and the carrying costs in cash, with Roya periodically giving the wife cash, that she then deposited into her bank account. The mortgage payments and other carrying costs then came out of the wife’s bank account. The husband relies on the bank documents as the most reliable evidence speaking to who paid what. He would have the Court find that the wife paid.

F. The Sale of the Condominium on May 21, 2022

30The condominium was sold for $915,000.00 in 2022. This closing occurred on May 21, 2022. I presume that the purchaser’s deposit was used to defray the cost of real estate commission, since the total amount of the commission is not reflected on the real estate lawyer’s trust ledger for this transaction. In any event, the real estate lawyer’s trust ledger states that the purchaser paid $869,381.86 on closing. After payment of the outstanding mortgage of $525,027.25, the balance of any real estate commission owing not covered by the prior deposit, and other legal fees and disbursements, there were net proceeds of sale of $341,833.06. The net proceeds were “Paid to you following closing – Marjan Sharifi”.

G. The Immediate Purchase of the Cottage Property

31The wife confirmed that she deposited the net proceeds into her bank account. Essentially almost all of these net proceeds were immediately used to fund the purchase of a cottage property. Although the real estate lawyer’s trust ledger statement for the cottage purchase states that the sum of $353,439.05 came from Roya and her partner to fund this transaction, the wife provided that law firm with a bank draft for $340,000.00, on June 3, 2022. The wife’s evidence is that this was done at Roya’s request, since the funds belonged to her anyway.

PART VI: ISSUES AND ANALYSIS

A. Applicable Legal Principles Concerning Resulting Trust

32This trial proceeded solely on the basis of the law of resulting trust, more specifically a species of that, being a “purchase money resulting trust”.

33It is well established that the law of equity, “ recognizes a distinction between legal and beneficial ownership. The beneficial owner of property has been described as “the real owner of property even though it is in someone else’s name”: see Pecore v. Pecore, 2007 SCC 17 ¶ 4.

34Although he was discussing the issue in the context of claims between unmarried spouses, at ¶ 17 of Kerr v. Baranow, 2011 SCC 10, Cromwell J. explained the circumstances in which resulting trusts can arise. He wrote:

Resulting trusts arising from gratuitous transfers are the ones relevant to domestic situations. The traditional view was they arose in two types of situations: the gratuitous transfer of property from one partner to the other, and the joint contribution by two partners to the acquisition of property, title to which is in the name of only one of them. In either case, the transfer is gratuitous, in the first case because there was no consideration for the transfer of the property, and in the second case because there was no consideration for the contribution to the acquisition of the property.

35Resulting trusts can also arise as between a parent and his or her adult child. The Supreme Court in Pecore v. Pecore had earlier decided how the presumption operates in that context. The dispute there concerned the ownership of funds that an elderly father had deposited into a joint account that he held with his daughter. And like this case before me, the contest was not as between the father and his daughter. Rather, after the father passed away, an issue arose as between the adult daughter and her former spouse, when they separated. The father’s Will provided that the residue of his estate would be shared between them. The issue before the Court in the spouses’ separation concerned how the funds in the joint account should be treated, whether as part of the residue of the estate, or money belonging to the daughter.

36In discussing the applicable legal principles, the Court determined that the presumption of resulting trust also applies as between a parent and his or her adult (as opposed to minor) child. The presumption of advancement in inapplicable. Therefore, I do not apply it in this case.

37The Supreme Court again dealt with resulting trusts, now in 2013, in Nishi v. Rascal Trucking Ltd., 2013 SCC 33. This case specifically dealt with the “purchase money resulting trust”. At ¶ 1 and 21, the Court defined that as:

1A purchase money resulting trust arises when a person advances funds to contribute to the purchase price of property, but does not take legal title to that property. Where the person advancing the funds is unrelated to the person taking title, the law presumes that the parties intended for the person who advanced the funds to hold a beneficial interest in the property in proportion to that person’s contribution. This is called the presumption of resulting trust.

21The purchase money resulting trust is a species of gratuitous transfer resulting trust, where a person advances a contribution to the purchase price of property without taking legal title. Gratuitous transfer resulting trusts presumptively arise any time a person voluntarily transfers property to another unrelated person or purchases property in another person’s name (D. W. M. Waters, M. R. Gillen and L. D. Smith, eds., Waters’ Law of Trusts in Canada (4th ed. 2012), at p. 397).

38This species of resulting trust has been applied to transactions between a parent and his or her adult child, too. Most recently in Bradshaw v. Hougassian, 2024 ONCA 425, the Ontario Court of Appeal applied Nishi v. Rascal Trucking Ltd., in an estate dispute between the adult children of their deceased mother. McGee J. applied the decision, to resolve a dispute between separated spouses, in O.K. v. M.H., [2024] O.J. No. 1170 (S.C.J.).

B. Who Bears the Onus in this Resulting Trust Case

39The parties disagree about who bears the onus in this case. The presumption of resulting trust is rebuttable on the civil, balance of probabilities standard of proof: see ¶ 42-44 of Pecore v. Pecore. The husband argues this is the wife’s onus to meet, as the transferee. The wife disagrees, and would place the onus on the husband.

40There is guidance about the question of onus in Pecore v. Pecore. At ¶ 22-25 of the Supreme Court said:

(a) A rebuttable presumption of law is a legal assumption that a court will make if there is insufficient evidence adduced to displace the presumption. The presumption shifts the burden of persuasion to the opposing party who must rebut the presumption; (b) The presumptions provide a guide for courts in resolving disputes over transfers where evidence as to the transferor’s intent in making the transfer is unavailable or unpersuasive; (c) The presumption of resulting trust is a rebuttable presumption of law and general rule that applies to gratuitous transfers. When a transfer is challenged, the presumption allocates the legal burden of proof. Thus, where a transfer is made for no consideration, the onus is placed on the transferee to demonstrate that a gift was intended; (d) The presumption of resulting trust therefore alters the general practice that a plaintiff (who would be the party challenging the transfer in these cases) bears the legal burden in a civil case. Rather, the onus is on the transferee to rebut the presumption of a resulting trust.

41But this case before me is factually different than in dispute before the Court in Pecore v. Pecore. In Pecore v. Pecore, the adult daughter stood to benefit from the right of survivorship, as opposed to having the funds fall into the residue of her father’s estate. It was in her interest to seek to rebut the presumption. But here, the wife, although the transferee, is not seeking to rebut the presumption of resulting trust. Her position, if it prevails, that it was Roya’s actual intention, not to transfer to her the beneficial ownership of the condominium, is consistent with the operation of the presumption.

42In Barber v. Magee, 2015 ONSC 8054, Fitzpatrick J. dealt with this precise issue. In dispute in that case were funds that the husband’s father had advanced and that went into a property. For the purposes of the resulting trust analysis, the evidence and submissions resolved around whether the advance was a gift or a loan. Like in this case now before me, both the husband and his father were aligned in their position that the father did not intend to transfer beneficial ownership of the funds advanced (ie. he did not intend to gift them). And also somewhat like in this case before me, the wife in Barber v. Magee claimed that there was never any indication to her that the monies were a loan, but she did not really know what the actual intention was at the time, having not previously seen all of the relevant evidence: see ¶ 47.

43Fitzpatrick J. found it was important to “look at the reality of the situation”: see ¶ 44. The onus was the wife’s as the person opposed to the presumption, but he ultimately resolved the issue by also considering the oral and documentary evidence and by applying a list of factors from previous decisions. At ¶ 73, he wrote:

Requiring the Applicant [the wife] to rebut the presumption with affirmative evidence would be untenable, and would result in many gifts being unjustly characterized as loans after the parties separate. To borrow from the words of Justice Heeney in Poole, this would simply be unfair. Although somewhat counterintuitive, allowing the presumption of resulting trust to be rebutted by the factors identified in Klimm and Byrne is more likely to facilitate justice than requiring affirmative evidence of donative intent. To require more from the party challenging the presumption would induce the mischaracterization of gifts.

44Barber v. Magee was appealed. One of the arguments on appeal, was that Fitzpatrick J. erroneously reversed the onus. The Ontario Court of Appeal agreed with Fitzpatrick J., that objective indicators can assist to determine whether an advancement is a gift or a loan. While the onus still rested with the wife (the party opposed to the presumption) to prove a gift, the Court of Appeal found that Fitzpatrick J. did not reverse any onus when commenting on and applying the objective criteria. The Court also agreed that Fitzpatrick J. was entitled to consider, that the person who would be in control of relevant documents (ie the husband), had failed to produce them, and that was relevant to an absence of indicia of a loan: see 2017 ONCA 558 ¶ 4, 5.

45In this case before me, like in Barber v. Magee, I find that the husband, who opposes the operation of the presumption has the onus. However as the Supreme Court said at ¶ 44 of Pecore v. Pecore:

As in other civil cases, regardless of the legal burden, both sides to the dispute will normally bring evidence to support their position. The trial judge will commence his or her inquiry with the applicable presumption and will weigh all of the evidence in an attempt to ascertain, on a balance of probabilities, the transferor’s actual intention. Thus, as discussed by Sopinka et al. in The Law of Evidence in Canada, at p. 116, the presumption will only determine the result where there is insufficient evidence to rebut it on a balance of probabilities.

46And that too, is exactly what has happened in this case. Both sides have called evidence. There are objective indicia that the Court can consider, like Fitzpatrick J. did in Barber v. Magee. Moreover, there are some missing documents, that the wife or her mother have control over, that were not produced, and that speak to the original intention. I intend to approach the analysis in the same fashion.

C. The Proper Approach to the Evidence

47According to ¶ 55 of Pecore v. Pecore, I am to, “ begin [my] inquiry by determining the proper presumption to apply and then weigh all the evidence relating to the actual intention of the transferor to determine whether the presumption has been rebutted.” The presumption that applies is resulting trust, not the presumption of advancement.

48The Court’s focus is to be on intention of the transferor “at the time the purchase money is advanced”: see Nishi v. Rascal Trucking Ltd. ¶ 2, 30 and 41; see also Bradshaw v. Hougassian ¶ 11; 2024. There is no such thing as a “common intention resulting trust” any longer, as a result of Kerr v. Baranow.

49Pursuant to ¶ 56 of Pecore v. Pecore, the evidence of the transferor’s intention at the time of the transfer “ought to be contemporaneous, or nearly so”. Courts have considered the relationship between the transferor and the transferee, their conduct, the wording of the transaction’s documents themselves, how the property transferred was controlled and used, what bank documents say, who made subsequent payments, and any tax treatment pertaining to the transaction, to ascertain one’s contemporaneous intention: see Pecore v. Pecore ¶ 56-70; see Barber v. Magee ¶ 42, 43; see J.L.S. v. D.B.S. ¶ 74; see also O.K. v. M.H. ¶ 89-108.

50In so doing, the Court may take into account evidence that arises subsequent to the transfer, to the extent that it is relevant to the transferor’s intention at the time of the transfer. The reliability of subsequent evidence and the weight to attach to it, must be assessed “guarding against evidence that is self-serving or that tends to reflect a change in intention”: see ¶ 56 and 59 of Pecore v. Pecore; see also Bradshaw v. Hougassian ¶ 11, 12.

51Much of the analysis that follows, is focused on what Roya’s intention was. But there is a separate matter about the wife’s mortgage subsequent payments. These payments may be subsequent evidence that speaks to Roya’s intention. However they also engage both factual and legal questions, that separately concern the wife’s proportionate contributions to the property.

D. The Court’s Analysis of the Evidence

52The husband raised a number of questions about the wife’s and Roya’s credibility. The husband’s challenge to the wife’s and Roya’s credibility has caused the Court some pause. But in the end, I am unable to find “the absence of intention [on the part of Roya] to create a beneficial interest” that would rebut the presumption. The most generous conclusion that I can make respecting the father’s position, is that I am left questioning whether the Court can ascertain Roya’s intention. In which case, the effect of that is the same. Either the presumption of resulting trust is not rebutted by evidence of “the absence of intention [on the part of Roya] to create a beneficial interest” for herself: see ¶ 34 of Nishi v. Rascal Trucking Ltd.; see also ¶ 19 of Bradshaw v. Hougassian. Or, where Roya’s intention cannot be ascertained, the presumption of resulting trust applies: see again ¶ 44 of Pecore v. Pecore.

(1) The Transaction’s Documentation, and the Wife’s and Roya’s Explanations for the Manner in Which Title Was Taken and the Mortgage Was Borrowed

53The husband relies on the title, to say that the wife was both the legal and beneficial owner of the condominium at the relevant times. The documents to which he refers the Court include the Agreement of Purchase and Sale, the amendments to the Agreement of Purchase and Sale, and the parcel register. He relies on the Charge that was registered on title, whereby the wife became the sole mortgagor, as well. He also points the Court to the wife’s mortgage application, that reveals that she was the sole mortgage applicant.

54By contrast, consistent with her position that the condominium was not hers, the wife did not disclose any interest in it on the date of marriage on either of her financial statements sworn January 18, 2023 or July 13, 2023. She did disclose that the sale proceeds had been disposed of after the sale, on those financial statements.

55Both the wife, and Roya, said that the documents were entered into in this fashion, for “mortgage financing purposes” but there was “never any intention that [the wife] was the beneficial owner” because Roya paid for it. They also didn’t execute “a trust agreement because [they] are family and [they] trust each other.”

56Apparently because Roya already owned a house, she didn’t want to have a problem with getting a mortgage on the new condominium, according to both the wife and her mother. Yet the corroborating evidence that the wife tried to rely upon, to support this explanation, was the inadmissible hearsay evidence of a mortgage broker. The wife did not call this broker to testify. She nevertheless claimed that the broker had told her, that the condominium should go into the wife’s name, for these financing reasons.

57The wife did call the affidavit and oral evidence of Anahita Zamani, the real estate agent who acted on the purchase of the condominium. Ms. Zamani has known Roya since 2003. They are also friends and neighbours, and Ms. Zamani has been a customer of Roya’s beauty business.

58Ms. Zamani’s evidence was that she understood that Roya was the purchaser of the condominium. She confirmed that Roya wanted the condominium, so she could operate a hair salon out of it. She repeated that the wife’s name was subsequently inserted for “mortgage financing purposes”, even though she “always understood that Roya was the true purchaser and beneficial owner”. She also said that she took instructions from Roya.

59But similarly, the foundation for Ms. Zamani’s statement, that the wife went on title for “mortgage financing purposes” was not clear. I am left wondering whether Ms. Zamani was not just repeating hearsay information, such as the apparent statements from the mortgage broker.

60Without hearing from the mortgage broker directly, there is still the wife’s and Roya’s own testimony to this effect, that Roya needed her daughter on title for financing purposs. But this is one of the areas of the evidence, about which the husband successfully raised credibility issues.

61For example, the wife elsewhere said that in January of 2014, when the Agreement of Purchase and Sale was signed, she was just 26 years and was working as a hair stylist. She said that she did not have sufficient funds to purchase any property. Now it is true, as Mr. Mazinani pointed out during an objection, that the mortgage would not be obtained for a further 5 years. On her mortgage application dated March 11, 2019 used to secure the financing, the wife claimed to have accumulated “personal cash” of $140,000.00, and she separately reported that the deposits that had been made towards the property so far, amounted to $142,000.00. She also said her annual self-employment income was $135,000.00.

62Yet according to her two financial statements sworn January 18, 2023 and July 13, 2023, the wife’s self-employment income was then just $24,000.00. For 2019, the year that she applied for the mortgage and claimed to have an income of $135,000.00 on the mortgage application, she reported to the Canada Revenue Agency that her Line 150 income was just $14,767.00. In fact, in the three years that followed (2020-2022), the wife would report to CRA incomes of just $25,120.00, 20,269.00, and $15,825.74, respectively.

63The wife attempted to blame the same mortgage broker for this discrepancy. She maintained that it was the mortgage broker who created the paperwork. She would not admit that there were significant discrepancies between what she reported to the lender and what she reported to the CRA.

64No other documentary evidence was introduced, that would enable me to decide whether Roya could have, or could not have qualified for a mortgage on a second property. In light of the documentary evidence that I do have about the wife’s income, and the absence of documentary evidence about Roya’s inability to qualify, I find this explanation that Roya could not get another mortgage, and so the wife took title, does not make sense. It also went unexplained as to why the wife and Roya signed the amendment to the Agreement of Purchase and Sale in 2015 for “financing purposes”, but the mortgage would then not be applied for almost another four years.

65In conclusion, I in no way rely on the hearsay evidence of the mortgage broker, and I place little weight on the wife’s and Roya’s evidence, that Roya needed her daughter’s help to get a mortgage.

66But on the other hand, there still is the real estate agent’s evidence, that she understood the condominium was for Roya. And again, it is not disputed, that Roya in fact paid the deposits, totaling just under $140,000.00, which payments continued to be made after the 2015 amendment to the Agreement of Purchase and Sale, when the wife took over the contract.

(2) The Subsequent Use of the Property

67I heard evidence about how the property was subsequently used, or not used, by the wife and her mother. Pieces of this evidence can be relied upon, by one side or the other, to support each of their arguments. But I find that the evidence as a whole, is that both Roya and the wife benefitted from its use in different ways. They acted like co-owners, which is the result I am finding.

68For example, the husband testified that the wife was living in the condominium when he met her. The wife agrees that she lived there from April of 2019, until April of 2020, when she moved into the husband’s property. In keeping with her position that she did not own the property, she says her mother allowed her to live there “rent free”.

69On the other hand, the wife only lived in part of the condominium for a short time. She did not have this exclusive use of the entire space, for living purposes. That is because, as the wife says, that the “intention” was always that Roya would operate her hair salon business from the condominium, and that did in fact happen from the time of the 2019 purchase, until the 2022 sale. But yet on the other hand, the wife also worked there, too. It was common ground that the two women have always worked together in the beauty industry, for many years. The real estate agent confirmed this, as well.

70There was conflicting evidence from the parties about whether the wife held herself out to others in the community as the owner, or not. I also heard evidence from the husband, that the wife dealt with maintenance issues. The wife admitted that she dealt with an issue with the air conditioner, once when it broke. Overall, any maintenance issues that the wife handled were minor in nature, and just because the wife dealt with the air conditioner, does not make the wife the sole owner, or exclude Roya as an owner. The evidence I heard about who represented what to community members, and who dealt with maintenance issues, was not particularly dispositive of the questions before the Court, one way or the other.

(3) The Subsequent Carrying Costs

71Earlier, I said there was a factual dispute about who paid for the mortgage and the condominium’s other expenses after the purchase, and once resolved, competing legal arguments about what impact the Court’s finding about who paid should have in the analysis.

72In regards to the factual question, I find the wife’s and Roya’s credibility to be lacking, and the documentary evidence to be incomplete. Therefore, I accept the husband’s argument on this point, and find that the wife paid the carrying costs after the closing.

73In regards to the legal arguments, I disagree with the wife’s counsel, that all of her subsequent payments are irrelevant in the assessment of the resulting trust. Not only do I find that they can be relevant in the assessment of Roya’s intention at the time the property was acquired, but subsequent mortgage payments in particular can also be properly considered as the wife’s contributions to the acquisition of the property, when apportioning the beneficial ownership interest in a resulting trust case, even if they were paid later on.

a. The Determination of Fact About Who Paid the Subsequent Carrying Costs

74The husband says that the wife paid for the condominium’s liabilities. He pointed the Court to the wife’s bank statements between January 23, 2019 and January 23, 2023.

75I have already addressed these bank statements (and the oral evidence), insofar as they do not explain the source of the $46,722.19 that was provided to the real estate lawyer to close. In regards to the subsequent expenses paid after closing, the bank statements and other evidence is also lacking.

76The wife acknowledges that the condominium’s expenses were paid from her account, but she testified about how these payments were made, particularly that the funds used belonged to Roya. Specifically, both the wife and Roya agreed that they earned cash from their work. Both claimed that Roya gave the wife cash, that she deposited into the bank, to cover the expenses. Both claimed that this was Roya’s money, and not the wife’s.

77In cross-examination, the wife testified that while she too received cash for her work, it was “not as much as my mom”. She said Roya was paid a lot in cash. Meanwhile, Roya refused to provide an estimate about how much she is paid in cash as a percentage of her income, when she was cross-examined.

78When testifying about the cash, the wife said “there are no tracing documents”. She said this in tandem with not producing her mother’s bank statements, to show any withdrawals that corresponded to the cash deposits that she made, to cover the expenses, either. At one point Roya said that there would have been bank transfers that could be traced. Yet both the wife and Roya testified that Roya’s business account no longer exists, so she could not obtain the statements.

79In a similar vein, Roya claimed that she paid $30,000.00 to renovate the property at some point. Although during her examination-in-chief Roya said she instructed the construction workers, and the wife had nothing to do with this renovation, once again no records were introduced, like contracts or receipts, to corroborate the cost of the renovations.

80In regards to the size and frequency of the cash deposits that Roya allegedly gave to the wife to cover the expenses, the wife testified that her mother never gave her a “pile of cash”. She said that Roya generally gave her small amounts periodically every two or three days, and then she would make deposits. Sometimes the amounts might have been larger though, the wife conceded.

81Indeed, in the statements from 2019, there are two such “larger” amounts, although I do not find they came from Roya. Rather, they were either unexplained (not questioned on) or not adequately explained. For example, on October 21, 2019, a few months after the closing, the wife made a single deposit of $24,336.34, and two others totaling an additional $1,000.00. It seems that some of this money covered the mortgage payment and certain other expenses. But the wife also immediately withdrew $24,000.00. There is another notation of a $25.00 withdrawal for “Investment SPECIAL DEPOSIT”.

82Eleven days later on November 1, 2019, the wife deposited another $46,000.00 and then invested it in a GIC on the same day. She was asked about this money. She claimed that this was her father’s money, given to her because he was traveling, that she later refunded back to him. There is in fact a corresponding GIC redemption and withdrawal on January 20, 2020. But the father was not called to testify about the fact that this was his money, or why he had to give the wife $46,000.00 because he was “travelling”. Nor were documents showing that this money emanated from him tendered.

83In cross-examination, counsel for the husband referred the wife to a cash deposit of $5,266.30 on April 17, 2019 as an example of one of the perhaps smaller, more regular deposits. The wife could not remember the particulars of this deposit.

84At first she denied that any portion of it came from her. She then admitted that she also made deposits of her own money, to cover her own insurance, phone bills and other personal expenses. As the cross-examination continued, the wife changed her evidence to say that some of this deposit of $5,266.30, that she had first said was not hers, would have in fact come from her, to cover her car payment and car insurance. Although in re-examination, the wife clarified that her car payment and car insurance would have been less than $1,000.00, there is no way to actually ascertain who deposited what on this occasion. At one point the wife said “how do you trace cash.”

85The explanation for why the condominium’s expenses were paid through the wife’s account also at times resembled the evidence given about the mortgage broker. It was done this way, because someone else who was not called to testify, claimed it had to be so. Both the wife and Roya said that the expenses had to be paid in this fashion, because the wife “was the titled owner of the Condominium” and so “the payments had to come out of [her] account”. The wife claimed that “the bank” said the money had to come from her account, as the owner of the property.

86There are obvious credibility problems and problems of proof respecting this evidence. There is no documentary evidence to trace the source of the funds used to pay the mortgage and the other condominium expenses. It may be that the wife and Roya were not paying income tax on their cash earnings, or as I explain below, perhaps there was a scheme to avoid paying capital gains tax on the later sale. Under the circumstances, the Court is unable to making findings about the extent to which the funds deposited were the wife’s, or Roya’s, or whether the funds were co-mingled from these dual sources, or whether they came from somewhere else. As the money for the mortgage and the other condominium expenses came entirely from the wife’s bank account, the simplest, and indeed the only thing the Court finds it can do, is to attribute those payments to her.

b. The Impact of the Court’s Finding that the Wife Made the Mortgage and Condominium Payments

87Now that this finding has been made, the second question becomes what it its impact in the analysis.

88I find this evidence has dual relevance.

89First, in regards to the all of the carrying costs, not just the mortgage, this could be some evidence, that Roya did not intend to retain beneficial ownership. For example, the wife paid the expenses, because the wife was the true owner. But another plausible explanation, which is the one that I am finding, is that Roya made a significant downpayment, and the wife paid the mortgage and expenses thereafter, as her contribution as a part owner. At a minimum the wife used the condominium, such as for her own business activities and to live there; it is logical to presume that she would take responsibility for at least some of the expenses.

90Second, in regards to her subsequent mortgage payments in particular, the wife argues that they are irrelevant in the analysis of a purchase money resulting trust. She says they do not confer upon her a proprietary interest, or detract from Roya’s 100% ownership. She reiterates that the relevant time for the assessment of a purchase money resulting trust is at the time of the acquisition of the property. She points the Court to certain cases that stand for this proposition.

91For example, at ¶ 64 of Khaira v. Ghumman, 2022 ONSC 7165, Sanfilippo J. held that any maintenance payments that Ms. Khaira made would not ground a purchase money resulting trust because of this issue of timing (payments made subsequently; not at the time of acquisition). Another example of this principle may be found in O.K. v. M.H., where McGee J. rejected the husband’s argument, that he was the sole beneficial owner of a property, in part because he paid for the mortgage over time.

92However, these cases are also factually different. Unlike in this case before me, in Khaira v. Ghumann, title to the property was taken in the husband’s name to begin with, as was the mortgage. The issue about the mortgage payments in that case was whether the wife’s (the non-titled spouse’s) payments mattered. Perhaps more importantly, Sanfilippo J. equally found that there was no evidence that Ms. Khaira had contributed to the original purchase money, at all. In other words, unlike here, the husband contributed all the purchase money, the husband took title, consistently with that contribution, and the husband was liable to the bank for the mortgage. While the wife’s contributions might have been relevant in an unjust enrichment analysis, the Court found that not to be so in the resulting trust analysis.

93Differently, in O.K. v. M.H., the husband was the title holder and he paid the mortgage. But McGee J. found that the source of the purchase money to acquire the property came from joint funds, and found that the husband held half of the property in trust for the wife. As to the reason that the husband took title in the first place, McGee J. found that it was “undisputed”, that the wife had a mistaken belief, that by placing title in the husband’s sole name, she was preserving her ability to claim a first-time homebuyers’ credit in relation to a subsequent property: see ¶ 92. Moreover, paragraph 94 of the decision could be read, not that the subsequent mortgage payments are irrelevant, but rather as the Court considering, and treating the husband’s subsequent payments, as insufficient evidence to overcome the finding about the original intention (to co-own the property). But to the extent that paragraph 98 of the decision, for example, stands for the proposition that subsequent mortgage payments can never count as contributions to the acquisition of the property, there are cases, including appellate authority, that say otherwise.

94First, the jurisprudence from the Supreme Court and the Ontario Court of Appeal provides that the extent of one’s purchase money resulting trust claim is only in proportion to one’s contribution. For example, at ¶ 25 of Kerr v. Baranow, when Cromwell J. explains the doctrinal problems with the “common intention resulting trust”, he also says, “[t]he point of the resulting trust is that the claimant is asking for his or her own property back, or for the recognition of his or her proportionate interest in the asset which the other has acquired with that property.” See also Nishi v. Rascal Trucking Ltd. ¶ 1; and Bradshaw v. Hougassian at ¶ 8.

95But more specifically, on the facts of several Court of Appeal decisions, courts have correctly considered subsequent mortgage payments as contributions to the original purchase. And one decision has very specifically commented on the treatment of such payments.

96In Andrade v. Andrade, 2016 ONCA 368, a mother had borrowed $1,000.00 from a community member to purchase a property. She otherwise paid $1,395.00 on closing and took out two mortgages to fund the purchase of a property. She put the house in the names of two of her children.

97Although the mortgages were later renewed in the names of two of her children, the Court found that the mother had paid all of the house expenses from her bank account. Part of appeal revolved around whether the funds in the bank account that had been used to pay all of these expenses came from the mother, versus another source. Inherent in this analysis, is the fact that it was the mother who made the original contribution to the property, which consisted almost entirely of borrowed funds, that she then paid off over time.

98Similarly, in Bradshaw v. Hougassian, another estate case, a mother had contributed $10,000.00 towards the $38,000.00 purchase price of a property. Notably, the son only contributed $8,000.00, an amount $2,000.00 less than his mother’s original contribution. But he simultaneously obtained a mortgage in his name for the balance. While the mother paid the mortgage for just a year, the son then later paid the rest.

99The ownership of this property was disputed after the mother’s death. The Ontario Court of Appeal upheld the trial judge’s finding, that the mother’s estate had a 26% interest in the property, based on her having contributed only a 26% share of the value of the property. [3] A review of the Court of Appeal’s decision, and the trial judge’s ruling (at 2023 ONSC 3266) reveals that the Court credited the son with both his $8,000.00 contribution, and the subsequent mortgage principal paydown, to get to his 74% interest.

100Finally, and most directly on point, in Chechui v. Nieman, 2017 ONCA 689, the ownership of a property, purchased in part with mortgage funds, was also in dispute, this time between separating spouses. After the purchase, the husband made a large lump sum payment of $1 million to pay off a bank debt, that had been obtained to acquire the property in the first place. The result was that the spouses were found to be equal owners. But at ¶ 55, Cronk J.A. found that it was not axiomatic, that just because the parties intended to hold title jointly, that the husband intended to forgo credit with respect to mortgage payments made subsequently.

101Furthermore, beginning at ¶57, the Court specifically dealth with one of the trial judge’s findings, that “a presumption of resulting trust did not arise in [the husband’s] favour because, in his view, a presumption of resulting trust can apply only on the purchase or transfer of property, and not to a post-purchase reduction of liabilities associated with the purchase or transfer of property”. Notably this is the precise argument now being made in this case before me. Cronk J.A. first found, at ¶ 59, that the repayment of the line of credit, was gratuitous and directly linked to the acquisition of the house. She then wrote at ¶ 62:

By proceeding in this fashion, the application judge essentially asked himself the wrong question. The repayment of the line of credit was integrally bound up with the purchase of the Brookdale property. [The wife] did not dispute that the parties had agreed that Ian would repay the mortgage -- later converted to the line of credit -- shortly after the Brookdale closing.

102And at ¶ 63, she found it was appropriate to look at the husband’s intention at the time he made the payment (subsequent to the purchase), in the resulting trust analysis.

103While I appreciate that in Chechui v. Nieman, the Court was considering one large after the fact lump sum payment, I recognize that in some cases, there will be a series of regular mortgage payments over many years. In some cases, this may be cumbersome. I appreciate that the analysis may be better dealt with in unjust enrichment framework depending on the circumstances.

104But here, I have found that Roya contributed to the purchase price, by way of the deposits. This was only a portion of the purchase price. It was not 100%, because there was a mortgage to pay. The wife’s ongoing payments are not just subsequent evidence of the Roya’s actual intention. Rather, I have found that the wife contributed the $46,722.19 on closing, she became the sole mortgagor. She then paid the mortgage over time, along with the property’s other expenses. In other words, the wife made contributions too, to the acquisition of the property, that she then held title to. Some of that her contributions involved the taking out of a debt, when the property was purchased, that she then serviced. To ignore this, as the Court said in Barber v. Magee, would be to “ignore the reality of the situation”.

105In conclusion, just as Cronk J.A. found in Chechui v. Nieman, I find the wife’s subsequent mortgage payments to be “integrally bound up with the purchase” of the condominium.

(4) The Subsequent Tax Treatment of this Property Upon the 2022 Sale

106As a part commercial and part residential property, I do not believe that this condominium would have been completely exempt from capital gains on the basis of it being someone’s principal residence. [4] And to the extent that this Court is finding that Roya had beneficial ownership interest in the condominium, her actual principal residence was always elsewhere, so on that basis too, this property was not completely tax exempt on its sale. Yet what happened after the 2022 disposition of the property, was that the wife improperly claimed that the entirety of the property was her principal residence on her 2022 tax return. Capital gains taxes were not paid to the CRA on the sale.

107The husband relies on this piece of subsequent evidence as evidence of actual intention, to argue that title should prevail and the wife is the legal and beneficial owner. The wife did not have a good explanation for why she did this. In re-examination, the wife’s counsel even asked the wife a question that seemed to try to shift the responsibility for this onto the accountant. And yet again like she did with the mortgage broker, the wife this time seemed to suggest her accountant is at fault.

108Frankly Roya’s testimony on this point was no better. In cross-examination, Roya first claimed that she paid capital gains tax on the property, although it was not immediately apparent to the Court that Roya understood that counsel was asking about capital gains taxes (as opposed to property taxes or some other taxes associated with the purchase, for example). Roya later claimed to be unaware of the fact that the wife filed the principal residence form with her 2022 taxes. She then claimed that she paid taxes, and if she hadn’t done so, she would pay them. At this point in the cross-examination, Ms. Lyons asked the Court to make a production Order, but the wife’s counsel conceded that Roya did not claim capital gains on her tax return upon the sale of the property.

109So does this evidence mean that the wife should be treated as the owner because of what she later reported to CRA upon the sale? In Pecore v. Pecore, the Supreme Court in principle agreed that as a matter of policy, a transferor should not be permitted to transfer beneficial title while asserting to the Canada Revenue Agency that such title had not passed to avoid the payment of taxes. However, in Andrade v. Andrade, van Rensburg J.A. later dealt extensively with a similar tax type argument. There, in another estate case, the trial judge considered that the mother took a tax credit for rent paid to her sons to be evidence that the sons were the “real, beneficial owners”. While consistent with legal title, the tax filings did not reflect what was actually occurring, because the mother never paid rent, and the sons then deducted various housing expenses to offset the rent: see ¶ 87 and 88. The trial judge also questioned the veracity of the explanation received for this: see ¶ 91, like I do respecting the testimony about the tax filings in this case before me.

110But at ¶ 92-94, Van Rensburg J.A. held that the fact that a party represents or deals with a property in a certain way that is inconsistent with beneficial ownership does not necessarily preclude a claim of beneficial ownership in later litigation. At ¶ 95, she found that the Court was entitled to consider that the mother’s tax filings were contrary to her estate’s argument that she was the beneficial owner, as some evidence of intention, but it was the mother’s actual intention at the time of the transaction that had to be determined on the whole of her evidence. At ¶ 96, she found that the mother had no part in the creation of the tax returns, and so they shed little light on her intention. She also found at ¶ 104-106, that the “clean hands” doctrine did not bar the claim, because “actions unrelated to one’s claim will not necessarily bar a plaintiff from her remedy”, the estate was not relying on fraudulent documents to prove its claim, and the estate was not seeking to profit from the manner in which the tax filings were arranged. Rather, as is the case here, the estate was seeking equitable relief in relation to the mother’s interest in the home, and the tax filings, while relevant, were not fundamental to the cause of action.

111More recently in Falsetto v. Falsetto, [2024] O.J. No. 883 (C.A.), a 2-1 decision of the Ontario Court of Appeal, albeit not a tax decision, the Court split over whether a person could transfer title to avoid the operation of the Planning Act, but retain beneficial ownership in a purchase money resulting trust analysis. Like the tax analysis in Andrade v. Andrade, the majority decision found that the Planning Act consideration was a relevant, but not determinative factor.

112And even returning to Pecore v. Pecore, which seems to have the stronger policy statement about this, that case in part concerned a question about different tax treatment that may or may not apply at the time of opening a joint bank account, unlike here, where the tax issue arose subsequently, and not at the time of the property’s acquisition. In any event, the Supreme Court’s comments about the policy issue are ultimately obiter, at least insofar as the precise capital gains tax issue in that case is concerned. The Court noted that the issue was not fully argued, and at ¶ 70, Rothstein J. said, “I can say no more than these are matters for determination between the Canada Revenue Agency and taxpayers in specific cases.”

113Here, there was no capital gains taxes payable when the either the Purchase and Sale Agreement or the Amendment were signed, or when the wife took title. The capital gains issue is a subsequent event. So while it is evidence about credibility, and while I have considered this tax evidence as subsequent evidence that may speak to Roya’s actual intention at the time of the original transaction, it is just as a factor, not the determining one.

114And yet again, there are competing plausible explanations for what happened. It could be that Roya did not intend to retain beneficial ownership, and that is why the wife reported the sale (improperly) to CRA. [5] An alternative explanation though, is that Roya could have in fact qualified for the mortgage contrary to what she, the wife and the real estate agent claimed, but she chose to put the property in her daughter’s name while retaining the beneficial ownership, with a view to avoiding a future tax liability, because she already owned another property. Were this so, this could be more problematic in the analysis, but this kind of ‘clean hands’ argument, that could result in the denial of equitable relief, was not pursued. Another explanation, is that there was a desire just not to pay tax, to which someone only turned their mind later on when the property was sold, and this happened irrespective of ownership. And yet another explanation, like what also happened in Andrade v. Andrade, is Roya’s evidence (although questionable in view of the serious challenge to her credibility), that she had no knowledge of the wife’s tax filing. Either way, I do not find that this case should be decided on the wife’s tax filings.

(5) The Parties’ Motivations in this Litigation

115Both sides are accusing the other of ulterior motives. These arguments were made with some reference to what happened to the sale proceeds after 2022 sale. The arguments about motives are more broadly advanced too. For example, as I have already said, the wife says that the husband refuses to pay her anything, and the husband says that the wife’s positioning is the latest in a series of claims that she is making, to enrich herself at his expense.

116Regarding the transfer of the sale proceeds to Roya for the purchase of the cottage, the husband says that all of it should be “deemed an improvident transfer and included on the wife’s net family property”. By contrast, the wife says that the husband never made an issue about the fact that the sale proceeds were given to her mother and spent on a cottage at the time, because he knew she was not the beneficial owner. She says he is only advancing this argument now, because he does not want to pay an equalization payment.

117The husband did admit to being aware that the condominium was going to be sold, prior to the separation. He testified that the wife told him he had to sign the real estate contract, because he was her spouse. But he also testified that he was not fully aware of how the proceeds were going to be used, because he was “always kept in the dark” when it came to financial situations. The wife denied that she was secretive, and said that they never talked about their finances.

118The husband later learned, also before the separation, that the sale proceeds got transferred over to Roya. He said he did not initially know why. He then found out that the wife and her mother were looking for a cottage. When asked whether he approved, he said it was too late. He claimed if he had known the funds were going to be transferred, he would have objected. He also said that he asked the wife to start contributing towards the matrimonial home’s expenses, now that the condominium had been sold, but she did not, as there was now a new mortgage debt to service on the cottage.

119Mr. Mazinani cross-examined the husband on this statement that he would have objected. He asked questions about why the husband failed to take steps to protect his interest, either when the property was sold or thereafter. But like much of the other evidence in this case, why people acted in certain ways can cut both ways. For example, Ms. Lyons cross-examined of Roya on the exact same point, albeit differently. Roya was asked, and admitted, that she knew the parties’ marriage was in trouble by early 2022, and that things got worse by the spring and summer of that year. She also admitted to having some familiarity with family law in Ontario, on account of her own previous divorce.

120Although I am not inclined to draw any of the following conclusions one way or the other, once again there are several that could be drawn. One, is that the husband knew that the property actually belonged to Roya, and that is why he did not act, but he raises the issue now because he owes an equalization payment. Another is that the wife and her mother acted to protect the wife’s asset, or alternatively her joint asset with her mother, when the marriage was in trouble, by selling it and transferring the proceeds to Roya for safekeeping. Another is that Roya acted to protect her own asset. Another is the wife agreed to contribute to the cottage that Roya bought, which has in fact been used by other family members since its purchase. This is a different theory that seems to have been advanced, arising out of some of the questions put to the witnesses.

(6) The Parties’ Positions Respecting Roya’s Downpayments

121In my view, the weightiest factor in the analysis concerns the parties’ positions respecting Roya’s downpayments of just under $140,000.00. I repeat that it is undisputed that Roya paid these.

122During closing submissions, the husband’s counsel attempted to argue that the transfer was not in fact gratuitous. She said that while Roya did pay the funds, she also transferred the contract to the wife. Therefore, with the funds came a contractual obligation. If Roya’s payments were not in fact gratuitous, then that is fatal to the wife’s claim that Roya is the beneficial owner in a resulting trust analysis.

123This argument, while interesting, fails to take into account, two things. First Roya continued to make deposit payments after the assignment. In other words, even after she supposedly divested herself of her obligations under the contract, Roya continued to contribute. And in so far as the amendments to the Agreement of Purchase and Sale is concerned, it is not factually correct that Roya transferred the obligations under the contract, at least not in their entirety. The documentation reveals that Roya continued to be jointly and severally liable. That there were joint and several obligations under the assigned contract, is consistent with the result that I intend to Order, which is one of shared ownership.

124In the end, what I am left with, is the fact that Roya made significant deposit payments. And neither side has actually clearly articulated that those payments were either intended to be a loan to the wife, or a gift. At its highest, the husband’s admission in cross-examination, is that he did not know what the original intention was.

D. Findings and Conclusions Respecting the Evidence of Actual Intention and the Presumption of Resulting Trust

125In summary, I find:

(a) On the one hand, the title documentation is in the wife’s name. The wife’s and Roya’s explanations for why the wife took title (to obtain mortgage financing) do not make sense; (b) On the other hand, the real estate agent testified as to her understanding behind the purchase that she acted on; (c) While the wife used the property as her residence for a time, she never had exclusive or even primary use. Both the wife and Roya operated their businesses out of the commercial space throughout; (d) While the wife incorrectly reported the property to be a principal residence on its sale, there are a number of conclusions that could be drawn from this. The tax filings are not dispositive; (e) Both parties are to some degree motivated to improve the strength of their positions respecting their other claims in this proceeding; and (f) The act of selling of the property, and the evidence about who acted or didn’t act to protect their interests as a result, is also open to varying conclusions being drawn.

126In a number of respects, the evidence that I heard during this trial raises more questions than it provides answers. But one particular factor weighs heavy, that Roya paid the deposits and no one said that these were intended to be either a gift or a loan. I am unable to find that there is an “absence of intention [on the part of Roya] to create a beneficial interest” for herself. The presumption of resulting trust is not rebutted. Alternatively, if there is no clear evidence of intention, then the presumption of resulting trust still applies.

127Just because the Court finds that Roya has a beneficial ownership interest because of her deposit payments does not end this matter. She did not pay 100% to acquire the property. The wife also made contributions. They were joint contributors. If anything, the subsequent evidence that I have just outlined, is consistent with an outcome that the parties were joint owners.

PART VII: THE QUANTIFICATION OF THE WIFE’S INTEREST IN THE PROPERTY

A. The Extent to Which the Wife’s Subsequent Mortgage Payments Contributed to the Property’s Acquisition

128Although the wife’s bank statements were filed, I was not given a complete accounting of the total amount of mortgage payments that the wife paid, broken out as between principal and interest (or providing the totals of the other amounts that she paid) between the closing date and the date of the sale. In the end this does not matter. The Charge reveals that the monthly mortgage payments were $2,518.82, commencing April 21, 2019. That means there were 37 payments, between the first payment on April 21, 2019, and what I assume was the last payment before the sale on April 21, 2022 as the sale closed on May 21, 2022). On this basis, the wife made mortgage payments of $93,196.34 made alone. [6]

129The husband says the maintenance fees were $714.78. [7] Assuming that was constant throughout, the maintenance fees would have cost $26,446.86 over the same time period. There may have been other amounts, such as insurance about which I heard some evidence, although not tallied up and quantified.

130I can see from the documentation that the wife’s subsequent mortgage payments reduced the mortgage principal by $32,428.75 between the 2019 closing and the 2022 sale. I can ascertain this from the real estate closing documentation for both the purchase and the sale. In particular, it reveals that the mortgage started out at $557,456.00, and ended up at $525,027.25 at the time of the sale. I did not hear any evidence about any missed mortgage payments.

131It could be argued that all of these payments were necessary to maintain the asset. That could be important in an unjust enrichment analysis. Here, I would restrict the analysis to the mortgage payments though, and specifically to the portion of those payments that translated into principle reduction. All of these payments really only translated in a smaller portion of the equity, or in other words the acquisition.

B. The Court’s Summary of the Wife’s and Roya’s Contributions, and Their Proportionate Interests In the Condominium

132In summary of the $727,734.92 purchase price:

(a) Roya contributed $139,364.00; (b) The documentary evidence reveals that the wife provided $46,722.19. As the source of this was not explained, but it came from the wife according to the real estate documentation, I am treating as the wife’s contribution; (c) The wife paid down the mortgage by $32,428.75, between the date of purchase and the date of sale; (d) Therefore, the wife contributed a total of $79,150.94 towards the acquisition of the property; and (e) This is a 64-36% split.

133I find that Roya’s beneficial interest in the property, in proportion to her contribution, is 64%. The wife’s is 36%.

134I will now quantify the wife’s percentage interest on the relevant dates, in dollars and cents.

C. The Wife’s Appraisal of the Condominium at the Date of Marriage Value

135Unhelpfully, the closing of the purchase of the condominium occurred almost two years prior to the date of marriage, and the sale occurred after it. The wife does not have proper evidence of value for the property as of the date of marriage.

136On or about February 1, 2024, the wife obtained a retrospective appraisal as of the date of marriage. The wife’s appraiser valued this portion of the property, at $550,000.00. The husband included the wife’s appraisal in his Exhibit Book. The Exhibit Book was marked as an exhibit. There was no objection.

137But on my further review, the appraisal is incomplete. It values only the residential portion of the condominium. I do not understand why the wife obtained an appraisal like this. I fail to understand how that is a sound approach; one cannot sell a portion of a condominium unit. The wife did not call the appraiser to testify to explain this, either.

138I understood the husband’s counsel to suggest that the Court should just use this value as the date of marriage value, since that is what the wife supplied. I have considered this. But while the wife ought to have obtained better evidence on the date of marriage, I do not see this result as fair to her. That approach would represent almost a $180,000.00 decrease in the property’s value, in the short period of time between the closing of the purchase and the date of marriage. This approach would yield little to no equity in the property on the date of marriage, and that is a fiction. When the Court embarks upon calculating the wife’s Net Family Property at the next hearing, the entire percentage ownership interest that I have attributed to the wife, would be included, without a date of marriage deduction. Finding that much growth in the wife’s net worth over the course of the marriage would also be a inflated fiction. I further observe that the husband could have obtained a more fulsome appraisal of the property, when the wife did not, especially since he is the one seeking to have it form part of her Net Family Property, but he chose not to.

139I considered whether to adjourn this matter to require the parties to obtain additional appraisal evidence, but I decline to do this too. That will delay the second part of the hearing, it may lead to an evidentiary dispute if the appraisal is contested, and otherwise there will be more costs. The parties knew from Daurio J.’s Endorsements, that the valuation of this property was one of the issues for this trial. And as I will demonstrate below, there is very little at stake when it comes to this asset, even now that I have determined the wife had some ownership interest in it. Adjourning to permit the parties to obtain an appraisal is not proportionate.

140Therefore, I have decided instead, to adjust the property’s value in a linear way from the time of its purchase, forward to the date of marriage, by using the purchase and sale prices. While I appreciate that this approach may not be completely accurate, as the market did not necessarily increase in a straight line, I find it is close enough. If the parties are dissatisfied with this approach, then they need to take responsibility for the fact that they did not put better evidence before the Court on this point.

D. The Court’s Calculation of the Wife’s Interest in the Equity at the Date of Marriage

141The property increased by $187,265.08, from its purchase price of $727,734.92, to the sale price of $915,000.00. The property was owned for exactly 38 months, between the closing on March 21, 2019 and the closing of the sale on May 21, 2022. There were just under 21 months, from the closing date to the date of marriage.

142On this approach, I determine the value on the date of marriage to be $831,223.52 (ie. $727,734.92 + ($187,265.08 x 21/38)).

143Unhelpfully, there is also no evidence of the precise mortgage balance at the date of marriage, either. I will apply the same methodology. I find the mortgage balance on the date of marriage to have been approximately $539,050.49 (ie. original mortgage balance of $557,456.00 less the mortgage principal paydown of $32,428.75 x 21/ 37 [8])).

144Therefore, I find the net equity in the property on the date of marriage was $292,173.03 (ie. $831,223.52 - $539,050.49).

145The wife’s 36% share that the parties shall include as a date of marriage deduction in the calculation of the wife’s Net Family Property, is therefore $105,182.29.

E. The Court’s Calculation of the Wife’s Interest in the Equity at the Date of Separation

146The wife 36% share of net sale proceeds on the date of disposition of $341,833.06, is $123,059.90.

147But what should happen, in view of the fact that all of the sale proceeds were given to the wife’s mother a few months before either of the parties’ dates of separation, to use for the purchase of the cottage? In my view, the Court should not leave open the prospect of a new argument, that the wife is now somehow entitled to deduct her 36% of the equity on the date of marriage, but that she will have no corresponding asset on the date of separation, further increasing the husband’s prima face equalization payment. For example, I find the wife would be hard pressed to take a position now, that she gifted these funds to her mother, after having previously taken the position that she did not own them. Her interest in the sale proceeds is traceable into the cottage in any event, and she would be entitled to credit for that investment, on the same kind of resulting trust analysis.

148Therefore, the parties shall include the sum of $123,059.50 as a date of separation asset in the calculation of the wife’s Net Family Property.

PART VIII: AN ALTERNATIVE APPROACH AND CONCLUDING COMMENTS

149Even if I am mistaken in this approach, for example if I should have found Roya to be the beneficial owner of the entire property on a resulting trust basis, then the wife might have still had a claim based in unjust enrichment on account of her initial contribution and/or her subsequent contributions that I have found she made. But then there would be different problems.

150The wife is not pursuing a claim against her mother based on unjust enrichment. Like her position on the resulting trust, that wouldn’t improve her position in this litigation against the husband. The husband cannot advance an unjust enrichment claim on the wife’s behalf against her mother, to improve his position in the equalization analysis. That is because a person does not have standing to advance a trust claim on behalf of a former spouse for equalization purposes: see Karatzoglou v. Commisso, 2023 ONCA 738 ¶ 24.

151However when it then came time for the second hearing, the wife’s failure to pursue a claim based on unjust enrichment may very well have been raised in the unequal division arguments: see Karatzoglou v. Commisso ¶ 24; see also Morris v. Nicolaidis, 2021 ONSC 2957, 2021ONSC 2957 ¶ 40. Perhaps this Court’s ruling on the purchase money resulting trust will not avoid these complexities.

152I am concerned about proportionality. As the parties can now see, the end result of this case merely increases the wife’s net worth by $17,877.61 for the purposes of the wife’s Net Family Property calculation. But for any unequal division, that translates into just $8,938.80 in the equalization calculation. Even if I ought to have attributed a greater share to the wife, for example because her other subsequent payments beyond just mortgage principle pay down should have counted, or even 100% ownership, she would still entitled to a date of marriage deduction. For example, if the husband had been completely successful and title completely prevailed, the wife’s growth respecting this asset would have been only $49,660.03, with a corresponding impact on the equalization calculation before unequal division, of $24,830.01 (ie. $341,833.06 - $292,173.03 = $49,660.03 / 2)

153I urge these parties to take a step back, and seriously consider what remaining monetary amounts are actually at stake (especially in view of the fact that both sides are pursuing an unequal division). They should be renewing any settlement discussions, before proceeding to the next step.

PART IX: COSTS

154I do not intend at this point to deal with costs of this focused trial. Costs may be taken into account in any settlement discussions, and otherwise can be addressed later, such at the conclusion of the second hearing, if no agreements are reached.

PART X: ORDERS

155This Court finds:

(a) The wife had a 36% share in the equity of the condominium, at the date of marriage, and the date of its disposition; (b) The wife’s 36% share of the equity on the date of disposition was invested in the cottage. It is traceable into the cottage as at the date of separation; (c) The parties shall include in the calculation of the wife’s Net Family Property, the sum of $105,182.29, as an asset on the date of marriage; (d) The parties shall include in the calculation of the wife’s Net Family Property, the sum of $123,059.90, as an asset on the date of separation; and (e) The parties shall appear before me on July 2, 2024 at 2 PM by zoom for up to 60 minutes, to schedule the conclusion of this matter, and to discuss any other issues or scheduling orders needed to prepare for that event, as required. If either counsel or either of the parties happens to be unavailable on the return date being fixed, I ask counsel to please contact me through the trial coordinator’s office within the next 7 days, to arrange a reasonable alternative date in short Order.

156The Court wishes to thank counsel for their assistance with this matter so far.

Justice Alex Finlayson Released: June 17, 2024

Footnotes

[1] As of January 1, 2021. [2] As of October 20, 2022. [3] $10,000/$38,000 = 26% [4] No accountant was called to testify the extent to which some of the property might have been tax exempt. [5] There is a different problem with this argument, because even if the wife was the owner and reported that as such to the CRA, she did not do so correctly and did not pay taxes. [6] The husband says the wife’s bank statements show mortgage payments of $2,612.12 per month. Therefore my math may be slightly off. [7] The wife’s bank statements reveal this. [8] There is one month less of mortgage payments during this period, in view of the commencement date of the mortgage, as identified on the charge. That is why this mortgage calculation uses 21/37, rather than 21/38 when dealing with value.