Court File and Parties

COURT FILE NO.: CV-20-00648307-0000 DATE: 20231016

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

RANDY BURBIDGE Plaintiff – and – PAT CASULLO (a.k.a. PAT CASSULO) and DENISE CARDY Defendants

Counsel: Ian J. Perry, for the Plaintiff Paul Portman, for the Defendants

HEARD: September 26-30, 2023

Papageorgiou J.

Overview

[1] Randy Burbidge (“Randy”) and Pat Casullo (“Pat”) have known each other since they were children. Pat had previously been married to Randy’s sister Lynn. They remained close even after the couple divorced.

[2] Randy thought of Pat as a mentor and frequently consulted Pat, particularly with respect to financial matters. Pat agrees that at least for a time, they had looked out for each other as if they were brothers.

[3] Prior to 2001, Randy had been living in Bolton and commuted to work in Toronto. The commute was long because he didn’t drive. The apartment he could afford was lacking in several respects: it was small, had no air conditioning and was in a “rough” part of town. Pat suggested Randy purchase a home in Toronto. When Randy said he could not qualify for a mortgage while he owned a home in Bolton, Pat said that he would lend him the money.

[4] On December 4, 2001, Randy purchased a condominium for $165,000 (the “Condominium”). Pat advanced $165,000 to Randy for this purchase (the “Loan”). Of this amount, $20,000 was reflected in a promissory note (the “Promissory Note”), that he told his wife nothing about.

[5] Pat and Denise (collectively, the “Defendants”) obtained a mortgage over the Condominium dated December 4, 2001, in the amount of $145,000 (the “Mortgage”).

[6] On June 20, 2004, Randy was charged with impaired driving. He was convicted. In January 2007, he was sentenced to 26 months at a minimum-security facility.

[7] Prior to his incarceration, in December 2006, the Condominium was transferred to Pat and Denise. Randy says that this was done to protect him from creditors while he was incarcerated and that they expressly agreed that they would hold the Condominium in trust for him. Upon payment of the outstanding amounts he owed, the Condominium would be transferred back into his name.

[8] After Randy was released from prison in 2009, he moved back into the Condominium and began paying Pat and Denise large periodic lump sums with the goal of eventually paying off the Loan.

[9] In 2019, Randy felt that he had made enough payments to satisfy his debt. He asked that Pat and Denise reconvey the Condominium to him.

[10] They refused. They take the position that at the time of the transfer to them in 2006, the Mortgage was in default and the transfer to them was a foreclosure. They take the position that from 2009 onwards, he lived in the Condominium as their tenant.

[11] Randy claims that he is the beneficial owner of the Condominium and seeks an order that it be transferred into his name, or alternatively an award of damages.

Decision

[12] For the reasons that follow, I am declaring that Pat and Denise hold the Condominium in trust for Randy by way of resulting trust, or alternatively by way of constructive trust imposed as a remedy for unjust enrichment. I am also directing that it be transferred into Randy’s name.

[13] As part of this equitable remedy, I am directing a reference to an Associate Judge to determine if any amounts remain owed by Randy to the Defendants in respect of the Loan and carrying costs they paid.

Issues

[14] In arriving at this decision, I have considered the following issues:

1. Was there an express trust agreement whereby Pat and Denise agreed that they would hold the Condominium for his benefit or was the Condominium conveyed pursuant to a foreclosure agreement?
2. Do Pat and Denise hold the Condominium in trust for Randy by way of resulting trust?
3. In the alternative, has Randy demonstrated that Pat and Denise have been unjustly enriched?
4. Should this court order a proprietary remedy if a resulting trust or constructive trust is found and if so, should there be terms?
5. Is this proceeding statute barred?
6. Do the principles of spoliation apply?
7. Is Randy entitled to the remedy of specific performance?
8. If Randy is not entitled to the remedy of specific performance, what are his damages?
9. What are the costs to which Randy is entitled?

Analysis

Trial evidence and witnesses’ credibility

[15] Prior to addressing the issues, it is important to address the trial evidence and the credibility of the witnesses.

[16] The following witnesses testified: 1) Randy; 2) Pat; 3) Denise; 4) Randy’s sister Debbie Martell (“Debbie”); and 5) Randall Longfield, the lawyer who was alleged to have represented Randy in respect of the conveyance of the Condominium to Pat and Denise.

[17] In addition, the parties: agreed to the admission of the affidavit of Arik Kramrish, an appraiser who provided a valuation of the Condominium; submitted an agreed statement of facts, agreed that the entire transcript of Randy’s, Pat’s and Denise’s evidence would be read in and form part of the trial record, and entered into an agreement with respect to the trial documents in accordance with Bruno v. Dacosta, 2020 ONCA 602, 69 C.C.L.T. (4th) 171.

[18] For reasons upon which I will elaborate more fully within the body of this decision, I find Randy’s evidence as to what occurred more reliable and credible than Pat and Denise’s. Randy’s evidence is more consistent with the contemporaneous documents, the chronology of events, and was supported by the two independent witnesses, Debbie and Mr. Longfield, both of whom I found credible and believable.

[19] In contrast, there were significant discrepancies in Pat and Denise’s testimony which I will outline throughout the body of this decision. Pat in particular, appeared to be saying things which he then realized could not support his overall case, and then attempted to patch them up as he went along.

[20] Thus, in all instances where Pat and Denise’s testimony differs from Randy’s (except for a few where I do accept their evidence because it is otherwise supported) I prefer and accept Randy’s evidence.

Issue 1: Was there an express trust agreement whereby Pat and Denise agreed that they would hold the Condominium for his benefit or was the Condominium conveyed pursuant to a foreclosure agreement?

[21] The oral express trust agreement that Randy claims is unenforceable pursuant to s. 9 of the Statute of Frauds, R.S.O. 1990, c. S.19, because it relates to land and was not in writing.

[22] Nevertheless, it is important to set out the evidentiary basis for this alleged oral trust agreement because it informs the analysis of whether there is a resulting trust and/or has been unjust enrichment. [1]

[23] In or around 2006, as his criminal trial date approached, Randy says that he became overwhelmed with legal fees and began to fall behind in expense payments related to the Condominium.

[24] Pat invited Randy to his cottage in Wasaga Beach in or around August 2006. Debbie attended with him.

[25] At that time, Randy says that he discussed his financial challenges with Pat, and they considered options which might protect Randy’s ownership interest in the Condominium while he was incarcerated.

[26] Randy says that their ultimate oral trust agreement was as follows:

• Randy’s obligation under the Mortgage would be suspended for the duration of any stay at a prison;
• Randy would transfer the Condominium to Pat and Denise, who would hold the Condominium in trust for his exclusive benefit;
• No one would be permitted to live in the Condominium for the duration of any sentence in a prison;
• Upon his release, Randy would repay the remaining balance on the Mortgage, together with all carrying costs associated with the Condominium incurred during his incarceration, in mutually-agreed installments; and
• The Condominium would be transferred back to him upon demand (the “Oral Trust Agreement”).

[27] Pat and Denise deny any such agreement was made. In fact, they allege a different oral agreement.

[28] They say that they arrived at an oral agreement with Randy whereby Pat and Debbie would informally foreclose on the Condominium by arranging a transfer from Randy to them (the “Foreclosure Agreement”).

[29] After Randy was released from prison in 2009, they say they agreed to assist him by allowing him to rent the Condominium at a rate of $1,400 per month initially, with gradual increases over time (the “Rental Agreement”). Randy says the payments he made were lump sum payments towards his debt.

[30] Credibility is clearly central to this matter. There are three different oral agreements alleged.

[31] Justice O’Halloran’s comments in Faryna v. Chorny, [1952] 2 D.L.R. 354 (B.C.C.A.), at para. 10, are particularly helpful in assessing credibility in this case:

The credibility of interested witnesses, particularly in cases of conflict of evidence, cannot be gauged solely by the test of whether the personal demeanor of the particular witness carried conviction of the truth. The test must reasonably subject his story to an examination of its consistency with the probabilities that surround the currently existing conditions. In short, the real test of the truth of the story of a witness in such a case must be its harmony with the preponderance of the probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions.

The alleged Foreclosure Agreement is improbable in all the circumstances.

[32] The following surrounding facts, documents and other evidence are provided by Pat and Denise in support of the alleged Foreclosure Agreement. Their evidence suffers from multiple and significant flaws, including inconsistencies in their evidence as well as inconsistency with or a lack of support in the contemporaneous documents.

[33] I will explain.

The terms with respect to the alleged Foreclosure Agreement are vague and inconsistent.

[34] Pat says that the Foreclosure Agreement was precipitated by Randy’s default on his payments in June, July and August 2006. There were also outstanding property taxes ($4,608) and maintenance fees ($3,273). There is documentary evidence which corroborates this. I accept this evidence.

[35] Pat explained that as the Mortgage was in default, he wanted to pursue foreclosure, but his lawyer told him it would be too expensive. An easier way to accomplish the same result was to simply have the Condominium conveyed to him. He says he spoke to Randy about it and they agreed.

[36] However, when asked about this Foreclosure Agreement, he could offer very few details as to when they reached this agreement and gave shifting explanations as to its terms, which were inconsistent with Denise’s.

[37] At trial, when asked what all the terms of the Foreclosure Agreement were, he first said that the Condominium would be transferred into his name and there were no other terms.

[38] When he was examined for discovery and asked whether this arrangement also involved forgiveness of the debt, he replied “not necessarily.” Then, in corrections to his transcript, he changed his position and said that he had made a mistake; a term of the Foreclosure Agreement was the forgiveness of the debt.

[39] Denise contradicted Pat’s evidence. She testified that the money had been lent by Pat and not her. The reason why the conveyance of the Condominium was made to both her and Pat was to protect her in the event anything ever happened to Pat:

Well, basically, I don’t know Randy and if something had happened to Pat, how would I be able to, you know, get the money back that he was lending him, that type of thing? And that’s when he said he put the property in both our names, so I wouldn’t have to worry about it.

[40] She was asked whether it was her understanding that after the conveyance on October 11, 2006 (the “Conveyance”), the debt was still outstanding, and she said that it was. This evidence is completely inconsistent with the Defendants’ position at trial that the Conveyance was a type of foreclosure.

The Conveyancing documents do not support a Foreclosure Agreement.

[41] The Conveyance documents state that the transfer was made for consideration of $175,000, but no money changed hands. If the consideration for the transfer was the release of the debt, then they could have stated this clearly on the Conveyance documents if they did not wish to draft a separate agreement, but they did not.

[42] The Land Transfer Tax Statement that accompanied the Conveyance also specifies that monies paid or to be paid in cash totaled $175,000. If the consideration was the forgiveness of the debt, other boxes on the Land Transfer Tax Statement could have been checked to reflect that, including 3(b) which relates to “Mortgages given back to the vendor” or 3(i) as “other consideration”.

[43] When Pat was examined for discovery, he said that he pulled the $175,000 at random. Then, he corrected his answer and said that he used comparables. However, he did not produce any comparables.

[44] Ultimately, at trial, he walked back from that evidence as well and said that he and Randy estimated that the Condominium had gone up in value by $10,000 because something would be required for the land transfer tax. But this did not stop them from setting out that there had been forgiveness of the debt on these documents as consideration for the transfer.

[45] At the time of this purported foreclosure, Pat’s amortization schedule [2] indicates that the total amount outstanding pursuant to the Loan was approximately $148,000. This is also inconsistent with the $175,000 figure. Pat admitted that the $175,000 figure in the Conveyance documents did not reflect what was actually owed to him.

[46] A lawyer, Mr. Shawn Campbell, represented Pat and Denise on the Conveyance. Pat knew that Randy needed independent legal advice and said he took Randy to a lawyer in Brampton. Randy recalled going to see someone in Brampton but did not know who it was or recall much about that meeting.

[47] Mr. Campbell’s legal account indicates that a lawyer named Randall Longfield acted as counsel for Randy and that he had received a certificate of independent legal advice. There is no certificate of independent legal advice before me from anyone and Pat says he never saw one. Pat denies Mr. Longfield was the lawyer who gave Randy independent legal advice, but he did not offer up anyone else who did, not even a name.

[48] Randy subpoenaed Mr. Longfield.

Mr. Longfield’s evidence provides strong evidence of the improbability of Randy having seen or signed the Conveyance documents.

[49] Mr. Longfield has been practicing real estate law since 1987. He testified that he had never met Randy, that he had no recollection of ever having represented Randy and that file searches at his office did not reveal any file where his firm represented Randy. Although there is no requirement for lawyers to have all their files dating back to the time they started practicing, Mr. Longfield does. He explained that his firm tracks every file they have had since 1987. They initially had alphabetized file cards which listed their clients. They ultimately switched to a computerized system. His firm searched both systems twice and there was no evidence that he or anyone at his firm had ever acted for Randy.

[50] Mr. Longfield had other concerns about the Conveyance. It shows that it was signed by someone named Heather Savard on behalf of the transferor (Randy) as well as the transferee (Pat and Denise).

[51] Mr. Longfield did not employ anyone named Heather Savard, or indeed ever. The Conveyance shows Ms. Savard’s address to be 3147 Mayfield Road, Brampton. This is the same address as Mr. Campbell’s based upon the account sent to Pat.

[52] Mr. Longfield said if he had acted for Randy as Mr. Campbell’s account suggests, the normal process would have been for each of the lawyers to sign the Conveyance. He was cross-examined significantly on this issue and he maintained that if he were acting on the matter, he would have had to sign the Conveyance.

[53] I found Mr. Longfield’s evidence to be clear and consistent internally, as well as consistent with the documents related to his purported involvement. He did not waiver when cross-examined. I found his evidence credible, reliable and believable, and I accept it.

[54] Pat had no explanation that could address any of the concerns Mr. Longfield raised about the Conveyance. Indeed, he agreed that Randy would have had to authorize the Conveyance and yet it was not signed by him, but by Ms. Savard who worked in Mr. Campbell’s office who was Pat’s lawyer.

[55] Pat also admitted that the Conveyance took place without Denise’s knowledge and could not explain how this could have occurred, since she was his spouse. Incidentally, he admitted that he made the $20,000 loan without Denise’s knowledge because he thought she would be upset about it. This deception of his wife also reflects on his credibility.

[56] There are also problems with the Mortgage Discharge which accompanied the Conveyance, also dated October 11, 2006 (the “Mortgage Discharge”).

[57] Pat agreed that his wife Denise would have had to agree to the Mortgage Discharge and that her name is on it. However, Pat admitted that Denise did not know about the Mortgage Discharge and it was done without her knowledge. Again, it was signed by Heather Savard and there is no evidence as to who she is.

[58] Since Pat went to the trouble of going to a lawyer to obtain advice, who then drew up these Conveyance documents, it is odd that he did not instruct the lawyer to clearly document the Foreclosure Agreement he now asserts.

[59] The lawyer who prepared the Conveyance documents, Mr. Campbell, has since been disbarred. Randy sought to subpoena him as a witness but could not find him. Pat did not even try to find him.

The alleged Foreclosure Agreement is not commercially reasonable.

[60] Pat’s lawyer argues that all these problematic details regarding the Conveyance are irrelevant because the Oral Trust Agreement alleged by Randy does contemplate a conveyance. That is true. But the problem is that there was significant value in the Condominium at the time of this transfer which dwarfed the amount due under the Loan. Mortgagors always have the right of redemption. It makes no sense that Randy would have seen a lawyer, received legal advice that he would be giving up the value of the Condominium which was in excess of the debt owed at the time of the Conveyance, and simply agreed that the Condominium could be foreclosed in this manner.

[61] All of the problems with the Conveyance documents highlight the improbability that the purpose of the Conveyance was some kind of foreclosure.

[62] Other facts and arguments made by Pat and Denise are equally unpersuasive.

[63] Pat argues that he acted as an owner would after October 11, 2006, by placing insurance on the Condominium and covering all expenses. However, this is also consistent with the terms of the Oral Trust Agreement alleged by Randy.

[64] Most of Pat and Denise’s evidence consist of bald statements which are not corroborated or supported by other evidence, and the supporting documentation does not strongly support the alleged Foreclosure Agreement.

The Objective evidence supports the existence of the Oral Trust Agreement

[65] In contrast, there are significant surrounding facts, documents and other evidence which support Randy’s assertion as to the existence of the Oral Trust Agreement.

There is corroboration for the Oral Trust Agreement

[66] Randy’s sister, Debbie, was present at the cottage at the time the Oral Trust Agreement was reached. She supported Randy’s evidence that their families were close and remained so even after their sister Lynn and Pat divorced. She confirmed that Randy had a great deal of trust and respect for Pat and would often solicit his advice regarding financial matters. Debbie also had a specific recollection of witnessing the conversation described by Randy where Pat and Randy agreed that the Condominium would be held by Pat in trust for Randy.

[67] Debbie testified that Pat told Randy that his creditors could make claims against the Condominium if he continued to hold title. Pat suggested that Randy transfer the Condominium to him and agreed that when Randy was released from prison, the title could be transferred back upon payment of the Loan.

[68] Like Randy, Debbie stated this conversation occurred in August 2006 at Pat and Denise’s cottage in Wasaga Beach. She could not remember it word for word, but recalled it because it was “important”. She recalled specific details including the fact that the discussion took place at a picnic table. She also had a specific recollection of Pat visiting her home on many occasions between 2006 and 2009 where he spoke to her about this very Oral Trust Agreement. I found her testimony to be clear, consistent and she did not waiver when cross-examined. I find her evidence credible and believable.

[69] As noted above, Pat denies any such visit to their cottage at all prior to 2010, but Denise confirmed that Randy and Debbie did come to their cottage sometime before he was convicted, which conviction was in January 2007. She also recalled that this visit occurred during the summer. Therefore, Denise’s evidence also provides some support for Randy’s and Debbie’s evidence. Denise did somewhat walk that evidence back and ultimately said she didn’t know whether it was before his conviction, but her initial evidence was that the visit occurred before Randy’s conviction.

[70] Pat and Denise point out that there is no documentation that supports the alleged Oral Trust Agreement, such as informal texts of any sort. However, Randy had had some significant stresses during that time. He had a drinking problem which led to his being charged with impaired driving. When the prospect of further incarceration was looming, and in the context of the work and stress of preparing for that criminal proceeding, it is not surprising that he would not have put their agreement in writing, particularly since he trusted Pat as a longtime friend and mentor. I do not view the absence of documentation significant in the circumstances, particularly since there is also no documentation which supports the Foreclosure Agreement which Pat and Denise assert, apart from the actual Conveyance documents which were problematic.

[71] Pat also testified that the Oral Trust Agreement would have made no commercial sense to him. He says that he would have seen no reason to discharge a mortgage, unless he intended to take title indefinitely. However, the opposite is true. It makes no sense to hold title to a property and have one’s own mortgage on it. As well, since the purpose was to protect Randy from creditors, leaving the mortgage on the Condominium would be a red flag. His explanation that he could cover Randy’s expenses while Randy was incarcerated without transferring title to himself misses the point that the parties were concerned about Randy’s creditors. He also fails to recognize that what he got out of this arrangement was better security than he had before; while he previously had the Mortgage, he now held title which meant the Loan was perfectly secure and he would not have to take formal steps to enforce it if Randy did not ultimately pay.

[72] I add that much of Pat’s testimony was about helping his friend. This entire transaction, both the Loan and this later Conveyance, were not mere business transactions. Pat admitted “it was an investment and he was helping out Randy.”

[73] This is made plain by considering what the parties did after the Conveyance.

The parties’ conduct while Randy was in prison supports the existence of the Oral Trust Agreement [3]

[74] While Randy was incarcerated for over two years, his clothing and other personal effects remained in the Condominium. No one else moved in and it was not rented to anyone.

[75] Pat admits that he is an experienced businessman. It makes no business sense that he would take this transfer of this Condominium and then not rent it or sell it or live in it if he had indeed foreclosed on it and it was his to do with as he pleased. His only explanation was that he did not know when Randy would get out of jail. This explains nothing. If he was the beneficial owner, he could have done whatever he wanted with the Condominium without needing to know when Randy would be released from jail.

[76] Further, although Pat had a key to the Condominium, so too did Randy’s sister Debbie. Randy had instructed her to have general oversight over the Condominium during his incarceration. She periodically went to the Condominium to clean it and ensure there were no issues. There is no explanation given as to why Debbie would be permitted a key if Pat and Denise owned the Condominium for their own benefit.

[77] Prior to his release, Randy instructed Debbie’s daughter Trysh Howes to repaint the interior in preparation for his return. She did not request any permission from Pat or Denise.

Pat’s Handwritten notes support the existence of the Oral Trust Agreement

[78] Randy was released from incarceration in or around April 2009.

[79] There is a handwritten note written by Pat dated September 11, 2009, entitled “Expenses for the Condominium.” Significantly, this note tracks the details of the alleged Oral Trust Agreement. It sets out property taxes and maintenance fees that Pat had paid during the period of Randy’s incarceration. It notes the last payment made by Randy was on May 1, 2006, and that the “amount owing” was $148,495.44, in line with the amortization table.

[80] This is also in line with Randy’s evidence that pursuant to the Oral Trust Agreement, the obligation under the Mortgage would be suspended for the duration of any stay at a prison. That is, this handwritten note did not say that there were any additional accumulated arrears owing as at September 11, 2009.

[81] During re-examination, Pat tried to suggest that the note did not mean that interest arrears had not accumulated. He suggested that what he meant was that the amount owing as of May 1, 2006 was $148,495.44. But the document does not say that. On the right hand side it says “owing 148,495.44”. The document listed every other entitlement that Pat had in terms of taxes, fees and insurance as at that date. It is implausible that the omission of interest arrears was a mistake.

[82] Furthermore, this last evidence given by Pat, where he tries to suggest that the note did not mean that interest arrears had not accumulated, is inconsistent with his evidence that the alleged Foreclosure Agreement resulted in a release of Randy’s debt.

[83] He cannot have it both ways.

[84] As well, Pat had no good explanation for why he prepared these handwritten notes in September 2009 and why he would have given these notes to Randy in 2019 when Randy requested a reconveyance. His repeated explanation that he prepared these notes for his personal use to show the costs he incurred while the Condominium sat empty explains nothing. He also had difficulty providing an explanation for why he would have given these notes to Randy in 2019. First, he agreed that the amount due on the Loan as of October 2006 would be irrelevant since he had foreclosed on the Condominium. He later explained that he gave these notes to Randy in 2019 because Randy wanted to purchase the Condominium at that time and so he was showing him the costs he had incurred while Randy was incarcerated for negotiating purposes. This also makes little sense.

[85] I emphasize that Pat’s evidence is that he has been a successful businessman who takes care and keeps records of everything.

The parties conduct after Randy was released from prison supports the existence of the Oral Trust Agreement and does not support the existence of the alleged Rental Agreement

[86] When Randy was released from prison in or around April 2009, he returned to the Condominium which he says was “untouched” and “like [he] had never left”.

[87] Upon his release, he wanted to improve himself and his life and immediately got a job with the intention of repaying the Loan.

[88] He began making large and irregular lump sum payments in an effort to repay the Loan. Pat set up a bank account specifically for Randy to deposit these payments into. Randy provided a summary of all amounts he paid as well as bank records which are consistent with these payments. Randy was not cross-examined on these bank records. Randy testified, and I accept, that Pat told him that he would let Randy know when the debt was paid off.

[89] At trial Pat agreed that Randy had made all the payments which were set out in his affidavit and his bank records. Then, without having cross-examined Randy at all on the supporting bank records for these payments, counsel challenged the fact that they had been made during closing submissions based upon evidence from a short re-examination. At the re-examination, Pat’s counsel asked Pat the account number where Randy had deposited these payments. Pat gave a specific account number. Counsel asked no further questions about this and it appeared innocuous enough.

[90] Counsel then argued in closing submissions that when one looked at the bank records, the deposits went into an account with a number that was different than the one Pat had referenced in re-examination.

[91] I have many concerns about this. Suffice it to say that it is unfair and an obvious breach of the rule in Browne v. Dunn (1893), 6 R. 67 (H.L.), to raise this issue in this way through closing argument without having asked a single question of Randy about the bank records. Never mind that in his evidence in chief, Pat accepted that he had received these payments.

[92] The following is a chart which sets out the payments which I find Randy made as well as the rent that Pat and Denise say would have been payable during each of these years pursuant to their alleged Rental Agreement.

Date/Year	Paid by Randy	Pat’s Total Rent Calculation
30/09/2009	$10,000
Total 2009:	$10,000	$11,200 based on 8 months
9/07/2010	$8,000
31/08/2010	$7,000
25/10/2010	$8,000
Total 2010:	$23,000	$16,800
15/08/2011	$8.000
26/08/2011	$8,000
19/09/2011	$8,000
Total 2011	$24,000	$16,800
18/05/2012	$8,000
11/06/2012	$8,000
24/07/2012	$5,000
Total 2012	$21,000	$16,800
06/07/2013	$8,000
06/09/2013	$1,000
21/12/2013	$8,000
Total 2013	$17,000	$16,800
26/04/2014	$8,000
02/10/2014	$8,000
Total 2014	$16,000	$16,800
11/07/2015	$8,000
3/09/2015	$8,000
30/04/2015	$8,000
Total 2015	$24,000	$17,100
21/05/2016	$8,000
06/08/2016	$8,000
15/10/2016	$8,000
Total 2016	$24,000	$17,400
06/03/2017	$8,000
19/08/2017	$8,000
Total 2017	$16,000	$18,000
03/03/2018	$8,000
05/06/2018	$8,000
05/06/2018	$10,000
20/10/2018	$8,000
Total 2018	$34,000	$18,300
25/02/2019	$8,000	$19,800
Total	$225,000	$185,800

[93] The way in which Randy made these payments is not the usual form of rental payments, which are customarily monthly. As well, there is no persuasive explanation as to why the overall amount fluctuated each year (both up and down) if this was rent. This fluctuation supports Randy’s evidence that he was simply making large payments towards his debt whenever he could.

[94] There is also no correlation between these payments and the monthly rent which Pat said was initially $1,400, or the increases he alleged.

[95] There was never any written rental agreement. There was no evidence of any written communications between the parties advising Randy of any matter related to his “renting” the Condominium or any alleged increases. Even the oral evidence was vague at best.

[96] As well, when examined for discovery, Denise indicated that she was unaware of any lease made in writing or verbally.

[97] Neither Pat nor Denise has ever claimed any rental income on their taxes or deducted any rental expenses. Pat had an accountant for approximately 30 years who did his taxes and said that his accountant advises him of what to put on his taxes; and yet, he said he never told the accountant about the rental income and there is no explanation as to why he did not.

[98] Thus, I reject Pat and Denise’s position that Randy was their tenant from 2009 onwards pursuant to any Rental Agreement.

[99] I find that the preponderance of evidence supports Randy’s evidence as to the existence of the Oral Trust Agreement, with the terms as set out above, for all the reasons I have cited herein. In other words, Randy’s assertions are more harmonious with the preponderance of the probabilities which a practical and informed person would recognize as reasonable in that place and in those conditions.

[100] However, as I have said, this agreement is not enforceable because of the Statute of Frauds.

[101] I add that if the Statute of Frauds had not applied, I would have found that there was consideration for the Oral Trust Agreement and in particular, Pat and Denise’s agreement that there would be no arrears of interest accrued during Randy’s incarceration.

[102] What Pat and Denise got from the arrangement was legal title which was better security than the Mortgage they previously had. If Randy had been released from prison and not made good on his debt, they would not have had to bring foreclosure proceedings which Pat said were expensive. In addition, they would have title to an asset worth approximately $25,000 more than the amount of the debt at the time of the Conveyance as well as potentially any increases in value.

Issue 2: Do Pat and Denise hold the Condominium in trust for Randy by way of resulting trust?

[103] I conclude that Pat and Denise hold the Condominium as trustees for Randy, by virtue of resulting trust, for the following reasons.

[104] Section 10 of the Statute of Frauds carves out resulting trusts and constructive trusts from its application.

[105] Although the Oral Trust Agreement is unenforceable by virtue of the Statute of Frauds, the facts that I have found inform the analysis with respect to Randy’s claim for a resulting trust.

[106] In Rathwell v. Rathwell, [1978] 2 S.C.R. 436, at p. 450, as cited in Maloney v. Maloney (1993), 109 D.L.R. (4th) 161 (Ont. Gen. Div.), Dickson J. discusses the difference between resulting and constructive trusts and notes that a resulting trust is primarily concerned with the intent of the transferor. In Pettkus v. Becker, [1980] 2 S.C.R. 834 cited in Maloney, at para. 43, Dickson J. further clarified that the sought for intention is rarely express and the court must glean the intent from the conduct of the parties and their financial arrangements, such as one partner paying for necessaries while the other pays for the mortgage. Here, there is both express evidence as well as conduct from which the intent can be gleaned.

[107] Further, when property is conveyed without consideration, there is a rebuttable presumption that the transferee holds the property in trust for the transferor, by way of resulting trust: Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, at para. 19.

[108] The case Goodfriend v. Goodfriend, [1972] S.C.R. 640 is particularly relevant. In that case, a wife had persuaded her husband to transfer property to her because she thought that he might be successfully sued to judgment. The Supreme Court upheld a resulting trust in favour of the husband. The Court cited what it called “trite law” that where a person transfers his property into another’s name gratuitously, a resulting trust in favour of the grantor is created and the grantee must prove that what was intended was a gift: at p. 646.

[109] In this case I accept that the Conveyance was made to protect Randy from creditors, as was the conveyance in Goodfriend. The parties did have an express agreement and there was consideration on both sides. That is, Randy received the benefit of Pat and Denise’s ongoing payment of the Condominium’s expenses and Pat and Denise obtained the benefit of having better security if he did not repay the Loan, as well as not having to take formal and expensive foreclosure proceedings if he did not.

[110] The question here with respect to consideration, is whether there was consideration for the transfer of the beneficial interest. There was not because there was no forgiveness of the debt.

[111] Thus, Pat and Denise have failed to provide persuasive evidence to rebut the presumption that they hold the Condominium in trust for Randy by way of resulting trust.

[112] Apart from the presumption, there is also specific evidence that it was the parties’ intention that Pat and Denise would hold the Condominium for Randy’s benefit. Even if this Oral Trust Agreement is unenforceable by virtue of the Statute of Frauds, the evidence in support of it still clearly demonstrates their mutual intention that Pat and Denise would hold the Condominium for Randy’s benefit.

[113] Pat and Denise argue that there was no specific pleading of resulting trust in the Statement of Claim.

[114] The purpose of a pleading is to set out the issues and provide the opposing party with sufficient notice as to the case they have to meet, as a matter of fairness. It is trite that a Statement of Claim must be read as generously as possible with a view to accommodate any inadequacies due to drafting deficiencies: Conklin v. Ontario, 2018 ONCA 726, at para. 7; Healthy Lifestyle Medical Group Inc. v. Chand Morningside Plaza Inc., 2019 ONCA 6, 46 C.P.C. (8th) 25, at para. 7.

[115] The Statement of Claim, when read broadly, is sufficient to plead facts which entitle Randy to claim a resulting trust. Paragraph 1 claims an equitable interest in the Condominium. It pleads that the transfer was made to protect Randy from creditors and that the parties agreed that Pat and Denise held it in trust, and that it would be reconveyed upon demand. This implicitly means that there was no consideration for the transfer of the beneficial interest and also pleads the requisite intention for a resulting trust.

[116] In any event, Randy alerted the Defendants to the resulting trust claim at the pre-trial on July 12, 2023, and Pat and Denise raised no issues at that time.

[117] Randy again raised the claim for a resulting trust in his factum dated September 19, 2023, approximately one week before the trial commenced. Pat and Denise did not raise the issue that it was not pleaded until they served their factum the day before the trial commenced.

[118] Pat and Denise were not taken by surprise by this claim. Further, they led no evidence that any delay compromised their ability to show that they paid valid consideration for the beneficial interest in the Condominium. To the extent necessary, I am amending the Statement of Claim with respect to this claim.

[119] I am satisfied that Pat and Denise hold the Condominium as trustees only, by way of the operation of the principle of resulting trust.

Issue 3: In the alternative, has Randy demonstrated that Pat and Denise have been unjustly enriched?

[120] I am also satisfied that Pat and Denise have been unjustly enriched.

[121] As set out in Pettkus v. Becker, [1980] 2 S.C.R. 834, and Sorochan v. Sorochan, [1986] 2 S.C.R. 38, the elements of unjust enrichment are an enrichment, a corresponding deprivation and the absence of a juristic reason for the enrichment. See also Kamermans v. Gabor, 2018 ONSC 5241, 41 E.T.R. (4th) 86, at para. 37.

The Benefit to Pat and Denise

[122] Pat and Denise have been enriched by the following:

• Payments made by Randy towards the Loan in the total amount of $225,000 after Randy’s incarceration;
• Payments made by Randy before his incarceration. Randy says that prior to his incarceration, he made total payments in the amount of $57,579. There is a minor dispute on the evidence here. Pat says that Randy stopped making payments in June 2006. He references the NSF checks for June, July and August in support of this. On balance, given the lack of bank records prior to 2009, the NSF checks and Randy’s admission that he began having financial troubles in 2006, I accept Pat’s evidence that Randy stopped making payments in June 2006. Therefore, based upon the amortization schedule provided by Pat, Randy had paid $50,861.36 to Pat prior to his incarceration; and
• Title to the Condominium, which is now valued at $560,000 as of June 20, 2023, in contravention of their Oral Trust Agreement which set out their expectations even if it was not an enforceable contract.

[123] To put it another way, if they are permitted to retain title, then that means that they will keep an asset valued at $560,000 as well as payments made by Randy in the total amount of $275,861.36 after having lent Randy $165,000.

[124] I add that at the time of the Conveyance, Randy owed approximately $148,000, and yet it is admitted that the Condominium’s value at that time was $225,000.

The Detriment to Randy

[125] Randy has suffered the following detriment:

• Pat and Denise hold title to the Condominium even though Randy has made significant payments towards his debt and contrary to the parties’ understanding and expectations; and
• Randy invested time, effort and money in making renovations which he calculated to be $31,700. These were for a new floor, lighting, specialty painting and plumbing, as well as new appliances like a dishwasher and refrigerator. He had to purchase the physical items like the floor and appliances, but family members helped him to complete the work. He paid his brother-in-law for the electrical work. Although he did not provide any receipts, I accept his evidence as I found him to be credible and I would not expect him to have receipts for work done over twenty years ago.

[126] To put it another way, Randy will have paid a total of $275,861.36 and spent $31,700 towards improvements and have nothing to show for it.

[127] Having said this, it is not possible to determine on this record whether all of Randy’s payments satisfied his debt taking into account the interest rate, and the irregular lump sum payments made by Randy after 2009.

[128] The only amortization schedule is one provided by Pat that presumes a 25-year term with regular payments, and it is simply inapplicable here. Neither party has provided the evidence or analysis which would permit me to address this issue.

[129] Nevertheless, although I cannot say with certainty that Randy satisfied all of his outstanding debt, I am satisfied he has paid enough of it that it would be unjust to permit Pat and Denise to keep the benefit of all the payments he made, and also reap the benefit of owning the Condominium outright.

[130] In that regard, the amortization schedule provided by Pat shows that the total amount that would have been paid by Randy over 25 years if he had made all the monthly payments was $287,894, with the final payment being in December 2026.

[131] Randy paid a total of $275,861.36 over 18 years, with the last payment being in March 2019. These numbers are very close. The fact that Randy paid off the Loan seven years prior to the date it would have been paid off pursuant to the amortization schedule means that he should have paid less in total, because interest would not have continued to accrue for the additional seven years reflected in the amortization schedule.

[132] Thus, although it is not possible to say that they match perfectly, there has been a benefit to Pat and Denise, and a corresponding detriment to Randy. See Royston v. Royston, at para. 33; Peter v. Beblow, [1993] 1 S.C.R. 980, at p. 1012. No one provided any authority which stated that the value of the benefit and detriment must be exactly the same.

The Absence of a Juristic Reason for the Benefit

[133] With respect to whether there is a juristic reason for Pat and Denise to keep this benefit, the Supreme Court in Kerr v. Baranow indicated that the test is not subjective: at paras. 40-45. Rather, the court must look to established categories to determine if there is a reason to allow the compensation. In doing so, the court may look to the reasonable expectations of the parties or moral/public policy reasons to determine if recovery by the plaintiff should be denied.

[134] Pat and Denise’s main argument is that the juristic reason for their enrichment is that they had a debtor/creditor relationship and Randy had defaulted in 2006. This is not a juristic reason for this benefit. These parties were not ordinary debtor/creditors. They were friends. This was not a purely commercial transaction. Further, the parties came to an understanding pursuant to their Oral Trust Agreement. This case is nothing like LCI International Inc. v. STN Inc. (1996), 10 E.T.R. (2d) 297, on which the Defendants rely, which involved arms-length commercial parties who had an agreement that addressed the very issue in question.

[135] The parties do have an understanding here too, but it is in line with Randy’s position: the reasonable expectation as reflected in their Oral Trust Agreement was that Randy would be entitled to the Condominium upon satisfying his debt.

[136] Furthermore, as a matter of public policy and morality, there can be no juristic reason for the benefit and detriment in the face of Pat and Denise agreeing to hold the Condominium in trust, receiving ongoing payments in accordance with that agreement, and ultimately denying the existence of the Oral Trust Agreement.

[137] I add that if there is any remaining amount owed to Pat and Denise in respect of the borrowed funds, they have failed to assert it either in a counterclaim or even claim set-off. Therefore, it does not lie in their mouths to say that the juristic reason for the benefit to them of retaining title to the Condominium is that they are owed more money. If that were the case, they should have raised and proven it with documentary support, particularly in light of the credibility concerns I have about their evidence.

[138] Nevertheless, as I will explain, the issue of whether they have been fully paid off will be taken into account in the overall remedy I fashion.

Issue 4: Should this court order a proprietary remedy and if so, should there be terms?

[139] With respect to the unjust enrichment claim, a proprietary remedy of a constructive trust is appropriate for the following reasons.

[140] In Soulos v. Korkontzilas, [1997] 2 S.C.R. 217, the Supreme Court explained that “good conscience” lies at the very heart of the court’s jurisdiction to impose a constructive trust: at p. 233. Citing Beatty v. Guggenheim Exploration Co., 122 N.E. 378 (1919), at p. 380, the Court stated, at p. 234:

A constructive trust is the formula through which the conscience of equity finds expression. When property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him to a trustee. [Emphasis omitted.]

[141] The Supreme Court, at p. 241, outlined the following considerations for the imposition of a constructive trust as a remedy, noting that this remedy can be imposed not only in cases of unjust enrichment but also where there has been wrongful conduct:

1. Was the defendant under an equitable obligation with respect to the activities which resulted in his having title over the assets?
2. Did the defendant obtain title over the assets because of activities of the defendant in breach of his equitable obligation to the plaintiff?
3. Is there a legitimate reason why the plaintiff seeks a proprietary remedy, which may be personal?
4. Are there factors that would make the imposition of the constructive trust unjust?

[142] All of the factors exist in this case.

[143] Pat and Denise have ended up holding title to the Condominium in breach of their express promise that they would hold it in trust for Randy. This was a breach of an equitable obligation to him, and it is not in good conscience to permit them to keep this property.

[144] Randy’s legitimate reason for seeking a proprietary remedy is that the Condominium has been his home since 2001. He has improved it. Pat and Denise have never lived there or intended to live there.

[145] I add that Randy has had somewhat of a difficult past. He had a drinking problem but he is currently on his feet and doing well. Removal from the only home he has known for decades would not be in his interest. Conversely, all Pat and Denise will likely do is sell it.

[146] Pat and Denise argue that Randy should only be entitled to damages, based upon the value of the Condominium as of February 2019. In essence, they seek to take advantage of continuing increases in the market when this was never anyone’s intention. Therefore, it would not be in good conscience to permit them to keep the increase in value.

[147] Therefore, I am imposing a constructive trust over the Condominium as a remedy for unjust enrichment.

[148] However, in fashioning the remedy for unjust enrichment, I must take into account that this is an equitable remedy based on fairness. In my view, this is also necessary as an ancillary part of the finding that Pat and Denise hold the Condominium by way of resulting trust in favour of Randy. It is trite that it is the beneficial owner who is responsible for carrying costs.

[149] Therefore, there must be a reference to an Associate Judge pursuant to rr. 54 and 55 of the Rules of Civil Procedure (the “Rules”) to determine the accounts as between the parties as a matter of fairness because the parties failed to provide an updated amortization schedule and to take into account carrying costs paid by Pat and Denise. Pursuant to their understanding, these were to be added to Randy’s debt. Even though Pat and Debbie did not counterclaim, equity requires me to take this into account as part of the equitable remedy.

[150] The Associate Judge shall conduct this reference in the following manner:

• The calculation will begin with the outstanding amount “owing” on Pat’s handwritten note of September 1, 2009, in the amount of $148,495.44.
• There shall be no interest arrears during the period of Randy’s incarceration because as I have found, the parties’ arrangement and their reasonable expectations were that Randy’s obligations would be suspended for the duration of any stay at a prison. This is supported by Pat’s September 1, 2009 handwritten note.
• Interest at a rate of 5 per cent shall begin to run from April 1, 2009, when Randy was released from incarceration.
• The payments made by Randy set out in this Judgment shall be applied on the dates and in the amounts he made them.
• The Associate Judge shall also include carrying costs incurred by Pat and Denise from 2006 onwards in respect of maintenance, taxes and insurance. Interest at a rate of 5 per cent shall apply.

[151] I note that Randy could have argued that Pat and Denise are foreclosed from pursuing their claim for carrying costs because they did not counterclaim, claim set-off or even provide the evidence for it. But Randy is an honest man. When I raised the issue of a reference to determine this issue, he readily agreed.

[152] Pat and Denise are seeking a windfall. Randy is seeking fairness for both sides.

Issue 5: Is this proceeding statute barred?

[153] Pat and Denise argue that Randy’s case is barred by the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, in particular s. 15(2) which bars a proceeding “in respect of any claim after the 15th anniversary of the day on which the act or omission on which the claim is based took place.”

[154] They also allege that it is barred by s. 4 of the Real Property Limitations Act, R.S.O. 1990, c. L.15 (the “RPLA”), which states that actions to recover land shall not be made after ten years from which the right to first bring the action accrued.

[155] In Nasr Hospitality Services Inc. v. Intact Insurance, 2018 ONCA 725, 142 O.R. (3d) 561, at paras. 34-35, the Court of Appeal directed that consideration of whether a proceeding is statute barred requires the court to determine whether the record enables making a series of findings of fact based on the following:

a. Presumption: the day on which the act or omission on which the claim is based occurred is the date the plaintiff is presumed to know of the matters listed in ss. 5(1)(a)(i)-(iv) of the Limitations Act; b. Actual knowledge: the date of actual knowledge under s. 5(1)(a), but only if the plaintiff’s evidence proves the contrary of the presumptive date; c. Objective knowledge: the s. 5(1)(b) objective knowledge date, based on the reasonable person with similar abilities and circumstances analysis; and d. Which of the actual knowledge and objective knowledge dates is earlier, for that earlier date will be the day on which the plaintiff discovered the claim for the purposes of applying the basic limitation period of two years.

See also Morrison v. Barzo, 2018 ONCA 979, 144 O.R. (3d) 600, at para. 29.

[156] In my view, these principles apply equally to the limitation period in the RPLA.

[157] Pursuant to s. 5(1) and Nasr, the presumptive date for when the alleged acts or omissions occurred was in October 2019, when Randy met with Pat and Pat told him for the first time that he would not reconvey the Condominium.

[158] This is also the date when Randy would have had actual knowledge of his claim. It is also the date when a reasonable person with similar abilities and circumstances would know of the acts or omissions on which the claim is based.

[159] Therefore, the date from which the limitation period runs is October 2019.

[160] The Statement of Claim was issued on September 25, 2020, and therefore it is not outside any of the limitation periods asserted.

Issue 6: Do the principles of spoliation apply?

[161] Pat and Denise say that the doctrine of spoliation applies because Randy waited to raise all these issues which then resulted in their inability to obtain bank records to verify his payments as well as Mr. Campbell’s file.

[162] There is no strong basis to believe that there would be anything helpful to Pat and Denise in Mr. Campbell’s file. Indeed, they never sought to obtain his file from him. It was Randy’s counsel who wrote to the Law Society seeking his file and who sought to subpoena him without success. In addition, in Pat’s affidavit of documents, he set out a significant number of closing documents attached to Mr. Campbell’s closing letter. There was no certificate of independent advice therein.

[163] Time has passed because of Pat and Denise’s improper conduct of accepting lump sum payments towards the debt since 2009, without disclosing to Randy until October 2019 their position that he resided in the Condominium pursuant to a Rental Agreement. If they have been prejudiced by the passage of time, they have only themselves to blame.

[164] Furthermore, the principle of spoliation only applies where there has been intentional destruction: Catalyst Capital Group Inc. v. Moyse, 2016 ONSC 5271, 35 C.C.E.L. (4th) 242, at para. 136. There is no evidence of this before me.

Issue 7: Is Randy entitled to the remedy of specific performance?

[165] There is no need to consider whether specific performance should be ordered. I have not found a breach of the express Oral Trust Agreement because it is unenforceable by virtue of the Statute of Frauds.

Issue 8: If Randy is not entitled to the remedy of specific performance, what are his damages?

[166] There is no need to consider the damages for breach of contract for the same reason above.

Issue 9: What are the costs to which Randy is entitled?

[167] Randy seeks substantial indemnity costs and I am awarding them for the following reasons.

[168] Pursuant to s. 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, costs are in the discretion of the court. Rule 57 of the Rules of Civil Procedure sets out the factors which courts should have regard to when awarding costs. The overall objective is “to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant”: Zesta Engineering Ltd. v. Cloutier (2002), 21 C.C.E.L. (3d) 161 (Ont. C.A.), at para. 4; Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.), at para. 26; Clarington (Municipality) v. Blue Circle Canada Inc., 2009 ONCA 722, 100 O.R. (3d) 66, at para. 52; and G.C. v. Ontario (Attorney General), 2014 ONSC 1191, at para. 5.

[169] The court has the discretion to award substantial indemnity costs, but such costs are “rare and exceptional” and only warranted where there has been reprehensible, scandalous or outrageous conduct on the part of a party: see DUCA Financial Services Credit Union Ltd. v. Bozzo, 2010 ONSC 4601, at para. 5; Foulis v. Robinson (1978), 21 O.R. (2d) 769 (C.A.); and most recently Mars Canada Inc. v. Bemco Cash & Carry Inc., 2018 ONCA 239, 140 O.R. (3d) 81, at para. 43.

[170] I am satisfied that there is a basis for substantial indemnity costs, particularly because of Pat and Denise’s actions in bringing this matter to the Landlord and Tenant Board as a strategic move to frustrate Randy’s proceeding.

[171] As noted, Randy stopped making payments in February 2019 because he felt he had satisfied his debt.

[172] Even though Pat had never received any further payments since then, he did not bring any proceedings before the Landlord and Tenant Board until September 2020, which was immediately after he received Randy’s August 2020 demand letter.

[173] Pat filed a series of inconsistent documents with the Landlord and Tenant Board which bore no relationship to the alleged rent that he said was payable. [4]

[174] When confronted with these errors, Pat did not have a great explanation other than to say that he sometimes makes mistakes. A better explanation is that when someone is reverse engineering payments to try to achieve a result, they are likely to make mistakes. The truth usually tells itself in a consistent manner (unless there has been trauma or there is a power imbalance). Untruths must continually be revisited and changed to achieve consistency.

[175] The Landlord and Tenant Board scheduled the hearing for March 24, 2021.

[176] Randy hired counsel who prepared responding materials at a cost of $5,000 and requested an adjournment to argue that the Residential Tenancies Act, 2006, S.O. 2006, c. 17 (the “RTA”) does not apply to their relationship. Pat would not consent to an adjournment, so Randy’s counsel prepared and attended on March 24, 2021. Pat did not appear, and the application was dismissed.

[177] Those proceedings were frivolous, vexatious and completely without merit and justify an award of substantial indemnity costs in this proceeding.

[178] Randy’s substantial indemnity costs are $72,774.59 plus disbursement in the amount of $4,990.69 plus HST in the amount of $9,815.67 for a total of $87,580.95.

[179] Randy has provided the details of rates and hours spent which are reasonable. Such costs are also within Pat and Denise’s reasonable contemplation as they are comparable to the amount set out in Pat and Denise’s Bill of Costs where they claim $81,113 on a substantial indemnity basis.

Conclusion

[180] In summary:

• I declare that the Condominium is held by Pat and Denise in trust for Randy by virtue of resulting trust or by way of constructive trust as a remedy imposed for unjust enrichment.
• I order that the Condominium shall immediately be registered in Randy’s name so that he can begin paying the carrying costs.
• There shall be a reference to an Associate Judge pursuant to rr. 54 and 55 of the Rules of Civil Procedure to determine the accounts between the parties and to determine whether any amounts are owed by either side in accordance with paragraph 150 above.
• Pending the outcome of the reference, or their agreement, Randy shall not sell, mortgage or dispose of the Condominium.
• Pat and Denise shall pay substantial indemnity costs in the amount of $87,580.95 within 30 days.

Papageorgiou J.

Released: October 16, 2023

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

RANDY BURBIDGE Plaintiff – and – PAT CASULLO (a.k.a. PAT CASSULO) and DENISE CARDY Defendants

REASONS FOR JUDGMENT

Papageorgiou J.

Released: October 16, 2023

[1] There is no reason to examine the requirements for an express trust because this is unenforceable in any event.

[2] Even though the Mortgage was only in respect of the $145,000 and the Promissory Note was in respect of $20,000, the amortization table prepared by Pat at the time and pursuant to which Randy paid a monthly amount took into account the entire Loan in the amount of $165,000.

[3] The parties introduced considerable evidence of what took place after these alleged agreements were entered into. No one objected to the admission of any of this evidence. Ordinarily, where a contract is being interpreted, the parties subsequent conduct is only admissible if there is an ambiguity. In my view, this principle is not applicable here. The issue is not the interpretation of an agreement, but the determination of which agreements took place which is a credibility issue. Alternatively, there is an ambiguity as to the terms of any agreement entered into which renders this evidence admissible.

[4] Pat filed an N4 on September 15, 2020, which stated that there was outstanding rent in the amount of $1,237.50 for August 31, 2020, and a further $1,650 as of September 2020. Pat was not able to persuasively explain how he arrived at the $1,237.50 for 2020, which must have been some reflection of partial rent having been paid. He tried to argue that Randy’s lump sum payments in 2019 overpaid the rent and that the overpayment from 2019 covered a significant part of 2019 up to August 31, 2020.

This math does not compute.

Randy paid $8,000 in February 2019. The alleged rent owed at that time was $1,650 per month which would have meant Randy would have to pay $19,800 that year. Thus, this payment not only does not cover all of the “rent” payable in 2019, but it would also not have paid anything due in 2020.

Pat’s Form L1 to evict Randy, dated October 5, 2020, then lists the amount owing as $4,723.50. The rental amount which Pat said applied in 2020 was $1,650. Therefore, this is the amount that should have been added to the total in the N4 which listed amounts outstanding for August and September 2020. But this document adds $1,836 and there is no explanation for this difference offered and it still does not accord with the theory advanced.

In March 2021, Pat filed yet another document which listed another set of amounts totaling $12,787.50.