COURT FILE NO.: CV-13-4327-00
DATE: 20201125
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
NORMAN FRASER
Plaintiff
- and -
JUDITH WILSON and ARDEN SLOLEY
Defendants
COUNSEL:
R. Cucci, for the Plaintiff
D. Milosevic and C. Fiske, for the Defendants
HEARD: September 21-25, November 12, 2020
REASONS FOR JUDGMENT
MANDHANE J.
OVERVIEW
[1] The defendant, Judith Wilson holds title to two residential properties in Brampton: 90 Atkins Circle ("Atkins") and 67 Kingknoll Drive ("Kingknoll") (together "the properties").
[2] Wilson currently lives in Kingknoll with her four children and her common law partner, Arden Sloley.
[3] The plaintiff, Norman Fraser, currently lives in Atkins with his family. He claims that Wilson holds the properties in trust for him and that title should be transferred into his name.
[4] Fraser relies on four documents that he says create an express trust in relation to both properties ("trust documents"). In the alternative, Fraser argues that he is the sole beneficial owner of the properties based on an equitable trust.
[5] Wilson, on the other hand, argues that she is the sole owner of the properties. She denies ever signing the trust documents and explains that any monies she received from Fraser were rent and/or repayment of cash loans. She denies that there was any sort of relationship, agreement or arrangement between the parties that would justify imposing an equitable trust.
THE PROCEEDINGS
[6] Fraser's Notice of Application was issued on September 25, 2013 and he obtained a Certificate of Pending Litigation in relation to the properties on October 1, 2013. His application was converted, on consent, into an action on April 30, 2014.
[7] Wilson's Statement of Defence and Counterclaim was filed on August 14, 2014.
[8] Wilson brought a motion for summary judgment in May 2016. The motion was originally returnable July 6, 2016. However, after considerable delay by Fraser, the motion was scheduled for April 24, 2017. On that day, Fraser's counsel sought and was granted a further adjournment.
[9] Wilson's motion for summary judgment was finally heard ten months later, on May 1 and June 2, 2017. In an endorsement dated June 2, 2017, Ricchetti J. dismissed the motion. He found that there was a genuine issue for trial in relation to Fraser's claims based on a constructive and/or resulting trust. Ricchetti J. noted that the affidavits of both parties "contain fundamental and diametrically opposed statements of fact which go to the heart of the issue to be decided in this proceeding." Ricchetti J. further noted that there was evidence to support each party's version of events.
[10] Significantly, Ricchetti J. would have granted the motion for summary judgment had Fraser only pleaded the express trusts. Based on the expert report, which was also before this court, Ricchetti J. found that the trust documents were forgeries:
[15] Mr. Fraser points to the trust documents signed by Ms. Wilson. He stated he was present when three of them were signed by Ms. Wilson. Surprisingly, given the importance of these documents, Mr. Fraser only produced copies and, when asked, couldn't produce the original documents. The handwriting expert says the signatures on the trust documents are forged because they use the same signature of Ms. Wilson and were apparently copied onto the successive documents to make it appear as though they were signed by Ms. Wilson. Mr. Fraser now says Ms. Wilson gave him these documents [...]
28[...] The original trust documents have never been produced by the Plaintiff. Now the only uncontroverted evidence is that the trust documents contain signatures of Ms. Wilson, were falsified (photocopied). Mr. Fraser's position now suggests that Ms. Wilson must have been the one who copied and put her copied signature on the trust agreements. This makes no sense.
[11] Of course, given the fulsome record before me, I am not bound by Ricchetti J.'s findings of fact or by his assessment of the express trust argument.
[12] On January 18, 2018, McSweeney J. ordered that Fraser produce an Affidavit of Documents by February 19, 2018. I find that Fraser did produce an Affidavit of Documents as required.
[13] On May 30, 2019 Justice Shaw ordered, on consent, that Fraser set the matter down for trial by June 14, 2019. The trial was eventually scheduled for October 21, 2019. It did not proceed.
[14] A pre-trial conference was scheduled for April 16, 2020 but was cancelled due to the COVID-19 pandemic. On September 18, 2020, despite objections from Fraser's counsel, a pre-trial was held. Justice McGee ordered that the trial proceed on an urgent basis, noting that "the action is now seven years old and there are concurrent mortgage enforcement proceedings with respect to one of the two properties in question: 90 Atkins Circle, Brampton."
[15] The trial took place in person, without a jury, from September 21-25 and on November 12, 2020, during the COVID-19 pandemic, I am thankful to the parties, counsel and court staff for working together to adhere to public health protocols.
[16] Fraser and Wilson both testified and were cross-examined extensively. The only other witness was the expert, G.P. Ospreay, who was also cross-examined. The parties filed a Joint Book of Documents prepared by Wilson's counsel. The parties agreed that I could consider the documents therein for the truth of their contents.
[17] At trial, Mr. Cucci stated several times on the record that it was unfair to have been "forced" to go to trial by Justice McGee. There was no trial unfairness. Neither counsel vacated the trial date and it was unreasonable for Mr. Cucci to assume that the trial would be cancelled without inquiring with the court. Overall, I agree with McGee J. that this matter required an urgent trial. As will be discussed below, there were serious issues with the reliability of the parties' evidence, in part due to the passage of time.
[18] At trial, the claim against Sloley and Wilson's counter-claim against Fraser were both withdrawn on consent.
WEIGHING THE EVIDENCE
[19] Fraser has the burden of satisfying me that it is more likely than not that Wilson holds all or a portion of one or both properties in trust for him. In deciding whether it is more likely than not that an alleged event occurred, I must scrutinize the evidence as a whole, consider any inherent improbabilities, address any inconsistencies that go to a central issue, and only rely on evidence that is clear, convincing and cogent: F.H. v. McDougall, 2008 SCC 53, at paras. 40-73.
[20] As is discussed below, I proceeded very carefully in determining which aspects of the parties' evidence to accept and reject. I ordered and reviewed the full trial transcript and tried to corroborate each party's version of events with the reliable business records. I received closing arguments orally and in writing.
The business records
[21] The business records were by far the most reliable evidence before me and I placed significant weight on them. While the parties often disputed the context in which a particular record was made, neither party disputed the reliability of the banking records, lawyer's letters, real estate transaction documents, city orders and other third-party documents created in the regular course of business.
[22] During the trial, I admitted an additional business record relied upon by Fraser that was not included in the Joint Book of Documents: namely, a TD bank receipt dated February 9, 2012 ("TD bank receipt"). The TD bank receipt was listed in Fraser's Affidavit of Documents dated February 2018, with the following description: "Record entry re: $27,000 payment N Fraser to J Wilson for 67 Kingknoll purchase." Despite seeking production of the documents listed in Fraser's Affidavit of Documents, Wilson claims that she never received the TD bank receipt.
[23] Fraser asked that I admit the TD bank receipt because it is essential to his claim for an equitable trust insofar as it shows a substantial sum of money flowing from Fraser to Wilson in the same timeframe as the Kingknoll purchase.
[24] Wilson objected to its admission, arguing that it was not produced by Fraser's counsel despite repeated requests. Wilson says that it would be overly prejudicial to require her to respond to new documents at trial.
[25] After carefully considering the law and the submissions of counsel, I exercised my discretion to admit the TD bank receipt. The evidence is crucial to Fraser's argument regarding a common law trust in Kingknoll, is reliable and therefore has high probative value: R. v. Seaboyer; R v. Gayme, 1991 CanLII 76 (SCC), [1991] 2 S.C.R. 577, 4 O.R. (3d) 383, at pp. 609-611.
[26] In terms of prejudice to Wilson, while it is certainly not ideal to receive new documents central to the case at trial, admission of the TD bank receipt did not materially change the case to meet. Fraser's Affidavit of Documents clearly outlined the substance of the receipt and its relevance. Wilson was effectively on notice that Fraser would likely adduce evidence at trial to suggest that he transferred $27,000 to Wilson in February 2012 as part of the Kingknoll arrangement. Wilson should have been prepared to respond to this argument regardless of whether the receipt was produced.
[27] Having decided to admit the TD bank receipt, I offered Wilson the opportunity to seek an adjournment. None was sought and the trial continued.
Expert evidence
[28] I also place considerable weight on the report of G.P. Ospreay & Associates dated July 21, 2016 ("expert report") and his evidence at trial.
[29] The expert's uncontroverted evidence is that each of the four signatures on the trust documents were identical replicas of one another. He also testified that none of the signatures were originals. This means that only one of the trust documents, if any, could have been genuine. He also testified that it was possible that none of the signatures was genuine and that they were all taken from a fifth document that was not before the court.
[30] After completion of his case, Fraser's counsel objected to admission of the expert report. This was a surprise because, at the pre-trial conference before Justice McGee the week before, Fraser's counsel had advised that the expert was not needed for cross-examination.
[31] Out of an abundance of caution, I allowed Fraser to make arguments regarding the admissibility of the expert report. While he did not challenge the expert's qualifications, Fraser argued that the expert report was irrelevant because Mr. Ospreay could not and did not conclude that all four of Wilson's signatures were photocopies. Stated differently, Fraser argues that the report is inadmissible because the expert could not rule out that one of the four signatures could be an original from a fifth source.
[32] I disagree. The expert report is clearly relevant to my determination of his argument regarding the existence of an express trust. The limits of the expert's opinion go to weight. On that basis, I admitted the expert report and allowed Fraser to cross-examine Mr. Ospreay. Overall, I found Mr. Ospreay's evidence credible and reliable for the limited purposes for which it was proffered.
The parties' testimony
[33] Overall, I was very cautious about relying on the uncorroborated testimony of the parties. They gave diametrically opposed evidence on what happened and why and both of their testimonies revealed gaps, inconsistencies and improbabilities.
[34] Aspects of each party's testimony lacked credibility. For example, I find that Fraser fabricated evidence about the trust agreements and about an alleged immigration scheme to dupe him into granting Wilson title on the properties. On the other hand, I find that Wilson was not forthright when she described the $27,000 transferred to her by Fraser as repayment of an unspecified loan, or about the purpose of the parties' meeting with a lawyer in 2013.
[35] Moreover, because of the passage of time, both parties had trouble remembering basic details like dates, locations, who was present and whether documents were originals or copies. This raises questions about the reliability of some aspects of their evidence.
[36] In terms of demeanor, Wilson delivered her evidence clearly, confidently and had no trouble understanding and responding to questions. Overall, she withstood cross-examination well, though she was evasive when asked about the $27,000 transfer and the parties' visit to the lawyer's office.
[37] In contrast, Fraser struggled to express himself and attributed this to his low educational attainment (grade 9) and newcomer status. While Fraser spoke English well, I accept that he was neither familiar nor comfortable with the formal and technical language used in court. For example, Fraser often had difficulty understanding questions from his own counsel, which required Mr. Cucci to rephrase various questions to obtain coherent answers.
[38] In assessing their relative credibility, I am cautious about placing too much weight on the parties' demeanor, especially in light of significant inconsistencies that call into question the overall reliability of their evidence: R. v. Hemsworth, 2016 ONCA 85, at paras. 44-45; R. v. Norman, 1993 CanLII 3387 (ON CA), [1993] O.J. No. 2802 (Ont. C.A.), at para. 55. Moreover, I take judicial notice that many newcomers find the court process foreign and difficult to navigate, and that people with low educational achievement may find it challenging to understand and answer questions that use technical jargon or unfamiliar terms.
FINDINGS OF FACT
[39] Through my weighing of the various strands of evidence, I honed in on a chain of events that makes sense based on the business records, the expert evidence, the aspects of the parties' evidence that I accept as credible and reliable, and the reasonable inferences that flow from the evidence. In setting out my findings of fact, I also identify the aspects of each party's theory of the case that I explicitly reject.
Wilson loans money to Fraser
[40] Fraser immigrated to Canada from Jamaica in 2003 and was in the business of acquiring, renovating and re-selling ("flipping") properties. As a newcomer, Fraser had trouble establishing his business because he did not have sufficient capital, nor good enough credit, to acquire real estate in Brampton.
[41] Fraser met Wilson because she was in a relationship with his brother, Clive Fraser), whom she eventually married in January 2006. Throughout the duration of the events in question, Clive lived in Jamaica and never visited Canada. Wilson and Clive divorced in August 2009. Throughout her relationship with Clive, Wilson had stable employment, substantial assets, and good credit.
[42] Between 2003 and 2009, Wilson lent Fraser money to purchase a truck and tools for his business. These were good faith loans between family members and no records were kept.
The sale of Atkins
[43] In 2008, Fraser's cousin Tyrell Glaze ("Glaze") bought Atkins for approximately $379,000. Glaze was listed as the sole owner on title but there was a trust agreement that gave Fraser beneficial ownership. Sometime in 2010, Fraser was formally added onto title and became responsible for paying the Atkins mortgage.
[44] After Wilson's divorce, she asked Fraser to pay back the roughly $20,000 that she had loaned him over the years. Fraser did not have the money to repay Wilson.
[45] The parties eventually agreed on an arrangement as follows:
- Wilson purchased Atkins from Fraser for $420,000 and became the sole titleholder;
- Wilson obtained a $411,568.50 mortgage from TD bank;
- Fraser gave Wilson $5000 as a reimbursement for real estate transaction fees;
- Wilson paid $10,000 as a deposit and $19,220.27 as down payment;
- After discharging his previous mortgage obligation, Fraser received $43,015.24 from the proceeds of sale and used $20,000 to re-pay Wilson, in satisfaction of all debts outstanding;
- Wilson obtained title, property and fire insurance in her name only;
- Fraser continued to live in Atkins with his family and was responsible for paying the monthly mortgage payments from a joint TD bank account ("joint TD account") in the amount of $1905;
- Fraser continued to pay for utility services directly;
- Fraser agreed to make repairs and improvements to Atkins in preparation for resale, which he estimates and I accept cost $35,000; and
- After the improvements were complete, the parties would sell Atkins and divide the proceeds proportionally.
[46] The closing documents and banking records are largely consistent with this version of events (the "Atkins arrangement"). The real estate transaction closed on December 6, 2010, Fraser received the proceeds on December 9, and he transferred $20,000 to Wilson on December 15.
[47] I reject Fraser's claim that he was duped into transferring Atkins to Wilson to enhance her chances of successfully sponsoring Clive to immigrate to Canada. The alleged immigration scheme does not make any common sense. Foremost, on September 25, 2007, Wilson received approval from the Canadian government to sponsor Clive. Moreover, Wilson and Clive were divorced in 2009, well before Wilson allegedly proposed the immigration scam to Fraser.
The purchase of Kingknoll
[48] In late 2011, given the seeming success of the Atkins arrangement, the parties agreed to invest in another Brampton property that could be flipped.
[49] Since Wilson lived in Scarborough and worked in Toronto, they agreed that Fraser would be primarily responsible for acquiring the property. On December 20, 2011, Wilson gave Fraser a bank draft for $15,000 to allow him to move quickly if the parties wanted to put a deposit on a property. On January 8, 2012, the parties jointly retained a real estate agent to represent them on the purchase of Kingknoll.
[50] Again, due to his poor financial position, Fraser needed Wilson to legally acquire the property. It was initially agreed that Wilson would purchase the property along with Fraser's then-girlfriend, Jillian Green. However, Wilson ultimately decided that it was less complicated if she acquired the property in her name alone.
[51] The terms of the Kingknoll arrangement were as follows:
- Wilson purchased Kingknoll for $390,000 and become the sole titleholder;
- Wilson obtained a $358,722 mortgage from Home Trust Company;
- Wilson provided $10,000 as a deposit and $5,000 in closing costs (though Fraser eventually repaid Wilson $5000 for real estate transaction fees);
- Wilson provided $36,687.20 as a down payment (though Fraser eventually reimbursed Wilson a total of $27,000);
- Wilson obtained title, property and fire insurance in her name only;
- Fraser signed a lease with the existing tenants, acted as their sole landlord, and retained the monthly rental income (which was an amount "a little bit less than the mortgage");
- Fraser became responsible for making the monthly mortgage payments in the amount of $1,895 from his account directly;
- Fraser arranged for and paid for the utility services;
- Fraser agreed to make necessary repairs and improvements in preparation for resale, including installing a natural stone driveway, all of which he estimates cost $40,000; and
- After the improvements were complete, the parties agreed that they would sell Kingknoll and divide the proceeds proportionally.
[52] I refer to this as the "Kingknoll arrangement." The real estate and banking records are largely consistent with the terms of this arrangement outlined above, and the real estate transaction closed on February 29, 2012.
[53] Again, I reject Fraser's claim that he was duped into transferring Kingknoll to Wilson as part of the immigration scam. As detailed below, I also reject his claim that Wilson provided him with signed trust documents in relation to Kingknoll. These versions of events do not make sense considering Wilson's substantial upfront financial contribution to Kingknoll.
[54] On the other hand, I also reject Wilson's evidence that she was the sole beneficial owner of Kingknoll. She could not explain why Fraser transferred $27,000 to her days before the sale, beyond stating that the payments must have been related to various unspecified loans.
Fraser misses Atkins mortgage payments
[55] Between March 2012 and September 2013, Fraser did not transfer sufficient funds into the TD joint account to cover 14 of the $1,905 monthly payments due on the Atkins mortgage. The total amount of the missed payments was $26,670. I accept Wilson's evidence that she made up those payments with her own funds to avoid going into mortgage arrears on Atkins.
[56] I reject Fraser's suggestion that there were insufficient funds in the TD joint account because Wilson withdrew the funds for her own personal use. Wilson had employment and dividend income and I do not accept that she needed these funds for her personal use.
Deficiencies at Kingknoll
[57] On November 29, 2012, the Kingknoll tenants terminated their tenancy and started a proceeding at the Landlord and Tenant Board (LTB). On January 9, 2013, the LTB found that Fraser failed to meet his obligations under the Residential Tenancies Act, 2006, S.O. 2006, c. 17, and ordered him to make nominal payments to the tenants to compensate them for the state of disrepair at Kingknoll.
[58] In July 2013, the City of Brampton issued an "Order to Comply" to Wilson (as titleholder on Kingknoll), noting various deficiencies in the front entry, front walk, garage door and second floor washroom. At some point, the City began to deal exclusively with Fraser, who eventually corrected the deficiencies noted by the City using his own funds.
Wilson moves into Kingknoll and Fraser forges the trust documents
[59] By the late summer and fall of 2013, Wilson was getting increasingly frustrated. The properties were becoming a headache and she wanted to disentangle herself from Fraser. Around the same time, Fraser became concerned that he might have difficulty proving a beneficial interest in the properties if Wilson walked away from their arrangement.
[60] In August 2013, Fraser proposed that the parties retain a lawyer to prepare trust documents that would crystallize their arrangements and set out their respective interests. Wilson was initially agreeable and they went to see a lawyer, Denise Odetoyinbo, together.
[61] On or around September 2013, Wilson moved into Kingknoll with her family. Fraser stopped paying the Kingknoll mortgage on September 1, 2013 and Wilson became solely responsible for all financial obligations in relation to Kingknoll.
[62] On September 4, 2013, the parties went back to the lawyer's office to provide their identification. I reject Wilson's evidence that she only went to the lawyer's office to support Fraser and that she did not appreciate the true nature of the meeting until it was well underway. Wilson admitted that the parties discussed the possibility of creating a joint tenancy and splitting title. She also recalled documents being presented that showed Fraser as having a 75 percent interest in the properties and her as having 25 percent interest. Wilson admitted that she did not say or do anything during the meeting that would outwardly indicate that she was uncomfortable or upset about the discussion. She said she was in "shock."
[63] I find it unlikely that Wilson would sit through an entire meeting with a lawyer whom she knew and not voice a word of concern if she was truly the exclusive owner of the properties. I also find it highly unlikely that the parties would have discussed a 75/25 split in ownership completely out of the blue.
[64] On September 9, 2013, the parties were meant to attend the lawyer's office to execute the trust documents. When Fraser arrived, Wilson and Sloley were already leaving the parking lot. Wilson seemed upset and told Fraser that she would not be signing any trust documents. When Fraser attended at the law office, the lawyer told him that Wilson was no longer willing to sign the trust documents and advised him to retain his own counsel.
[65] Sometime between September 9 and 25, 2013, I find that Fraser panicked and forged the trust documents in a sloppy attempt to create enforceable express trusts. The four forged trust documents are as follows:
- "Trust Agreement" dated November 30, 2010, with signatures of both parties, giving Fraser sole beneficial ownership over Atkins;
- "To Whom It May Concern" letter dated January 27, 2012, with Wilson's signature, authorizing Fraser to purchase Kingknoll in her name, noting his payment of $20,000 in relation to both properties, and stating the parties' intention that Fraser live in Atkins and "flip" Kingknoll.
- "Re Mortgage Number 10030491" letter dated March 1, 2012, with signatures of both parties, acknowledging: that Wilson holds Atkins in trust for Fraser, that Fraser paid Wilson $10,000 to use her name to obtain Kingknoll as an investment property for his sole benefit, and that Fraser remains liable for all debts and legal actions related to the properties.
- "Trust Agreement" dated September 1, 2013 and with signatures of both parties, giving Fraser sole beneficial ownership over Kingknoll.
[66] I reject Fraser's claim that Wilson signed the trust documents. Taking his trial evidence at its highest, Fraser could only point to one document that was signed in his presence and, even then, he could not recall basic details regarding when, where and in the presence of whom it was signed. Despite the central importance of these documents, he never asked for or kept originals. This does not make sense, given his prior familiarity with trust documents from the initial purchase of Atkins with Glaze.
[67] Fraser admitted that the trust agreements before the court only contained Wilson's photocopied signature. However, he explained that Wilson provided him with photocopied documents as part of another plan to dupe him. He argues that Wilson provided him with photocopied documents because she knew that he would not be able to rely upon them in future legal proceedings. Again, like Ricchetti J., I find that Fraser's explanation lacks common sense.
[68] Finally, in finding that the trust agreements are forgeries, I rely on the handwriting expert's evidence insofar as it shows that the four signatures are identical photocopies.
Fraser remains in Atkins
[69] On or around September 10, 2013 Wilson listed Atkins for sale for $430,000. On September 25, 2013, Fraser obtained a Certificate of Pending Litigation and Atkins was never sold.
[70] In September 2013, Wilson also applied to the LTB to evict Fraser from Atkins for non-payment of rent. After a hearing on January 29, 2016, the LTB found that it did not have jurisdiction to make the order sought because the parties were not in a landlord-tenant relationship. The LTB found that it was inconsistent with a residential tenancy for Fraser to be responsible for the mortgage and making major repairs. The LTB dismissed the application.
[71] On May 17, 2016, TD bank brought a claim against Wilson to repossess Atkins for mortgage arrears. In her Statement of Defence, Wilson blamed Fraser for the default and cross-claimed against him. Wilson's defence further supports a finding that the parties were not in a landlord-tenant relationship.
[72] On September 29, 2016, on consent of the two main parties to the action, this court ordered Wilson to transfer Atkins to TD bank. On May 9, 2017, TD served Fraser with a Notice Demanding Possession, requiring him to vacate Atkins by May 24, 2017. Fraser did not comply. On November 26, 2018, TD obtained a Notice to Vacate that required Fraser to vacate Atkins by December 14, 2018. Again, Fraser did not comply.
[73] Between March 5, 2018 to September 10, 2020, Fraser began to pay the Atkins mortgage and mortgage arrears accrued after September 2013 directly to TD bank's lawyers. In return, he was allowed to remain in Atkins pending the outcome of this litigation. During this time period, Fraser paid a total of $113,800 towards the mortgage. As of trial, the agreement with TD Bank remains in place and Fraser remains in Atkins. Wilson is not making any mortgage payments towards Atkins.
ANALYSIS
[74] Fraser asks me to find that Wilson held Atkins and Kingknoll in trust for him. He relies on the existence of an express trust and, in the alternative, a common law trust. Fraser accepts that it is also open to me to find that he has a proportional interest in one or both properties.
[75] My finding that all the trust documents are forgeries disposes of Fraser's claim based on an express trust. Moreover, my finding that both parties contributed financially towards the purchase and maintenance of Atkins and Kingknoll does not support either party's claim for sole beneficial ownership. Therefore, I limit my analysis to determining whether Fraser holds a beneficial interest in Atkins or Kingknoll based on a common law or equitable trust.
Equitable trusts
[76] The fundamental principle underlying the imposition of a resulting trust is that equity presumes bargains not gifts: Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, at para. 24. When one person (the grantor) contributes to acquisition of a property, while another person (the grantee) acquires legal title, the grantee will be presumed to hold the property in trust for the grantor. Similarly, where the grantor purchases property and conveys it into the name of the grantee, the grantee will be assumed to hold the property in trust for the grantor. The grantee can rebut this presumption by showing, for example, that the property was a gift: Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, at para. 19.
[77] Proof of common intention is not required to impose a resulting trust; the intention of the grantor is the governing consideration: Kerr, at paras. 17-29. Moreover, because the doctrine of resulting trust focuses solely on the acquisition or conveyance of property at the moment in time when title is gratuitously put in the name of the grantee, the most relevant time period for ascertaining the grantor's intention will generally be the time of acquisition or conveyance: Pecore, para. 56.
[78] The doctrine of constructive trust, on the other hand, takes into account the entire history between the parties and is remedial insofar as it compensates for unjust enrichment, which, in turn, requires consideration of each party's contributions to the maintenance of and improvements to the property subsequent to its purchase: Kamermans v. Gabor, 2018 ONSC 5241, at para. 31.
[79] Constructive trusts can be imposed in the absence of the parties' intention to create a trust. Where the grantor can demonstrate a substantial and direct link between his or her contributions and the acquisition, preservation, maintenance or improvement of a property, a share of the property proportionate to the unjust enrichment can be impressed with a constructive trust in her or his favour: Kerr, para. 50.
[80] The three elements of the constructive trust claim are: (1) an enrichment by one party; (2) a corresponding deprivation of the other party; and (3) the absence of a juristic reason for the enrichment: Kerr, at paras. 30-31.
[81] To satisfy the first requirement, the plaintiff must show that he gave something to the defendant that she received and retained. The benefit need not be retained permanently, but there must be a benefit that enriched the defendant, and which can be returned to the plaintiff: Kerr, para. 38. In terms of the second element, the plaintiff's loss will only be material if the defendant has gained a benefit and been enriched: Kerr, para. 39.
[82] In terms of the final element, the plaintiff must show that there is no reason in law or justice for the defendant to retain the benefit conferred by the plaintiff, i.e. the retention must be "unjust" in the circumstances: Kerr, para. 4. At this stage, the court may consider the parties' legitimate expectations and moral and policy-based arguments: Kerr, para. 44.
[83] Here, the doctrine of constructive trust is most applicable. The Atkins and Kingknoll arrangements saw monies flow between the parties before, during and after Wilson's "purchase" of the properties. Moreover, the intention of the parties in relation to the properties changed over time. For example, Kingknoll was initially purchased as an investment property and was treated as such until Wilson moved into the home and made it her primary residence in September 2013.
Constructive trust in relation to Atkins
[84] In relation to Atkins, I am prepared to impose a constructive trust in favour of Fraser. I find that that he holds 81 percent of the beneficial interest in Atkins, while Wilson retains 19 percent of the beneficial interest.
[85] Appendix A shows each party's financial contribution to the acquisition, maintenance and improvement of Atkins from the date of sale to the beginning of trial. In total, Fraser contributed $237,765, while Wilson contributed $55,890. Fraser's proportional contribution was 81 percent and Wilson's proportional contribution was 19 percent.
[86] While both parties contributed substantial sums to the purchase and maintenance of Atkins, that alone is insufficient to establish a constructive trust. I must go on to consider whether Wilson would be unjustly enriched if she retains exclusive beneficial ownership of Atkins.
[87] Wilson's main argument against imposition of a constructive trust is that Fraser's contributions to Atkins were rent, such that he suffered no deprivation and she received no benefit. She relies on Dhillon v. Brar, 2019 ONSC 4066, where Shaw J. found that there was no deprivation to the plaintiff (and therefore no constructive trust) where he paid all the carrying costs for a property in which he and his family lived.
[88] My findings of fact lead me to a different result. Unlike the parties in Dhillon, Fraser and Wilson were engaged in a joint venture to flip Atkins. I agree with the LTB that Fraser's contributions to Atkins exceed what one would reasonably expect to be paid as rent. Unlike the situation in Dhillon, Fraser paid for and installed a new roof and furnace and completed other repairs. These improvements were aimed at enhancing the resale value of Atkins. It follows then that there was no juristic reason for Wilson's enrichment and that a constructive trust must be imposed to the benefit of Fraser based on his proportional contribution.
Constructive trust in relation to Kingknoll
[89] In relation to Kingknoll, I am also prepared to impose a constructive trust. I find that Wilson retains 68 percent of the beneficial interest in Kingknoll, Fraser holds 32 percent of the beneficial interest.
[90] Appendix B shows each party's financial contribution to the acquisition, maintenance and improvement of Kingknoll from the date of sale to the beginning of trial. In total, Wilson contributed $179,707, while Fraser contributed $86,290. Wilson's proportional contribution was 68 percent and Fraser's proportional contribution was 32 percent.
[91] Before imposing a constructive trust, I must consider whether Wilson would be unjustly enriched if she retained the sole beneficial interest in Kingknoll. Again, I note that Fraser and Wilson were engaged in a joint venture to flip Kingknoll. Until their relationship soured in September 2013, despite never living in the property, Fraser made significant financial contributions to the purchase and improvement of Kingknoll. It follows then that there was no juristic reason for Wilson's enrichment and that a constructive trust must be imposed based on Fraser's proportional contribution.
Remedy
[92] Remedies for unjust enrichment are restitutionary in nature and, in most cases, a monetary award will be a sufficient remedy: Kerr, paras. 46-47. In terms of fixing the amount owed, the Supreme Court of Canada emphasized the need for flexibility: Kerr, paras. 70-73.
[93] In this case, given that the parties were engaged in a joint venture, the most appropriate manner to quantify the monetary award is to calculate the share of accumulated wealth proportionate to the claimant's contributions: Kerr, paras. 87.
[94] As there was no evidence before me regarding the current equity in the properties, I cannot calculate the quantum of damages owing. I would encourage the parties to agree upon the amount owing without resort to this court. For example, the parties may obtain an independent valuation of the properties at their joint expense to assist with making the appropriate calculations. If the parties cannot agree on the quantification of the monetary award, they shall contact my judicial assistant on or before January 25, 2021 to schedule a telephone trial management conference to discuss next steps.
COSTS
[95] Counsel provided their cost outlines and made oral and written submissions. There were no relevant offers to settle.
[96] For the following reasons, I decline to award costs to either party. Foremost, I note that success was divided roughly equally, with each party retaining a larger proportional interest in one of the properties and a smaller proportional interest in the other.
[97] To the extent that Fraser was marginally more successful, I find that there are factors that weigh against awarding him costs. First, after the summary judgment motion, I find that Fraser's decision to pursue the express trust claim was unreasonable and unnecessarily increased the complexity of the trial.
[98] Second, I find that Mr. Cucci's disorganization meant that relevant documents were not provided to Wilson until trial, again lengthening the trial significantly.
[99] Finally, and most troublingly, I find that Fraser intentionally delayed the hearing of this matter over several years to allow him to accumulate greater equity in Atkins. Ironically, Wilson was left to drive this litigation forward, which in turn resulted in increased legal fees for motions and preparation of joint documents.
Mandhane J.
Released: November 25, 2020
APPENDIX A
CONTRIBUTIONS TO ATKINS
| Transaction | Fraser | Wilson |
|---|---|---|
| Real estate transaction fees | $5000 | 0 |
| Deposit | 0 | $10,000 |
| Down payment | 0 | $19,220 |
| Mortgage payments* | $215,265 | $26,670 |
| Repairs and improvements** | $17,500 | 0 |
| TOTAL | $237,765 | $55,890 |
| PROPORTIONAL CONTRIBUTION | 81% | 19% |
*To arrive at the mortgage payment values, I find there were 117 monthly mortgage payments due between December 2010 and September 2020. I find that Fraser eventually made all the payments except for the 14 payments he missed in 2013, which were paid for by Wilson.
** In light of the deficiencies associated with Fraser's improvements to Atkins, I find that his estimated contribution to repairs and improvements should be discounted by 50%.
APPENDIX B
CONTRIBUTIONS TO KINGKNOLL
| Transaction | Fraser | Wilson |
|---|---|---|
| Real estate transaction fees | $5000 | 0 |
| Deposit | 0 | $10,000 |
| Down payment | $27,000 | $9,687 |
| Mortgage payments* | $34,290 | $160,020 |
| Repairs and improvements** | $20,000 | 0 |
| TOTAL | $86,290 | $179,707 |
| PROPORTIONAL CONTRIBUTION | 32% | 68% |
*To arrive at the mortgage payment values, I find there were 102 monthly mortgage payments due between March 2012 and September 2020. I find that Fraser made all the payments until September 2013 (18 months) and that Wilson made the payments thereafter.
** In light of the deficiencies associated with Fraser's improvements to Kingknoll, I find that his estimated contribution to repairs and improvements should be discounted by 50%.
COURT FILE NO.: CV-13-4327-00
DATE: 20201125
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
NORMAN FRASER
Plaintiff
- and -
JUDITH WILSON and ARDEN SLOLEY
Defendants
REASONS FOR JUDGMENT
Mandhane J.
Released: November 25, 2020