Court of Appeal for Ontario

Date: 2019-06-20 Docket: C65849

Judges: Juriansz, van Rensburg and Paciocco JJ.A.

Parties

Between

Pezzack Financial Services Inc. Creditor (Respondent)

and

Frank Raso Debtor

and

Carlo Colacci Garnishee

Counsel

Ronald B. Moldaver, Q.C., for the appellants, Chanel Holdings Ltd. and 1598356 Ontario Inc.

Evan L. Tingley, for the respondent

Heard: June 17, 2019

On appeal from the judgment of Justice Markus Koehnen of the Superior Court of Justice, dated August 23, 2018.

Reasons for Decision

[1] The appellants appeal from the motion judge's decision that the respondent Pezzack Financial Services Inc., (Pezzack), is entitled to the proceeds of the settlement of a mortgage action held in escrow pursuant to its Notice of Garnishment served on the mortgagor. The Garnishee, Frank Raso, was the assignee of the mortgage.

[2] The appellants, Chanel Holdings Ltd., (Chanel), and 1598356 Ontario Ltd., (159), brought a motion resisting the garnishment on the basis that Raso held the mortgage in trust for 159 pursuant to an express or a resulting trust. They claimed the money should be paid out to them instead of to Pezzack.

[3] There is no basis for disturbing the motion judge's finding the claimed express trust was a sham. He applied the proper legal principles and his conclusion is amply supported by the evidence of the parties' post-declaration conduct.

[4] Counsel argues that, in any event, Chanel on behalf of 159, not Raso, paid the assignor for the assignment of the mortgage. Consequently, he submits there is a resulting trust in favour of 159. These are not the circumstances in which a resulting trust may be found. In any event, any presumption of a resulting trust is rebutted by Raso's rejected claim of an express trust and the motion judge's finding that he used himself, Chanel and 159 interchangeably as it suited him.

[5] The appeal is dismissed. Costs are fixed in favour of the respondent in the amount of $10,000.00 all-inclusive as agreed by the parties.

"R.G. Juriansz J.A."

"K. van Rensburg J.A."

"David M. Paciocco J.A."