Court File and Parties

COURT FILE NO.: CV-18-77796 and CV-18-78632 (Ottawa)

DATE: 20220627

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: CHARBEL KAJJOUNI, Applicant/Respondent by cross-application

AND:

ANTOINE KAJJOUNI, MARYAM KAJJOUNI, JOSEPH KAJJOUNI and FADI KAJJOUNI, Respondents/Applicants by cross-application

BEFORE: Mr. Justice Graeme Mew

COUNSEL: Aaron King, for the applicant/respondent by cross-application Isaac Owusu-Sechere, for the respondents/applicants by cross-application

HEARD: 7, 8, 9 and 10 February 2022, at Ottawa (by video conference)

ENDORSEMENT

[1] These applications involve family members who, for many years, lived together in a house located at 1109 Château Crescent, Ottawa. Legal title to the house has, throughout the Kajjouni family’s association with it, been held by Charbel Kajjouni. Charbel is the son of Antoine and Maryam Kajjouni and the brother of Joseph and Fadi Kajjouni.

[2] A second property, consisting of 50 undeveloped acres of land in the Township of Augusta, is also registered in Charbel Kajjouni’s name.

[3] The family members other than Charbel claim that they are entitled an ownership interest in both properties.

[4] In respect of the Augusta property, Antoine Kajjouni alleges that he and his wife purchased the vacant land as a first step in creating an estate for their three sons and that since Charbel was the oldest son and had good credit, title was taken in his name “to be held in trust for the family, especially the two other sons”.

[5] The family members (other than Charbel) claim, in respect of the house at 1109 Château Crescent, that the parents decided to purchase the property and arranged to finance it initially from their own resources, and then, subsequently, arranged for a mortgage on the property. According to them, the property was registered in the name of Charbel Kajjouni, but that he held it “in trust for the family but especially the other two sons, in case something happened to [the parents] then [the two other sons] would at least have a place to stay”.

[6] In asserting an ownership interest in the two properties held by Charbel Kajjouni, the other family members ask the court to find “that a constructive or equitable trust was established and that there has been unjust enrichment”.

[7] Neither of these trust arrangements are documented. Their alleged existence is principally dependant on the evidence of Antoine Kajjouni.

[8] The hearing of these applications was conducted over four days. In addition to affidavit evidence and transcripts of cross-examinations, Charbel Kajjouni and Antoine Kajjouni gave viva voce testimony at the hearing.

[9] On the basis of the evidence and arguments presented by the parties, there are three principal bases upon which the claims of the other family members could be grounded:

a. resulting trusts arising from the assertion by the parents that they provided the purchase money for the properties;

b. constructive trusts arising from what are alleged to be the financial contributions of the parents both to the initial purchase of the properties and the subsequent payment of, or contribution towards, taxes, mortgage payments, utilities and other expenses relating to one or both of the properties; and

c. an overarching claim that Charbel Kajjouni has been unjustly enriched at the expense of the other family members.

[10] For the reasons that follow, I find that Charbel’s legal title to the Augusta and Château properties is not subject to any ownership interest or claim based on unjust enrichment by other members of his family.

Legal Principles

[11] A finding of unjust enrichment requires the establishment of three elements: enrichment, a corresponding detriment and an absence of a juristic reason for the enrichment. The remedies for unjust enrichment include monetary awards, and constructive or resulting trusts.

[12] A resulting trust will arise when title to a 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: Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, at para. 20.

[13] In the present case, the properties were not transferred to Charbel Kajjouni by the other family members. Rather, the other family members assert that they funded the purchase of the properties, either from their own resources, or from mortgages that they negotiated and assumed responsibility for. In other words, the family members assert the existence of a purchase money resulting trust which presumes that a person who advances purchase money, but does not take title to a property, intended to assume a beneficial interest in the property in proportion to his or her contribution to the purchase price: Nishi v. Rascal Trucking Ltd., 2013 SCC 33, [2013] 2 S.C.R. 438, at para. 29. For the presumption of a purchase money resulting trust to apply, the persons claiming to be beneficial owners must first show that they were the ones who advanced the purchase money: Bao v. Mok, 2019 ONSC 915, at para. 69.

[14] The remedy of constructive trust was described by McLachlin J, in Peter v. Beblow, 1993 CanLII 126 (SCC), [1993] 1 S.C.R. 980, at para. 25:

In Canada the concept of the constructive trust has been used as a vehicle for compensating for unjust enrichment in appropriate cases. The constructive trust, based on analogy to the formal trust of traditional equity, is a proprietary concept. The plaintiff is found to have an interest in the property. A finding that a plaintiff is entitled to a remedy for unjust enrichment does not imply that there is a constructive trust. As I wrote in Rawluk, supra, for a constructive trust to arise, the plaintiff must establish a direct link to the property which is the subject of the trust by reason of the plaintiff's contribution.

The Augusta Property

[15] The family members, in their notice of application, assert that Antoine Kajjouni raised the down payment to purchase the Augusta property and completed full payment of $25,000 to the vendor, Daniel Timothy Scharfe, who was “a trusted and close friend”. In the first of three affidavits which he filed in connection with these applications, Antoine Kajjouni states that he provided the down payment for the purchase of the land and borrowed the balance from his younger brother, Eli, to complete payment, the total purchase price being $25,000.

[16] The record contains a Canada Trust transaction record showing the transfer of $25,000 from A. Kajjouni to C. Kajjouni on 8 April 2004. The transfer of the Augusta property from Mr. Scharfe to Charbel Kajjouni took place on 13 April 2004 for consideration of $25,000.

[17] In an affidavit sworn on 21 December 2018, Charbel Kajjouni disputes Antoine Kajjouni’s evidence that he purchased the Augusta property. Charbel Kajjouni says that he purchased the land himself, alone, for $25,000 “without any contribution from any of the [other family members]”. He acknowledges that he was young at the time the Augusta property was purchased (20 years old), but says that he had been working since he was 16, and had earned sufficient money that he was able to take $25,000 out of a chip wagon business that he was running at the time.

[18] If I accept Antoine Kajjouni’s evidence that he was the source of the $25,000 payment for the property, there would be a presumption of a resulting trust in his favour. The onus would then be on Charbel Kajjouni to rebut that presumption.

[19] On behalf of Charbel Kajjouni, it is argued that the timing of the 8 April 2004 TD transfer is coincidental, and is not definitive proof that Antoine Kajjouni paid for the Augusta property: Antoine’s evidence was that in 2004 he only had one bank account (with Desjardins), that he had not worked since 1993, and had been on social assistance or benefits from the Ontario Disability Support Program (ODSP). Furthermore, Charrbel Kajjouni asserts that his father was, at that juncture, “well into the process of accumulating $183,500 in debt, mostly from gambling…was 18 months away from declaring bankruptcy…[had] never claimed a substantive amount of cash as an asset to ODSP…[had] made unsubstantiated claims of receiving $30,000.00 from his parents in around 1991” and, regarding those latter funds, had spent most if not all of it already. Charbel Kajjouni also asserts that his father would regularly transfer funds from lines of credit or credit cards to him, and that he (Charbel) would then take the money out in cash for his father, “likely to avoid scrutiny from ODSP”.

[20] Notwithstanding his accusations about his father’s finances, Charbel Kajjouni has not produced any records that support his contention that he took $25,000 out of his chip wagon business to fund the purchase of the Augusta property. Nor is there any other documentary evidence that would support his contention that he was the source of the funds, or otherwise refute Antoine Kajjouni’s evidence.

[21] I am, accordingly, satisfied that, on the albeit imperfect evidence before me, it was Antoine Kajjouni who provided the $25,000 that was used to purchase the Augusta property. Whether that $25,000 came from a credit line, a credit card, or a bequest from Antoine Kajjouni’s parents, matters not.

[22] As a result of that finding, the presumption of a resulting trust in favour of Antoine does arise, and the onus passes to Charbel Kajjouni to rebut that presumption.

[23] Charbel points to three reasons, supported by evidence, that, he submits, repudiate the respondents’ entitlement to relief.

[24] First, Charbel Kajjouni asserts that, apart from a payment made on 25 September 2018, he has made all of the property tax payments in relation to the Augusta property and has, in all other respects, acted in a manner consistent with a true owner of the property (including mortgaging it). He concedes, however, that many of the tax payments were physically delivered to the Township of Augusta by his parents, but (with the one exception) with funds supplied by him. In that regard, Antione Kajjouni denies that Charbel has been the source of the tax payments, and says:

… why would I pay the taxes on September 25, 2018 out of the blue, if I was not already responsible for making that payment from our resources. On the other hand if [Charbel] was responsible how come he did not go and pay on September 25, 2018.

[25] Antione Kajjouni is unable to provide any documentary proof that he has paid the taxes on the Augusta property from his own resources. He said at the hearing that such evidence exists, but he would need to search for it.

[26] The lack of reliable documentary confirmation of the source of the funds used to pay the Augusta taxes makes it hard to reach a conclusion on whose account should be accepted. I therefore do not find that the evidence as to who paid the taxes on the Augusta property assists a determination of whether the presumption of a resulting trust in favour of Antoine has been rebutted.

[27] The second issue raised by Charbel is what can best be described as a “clean hands” submission.

[28] Antoine Kajjouni has been claiming social assistance or ODSP since 1993. He says that he received $30,000 from his parents in 1991, that he had saved around $10,000 from when he worked in Montreal, and that he received around $10,000 from the sale of his parents’ home after their deaths. Yet in December 2004, he stated that he did not have an ownership interest in any property, that he did not own any real property, and that he had no cash on hand. He also said that he only had one bank account with just over $500 in it.

[29] When, 18 months after the acquisition of the Augusta property, Antoine Kajjouni declared personal bankruptcy, he did not disclose the interest he now claims in the Augusta property. Nor at any time since then, right up to the present day, has he informed the Ontario Ministry of Children, Community and Social Services or any agency responsible for the social assistance he has received, that he asserts an interest in these properties.

[30] In short, it is Charbel’s position that Antoine has not been candid with the court about how he raised the funds to purchase the Augusta property and, more significantly, has concealed his assets and his claims regarding the Augusta and Château properties in order to either thwart his creditors or obtain state benefits.

[31] An equitable remedy – be it a resulting trust or a constructive trust – based on the contention that one person – in the present case Charbel Kajjouni – has been unjustly enriched to the detriment of another, requires the person claiming the remedy to come with clean hands. Where a claimant has concealed his financial circumstances, including a claim to a beneficial interest in real property, in order to receive social assistance, a court will deny equitable relief: Kyriacou v. Zikos, 2021 ONSC 7589, at para. 70; Campbell v. Szoke, 2003 CanLII 2291 (ON SC), at para. 91.

[32] To similar effect, Charbel Kajjouni argues that because of his bankruptcy in 2006, Antoine cannot make out a claim that he has suffered a corresponding detriment as a result of the unjust enrichment which he asserts Charbel has enjoyed. Antoine did not disclose any interest in the properties to his trustee while at the same time eliminating liabilities totalling $183,500. As Charbel Kajjouni’s written submissions put it:

Antoine gained more than he would be deprived as his $183,500 debt was eliminated, and he has been, and continues to receive, funds from ODSP.

[33] I agree with Charbel Kajjouni’s contention that Antoine (and, through him, the other family members), should not be entitled to equitable relief. Either Antoine Kajjouni’s claims are a contrivance or he has not been candid with state agencies or with his creditors about his assets. Furthermore, his evidence about the source of his funds and his ability to retain inherited monies and to save enough to purchase two properties, despite having spent a majority of his adult life on social assistance, is implausible.

The Château Property

[34] The Château property was purchased on 17 February 2006 for $201,000. Charbel Kajjouni states that he alone funded the down payment of approximately $15,000. The balance of the purchase price was financed by a mortgage of $184,518 from HSBC Bank Canada.

[35] Antoine Kajjouni’s evidence is that he and his wife negotiated the purchase of the Château property, provided the down payment, and arranged financing through a mortgage broker, Hussain Al Saleh.

[36] In addition to having financed the down payment, Charbel and Antoine both claim to have thereafter made the mortgage, tax and utility payments. Antoine does, however, concede that payments were made through Charbel:

Charbel apparently had good credit at the time, so I arranged the funding for the house through the mortgage broker Al Hussain. I told Charbel that I would put the house under his name, due to his good credit at the time and we as a whole family would live in it and make payments, such as mortgage, bills, property tax insurance and all other costs associated with the house.

[37] The whole family lived in the Château house for over a decade. Banking records show that mortgage payments were made through Charbel’s account and, indeed there have been at least two refinancings of the property. Until recently, utility payments were also made through Charbel. Around 2016, the utilities account was taken over by Maryam Kajjouni. Antoine says this occurred because Charbel was not making the utility payments; Charbel says it was to help his mother build up a credit rating.

[38] In 2018 a dispute arose over Charbel Kajjouni’s wish to move his girlfriend and their two children into the Château house. He purported to give the other family members notice to leave the house, which is what prompted the applications now before the court.

[39] Antoine Kajjouni has consistently represented to ODSP that he is a tenant at the Château property. He filed a note to that effect on 1 April 2006 in which said he was paying $950 a month “all inclusive”. Charbel Kajjouni’s evidence in 2018 was that Antoine paid him rent of $950 each month “until recently” when it increased to $1,300. The shelter allowance paid to Antoine by ODSP appears to have covered most, but not all, of the “rent” paid to Charbel.

[40] Antoine believed that $950 represented the amount that Charbel was paying for mortgage and taxes. He did not know whether that also included insurance.

[41] Unlike the Augusta purchase, there is no payment by Antoine that corresponds with the down payment made for the Château property. He claims that a $15,000 transfer to Charbel on 1 February 2005 and a $10,700 cheque dated 22 September 2005, drawn on a credit line and payable to Charbel represent contributions towards the Château down payment. This seems improbable given that neither the amounts nor the timing of the payments correspond with the Château purchase.

[42] The evidence does not support Antoine Kajjouni’s claim of a purchase money resulting trust in his favour.

[43] The alternative claim by Antoine and the other family members for a constructive trust is grounded on their assertion that payments made for “rent” and utilities have unjustly enriched Charbel.

[44] At all times, however, the aggregate monthly amounts paid for the mortgage, taxes, utilities, insurance and other expenses related to the Château property, have exceeded the monthly “rent” paid to Charbel.

[45] I find that Charbel’s evidence - that he went house hunting in 2005 with the idea that he would purchase a home, in which he and his family would live, and that they (Antoine) would pay rent in an amount equal to the ODSP payments that they could receive for accommodations - is the more plausible account of what occurred.

[46] Furthermore, the claim for equitable relief in relation to the Château property is tainted by the same lack of clean hands that I have found to have disentitled Antoine and the other family members in relation to the Augusta property.

[47] Ultimately, the preponderance of the evidence supports Charbel Kajjouni’s claim to ownership of the Château property and, thus, his entitlement to exclusive possession of it.

Disposition

[48] For the foregoing reasons, the application by Antoine Kajjouni, Maryam Kajjouni, Joseph Kajjouni and Fadi Kajjouni (court file no. CV-18-78632) is dismissed. The application of Charbel Kajjouni in court file no. CV-18-77796 for an order for the immediate and exclusive possession of 1109 Château Crescent, Ottawa, is granted.

[49] Charbel has been entirely successful in these proceedings. The partial indemnity costs outlines submitted by the parties are for comparable amounts ($66,079.48 all inclusive and $50,000 respectively).

[50] I fix the costs payable by Antoine Kajjouni, Maryam Kajjouni, Joseph Kajjouni and Fadi Kajjouni to Charbel Kajjouni in the all-inclusive amount of $60,000.

Mew J

Date: 27 June 2022