Court File and Parties
Court File No.: CV-16-293-00 Date: 2018 December 14 Ontario Superior Court of Justice
Between: Judith Anne Holsgrove, Plaintiff – and – Catharine Dawn Holsgrove, Defendant
Counsel: K. Gordon Gwynne-Timothy, for the Plaintiff/Moving Party Aaron Heard, for the Defendant/Responding Party
Heard at Kingston: October 17, 2018
Before: MacLeod-Beliveau J.
Reasons for Decision on Motion for Summary Judgment
[1] At the conclusion of the argument of this Motion for Summary Judgment, I advised counsel that I would be making the vesting order sought by the plaintiff, vesting the disputed property into the plaintiff’s sole name, with an accounting as between the parties, and that my Reasons for Decision would follow. These are those reasons. As I advised the parties at the time, the delay is due to other pressing criminal decisions that had to be written first, and my sitting schedule.
[2] The plaintiff, age 80, is the mother of the defendant Catharine Dawn Holsgrove, age 52. This is a dispute about title to a home on Inverness Crescent in the City of Kingston (the disputed property). Title to the home is registered in the daughter’s name alone. The mother brings this application for a declaration that the mother holds the equitable title to the disputed property and that the daughter holds the registered title to the property in trust for the mother. The mother brings this motion for summary judgment for the return of the title into her sole name and for an accounting of funds received by the daughter for the $80,000.00 mortgage that the daughter placed on the property. The mother states that the mortgage was secured against the property by the daughter without the mother’s knowledge and consent and that the funds were used by the daughter for her own personal purposes.
[3] The mother, a widow, retired in 2001. She is in need of funds to support herself in her retirement. There was a serious falling out between the mother and daughter in early 2016. Prior to that time, the mother and daughter resided in the home with the daughter’s husband and two older children. The mother moved out of the house and began this litigation by issuing a statement of claim on July 25, 2016. The mother obtained a Certificate of Pending Litigation on August 2, 2016 preventing any further dealings with the property by her daughter. The certificate of pending litigation remains in place.
[4] The home in dispute was purchased solely with the mother’s funds on February 18, 2010. On February 17, 2010, the day before the closing of the purchase of the home, the daughter signed a Declaration of Trust wherein the daughter declared that she held title to the disputed property in trust for her mother, subject to the balance due on closing being paid. The home was purchased solely with the mother’s funds, without any contribution from the daughter. The mother’s funds represented her entire life savings accumulated by herself and her late husband.
Issues
[5] The issues between the parties are firstly, whether or not there is a valid trust, and who has legal ownership of the property? Secondly, the parties are disagreed as to whether there should be a full accounting as between the parties since the date of purchase of the property, or only an accounting as to the mortgage funds received by the daughter after she placed the mortgage on the property?
Result
[6] A declaratory order shall issue that the defendant holds title to the disputed property in trust for the plaintiff. Further, a vesting order pursuant to s. 100 of the Courts of Justice Act shall issue forthwith that all right, title, and interest in the disputed property shall vest in the sole name of the plaintiff, Judith Anne Holsgrove.
[7] A further order shall issue that there shall be a full accounting as between the parties from February 18, 2010, the date of purchase of the property, until October 31, 2018, as the first accounting period. The accounts shall be served and filed by the daughter on or before May 31, 2019, in the proper court form as required. Pending further order of the court, the daughter shall be permitted to continue to reside at the property and may not be evicted, subject however, to the mother’s right to bring a motion for sale and or encumbrance of the property and for the eviction of the daughter, if the parties cannot agree otherwise, as the mother is in need of funds to support herself in retirement and the home is the mother’s property. There shall be a second accounting period from November 1, 2018 until a date when this matter is either settled, or the house has been sold.
[8] The Certificate of Pending Litigation shall remain on title pending further order of the court. Costs are reserved. If counsel are unable to agree on the issue of costs, I shall receive written submissions by January 31, 2019 after which I will determine the issue of costs based on the materials filed. If there are any matters that I have failed to address, counsel may deal with those matters together with their costs submissions or by written submissions.
[9] If the parties intend to proceed with the accounting, I will hear the matter and be seized. Counsel may contact the trial co-ordinator for available dates to proceed.
[30] A declaratory order shall issue that the defendant holds title to the disputed property in trust for the plaintiff. Further, a vesting order pursuant to s. 100 of the Courts of Justice Act shall issue forthwith that all right, title, and interest in the disputed property on Inverness Crescent in the City of Kingston shall vest in the sole name of the plaintiff, Judith Anne Holsgrove. The full legal description, the PIN number and the municipal address of the property shall be put into the final judgment.
[31] The financial issues between the parties cannot be fully determined on the material filed before me. They cover several years and are complicated and likely expensive to pursue. If the parties cannot otherwise agree, a further order shall issue that there shall be a full accounting as between the parties from February 18, 2010, the date of purchase of the property, until October 31, 2018, as the first accounting period. The accounts shall be served and filed by the daughter on or before May 31, 2019, in the proper court form as required. Pending further order of the court, the daughter shall be permitted to continue to reside at the property and may not be evicted, subject however, to the mother’s right to bring a motion for sale and/or encumbrance of the property and for the eviction of the daughter, if the parties cannot agree otherwise, as the mother is in need of funds to support herself in retirement and the home is the mother’s property. There shall be a second accounting period from November 1, 2018 until a date when this matter is either settled, or the house has been sold.
[32] The Certificate of Pending Litigation shall remain on title pending further order of the court or agreement of the parties.
[33] If the parties intend to proceed with the accounting, I will hear the matter and be seized. Counsel may contact the trial co-ordinator for available dates to proceed before me.
Background Facts and Analysis
[10] The mother is a widow. Her husband Ronald Arthur Holsgrove died in March of 1997. The mother has three children – her daughter and two sons, Daniel and Timothy. The mother was a registered nurse until she retired in 2001.
[11] The mother owned a previous home on Collingwood Street in Kingston from 1968 until 2010 when she sold it and applied the funds to buy the house on Inverness Crescent. Leading up to the purchase of the Inverness Crescent home, there were several discussions between the mother and the daughter. The mother at that time was very sick and had been diagnosed with a life-threatening disease and was heavily medicated. The daughter suggested to the mother that title to the new home be in the daughter’s name so that they could get money to help the mother if she needed it during her illness. According to the mother, the daughter and her husband Michael Douglas Martin, were financially unstable, had addiction issues, and problems in their marriage. The mother was concerned about her two adult grand-daughters. The daughter and her husband suggested that if the title to the house was in the daughter’s name, that they would let the mother live there for the rest of her life.
[12] The mother’s concerns about her daughter’s finances were well based. In 1996, both the mother and her husband had to co-sign the daughter’s mortgage on their Queen Mary Road property as the daughter’s husband was buying lottery tickets and forced their mortgage into arrears. The co-signing of the daughter’s mortgage eventually cost the mother about $20,000.00. The daughter and her husband separated and the daughter and the two grand-daughters moved in with the mother. In May of 1998, the daughter then reconciled with her husband and he moved in with the family at the Collingwood house. They never paid rent. They lived with the mother from 1998 until 2003.
[13] On January 8th, 2010, the mother entered into an agreement of purchase and sale to purchase the Inverness Crescent property for $260,000.00 signed by her alone. The daughter and her husband convinced the mother that if title was in the daughter’s name alone, that they would be then able to provide for the mother’s future needs if she became more ill. However, when the three of them met with their lawyer, Mr. Jehuda Kaminer, he suggested that the arrangement would not be wise as the mother would not be protected if the trust and goodwill between the parties disappeared down the road. As it turned out, that is exactly what happened. The pressure continued at the lawyer’s office from the daughter. Eventually Mr. Kaminer suggested that if title was going to be in the daughter’s name, that the daughter sign a Trust Declaration giving the mother the beneficial ownership of the house. They all agreed to the trust declaration and it was signed. Title was placed in the daughter’s name alone, and the following Trust Declaration was signed the day before closing on February 17, 2010 by the daughter:
I, Catharine Dawn Holsgrove, being the registered owner of the property legally described as (details omitted) Inverness Crescent, Kingston, hereby declare that I hold the property in trust for Judith Anne Holsgrove, subject to the balance due on closing being paid.
[14] After closing, the mother, daughter, her husband and two grand-daughters moved into the Inverness Crescent home. The amount realized on the sale of the Collingwood home was $226,000. The Inverness Crescent property was mortgaged at the time of closing on February 18, 2010 for $34,000. On May 11, 2010, to provide more cash flow, the first mortgage was increased to $49,900 as a new first mortgage on the property for a period of 2 years at 10%, with the previous mortgage at purchase being paid out. This mortgage was interest only, which the mother paid for two years. The mother understood the extra $16,000 was going to be used for renovations, but the renovations never materialized, or only shoddy work was done. Angry words were exchanged between the parties. When the mortgage came up for renewal in 2012, the mother wanted the daughter to obtain a better interest rate, but the daughter refused and renewed the mortgage for another two years. The mother then stopped paying the interest only mortgage payments, but she continued to pay other household expenses and property taxes.
[15] In June of 2010, the mother asked that legal title to the house be put into the mother’s name alone. The mother’s health had substantially improved. The daughter’s husband said, “We (he and the daughter) are working on it”. Nothing happened. According to the mother, any work done was shoddy and improperly done and the house is in a state of disrepair which it was still in when the mother moved out in July of 2016.
[16] The parties lived in the property with the mother paying for family groceries, property taxes, everyone’s cell phone bills, veterinary bills for the daughter’s pets, and pet food. The daughter often asked the mother for cash which the mother says averaged about $400 per month. The mother was talked into paying $5,000 cash of the daughter’s $6,000 alleged income tax bill. The daughter insisted on cash, not a cheque and took the money from the bank teller who had advanced it to the mother.
[17] There is significant evidence of verbal abuse and shaming of the mother by the daughter and her husband, laughing at her in public, and that she was confined to the lower level of the house and not allowed to come upstairs.
[18] In May of 2016, the mother discovered that the daughter had mortgaged the property for $80,000 with the Bank of Nova Scotia, registered on February 28, 2014. I am satisfied that this mortgage was made without the mother’s knowledge. Part of these new mortgage funds were used to pay out the existing mortgage, but the use of the balance of funds of approximately $30,100.00 is unknown to the mother.
[19] There is significant evidence that the daughter encouraged the mother to throw out her documentation related to the house purchase, which the mother did not do. In reviewing her documentation, the mother found that the daughter had forged some cheques on the mother’s bank account.
[20] By the spring of 2016, the situation at Inverness Crescent had become toxic and intolerable for the mother. The daughter said the house was hers and that she was going to sell it, and that the mother had to pay her $2,000 a month and that she could not keep her dog at the house anymore. After a further dispute about air conditioning, there was a physical altercation between the daughter and the mother. The situation had become intolerable for the mother. The mother phoned a friend and left Inverness Crescent. She left behind her belongings. She left behind a motorhome and a boat which was sold by the daughter as her power of attorney, since revoked, without a proper accounting for the proceeds.
[21] Since August of 2016, the mother has lived in a modest one bedroom apartment costing $875 per month plus utilities, and her funds are getting low.
[22] The daughter’s factual version of events is decidedly different. She denies knowing that she was only a trustee of the Inverness Crescent property. Her explanation of the circumstances surrounding the signing of the declaration of trust is that, if she had understood it was her mother’s equitable property, she never would have agreed to the arrangement. The daughter states that the motorhome and boat did not come to Inverness Crescent. She states she does not know where the monies went from the increased mortgage funds which she says were put into the mother’s bank account and that is why the renovations were not done on Inverness Crescent. The daughter states that’s why she made sure the Bank of Nova Scotia mortgage funds went into her bank account. The documentation provided demonstrates that at the time of the Bank of Nova Scotia mortgage in February of 2014, the “draft” trust ledger statement showed the first mortgage advance was only $70,000.00, not $80,000.00. What was paid out with the new Bank of Nova Scotia mortgage was the old first mortgage in the amount of $50,924.86. Funds were used to pay off the daughter’s line of credit with the T.D. Bank of approximately $7,600 and $2,700 to T.D. Visa. $5,857.48 was paid to the City of Kingston for realty tax arrears. There was approximately $1,500 at best paid out to the daughter. No explanation was given as to why a copy of the final reporting letter and trust ledger statement, as opposed to the ‘draft’, for the Bank of Nova Scotia mortgage was not produced by the daughter. The daughter’s factual recollections, I find, are not consistent with the documentary evidence in this case. I reject the daughter’s factual version of the events between the parties, and find the mother’s evidence and documentation to be credible.
[23] The documentation produced by the mother is that as of May 24, 2018, the tax arrears owing to the City to Kingston were $16,144.20. Those taxes are approximately only $300.00 per month. The fact that the daughter has not even paid the taxes on the property is further evidence that the daughter was clearly not keeping up with her financial obligations and has abused her position as a trustee of the mother’s property.
[24] I find that this is an appropriate case for determination by way of a motion for summary judgement. Despite the breakdown of the personal relationship between the mother and the daughter, and all the sordid details in the materials filed, the central issue as to who has the beneficial ownership of the disputed property is well documented. I find that there is no ambiguity as to the essential facts of this case. I find there is no genuine issue for trial and that any remaining financial issues as between the parties can be dealt with by way of a reference to take the accounts as set out in Rule 20.04 (5) of the Rules of Civil Procedure.
[25] I find all the elements of establishing a valid trust have been met in this case. The signed Declaration of Trust is clear evidence that the daughter held ownership of this property for the mother. The property was purchased entirely with the mother’s funds. The daughter obtained a direct benefit of having a place to live with her family.
[26] The case referenced by counsel on the trust issue was Duca Financial Services Credit Union Ltd. v. Bozzo, 2011 ONCA 247. The Court of Appeal held that concerning the validity of a trust declaration, that there must be three certainties: the certainty of intention, the certainty of the subject matter, and the certainty of objects.
[27] In the Duca case, the trust was ultimately found to be sham as Mr. Bozzo considered himself to have retained control of the assets of the trust. Mr. Bozzo was in fact the trustee and the intent of the trust was to obtain protection from creditors within a family run business. As one of the essential three certainties to establish a trust was missing, in that Mr. Bozzo considered himself to have retained control of the assets purportedly held in trust, the Court of Appeal held that there was no certainty of intention to create a trust. The Duca case is completely distinguishable from the case before me.
[28] The evidence in this case is unequivocal that the mother did not retain control of the property of the trust and that the daughter acted out of personal self-interest as her trustee. The certainty of intention in this case has been established by the signed Declaration of Trust document. The subject matter of the trust is the disputed property on Inverness Crescent in the City of Kingston. The object, or the beneficiary of the trust, is clearly the mother.
[29] As the necessary elements for the creation of a trust relationship are all present, I find that such a relationship did exist between the plaintiff mother and the defendant daughter in relation to the Inverness Crescent property.
Costs
[34] Costs are reserved. If counsel are unable to agree on the issue of costs, I shall receive written submissions by January 31, 2019 after which I will determine the issue of costs based on the materials filed. If there are any matters that I have failed to address, counsel may deal with those matters together with their costs submissions or by additional written submissions.
Post-Hearing Issues Resolved on Consent
[35] On December 10, 2018, counsel for both parties filed a consent to an order that the defendant daughter shall vacate and provide the plaintiff mother with vacant possession of the disputed property on Inverness Crescent on or before March 31, 2019. There is further agreement that the premises shall be left in a clean and broom-swept condition, and that the chattels belonging to the defendant daughter shall be removed and that any chattels belonging to the plaintiff mother shall be left in the premises. There shall be an order to go on consent as to these terms accordingly.
[36] Counsel are to draft a final Judgment in accordance with these reasons in the proper Form 59B. Counsel are to draft a consent order in accordance with the consent terms above, in proper Form 59A. Any other further terms of consent between the parties can be dealt with by way of additional consent orders brought to my attention. MacLeod-Beliveau, J., being seized of this matter, shall sign the final judgment and any additional or consent orders in this matter.
Honourable Madam Justice Helen MacLeod-Beliveau Released: December 14, 2018