COURT FILE AND PARTIES
COURT FILE NO.: CV-12-452035
DATE: 20140821
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Eun Jin Kim, Applicant
AND:
Jong Hyun Kim, Respondent
BEFORE: Carole J. Brown J.
COUNSEL:
K. MacDonald, for the Plaintiff
H. Hong, for the Defendant
HEARD: August 19, 2014
ENDORSEMENT
[1] The applicant, Eun Jin Kim, brings this application for a determination of whether the amount of $172,500 currently held in trust should be released to the applicant or whether it or a portion of it should be released to the respondent as a resulting trust.
[2] The applicant was a student in Ontario in 2005 and 2006. During this time, her father, the respondent, provided her with various amounts of money from November 17, 2005 to April 26, 2006, totaling $53,490.01, for purposes of assisting her with her tuition costs and living expenses while attending school in Canada. As well, he provided her sister, also a student in Ontario, with money to assist the sister with school expenses. During that time, her mother also provided financial assistance such that the applicant was able to save the money received from her father, along with other monies which she earned from part-time jobs.
[3] In 2007, the applicant decided to purchase property in Canada and was able to purchase a home at 88 Olive Avenue in the City of Toronto for $575,000. She placed a down payment on the home in the amount of $172,500, which included a $120,000 loan from her mother, Soon Nam Lee, comprising a $100,000 transfer plus a smaller sum of $20,000, and the balance from her personal savings account, which she had saved over the previous two years. She secured a mortgage for the remaining balance of $402,500.
[4] Following purchase of the property, her father, who was in the construction business, did some renovations to the property, including installation of drywall in the basement and laying some laminate flooring. The renovations had to be removed as they did not meet City standards. In 2008, following an altercation between the parties, there was no further contact.
[5] In 2011, the applicant attempted to secure a second mortgage on the property and, during the course of that transaction, learned that the respondent had placed a caution on the property. It was subsequently removed such that she was able to secure the second mortgage.
[6] In 2012, the Applicant accepted an offer to sell the property for $1,160,000. Her lawyer, Mr. Hui, learned that another caution had been placed on the property on March 5, 2009 by the respondent. He contacted counsel for the respondent who agreed to remove the caution in order to sell the property on the condition that Mr. Hui retain $172,500 from the proceeds of sale of the property until it was determined whether the respondent was the true beneficial owner of that amount due to a resulting trust between the parties. Hence, this application.
The Issues
[7] The issues to be determined on this application are, as follows:
Whether the amount of $172,000 currently held in trust should be released to the applicant.
Alternatively, whether the respondent is entitled to the amount of $172,500 on the basis that a resulting trust was established when the respondent provided the applicant with money to aid with living expenses and tuition in 2005 and 2006.
The Law
[8] As observed by DWM Waters, in his text, Law of Trusts in Canada, 2d edition (Toronto: Carswell, 1984):
Broadly speaking, a resulting trust arises whenever legal or equitable title to property is in one party's name, but that party, because he is a fiduciary or gave no value for the property, is under an obligation to return it to the original title owner, or to the person who did give value for it.
[9] In Anger and Honsberger, Real Property, 2d edition, Volume 1, page 646-647, it is stated that:
Where one person purchases property in the name of another or in the name of himself and another or others, a rebuttable presumption of a resulting trust arises where the other person is a stranger since equity presumes bargains, not gifts…
A resulting trust is presumed to arise when property is purchased with the money of one person but the conveyance is taken in the name of another, although there is no written evidence of the trust.
In order to raise such a resulting trust, the party asserting it must be able to show that, at the time of the completion of the purchase, he either actually paid or came under an absolute obligation to pay the whole or some ascertained portion of the price. A trust thus prima facie resulting from the payment or an obligation to pay the purchase price may always be rebutted by parole evidence on the part of the nominal purchaser. On the other hand, this rebutting evidence may in turn be contradicted by some sort of evidence on the part of the alleged beneficiary and the question to be decided may thus become a pure question of fact to be determined on the conflicting evidence alternately adduced for the purpose.
[10] Further, in Anger and Honsberger, it is stated that:
The basic principle of a resulting trust is an intention, express or presumed by the law, on the part of the person paying the purchase money that he should have the beneficial interest. Consequently, it would follow that, if there can be shown to have been in fact an intention on the part of the purchaser that the beneficial interest shall go to the person to whom the property is conveyed, the presumption is entirely removed and no trust would result.
[11] The factors to consider in determining intention of the transferor of money include:
a. Whether there was any contemporaneous document evidencing a loan;
b. Whether the manner of repayment is specified;
c. Whether there is security held for the loan;
d. Whether there are advances to one child and not to others, or advances on equal amounts to various children;
e. Whether there has been any demand for payment;
f. Whether there has been any partial repayment; and
g. Whether there was any occasion or likelihood of repayment.
Locke v Locke 2000 BCSC 1300, [2000] B.C.J. No. 1850, cited in Klimm v Klimm 2010 ONSC 1479, [2010] O. J. No. 968
[12] Advancement is a gift during the transferor's lifetime to a transferee who, by marriage or parent-child relationship, is financially dependent on the transferor: see Waters' Law of Trusts. There is no presumption of advancement between adult parent and child: Pecore v Pecore, 2007 SCC 17, [2007] S.C.J. No. 17.
[13] The evidence required to rebut both presumptions is evidence of the transferor's contrary intention on the balance of probabilities: Pecore v Pecore, supra.
[14] In this case, we deal with a purchase money resulting trust for which there are three requirements:
The trustee has title to the property;
The claimant must have supplied the whole or part of the purchase price when the property was being bought from a third-party and transferred into the alleged trustee’s name (Waters, supra, at page 302);
The claimant must prove that he acted throughout as a purchaser (Waters, supra at page 305).
Analysis
[15] In the present case, the property was purchased in 2007 in the name of the applicant and she was fully responsible for the financial obligations pursuant to the purchase and mortgage of property. There is no evidence to suggest that the respondent supplied the whole or part of the purchase price when the property was being bought from a third-party and transferred into the applicant's name. There was some evidence in the form of a transcript from cross-examination of the mother, Ms. Lee, in which she stated that the monies transferred to her daughter, the applicant, were a gift from the husband to the daughter. However, there is no documentary evidence of this. The respondent has provided no documentary evidence in support of his claim, including no bank documentation to support his claim. The monies from the mother are reflected in the applicant's banking documentation as having been transferred from her account to the applicant's account. The balance of the monies came from the applicant. There may have been some of those monies which had been given to the applicant in 2005 and 2006, while she was a student for purposes of her tuition and living expenses, and through her economies, saved by her in her bank account. There is nothing to isolate any monies which may have been given by her father for her school expenses from the other monies in her savings account.
[16] As regards the factors to be considered concerning intention of the transferor, as set forth at paragraph 10, supra, none of the factors evidencing a loan or repayment has been established by the respondent. There is no evidence to support the respondent’s contention that any monies given to his daughter were in the form of a loan or that he was to have a beneficial interest. There is no loan document, there is no specification of any manner of repayment, there is no security taken any amounts advanced. There was a request for repayment only when the relationship between the parties deteriorated 2008. There has been no partial repayment. Larger amounts of money were given to the respondent's other daughter, also a student. The $120,000 provided by the mother, Ms. Lee, was repaid at the time of the sale of the property. There is no evidence to support the respondent’s contention that any monies given to his daughter were in the form of a loan or that he was to have a beneficial interest.
[17] As regards the requirements for the purchase money resulting trust, title to the property is held by the applicant. There is no evidence to establish that the claimant supplied the whole or part of the purchase price at the time the property was being bought. As regards the $120,000 advance from the mother, there is no evidence that this actually came from the father, rather than from the mother's account. As regards the balance of the monies, which were taken from the applicant's own savings account, there is no evidence to indicate that the monies were to be used other than for her school expenses. There is no evidence to suggest that the monies were given to be used as part of a down payment for the purchase of property, nor that, at the time the monies were given, there was even contemplation of purchasing a property. There is no evidence to suggest that the monies were given as a loan rather than as a gift. There is no evidence to indicate that the respondent acted throughout as the purchaser, as required in establishing a purchase money resulting trust.
[18] Based on the foregoing, all of the evidence before me and the submissions of counsel, I find no evidence on which to conclude that these monies or a portion of them were subject to a resulting trust in favour of the respondent. I find that there are no monies owing or payable to the respondent. I order that the amounts held in trust by Henry K Hui & Associates in the amount of $172,500 be released to the applicant in full.
Costs
[19] I would urge the parties to agree upon costs, failing which I would invite the parties to provide any costs submissions in writing, to be limited to three pages, including the costs outline. The submissions may be forwarded to my attention, through Judges’ Administration at 361 University Avenue, within thirty days of the release of this Endorsement.
Carole J. Brown J.
Date: August 21, 2014