Court File and Parties
COURT FILE NO.: CV-13-244 DATE: 2021/02/16 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN: MARK STYRES, Plaintiff – and – ALISON MARTIN, Defendant
Counsel: Gerry Smits, Counsel for the Plaintiff Mark Staats, Counsel for the Defendant
HEARD: January 4, 5, 25 and 26, 2021
THE HONOURABLE MR. JUSTICE D.A. Broad
Reasons for Judgment
Background
[1] The plaintiff, Mark Styres, and the defendant, Alison Martin, commenced their relationship in early 2001. The relationship ended in or about late 2012 to early 2013. They never married.
[2] At the time that the relationship began, the plaintiff resided at the home which is the subject matter of this proceeding which is municipally described as 1935 Chiefswood Road, Ohsweken, Ontario (the “Property”), and located on the Six Nations of the Grand River Reserve (the “Reserve”).
[3] The plaintiff was gifted the Property by his father Herman Styres Jr. as a vacant plot of land in 1983. The Property formed part of lands which had been in the Styres’ family for generations.
[4] The plaintiff had a three-bedroom raised ranch home built on the Property. The plaintiff did not testify as to when the house was built, but it is clear that it was built well prior to the plaintiff and the defendant commencing their relationship. Brian Keith Porter, architect, testified that the plaintiff approached him in 1979 to prepare plans for construction of the house and that the house was likely built in or around 1983.
[5] The plaintiff was involved in a single car motor vehicle accident on September 5, 1998 and sustained a permanent brain injury which prevented him from working. The brain injury primarily affected his memory.
[6] The plaintiff’s injuries were deemed “catastrophic” for the purposes of his claim for Statutory Accident Benefits (“SABS”) under the Insurance Act, R.S.O. 1990, c. I.8.
[7] Throughout the relationship between the plaintiff and defendant the plaintiff was not employed, He stated that he received income replacement benefits under the SABS in the sum of approximately $4,000 US per month. Although not specifically referred to in evidence, it appeared that he was also entitled to an attendant care benefit under the SABS Schedule (Ont. Reg. 403/96).
[8] Sometime in 2003 the plaintiff requested the defendant to assume the role of what he characterized as his “caregiver”. Counsel for the plaintiff was unable to point to any provision in the Insurance Act or the Regulations thereunder which would support the use of the term “caregiver” for the purposes of the SABS in this context. It would appear that the correct characterization of the defendant’s role was “aide or attendant” for the purposes of the “attendant care benefit” provided for in s. 16(2) of Ont. Reg. 403/96.
[9] In her role as “aide or attendant” the defendant accompanied the plaintiff to appointments with his medical providers and lawyers and helped him as needed with his memory issues. However, the plaintiff was never found to be incapable of managing his own affairs and he continued to attend to his own banking and other financial matters without assistance from the defendant. For approximately two or three years during the relationship the defendant received cheques averaging approximately $500 per month in respect of the plaintiff’s attendant care benefit, the proceeds of which she consistently paid over to the plaintiff and retained none for herself.
[10] The plaintiff led no expert or other medical evidence with respect to the nature of his limitations which resulted from the injuries he sustained in the motor vehicle accident. The parties agreed in their evidence that his only limitation was with respect to his memory, but the nature and extent of his memory difficulties were not particularized, except that they prevented him from continuing with his previous employment with his father’s business Styres Lumber.
[11] The plaintiff’s cousin Glenn Styres (“Glenn”) testified that after the accident he arranged to have the plaintiff work with him at a gas bar. However, the plaintiff was unable to stay focussed on the job. Glenn stated that, due to his memory problems, he was unable to allow the plaintiff to work alone. He described the plaintiff’s memory difficulties as “intermittent.”
[12] The parties agreed that the only assistance that the defendant provided to the plaintiff in respect of his brain injury was to accompany him to appointments with medical and legal service providers and to help him generally to recall things. She also accompanied the plaintiff to meetings of his brain injury support group and to brain injury conferences. The defendant confirmed that if the plaintiff was unable to understand what he was being told at medical and legal appointments he typically asked the doctor or the lawyer to provide additional explanation. She stated that she would “cue” him if he forgot something. She stated that, although she reminded him of appointments, he did maintain a personal agenda to keep track of appointments.
[13] At the time the plaintiff and the defendant commenced their relationship the defendant owned and operated a gas bar and variety store business named “Red Indian” which was located near to the Property on the Reserve. She continued to operate this business throughout the relationship. She also owned a number of residential rental condos, two in Collingwood, Ontario and a succession of condos in Sarasota, Florida (one at a time) and a timeshare interest in South Carolina. She also owned a vacant 7-acre parcel of land and her own residence on the Reserve. After she moved in with the plaintiff her brother moved into her residence. She transferred it to her brother for a short period of time and it is now owned by her daughter.
[14] In January 2002 the plaintiff requested the defendant to agree to being named as his attorney for personal care and for property. He advised the defendant that he was requesting this of her due to a previous experience while in hospital following his accident. There had been a dispute between his first and second wives concerning decision-making for his care. He explained to the defendant that he did not want to go through a similar experience again in the future.
[15] The Powers of Attorney for Personal Care and a Power of Attorney for Property were executed by the plaintiff on January 23, 2002. The defendant never utilized either Power of Attorney for any purpose including making any personal care, financial or property decisions for the plaintiff.
[16] On November 18, 2003 the plaintiff entered into Minutes of Settlement with his second wife Kristine to settle the matrimonial dispute between them. Pursuant to the terms of the settlement the plaintiff agreed to make a payment of $47,260.00 which was primarily to acquire Kristine’s interest in the Property. He borrowed this amount from his father in order to complete the payment.
[17] In or about February 2004 the plaintiff advised the defendant that he wished to transfer the Property to her. On February 13, 2004 the plaintiff executed a Transfer of Land in respect of the Property to the defendant. The transfer became effective on May 19, 2004 following approval of the Six Nations Band Council. The dispute between the parties in the action revolves around the plaintiff’s reasons for this transfer and the circumstances surrounding it.
[18] The plaintiff testified that he learned that he had been charged or was about to be charged with tobacco offences under the Excise Tax Act (Canada) along with Glenn. He testified that Glenn told him to “get everything out of your name.” Glenn had previously been convicted of an offence or offences under the Excise Tax Act and told the plaintiff that it had resulted in him forfeiting substantial property to the federal government.
[19] The plaintiff stated that, upon receiving the advice from Glenn, he went home, called the defendant to come home and advised her “I need to put the house in your name.” He did not testify that he told the defendant that he wished to transfer the Property to her because he was facing, or expected to face, charges under the Excise Tax Act (Canada).
[20] The defendant testified that the plaintiff had on two occasions over the previous few months requested that she accept a transfer of the Property. She declined those previous requests. He approached her a third time on February 13, 2004. She testified that he asked her if she would agree that the house be put in her name and that “he wanted me to have the house.” She agreed and said “fine – let’s go.” The defendant testified that there was no discussion between them regarding any promise to transfer the house back to him if he asked. She testified that the plaintiff did not say anything about any risk of the federal government taking the Property or that there was a risk of losing it due to charges against him for dealing with or transporting tobacco. She stated that at the time of the transfer she did not know anything about the charges and first learned of them in September 2004, well after the transfer was completed.
[21] The plaintiff and the defendant drove together to the Six Nations Housing Office on February 13, 2004 where they met with a Housing Office representative. Neither of them consulted with a lawyer, any family members or other persons to seek advice in relation to the proposed transfer. The plaintiff advised the Housing Office representative that he wanted to put the house into the defendant’s name, however, they were advised that he could not do so because the Property was encumbered by a mortgage in favour of Royal Bank of Canada (RBC). The mortgage had been taken out sometime previously by the plaintiff to finance earlier renovations to the Property.
[22] The plaintiff and the defendant drove to the Royal Bank of Canada branch. The defendant arranged to pay the amount outstanding on the mortgage in the sum of $32,007.91 from her personal RBC account. They returned to the Housing Office at which time the representative telephoned RBC to confirm that the mortgage had been fully paid off. Housing Office staff prepared the transfer documentation which was signed by the plaintiff. No lawyer was involved in the transaction.
[23] The defendant testified that there was no discussion between herself and the plaintiff prior to going to the Housing Office or at the Housing Office with respect to the plaintiff’s reason for wanting to transfer the Property to her.
[24] The defendant testified that she learned from the plaintiff of the charges against him under the Excise Tax Act (Canada) in or about September 2004. She recalled that it was at that time because it was close to her daughter’s birthday.
[25] The Excise Tax Act (Canada) charges against the plaintiff were subsequently resolved as a part of a plea bargain agreement whereby Glenn pleaded guilty and was fined $10,000 and the charges against the plaintiff were withdrawn. Neither the plaintiff nor Glenn provided the approximate date of withdrawal of the charges.
[26] The plaintiff made no request of the defendant to reconvey the Property to him following the resolution of the charges against him or at any other time prior to the break-up of their relationship.
[27] In 2009 the defendant was struggling financially. She was in substantial debt in relation to her gas bar and variety store business, primarily to her gas supplier. She had started a separate gift shop business which failed and had to be closed. She approached her mother Janet Frazer for a loan of $200,000. Her mother required collateral by way of a mortgage on the Chiefswood Road Property. Ms. Frazer explained to the defendant that she required security because she had earlier lent money to her son without security and she lost the full amount.
[28] The defendant spoke to the plaintiff about the proposed loan from her mother and her mother’s requirement for mortgage security. She testified that she was unable to engage the plaintiff in a meaningful discussion about the issue. He told her “don’t worry about it.” He did not want to discuss it. The defendant concluded that the plaintiff did not care if she put a mortgage on the Property in favour of her mother. The mortgage was registered on December 23, 2009. The mortgage had a three-year term and was due and payable in October 2012 with no requirement for interim payments.
[29] Shortly after the maturity date of the Mortgage in October 2012 the defendant discovered that the plaintiff was involved with another woman and they began to argue “all the time.” The defendant testified that the plaintiff told her that he wanted the Property back. The defendant responded that her mother wanted her loan repaid.
[30] The plaintiff informed the defendant in February 2013 that the relationship was over. The defendant testified that the plaintiff asked her at that time how much she wanted to transfer the house back to him. She responded that her mother required repayment of $200,000. The plaintiff agreed that he had asked the defendant how much she wanted to transfer the Property back to him, but she did not provide him with a price. He did not specify when this occurred.
[31] In March 2013 the defendant’s mother advised the defendant that she either wanted the Property transferred to her or repayment of the $200,000 loan. The defendant stated that she advised the plaintiff of this, to which he responded, “she won’t do anything.” The defendant transferred the Property to her mother in May 2013 but remained living at the Property until 2014. The plaintiff wrote to the Band Council, with the assistance of his daughter Amanda Styres on April 13, 2013 asking it to withhold approval of the transfer by the defendant to her mother. The Band Council declined this request.
[32] The parties agreed that the defendant had made various payments and provided certain personal financial benefits to or on behalf of the plaintiff prior to the plaintiff’s transfer of the Property to the defendant.
[33] Following the theft of the plaintiff’s vehicle in 2001 the defendant purchased a 2002 Dodge Dakota pickup truck for the plaintiff’s use on December 5, 2001 for the total price of $40,036. She made a $10,000 deposit and financed the balance. The defendant testified that she also paid for insurance and maintenance on the vehicle. The plaintiff stated that he paid for the insurance on the Dodge Dakota but the defendant paid for maintenance. Particulars of these payments were not provided in evidence.
[34] The defendant provided two replacement vehicles for the use of the plaintiff following the transfer of the Property - a 2005 Ford Mustang on June 16, 2005 for purchase price of $35,175.50, and a 2006 Honda Ridgeline truck on April 27, 2006 for total purchase price of $53,044.23. She also paid the insurance and maintenance on these vehicles however the amounts were not entered into evidence. The plaintiff agreed that the defendant paid for insurance and maintenance on the Ford and Honda vehicles. The defendant did not specify how long she provided vehicles to the plaintiff for his use.
[35] The defendant also paid the entirety of the plaintiff’s legal accounts totaling $10,654.37 prior to the transfer in connection with his family law proceeding with his second wife Kristine. She also paid for his golf club membership at Lynn Meadows golf club in the sum of $1,252.25 in May 2001. The defendant says that she also assisted him in making various child support payments on his behalf which were in the sum of $200 monthly. This occurred when the plaintiff was short on money due to his accident benefit cheques arrived sporadically. She says that she helped pay for a number of golf trips taken by the plaintiff, however the plaintiff disputed this, and the defendant provided no documentary proof of these payments. The defendant stated that she made various payments on the plaintiff’s credit cards however no particulars were provided.
[36] The parties each contributed to the household expenses from time to time as their respective financial circumstances permitted. The parties did not maintain records of how much each of them contributed to household expenses.
[37] The parties each paid for certain improvements to the house prior to and following the transfer. The defendant paid for improvements to the house in January 2003 in the sum of $5,200.00 and the plaintiff paid for improvements in April 2010 in the sum of $795.00 and in February 2011 in the sum of $3,884.00.
Credibility and Reliability
[38] As indicated above, the plaintiff suffers from memory problems derived from injuries he sustained in the 1998 motor vehicle accident. It was evident during his testimony that he had difficulty recalling the details of events and conversations. At times he contradicted himself and often he professed an inability to remember.
[39] For example, on examination-in-chief the plaintiff stated he could not remember if there was approximately $30,000 owing on a mortgage on the Property when he and the defendant attended at the Housing Office. He had no knowledge of the mortgage payout statement that was produced by RBC on that date. On cross-examination, when asked about the defendant having paid out the loan to RBC on the same day as the transfer, he responded “I guess so but I don’t know. It all happened on one day.” He went on to say that he did not personally pay off the mortgage on that date because he did not have the money and he asked the defendant to do so.
[40] The plaintiff testified on cross-examination that he did not say anything to the defendant about his conversation with Glenn or about his reasons for wanting to transfer the Property to her, but stated that he told her that she could sign the Property back to him “after the court is over.” He maintained that the defendant knew about the charges against him because documents regarding the charges came to the house in the mail and he showed them to her whereupon she told him he was “being charged with tobacco.” However, when it was suggested to him that the charges were not laid until after February 2004, he responded that he did not know. He acknowledged that he had no documents showing when the charges were laid or when they were dropped.
[41] On his examination-in-chief the plaintiff was unable to remember signing the Powers of Attorney for Personal Care and for Property and stated that he did not know what they were for. On cross-examination he stated that he did not know if the defendant ever used the Powers of Attorney.
[42] On his examination-in-chief the plaintiff maintained that he paid bills from Woody’s Flooring for new carpet and flooring for the house, however, on cross-examination he stated “[the defendant] probably paid the ones on her name and I probably paid the ones in my name.” With respect to the bill from his nephew Wayne Miller for certain home improvements he stated, “I think I paid for it, I’m not sure.” He stated that he was not really sure if he paid other invoices.
[43] Although the plaintiff was credible in the sense of possessing a determination to be truthful, I found his evidence to be unreliable.
[44] In contrast I found the defendant to be both credible and reliable. She testified in a very straightforward and matter-of-fact way, had a good recall and was confident with the details of events and conversations. She was also fair in acknowledging facts which were not necessarily favourable to her position, such as that the plaintiff paid certain bills for home improvements. None of the evidence provided by the defendant was undermined on cross-examination.
[45] Where the evidence of the plaintiff and the defendant conflicts, I prefer the evidence of the defendant.
Nature of the Action and Claims Being Advanced
[46] By Statement of Claim issued August 9, 2013 the plaintiff brought an action against the defendant and the estate of her mother Janet Frazer for various relief.
[47] The action against the estate of Janet Frazer was dismissed on a motion for nonsuit in the previous trial. The counterclaim by the estate of Janet Frazer against the plaintiff was not pursued.
[48] The claims advanced in the Statement of Claim against the defendant included damages for conversion, breach of trust, breach of fiduciary duty, unjust enrichment, and fraud and/or fraudulent misrepresentation, as well as damages for physical damage to the residence on the Property and punitive and/or exemplary damages.
[49] In submissions counsel for the plaintiff abandoned the claims for damages for conversion, damage to the Property, breach of trust, fraud or fraudulent misrepresentation and punitive or exemplary damages.
[50] The claims which were pursued by the plaintiff at trial can be characterized as 1) a claim for damages for breach of fiduciary duty, 2) a claim for a declaration that the defendant held the Property for his benefit on a resulting trust and for an accounting of the net value of the Property, and 3) a claim for restitution based on unjust enrichment.
Claim for Breach of Fiduciary Duty
[51] The Statement of Claim did not set out the basis upon which the plaintiff alleged that the defendant owed a fiduciary to him and moreover, did not set out the basis upon which the defendant is alleged to have breached a fiduciary duty.
[52] In submissions, counsel for the plaintiff took the position that, as the plaintiff’s “caregiver,” the defendant was in a position of trust, and therefore owed him a fiduciary duty. He submitted that she breached her fiduciary duty in two respects - first by failing to have the plaintiff obtain independent legal advice prior to the transfer of the property in February 2004, and second, by refusing his request to reconvey the property to him when their relationship broke down in 2012-13.
[53] Counsel for the plaintiff did not specifically argue that the defendant was a fiduciary by virtue of his having executed Powers of Attorney for personal care and property, naming the defendant as his attorney for those purposes. It is nevertheless necessary to consider this issue as well.
[54] In the case of Frame v. Smith, [1987] 2 S.C.R. 99 Wilson, J., dissenting in the result, noted at paragraphs 39-42 that relationships in which a fiduciary obligation has been imposed seem to possess three general characteristics:
(1) the fiduciary has scope for the exercise of some discretion or power;
(2) the fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary’s legal or practical interests;
(3) the beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power.
[55] In the case of Hodginson v. Simms, [1994] 3 S.C.R. 377 at p. 409 La Forest, J. identified two categories of fiduciary obligations: per se and ad hoc, noting that per se fiduciary obligations will arise from a relationship that has at its essence “discretion, influence over interests, and an inherent vulnerability.” Two examples of per se fiduciary relationships were offered by La Forest, J. namely, those between a trustee and a beneficiary, and between an agent and a principal. (see also Sharp v. Royal Mutual Funds Inc., 2020 BCSC 1781, per Francis, J. at para. 41).
[56] As identified by Cromwell, J. in Galambos v. Perez, 2009 SCC 48 at para. 48, ad hoc fiduciary duties, in contrast to categories of relationships to which fiduciary obligations are innate, may arise as a matter of fact out of the specific circumstances of a particular relationship. The existence of the fiduciary obligation is therefore primarily a question of fact to be determined by examining the specific facts and circumstances.
[57] In Elder Advocates of Alberta Society v. Alberta, 2011 SCC 24, McLachlin C.J.C. stated at para. 29 that the three “hallmarks” referred to in Frame are not a complete code for identifying fiduciary duties and that there are additional elements which identify the existence of a fiduciary duty in cases not covered by an existing category in which fiduciary duties have been recognized.
[58] Chief Justice McLachlin provided the following summary of these elements at para. 36:
In summary, for an ad hoc fiduciary duty to arise, the claimant must show, in addition to the vulnerability arising from the relationship as described by Wilson J. in Frame; (1) an undertaking by the alleged fiduciary to act in the best interests of the alleged beneficiary or beneficiaries; (2) a defined person or class of persons vulnerable to a fiduciary's control (the beneficiary or beneficiaries); and (3) a legal or substantial practical interest of the beneficiary or beneficiaries that stands to be adversely affected by the alleged fiduciary's exercise of discretion or control.
[59] In my view, the relationship between the parties did not give rise to per se fiduciary obligations owed by the defendant to the plaintiff.
[60] With respect to the submission that as a “caregiver” the defendant was a per se fiduciary, as noted above, counsel for the plaintiff was unable to point to a regulatory provision by which the defendant was designated as, or fulfilled the role of, a “caregiver” or the existence of a contractual basis for that designation.
[61] Subsections 16(1) to 16(2) of Ont. Reg. 403/96 (which represented the Statutory Accident Benefits Schedule for accidents on or after November 1, 1996) provided as follows:
- (1) The insurer shall pay an insured person who sustains an impairment as a result of an accident an attendant care benefit. O. Reg. 403/96, s. 16 (1).
(2) The attendant care benefit shall pay for all reasonable and necessary expenses incurred by or on behalf of the insured person as a result of the accident for,
(a) services provided by an aide or attendant; or
(b) services provided by a long-term care facility, including a nursing home, home for the aged or chronic care hospital. O. Reg. 403/96, s. 16 (2).
[62] The term “caregiver” was utilized in s. 13 of the Regulation in reference to the provision of a “caregiver benefit” in situations where the insured person (that is the person who incurred the injury) was residing with a person in need of care and was the primary caregiver for that person and did not receive any remuneration for engaging in caregiving activities. This section of the Regulation has no application to the case at bar.
[63] It is apparent that the “services” provided by an “aide or attendant” were not defined in the Regulation and could cover a broad range of assistance to the insured person. In my view the fact that the defendant fulfilled the role of an “aide or attendant” to the plaintiff for the purpose of an attendant care benefit under the SABS did not per se make the defendant a fiduciary.
[64] Moreover, the fact that the plaintiff had executed Powers of Attorney for Personal Care and for Property naming the defendant as his attorney for those purposes, by itself, did not make the defendant a per se fiduciary. As indicated above, per se fiduciary obligations will arise from a relationship that has at this its essence “discretion, influence over interests, and an inherent vulnerability.” I find that the defendant never exercised the powers granted by the Powers of Attorney and she was never asked to do so by the plaintiff. The relationship between the plaintiff and the defendant did not have at its essence “discretion, influence over interests, and an inherent vulnerability.” The plaintiff testified that his purpose in making the Powers of Attorney was to avoid the potential for dispute among his family members in the event that decisions might need to be made on his behalf in the future. His purpose was not to vest the defendant with immediate discretion and influence over his interests.
[65] With respect to the question of whether the plaintiff was peculiarly vulnerable, the most important factor is whether vulnerability arises from the relationship between the parties (see Galambos v. Perez, 2009 SCC 48 at para. 68).
[66] As was the situation in Sharp v. Royal Mutual Funds Inc., 2020 BCSC 1781 (see para. 61) this is not a case where the defendant had discretion or power over the plaintiff’s financial decisions. The evidence is clear that the plaintiff made his own decisions with respect to his banking and financial affairs and never relinquished that power to the defendant nor did he ask her to assist him with his financial affairs.
[67] In Hunt v. TD Securities Inc., [2003] O.J. No. 3245 (C.A.), leave to appeal refused at 2003 CarswellOnt 3141, being a case involving the relationship between an investment broker and client, the Ontario Court of Appeal noted that the duty must exist independent of the wrong, stating at para. 46:
In other words, one cannot reason backwards from the fact that an individual is harmed by the unauthorized acts of their broker, to the conclusion that they are vulnerable. Rather, the individuals and the nature of the relationship must be examined.
[68] Francis, J. pointed out at para. 63 of Sharp v. Royal Mutual Funds Inc., 2020 BCSC 1781 that a similar principle was expressed in Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574 at 652 where Justice La Forest held that “a fiduciary duty will not be imposed on the basis of a wrong and ‘used as a conclusion to justify a result.’”
[69] The question of whether the relationship between the parties was such that the plaintiff was peculiarly vulnerable must be examined contextually.
[70] In my view the evidence does not support a suggestion that the plaintiff was peculiarly vulnerable. The only roles which the defendant played in reference to the plaintiff’s injury were to accompany him to his professional appointments and to help him, as needed, with his memory issues. The plaintiff, at all times, looked after his own financial and other affairs.
[71] The fact that the defendant acquired ownership of the Property from the plaintiff for less than full value does not, by itself, result in the imposition of a fiduciary duty on the defendant.
[72] As indicated above, in order to find the existence of an ad hoc fiduciary duty there must have been “an undertaking by the alleged fiduciary to act in the best interests of the alleged beneficiary or beneficiaries.”
[73] Cromwell, J. stated the principle as follows in Galambos v. Perez, 2009 SCC 48 at para. 76:
what is required in all cases of ad hoc fiduciary obligations is that there be an undertaking on the part of the fiduciary to exercise a discretionary power in the interests of that other party. To repeat what was said by McLachlin J. in Norberg, "fiduciary relationships... are always dependent on the fiduciary's undertaking to act in the beneficiary's interests" (p. 273). As Dickson J. put it in Guerin, fiduciary duties may arise where "by statute, agreement, or perhaps by unilateral undertaking, one party has an obligation to act for the benefit of another." (p. 384).
[74] At para. 79, Cromwell, J. confirmed that the fiduciary’s undertaking may be express or implied in the particular circumstances of the relationship, stating as follows:
This does not mean, however, that an express undertaking is required. Rather, the fiduciary's undertaking may be implied in the particular circumstances of the parties' relationship. Relevant to the enquiry of whether there is such an implied undertaking are considerations such as professional norms, industry or other common practices and whether the alleged fiduciary induced the other party into relying on the fiduciary's loyalty.
[75] In my view there is no basis for a finding that the defendant undertook to act in the best interests of the plaintiff.
[76] Specifically, there was no evidence that the defendant gave any express undertaking to that effect and no basis for a finding that such an undertaking may be implied. There were no relevant professional norms, industry or other common practices and no evidence that the defendant induced the plaintiff into relying upon her loyalty.
[77] The plaintiff did not testify to any inducement or any request by the defendant that he transfer the Property to her, and I accept the evidence of the defendant that the plaintiff approached her twice previously to accept a transfer of the Property which she declined. She only agreed to accept the transfer following his third request, without any prompting by her, and took it upon herself to pay off the plaintiff’s mortgage on the property from her own resources in order to complete the transfer. The defendant’s evidence of the plaintiff’s prior requests was not challenged or undermined by the plaintiff.
[78] In my view there is no basis for a finding that the defendant was acting in a fiduciary capacity or breached any fiduciary duty in accepting the transfer of the Property in 2004 without seeing to it that the plaintiff obtained independent legal advice. I am also unable to find that the defendant breached a fiduciary duty to him by not acceding to his request in 2012 that she reconvey the Property to him. If her acceptance of the Property was not in breach of a fiduciary duty in 2004, I am unable to find that a refusal to reconvey it to him in 2012 was in breach of a fiduciary duty.
Claim Based Upon Resulting Trust
[79] Although the plaintiff did not advance a claim based upon the doctrine of resulting trust in the Statement of Claim, it was clear during the trial that he was asserting such a claim with respect to the Property. It is therefore appropriate to consider this claim notwithstanding that it was not pleaded (see Holtby v. Draper, 2017 ONCA 932 (C.A.) at para. 21).
[80] In the case of Pecore v. Pecore, 2007 SCC 17 (S.C.C.) Rothstein, J. stated at para. 20:
A resulting trust arises when title to property is in one party's name, but that party, because he or she is a fiduciary or gave no value for the property, is under an obligation to return it to the original title owner: see D.W.M. Waters, M.R. Gillen and L.D. Smith, eds., Waters' Law of Trusts in Canada (3rd ed. 2005), at p. 362.
[81] At para. 24 Rothstein J. confirmed that the doctrine of resulting trust has application in cases of gratuitous transfers:
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.
[82] The Alberta Court of Appeal in the case of J.(D.) v. J.(M.), 2009 ABCA 272 (Alta. C.A.) confirmed that if the transfer was not gratuitous, no resulting trust could arise. At paras. 45-46 the Court stated as follows:
A resulting trust arises when property is in one party's name, but that party is under an obligation to return it to the original title owner because of a fiduciary duty or because the party holding the property gave no value for it. The presumption of resulting trust is a rebuttable presumption of law that applies if there is insufficient evidence to displace the presumption. The presumption may be relevant where there has been a gratuitous transfer and where evidence as to the transferor's intention is unavailable or unpersuasive: Pecore v. Pecore, 2007 SCC 17 at para. 23. Because equity presumes bargains, not gifts, the presumption of resulting trust has the effect of placing the burden on the transferee to demonstrate that a gift was intended where a transfer has been made without consideration: Pecore v. Pecore, 2007 SCC 17 at para. 24. As Rothstein J. observed for the majority in Madsen, the clearer the evidence in the documents, the more weight that evidence should carry: para. 21.
To determine if there was a resulting trust here, the trial judge was obliged to consider whether the transfer in question was gratuitous and, if so, whether the presumption of resulting trust was rebutted. If the transfer was not gratuitous no resulting trust could arise.
(emphasis added)
[83] In the case of Hamilton v. Hamilton, 92 O.A.C. 103 (C.A.) Osborne, J.A., writing for the panel, stated as follows:
The presumption of a resulting trust is rebuttable on a showing by the title-holder that the non-titled party intended the title-holder to have the property for his or her own benefit. The presumption of a resulting trust is also rebuttable on a showing that the transfer to the titled party was not gratuitous. See Oosterhoff and Gillese, Text, Commentary and Cases on Trusts, 4th ed. (1992) and Hovius, Family Law: Cases Notes and Materials, 3rd ed. (1992).
[84] Finally, the British Columbia Court of Appeal confirmed in the case of Bajwa v. Pannu, 2007 BCCA 260 (B.C.C.A.) that there can be no resulting trust where the party whose equitable interest is challenged gave value and it is a question of fact whether value was given. Low, J.A. stated as follows at para. 16:
The Virks rely on Professor Waters' text, Law of Trusts in Canada, 2d. ed. (Toronto: Carswell, 1984) at 299. The passage on that page of the text says that for a resulting trust to be inferred the person said to be a trustee must have given no value for his legal interest. It follows that if it is found as a fact that the person whose equitable interest is challenged did give value, there can be no resulting trust. Whether value was given is a question of fact to be determined on the evidence in each case. The trial judge here found that Mr. Pannu gave value and there was evidence to support that conclusion. This is not a case like so many others in which one party has transferred an asset to another for no consideration. The evidence here supported the conclusion that Mr. Pannu was a co-purchaser which, in effect, is what the trial judge found to be the case.
[85] The evidence is clear in the case at bar that defendant gave value to the plaintiff at the time of the transfer by paying off the plaintiff’s mortgage to RBC in the sum of $32,007.91 and that the value was substantial and not nominal. That the transfer of the Property to the defendant was therefore not gratuitous.
[86] In the case of Davy v. Davy, 2019 BCSC 1826 (B.C.S.C.) Gomery, J. held at para. 92 that “a transaction is not gratuitous where the transferee contributed something of value to the transferor or to a third party in order to permit the transaction to proceed.”
[87] Mr. Smits, on behalf of the plaintiff, acknowledged that the transfer was not gratuitous but submitted that the doctrine of resulting trust can nevertheless be applied where the value given by the transferee is less than the value of the asset transferred, provided credit is given to the transferee for the amount contributed by her or him.
[88] Mr. Smits offered no authority for this submission and I am unable to accept it. The authorities are clear that the doctrine of resulting trust applies only to gratuitous transfers and where the transferee is shown to have given value, no resulting trust may arise.
[89] The plaintiff’s claim based on the doctrine of resulting trust cannot be sustained.
Claim Based on Unjust Enrichment
[90] The principles guiding application of the doctrine of unjust enrichment were outlined in the case of Montor Business Corp. (Trustee of) v. Goldfinger, 2016 ONCA 406 (C.A.) at paras. 109-114 as follows:
As Iacobucci J. noted in Garland v. Consumers' Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629 (S.C.C.), at para. 30, the test for unjust enrichment requires that a claimant establish the following three elements:
a) an enrichment of the defendant;
b) a corresponding deprivation of the plaintiff; and
c) an absence of juristic reason for the enrichment.
As noted in Garland v. Consumers' Gas Co., 2004 SCC 25, at para. 31, the first two elements are determined by applying a "straightforward economic approach". Iacobucci J. explained, at para. 36: "Where money is transferred from plaintiff to defendant, there is an enrichment."
The analysis in respect of the third element proceeds in two steps.
At the first stage, the claimant has the burden of demonstrating that "no juristic reason from an established category exists to deny recovery." The established categories include a contract, a disposition of law, a donative intent, and other valid common law, equitable or statutory obligations: see Garland v. Consumers' Gas Co., 2004 SCC 25, at para. 44.
If the claimant can show that there is no established juristic reason, then, at the second stage, the defendant bears the burden of demonstrating that there is another reason to deny recovery. When determining if there is a reason to deny recovery at this stage, courts are required to consider the reasonable expectations of the parties and public policy considerations: see Garland v. Consumers' Gas Co., 2004 SCC 25, at paras. 45-46.
As this court noted in Campbell v. Campbell (1999), 43 O.R. (3d) 783 (Ont. C.A.), at pp. 794-95, and Simonin v. Simonin, 2010 ONCA 900, 329 D.L.R. (4th) 513 (Ont. C.A.), at para. 24:
[W]hat is at the heart of the third requirement is the reasonable expectation of the parties, and whether it would be just and fair to the parties considering all of the relevant circumstances, to permit the recipient of the benefit to retain it without compensation to those who provided it.
[91] The defendant acknowledges that the first two elements of the test for unjust enrichment, namely enrichment and deprivation, have been met on the basis that the value of the Property at the time of the transfer by the plaintiff to the defendant exceeded the amount paid by the defendant to discharge the RBC mortgage.
[92] The question therefore is whether the third element has been satisfied, namely the absence of a juristic reason for the enrichment.
[93] As indicated in Garland v. Consumers' Gas Co., 2004 SCC 25, at the first stage of the third element the plaintiff bears the burden of demonstrating on a balance of probabilities that, in effecting the transfer, he did not have a donative intent. The other established categories of juristic reasons including contract, the disposition of law and other valid common law, equitable or statutory obligations have no application.
[94] In my view, the plaintiff has failed to discharge the burden of demonstrating a lack of donative of intent on his part at the time of the transfer. I accept the evidence of the defendant, which is not disputed by the plaintiff, that the plaintiff approached the defendant on two previous occasions seeking her agreement to accept a transfer of the Property and it was only on his third approach, made without any prompting or request on her part, that she agreed to accept the transfer. The defendant paid from her own resources the outstanding amount owing on the plaintiff’s mortgage on the property in excess of $32,000.
[95] I find that the plaintiff did not communicate to the defendant that his intent was to transfer the Property to her only temporarily in order to put it beyond the reach of the federal government until the charges against him under the Excise Tax Act (Canada) were resolved or for any other reason. Nor did he communicate to the defendant that he had an expectation that she would be obliged to reconvey the Property to him at his request.
[96] The plaintiff acknowledged in testimony that at the time of the transfer he was in love with the defendant and expected to spend the rest of his life with her. The evidence indicated that the defendant had been financially generous towards him prior to the transfer. She purchased a new vehicle for his exclusive use when his truck was stolen for which she paid for at least the maintenance and possibly the insurance from her own resources. She fully paid for his legal expenses associated with his matrimonial proceedings with his second wife Kristine. She paid for improvements and renovations to the Property. She also contributed to his payments of child support and on his credit cards.
[97] Mr. Smits submits that it would illogical for the plaintiff to have gifted the Property to the defendant only three months after borrowing over $47,000 from his father to purchase his former wife Kristine’s interest in it. However, the plaintiff did not testify that he ever had any intention to repay his father any part of the loan or that his father ever requested that he make any payment to him towards the loan. There was no evidence that the plaintiff entered into any oral or written agreement with his father specifying any terms for repayment. There was no evidence that the plaintiff made any payments to his father in respect of the loan. I am unable to infer a lack of donative intent in these circumstances from the fact that the plaintiff borrowed $47,000 from his father to purchase his former wife’s interest in the Property.
[98] I find that the plaintiff’s conduct following the transfer was consistent with a donative intent on his part at the time of the transfer. The defendant testified that when she and the plaintiff returned to the home following the execution of the transfer documents and defendant’s daughter Rebecca came home from school, the defendant announced to Rebecca “Mark put the house in my name” and testified that “everybody was happy that day.” The defendant testified that the three of them discussed redecorating Rebecca’s bedroom and the plaintiff said “I don’t care what you do. Do whatever you want, it’s your house.”
[99] Rebecca testified that upon her return from school on the day of the transfer the defendant and the plaintiff sat her down and told her that the house had been transferred to the defendant that day. The plaintiff told her that she was free to do what she wanted with her bedroom. They discussed doing painting and moving in some of Rebecca’s own furniture. Rebecca stated that she requested a new window and the three of them discussed paint schemes for the bedroom. The plaintiff told her to “pick whatever colour you want it’s your room.” She testified that they discussed other changes in the house, including replacing carpet, whereupon the plaintiff stated “it’s your house - do whatever you want.”
[100] The plaintiff made no objection to the defendant granting a mortgage on the Property to her mother to secure a $200,000 loan. The defendant testified that the plaintiff displayed a lack of interest in the prospect of the mortgage being placed on the title. In my view, the plaintiff’s disinterest in the defendant encumbering the Property adds additional support for the plaintiff’s donative intent at the time of the transfer.
[101] The plaintiff made no request to the defendant to reconvey the Property to him until the breakup of the relationship in the fall of 2012, some 8 ½ years following the transfer. The defendant testified that the plaintiff asked her how much she wanted in exchange for a reconveyance. The plaintiff agreed that he asked her this but was unclear in his evidence on when he did so. In my view the plaintiff’s inquiry of the defendant with respect to how much she wanted in exchange for a reconveyance of the Property is inconsistent with a belief that he retained beneficial ownership to the Property. It is also inconsistent with an expectation on his part that the defendant was obliged to reconvey it to him on request, and is consistent with his having had a donative intent at the time of the transfer.
[102] In my view, the plaintiff has failed to discharge the onus of proving on a balance of probabilities that his true intent in transferring the Property to the defendant was to put it beyond the reach of the federal government in connection with charges or pending charges against him under the Excise Tax Act (Canada) so as to displace a finding that he intended to gift the Property to the defendant. The plaintiff led no evidence that he mentioned such charges to the defendant at the time of or prior to the transfer. Neither the plaintiff nor his cousin Glenn gave evidence with respect to when the charges were laid against them. In contrast, the defendant was specific that she first learned of the charges in September 2004 due to its proximity in time to her daughter’s birthday.
[103] In any event, an intent on the part of the plaintiff to put the Property beyond the reach of the federal government is not necessarily inconsistent with an intent to gift it beneficially to the defendant. Indeed, a transfer of the paper title to the defendant while retaining beneficial ownership to himself would not achieve the purpose of putting the Property beyond the government’s reach on a forfeiture.
[104] I find that there is insufficient evidence to support a finding that the nature of the plaintiff’s brain injury impaired his judgment so as to displace the existence of a donative intent.
[105] Given that the plaintiff has failed to show that there was no established juristic reason for the enrichment, it is not necessary to proceed to the second stage of the enquiry into the third element of the doctrine of unjust enrichment, namely whether there is another reason to deny recovery to the plaintiff, including an analysis of the reasonable expectations of the parties.
[106] For the reasons set forth above I find that the plaintiff’s claim based upon unjust enrichment cannot succeed.
Quantum
[107] In the event that I am wrong in finding that there was a juristic reason for the enrichment of the defendant, it would be useful to determine the amount of an appropriate monetary award in favour of the plaintiff for unjust enrichment in that event.
[108] Mr. Smits for the plaintiff submitted that the amount of the plaintiff’s claim is the sum of $150,000, however he did not provide particulars on how he arrived at that figure.
[109] Mr. Brian Porter, Architect, was called by the plaintiff to offer expert opinion evidence relating to the value of the Property on various dates. However, following a voir dire the scope of his qualification to give expert opinion evidence did not include the provision of an opinion with respect to the market value of the Property. The scope of his qualification was to “assign value of lands and buildings on the Six Nations Reserve based upon replacement value of the buildings, adjusted by depreciation and inflation and location of and available services to the land.”
[110] Mr. Porter explained that he was unaware of any conventional real estate appraisers who practice on the Reserve providing market value appraisals, as there is no available data on sale prices of comparable properties on the Reserve. He stated that he has received no training in conducting residential real estate appraisals and does not hold himself out as a real estate appraiser.
[111] Mr. Porter testified that he was retained by the plaintiff in 2001 to provide his opinion of the value of the house on the Property. His opinion was based strictly on replacement construction cost less depreciation. Based solely on those factors he estimated the value of the residence as of September 13, 2001 at $141,804. This did not include any value for the land itself.
[112] The plaintiff subsequently requested him to update his valuation in 2016 and he did so by applying a simple arithmetical calculation involving the addition of 3% to each of the intervening years. He explained that 3% represents the historical difference between the rate of inflation and interest rates and was a technique that he used when he previously worked with Indian and Northern Affairs Canada.
[113] Mr. Porter stated that he was not asked to conduct an inspection of the building in 2016. According to his calculation the value of the building, based upon replacement cost less depreciation plus 3% per year calculated from the date of his earlier valuation, was $179,633.06 as of 2009 and $202,178.60 as of 2013.
[114] On cross-examination Mr. Porter acknowledged that the 3% annual adjustment that he applied did not take into account the condition of the building. He also acknowledged that replacement cost is quite different than what the Property would sell for. He could offer no information on whether anyone was willing to purchase the Property in 2001 or in 2013.
[115] In my view, no weight can be given to Mr. Porter’s opinion of value based purely upon replacement construction costs adjusted for depreciation and inflation. His opinion was of no assistance to the Court in estimating the “value” of the Property at any point in time for the purposes of the issues in the action, that is, what an arm’s-length purchaser under no compulsion to buy would offer for the Property.
[116] In the case of Bell v. Bailey, [2001] O.J. No. 3368 (C.A.) Osborne, J.A. observed at para. 34 that, on the authority of Peter v. Beblow, [1993] 1 S.C.R. 980 (S.C.C.), where unjust enrichment is established and a monetary award is adequate, the value of the contributions giving rise to a finding of unjust enrichment should be determined on a “value received basis.”
[117] In the particular circumstances of the case at bar I find that the defendant “received” $200,000, being the amount of the loan monies that she owed to her mother Janet Frazer from which she was released in exchange for the conveyance of the Property to Ms. Frazer in May 2013. Credited against this amount is the amount that the defendant paid to RBC to discharge the plaintiff’s mortgage in February 2004 in the sum of $32,007.90.
[118] In my view, in order to take account of the benefit received by the defendant, net of benefits conferred by her on the plaintiff, it is appropriate to also credit the defendant the value of her provision of vehicles for the plaintiff’s use, the amounts paid by the defendant for the plaintiff’s personal legal fees in relation to his family law dispute with his second wife, and the payment by the defendant of the plaintiff’s golf club membership.
[119] No actuarial or other evidence was led related to the difference in the value of the Canadian dollar between when those benefits were conferred by the defendant on the plaintiff and when the $200,000 mortgage debt was released upon the conveyance to the defendant’s mother in 2013. In the absence of available evidence on the issue, the Court is called upon to do its best with what it has been given.
[120] I would apply an average of a straight 2% per year for nine years or 18% to account for the difference in the value of money between 2004 and 2013.
[121] On this basis the RBC mortgage amount of $32,007.90 would equate to $37,769.32.
[122] The amount paid by the defendant for the plaintiff’s legal fees in the sum of $10,654.37 would equate to $12,572.16, and the amount paid by the defendant for the plaintiff’s golf membership for one year in the sum of $1,252.25 would equate to $1,477.66.
[123] I would estimate the annual value of the use of a succession of vehicles by the plaintiff as provided to him by the defendant, including financing cost, insurance, maintenance and depreciation, at $5,000 per year for five years at $25,000.
[124] I would not adjust for contributions by each of the parties for renovations and improvements to the Property as they were roughly equivalent. I would also not take into account payments to Leon’s Furniture for beds and bedding as each of the parties benefitted from these purchases.
[125] The following is a calculation of the net benefit received by the defendant on the assumption that there was no juristic reason for its retention:
| Item | Benefit conferred on Plaintiff by Defendant | Benefit conferred on Defendant by Plaintiff |
|---|---|---|
| Proceeds of Sale of Property May 2013 | $200,000.00 | |
| RBC Mortgage Discharge Amount February 2004 | ($37,769.32) | |
| Legal Fees | ($12,572.16) | |
| Golf Membership | ($1,477.66) | |
| Use of Vehicles | ($25,000.00) | |
| Total | ($76,819.14) | $200,000.00 |
| Net Benefit to Defendant | $123,180.86 |
[126] I find an appropriate monetary award in favour of the plaintiff for unjust enrichment, assuming no juristic reasons for the enrichment, would be the sum of $123,180.86.
Disposition
[127] For the foregoing reasons, the action is dismissed.
Costs
[128] The parties are strongly urged to settle the issue of the costs of the action.
[129] If the parties are unable to do so, the defendant may make written submissions as to the costs of the action within 14 days of the release of these Reasons. The plaintiff has 10 days after receipt of the defendant’s submissions to respond. The written submissions shall not exceed five (5) double-spaced pages exclusive of Bills of Costs or Costs Outlines, offers to settle and authorities. All such written submissions are to be forwarded to me via email to my Judicial Assistant at Kitchener at the email address utilized for the release of these Reasons.
[130] If the parties are able to settle the question of costs, counsel are requested to advise the court accordingly.