REASONS FOR JUDGMENT

J.M. Woollcombe J.

Introduction

[1] The issue to be decided in this case is how to divide the net proceeds of the sale of a home purchased and owned jointly by the applicant and respondent during their common law relationship.

[2] The applicant and respondent met in November 2014 and began a relationship. On July 31, 2015, they paid $466,000 to purchase a home at 39 Wexford Road, Brampton. They owned the property as joint tenants. They moved into the property in early August 2015 and lived there together.

[3] The applicant and respondent separated on December 24, 2016. The property was sold for $700,000 and closed on April 25, 2017. There is $220,282.92 in net proceeds being held in trust. Each side makes a claim for an uneven division of the net proceeds.

[4] It is the applicant’s position that he is entitled to $121,122.02 and that the respondent is entitled to $99,060.93. He says that the respondent’s father, Mr. Tajti, is entitled to $10,000, which should be paid equally by the parties from their shares of the net proceeds.

[5] The respondent submits that the applicant is entitled to $78,782.26 and that she is entitled to $116,925.69. She says that her father, Mr. Tajti, is entitled to $24,575.

[6] The respondent’s father, Steve Tajti, was added as a respondent on November 13, 2018. Although he has never filed any materials, he also makes a claim on the net proceeds. Neither the applicant nor the respondent objected to him participating fully in the trial. He claims $24,575 on account of (1) a $6,000 loan made to the applicant and (2) $18,757 for materials and labour for home improvements he contributed to the property, for which he always expected to be compensated and re-paid.

The Issues to be decided

[7] I shall address each of the claims made by each of the parties.

(a) Deposit / Down payment on home

[8] The applicant and respondent contributed different amounts to the initial purchase of the home.

[9] The applicant paid $10,000 by way of deposit. The respondent paid $50,0000, which had been a gift to her from her parents. The applicant and respondent agree that each of them should receive from the net proceeds the value that each contributed to the purchase. Accordingly, I order that the applicant receive $10,000 and the respondent receive $50,000 from the net proceeds to reflect their initial contributions to the purchase.

[10] The parties arranged that their mortgage payments be deducted from the applicant’s bank account. In order to obtain the mortgage in both their names, the applicant paid a debt for the respondent’s car of $16,860.88. The applicant and respondent agree that he is entitled to this amount back from the net proceeds.

[11] The applicant and respondent also agree that at the time the purchase of the home closed, the applicant paid a shortfall of the closing costs of $11,908.57. They agree that this cost should be divided between them. In order to ensure that this cost is shared equally between them, the applicant will receive half of what he paid back ($5,954.29) from the net proceeds and the respondent will have her half ($5,954.293) deducted from her share of the net proceeds.

(b) The applicant’s claim for unjust enrichment on the basis of his mortgage and utility payments

[12] The applicant makes a claim of unjust enrichment, and for an unequal division of the net proceeds, on the basis of him having contributed more than the respondent to the costs of carrying the home. He says that this includes the fact that he paid the mortgage (which included the property taxes) and utilities.

[13] To succeed in a claim of unjust enrichment, the applicant must show that the respondent was enriched by him, that he has suffered a corresponding deprivation and that the benefit and corresponding deprivation occurred without a juristic reason. This means that there must be no reason in law or justice for the respondent’s retention of the benefit conferred on her by the applicant, making her retention of the benefit she received thereby “unjust”. It is significant, however, that the third stage of the analysis allows for consideration of the autonomy of the parties, including the legitimate expectations of the parties and their right to order their affairs by agreement: Kerr v. Baranow, 2011 SCC 10 at paras. 36-40.

[14] The applicant claims $25,617 for repayment of half the mortgage and $500.00 for repayment of half the utilities. As I understand his position, it is that the respondent received a benefit from him paying those expenses, and that he suffered a corresponding deprivation.

[15] Some factual background is needed.

[16] When they purchased the house, the applicant was working in construction. The respondent was not working and was collecting employment insurance. The arrangements that they made to share their joint expenses are not entirely clear. Nor does the evidence adduced provide a fulsome picture as to who paid what over the course of the time they owned the home.

[17] The applicant was involved in a car collision on October 21, 2015. He did not work after this. Clearly, the accident had a profound effect on the plans that the parties had made. The applicant went on short term disability for 15 weeks, during which time he collected employment insurance. He then went on disability. The respondent continued to collect employment insurance until February 2016, after which time she returned to full-time work.

[18] The applicant says that he always paid the mortgage, which included paying the property taxes, as well as some of the utilities and credit cards.

[19] The respondent says that she contributed to the household by paying for utilities, groceries, assisting with costs for the applicant’s daughter and also became the “family chauffeur” after the applicant’s accident.

[20] Each party provided some evidence as to what they paid towards household expenses.

[21] In respect of the mortgage and property taxes, which was $2,328.85 monthly, the applicant has produced some, but not all of his National Bank of Canada statements showing the mortgage payments he made. There is no genuine dispute that he paid the mortgage in the other months for which he has not produced bank statements.

[22] The applicant says he was also paying the utilities. The incomplete bank statements filed reveal payments for some utilities. This includes: December 17, 2015 ($139.63) March 21, 2016 ($195.17); June 20, 2016 ($112.65) August 7, 2016, September 19, 2016 ($56.04), November 21, 2016 ($79.81) December 19, 2016 ($131.88) January 18, 2017 ($165.10).

[23] The respondent has also provided some documentary evidence in support of her claim to have contributed to the household expenses. These include:

a September 1, 2015 Shopper’s Drug Mart receipts for $145.59 for items that the applicant says were items for the household;
a September 15, 2015 payment on the applicant’s credit card for $500;
an October 5, 2015 payment on the applicant’s Mastercard for $300;
a November 4, 2105 Shopper’s Drug Mart receipts for $21.05
December 10, 2015 Hydro payment on for $100;
a December 10, 2015 Rogers payment for $150;
a December 9, 2015 FRO for $1500;
a January 5, 2016 Rogers for 280.22;
a June 8, 2016 payment for the applicant’s mobile phone of $45.20;
a December 2, 2016 payment on the applicant’s Mastercard for $647;
a December 2016 Hydro payment for $90.10 and to Peel water for $117.23
an undated payment of $100 to FRO;

[24] In addition, the respondent provided her TD Bank statements from July 18, 2016 through to January 6, 2017, which were marked as Exhibit 17. There are a large number of payments that appear to have been made for groceries, although I cannot be sure. There are also withdrawals for gas. There is a payment of $42.50 for a mobile phone, which seems likely to have been the applicant’s phone given the June 8, 2016 payment referred to above. These statements also reveal:

an August 18, 2016 Rodgers cable payment for $150;
a September 6, 2016 Hydro payment for $177;
an October 18, 2016 Hydro payment for $174.07.

[25] It was the respondent’s evidence that their home expenses were covered jointly and that she paid for groceries. She said that she sometimes gave the applicant cash and sometimes made payments online.

[26] It is clear to me that the applicant and respondent made an agreement that they would share household expenses so as to enable them to pay down the mortgage costs and thus, ultimately, to acquire equity in the home. While the mortgage came from the applicant’s account for the duration of the time the home was owned, the respondent made many payments for many other things including food, utilities, the applicant’s FRO costs, the applicant’s credit card, the applicant’s phone, household needs and the applicant’s daughter’s expenses.

[27] While it is impossible to be exact, from the evidence before me, it appears that the parties both contributed to the household expenses as they were able to, given their incomes. Those contributions enabled them to continue to own the home and to acquire equity in it. It is very unclear what the total amounts were that each contributed to maintenance of the house and its attendant expenses each month. I cannot say that their contributions were identical. Nor can I say what they were. But, I am not able to conclude, on the basis of the evidence before me, that the applicant has proven that the respondent was enriched by the fact that he paid the mortgage costs, or that he suffered any corresponding deprivation.

[28] Moreover, even had I found that there was an enrichment and deprivation, it seems to me obvious that there would be nothing “unjust” about it. The first stage of the juristic reasons analysis applies to the established categories of juristic reasons, which is not in play here. In their absence, the second step permits the consideration of the reasonable expectations of the parties and public policy considerations to assess whether recovery should be denied: Kerr v. Baranow, at paras. 40-44.

[29] In this case, I find that there is no evidence that the parties ever agreed to, or even discussed the idea that they would apportion the costs of the home on a completely equal basis. Nor is there any evidence of an agreement that, were they to separate, they would go back and ensure that each had contributed to the joint expenses that enabled them to accumulate equity in the home equally. Their agreement was that each would pay what they could from the money each had. And this is precisely what they did. In these circumstances, when they chose to order their affairs in a reasonable and fair manner, if there was any minor enrichment of the respondent and corresponding deprivation of the applicant because he contributed more than she did towards building the equity in the home, there is nothing unjust about it.

[30] In terms of car insurance, the applicant says he paid the respondent’s car insurance and highlights payments in his bank statements. He claims to be owed $1,320 for having paid her auto insurance.

[31] Exhibit 5 is an Allstate Insurance document for the respondent’s car that indicates that the policy premium was $1,825.20 for the period from November 26, 2015 to April 30, 2016 and that the amount owing is $205.57 on each of February 3, 2016 and March 3, 2016. The applicant has not provided his bank statement covering February 3, 2016. He has provided a statement showing an auto insurance deduction on March 3, 2016 for the premium.

[32] There are other payments to Allstate for other amounts of auto insurance on the applicant’s bank statements. I have no evidence that these were for the respondent’s car insurance.

[33] On the basis of the incomplete evidentiary record, I am not persuaded that there was any unjust enrichment from the applicant having paid auto insurance costs.

(c) The 6,000 loan from Mr. Tajti

[34] As I have indicated, the applicant was in a car accident in October 2015. As a result, he was unable to work and so received employment insurance for 15 weeks while on short term disability and then began receiving a disability pension. He said that it took some time for the disability to be processed. During this period, the applicant says that they did not have money for the mortgage payments.

[35] The applicant says that in February 2016, the respondent asked her mother for some money and that $6,000 was transferred into his account. Exhibit 4 is a withdrawal slip showing that on March 22, 2016, $6,000 was withdrawn from the account of the respondent’s mother and deposited into the applicant’s account.

[36] The applicant says that he accepted the $6,000 loan to pay for the mortgage at a time when he was struggling financially having been unable to work since his October 2015 accident. January and February 2016 were difficult times for the applicant and respondent as the applicant was not yet receiving his disability and the respondent was not yet working. He says that this was used for mortgage and bill payments. While at one point, I understood counsel to suggest that this $6,000 was a gift, a careful review of the applicant’s evidence makes clear that he testified that he understood it to be a loan.

[37] The bank statements that the applicant provided in Exhibit 1 do not include the period after March 22, 2016. There is no documentary evidence, therefore, of this loan being used for the mortgage. The applicant denied the suggestion that he has not provided his bank statement for this period because he did not want to show where the money actually went and insisted that this was an error.

[38] The respondent submits that there is no evidence that this money was put towards the mortgage and that the applicant should be responsible for paying it from his share of the proceeds from the home.

[39] Mr. Tajti testified that the applicant had financial problems and approached him in January or February 2016 and asked him for a loan. He says that the applicant promised to pay the money back. Mr. Tajti trusted him and so had no reason to request that he signed any documents to prove the loan. He said that he did not know what the money was used for, though he said that it was given to the applicant for his family.

[40] While true that there is no bank statement from the applicant for the period when he deposited the money, and no evidence other than from the applicant as to how this $6,000 was used, I accept the applicant’s evidence that he had a cash shortfall and used this loan to pay the ongoing monthly household expenses that were coming from his account, including the mortgage. There is no evidence to suggest that he did anything else with it.

[41] I observe that in her Answer filed on April 16, 2018, the respondent sought an order that the parties be equally responsible for the funds owed to her parents. She took the same position in her Financial Statement filed with her Answer on April 16, 2018 and in her Amended Answer of September 25, 2018. Up until the time of this trial, she appears to have consistently characterized this debt as a joint debt. I find that is because that is precisely what it is.

[42] I conclude that Mr. Tajti should be repaid the $6,000. Because the applicant and respondent benefitted from this loan being used for the mortgage and household expenses, the money should be repaid by the applicant and respondent equally, $3,000 each, from the net proceeds.

(d) Improvements made to the home by Steve Tajti - Gifts or Loans?

[43] There is a significant dispute between the applicant and respondent as to whether Mr. Tajti made a gift or loan to them through the home improvements he made to their home. It is undisputed that Mr. Tajti did considerable work on the home. This consisted of not only tearing up the carpet upstairs, repairing the sub-floor and replacing it with laminate flooring, but also renovating the kitchen. Mr. Tajti makes claims for both materials ($8,825) and labour ($9,750). He says that he was told he would be repaid for both the materials he bought and the time he spent working in the home and fully expected this to happen at some point.

[44] The applicant says that the claim should be dismissed because Mr. Tajti made a gift to them of the materials for the renovations and his time to do the work. The respondent agrees with Mr. Tajti that his claim should be paid by the applicant and respondent from the net proceeds.

[45] The applicant testified that after they purchased the home, the respondent’s father visited the property and offered, as a house warming gift, to take up the carpeting on the upper level of the home and replace it with laminate flooring. The applicant says that Mr. Tajti did this and that he assisted with this work.

[46] The applicant says that the respondent was never happy with the condition of the home. She told her parents this. He said that after this, Mr. Tajti came and did the kitchen renovation on the home. The applicant said that he did not ask for this renovation and that he never said he would re-pay Mr. Tajti for the cost of it. He said that the respondent was going to get a job to pay her parents back. While the applicant says that he wanted to see the respondent happy, and wanted the renovations, he could not afford them, especially after his accident. According to the applicant, the respondent was fighting with her parents because she did not think it was fair that they had given $100,000 to her sister and only $50,000 to her.

[47] The applicant testified that he paid for some of the materials for the kitchen on his credit card. He paid for such things as trim, paint, hardware such as door knobs and light fixtures on his credit card. No receipts for any such items are in evidence before me.

[48] The respondent says that when they bought the home, it needed work. They agreed that her father would take on the task of tearing up the upstairs carpet and replacing the flooring. The flooring was purchased for delivery immediately on the house closing so that this work could be prioritized and completed. While her father paid for the flooring using his Home Depot card, and deferred payment for 18 months, the plan was that the applicant and she would re-pay all costs.

[49] Later, over a period of months, Mr. Tajti did significant work on renovating the kitchen including replacing and installing new cabinetry, countertops, sink and lights. Various other renovation work was done through the house. The respondent says that she and the applicant always went with her father to order and buy the materials and that they approved of their costs, even if her father was the person paying. They expected to pay him back. The respondent testified that they knew that her father would do high quality work for them and that while he had been employed as a tool and dye maker, he was an experienced home renovator. She says there was never a plan that his work in their home be free and that they expected to pay Mr. Tajti for his work. Indeed, she testified that the applicant regularly told her father that he would pay him back for all of the work.

[50] Photographs of the house when it was purchased in July 2015 were entered as Exhibit 11. Photographs of the home when it was listed for sale in April 2017 were also provided. Even from these relatively few photographs, it is clear that there were a number of significant improvements made throughout the home, including to the upstairs flooring and in the kitchen.

[51] There can be no dispute that the improvements to the house made by Mr. Tajhi increased the value of the home. Indeed, the appreciation in its value from when it was purchased for $466,000 to when it was sold 21 months later for $700,000 is a strong indicator that the renovations added value to the home.

[52] Mr. Tajti’s evidence is that while he and his wife gave as a gift to the applicant and respondent a dishwasher, range hood and stove, they did not ever intend to give them any of the materials used in the renovations or the labour.

[53] He says that his daughter and the applicant approached him because the home they had bought was run down and needed work. He agreed, at first, to do the flooring work upstairs. This involved tearing out the carpet, repairing the subfloor and laying new laminate flooring. The cost of the materials was discussed when they bought them together. He said that the cost of his labour was not discussed but that he was told that he would be paid for his work. He did not think they needed a written agreement. After this work was done, he did not invoice the applicant and respondent for the project.

[54] Subsequently, Mr. Tajti did the kitchen and other work around the home. He thought he had been there regularly between the purchase and December 24, 2016 when the respondent moved out. He knew that the applicant had been involved in the accident in the fall of 2015 and was not working, but insisted that he did the project believing that he would be reimbursed for the materials and labour.

[55] In respect of the most major items he purchased, receipts have been filed that add, collectively, to $8,825. He did not keep track of the hours or days he spent working in the home. He did not discuss in advance with the applicant and respondent what he anticipated his labour costs would be for the work.

[56] Asked how he arrived at the figure for his labour costs, Mr. Tajti said that he charged about the same in labour as the value of the materials he purchased. He never broke down the labor costs on an hourly or daily basis.

[57] After the respondent moved from the home and the applicant and respondent separated, Mr. Tajti did nothing to try to collect the debt that he says was owed to him. While he says that he brought a claim in the Small Claims Court, counsel for the applicant and respondent agree that this claim was stayed in the Small Claims Court because the family law proceeding had been commenced first in the Superior Court of Justice. Mr. Tajti did not take any steps to make a formal claim for this loan until after the Application was commenced in October 2017.

[58] The applicant and respondent take different positions on the appropriate legal analysis.

[59] The applicant, citing Dasilva v. Dasilva, 2004 CanLII 5043 (ON SC), [2004] OTC 185 at paras. 36-52, says that when parents advance money to their children, it is presumed to be by way of gift and that the onus of proving a loan is on the party who asserts that it.

[60] The respondent, citing Pecore v. Pecore 2007 SCC 17, submits that when parents transfer money to adult children, there is a presumption of a resulting trust and that this needs to be rebutted by the party who asserts that the advancement was a gift. In other words, the respondent says the starting point is that Mr. Tajti loaned to the applicant and respondent the value of the materials he put into the house and it should be presumed that he expected to be paid back for it and his labour.

[61] This issue of whether money or other items of value advanced by a parent to an adult child should be characterized as a gift or loan has, predictably, often arisen in the family law context and frequently been considered by the courts. Notwithstanding the 2004 decision in Dasilva v. Dasilva, I think more recent appellate jurisprudence makes clear how this issue ought to be approached.

[62] I begin with Pecore v. Pecore, 2007 SCC 17, in which, at paras. 24-26, the Supreme Court of Canada explained the doctrine of the presumption of resulting trust as follows:

24 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: see Waters' Law of Trusts, at p. 375, and E.E. Gillese and M. Milczynski, The Law of Trusts (2nd ed. 2005), at p. 110. This is so because equity presumes bargains, not gifts.

25 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.

[63] The Court of Appeal for Ontario defined what is meant by a gift, and then summarized the existing law relating to resulting trusts more recently in Foley (Re), 2015 ONCA 382, at paras. 25-27:

A valid inter vivos gift is one that is intended to take effect during the lifetime of the donor. It consists of a voluntary transfer of property to another with the full intention that the property will not be returned. To establish a gift, one must show intention to donate, sufficient delivery of the gift, and acceptance of the gift: McNamee v. McNamee, 2011 ONCA 533, 106 O.R. (3d) 401, at para. 24.

Equity presumes bargains, not gifts. Thus, when a parent gratuitously transfers property to an adult child, the law presumes that the child holds the property on a resulting trust for the parent: Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, at para. 36. The onus shifts to the adult child to rebut the presumption by proving the contrary intent on a balance of probabilities: Sawdon Estate v. Watch Tower Bible and Tract Society of Canada, 2014 ONCA 101, 119 O.R. (3d) 81, at paras. 56-57; Mroz (Litigation Guardian of) v. Mroz, 2015 ONCA 171, at para. 72. The trial judge must begin her inquiry with the presumption and then weigh all the evidence in an attempt to determine the parent's actual intent at the time of the transfer: Pecore, at para. 44; Sawdon, at para. 57; Mroz, at para. 72.

[64] See also: Barber v. Magee, 2017 ONCA 558, [2017] O.J. No. 3409.

[65] The authorities provide that the starting point in this situation is the presumption of resulting trust. In this context, therefore, the law begins from the presumption that whatever Mr. Tajti gave to the applicant and respondent was by way of a loan, for which he expected compensation in return. This presumption is, of course, rebuttable.

[66] The courts have also provided some direction respecting what factors should be considered in deciding whether an advancement is a gift or a loan. As set out in Barber v. McGee:

Generally, there are objective indicators that can assist in determining whether an advancement is a gift or a loan: Locke v. Locke, 2000 BCSC 1300, [2000] B.C.T.C. 681, at para. 21; Klimm v. Klimm, 2010 ONSC 1479, [2010] O.J. No. 968, at para. 28-32; Mora v. Mora, 2011 ONSC 2965, [2011] O.J. No. 2188, at paras. 38-40. A gift is a transfer in which the absence of an expectation of repayment tends to be reflected in the absence of security, recording, payments or efforts to collect payments. A loan often involves a formal, recorded transfer in which terms are set out and in which repayment is made or sought. In evaluating whether the presumption of resulting trust has been rebutted, a trial judge will naturally look at such indicia.

[67] In determining how to characterize an advancement, the judge should look at all of the relevant evidence in a particular case. Some of the general factors to be considered are, in accordance with Locke v. Locke:

a. Whether there were any contemporaneous documents evidencing a loan;

b. Whether the manner for repayment is specified;

c. Whether there is security held for the loan;

d. Whether there are advances to one child and not others or advances on equal amounts to various children;

e. Where there has been any demand for payment before the separation of the parties;

f. Whether there has been any partial repayment; and,

g. Whether there was an expectation or likelihood of repayment

[68] I turn now to Mr. Tajti’s claim that he loaned to the applicant and respondent the value of the materials and labour for the renovations he undertook. That analysis starts with the presumption of a loan.

[69] There is some evidence that supports Mr. Tajti’s claim. Clearly, both he and his daughter testified that this was the situation.

[70] In addition, there is evidence that the applicant and respondent were present when items for the kitchen were bought and that they were involved in choosing what would be bought, knowing and approving of the cost. This could suggest that they planned to pay the costs back.

[71] Further, Mr. Tajti’s assertion that he expected to be repaid is supported to some degree by the fact that he kept receipts for the most significant materials he purchased. On the other hand, one might well expect anyone to keep these receipts in case there was, later, an issue with the items and a need to prove when and from whom they had been purchased.

[72] I find that the preponderance of other evidence suggests that the materials for the home renovation, and labour expended by Mr. Tajti, were gifts from him to the applicant and respondent. In reaching that conclusion, I rely on the following factors.

[73] First, it is undisputed that before doing the work, Mr. Tajti never provided the applicant and respondent with a written estimate of what the work he was going to do would cost. Providing a cost estimate to anyone for whom you are going to do work, and obtaining their approval in advance, is the normal way in which a person expecting to be paid for that work would operate.

[74] Second, even if there was no formal estimate provided, one would have expected that there would be an informal discussion before the work began about costs for both materials and labour. While I accept that there likely was some discussion about materials as they were bought, there is no evidence that there was ever any discussion about how Mr. Tajti expected to be compensated for his labour.

[75] Third, as work was completed, Mr. Tajti did not provide to the applicant and respondent, either in writing or verbally, any indication as to what that work cost or when payment was expected. The upstairs flooring work was done well before the kitchen and was completed in the fall of 2015. One would have expected that, upon completion of that work, Mr. Tajti would have told the applicant and respondent what it had cost. Even if he was not expecting payment at that time, the time to provide a bill for the work was shortly after the work was completed in late 2015. Mr. Tajti’s decision not to communicate anything about what that work cost, or what he expected to be paid, suggests that he did not expect compensation.

[76] Fourth, I reject Mr. Tajti’s evidence that he did not understand the applicant and respondent’s financial stress, and the impact of the fact that the applicant was not working, when he continued to do work for them. There can be no doubt that he was aware of the applicant’s accident and that he was not working. He also knew, having loaned the applicant money in March 2016, that the couple was having financial difficulties. Yet, after that, he continued to make significant expenditures for renovations including the $5,106.62 for kitchen cabinetry on April 16, 2016 and $1,650 for countertops on August 9, 2016. I find it inconceivable that, knowing the very challenging financial situation that the applicant and respondent were in, he would have made these significant further expenditures for their home with a genuine expectation of repayment.

[77] Fifth, had he genuinely expected to be paid for the materials and labour, Mr. Tajti would, in my view, have taken steps to obtain payment when all the work was done. The evidence as to when that work was done is disputed. But there can be no doubt that he had completed all of the work when the respondent moved out in December 2016. Again, Mr. Tajti did nothing to even advise the applicant and respondent that he believed he was owed compensation, let alone to set out for them what the amount owing was. I find he did nothing because he had no expectation he would be paid. I find it of significance that the first time Mr. Tajti appears to have done anything was after the Application was commenced in October 2017.

[78] Sixth, I accept the evidence of the applicant that the respondent was bothered by the fact that her father gave $100,000 to her sister for her home, and yet she only received $50,000 towards her down payment. Mr. Tajti acknowledged that he had given his other daughter the $100,000. But, when asked whether the renovations were to balance the amounts given to his daughters, he purported not to understand the question. He then asserted that he “never thought” about that or about making the gifts equal. I found his evidence on this point to be incredible and not capable of belief. I find that he knew that doing the renovations for his daughter, as a gift to her, would not only make her happy, but would balance things out between the sisters, his daughters.

[79] Finally, while the respondent asserts that text messages sent by the applicant reveal that he always understood Mr. Tajti was to be repaid, I cannot conclude from those text messages that this is the case. In the text messages exchanged in January 2017, the applicant said, in reference to the respondent’s parents, “…when I sell the house they going to get paid so they can f***right off”. I do not accept that this was an acknowledgement of a loan for the renovations. Later that night, the respondent sent a text in which she suggested that her parents should be paid for the kitchen cabinets and counter, the upstairs flooring and the $6,000 loan. Initially, the applicant responded, “Wrong!!! Nice try though.”. Subsequently, he responded that the house would be sold and that everyone would be paid. Again, I cannot take this as an admission that there was a debt for all of the renovations owed to Mr. Tajti. It is far from clear what the applicant was referring to.

[80] I conclude that the applicant has rebutted the presumption of a loan and conclude that Mr. Tajti’s claims for the materials and labour should not be granted on the basis that he gifted them to the parties.

[81] I cannot leave this issue without addressing two additional points.

[82] First, counsel for the respondent submitted that if I were to conclude that Mr. Tajti had made a gift of the materials and labour for the home renovations, I should conclude that it was a gift only to the respondent and not to the applicant. I reject this submission because there is no evidence whatsoever to support it. This was not even canvassed with any of the witnesses. It is obvious to me that whatever the arrangement was with Mr. Tajti, it was the same for both the applicant and respondent and that they must be treated the same way in respect of the renovations.

[83] Second, I note that while the applicant disputed that Mr. Tajti loaned to them anything but the $6,000, in his draft order, he provided that Mr. Tajti ought to be repaid a total of $10,000, divided evenly between the applicant and respondent. No submissions were made respecting this. It appears to me to be a gesture by the applicant to re-pay Mr. Tajti for some of the costs of the materials. While I have found that the work done was as a gift, in view of what can only be understood as an agreement between the applicant and the respondent that Mr. Tajti should receive some compensation for what he contributed to their home, I will make an order that, in addition to the $6,000 loan that is to be repaid to Mr. Tajti from the net proceeds, he should receive an additional $4,000 from the joint proceeds, shared between the applicant and respondent.

(e) The respondent’s claim for damaged property

[84] The respondent makes a claim for $3,500 for damaged and disputed property.

[85] She says that after she left the home, the applicant denied her access to the property and that she was unable to collect her belongings, including furniture. When she was able to attend to retrieve her things, she says that she took what she could but left a number of items in the garage.

[86] Photographs taken on March 11, 2017 show items, including a cabinet that is said to have contained a computer, couches and a mattress stored in the garage. Photographs were also taken of what is said to be damage to rugs caused by the applicant’s girlfriend’s dog as well as damage to a mattress and cabinet. The respondent says that the computer inside the cabinet was also damaged.

[87] There are no photographs of the damaged computer. There is no way to tell whether the damage to the cabinet was done before or after it was stored in the garage. There are no receipts showing the costs of repairing or replacing any of the items said to have been damaged, including the rugs.

[88] The respondent disagreed that she left these items in the garage because they were already damaged. She says that as soon as she noted the damage, she contacted the police. The police reports relating to the various complaints made by the applicant were put to her. There is no indication in those reports that any complaint about this alleged property damage was ever made to the police. This causes me to doubt that such a complaint was ever made to the police and to doubt the reliability of her evidence respecting this claim.

[89] In my view, evidence falls well short of establishing that the applicant damaged any property. The respondent’s claim is dismissed.

(f) The $7,948.59 of disputed legal fees

[90] On the Trust Ledger Statement provided by JSM Law after the closing of the sale of the home, there is a line item entitled “Paid Legal fee to JSM – Separation Resolution (Paid from Eduardo Botelho Share) for $7,958.59. The parties agree that while the ledger indicates that the amount is to be paid from the applicant’s share of the net proceeds, what in fact happened was that it was paid from the joint proceeds. The respondent says that she should receive from the net proceeds her half of this payment back so that the entire cost is paid by the applicant.

[91] The applicant said that he does not agree that this legal fee should be paid from his share of the proceeds. He disputes that the law firm was acting for him on a family matter and says that the lawyer, Jujhad Mangat, was their real estate lawyer and that he also tried to get the applicant and respondent to settle their family dispute so as to enable the sale proceeds from the home to be distributed.

[92] While the applicant was shown a “Retainer Agreement” prepared by JSM Law for legal services for him, dated February 28, 2017, he testified that he did not recognize it and never signed it. There is no evidence of a retainer agreement being signed for anything other than the real estate transaction.

[93] The respondent agrees that after the sale of the home, Mr. Mangat, who had acted for the applicant on his personal injury case, tried to reach a resolution between the applicant and respondent for the sale of the home. But she says that Mr. Mangat was retained by her only for the sale of the home. Indeed, the respondent says that she retained Manny Chahal to act for her on the family law issues between the applicant and respondent. A letter from Mr. Chahal to the applicant dated February 3, 2017 confirms that he was retained to try to resolve their financial dispute.

[94] Under cross-examination, the respondent agreed that Mr. Mangat did take steps to try to resolve the distribution. For example, Exhibit 15 contains an email response to her of May 18, 2017 relating to the sale. This, of course, post dates that Trust Ledger Statement with the bill to the applicant for the legal fees for separation.

[95] It was put to the respondent that she never made a claim for these legal fees in her Answer or Amended Answer. Counsel submits that she did, however, make a claim for unequal distribution of the net proceeds on the basis of an unjust enrichment and suggests that the doctrine of unjust enrichment analysis applies if, as the ledger suggests, the debt is exclusively the applicant’s, but has been paid out of the joint net proceeds, rather than from the applicant’s share of those proceeds.

[96] Of some significance is the fact that from the time the respondent first saw the trust ledger, she has repeatedly raised with Mr. Mangat her objection to his legal fees for the applicant being paid from the joint proceeds.

[97] In my view, there is no basis upon which to conclude that Mr. Mangat was ever retained by the respondent to act for her. There is no evidence that he acted for her in any capacity other than as the real estate lawyer. If there was legal work provided by Mr. Mangat to the applicant prior to the house closing, it should not be paid for by the respondent, as she neither retained him, nor received any benefit for these funds. The applicant did. The trust ledger suggests that it was always understood by Mr. Mangat that the applicant would pay these fees from his own share of the net proceeds.

[98] Given that these fees were paid from the joint proceeds, instead of the applicant’s share of the proceeds, the respondent should receive half from the net proceeds ($3,979.30) and the applicant’s net proceeds should be deducted by half of the cost ($3,979.30).

Conclusion

[99] As a result, I conclude that the net proceeds are to be divided as follows:

Applicant’s entitlement is: Deposit for offer $10,000 Resp’s car loan payment $16,860.88 Closing costs $5,954.29 Less ½ of $6,000 Loan from Mr. Tajti - $3,000 ½ debt conceded to Mr. Tajti - $2,000 ½ legal fees – JSM trust ledger - $3,979.30 Net owing to the applicant $23,835.87

Respondent’s entitlement is: Downpayment $50,000 ½ legal fees - JSM trust ledger $3,979.30 $53,979.30 Less Closing costs - $5,954.29 ½ of $6,000 Loan from Mr. Tajti - $3,000 ½ of additional debt to Mr. Tajti - $2,000 Net owing to the respondent $43,025.01

Of the total net proceeds of $220,282.95, each party receives the net amount owed: $23,835.87 to the applicant $43,025.01 to the respondent $10,000 to Mr. Tajti.

This leaves $143,422.07 to be divided equally between the applicant and respondent.

The applicant receives: $95,546.91 ($71,711.04 + $23,835.87) The respondent receives: $114,736.05 ($71,711.04 + $43,025.01) Mr. Tajti receives: $10,000

Costs

[100] The parties did not bring costs outlines to the trial. I encourage them to resolve the issue of costs. Should they be unable to do so, I will accept written costs submissions from each of them within three weeks of the release of my judgment. Costs submissions are to be not longer than three pages, in addition to bills of costs, offers to settle and case law relied upon by the parties.

Woollcombe J.

Released: December 18, 2019

Botelho v. Tajti, 2019 ONSC 7271

Case Summary

REASONS FOR JUDGMENT

Introduction

The Issues to be decided

(a) Deposit / Down payment on home

(b) The applicant’s claim for unjust enrichment on the basis of his mortgage and utility payments

(c) The 6,000 loan from Mr. Tajti

(d) Improvements made to the home by Steve Tajti - Gifts or Loans?

(e) The respondent’s claim for damaged property

(f) The $7,948.59 of disputed legal fees

Conclusion

Costs

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Issues

Legal Tests 3