SUPERIOR COURT OF JUSTICE
CITATION: Morris v. Donegan, 2015 ONSC 3360
COURT FILE NO.: CV-14-3715-00 and CV-14-3957-00
DATE: 2015 05 28
ONTARIO
BETWEEN:
MILLICENT MORRIS
Wendy H. Greenspoon-Soer, for the Applicant
Applicant
- and -
GLENROY DONEGAN and DIRECTOR OF TITLES
Ajay Duggal, for the Respondent Donegan
Respondent
HEARD: December 17, 2014 and January 29, February 13 and February 17, 2015
REASONS FOR DECISION
EMERY J
[1] In the curious case of Millicent Morris and Glenroy Donegan, the parties dispute the extent of the interest the other holds in 108 Vivians Crescent, Brampton.
[2] This is a curious case because of the reasons given by Mr. Donegan for transferring a 50 percent interest in the property to Ms. Morris in 2013 as a joint tenant. It becomes even more curious because the documents subsequently registered under the Land Titles Act show that Ms. Morris transferred all but 5 percent of that interest back to Mr. Donegan on May 23, 2014, something she denies doing. It is also a most curious case because of the evidence given by Mr. Jaspal Singh Bhullar. Mr. Bhullar is a lawyer who purportedly acted for Ms. Morris on May 23, 2014, Mr. Bhullar testified voluntarily against her interests at the trial of the issues on February 17, 2015.
[3] There are two applications before the court. Ms. Morris commenced an application against Mr. Donegan and the Director of Titles on August 12, 2014 seeking recognition that she is a 50 percent owner of 108 Vivians Crescent. Ms. Morris seeks an order flowing from that finding that the Land Registrar for the Regional Municipality of Peel set aside the transfer on May 23, 2014 because it was a fraudulent conveyance. Ms. Morris seeks a further order that 108 Vivians Crescent be partitioned and sold under the Partition Act to receive the value of her interest.
[4] Mr. Donegan commenced a separate Notice of Application against Ms. Morris on August 29, 2014 under Court File Number CV-14-3957. In that application, Mr. Donegan seeks a declaration that Ms. Morris has no interest whatsoever in 108 Vivians Crescent. His application also requested an order requiring Ms. Morris to pay him $2,000 in past rent, and made a claim for punitive and aggravated damages in the amount of $200,000. The claims for past rent and for punitive and aggravated damages were not pursued at the trial, likely for good reason.
[5] The competing applications came on for hearing before me on December 17, 2014. In view of the conflicting evidence given in the affidavits, I ordered a trial of the issues under Rule 38.10. I specifically directed that, in addition to the right of the parties themselves to give viva voce evidence, I expected evidence from Winiesha Marlow, the daughter of Ms. Morris who had direct evidence to give relevant to what occurred on May 23, 2014. The trial proceeded on January 29, 2015 with Ms. Morris testifying, and resumed on February 13, 2014 when Mr. Donegan testified and Ms. Marlow was available to give evidence.
[6] It was on that day that Mr. Bhullar also testified voluntarily at trial.
[7] I have read the evidence given in support of, and in response to each application. As the applications are two sides of the same coin, I heard the evidence given at trial, as well as the submissions of counsel on both applications together. I have determined the outcome of the two applications based on the affidavits and the viva voce evidence given at trial for the reasons that follow.
FACTS AND BACKGROUND
[8] I propose to briefly set out the evidence given by each of the witnesses, after which I shall make findings of credibility and apply relevant legal principles to determine the result of these applications.
Millicent Morris
[9] Ms. Morris was represented by Mr. Ian Kilgour when her Notice of Application was commenced. She takes issue with the accuracy of certain affidavits she filed in support of the application. Subsequently, she retained Ms. Greenspoon-Soer, who filed a supplementary application record on her behalf as well as a factum for the return of the applications before me in December 2014. Ms. Greenspoon-Soer represented her on the initial return of the application, and at the summary trial. I intend to refer to the evidence given by Ms. Morris at trial, except where facts are given in an affidavit to complement or provide clarity to that evidence.
[10] Ms. Morris asks the court to find as a fact that she and Mr. Donegan entered a romantic relationship that continued until it broke down in 2014. It is this romantic relationship that provides the context for Mr. Donegan’s transfer of the 50% interest in 108 Vivians Crescent to her in February 2013.
[11] Ms. Morris was hired by Mr. Donegan at S.C.M. Company in Mississauga where she went to work in August 2005. He was her boss. He began flirting with her right away and by November 2005 they had progressed from dating to a sexual relationship.
[12] In 2008, Ms. Morris moved in with Mr. Donegan at his home at 15 Fallgate Drive in Brampton.
[13] In the course of their relationship, Ms. Morris had asked Mr. Donegan if he was married. He had said no, but he had pointed out another woman who also worked at S.C.M. Company, and explained to Ms. Morris that she was the mother of his children. He referred to this other woman as his “baby mother”.
[14] In April 2010, Mr. Donegan sold 15 Fallgate Drive. He told Ms. Morris that he had sold it to his ex-girlfriend. She now knows that he sold the house to his estranged wife.
[15] Ms. Morris subsequently rented two bedrooms for herself and her daughter at 58 Ferguson Place in Brampton in February 2009. 58 Ferguson Place was owned by Mr. Donegan’s father. Mr. Donegan asked his father to rent Ms. Morris that space. She paid Mr. Donegan’s father $600 a month for rent.
[16] Mr. Donegan and Ms. Morris would look at houses together around this time. They had viewed 108 Vivians Crescent and Ms. Morris had told Mr. Donegan how much she had liked it. Unbeknownst to Ms. Morris, Mr. Donegan made an offer on the house based on her wish that they purchase the house.
[17] Mr. Donegan purchased 108 Vivians Crescent on September 7, 2010. Ms. Morris did not know he had purchased 108 Vivians Crescent until the spring of 2011.
[18] Ms. Morris moved into 108 Vivians Crescent in August 2011 with her daughter, Winiesha. Ms. Morris lived there with Mr. Donegan as a couple until they separated in May 2014. Mr. Donegan told her that his ex-girlfriend, who Ms. Morris now understands to be his wife, was living with her mother.
[19] Mr. Donegan was unemployed at the time Ms. Morris moved in. Ms. Morris would pay $1,800 a month as her contribution towards the house because she considered herself and Mr. Donegan to be a couple. She would withdraw approximately $900 every two weeks out of her account and made a deposit to Mr. Donegan’s account at the Toronto Dominion Bank to look after the mortgage payment.
[20] 108 Vivians Crescent is a three bedroom home. Ms. Morris states that she shared the master bedroom on the second floor with Mr. Donegan. Her daughter, Wineisha, had the bedroom next to the master bedroom. There was also a spare bedroom on that floor. Ms. Morris states that, contrary to Mr. Donegan’s evidence, he did not live in the basement and rent the upstairs of the house to Ms. Morris.
[21] Ms. Morris testified that she also bought supplies for the home, including laundry soap.
[22] Ms. Morris and Mr. Donegan opened a joint bank account at the Toronto Dominion Bank in 2012. Ms. Morris started to pay $900 every two weeks into the joint bank account to cover the mortgage.
[23] Over time, one of Ms. Morris’ sons came to live at 108 Vivians Crescent. Mr. Donegan required Ms. Morris to contribute $200 more each month for that son to live at the house.
[24] Mr. Donegan had granted a mortgage to Toronto Dominion Bank when he purchased 108 Vivians Crescent in 2010. When the mortgage came due in 2013, Mr. Donegan arranged to refinance the house with Home Trust Company in the amount of $352,000 to payout the mortgage with Toronto Dominion Bank for approximately $326,000, and to receive the balance in cash. Mr. Donegan was unemployed at the time and could not qualify for the mortgage himself.
[25] Mr. Donegan told Ms. Morris that she deserved to get more than 50 percent of the house at 108 Vivians Crescent because she had “done more than her share”. He also told her that she should be on title in case something happened to him. As an owner, she would also be a party to the mortgage with Home Trust Company.
[26] Ms. Morris agreed to become a joint tenant on title, and to be a party on the mortgage. On or about February 12, 2013, she signed real estate documents at the office of Mr. Donegan’s lawyer for the transfer of a one-half interest in the property to her as a joint tenant, and to go on the mortgage with Home Trust.
[27] After becoming an owner of the house and a party on the mortgage, she reduced the amount she was paying each month to $800 every two weeks. She would deposit this amount directly to the joint account to make the mortgage payments.
[28] When the house was refinanced with Home Trust Company, Mr. Donegan gave Ms. Morris $1,000 to apply against her American Express card. She had no idea that she had signed a mortgage that provided surplus funds to allow Mr. Donegan to pay off $15,000 towards his own credit cards.
[29] In 2014, Mr. Donegan took her T4 slip from work and did her income tax return without her knowledge. He told her that he had done so after the fact when he told her that she would be getting a refund they could use to pay household bills.
[30] Ms. Morris denies that she was paying rent before or after she became a joint tenant on title to 108 Vivians Crescent. She states at paragraph 49 of her affidavit sworn on September 18, 2014, that:
- In response to paragraph 20 and tab E (of Mr. Donegan’s affidavit), I deny that I was paying rent. I was an owner of the house, on the mortgage, and sleeping with my co-owner. I was a joint tenant with the intention that the house would be mine if anything should happen to him.
[31] By May 2014 the relationship between Ms. Morris and Mr. Donegan was breaking down. According to Ms. Morris, Mr. Donegan had become possessive and controlling. Mr. Donegan was very upset because she was starting to go out with friends. Ms. Morris stopped having intimate relations with him. Mr. Donegan became even more upset when he and Ms. Morris were no longer intimate.
[32] During this time, Mr. Donegan would be verbally abusive to Ms. Morris when she would return to the home after spending time with friends. He would tell her to “pack your things” and to get out of his house. He would then calm down and assure her that he would never try to take away her half of the house, no matter what the circumstances were between them.
[33] Ms. Morris arrived back at the house around 10:30 p.m. on the evening of May 11, 2014. She had just taken Winiesha back to university in Hamilton. Mr. Donegan was waiting for Ms. Morris in the driveway of the house. He knocked the cell phone out of her hand with his open fist, and dragged her by the hair towards the garage. Ms. Morris testified that she said to him at that time “after looking after you for eight years you are going to hit me out here?”
[34] Ms. Morris slept on the couch after the incident in the driveway.
[35] Ms. Morris testified that she reported the incident to the Peel Regional Police Service, even though she did not want Mr. Donegan charged. She testified that she wanted to report the incident so that the police would have a record of it.
[36] Ms. Morris moved out of the home at 108 Vivians Crescent on July 4, 2014.
[37] Ms. Morris retained counsel to seek the partition and sale of 108 Vivians Crescent on July 31, 2014. It was only after her lawyer conducted a title search that she found out that a transfer had been registered on May 23, 2014 to sever her ownership of the property as joint tenants with Mr. Donegan, and that 45% of the ownership in the property she held had been transferred to Mr. Donegan. This apparent transfer made him the owner of 95% of the property, and reduced her ownership share to 5%.
[38] Ms. Morris testified that she did not sign the Acknowledgment and Direction for this transfer. Ms. Morris states conclusively that she does not know who signed the documents at Mr. Bhullar’s office, but it was not her.
[39] Ms. Morris obtained documents from Mr. Bhullar’s office through Mr. Kilgour after discovering the transfer. Mr. Bhullar provided a copy of the identification he had on file for Ms. Morris when she allegedly attended at his office to sign the Acknowledgment and Direction. There is a photocopy of the front and back of her Scotia Bank Visa card. The Visa card shows a signature on the panel for the customer’s signature beside a specific security number. Mr. Bhullar also provided a photocopy of the front and back of her driver’s license. The back of the driver’s license is not signed.
[40] Ms. Morris does not understand how Mr. Bhullar obtained the photocopies of her Visa card and driver’s license as identification. She testified that the signature on the back of the Visa card shown in the photograph provided by Mr. Bhullar is not her own. She suspects that Mr. Donegan borrowed her Visa card and driver’s license and had them photocopied, then signed or had someone sign the signature strip on the photocopy of the Visa card before photocopying it again to provide to Mr. Bhullar.
[41] Ms. Morris did not call an expert witness for handwriting analysis to offer an opinion that the signature on the Acknowledgment and Direction to transfer 45% of the ownership of 108 Vivians Crescent back to Mr. Donegan was not her signature.
[42] Ms. Morris attached a photocopy of the front and back of her Visa card as well as her driver’s license as an exhibit to the first affidavit she swore on August 6, 2014. The photocopies of each card are not signed on the back of those cards.
[43] Mr. Donegan’s counsel cross-examined Ms. Morris on October 15, 2014. As an answer to an undertaking, she produced a letter from Scotia Bank dated October 24, 2014. In that letter, Scotia Bank confirmed the expiry date and security number on the reverse side of her Visa card, along with the following details:
the date the account was opened;
the most recent card reissued on a specific date;
expired card activated on a specific date;
the effective date on the card and that it is still active, and;
that as of the effective date, the card has not been canceled lost or stolen.
[44] At trial, Ms. Morris produced the Visa card from Scotia Bank that matched the same details set out in the letter from Scotia Bank. This card showed no evidence of having ever been signed on the back.
[45] Ms. Morris testified that she has never applied for, or received a replacement card from Scotia Bank.
[46] Ms. Morris also testified that she has never manipulated her Visa card to remove her signature.
[47] Under cross-examination, Ms. Morris admitted that she paid no funds towards the purchase of 108 Vivians Crescent. She played no role in the purchase of 108 Vivians Crescent in 2010. While living at the house on Ferguson Place owned by Mr. Donegan’s father, Mr. Donegan did not tell her that he had purchased 108 Vivians Crescent. However, she had looked at the house with Mr. Donegan and she had expressed a desire that they purchase the property as a home.
[48] Ms. Morris was adamant that she was not renting space as a tenant when she resided at 15 Fallgate with Mr. Donegan. She provided $3,400 to refinish the hardwood floors in the house. She states that they lived there as a couple. She contributed to the finances of the home, paying them to Mr. Donegan on regular basis. She states that she shared the master bedroom with him. They were a couple, sharing things together such as finances, and cooking, cleaning and laundry chores.
[49] Mr. Donegan would visit Mr. Morris when she lived on Ferguson Road between 2009 at 2011.
[50] Ms. Morris states that when she moved into 108 Vivians Crescent in 2011, she was romantically involved with Mr. Donegan.
[51] When she moved into 108 Vivians Crescent, Mr. Donegan told her that the total amount between the mortgage payment and the property taxes each month was $1800. She was in fact paying $1800 to Mr. Donegan as her contribution towards the home and the relationship after she moved in because Mr. Donegan was not working at the time.
[52] A great deal of time was taken up during her cross-examination with questions about how much Ms. Morris would withdraw from her account periodically each month, and how much she would pay to Mr. Donegan. Most of the time, she would pay approximately $900 every 2 weeks into his bank account. Sometimes these payments were made in uneven amounts. Ms. Morris testified that all she knows is that she was paying the mortgage and the taxes for the house at 108 Vivians Crescent.
[53] Ms. Morris testified that she was added to the title of 108 Vivians Crescent when Mr. Donegan was required to renew the mortgage with TD Canada Trust. This actually became a refinancing of the property through a new mortgage with Home Trust Company. Mr. Donegan told her that he loved her, and wanted her to go on title to the house just in case something should happen to him. He also told her that she should have an interest in the house because she deserved it.
[54] Ms. Morris states that she signed the mortgage because she was acquiring a 50% interest in the house. It was her understanding that when they went to sign the documents, it was to make it so that they owned the home together.
[55] Ms. Morris denies the suggestion that Mr. Donegan required her to appear on for the sole purpose of becoming a party to the mortgage to help him out. Ms. Morris states that she trusted Mr. Donegan at the time.
[56] Ms. Morris was shown the letter the Mr. Balkar Singh Saini law office dated May 23, 2014 that was apparently written to Mr. Bhullar that day to explain the transaction. Ms. Morris testified that it was only after the litigation was commenced that she saw this letter at her lawyer’s office.
[57] The events of May 24, 2014 are clear in her mind. Winiesha had arrived the day before and had stayed overnight at 108 Vivians Crescent. Ms. Morris testifies that she left the house the next morning with Winiesha before noon. She states that they probably went to the supermarket first, and then travelled by car to the Shoppers World Mall at Highway 10 and Steeles Avenue in Brampton.
[58] Ms. Morris cannot recall the number of stores she visited with her daughter on May 23, 2014, but estimates they shopped at approximate five stores including Urban Planet. It was not her payday that day, and so she paid by debit card everywhere they went. They stopped at the food court in the mall to have lunch. She testified that she paid for the purchases she made with her debit card, including lunch for Winiesha and herself. Ms. Morris attached the bank statement showing those debit entries for that day as Exhibit C of her affidavit sworn on October 14, 2014 at pages 146 and 147 of her supplementary application record. Those entries are consistent with this evidence.
[59] Ms. Morris unequivocally states that she never attended at Mr. Bhullar’s office. She states that she did not sign the letter from Mr. Saini dated May 23, 2014 or any other documents at Mr. Bhullar’s office. She steadfastly denies that the signature on the Acknowledgment and Direction that transferred 45% of the ownership to Mr. Donegan is hers.
[60] Ms. Morris also testified that she attended the police station to report the fraud when she discovered that someone had signed her name on documents in 2014 without her knowledge or consent to transfer all but 5% of the ownership in the house to Mr. Donegan.
[61] Ms. Morris re-attended to the police station on October 21, 2014 to again complain about Mr. Donegan’s assault on her to ensure that there was a record of that incident. She denies that she re-attended at the police station to reassert the complaint because Mr. Bhullar had been cross-examined on October 15, 2014.
Winiesha Marlow
[62] Ms. Morris called her daughter, Winiesha Marlow, to give evidence. Ms. Marlow is 20 years old and was a student at McMaster University in May 2014.
[63] Ms. Marlow lived at 108 Vivians Crescent with her mother and Mr. Donegan before she enrolled at McMaster University. As a student, she would come home from time to time. She testified that her mother lived at 108 Vivians Crescent with Mr. Donegan as a couple. She testified that Mr. Donegan would refer to her as his stepdaughter, and that she called him “dad” for approximately nine years. The relationship between Ms. Morris and Mr. Donegan started when they all moved into the home on Fallgate Drive together.
[64] Ms. Marlow testified that Ms. Morris and Mr. Donegan slept in the master bedroom together. She knew this because her room was right beside the master bedroom on the second floor of the house.
[65] That Thursday evening, Ms. Marlow arrived in Brampton to spend the weekend with her mother. That night Ms. Marlow slept on the couch in the front room of the house because of a bedbug issue in the room she normally slept in when at home.
[66] On the morning of Friday, May 23, Ms. Marlow and Ms. Morris left the house at 108 Vivians Crescent together sometime after 11:00 a.m. Ms. Marlow states that she and her mother first stopped at the Shoppers World Mall in Brampton to shop at various stores, including Urban Planet. They had lunch at the food court around 12 noon. They then went to the Superstore to shop for groceries.
[67] Ms. Marlow states that she saw Mr. Donegan on the evening of May 22, 2014 when she arrived at 108 Vivians Crescent. She would not have seen him the next morning.
Glenroy Donegan
[68] Mr. Donegan stated in evidence that he relies on his affidavit sworn on August 14, 2014 in response to Ms. Morris’ application and in support of his own application.
[69] Mr. Donegan is steadfast in his position that he and Ms. Morris maintained a landlord and tenant relationship throughout the years since 2008. This he would have the court believe even though attributes had developed by August 2011 to make it a “tenancy with benefits”.
[70] Mr. Donegan admitted that he served as a father figure for Ms. Marlow. He could not recall any occasion when Ms. Marlow would refer to him as “dad”. Mr. Donegan denies that he ever formally referred to her as his daughter. However, he does concede that he coached soccer for 12 years and that he did go to “a couple” of her soccer games.
[71] Mr. Donegan purchased 108 Vivians Crescent in September 2010 for $377,000. He paid the entire down payment for this purchase. Mr. Donegan states that he lived in the house at 108 Vivians Crescent with his wife until they separated in July 2011.
[72] Ms. Morris had been residing at 58 Ferguson Place in Brampton in a basement apartment in a house owned by Mr. Donegan’s father. Mr. Donegan states that she was giving piano lessons at the time and required more space to provide piano lessons, as well as to accommodate a brother who was to visit her from Jamaica. Ms. Morris therefore moved in to 108 Vivians Crescent.
[73] Mr. Donegan states that Ms. Morris did not pay the rent on a consistent basis.
[74] In January 2013, Mr. Donegan had been unemployed and had just started to work with a new employer. He was therefore not qualified to renew the mortgage in his own name. He approached Ms. Morris to add her name to the mortgage. He states that he offered to pay $1,000 towards her credit card as a courtesy for helping him renew the mortgage and that Ms. Morris agreed to this request.
[75] In February 2013, Ms. Morris added her name to the mortgage. By this time, Mr. Donegan was no longer renewing the mortgage with TD Canada Trust, but had arranged a new mortgage with Home Trust Company for a greater amount. Mr. Donegan deposed in an affidavit he had been advised by his lawyer Sandeep Taneja, that the lender would require Ms. Morris to be an owner of 108 Vivians Crescent on title in order to sign for the mortgage. Mr. Donegan states that he agreed to this requirement because he had no choice.
[76] In contrast, Mr. Donegan testified at trial that he had no idea Ms. Morris was added to the title of 108 Vivians Crescent as an owner. He stated at trial that this must have been a mistake. He did not understand that she went on title as the registered owner as to 50% interest, and as a joint tenant. He states that Ms. Morris did not pay him for this 50% interest, and that he paid the legal fee for this transaction.
[77] Mr. Donegan states that he and Ms. Morris opened a joint account to service the mortgage. Mr. Donegan states that Ms. Morris would deposit her rent money directly into the joint account from which the mortgage would be paid so that he would not have to take the step of transferring money from his own account to the joint account to make the mortgage payment. Mr. Donegan states that the joint account was only used to pay the mortgage. The rest of utilities and other household expenses were paid out of his personal account.
[78] In May 2014, Mr. Donegan and Ms. Morris discussed the prospect of Ms. Morris moving out of 108 Vivians Crescent. He says she intended to have relatives from Jamaica move into the house and that if Mr. Donegan did not agree, she would require that her name be removed from the mortgage.
[79] Mr. Donegan also testified that Ms. Morris was by this time engaged to someone else, and that she and her fiancé intended to purchase their own property. Ms. Morris therefore wished to be removed from the mortgage on 108 Vivians Crescent. Mr. Donegan states that it was her intention to move from 108 Vivians Crescent in July 2014.
[80] Mr. Donegan asked at the bank about what would be required to remove Ms. Morris from the mortgage. He was told that he did not qualify to hold the mortgage solely in his own name at the time.
[81] Ms. Morris wanted her name off the mortgage at all costs. Mr. Donegan states that they ultimately agreed upon a plan where Ms. Morris would limit her liability under the mortgage by reducing her share of the registered ownership in the property. Mr. Donegan states that he made the suggestion to limit her exposures under the mortgage to 5%. This was the basis of the plan to transfer of all interest she held in 108 Vivians Crescent but 5% and to sever the joint tenancy to make them tenants-in-common.
[82] Mr. Donegan states that he retained Mr. Saini as his lawyer to make this transfer, and that Ms. Morris retained Mr. Bhullar to represent her on the transaction.
[83] Mr. Donegan admitted under cross-examination that he and Ms. Morris had an intimate relationship after she moved in to 108 Vivians Crescent in 2011. He states that he and his wife had an on and off relationship, just like the relationship he had with Ms. Morris. There is an element of truth to this statement. It would appear Mr. Donegan never lacked for female companionship. If he was off with one of the women in his life, it seems that he was on with the other.
[84] Mr. Donegan agrees that he never took steps to evict Ms. Morris or to give her notice if she did not pay rent on the first day of each and every month. He admits that he never reported rental income to Canada Revenue Agency on his income tax returns. He also never declared this rental income to employment insurance even though he was unemployed for part of this time. He also volunteered that the money that Ms. Morris paid him was so inconsistent that he would not know what to declare in any event.
[85] He admits that she often cooked for him, and that he cooked for her. He admitted that she cleaned the house. She gave him his medication.
[86] Mr. Donegan states that he was shocked to find out in February 2014 that Ms. Morris was registered on title as an owner of 108 Vivians Crescent. When he and Ms. Morris agreed to reduce her registered interest to 5% and to sever the joint tenancy to limit her exposure under the mortgage, Mr. Donegan called around to look for a lawyer to represent Ms. Morris on the transaction.
[87] On May 23, 2014, Mr. Donegan met with Mr. Saini for an undetermined length of time. Ms. Morris waited in the car. Mr. Donegan states that he signed documents in Mr. Saini’s office. Among those documents was the direction re: title that Mr. Donegan signed that would sever the joint tenancy and transfer all interest but 5% held by Ms. Morris to Mr. Donegan.
[88] Mr. Donegan cannot remember what he and Mr. Saini spoke about at this meeting. Mr. Saini was not called to give evidence at trial.
[89] Donegan testified that he and Ms. Morris then went looking to find a lawyer to represent Ms. Morris on the transaction. They first attended at one law office where the lawyer was not available. After 10 o’clock they then found Mr. Bhullar who had time to meet with Ms. Morris. Mr. Donegan states that he waited in the reception area. He states that Ms. Morris was in Mr. Bhullar’s office between 15 to 30 minutes.
[90] Nothing was done to remove Ms. Morris from the mortgage. Once the transfer was complete, Mr. Donegan states that he and Ms. Morris resumed a good relationship until she moved out in July.
[91] Mr. Donegan was not asked in-chief or in cross-examination about seeing Winiesha in Brampton on either May 22 or May 23, 2014.
[92] In re-examination, Mr. Donegan stated he still has a relationship with his wife, Norissa Donegan and that he never separated from her until June or July 2011, Mr. Donegan testified that he is still working things out with her but that he is not living with her at this time.
Jasper Singh Bhullar
[93] Mr. Bhullar initially volunteered to be examined under oath on the application and was in fact examined by counsel for each Ms. Morris and Mr. Donegan on October 15, 2014. Mr. Bhullar again volunteered to testify as a witness at trial even though he was not called by either party by invitation or summons.
[94] Mr. Bhullar was called to the bar in 2012. He practices residential real estate. He states that between 11:00 a.m. and 12:00 noon on May 23, 2014, Ms. Morris and Mr. Donegan showed up at his office without an appointment. He had never met either of those individuals before.
[95] Mr. Bhullar states that he represented Ms. Morris on the transfer of all but 5% of her interest in 108 Vivians Crescent and the severance of the joint tenancy. He identified Ms. Morris in court. He also identified Mr. Donegan in court.
[96] Mr. Bhullar described in court how he met alone with Ms. Morris on May 23, 2014 while Mr. Donegan waited in his reception area. Ms. Morris did not have the transaction papers with her. Mr. Saini faxed the transaction documents over to Mr. Bhullar’s office. One of those documents was a letter from Mr. Saini’s office dated May 23, 2014. This letter had already been signed by Mr. Donegan. It is curious that this letter, already signed by Mr. Donegan, was addressed to Mr. Bhullar even though Ms. Morris and Mr. Donegan had no idea what lawyer Ms. Morris wold ultimately retain to represent her on the transaction by when they left Mr. Saini’s office earlier that morning.
[97] Mr. Bhullar testified that he had Ms. Morris sign this letter above her name on the second page. The fax copy of that letter from Mr. Saini already showed Mr. Donegan’s signature above his name.
[98] Mr. Bhullar stated under cross-examination that he advised Ms. Morris specifically about the meaning of paragraph 2 and 3 of Mr. Saini’s letter when they met on May 23, 2014. He states that he understood from her that she had was on title to 108 Vivians Crescent to assist with an earlier renewal of the mortgage. According to Mr. Bhullar’s evidence, the purpose of the transaction was to limit, if not eliminate her exposure to liability under the mortgage.
[99] Mr. Bhullar prepared the Acknowledgment and Direction and had Ms. Morris sign it.
[100] Mr. Bhullar testified that he explained to Ms. Morris what these documents meant to her. She was in his office for 40 to 50 minutes.
[101] After she left, Mr. Bhullar stated that he faxed the documents over to Mr. Saini’s office. He does not think that he walked the documents over to him.
[102] In his cross-examination on October 15, 2014, Mr. Bhullar and stated that he had walked the documents over to Mr. Saini’s office. Now he states that his evidence given on October 15, 2014 is wrong and that he did not deliver those documents to Mr. Saini in person.
[103] Mr. Bhullar also made notes in the form of a memorandum of his meeting with Ms. Morris the following day.
[104] Mr. Bhullar states that Ms. Morris produced a credit card and her driver’s licence for identification, and not just photocopies of those cards at his office on May 23, 2014. He says he specifically recalls seeing the signature of Ms. Morris on the back of the credit card that he photocopied for identification purposes.
[105] Mr. Bhullar states that Ms. Morris paid him his fee of $250 plus HST in cash.
[106] The following day, Ms. Morris returned to Mr. Bhullar’s office after 3:00 p.m. to pick up his reporting letter to her. It would appear from the evidence of Mr. Bhullar that he did not prepare a reporting letter for her.
[107] Mr. Bhullar testified that an expert retained by Ms. Morris visited him at his office and that he had received a letter from Ms. Greenspoon-Soer dated November 2014. Ms. Greenspoon-Soer’s letter requested that Mr. Bhullar show the documents that had ostensibly been signed by Ms. Morris for this transaction to the expert. Mr. Bhullar states that he never heard from that expert again. I draw no adverse inference for this evidence.
[108] Mr. Bhullar agrees that the sequence of events that occurred at the meeting between himself and Ms. Morris on May 23, 2014 is set out in his memorandum. According to that memorandum, the transfer of her interest in 108 Vivians Crescent except for a 5% interest accomplished two things; it transferred her interest except for a retention of 5% of the ownership in 108 Vivians Crescent to Mr. Donegan, and it severed the joint tenancy. While the memorandum documents that the transaction achieved these results, Mr. Bhullar admits that nowhere in the memorandum does he record that he advised Ms. Morris that she remained 100% liable under the mortgage notwithstanding the transfer of her interest in the property.
Analysis
[109] Ms. Morris seeks an order setting aside the transfer registered as PR 253-7925 on May 23, 2014 and for the Director of Titles to rectify the Register under section 3 of the Land Titles Act so that she is restored on title as the registered owner of an undivided one half interest of 108 Vivians Crescent. She seeks an order that the property be listed for sale and the net proceeds of sale divided equally pursuant to the Partition Act.
[110] Ms. Morris takes the position that Mr. Donegan gifted her that interest on February 12, 2013 and that she has conducted herself in a manner consistent with that of an owner of the property by assuming responsibility of the mortgage and making mortgage payments. She claims that she did not sign any transfer documents on May 23, 2014 to transfer any of that interest to Mr. Donegan.
[111] Mr. Donegan has brought his own application in which he seeks an order that he is a 100% interest in 108 Vivians Crescent. He takes the position that Ms. Morris was at all material times a tenant at each the Fallgate Drive property and later at 108 Vivians Crescent. He denies that they engaged in an intimate relationship while at the house on Fallgate Drive and only entered into that relationship after Ms. Morris moved into 108 Vivians Crescent.
[112] I start with the conclusion that Mr. Donegan’s transfer of an undivided one half interest in 108 Vivians Crescent to Ms. Morris was a bona fide transfer to her in February 2013. Mr. Donegan stated in his affidavit on the application that he agreed to the transfer in order for Ms. Morris to go on the mortgage. At trial, he professed his surprise at learning in 2014 that she had gone on title as a joint tenant.
[113] In order for there to be a gift of an interest in land, the Court of Appeal in McNamee v. McNamee, 2011 ONCA 533 (Ont. C.A.), stated that the onus is on the person alleging the gift to satisfy the court that each part of the following three-part test is met:
An intention to make a gift without any expectation of consideration, compensation or remuneration;
Delivery of the gift; and
Sufficient acknowledgment of receiving the gift is given by the recipient.
[114] I find as a fact that Mr. Donegan gifted a one half interest in 108 Vivians Crescent to Ms. Morris as a joint tenant because of there is ample evidence that they were involved in an intimate relationship of some permanence. This relationship provides the credible context of his gift of an interest in 108 Vivians Crescent to Ms. Morris. I find as a fact that this relationship was more than a landlord and tenant situation. The parties met where they were both employed in 2005. Ms. Morris moved into 15 Fallgate after three years of first forming her relationship with Mr. Donegan. He pointed out his “baby mother” to her at work. He would likely not have done that if Ms. Morris was truly just a tenant. He arranged for her to rent rooms in his father’s house on Ferguson Place when she moved from 15 Fallgate after Mr. Donegan told her he had sold it to his “ex-girlfriend”. They looked at houses together. He purchased the house that she said she liked. Mr. Donegan took steps to ensure that Ms. Morris remained in his life. These are steps above and beyond what Ms. Morris might expect from a landlord.
[115] Ms. Morris states Mr. Donegan specifically told her that she deserved to become an owner of 108 Vivians Crescent, and that she should be a joint tenant owner in case something happened to him. If there is an issue of credibility between the two parties. I prefer the evidence of Ms. Morris because she gave detailed evidence about the relationship spanning nine years. In contrast, Mr. Donegan cannot recall specifics except for denying the intimacy of their relationship at 15 Fallgate Drive.
[116] I also draw the inference from the evidence given by Mr. Donegan from the transfer back of all by 5% of the ownership interest retained by Ms. Morris that he knowingly transferred an interest to the property to her in 2013. Otherwise, he would have taken back 100% of her interest in 2014.
[117] Ms. Morris has satisfied the first part of the test by proving Mr. Donegan’s intention to make the gift. When Mr. Donegan signed the transfer of that interest in February 2013, he satisfied the delivery aspect of the test. Ms. Morris has satisfied the acknowledgment aspect to meet the third part of the test when she became a party to the mortgage and became legally responsible to service the mortgage. I therefore conclude that Ms. Morris has proven on the balance of probabilities that Mr. Donegan gifted her an undivided one half interest in 108 Vivians Crescent as a joint tenant in February 2013.
[118] Ms. Morris relies upon section 2 of the Fraudulent Conveyances Act, RSO 1990, c. F.29 to set aside the assessment transfer of part of that interest to Mr. Donegan on May 23, 2014 as a fraudulent conveyance. Section 2 reads as follows:
Where conveyances void as against creditors
- Every conveyance of real property or personal property and every bond, suit, judgment and execution heretofore or hereafter made with intent to defeat, hinder, delay or defraud creditors or others of their just and lawful actions, suits, debts, accounts, damages, penalties or forfeitures are void as against such persons and their assigns. R.S.O. 1990, c. F.29, s. 2.
[119] After the altercation in the driveway on May 23, 2014, Ms. Morris made the decision to move out of 108 Vivians Crescent. While she may have expressed a desire to limit her liability under the mortgage, it makes no sense for her to give up her ownership interest in 108 Vivians Crescent without being released from the mortgage. I find as a fact that Ms. Morris did not attend at Mr. Bhullar’s office on May 23, 2014 and that she did not sign the Acknowledgment and Direction or initial the transfer of any interest she holds in 108 Vivians Crescent for the reasons that follow.
[120] Mr. Bhullar testified that Ms. Morris paid her bill in cash. Ms. Morris states in her evidence that she did not have cash on the morning in question and that she made all purchases at the Shoppers World Mall by debit card, including lunch with her daughter. She has produced her bank statement showing those debits from that morning to corroborate this evidence.
[121] Mr. Bhullar made notes the following day that speak of Ms. Morris’s intention to be removed from the mortgage against 108 Vivians Crescent. Those notes indicate that she wished to sever the joint tenancy and become a tenant in common with Mr. Donegan on title. Mr. Bhullar stated that Ms. Morris is instructions were that she wanted to retain a 5% share of the ownership while Mr. Donegan would hold 95% without any payment of consideration. This does not make sense, as reducing her ownership interest in 108 Vivians Crescent did not in any way lessen her overall liability under the mortgage.
[122] Mr. Bhullar’s memorandum is inconsistent with the letter from Mr. Saini setting out the intent of the transfer (at least from Mr. Donegan’s point of view). Mr. Bhullar’s notes omit any reference to the alleged concern held by Ms. Morris about her overall liability for the mortgage. This was the reason for the plan devised by Mr. Donegan for the transfer of all but 5% of the ownership interest Ms. Morris held in the property to Mr. Donegan.
[123] Mr. Bhullar did not testify in his evidence chief or under cross-examination about whether Winiesha accompanied her mother to his office that day. There was no evidence given by Mr. Bhullar whatsoever about anyone attending at his office that day except for Ms. Morris and Mr. Donegan.
[124] I also prefer the evidence of Ms. Morris that she never provided her driver’s license or Visa card to Mr. Bhullar for identification purposes. There is no need for any client to provide a Visa card in addition to a driver’s license for identification purposes. This is particularly so when Mr. Bhullar stated that Ms. Morris purportedly paid his fee in cash.
[125] I therefore prefer the evidence of Ms. Morris that she was not at Mr. Bhullar’s office on the morning of May 23, 2014. I find that someone other than Ms. Morris signed the acknowledgment and direction to transfer her interest in 108 Vivians Crescent to Mr. Donegan without her knowledge or consent.
[126] It is not necessary for me to find that this was a fraudulent conveyance within the meaning of the Fraudulent Conveyances Act because the Acknowledgment and Direction to transfer all but 5% of the ownership interest of Ms. Morris to Mr. Donegan on May 23, 2014 was a fraudulent instrument. As a fraudulent instrument, it was fraudulent and void, and remains fraudulent and void, despite registration: section 155 of the Land Titles Act, RSO 1990, c. L. 5.
[127] In view of my finding that the Acknowledgment and Direction resulting in the transfer was a fraudulent instrument, I find that the transfer itself was fraudulent and therefore void. Ms. Morris retains the ownership interest purportedly transferred to Mr. Donegan on May 23, 2014. She continues to hold an undivided 50% ownership interest in 108 Vivians Crescent as a joint tenant. I therefore order the Director of Land Titles to rectify the register under section 159 of the Land Titles Act, which reads as follows:
Court may order rectification
- Subject to any estates or rights acquired by registration under this Act, where a court of competent jurisdiction has decided that a person is entitled to an estate, right or interest in or to registered land or a charge and as a consequence of the decision the court is of opinion that a rectification of the register is required, the court may make an order directing the register to be rectified in such manner as is considered just. R.S.O. 1990, c. L.5, s. 159.
[128] Ms. Morris seeks an order under the Partition Act for the listing and sale of 108 Vivians Crescent after this finding of her ownership interest to receive her share of the equity. I now intend to briefly review the rights of a party holding an ownership interest in a property to partition and sale, and any discretion held by the court to refrain or not from granting that relief.
[129] The powers I am given under the under the Partition Act are discretionary, and governed by the cases that confine the scope of that discretion.
[130] Mr. Donegan did not raise any argument that the transfer of a one half interest in 108 Vivians Crescent to Ms. Morris in 2013 created an actual or resulting trust. In any event, there was no trust claim made in Mr. Donegan’s application, and no evidence was given to support the claim that he transferred a 50% interest in 108 Vivians Crescent to Ms. Morris in trust.
[131] In any event, it is now the law that a resulting trust arising solely from the common intention of the parties is no longer a useful device to resolve property disputes in domestic cases: Kerr v. Baranow, 2011 SCC 10, [2011] S.C.J. No. 10 (SCC) at para. 29. I therefore do not consider a trust claim to be an issue, or a presumption for Ms. Morris to rebut.
[132] The logical place to start for Ms. Morris’ application is the Partition Act itself. The power to order a jointly held property for sale is found in section 2, which reads as follows:
Who may be compelled to make partition or sale
- All joint tenants, tenants in common, and coparceners, all doweresses, and parties entitled to dower, tenants by the curtesy, mortgagees or other creditors having liens on, and all parties interested in, to or out of, any land in Ontario, may be compelled to make or suffer partition or sale of the land, or any part thereof, whether the estate is legal and equitable or equitable only. R.S.O. 1990, c. P.4, s. 2.
[133] Under the Act, a joint tenant has a prima facie right to an order for the partition or sale of lands held with another joint tenant. The other joint tenant has a corresponding obligation to permit that partition or sale. These have been described in the case law as fundamental rights flowing from the joint tenancy. The court is required to compel such partition or sale if no sufficient reason can be shown why such an order should not be made.
[134] Each case must be considered on its own facts and circumstances. The court must exercise its discretion having regard to those particular facts and circumstances: see Davis v. Davis, 1953 CanLII 148 (ON CA), [1954] O.R. 23 (C.A.).
[135] The onus to show what circumstances are present in a proceeding that might require the court to exercise its discretion to refuse an application for a partition or sale order rests with the party opposing the application. That party must show the court there is a sufficient reason recognized in law why an order for partition or sale should not be made.
[136] On its face, Ms. Morris as a joint owner of 108 Vivians Crescent is entitled to compel partition and sale of the property. Under the Partition Act, she has a prima facie right to an order that the property be listed for sale and sold to recover her interest. Mr. Donegan has a corresponding obligation to permit that partition and sale. The court is required to compel such partition or sale if the responding party cannot show sufficient cause why the order should not be made: Afolabi v. Fala, 2014 ONSC 1713.
[137] The discretion of the court to refuse an order for partition and sale is narrow: Latcham v. Latcham 2002 CanLII 44960 (Ont. C.A.). The courts in this province have held that discretion should only be exercised to refuse a partition order if the evidence shows malicious, vexatious or oppressive conduct by the moving party for seeking the order for sale. This necessarily requires the court to take a good hard look at what evidence, if any, has been filed with respect to the intentions of the moving party behind the application. It also requires the court to determine, on the balance of probabilities, if the resisting party has made out a case for the court to refuse the order for partition and sale on one of the recognized grounds.
[138] The authorities have also held that the court may consider whether the partition and sale would cause such hardship to the resisting party to amount to oppression: Bailey v. Rhoden, 2008 CanLII 42427 (S.C.J.). I am of the view that this factor requires the court consider any evidence on the effect of the sale to the adverse party to determine if the combined cause-and-effect of the sale amounts to oppression.
[139] There was no evidence given by Mr. Donegan that Ms. Morris brought this application with oppressive, vexatious or malicious intent. Nor did Mr. Donegan give any evidence that the sale of 108 Vivians Crescent would work an undue hardship on him that would amount to oppression. Therefore, I see no reason to exercise any discretion to refuse the relief Ms. Morris is claiming for the partition and sale of the property to realize the value of her interest.
[140] I therefore order the parties to list 108 Vivians Crescent for sale within 30 days, at a price that is mutually agreeable to the parties. If the parties cannot agree to the listing price, they may jointly retain a real estate agent to provide the recommended listing price and to list the property for sale, failing which Ms. Morris is given the right to retain the listing agent to list and sell the property after July 31, 2015.
[141] If either party is uncooperative with the process of listing and selling the house, the parties may return to me for further directions and costs will be an issue should a re-attendance be necessary. Once the property is sold, the net proceeds of sale after payment of the real estate commission and legal fees shall be divided equally between the parties, subject to any adjustments for costs.
[142] Norissa Donegan is also to receive a copy of this decision from counsel for Mr. Donegan. If Ms. Donegan takes the position that 108 Vivians Crescent is a matrimonial home, a motion may be brought before me by June 30, 2015 to make a determination and to grant an order appropriate to the circumstances.
[143] If either party seeks costs on this application and trial of the issues, that party may make written submissions on costs by June 12, 2015 consisting of no more than three typewritten pages, not including a bill of costs and any case law to support their position. The other party may file responding submissions subject to the same limitations by June 26, 2015. The first party shall then have until June 29, 2015 to file reply materials, if any. All materials shall be filed at the trial coordinator’s office in Brampton, or submitted by fax to my judicial assistant Sherry McHady at (905) 456-4834 at Judges’ Chambers in Brampton.
EMERY J
Released: May 28, 2015
CITATION: Morris v. Donegan, 2015 ONSC 3360
COURT FILE NO.: CV-14-3715-00 and CV-14-3957-00
DATE: 2015 05 28
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
MILLICENT MORRIS
Applicant
- and -
GLENROY DONEGAN and DIRECTOR OF TITLES
Respondent
REASONS FOR DECISION
EMERY J
Released: May 28, 2015