Court File and Parties
COURT FILE NO.: FS-14-00019452-0000 DATE: 20160512 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
VICTORIA CHECHUI Applicant
- and - IAN JAMIESON NIEMAN Respondent
Counsel: Harold Niman & Chloe van Wirdum, for the Applicant Valois Ambrosino & Veronica Manski, for the Respondent
HEARD: January 7, 8, 11, 12, 14 & February 1 – 5, 8, 9, 2016
HOOD J.
Reasons for Decision
Overview
[1] The applicant, Victoria Chechui (“Victoria”), and the respondent, Ian Jamieson Nieman (“Ian”), met online in the fall of 2009. By the summer of 2010 they were living together. In March 2013, they purchased a house in joint tenancy on Brookdale Avenue in Toronto (“Brookdale”), with an April closing. They continued to live there together until their separation. In October 2013, they opened a sizeable joint account with RBC Dominion Securities Inc. In January 2014, Victoria and Ian separated.
[2] At issue in this trial is the ownership of the jointly owned Brookdale house and the joint account. Victoria claims a 50% ownership in both. Ian claims that Victoria holds her interest in Brookdale and the account in trust for him. Alternatively, he makes an unjust enrichment claim against Victoria on both the house and the account. He further argues if the court finds that Victoria does hold Brookdale and the account in trust for him, he is entitled to damages for breach of trust, or breach of fiduciary duty or breach of contract in the amount of $4,000,000. He also makes a claim for punitive damages in the amount of $500,000.
Result
[3] For the following reasons, I find for Victoria with respect to Brookdale and for Ian with respect to the joint investment account.
Credibility and Reliability of Witnesses
[4] In many instances during the course of the trial, Ian’s evidence conflicted with Victoria’s and with the other witnesses called by the parties, including those called by Ian. In making my assessment of the witnesses and weighing the evidence, I adopt the statements referred to by Newbould, J. in Springer v. Aird & Berlis LLP (2009), 2009 ONSC 15661, 96 O.R. (3d) 325 (S.C.), at paras. 14-17, along with his analysis therein.
[5] All in all, I have difficulty in accepting Ian’s evidence as reliable when weighed against the documentary evidence and the evidence of the other witnesses. If there is a conflict, I accept the other evidence over Ian’s. By the conclusion of the trial I was left with the impression that Ian’s evidence had been reconstructed or rationalized to coincide with his interests in this action. He had a story to tell and a position to put forward and he did so regardless of what the other evidence disclosed.
[6] When confronted with a document that contradicted his position, such as the Direction re: Title (Exhibit 28) dated April 9, 2013 executed by him placing the title of Brookdale into joint tenancy, his response varied from stating he did not know what joint tenancy meant, to he did not read the document when he signed it, to he knew what it meant but he did not see this when he reviewed the document before signing. These various responses at trial conflicted with his prior testimony at his questioning where he acknowledged he was aware that he and Victoria were registered as the joint owners of the home.
[7] As for Victoria, I found her evidence for the most part to be balanced, forthright and consistent with the documentary evidence offered. She readily acknowledged where her memory failed her and conceded points in cross-examination rather than engaging in argument or advocating her position.
[8] In contrast, Ian refused in cross-examination to admit to anything he perceived might hurt his case. As just one example of this, Ian refused to acknowledge he and Victoria were a couple and living together in the summer of 2010 in Victoria’s house in Toronto. He preferred to take the position that he was merely renting a room from her, overlooking his Facebook status which indicated he was in a relationship with Victoria and all of the other evidence which indicated they were cohabiting. Ian was more of an advocate than a witness.
Factual Background
[9] There was a significant amount of evidence presented at trial that, at the end of the day, was not helpful to the issues that I had to decide. A great deal of evidence surrounded the gift letter from Ian's mother, Mrs. Dianne Nieman, and her gift of $1,700,000 towards the purchase of Brookdale. Ian's Answer does not contradict the gift letter, yet much of his evidence and that of his witnesses touched on the gift and whether Mrs. Nieman intended to include Victoria as a recipient of this gift or whether the $1,700,000 was actually gifted to Ian alone. Not only is this issue irrelevant to the ownership rights between Ian and Victoria relating to Brookdale, but the party who would be in a position to challenge the gift from Mrs. Nieman was not before the court. If anyone could have challenged the gift and Victoria's entitlement to it, it would have been Mrs. Nieman’s estate. It has not done so.
[10] Victoria and Ian met online on a dating website in October, 2009. Victoria lived in Toronto in her home on Airdrie Road (“Airdrie”) and Ian lived with his mother in Ottawa.
[11] Victoria had a good job with Rogers earning approximately $160,000 including bonus, while Ian was unemployed. Ian was a musician and had had some success in the past in remixing songs for dance clubs and in creating music for a TV show. He had a number of music releases and top ten songs on various music charts over the years, but these generated only minimal royalty income.
[12] After meeting online Victoria and Ian began dating. She would travel to Ottawa and he to Toronto. They took trips together. He met her parents. She met his mother. In July, 2010, he moved to Toronto, rented a space to work on his music and moved in with Victoria at her home on Airdrie. As Ian made little income, most of the expenses for Airdrie were covered by Victoria. Ian did things like the yard work, cleaning and cooking.
[13] There was a substantial amount of evidence presented, primarily by Ian, about the nature of their relationship, his relationship with his mother and his relationship with the rest of his family. Most, if not all of it, was not germane to the issues before me and I do not propose to dwell on it, and will only mention it if relevant to the joint ownership of the home on Brookdale and the joint account.
[14] In late summer 2010, Ian became aware that he had to move out of his music studio. He moved his equipment to Airdrie and he and Victoria then explored whether it would be feasible to turn the basement of her home into a music studio. It turned out, for a number of reasons, that this was not an option.
[15] Ian’s mother, Mrs. Nieman, had recently come into a large inheritance from the sale of her own mother’s property in British Columbia and with her financial advisor had decided that she should invest a portion of it in Toronto real estate. Mrs. Nieman decided to buy a house for Ian and Victoria to live in, which would also be suitable for a music studio for Ian. It was agreed that if Mrs. Nieman bought it, Victoria and Ian would look after the upkeep and expenses.
[16] Victoria found a property in Toronto on Austin Terrace, and Ian, with a power of attorney given to him by his mother, executed the agreement of purchase and sale. The transaction closed in early November, 2010, with Mrs. Nieman paying for the purchase. The home was owned by Ian and Mrs. Nieman as tenants in common with Ian owning 99% and Mrs. Nieman 1%.
[17] Once purchased, Victoria and Ian moved in. As before with Airdrie, most of the bills and expenses were paid for by Victoria with Ian doing most of the housework. Ian also contracted for and became involved in the construction of his music studio in Austin Terrace. The cost of this was also paid for by Mrs. Nieman.
[18] Having moved into Austin Terrace with Ian, Victoria put her home on Airdrie up for sale. It sold in December, 2010 with the majority of the sale proceeds paying off her first mortgage. With the balance, she paid off a line of credit, gave some money to her parents, and put the remaining balance into her bank account, into which she deposited her pay from Rogers and from which she paid most of the expenses for Austin Terrace.
[19] Ian in his testimony tried to paint a picture that although living together, they were living more like roommates than a couple. He suggested that he was equally responsible for the household expenses and that he and Victoria were living separate lives. As indicated previously, I prefer Victoria’s evidence over Ian’s where there is a conflict, and accept her evidence that they had no such financial arrangement, as suggested by Ian, that they were living as a couple, and as she was earning a good income, was happy to pay most of the expenses. Ian’s inability to make an equal financial contribution to their household expenses is supported by Exhibit 40, his own lawyer’s letter written on March 25, 2014, following separation, where Ian’s lawyer suggested spousal support should be paid to Ian. The letter states that for the four years they were together Ian’s average income was $13,751. This supports Victoria’s position that she paid most of the household expenses.
[20] While not all that relevant to the ultimate decision, but more for chronological purposes, in July 2, 2011, Victoria resigned from Rogers for health reasons. Victoria says this was discussed with and agreed to by Ian, again as a couple. Ian, on the other hand, says it came as a surprise and that she simply announced to him that she had quit her job. I believe Victoria.
[21] As part of her arrangement with Rogers, Victoria received 10 months of severance pay which was to run out in March, 2012. In November, 2012, Victoria found a new job at SapientNitro which paid her a salary of $190,000 plus a performance bonus. That same month Ian proposed to Victoria. They agreed upon a wedding date of July 26, 2013 and began to make plans for it.
[22] In late November, 2012, Mrs. Nieman had some medical issues with some internal bleeding and a fall. On both occasions she went to a hospital in Ottawa. Ian drove back and forth between Toronto and Ottawa and eventually drove his mother back to Toronto in order to have her stay with Victoria and him at Austin Terrace.
[23] On December 5, 2012, Ian took his mother to Toronto General as she was exhibiting some confusion. She was admitted, and following some tests, it was determined she had suffered two small strokes. On December 13, 2012, she suffered a larger stroke which had a serious impact upon her physical abilities. On January 22, 2013, Mrs. Nieman was transferred from Toronto General to the Toronto Rehab facility. Ian spent most of every day with his mother assisting in her recovery and out of concern for her wellbeing. While Victoria was also concerned with Mrs. Nieman’s wellbeing, she had just started a new demanding job with SapientNitro which involved long hours and a lot of travel so she was usually only able to visit Mrs. Nieman on weekends.
[24] Victoria had a close relationship with Mrs. Nieman. They hit it off right from the beginning. They enjoyed similar books, liked cooking and wine and talked politics. They went on trips together, and until her stroke, communicated nearly every day by phone, text or email. While in Toronto Rehab, Ian sent Victoria a video message from his mother. Although it was short, Mrs. Nieman told Victoria that she loved her and she was her “daughter, through and through”. For Victoria, the feeling was mutual. Victoria and Ian planned to get married at Canoe, a restaurant in Toronto, not only because they both liked it but because Mrs. Nieman loved it. Canoe was booked while Mrs. Nieman was in Toronto Rehab.
[25] Victoria, Ian and Mrs. Nieman decided that when she was discharged from Toronto Rehab, which was to take place on April 22, 2013 at the latest, the three of them would live together. It became clear that, while Mrs. Nieman was improving at Toronto Rehab, upon discharge she would be confined to a wheelchair. Austin Terrace was not a good location for a wheelchair and the three of them decided to look for a new house they could live in together.
The Brookdale Property
[26] Following the decision that the three of them would live together, Victoria located a house on Brookdale. Only minor alterations had to be made to the house for it to be wheelchair accessible. Ian, Victoria and Mrs. Nieman then discussed how it could be purchased. It was going to cost more than $2,500,000 to buy. Mrs. Nieman had approximately $1,700,000 from her inheritance invested with Scotia Trust which she was prepared to provide for a down payment. Victoria gave evidence that this $1,700,000 was a gift to Ian and her from Mrs. Nieman. They lived together and they were soon to be married. The gifting of this amount to Ian and her is consistent with the documentary evidence including the gift letter executed by Mrs. Nieman and the evidence of numerous independent witnesses, including Ann Harvey, the mortgage broker from RBC, Rachel Blumenfeld, a lawyer retained to change Mrs. Nieman’s two powers of attorney and Lawrence Fine, who gave independent legal advice to Mrs. Nieman on the gift letter. Ian’s position is that the $1,700,000 was not a gift to the two of them, but to him alone.
[27] In order to make up the balance of the purchase price for Brookdale, Victoria agreed to obtain a mortgage. She was the only one working and Ian would not qualify. On March 9, 2013, Victoria was approved by Ann Harvey from RBC for a mortgage of $1,000,000 pending confirmation of the $1,700,000 from Mrs. Nieman.
[28] On March 16, 2013, the agreement of purchase and sale for the Brookdale property from Ian and Victoria for $2,600,000 was accepted by the vendors. The closing date was April 10, 2013, prior to Mrs. Nieman’s probable discharge from Toronto Rehab. Mr. Ipchilar, the real estate agent for Brookdale, testified that Ian was aware the agreement of purchase and sale was in both his name and Victoria’s when he executed it.
[29] Ultimately, title was taken in both their names as provided for in the agreement. The lawyer, Konstantine Chatzidimos, who acted for Ian and Victoria on the real estate transaction, was made aware of this when he met with both Ian and Victoria on March 19, 2013. The transaction was closed on April 10, 2013 with Ian and Victoria as joint tenants. A direction regarding title to this effect was signed by Ian and Victoria on April 9, 2013 at Mr. Chatzidimos’ office. Mr. Chatzidimos reported to Ian and Victoria on May 22, 2013. In the reporting letter Mr. Chatzidimos confirmed that title was taken jointly by Ian and Victoria.
[30] Ian gave conflicting testimony, as mentioned previously, that either he did not know what joint tenancy meant, or he did not read the document which may have mentioned joint tenancy before signing it, or he read the document but did not see the reference to joint tenancy in it.
[31] He also testified that Victoria was only on title as a joint tenant because the mortgagee, RBC, required this, due to the fact that Victoria was the mortgagor. Ms. Harvey, the mortgage broker from RBC, testified that this was not RBC’s requirement. She confirmed that RBC’s requirement was just the opposite. She gave evidence that RBC required that those on title had to be the mortgagors. As a result both Ian and Victoria were mortgagors, although the mortgage had initially been approved based on Victoria’s income alone.
The Gift Letter
[32] The other requirement of RBC was that because Mrs. Nieman was not going to be on title but was providing $1,700,000 towards the purchase of Brookdale, RBC needed a gift letter executed by her confirming that she was gifting the down payment. RBC further required Mrs. Nieman to obtain independent legal advice regarding the gift and to have her signature on the gift letter witnessed by a lawyer.
[33] Initially, Ian took his mother to see Rachel Blumenfeld with respect to this gift letter. Ms. Blumenfeld was a lawyer at Miller Thomson practising in the area of Wills and Estates, Tax Planning and Estate Administration. Ms. Blumenfeld had previously met Mrs. Nieman in early March, 2013 following her stroke, in order to prepare new powers of attorney naming Ian as Mrs. Niemans’s power of attorney for both property and personal care, and thereby revoking earlier powers of attorney from March, 2008 which had named other attorneys in addition to Ian.
[34] Ms. Blumenfeld met with Mrs. Nieman on April 3, 2013 with respect to the required gift letter. She was asked to witness the gift letter whereby Mrs. Nieman gifted $1,700,000 to Ian and Victoria. Ms. Blumenfeld had two issues with this, namely whether Mrs. Nieman had the capacity to make a gift of that size due to the fact this gift would significantly reduce Mrs. Nieman’s assets, and whether Ian’s siblings would attack the gift and end up suing, not only Ian, but herself as the lawyer giving the independent legal advice.
[35] As was her practice, Ms. Blumenfeld recommended that before she gave independent legal advice and had Mrs. Nieman sign the gift letter, Mrs. Nieman should be assessed by a doctor to ensure she had capacity and there was no undue influence, in order to avoid a lawsuit against Ian and her, the lawyer.
[36] Ms. Blumenfeld confirmed that Mrs. Nieman was aware that half of the $1,700,000 being gifted by her was being gifted to Victoria. She also told Ian and Mrs. Nieman that in a situation like this, when a client was gifting a large amount of money to buy a property, that her advice was to take back a mortgage. This advice was not followed.
[37] Instead, Ian became upset over the prospect of his mother being assessed and the next day had Victoria draft an email for him to send to Ms. Blumenfeld terminating her retainer. He felt Victoria’s draft was a little too harsh, and as there was the possibility they might need Ms. Blumenfeld’s assistance in the future, he drafted and sent his own email, which he felt was more measured, terminating her retainer.
[38] However, RBC still required the gift letter to be witnessed along with the certificate of independent legal advice, so Victoria contacted their real estate lawyer, Mr. Chatzidimos, who arranged for Mrs. Nieman to see Mr. Lawrence Fine, a lawyer who shared space with Mr. Chatzidimos’ firm.
[39] Mr. Fine met with Mrs. Nieman on April 5, 2013 for the purpose of reviewing the gift letter required by RBC and to provide her with independent legal advice. He asked Mrs. Nieman a number of questions regarding the nature of the gift and the gift letter and satisfied himself as to both her desire to make the gift and the absence of any undue influence in making the gift. He was satisfied that she understood in making the gift, she could not get her money back and had no recourse as she would if it was a loan. He made a suggestion about obtaining a promissory note but she did not want one. Nor did she want to be on title on the home. He witnessed Mrs. Nieman’s execution of the gift letter, then executed the certificate of independent legal advice for the bank and had Mrs. Nieman sign the acknowledgment on the certificate.
[40] Ian made an issue at trial that the gift letter when signed by his mother had his signature on it and not Victoria’s. Mr. Fine could not recall whether the gift letter was signed by Ian before or after he saw Mrs. Nieman. Ian claims Mr. Fine asked him to sign it before he met Mrs. Nieman. It did not have Victoria’s signature on it when he saw Mrs. Nieman. To Mr. Fine, it did not matter whether the recipients of the gift had signed the gift letter. What mattered to him was whether the donor, Mrs. Nieman, was making the gift freely and willingly, without compulsion, and understood the consequence of giving $1,700,000 to Ian and Victoria to be used to buy a property when she was not on title. As he put it, he was exploring the issue as to whether the money was really being given to Ian and Victoria as a gift.
[41] I hold that it makes no difference whether Ian’s signature was on the gift letter before or after Mr. Fine saw Mrs. Nieman, or that Victoria’s signature was not on the gift letter when signed by Mrs. Nieman and was put on later. The letter clearly sets out who the recipients of the gift are and the purpose of the gift. Ian and Victoria’s signatures were there to certify to the bank, among other things, that the funds were a genuine gift. Their signatures without Mrs. Nieman’s, as the donor, would be pointless. It would only make sense to have them sign after Mrs. Nieman had indicated her willingness to make the gift. However, if Ian did sign before his mother that would not invalidate the gift. Nor would the gift be invalidated because Victoria signed it later that day on April 5, 2013 before sending it out to Ms. Harvey at RBC. While he initially refused to acknowledge it in his testimony, Ian eventually agreed during his cross-examination that he knew the deed of gift from his mother was to both Victoria and him before he signed it.
Purchase of Brookdale/Sale of Austin Terrace
[42] On April 9, 2013, Victoria and Ian met with Mr. Chatzidimos to execute the necessary documents, including the direction as to title, for the purchase of Brookdale. On April 10, 2013, the purchase closed and shortly after Ian and Victoria moved into the property.
[43] Mrs. Nieman was to be discharged from Toronto Rehab on April 15, 2013. Unfortunately, that same day she had a stroke. Eventually she ended up at Toronto Western where she passed away on May 5, 2013.
[44] Ian was distraught by the death of his mother and suggested to Victoria that they postpone the wedding scheduled for July 26, 2013. Victoria agreed.
[45] Following Mrs. Nieman’s death, the house on Austin Terrace was listed for sale along with Mrs. Nieman’s house in Ottawa. An agreement for the sale of Austin Terrace was signed with a closing in October, 2013. It sold for $2,325,000. Ian’s share of the net proceeds of sale, amounting to $2,141,555.34, was deposited into his personal chequing account at RBC. That same day Ian transferred $1,000,108.33 from this account to pay off the mortgage on Brookdale, which had been converted into a line of credit.
[46] At no time did Ian ask Victoria to transfer her half interest in Brookdale to him. At no time did Ian take steps to put a mortgage on the Brookdale property to secure the money paid by him to pay off the outstanding line of credit. I find that this was because Ian knew, and his intention always was, that Brookdale was to be owned jointly by Victoria and him. They were engaged and while the wedding date had been postponed, they still planned to marry.
[47] At trial, Ian refused to acknowledge, despite all of the documentation to the contrary and the evidence to the contrary from Mr. Chatzidimos, Mr. Fine and Ms. Blumenfeld, that Victoria had any interest in Brookdale. He continued to say that the plan was for his mother and him to own Brookdale. This is perhaps how Ian now wishes it was but it does not accord with the evidence.
[48] Ian also attempted to argue at trial that he and Victoria were not in a relationship of any permanence prior to their eventual separation. As mentioned previously, he testified that he was a tenant of Victoria`s when living with her in her home on Airdrie. When asked why he referred to Victoria as his common-law spouse on his tax returns, he answered that he had his accountant do his returns and he trusted people who did work for him, once again attempting to disavow any conduct by him that he now perceived could hurt his position in this lawsuit.
The Investment Account
[49] On the same day Ian paid off the outstanding line of credit on Brookdale, he transferred a further $1,000,000 into his savings account at RBC. The RBC branch manager suggested that Ian meet with Richard Gourlay, an investment advisor at RBC Dominion Securities Inc. Ian and Victoria met with Mr. Gourlay in October, 2013.
[50] At Ian and Victoria’s first meeting, Mr. Gourlay discussed with Ian his investment objectives and the type of account Ian wanted. Ian told Mr. Gourlay that his primary objective was income and that any income generated by the account was to be deposited into his personal account. Mr. Gourlay understood that this was to be a non-registered account. While the evidence differs as to when this was discussed, Ian and Mr. Gourlay agree that Ian told Mr. Gourlay that he wanted Victoria to be made a beneficiary on the account so that she was taken care of in the event of his death. He wanted the money to be transferred to Victoria tax-free if something was to happen to him. Victoria, in her evidence, acknowledged that she was not part of any discussion about making her a beneficiary of the account.
[51] Mr. Gourlay explained to Ian at the meeting that this intention of his was not possible with a non-registered account and to accomplish this Ian would either have to provide for it in his will, or make the investment account a joint account. There is differing evidence as to whether Ian in fact had a will. Mr. Gourlay’s evidence is that Ian did not want to update his will, so he instructed him to make it a joint account. Victoria acknowledged that she was unaware of the nature of these discussions between Ian and Mr. Gourlay. Following this meeting, Mr. Gourlay sent an Executive Summary to Ian which detailed Ian’s objectives, the investment guidelines, goals and assumptions and his proposal for investment.
[52] After receiving the Summary, Ian had Victoria contact Mr. Gourlay to arrange another meeting in order to discuss his proposal and to arrange the opening of an account. This meeting took place on October 21, 2013, at which time all of the RBC account documentation was executed by Ian and Victoria.
[53] Victoria, in her evidence, readily acknowledged it was all of Ian’s funds that went into the joint account. She also acknowledged that prior to putting the funds into the joint account, Ian was free to do whatever he wished with the balance of the proceeds from the sale of Austin Terrace. She did not ask to be placed on the account. Ian decided what to do with the sale proceeds and he chose to put $800,000 into the joint account.
[54] The account documentation was prepared by Mr. Gourlay prior to the meeting on October 21, 2013. He brought it with him to the meeting already filled out, with Ian as the primary applicant on the account and Victoria as the co-applicant. Both were indicated as being beneficial owners of the account. While both Ian and Victoria were authorized to give instructions regarding the account, all accumulated income from the account was to be deposited into Ian’s chequing account. The account documentation was signed by Ian and Victoria at this meeting on October 21, 2013.
[55] Mr. Gourlay testified that he spent half of the meeting going over the documentation and clarifying it for Ian and Victoria. While he could not say how specific he was in explaining to Ian what a beneficial owner was, it was clear that the account was in both their names as Ian had instructed, and Mr. Gourlay was satisfied that Ian knew what he was signing.
[56] Ian testified that he did not read the RBC account documentation before he signed it because he was a trusting person. When confronted with his prior sworn testimony on questioning that he had read it over before signing, he responded by saying he over-exaggerated his prior answer and he does not read legal documents before signing because he does not have the attention span to do so. When then confronted with prior sworn testimony that he does in fact read legal documents when prepared for him, he stated this answer at his questioning was not true.
[57] He further testified that in his view, the joint account was opened in error and that he was never informed of the ramifications of it being opened as a joint account.
[58] On October 21, 2013, Ian transferred $800,000 from his savings account into his chequing account, and on October 22, 2015, he transferred $800,000 from his chequing account into the joint investment account. Thereafter, both he and Victoria gave Mr. Gourlay instructions on the management of the account. While the account documentation provided that either Ian or Victoria could make investment decisions on their own, the investment decisions were in fact made together. All income generated by the account went to Ian.
[59] Victoria claimed half of the income from the investment account on her tax return for 2013. The other half was claimed by Ian. It was never made clear why this was done when all of the income went to Ian. Victoria testified that she believed this was the proper way to treat the income for tax purposes. There was no evidence to suggest that this was proper or improper.
Separation
[60] Ian and Victoria separated on January 7, 2014. On this they are in agreement. They disagree on why but that is not relevant to the issues before me. Shortly after their separation, Victoria told Ian that she would transfer her half interest in Brookdale and the joint account to Ian, and gave instructions to Mr. Chatzidimos to commence the transfer of her half interest in Brookdale. Ian argues that this is proof that Victoria realized she had no interest in either. Victoria argues that she said this and gave the instructions while she was emotionally fragile having just separated, and in order to mollify Ian so as to stop him from pestering her about the Brookdale property and the account. I accept Victoria’s position on this. I place no weight on statements or instructions made during the throes of an emotional separation made without any legal advice. In any event, almost immediately thereafter, she changed her position and withdrew the prior instruction and accessed the line of credit on Brookdale for a short-term investment of her own. Ian complained about this saying she had no right to use the line of credit as she had no interest in Brookdale.
[61] On February 10, 2014, Victoria advised Mr. Gourlay that she and Ian were going through a legal separation and the account should be effectively frozen subject to the income continuing to be paid to Ian in accordance with the initial arrangement. RBC complied with this request.
Analysis
The Investment Account
[62] This issue involves an analysis of the law of resulting trust. Because equity presumes bargains not gifts, the transfer of $800,000 by Ian places the onus on Victoria to rebut the presumption that Ian had no intention to gift half of this amount to her. As explained in Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, at para. 44, I am to weigh all of the evidence in an attempt to ascertain, on a balance of probabilities, the transferor’s, Ian’s, actual intention.
[63] Matters that may be considered in this determination are the source, control and use of the funds, the tax treatment and the banking documents themselves. All of the funds were from Ian. Victoria acknowledges this. While the income was paid to Ian, the control of the funds was joint. The tax treatment of the income was also joint, although the evidence as to why this was done is not clear. The banking documents as executed by Ian, clearly create a joint account, where both account holders can make investment decisions and both can withdraw funds from the account. The documents clearly make Victoria a beneficial owner. This was, as Mr. Gourlay understood it, the effect of the documents, and what he explained to Ian.
[64] Ian’s current assertions that he did not turn his mind to what was done, that he did not mean to do what he did, and that he failed to understand what he was doing and signed it without reading the documentation because he trusted Mr. Gourlay, are not accepted by me. I view this as being an example of Ian rationalizing what he signed in an effort to support the story he now wished to tell in the belief it would help his ultimate position. However, based upon the independent evidence of Mr. Gourlay, I do accept that his intention in setting up the joint account was to benefit Victoria if something should happen to him.
[65] I accept Mr. Gourlay’s evidence as to Ian’s intention when the account was set up. Simply because I find that Ian’s current assertions at trial are not believable, does not detract from the credibility of the evidence given by Mr. Gourlay with respect to Ian’s intention.
[66] Relying on the evidence of Mr. Gourlay, I am satisfied that Ian had no intention to gift Victoria one-half of the investment account. What Ian gifted to Victoria was a gift of the right of survivorship. While he intended her to be a joint account holder, it was only for the purpose of benefitting her upon his death, presuming they were still together. I am not satisfied on the evidence that Victoria has rebutted the presumption that she held her interest in the joint account in trust for Ian. In fact, the totality of the evidence convinces me that she did hold this in trust for Ian.
The Brookdale Property
[67] The Brookdale Property is different from the joint account. It was purchased with the help of the gift from Mrs. Nieman to both Ian and Victoria. There is no doubt in my mind, based upon the gift letter and the testimony of Ms. Blumenfeld and Mr. Fine, that the gift of $1,700,000 was for both Ian and Victoria and not for Ian alone as he now argues. He did not provide the funds to purchase Brookdale. The funds came from his mother, gifted to both Victoria and him, and from RBC with mortgage security given by the two of them.
[68] Although Ian was on the mortgage with Victoria, as title was in both their names, Victoria was the primary borrower, and as Ms. Harvey testified, the mortgage loan was given on the strength of Victoria’s income, not Ian’s, which was negligible.
[69] In other words, there is no resulting trust claim or any claim that can be made by Ian with respect to the $1,700,000 gifted by his mother.
[70] Ian did pay off the line of credit with $1,000,000 of his funds from the sale of Austin Terrace. However, this payment does not lead to a presumption of resulting trust in Ian’s favour. In Hamilton v. Hamilton (1996), 1996 ONCA 599, 92 O.A.C. 103 (Ont. C.A.), at para. 39, the court, at para. 39, limits the presumption of resulting trust to the purchase of property. This has been followed in Dale v. Salvo, 2005 ONSC 25893, [2005] O.J. No. 3111 (S.C.) where Genesse, J. held, at para. 45, that mortgage payments after purchase are irrelevant in the context of a resulting trust. While these cases are not specifically referred to, in Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, Cromwell, J. suggests that resulting trusts arise in two situations only, on the acquisition or transfer of property.
[71] Even if the presumption of resulting trust applies to the payment of the line of credit by Ian, the presumption has been rebutted on the evidence. I find in accordance with Victoria’s evidence that it was always the intention of Ian and her that they would own Brookdale jointly and equally regardless of their contributions to the purchase. This applies equally to the payment of $1,000,000 by Ian. He gifted this amount. All of the real estate purchase documentation indicated that Brookdale was held in joint tenancy. He executed a direction to that effect.
[72] I do not believe Ian when he says he did not understand what joint tenancy meant or he did not read the direction when he signed, or did not see the reference to joint tenancy when he signed, or did not understand what he was signing or that it was not explained to him. Mr. Ipchilar says Ian knew the agreement of purchase and sale named Victoria and him as purchasers. Mr. Chatzidimos says he did understand the documentation and it was explained to him. Ian got a reporting letter that made it clear. He could have sought to have the Brookdale property held differently if he wanted. He held Austin Terrace with his mother as tenants in common. He could have done the same with Victoria but he did not. He could have sought to change the title after the purchase but he failed to do so. He could have protected the $1,000,000 payment through some form of security such as a mortgage if he was not making a gift. He did not do so.
Damage Claims
[73] One of Ian’s claims is that because withdrawals from the investment account were frozen by Victoria writing to RBC, he was unable to complete his recording studio in Brookdale, and as a result, lost various recording contracts. His claim is for $4,000,000 in damages. At trial, his evidence of his loss was more conservative. He estimated that he lost $20,000 in 2014, and more in 2015, perhaps $25,000 to $30,000.
[74] No evidence was provided as to how these figures were arrived at other than Ian’s bald assertions. No potential contracts were put into evidence in support. The damage amounts are completely without foundation. Moreover, Ian took no steps to free up funds from the joint account by way of a motion to the court in order to complete his studio so that he could secure these contracts. While RBC apparently froze the account at Victoria’s request, there was no evidence as to whether RBC could or should have done so. Certainly, Ian took no steps to unfreeze the account. Nor was there evidence as to why Ian could not have rented a recording studio in order to secure these alleged contracts. This claim must fail.
[75] Ian argues that he is entitled to damages for breach of contract. There is no contract between himself and Victoria in relation to either Brookdale or the joint account, other than the joint transfer and joint account documents themselves. Ian argues there was a contract by Victoria to transfer her interest in Brookdale and the joint account to him following separation. There was no such contract. Nor has Ian proven any damages arising from the alleged breach of contract.
[76] Similarly, Ian argues there was a breach of trust resulting in the same unproven damages when Victoria failed to transfer her interests following separation. While she did hold one half of the joint account in trust, making this claim theoretically possible, Ian has failed to prove any damages or breach.
[77] Ian also argues a breach of fiduciary duty resulting in the same damages when Victoria failed to transfer her interests. Even if Ian had proven some damages Victoria was not in a fiduciary relationship with Ian. There is no evidence in support of a fiduciary relationship as characterized in Frame v. Smith, 1987 SCC 74, [1987] 2 S.C.R. 99, at para. 39. The Brookdale property and joint account were controlled equally by Ian and Victoria. Victoria did not exercise any discretion or power over Ian. Ian was not vulnerable to or at the mercy of Victoria. He took advice from lawyers and an investment advisor. This claim must also fail.
[78] Nor can there be a claim for unjust enrichment with respect to Brookdale. $1,700,000 was clearly gifted by Mrs. Nieman to both Ian and Victoria. It was always the mutual intention of both Ian and Victoria that they would own Brookdale jointly and equally regardless of their contributions to the purchase. Ian knew what holding property in joint tenancy meant. He could have held the Brookdale property differently if he had wished. He gifted the payment of $1,000,000 to pay off the line of credit. Again, if he had wanted to protect this amount he could have made the payment in exchange for a mortgage.
Order
[79] The applicant’s application with respect to the joint investment account held by RBC is dismissed and the applicant shall instruct RBC to remove her name from the account so that the account is in Ian’s name alone.
[80] Brookdale shall be listed for sale and the net proceeds of sale shall be divided equally between the parties. I expect that the parties will be able to work out the sale process moving forward. If they are unable to do so, I may be spoken to for directions, either through a motion or a telephone conference arranged through the family court office.
[81] All of Ian’s claims other than his claim as to ownership of the joint account are dismissed.
[82] I would hope that the parties would be able to reach an agreement on costs. I encourage the parties to try to do so.
[83] If unable to, any party seeking costs may file brief written submissions, not to exceed three typed, double spaced pages, together with a Bill of Costs and any necessary documents, such as offers to settle, on or before June 3, 2016. Any reply submissions, subject to the same directions, are to be filed within three weeks of service of the initial submissions. I understand that often the parties, following service, file their submissions as part of the continuing record. The court office does not always bring the submissions to the court’s attention as they are unaware that the court is waiting for these submissions. Accordingly, I direct the parties to not only file their respective cost submissions as part of the continuing record, but to also provide a copy directly to Judges’Administration, Room 170, at 361 University Avenue, to my attention.
HOOD J.
