COURT FILE NO.: FS-18-0101

DATE: 2022/09/20

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

VINCENT PAUL LAVALLEE

Applicant

– and –

SHARLEEN MANISE LAVALLEY

Respondent

Michael Swinwood for the Applicant

Shawn Hamilton for the Respondent

HEARD: September 14, 2022

REASONS FOR DECISION

M.G. Ellies R.S.J.

OVERVIEW

1The parties bring competing motions for summary judgment. In his motion, Mr. Lavallee seeks a declaration that Ms. Lavalley holds his 50 percent ownership interest in their former home in trust for him. In hers, Ms. Lavalley seeks to dismiss Mr. Lavallee’s claim or, in the alternative, to compel him to fulfill undertakings given during questioning conducted on October 28, 2019.

2For the following reasons, Mr. Lavallee’s motion is granted and Ms. Lavalley’s motion is dismissed. However, notwithstanding the result, Mr. Lavallee is ordered to pay Ms. Lavalley’s substantial indemnity costs in the amount of $5,000, all-inclusive.

BACKGROUND

3The parties lived together in a common-law relationship from 2002 to 2013. They have two children. Originally, this family law application included a claim for custody, but that issue was resolved. The property issue is the only one left.

4The parties disagree about the dates and some of the details concerning the following events, but not about whether they occurred.

5In either 2002 or 2005, the parties purchased a piece of vacant land located at 195 Nipissing Road, Whitney, Ontario. The purchase price was $21,000 or $22,000. Mr. Lavallee deposes that he paid $14,000 of the purchase price and that Ms. Lavalley paid the rest. This is not disputed by Ms. Lavalley. Nor is the assertion that the property was put into the names of the parties jointly.

6In or about 2007, Mr. Lavallee transferred his interest in the property to Ms. Lavalley. There is no dispute that the transfer was for the purpose of protecting Mr. Lavallee’s interest against creditors and that Mr. Lavallee later went bankrupt. There is also no dispute that nothing was paid by Ms. Lavalley for Mr. Lavallee’s interest.

7At some point after the property was purchased, and over a period of time which continued past the point at which Mr. Lavallee transferred his interest to Ms. Lavalley, a home was built on the property. Mr. Lavallee alleges that he supplied most of the labour and materials for the home and that the value of his contribution was approximately $180,000.

8Ms. Lavalley advances two defences. First, while she acknowledges that Mr. Lavallee did contribute both money and effort into building the home, she disputes that his contribution came anything close to what is alleged. She specifically denies that Mr. Lavallee’s contributions amount to a 50 percent interest in the property. Second, she expresses “concern” that Mr. Lavallee transferred his interest to her in order to defeat his creditors.

9According to a report obtained by Mr. Lavallee, the property is now worth roughly $900,000. Ms. Lavalley continues to live in the home.

10The parties went to questioning under r. 20 of the Family Law Rules, O. Reg. 114/99. During the questioning of Mr. Lavallee, a number of requests for information were taken under advisement and certain undertakings were given. Ms. Lavalley submits that the bulk of the undertakings remain unfulfilled. She contends that, without these undertakings being fulfilled, Mr. Lavallee cannot prove the extent of his interest, if any, in the home. As a result, she submits that there is no genuine issue for trial. In the alternative she requests an order requiring Mr. Lavallee to fulfill his undertakings.

11In response to Ms. Lavalley’s motion, Mr. Lavallee brought his own motion for summary judgment, in which he seeks a declaration that Ms. Lavallee holds his 50 percent interest in the home in a resulting trust because his interest was transferred to her gratuitously.

12As I will explain, Mr. Lavallee’s motion must be allowed.

ANALYSIS

Summary Judgment Motions

13Motions for summary judgment in family law proceedings are governed by r. 16 of the Family Law Rules, which mirrors r. 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Rule 16(6) requires the court to make a final order if there is no genuine issue requiring a trial of a claim or a defense. To determine whether there is a genuine issue, r. 16(6.1) grants the court the power to weigh evidence, evaluate credibility, and draw inferences. However, none of these powers are necessary in this case because neither of the two defenses advanced by Ms. Lavalley can succeed in light of her admissions that the home was owned by them as joint tenants and that Mr. Lavallee’s interest was transferred to her gratuitously.

14Resulting trusts can arise in a variety of different situations. As Cromwell J. observed in Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, at para. 17, the two that arise most commonly in domestic situations are: (1) the gratuitous transfer of property from one person to another and (2) the joint contribution by two persons to the acquisition of property, title to which is taken in the name of only one of them. With respect, Ms. Lavalley is confusing the first situation with the second.

15This is a case in which property was acquired in the names of both parties and one party later transferred his interest to the other. It falls squarely within the first set of circumstances described above. This is not a situation where Mr. Lavallee must demonstrate that he contributed to property acquired solely in Ms. Lavalley’s name, although it has been admitted that he made a contribution to the acquisition of the property when it was put into both parties’ names. Where title to real property is taken in the names of the parties as joint tenants, as it was here, the “unity of interest” requirement dictates that each tenant has an equal interest in the property: Anne Warner La Forest, Anger & Honsberger, Law of Real Property, loose leaf, 3rd ed. (Toronto: Thomson Reuters, 2022), at para. 14.2. That is the interest that Mr. Lavallee transferred to Ms. Lavalley. He need not demonstrate anything else.

16The law is clear that a gratuitous transfer of property between adults creates a presumption of resulting trust: Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, at para. 24. The presumption applies to transfers between common law spouses, just as it applies to transfers between other adults: Walters v. Nusseiri, 2019 ONSC 22, at para. 78. Where the presumption arises, the onus is on the transferee (the party to whom the interest was transferred) to rebut the presumption by demonstrating on a balance of probabilities that a gift was intended: Pecore, at paras. 25 and 43.

17To rebut the presumption, Ms. Lavalley relies on the fact that Mr. Lavallee transferred his property to protect it from creditors. However, that is not enough. Mr. Lavallee’s claim is not barred simply because he transferred his interest to protect it from creditors. This was the holding in Holtby v. Draper, 2017 ONCA 932, 138 O.R. (3d) 481, where van Rensburg J.A. wrote on behalf of the court, at para. 53: “[w]hile evidence of an intention to defeat creditors can be evidence of a gift, it is not conclusive.”

18Ms. Lavalley denies that the parties intended to create a trust, but she has introduced no other evidence that Mr. Lavallee intended to make a gift of his interest in the home. As a result, Ms. Lavalley has failed to rebut the presumption of resulting trust.

Undertakings Motion

19I agree with Ms. Lavalley that Mr. Lavallee has not complied with all of his undertakings. However, the undertakings relate to Mr. Lavallee’s assertion that he contributed substantially to building the house, the fact that he went bankrupt after transferring his interest to Ms. Lavalley, and to his honesty. This information is no longer relevant in light of my ruling that Ms. Lavalley holds Mr. Lavallee’s 50 percent interest in trust for him by way of a resulting trust.

20Therefore, the undertakings motion is also dismissed.

CONCLUSION

21Based on Ms, Lavalley’s admissions, r. 16(6) of the Family Law Rules requires me to find that there is no genuine issue for trial with respect to Mr. Lavallee’s claim that Ms. Lavalley holds his 50 percent interest in the property in trust for him.

22However, notwithstanding Mr. Lavallee’s success, I believe that Ms. Lavalley should be awarded the costs of her motion. I agree with counsel for Ms. Lavalley that it is unlikely that Mr. Lavallee would have brought his own motion had Ms. Lavalley not brought hers. Instead, it appears that Mr. Lavallee would have been quite content to provide as little information as possible to Ms. Lavalley in support of his claim. Ms. Lavalley ought not to have been put to the expense of bringing her motion, regardless of the success of Mr. Lavallee on his.

23For these reasons, I also agree with counsel for Ms. Lavalley that Mr. Lavallee ought to pay costs on a substantial indemnity basis, which I assess at $5,000 all-inclusive.

24If counsel cannot agree on the costs of the underlying application, they may make written submissions, limited to five typewritten pages (exclusive of attachments), as follows:

(1) by Mr. Lavallee, within 20 days of the release of these reasons;

(2) by Ms. Lavalley, within 20 days of the receipt of Mr. Lavallee’s submissions, and

(3) reply, if necessary, by Mr. Lavallee, within 10 days of the receipt of Ms. Lavalley’s submissions.

M.G. Ellies R.S.J.