Court File and Parties
Court File No.: CV-23-00709239 Date: 2024-06-26 Ontario Superior Court of Justice
Between: Rosa Zapata, Applicant And: Vicente Zapata, Carlos Zapata, and Shapiro Real Estate and Business Lawyers, Respondents
Counsel: Marek S. Malicki and Victoria Melnyk for the Applicant
Read: June 25, 2024
Before: Papageorgiou J.
Overview
1The Applicant seeks a Declaration that proceeds of sale of 40 Noranda Drive (the “Property”) are funds belonging to her.
2The Property was previously owned by the Applicant and her husband, Fausto Zapata as joint tenants. Because of verbal abuse and threats from her husband, and recommendations from her doctor, she decided to sell the Property. Her husband would not agree.
3Her lawyer told her that it would be easier to conduct a partition action if her share was transferred to her sons, the Respondents Vicente and Carlos. The transfer occurred on August 15, 2022.
4She commenced a partition action and the Property was sold.
5She claims ½ the proceeds of sale currently being held by Shapiro Law, the law firm which conducted the sale, in the amount of $626,072.27. Her former spouse has already been paid his share.
6Carlos has provided his consent. Vicente did not but he also did not respond to this Application.
Decision
7For the reasons that follow I am granting the judgment as sought.
The Issues
8The only issue is:
- Do the materials provide a basis for the finding that the Respondents Carlos and Vicente held the Property as to 50 % on behalf of the Applicant by way of resulting trust?
Analysis
9As set out in Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, at para. 20, a resulting trust arises where one party makes a gratuitous transfer to another but intends to retain a beneficial interest. The focus of the inquiry is the “transferor’s actual intention”, specifically whether the intention of the transferor at the time of the transfer was to make a gift or retain the beneficial interest: Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, at paras. 14, 18 and 25.
10A resulting trust presumption arises when a parent gratuitously transfers property to an independent child: Pecore at para 36.
11I am satisfied that the Applicant has established that she held a resulting trust over ½ of the Property, such that she is entitled to ½ the proceeds of sale based upon the following:
- She made the transfer to her independent children whereby the presumption of resulting trust arises.
- She gave evidence that she did not intend to make a gift and intended to retain a beneficial interest, which evidence has not been challenged.
- She gave evidence that the purpose of the transfer was to facilitate the partition and sale application, which evidence has not been challenged.
- Vicente and Carlos paid no consideration.
- Carlos and Vicente filed no evidence to rebut the presumption.
- Carlos corroborates the Applicant’s evidence that the transfer was not a gift and was for partition and sale of the Property.
- Vicente did not respond to this Application but as part of the partition proceeding, he admitted that there was no gift of an interest in the Property.
12I am satisfied that the Applicant is entitled to the relief sought including distribution of the funds being held by the law firm, in the amount of $626,072.27 plus pre-judgment and post judgment interest at the rates set out in the Courts of Justice Act rate from the date of closing, April 14, 2023.
13The Applicant seeks costs as against Vicente only in the amount of $10,075.08, on a partial indemnity basis, which I award payable within 30 days.
14The Applicant’s counsel has provided a Bill of Costs. The rates and hours are reasonable and the overall costs sought are fair and reasonable and within Vicente’s reasonable contemplation. It is unfortunate that this Application was necessary in all the circumstances.
Papageorgiou J.
Released: June 26, 2024