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

[1] The Applicant seeks a Declaration that proceeds of sale of 40 Noranda Drive (the “Property”) are funds belonging to her.

[2] The 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.

[3] Her 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.

[4] She commenced a partition action and the Property was sold.

[5] She 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.

[6] Carlos has provided his consent. Vicente did not but he also did not respond to this Application.

Decision

[7] For the reasons that follow I am granting the judgment as sought.

The Issues

[8] The 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

[9] As 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.

[10] A resulting trust presumption arises when a parent gratuitously transfers property to an independent child: Pecore at para 36.

[11] I 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.

[12] I 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.

[13] The 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.

[14] The 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