CITATION: Perrier v. Cvetkovic, 2020 ONSC 4545

DIVISIONAL COURT FILE NO.: DC-19-21 and DC-19-22

DATE: 20200727

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Ellies R.S.J., Sachs and Favreau JJ.

B E T W E E N :

PATRICK PERRIER

Respondent

– and –

MILIJANA CVETKOVIC

Appellant

Dennis G. Crawford

for Patrick Perrier

Nathaniel Read-Ellis

for Milijana Cvetkovic

MILIJANA CVETKOVIC

Appellant

– and –

PATRICK PERRIER

Respondent

HEARD: Heard in Hamilton on February 6, 2020

FAVREAU J.:

Overview

[1] The appellant, Milijana Cvetkovic, and the respondent, Patrick Perrier, are each registered as 50% owners of a property in Kitchener, Ontario.

[2] Mr. Perrier brought an application under the Partition Act, R.S.O. 1990, c P.4, for permission to sell the property. Ms. Cvetkovic brought her own application, seeking a declaration that Mr. Perrier holds his 50% interest in trust for her.

[3] In a decision addressing both applications, Sloan J. granted Mr. Perrier's application and dismissed Ms. Cvetkovic's application. In doing so, he found that Mr. Perrier's acquisition of his share of the property was not a gratuitous transfer, and that he therefore owns 50% of the property and is entitled to trigger the sale of the property under the Partition Act.

[4] Ms. Cvetkovic appeals the decision on the grounds that the application judge applied the wrong legal principles and misapprehended the evidence.

[5] For the reasons below, the appeal is allowed in part.

Background facts

[6] The property at issue consists of two semi-detached homes at 192-194 Wentworth Avenue in Kitchener, Ontario.

[7] Ms. Cvetkovic's parents bought the property in 1996 for Ms. Cvetkovic and her sister, Slobdanka. In 1997, Ms. Cvetkovic began living at 192 Wentworth Avenue and her sister at 194 Wentworth Avenue.

[8] Initially, Ms. Cvetkovic and her sister made mortgage payments to their parents. In 2003, the parents transferred the property to the sisters at which point they became registered co-owners and took over the mortgage.

[9] In 2008, Ms. Cvetkovic's sister decided to move out of her portion of the property. At the time, Ms. Cvetkovic decided to buy her sister's share and re-finance the property. Ms. Cvetkovic intended to rent out 194 Wentworth Avenue.

[10] Ms. Cetkovic contacted CIBC Mortgages Inc. about refinancing the property and was told that she would not qualify for a mortgage on her own.

[11] At that time, Ms. Cvetkovic and Mr. Perrier were dating. Ms. Cvetkovic asked Mr. Perrier to co-sign the loan. Initially, the parties sought to have Mr. Perrier shown as having a 10% interest in the property, but the bank did not agree to this proposal and required that Mr. Perrier have a 50% interest.

[12] Mr. Perrier co-signed the mortgage and was then listed on title to the property as having a 50% interest. The CIBC lent Ms. Cvetkovic and Mr. Perrier $200,000, which was close to the full value of the property. Ms. Cvetkovic's sister was paid $40,000 from the mortgage proceeds.

[13] Mr. Perrier moved into the unit at 194 Wentworth Avenue sometime in 2008. Mr. Perrier says that he moved in as a 50% owner in July 2008 whereas Ms. Cvetkovic says that he moved in as a tenant in December 2008.

[14] Mr. Perrier paid $500 every two weeks into an account used to pay the mortgage. This was more than half of the monthly mortgage payments on the property