Court File and Parties

COURT FILE NO.: FC-15-2578 DATE: 20190327 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

DIANE MCCARTHY Applicant – and – MARCEL LABONTE Respondent

Counsel: Laura Pilon, for the Applicant Stephane MonPremier, for the Respondent

HEARD: November 1, December 18 and 19, 2018

REASONS FOR decision

Audet J.

[1] This trial was commenced on November 1, 2018 and was completed on December 18 and 19, 2018. In her Application, Ms. McCarthy sought the sale of a condominium located at 555 Brittany Drive, apt. 403, Ottawa, Ontario (“the Brittany Drive condo”), a camping trailer and a boat, all of which were jointly owned at the time of the parties’ separation in April 2015. Ms. McCarthy also sought the equal division of the net proceeds resulting from the sale of these assets, as well as spousal support.

[2] In his Answer, Mr. Labonte sought to set aside the transfer of title by virtue of which Ms. McCarthy became the joint owner of the Brittany Drive condo in 2011. He pleads a resulting trust and alleges that the transfer was made gratuitously for estate planning purposes only. Alternatively, he pleads unjust enrichment. He notes that the net proceeds from the sale of the boat have already been shared with Ms. McCarthy, and he seeks the dismissal of her claims with regards to the camping trailer and spousal support.

[3] For the reasons that follow, I find that Mr. Labonte’s transfer of a joint interest in the Brittany Drive condo to Ms. McCarthy was gratuitous, and that the presumption of a resulting trust in favour of Mr. Labonte has not been rebutted by Ms. McCarthy. As such, I order that title to the property be transferred back to Mr. Labonte’s sole name. I also dismiss Ms. McCarthy’s claims with respect to the boat and the camping trailer, as well as her claim for spousal support.

Background

[4] The parties lived together for approximately three years from 1970 to 1973, and a son was born from that relationship. While Ms. McCarthy pointed out that she raised the parties’ son on her own, without financial assistance from Mr. Labonte (which I accept), Mr. Labonte explained that, after their separation in 1973, Ms. McCarthy moved to western Canada with their young child without leaving an address or any contact information. He says that he never heard from them again until some 25 years later, when Ms. McCarthy reconnected with him and asked whether he would like to meet his adult son. Ms. McCarthy had since married, divorced and returned to the Ottawa area.

[5] In the fall of 2005, the parties started seeing each other again. At that time, Ms. McCarthy was 54 years of age and Mr. Labonte was 62. Ms. McCarthy was living on her own in a rented apartment, and Mr. Labonte, who had recently separated from his wife, was living in a condominium located at 408-40 Landry Street, in Ottawa (“the Landry Street condo”). This condominium was mortgage-free and jointly owned by Mr. Labonte and his ex-wife, but Mr. Labonte had exclusive possession of it and was assuming all expenses related to it. In September 2006, Ms. McCarthy moved into the Landry Street condo with Mr. Labonte.

[6] At the time the parties moved in together, Ms. McCarthy was working full-time as a registered nurse. By her own testimony, she was financially independent and had no debt nor any significant assets. Mr. Labonte worked full-time as a parts manager in a local garage, earning in the range of $50,000 per year. Aside from his joint interest in the Landry Street condo, he had approximately $164,000 in RRSP which he had accumulated over his lifetime. He also had no debt.

[7] Mr. Labonte and his ex-wife sold the Landry Street condo in 2008 for $244,000. I find, based on the evidence before me, that Ms. McCarthy became uncomfortable with the fact that she was living in a home jointly owned by Mr. Labonte and his ex-wife, which meant that she might be required to vacate her own home in the event of Mr. Labonte’s death. As a result, Mr. Labonte decided to sell the Landry Street condo and to purchase another one in his sole name.

[8] On August 15, 2008, Mr. Labonte purchased the Brittany Drive condo in his sole name, for $165,000. He paid $65,000 as a down payment out of his share of the proceeds from the sale of the Landry Street condo, and took a line of credit secured against the property for the balance of $100,000. The parties moved into the Brittany Drive condo in September or November 2008, and this is where they still lived at the time of their separation on April 25, 2015.

[9] On or about July of 2009, Mr. Labonte increased his line of credit (to $225,000) to purchase a camping trailer ($30,010) a boat, motor and trailer ($15,364), as well as other camping equipment. While the trailer was clearly purchased in the parties’ joint names, the evidence before me did not allow me to determine whether title to the boat was put in the parties’ joint names (the Bill of Sale is only in Mr. Labonte’s name). However, I find that the entire purchase price for both items was paid with the use of Mr. Labonte’s mortgage line of credit, with the exception of a $1,500 deposit paid by Ms. McCarthy towards the purchase of the boat.

The parties’ employment history

[10] Mr. Labonte was employed as a parts manager at McNeal Motors, in Manotick, for years. When the business closed down in 2008 (Mr. Labonte was then 65), he decided to retire. During his last full year with McNeal Motors, Mr. Labonte earned an annual income of $51,804. His retirement, however, did not last very long. Mr. Labonte explained that he quickly became restless and bored, and within a few months, secured a low-paying job at Lachapelle Buick. He worked there until June 2016, at which time he started working for Belair Lexus Toyota, driving the valet shuttle bus. He continues to be employed in that capacity today.

[11] Mr. Labonte’s income history for the years of the parties’ cohabitation is as follows:

2006: $50,117 2007: $51,804 2008: $47,559 2009: $49,399, which includes $16,600 of RRSP income 2010: $56,719, which includes $19, 113 of RRSP income 2011: $58,489, which includes $16,595 of RRSP income 2012: $87,635, which includes $45,203 of RRSP income, employment income of $24,760, CCP in the amount of $11,162 and OAS of $6,510 2013: $86,367, which includes $42,400 of RRSP income, employment income of $18,633, CCP in the amount of $11,525 and OAS of $6,579 2014: $53,761, which includes $24,620 of RRSP income, CCP in the amount of $10,803 and OAS of $6,676 2015: $46,662, which includes employment income of $20,852, CCP in the amount of $11,907, OAS of $6,786, other pension of $3,751 and EI of $3,366 2016: $52,538 2017: $53,479 2018: $47,931, which includes CPP and OAS in the amount of $14,787

[12] Since Mr. Labonte’s 2006 to 2011, and 2016 to 2017 income tax returns were not adduced into evidence, I was unable to determine the source of Mr. Labonte’s income for those years.

[13] Ms. McCarthy’s evidence regarding her employment and earning history was provided in a disorganized and piecemeal fashion, without much supporting evidence. As a result, it was impossible for me to ascertain with any kind of certainty what her real income was over the years. None of her income tax returns were produced; only her notices of assessment (or Income and Deductions print-outs), despite the fact that for some of those years, she earned income from her own (non-incorporated) business. During those years, her gross professional income far exceeded her net, taxable professional income.

[14] In addition, Ms. McCarthy confirmed during her testimony that throughout the years of her cohabitation with Mr. Labonte (and potentially since 1993), she was in receipt of non-taxable Survivor’s Benefits. This source of income was never disclosed prior to trial, including in Ms. McCarthy’s sworn financial statements filed in the context of this litigation, and no supporting documentation was adduced in evidence to confirm the amounts she received over the years.

[15] The following is what I was able to ascertain from Ms. McCarthy’s testimony regarding her employment history. Following the birth of the parties’ son, Ms. McCarthy worked in the field of clerical accounting. She was employed for 25 years with Sports Canada in office management. During those years, she completed different computer courses as well as a hair styling and a cosmetic course.

[16] When the parties’ son became independent, she went back to school and obtained her diploma as a nurse. At some point, she was admitted to the College of Nurses of Ontario as a registered practical nurse. Prior to 2006, Ms. McCarthy was working as a nurse for “Care For”, an organization providing nursing care to the homeless for clients such as the Ottawa Mission, the Salvation Army and the Sheppard’s of Good Hope.

[17] On or around that time, and after a brief period of unemployment, Ms. McCarthy, through a program offered by the City of Ottawa, decided to start her own business to provide nursing staff placements to retirement homes. While building her business, Dignity Eldercare, Ms. McCarthy went back to school to complete a specialized foot care training.

[18] Dignity Eldercare began operating in September 2009, using the Brittany Drive condo’s address as its registered office. In her testimony, Ms. McCarthy alleges that she had to stop her business operations in July of 2011 because the parties were having major problems in their relationship and “she was thrown out of the condo all the time”. This, she said, created ongoing problems in her ability to run her business because her computer and business records were kept in the condo.

[19] However, in her cross-examination Ms. McCarthy admitted that she had decided to retire in 2011 (when she was approaching 60 years of age) because Mr. Labonte was also retired, and she felt it was unfair that he got to enjoy extensive vacations while she was required to work. She also admitted that, as a result of her failure to pay her annual dues to her professional college, her licence as a registered nurse was suspended in 2013. In any event, Ms. McCarthy does not appear to have been gainfully employed after she ceased operating her business in 2011, and until the parties separated.

[20] In 2013, Ms. McCarthy began receiving CPP disability benefits. In her testimony, she stated that the CPP payments she received in 2013 included lump sums for the years 2011 and 2012. The basis upon which Ms. McCarthy qualified for CPP disability benefits is unknown to me. She stated that at some point while attending Algonquin College (presumably while completing her foot care diploma, at some point around 2009, but I cannot be sure), she had a heart attack. In cross-examination, she mentioned being ill with pneumonia in 2017, and then to have broken her foot. No evidence whatsoever was adduced to confirm the veracity of these allegations, or their timing, not even a medical note. No evidence was adduced to confirm on what basis she became entitled to receive CPP disability benefits. In any event, her notices of assessment do confirm that she received disability benefits from 2013 to December 2017, at which point she turned 65 and her CPP disability benefits were replaced with CPP retirement benefits.

[21] Despite her testimony to the effect that she earned around $3,000 in employment income between March and December 2017, no evidence was adduced to confirm those amounts. Despite her admission that she earned employment income in 2018, she was unable to confirm the level of income earned by her during that year, and she produced no evidence confirming the identity of her employer(s) or the capacity in which she was employed.

[22] Ms. McCarthy’s disclosed income for each year of the parties’ cohabitation, as shown in her notices of assessment and Income and Deductions print-outs, is as follows:

2006: $26,857, which includes employment income of $9,898, CPP benefits of $2,559, EI of $10,395, workers’ compensation benefits of $2,924 and interest, investment or RRSP income of $1,081 2007: $38,298, which includes employment income of $28,709, CPP benefits of $2,612, EI of $6,366, and interest, investment or RRSP income of $611 2008: $12,193, which includes CPP benefits of $2,559, EI of $12,690, RRSP income of $611 and net professional income of minus $5,627 (with gross professional income of $280), and social assistance payments of $1,854 2009: $14,001, which includes CPP benefits of $2,731, EI of $4,230, RRSP income of $611 and net professional income of $6,429 (with gross professional income of $18,135) 2010: $14,671, which includes CPP benefits of $2,742, RRSP income of $611 and net professional income of $11,318 (with gross professional income of $23,132) 2011 $3,400, which includes CPP benefits of $2,789 and RRSP income of $611 2012: $3,478, which includes CPP benefits of $2,867 and RRSP income of $611 2013: $16,358, which includes CPP disability benefits of $15,870 and RRSP income of $611 2014: $12,972, which includes CPP benefits of $5,122, CPP disability benefits of $7,239 and RRSP income of $611 2015: $13,195 2016: $13,346 2017: $16,497

[23] As stated before, Ms. McCarthy did not produce her full income tax returns for any of those years but she did produce Income and Deductions printouts for most years. However, for the 2015, 2016 and 2017 taxation years, she only produced her notices of assessment. Therefore, the exact sources of her income for those last three years cannot be ascertained. Also, it is important to note that the above income does not include the Survivor’s Pension benefits received by Ms. McCarthy throughout those years which, in accordance with her own testimony, she received on a tax-free basis (and therefore that income would likely not appear on her tax returns or notices of assessment).

[24] Finally, I wish to note that Ms. McCarthy always claimed “divorced” or “single” as her status on her income tax returns during the years of the parties’ cohabitation. As for Mr. Labonte, he claimed to be “single” on his 2014 and 2015 income tax returns. Since his full income tax returns for all other years were not filed in evidence (his income was confirmed by Agreed Statement of Fact), I am unaware of his claimed status for all other years.

The March 26, 2010 “Separation Agreement”

[25] At some point in 2009, early 2010, the parties began experiencing difficulties in their relationship and discussed a possible separation. By that time, they had been living together for about three years. On March 26, 2010, they signed a one page document drafted by Ms. McCarthy entitled “Separation Agreement”. It stated:

Marcel Labonte and Diane McCarthy have at this time a platonic relationship; which was not perceived at the time that they cohabitated. In addition, our relationship has progressed to the point that we have no common interests and feel that dissolution of the relationship is warranted.

[26] The document went on to provide that the Brittany Drive condo, trailer and boat would be sold and the net proceeds from their sale (after the payment of the outstanding line of credit, which included the purchase price of the trailer, boat and other items related to these two assets) would be divided equally between the parties. Any RRSP acquired by Mr. Labonte since the beginning of the relationship would be “determined by legal council”. Finally, any amount still owing on any of the parties’ credit cards would be divided “on a 50% basis … as of March 25, 2010”.

[27] This document was signed by both parties without witnesses, without independent legal advice and without any financial disclosure being exchanged. It is Mr. Labonte’s evidence that he does not recall having signed this document, and that by the look of his signature, he may very well have been intoxicated when he signed it.

[28] I find that this document has no impact whatsoever on the outcome of this case. First of all, it is not a domestic contract since the parties’ signatures were not witnessed. Even if they had, in light of the circumstances surrounding its preparation and execution, this agreement would not have stood the court’s scrutiny under s. 56 of the Family Law Act, R.S.O. 1990, c. F.3 (“FLA”).

[29] Secondly, it is clear that once he sought legal advice, Mr. Labonte had no intention to follow through with this purported agreement. On September 27, 2010, Ms. Arlitt, recently retained by Mr. Labonte, wrote to Ms. McCarthy to begin the separation process. In that letter, counsel for Mr. Labonte makes his legal position very clear: although there have been discussions between the parties with regards to a financial settlement, title to Mr. Labonte’s condo is in his sole name, and as common law partners, Ms. McCarthy is not entitled to any share therein.

[30] Thirdly, I find it more likely than not, given the improvident nature of the bargain in which he was purportedly entering, that the agreement was signed by Mr. Labonte in a moment of great vulnerability, more likely than not while in a state of advanced intoxication. The evidence presented to me during this trial supports a finding that Mr. Labonte got very intoxicated on several occasions during the parties’ relationship. On two occasions, his heightened state of intoxication led to the parties’ eviction from two different camping sites.

[31] Finally, as the parties eventually reconciled and continued to cohabit with one another for five years thereafter, this purported agreement became moot in any event.

The transfer of Mr. Labonte’s condo to both parties jointly

[32] On April 12, 2011, title to Mr. Labonte’s condo was transferred to both parties, as joint tenants. The circumstances surrounding this transfer will be explored more fully below. For the moment, it is sufficient to say that the parties retained the services of Mr. Bruce Simpson to prepare their wills and to transfer Mr. Labonte’s condo to the parties’ joint names. No written agreement was signed by the parties, only the transfer itself. Mr. Simpson had represented Ms. McCarthy in the context of her divorce from her former husband and, at the request of Ms. McCarthy, he was retained by the parties to complete this retainer. Neither party obtained independent legal advice prior to executing the transfer.

[33] On or about February 7, 2012, Ms. McCarthy became jointly liable for the line of credit secured against the property. Although Ms. McCarthy testified that Mr. Labonte needed to increase the limit and did not qualify without Ms. McCarthy as a co-borrower, the Parcel Register confirms that Mr. Labonte had already obtained the increase on his line of credit ($225,000) in 2009, in his sole name, and that the line of credit was never further increased thereafter. Although no evidence to that effect was provided during the trial, given the above, it seems more likely than not that Ms. McCarthy was added as a co-borrower on the mortgage line of credit simply because she had become a joint owner of the condo.

[34] The parties ultimately separated on April 25, 2015 when they were 62 and 70, respectively. They were never married. Mr. Labonte remained in exclusive possession of the Brittany Drive condo after the parties’ separation and to the date of trial, assuming all expenses related to the condo throughout that time. In August 2015, he sold the camping trailer and all of its contents for $25,000. As the trailer was jointly owned, Ms. McCarthy was required to sign the Bill of Sale and ownerships and, therefore, was well aware of its sale. Mr. Labonte kept the sale’s proceeds. The boat was sold on Kijiji for $6,500 by Mr. Labonte and he paid $3,000 to Ms. McCarthy shortly thereafter.

[35] After the parties separated in April 2015, Ms. McCarthy again retained the services of Mr. Simpson to represent her in the context of her separation from Mr. Labonte. Following a contested motion brought by Mr. Labonte which was heard on December 15, 2016, Justice Labrosse made an order removing Mr. Simpson as solicitor of record for Ms. McCarthy, based on his finding that he was in a conflict of interest.

Preliminary comments regarding disclosure

[36] It is important to note at this juncture that throughout the course of this litigation, which lasted three years, Ms. McCarthy was ordered on several occasions to produce financial disclosure including proof of her alleged direct and indirect contributions towards the purchase of the condo, the trailer and the boat. There were many motions and court appearances brought for the purpose of moving this case along and force Ms. McCarthy to comply with disclosure orders. More specifically:

• an order requiring disclosure was made by Master MacLeod (as he then was) on March 7, 2016 in the context of the first case conference;
• an order was made by Justice Labrosse on January 3, 2017, in the context of the motion to remove Mr. Simpson as counsel of record, also dismissing Ms. McCarthy’s motion for summary judgment (Justice Labrosse found that this cross-motion was brought solely for the purpose of retaliating), and requiring her to provide disclosure within 30 days. Costs in the amount of $4,400 were awarded against Ms. McCarthy;
• an order was made by myself on May 5, 2017, in the context of a motion brought by Mr. Labonte to strike Ms. McCarthy’s pleadings as a result of her failure to pay Justice Labrosse’s cost award. Although duly served well in advance of the motion, Ms. McCarthy sought an adjournment to allow her to retain new counsel. I granted the adjournment but ordered Ms. McCarthy to pay costs thrown away in the amount of $1,200, and ordered that both cost awards were to be paid before Ms. McCarthy could take any further steps in this proceeding;
• an order was made on June 26, 2018 by Justice Engelking requiring Ms. McCarthy to pay Justice Labrosse’s cost award by October 31, 2018, failing which the trial scheduled to proceed on November 1, 2018 would proceed on an uncontested basis. She further ordered that “any and all evidence” relied upon by her to support her contention that she contributed financially to the properties in question be provided within 30 days”.

[37] When the trial began before me on November 1, 2018, Ms. McCarthy had finally paid Justice Labrosse’s costs award. However, it became evident that the vast majority of the documents upon which she was relying had never previously been disclosed to Mr. Labonte (this included proof of income, bank and credit card statements and other documents filing up two full volumes). After having allowed counsel to discuss their options, I adjourned the trial on consent of the parties. The trial ultimately resumed before me on December 18, 2018.

[38] Finally, it must be noted that Ms. McCarthy requested an adjournment of the trial twice; first on October 23, 2018, on the basis that more time was required to complete disclosure (her request was denied by Shelston J.), and a second time on December 14, 2018 to allow Ms. McCarthy to retain new counsel (I denied her request).

Ownership of the Brittany Drive condo

[39] Mr. Labonte takes the position that Ms. McCarthy holds her interest in the Brittany Drive condo in trust for him, and seeks the transfer of that interest back to him by way of resulting trust. He states that Ms. McCarthy provided no consideration for the transfer of a 50% interest in the condo, which was entirely gratuitous, and that the transfer was part of an estate planning meant to insure that the property would pass on to Ms. McCarthy in the event of his death if the parties were still together. He says that there was never any intention on his part to gift Ms. McCarthy a one half interest in his condo in the event of a separation. Mr. Labonte states that he was misled by Mr. Simpson, whom he believed would act in his best interests, in thinking that the transfer of his condo into the parties’ joint names accomplished his stated goal of leaving the property to Ms. McCarthy upon his death.

[40] Ms. McCarthy states that she made significant contributions to the purchase, maintenance and upkeep of the Brittany Drive condo over the years, as well as significant contributions to the parties’ household expenses, and as such the transfer was not gratuitous; it was intended to reflect Ms. McCarthy’s important contributions.

[41] In Kerr v. Baranov, 2011 SCC 17, [2011], 1 S.C.R. 269, the Supreme Court of Canada explained that a resulting trust is imposed “to return property to the person who gave it and is entitled to it beneficially, from someone else who has title to it. Thus, the beneficial interest ‘results’ back to the true owner” (at para. 12). The court further explained (at para. 16) that there are two types of resulting trust claims in domestic situations: 1) the gratuitous transfer of property from one partner to the other; or 2) joint contribution by two partners to the acquisition of property, title to which is in the name of only one of them. He stated that “in either case, the transfer is gratuitous, in the first case because there was no consideration for the transfer of the property, and in the second case because there was no consideration for the contribution to the acquisition of the property.”

[42] In Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, the Supreme Court set out the legal analysis relevant to the establishment of a resulting trust. The court explained that the law presumes a fair bargain, not a gift. Where a transfer is made without proper consideration, there is a presumption of resulting trust and the transferee is presumed to be holding title in trust for the transferor’s benefit. The burden then shifts on the transferee to rebut the presumption of a resulting trust. At paras. 24 and 25, the court stated the following:

The presumption of resulting trust is a rebuttable presumption of law and general rule that applies to gratuitous transfers. When a transfer is challenged, the presumption allocates the legal burden of proof. Thus, where a transfer is made for no consideration, the onus is placed on the transferee to demonstrate that a gift was intended.

The presumption of resulting trust therefore alters the general practice that a plaintiff (who would be the party challenging the transfer in these cases) bears the legal burden in a civil case. Rather, the onus is on the transferee to rebut the presumption of a resulting trust.

[43] I find that Ms. McCarthy paid no consideration for the transfer of Mr. Labonte’s half interest in the Brittany Drive condo to her. The evidence before me makes it clear that the condo was purchased by Mr. Labonte with his own funds and owned by him in his sole name in 2008. Ms. McCarthy made no contribution towards its purchase at that time. Throughout the parties’ eight year relationship, Mr. Labonte was solely responsible for the payment of the mortgage line of credit, municipal taxes, utilities and any other expense related to the Brittany Drive condo, as well as the Landry Street condo that he owned before that and in which the parties also resided together. While I accept that Ms. McCarthy may have paid the odd utility bill as well as the Netflix account, the evidence makes it clear that Mr. Labonte was solely responsible for all expenses related to the parties’ housing.

[44] During this eight year relationship, Mr. Labonte dilapidated all of his RRSP ($164,000) as well as any remaining proceeds from the sale of the Landry Street condo, to fund the parties’ day-to-day expenses and lifestyle. In addition to buying the trailer and the boat with the use of the line of credit, which at the time of the parties’ separation stood at approximately $185,500 (according to Ms. McCarthy’s sworn financial statement), he paid for most of the costs associated with the parties’ travel and vacation (including a three month stay in Costa Rica), fully equipped the camping trailer (patio furniture, land mower, servicing for the boat, yearly lot fees, outside deck with “add-a-room”, etc.), and generally paid for the parties’ outings and activities. He made all of the payments towards the line of credit, before and after it became joint, and was also solely responsible for the payment of the credit card attached to the line of credit which was used by both parties to pay for various expenses. Finally, Mr. Labonte repaid a $12,000 loan contracted by Ms. McCarthy for the parties’ son’s education.

[45] As stated before, Ms. McCarthy was required, on several occasions during the course of this litigation, to provide the evidence relied upon by her to support her contention that she contributed financially to the acquisition, maintenance and/or renovation of the Brittany Drive condo. During the course of this trial, Ms. McCarthy adduced into evidence the monthly bank statements for her personal and business bank accounts (Dignity Eldercare). These records make it clear that throughout the course of the parties’ relationship, Ms. McCarthy made regular purchases at grocery stores, drugstores, LCBO and other retail stores such as Walmart. While I accept that Ms. McCarthy paid her fair share of the parties’ groceries and some of the parties’ day-to-day expenses (restaurant, entertainment, personal care items, prescription drugs), her bank records confirm that she was mainly responsible for her own personal expenses, which included her vehicle expenses.

[46] Ms. McCarthy was unable to prove, as alleged, that she paid for trips and vacations; she did pay for plane tickets for the parties’ granddaughter to visit them in Ottawa for a visit once or twice, and she did contribute to some outing expenses while on vacation with Mr. Labonte. She was also unable to prove, as alleged, that she was responsible for the purchase of major items of furniture, although I accept that she brought her own furniture from her apartment when she moved in with Mr. Labonte, and that she paid $1,179 towards the purchase of blinds for the condo in 2013, as well as some negligible smaller items.

[47] In terms of specific contributions towards the purchase of the Brittany Drive condo itself, Ms. McCarthy produced documentary evidence of several bank transfers and cheques made from her business account to Mr. Labonte’s and/or the parties’ joint bank account between April 2009 and June 2011, totalling $27,114.99. She said these transfers were her contribution towards acquiring a one half interest in Mr. Labonte’s condo.

[48] There are significant difficulties with this evidence. Firstly, some of those transfers and payments (at least two payments of $527.87 and $1,451.74 respectively) appear to be reimbursements for expenses paid by Mr. Labonte on behalf of Ms. McCarthy. The total figure also includes the $1,500 deposit paid by Ms. McCarthy towards the purchase of the boat (and for which she already received her share of the net proceeds). An additional $4,185.38 (the totality of the payments made by her in 2011) was paid by Ms. McCarthy towards the yearly camping lot fees for two camping sites in which the parties camped during the summer of 2011, and from which they were evicted as a result of Mr. Labonte’s behavior while intoxicated.

[49] The balance of the transfers, all made between April 2009 and September 2010 and totalling $19,450, was paid from Ms. McCarthy’s business bank account to Mr. Labonte’s bank account by way of various cheques. There is no ascertainable pattern of payment; the cheques were for various amounts ranging from $400 to $1,700, and they were not paid in accordance with any fixed schedule. It was Mr. Labonte’s evidence, which I accept, that these payments were made primarily to allow Ms. McCarthy to claim “rent” expenses which were deducted from her business income for tax purposes in 2009 and 2010. Mr. Labonte’s testimony on this is supported by that fact that a total of $23,520 was claimed by Ms. McCarthy as business expenses during the two years in question (2009-2010).

[50] I am not prepared, based on the evidence before me, to conclude that these payments were made by Ms. McCarthy for the purpose of acquiring a half interest in the Brittany Drive condo. The evidence presented to me simply does not support such a finding. It is also important to note that, with the exception of the payments made in 2009 and 2010 while Ms. McCarthy was operating her business from Mr. Labonte’s condo, she never paid any rent to Mr. Labonte over the course of the eight years that they lived together, and she basically lived in the Landry Street and Brittany Drive condos free of charge.

[51] Having found that Ms. McCarthy paid no consideration for the transfer to her of a half interest in the Brittany Drive condo, the burden shifts to Ms. McCarthy to show that a gift was intended by Mr. Labonte. I find that Ms. McCarthy did not meet that burden. To that effect, I accept Mr. Labonte’s evidence that his intention at the time of the transfer, which to a large extent is supported by Ms. McCarthy’s own testimony, was to insure that Ms. McCarthy would receive the condo in the event of his death. Mr. Labonte explained that at the time of the transfer, he did not have a will. He was concerned that, if anything was to happen to him, Ms. McCarthy (and eventually their son) might not get the Brittany Drive condo as the parties were not married. It is for that reason that he agreed to meet with Mr. Simpson to discuss his estate planning.

[52] Mr. Labonte stated that during the meeting with Mr. Simpson, he expressed his intention to leave his condo to Ms. McCarthy in case of his death. He confirmed his understanding, based on the information provided by Mr. Simpson, that as joint tenants the property would become the surviving party’s property upon the other’s death. He said that Mr. Simpson specifically advised Ms. McCarthy that “this did not mean that she was entitled to one half of the property”. Along with the paperwork necessary to effect the transfer from Mr. Labonte to the parties jointly, Mr. Simpson also prepared a will for each of them, consistent with their stated wishes. Mr. Labonte says that they were not advised to obtain independent legal advice before signing the transfer, nor were they offered an opportunity to do so.

[53] When questioned about this meeting with Mr. Simpson, Ms. McCarthy did not deny that the parties were not offered an opportunity to obtain independent legal advice. While she denies having been told by Mr. Simpson that she would not necessarily be entitled to one half of the property, she did state that Mr. Labonte had transferred the condo into their joint names because at the time, his existing will provided “for his ex-wife to get it all”, and that he wanted her and their son to receive it in the event of his death.

[54] Neither party called Mr. Simpson as a witness during this trial; therefore, I cannot come to any conclusion as to what actually took place during this meeting. However, the evidence as a whole leads me to the clear conclusion that Mr. Labonte’s true intention on that day was to insure that the condo would become Ms. McCarthy’s property in the event of his death. It was part of an estate planning which included the preparation and signing of two wills consistent with that intention. I find that he never intended to gift one half of his property to Ms. McCarthy while alive, and never intended for Ms. McCarthy to retain a one half interest in the Brittany Drive condo in the event of the parties’ separation.

[55] As a result, I find that the transfer of a one half interest in the Brittany Drive condo from Mr. Labonte to Ms. McCarthy in 2011 was gratuitous, and that the presumption of a resulting trust in favour of Mr. Labonte has not been rebutted by Ms. McCarthy. I find that Ms. McCarthy holds title to a 50% joint interest in the Brittany Drive condo in trust for Mr. Labonte and that title to the property must now result back to him.

[56] As such, I order that title to the Brittany Drive condo shall be transferred into Mr. Labonte’s sole name, and that he shall be solely responsible for the mortgage line of credit registered on title of the property. He shall take all necessary steps to remove Ms. McCarthy’s name from the joint mortgage line of credit.

The camping trailer

[57] It is not disputed that the entire purchase price ($30,010) of the trailer was paid with the use of the line of credit secured against the Brittany Drive condo. Mr. Labonte has been solely responsible for the repayment of that debt throughout. When the trailer was sold, Mr. Labonte kept the proceeds ($25,000). As he will also continue to assume the debt associated with its purchase, which includes a deficit between its purchase and resale price, I see no reason why Ms. McCarthy should receive one half of the sale’s proceeds.

The boat

[58] It is not disputed that Ms. McCarthy received her 50% share (after some adjustments) of the net proceeds from the sale of the boat.

Unjust enrichment

[59] Given my conclusions with regards to the claim of resulting trust, it is not necessary for me to deal with Mr. Labonte’s alternative claim of unjust enrichment.

Spousal Support

[60] Ms. McCarthy claims entitlement to non-compensatory spousal support. She submits that Mr. Labonte earns twice her income and that she is unable to find gainful employment as a result of poor health, disabilities and old age. She states that her standard of living has decreased significantly since the parties’ separation and that she has had to rely on public assistance to survive.

[61] Mr. Labonte seeks an order imputing a reasonable income to Ms. McCarthy, back to the date of the parties’ separation, in the range of what she states she is able to earn working as a nurse on a full time basis. At a very minimum, he says, with her credentials, she should be able to earn at least as much as he is earning himself, negating any need for spousal support.

[62] Given that the parties were never married, any spousal support entitlement on the part of Ms. McCarthy must be assessed based on the provisions of the FLA:

Obligation of spouses for support

30 Every spouse has an obligation to provide support for himself or herself and for the other spouse, in accordance with need, to the extent that he or she is capable of doing so.

Purposes of order for support of spouse

33 (8) An order for the support of a spouse should,

(a) recognize the spouse’s contribution to the relationship and the economic consequences of the relationship for the spouse;

(b) share the economic burden of child support equitably;

(c) make fair provision to assist the spouse to become able to contribute to his or her own support; and

(d) relieve financial hardship, if this has not been done by orders under Parts I (Family Property) and II (Matrimonial Home).

Determination of amount for support of spouses, parents

(9) In determining the amount and duration, if any, of support for a spouse or parent in relation to need, the court shall consider all the circumstances of the parties, including,

(a) the dependant’s and respondent’s current assets and means;

(b) the assets and means that the dependant and respondent are likely to have in the future;

(c) the dependant’s capacity to contribute to his or her own support;

(d) the respondent’s capacity to provide support;

(e) the dependant’s and respondent’s age and physical and mental health;

(f) the dependant’s needs, in determining which the court shall have regard to the accustomed standard of living while the parties resided together;

(g) the measures available for the dependant to become able to provide for his or her own support and the length of time and cost involved to enable the dependant to take those measures;

(h) any legal obligation of the respondent or dependant to provide support for another person;

(i) the desirability of the dependant or respondent remaining at home to care for a child;

(j) a contribution by the dependant to the realization of the respondent’s career potential;

(k) Repealed: 1997, c. 20, s. 3 (3).

(l) if the dependant is a spouse,

(i) the length of time the dependant and respondent cohabited,

(ii) the effect on the spouse’s earning capacity of the responsibilities assumed during cohabitation,

(iii) whether the spouse has undertaken the care of a child who is of the age of eighteen years or over and unable by reason of illness, disability or other cause to withdraw from the charge of his or her parents,

(iv) whether the spouse has undertaken to assist in the continuation of a program of education for a child eighteen years of age or over who is unable for that reason to withdraw from the charge of his or her parents,

(v) any housekeeping, child care or other domestic service performed by the spouse for the family, as if the spouse were devoting the time spent in performing that service in remunerative employment and were contributing the earnings to the family’s support,

(v.1) Repealed: 2005, c. 5, s. 27 (12) .

(vi) the effect on the spouse’s earnings and career development of the responsibility of caring for a child; and

(m) any other legal right of the dependant to support, other than out of public money.

[63] I find that both parties are of very modest means, and that while they were together, lived way beyond their means. The only reason why they were able to sustain this much higher standard of living was by drawing on Mr. Labonte’s retirement and capital assets which ultimately were entirely liquidated.

[64] As stated before, when the parties began living together Mr. Labonte earned employment income of $50,000 per year. After he retired in 2008, he resumed work but at a much lower income, in the minimum wage range and initially on a part-time basis. During the six years that followed, he cashed all of his RRSPs ($164,000) withdrawing between $16,000 and $45,000 each year until 2015 (the year of the parties’ separation), at which time he had none left. While at the beginning of this relationship he owned a half interest in a condo with his ex-wife (worth $122,000 net in 2008) and had no debt, by the end of his relationship with Ms. McCarthy he owned a $215,000 condo with a $185,500 mortgage line of credit.

[65] In 2009 and 2010, Ms. McCarthy was operating her business earning between $18,135 and $23,132 of gross business income. From 2011 and until the parties’ separation, she earned very little, if any, employment income and her earnings consisted of disability benefits and undisclosed Survivor’s Benefits. It is unquestionable that she was supported by Mr. Labonte in a significant way, and that the parties’ lifestyle which included summer camping, boating and winter vacationing was funded by Mr. Labonte’s retirement savings and the depletion of Mr. Labonte’s equity in his home.

[66] During his testimony, Mr. Labonte, who is currently 74 years of age, testified that it was impossible for him to retire at this time, and that he would have to continue working for as long as he could, given that he no longer had any retirement savings. Also, in light of the significant amount owing on his mortgage line of credit, he would be forced to sell his condo unless he continued to work. He states that this is the only reason why he still works at his age. His current income in the amount of approximately $47,900 per annum comprises of full-time minimum wage employment income of $33,144, plus CPP and Old Age Security in the amount of $14,800 per annum.

[67] Ms. McCarthy is ten years younger than Mr. Labonte, at 66 years of age. She is a registered nurse (she was able to re-qualify for her licence in 2017 by going back to school for three months) with a special training in foot care. Before she decided to retire in 2011, her business was doing increasingly well. She has 25 years of experience in the field of accounting and office management. During her testimony, Ms. McCarthy confirmed that she would be able to earn $22 an hour as a nurse, and as much as $30 an hour as a foot care professional, but that she would likely not be able to work for more than four hours a day as a result of her poor health and disabilities.

[68] The difficulty is that Ms. McCarthy has provided no evidence whatsoever to support her claim that she has health issues or disabilities. No medical evidence has been disclosed during the course of this litigation or presented to me at trial. There is no expert evidence with regards to the nature and extend of her alleged disabilities and their impact on her ability to work. Ms. McCarthy also claimed to have suffered physical abuse at the hands of Mr. Labonte, which she states has had an impact on her ability to return to the workforce. However, despite her allegations that the police and her doctors “have all the evidence in that regard”, none has ever been disclosed and none has been presented to me. Mr. Labonte categorically denies any allegations that he might have been physically or otherwise abusive toward Ms. McCarthy.

[69] I have also been provided with no evidence of Ms. McCarthy’s alleged ongoing efforts to find employment since the parties’ separation, or before. While she confirmed in her testimony that she had accepted a job in 2017 with Nurse Next Door, where she says she has been working since March 2017, Ms. McCarthy presented no evidence confirming her schedule, work hours and wages earned. She explained that in the fall of 2018, she had been forced to sell her vehicle to pay the cost award made against her by Justice Labrosse, and as a result had been forced to quit her job. Given the lack of evidence with regards to the nature of her work with Nurse Next Door, and why she would be unable to rely on public transit to go to work, I am unable to determine how the lack of a vehicle might have affected her ability to continue to work there or elsewhere.

[70] Ms. McCarthy was also unable to confirm the amounts she receives by way of Survivor’s Benefits, although she confirmed that they are paid to her on a tax-free basis, and she was unable to confirm whether or not these benefits were part of the income earned by her as shown in her notices of assessment over the years. Since she turned 65 in December 2017, she has been receiving CPP benefits in the amount of $1,448 per month (even this amount was not clear in her evidence). She should have also begun to receive Old Age Security since she turned 65, but that has also not been disclosed or discussed in evidence.

[71] In March 2017, Ms. McCarthy filed a consumer proposal under the Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3. Only the first two pages of her proposal were adduced in evidence. As a result, I have no specifics with regards to the debts that were caught in her proposal, and the payments that she undertook to repay to her creditors. According to her last financial statement sworn in October 2018, she appears to have consolidated $46,500 of debts owed at the time of the parties’ separation into a $8,400 debt currently owing by her, and which she repays at the rate of $200 per month.

[72] In the end, I am left completely unable to determine, based on the information before me, what Ms. McCarthy’s income has been since the parties’ separation, and what it currently is. As the claimant of spousal support, the burden is on Ms. McCarthy to provide me with all of the evidence necessary to support her claim. Given the lack of evidence before me, I am unable to determine what Ms. McCarthy’s alleged health issues and disability are and what impact, if any, they may have on her ability to work and to earn at least part-time minimum wages. By her own testimony, she worked as a nurse for Nurse Next Door as recently as 2017. She also confirmed having worked in 2018, although she provided no evidence as to where and how much. Combined with her CPP, Old Age Security and Survivor’s Benefits, I find that her income is or ought to be similar to that of Mr. Labonte, and I decline making an order for spousal support.

Costs

[73] Mr. Labonte is clearly the successful party in this trial. If the parties cannot agree on costs, I will accept written submissions from the parties not exceeding five pages (exclusive of Bills of Costs and Offers to Settle). Mr. Labonte will have 20 days from the date of this decision to provide his submissions and Ms. McCarthy will have 20 days thereafter to do the same. Mr. Labonte will be allowed a brief reply if deemed necessary, not exceeding one page, which shall be provided within 7 days from receipt of Ms. McCarthy’s submissions.

Madam Justice Julie Audet

Released: March 27, 2019