COURT FILE NO.: FC-21-7 (Simcoe)
DATE: 2024/09/09
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
PALLE SORENSEN
Applicant
– and –
MARGIT BARBARA WAMSLEY
Respondent
Nizam Hashmi, Counsel for the Applicant
Emma Brown, Counsel for the Respondent
HEARD: March 5, 6, 7 and 8, 2024
Written Submissions: March 26, April 12 and April 26, 2024
GIBSON J.
REASONS FOR DECISION
Overview
[1] This case involves the trust claims of the Applicant, Palle Sorensen (“the Applicant” or “Palle”) against the property municipally described as 937 Lynn Valley Road in Port Dover, Ontario (“the Property”), which was owned in the sole name of the Respondent, Margit Barbara Wamsley (“the Respondent” or “Margit”) from 2014 until 2020. The parties co-habited for five and a half years from June 2014 until December 2019. The Respondent now also claims for spousal support from the Applicant.
[2] The Applicant is 60 years old, and the Respondent is 65 years old. The Applicant works as an agro-engineer in the pork industry. He has worked in Canada, Russia, China and now Bulgaria in this capacity. The Respondent works in government administration, and is semi-retired from employment with Norfolk County.
[3] In 2020, the Property was sold for $890,000. On March 2, 2022, the sum of $150,000 was released to the Applicant toward satisfaction of any interest he may have or have had in the Property.
[4] These proceedings were commenced on January 21, 2021, by way of Application. The Applicant seeks a 50% share in the net equity of the Property on the basis of resulting trust or, in the alternative, constructive trust. The Applicant requests a finding of unjust enrichment, interest on the Applicant’s share of the net proceeds of sale, and the imposition of a constructive trust interest in the property municipally described as 17 Spruce Grove Court in Port Dover, Ontario, where the Respondent now resides and which is owned solely by the Respondent. He seeks to receive “at least half” of the net proceeds of sale of the Property, and submits that the Respondent’s claim for spousal support should be dismissed.
[5] The Respondent seeks that the Applicant be considered to have a constructive trust interest in the Property which is consistent with his proportional contributions at the time of purchase and throughout the Respondent’s ownership of the Property, and that the net equity be divided on a 30% and 70% basis, or with the net equity of $857,100.66 divided with the Applicant to receive $257,130.19 and the Respondent to receive $599,970.46, and that the Applicant pay to the Respondent $25,000 for transitional spousal support.
Facts
[6] The Parties submitted an Agreed Statement of Facts, which was made Exhibit 1 in evidence. It provides as follows:
STATEMENT OF AGREED FACTS
Relationship History
The Applicant, Palle Sorensen (“Palle”) came to Canada in 1999 and became a Canadian citizen in 2019. Palle has been in Bulgaria for employment since in or around 2017.
The Respondent, Margit Barbara Wamsley (“Margit”) is a Canadian citizen and resident of Ontario. Margit had income from her employment and business.
During the parties’ relationship, Margit had a business for selling t-shirts for Friday the 13th. Margit’s Friday the 13th business continued to operate after the date of separation.
Palle was previously married and divorced. Margit was previously married and divorced. The parties divorced their respective spouses before they started their common law relationship with each other.
The parties met in 2007. In 2014, they commenced residing together. There are no children of the parties’ relationship.
In 2007, Palle resided at a property provided by his employer. Margit resided at the property municipally described as 37 Lynn Park Avenue in Port Dover, Ontario. The parties sometimes spent summer months at Margit’s property, and sometimes they spent winter months at the property Palle lived in.
Palle stayed temporarily with Margit at her residence located at 37 Lynn Park Avenue in Port Dover, Ontario for approximately one month in January 2012. In February 2012, Palle left Canada for Russia, where he commenced employment. In December 2013, Palle returned to Canada after completing his employment term. Palle secured employment in China effective February 2014. He stayed temporarily with Margit from December 2013 until February 2014.
During the parties’ relationship, there were the following relevant accounts:
a. Palle and Margit had a joint account with TD Canada Trust, account number ***208;
i. In or around January 2017, the parties set up the joint TD Canada Trust account ***208 for the purpose of Palle transferring funds into that account and Margit utilizing those funds to pay Palle’s share of the mortgage, household expenses and capital expenses.
b. Palle had a bank account with TD Canada Trust, account number ***151;
c. Palle had a Visa credit card with TD Canada Trust, account number ***950;
d. In Bulgaria, Palle had bank accounts, one for the Canadian currency and the other for the Bulgarian currency;
e. Margit had a bank account with the Royal Bank of Canada, account number ***628;
f. Margit had a bank account with Hald-Nor Credit Union, account number ***307;
2012
On or about July 11, 2012, Palle loaned to Margit $15,000.00 by way of bank draft from his TD Canada Trust account ***151, for the “Friday the 13th event being held on July 13, 2012.
The sum of $195.00 of Margit’s funds existed in the Hald-Nor Credit Union account ***307, which account she was not using, when Palle began to deposit, through Margit, his funds into that account, commencing on or about July 17, 2012.
In 2007, Palle resided at a property provided by his employer. Margit resided at the property municipally described as 37 Lynn Park Avenue in Port Dover, Ontario. The parties sometimes spent summer months at Margit’s property, and sometimes they spent winter months at the property Palle lived in.
2013
- On or about July 9, 2013, Palle exchanged $4,000.00 United States Dollars (“USD”) for $4,131.60 Canadian Dollars (“CAD”). This was deposited into the Hald-Nor Credit Union account ***307 on July 9, 2013.
2014
On or about April 22, 2014, Palle exchanged $910.00 Chinese currency (“RMB”) for $119.39 CAD and deposited these funds to his TD Canada Trust account ***151.
On or about April 22, 2014, Palle exchanged $8,800.00 USD for $9,438.88 CAD and deposited these funds to his TD Canada Trust account ***151.
On or about April 22, 2014, Palle then paid $2,596.30 to his TD Canada Trust Visa ***950 and obtained a draft for $4,000.00 which was deposited into the Hald-Nor Credit Union account ***307.
In June 2014, Margit sold her property located at 37 Lynn Park Avenue, Port Dover, ON. At the same time, on or about June 19, 2014, the property at 937 Lynn Valley Road, Port Dover, Ontario (“Property”) was purchased for $450,000.00. The title of the Property was registered in the name of Margit.
For the purchase of the Property, Margit used $189,851.00 from the sale of her previous property located at 37 Lynn Park Avenue, Port Dover, ON. $67,800.00 of Palle’s money in the Hald-Nor Account was used toward the purchase of the Property. At the time of the purchase of the Property, there was a mortgage registered against the Property in the amount of $200,000.00 in favour of Royal Bank of Canada (“Mortgage”).
Margit was the sole owner on title for the Property.
Margit was the sole mortgagor for the Property.
Palle was the guarantor of the Mortgage.
At the time of the purchase of the Property, the parties agreed and understood that the parties would equally share the costs for the mortgage, property tax, home insurance, maintenance costs, and utility bills for the Property.
On or about April 29, 2014, Palle contributed $10,000.00 from the Hald-Nor Credit Union account ***307 as a deposit for the Property.
Palle was in Canada from on or about June 11 until June 24, 2014.
On June 13, 2014, Margit had a Friday the 13th event.
At the start of the business day on June 16, 2014, Palle had $0.39 in his TD Canada Trust account ***151 – Palle deposited $4,740.00 in cash into his TD Canada Trust account ***151. On that same day, he paid
$3,849.66 to his TD Canada Trust Visa ***950.
On or about June 9, 2014, a receipt was issued reflecting that on May 22, 2014, Margit paid a liability increase to Norfolk Mutual Insurance Company (Adams Insurance) in the amount of $43.20, in cash.
On or about June 17, 2014, Margit deposited $8,000.00, into the Hald-Nor Credit Union account ***307 in order to partially repay a loan from Palle, made on March 3, 2014, for the June 13, 2014 Friday the 13th Event. Margit borrowed $15,000.00 from Palle on or about March 3, 2014.
On or about June 17, 2014, Palle contributed $57,800.00 from the Hald-Nor Credit Union account ***307 toward the down payment for the Property.
On or about June 18, 2014, Palle deposited $8,506.50 in cash into his TD Canada Trust account ***151 on that same date and withdrew $7,000.00 as a bank draft, to deposit into the Hald-Nor Credit Union account ***307 on June 23, 2014.
On or about July 9, 2014, Margit paid the building permit fee to Norfolk County in the amount of $330.00, by way of a cheque from her Royal Bank of Canada account ***628.
On or about July 14, 2014, Margit paid a deposit for the pool built at the Property in the amount of $5,000.00 from her Royal Bank of Canada account ***628.
On or about August 1, 2014, Margit paid a location change fee to Norfolk Mutual Insurance Company (Adams Insurance) in the amount of $253.80.
On or about August 11, 2014, Margit paid a deposit for the pool built at the Property by South Coast Pools
in the amount of $6,500.00.
On or about August 11, 2014, a bank draft was paid from the Hald-Nor Credit Union account ***307 in the amount of $18,500.00, to South Coast Pools. This sum was comprised of Palle’s money.
On or about August 15, 2014, a bank draft was paid from Palle’s TD Canada Trust account ***151 to South Coast Pools in the amount of $10,000.00.
On or about August 18, 2014, Margit paid a deposit for the pool built at the Property in the amount of $6,533.40 from her Royal Bank of Canada account ***628.
On or about October 6, 2014, Margit paid a Bell invoice for Palle’s account number 524788731 in the amount of $57.63 from her Royal Bank of Canada account ***628. $57.63 paid from Palle to Margit in 2014 was for Palle’s Bell invoice.
In 2014, Margit paid Palle’s life insurance on his behalf, making a combined monthly insurance payment of $235.01 from her Royal Bank of Canada account ***628 for the months of June through to December.
a. Palle’s share of the combined insurance in 2014 was $124.78 per month, for a total of $873.46.
b. In 2014, $873.46 transferred from Palle to Margit was for his share of life insurance.
On or about November 24, 2014, Margit paid the property insurance for the Property with Norfolk Mutual Insurance Company (Adams Insurance) in the amount of $1,589.76, for the period of November 24, 2014 to November 24, 2015.
In 2014, Margit paid:
a. $686.00 in gas expenses for the Property;
b. $1,041.00 in hydro expenses for the Property;
c. $2,376.00 in property insurance, and $2,481.00 in property taxes. 50% of these expenses were owed from Palle to Margit.
2015
On or about January 15, 2015, Margit wrote a cheque to Palle from her Royal Bank of Canada account ***628 in the amount of $3,500.00.
On or about February 1, 2019, Margit paid $1,000.00 to Automart Sales and Leasing as a down payment for the purchase of Palle’s Dodge Ram truck. $1,000.00 transferred from Palle to Margit in 2015 was for the purchase of Palle’s truck.
On or about February 9, 2015, Margit paid $12,000.00 by way of bank draft and $5.00 in cash to Automart Sales and Leasing for the purchase of Palle’s Dodge Ram truck. $12,005.00 transferred from Palle to Margit in 2015 was for the purchase of the truck.
On or about December 8, 2015, Margit wrote a cheque to Palle from her Royal Bank of Canada account ***628 in the amount of $931.00. On that same day, Palle made a payment on his TD Visa account ***950 in the amount of $931.00.
In 2015, Margit paid Palle’s truck insurance on his behalf in the sum total of $1,647.00. $1,647.00 transferred from Palle to Margit in 2015 was for his truck insurance.
On or about November 30, 2015, Margit paid the property insurance for the Property with Norfolk Mutual Insurance Company (Adams Insurance) in the amount of $1,448.28, for the period of November 24, 2015 to November 24, 2016.
In 2015, Margit paid Palle’s life insurance on his behalf, making a combined monthly insurance payment of $235.01 from her Royal Bank of Canada account ***628.
a. Palle’s share of the combined insurance in 2015 was $124.78 per month, for a total of $1,497.36.
b. In 2015, $1,497.36 transferred from Palle to Margit was for his share of life insurance.
In 2015, Margit paid the property tax for the Property in the amount of $4,977.64.
In 2015, Margit received from Palle $17,925.00.
In 2015, Margit paid:
a. $1,630.00 in gas expenses for the Property;
b. $2,366.00 in hydro expenses for the Property;
c. $4,977.64 in property taxes.
50% of these expenses were owed from Palle to Margit.
2016
On February 8, 2016, Palle did not e-transfer $1,500.00 to Margit as alleged in his Affidavit sworn November 4, 2021.
On or about April 4, 2016, Margit paid $84.00 for a traffic fine incurred by Palle. In 2016, $84.00 transferred from Palle to Margit was for Palle’s traffic fine.
On or about April 18, 2016, Palle paid Margit $1,500.00.
On or about May 2, 2016, Margit paid $115.26 for changing the tires on Palle’s truck. In 2016, $115.26 transferred from Palle to Margit was for Palle’s tire change.
On or about June 14, 2016, Margit paid additional property insurance for the Property with Gulliver Insurance (Adams Insurance) in the amount of $32.40, for the period of March 22, 2016 to March 22, 2017.
On or about July 22, 2016, Palle paid Margit $1,200.00.
On or about August 22, 2016, Palle paid Margit $1,100.00.
On or about September 6, 2016, Palle paid $2,300.00 to Margit, which she received on September 11, 2016.
On or about September 11, 2016, Margit paid $2,554.07 directly to Palle’s TD Visa account ***950. In 2016, $2,554.07 transferred from Palle to Margit was to reimburse her for paying this amount to his TD Visa account ***950.
On or about September 21, 2016, Margit paid on Palle’s behalf $2,000.00 to Palle’s daughter, Anne, in Denmark, as a wedding gift. $2,000.00 transferred from Palle to Margit was for this gift.
In April 2016, Margit paid on Palle’s behalf an additional $2,000.00 to Palle’s daughter, Kathrine, in Canada, as a wedding gift. $2,000.00 was owed from Palle to Margit for this transfer.
Margit paid $1,056.00 for the parties’ travel expenses to attend Palle’s daughter, Kathrine’s, wedding in April 2016. Margit also cashed in 109,299 in travel points to pay for the parties’ return flights, worth approximately $1,200.00 for both parties.
On or about November 7, 2016, Margit paid $1,135.80 directly to Palle’s TD Visa account ***950. In 2016, $1,135.80 transferred from Palle to Margit was to reimburse her for paying this amount to his TD Visa account ***950.
On or about November 21, 2016, Margit paid the property insurance for the Property with Norfolk Mutual Insurance Company (Adams Insurance) in the amount of $1,753.92, for the period of November 24, 2016 to November 24, 2017.
On or about December 8, 2016, Margit paid $2,200.00 directly to Palle’s TD Visa account ***950. In 2016, $2,200.00 paid from Palle to Margit was to reimburse her for paying this amount to his TD Visa account ***950.
In 2016, Margit paid Palle’s life insurance on his behalf, making a combined monthly insurance payment of $235.01 from her Royal Bank of Canada account ***628.
a. Palle’s share of the combined insurance in 2016 was $124.78 per month, for a total of $1,497.36.
b. In 2016, $1,497.36 transferred from Palle to Margit was for his share of life insurance.
In 2016, Margit paid the property tax for the Property in the amount of $4,989.53.
On October 4, 2016, Margit paid $39.33 to fix a leaking tire on Palle’s truck. In 2016, $39.33 transferred from Palle to Margit was for repairs to a leaking tire.
In 2016, Margit paid:
c. $2,070.00 in gas expenses for the Property; and
d. $2,803.00 in hydro expenses for the Property;
50% of these expenses were owed from Palle to Margit.
2017
On or about February 24, 2017, Palle exchanged $3,130.00 Bulgarian Lev (“BGN”) for $2,001.96 CAD and deposited it into the TD Canada Trust joint account ***208. Palle further exchanged $120.00 Romanian Leu (“RON”) for $33.01 CAD, which he deposited into the TD Canada Trust joint account ***208. Following these two transactions on February 24, 2017, Palle withdrew $100.00 cash from the TD Canada Trust joint account ***208.
In the first several months of 2017, Palle travelled to Ontario for the periods of February 23-March 11 and again from April 22-May 6.
On or about April 10, 2017, Palle transferred $3,200.00 from the TD joint account ***208 to his TD Visa account ***950.
On or about June 7, 2017, Palle authorized Margit’s daughter, Kirbie, to sell his 1988 Cadillac Brougham and his digger for a combined total of $5,000.00, on his behalf, while the parties were out of the country.
On or about July 16, 2017, Margit paid $149.10 for a new battery for Palle’s Cadillac vehicle. In 2017, $149.10 transferred from Palle to Margit was for the new vehicle battery.
On or about November 3, 2017, Margit paid the property insurance for the Property with Norfolk Mutual Insurance Company (Adams Insurance) in the amount of $1,719.36, for the period of November 24, 2017 to November 24, 2018.
On or about December 3, 2017, Margit transferred $500.00 to Palle’s daughter, Kathrine. $500.00 transferred from Palle to Margit in 2017 was to reimburse her for the $500.00 to his daughter.
In 2017, Margit paid Palle’s life insurance on his behalf, making a combined monthly insurance payment of $235.01 from her Royal Bank of Canada account ***628.
a. Palle’s share of the combined insurance in 2017 was $124.78 per month, for a total of $1,497.36.
b. In 2017, $1,497.36 transferred from Palle to Margit was for his share of life insurance.
In 2017, Margit paid the property tax for the Property in the amount of $5,211.92.
In 2017, Margit paid Palle’s truck insurance on his behalf in the amount of $1,252.00. $1,252.00 transferred from Palle to Margit in 2017 was for his truck insurance.
In 2017, Margit transferred $46,445.00 from the joint TD account ***208, from which she paid $6,750.00 on Palle’s personal TD Visa account ***950.
In 2017, Margit paid:
c. $1,926.84 in gas expenses for the Property; and$2,405.83 in hydro expenses for the Property;
50% of these expenses were owed from Palle to Margit.
- In 2017, Margit received the sum total of $46,445.00 from Palle.
2018
On or about April 6, 2018, Margit paid $113.00 to change the tires on Palle’s truck. In 2018, $113.00 transferred from Palle to Margit was for his tire change.
On or about May 9, 2018, Margit paid $411.00 to replace Palle’s bifocals at Simcoe Optometric Clinic using her MBNA Mastercard ***282. In 2018, $411.00 transferred from Palle to Margit was for his bifocals.
On or about July 16, 2018, Margit reimbursed Palle in the amount of $9,000.00 into his TD account ***151 for funds withdrawn from the TD joint account ***208 for her Friday the 13th event.
On or about July 17, 2018, Margit paid $411.00 to replace Palle’s bifocals (again) at Simcoe Optometric Clinic, using her MBNA Mastercard ***282. In 2018, $411.00 transferred from Palle to Margit was for his bifocals.
In July 2018, Margit had a Friday the 13th event.
On or about November 7, 2018, Margit paid the property insurance for the Property with Norfolk Mutual Insurance Company (Adams Insurance) in the amount of $1,782.00, for the period of November 24, 2018 to November 24, 2019.
In 2018, Margit paid:
a. $2,291.45 in gas expenses for the Property; and
b. $2,234.41 in hydro expenses for the Property;
50% of these expenses were owed from Palle to Margit.
In 2018, Margit paid the property tax for the Property in the amount of $5,437.68.
In 2018, Margit paid Palle’s truck insurance on his behalf in the sum total of $1,411.00. $1,411.00 transferred from Palle to Margit in 2018 was for his truck insurance.
In 2018, Margit transferred $85,525.00 from the TD joint account ***208, from which she paid $9,400.00 on Palle’s TD Visa account ***950 from her Royal Bank of Canada account ***628.
In 2018, Margit paid Palle’s life insurance on his behalf, making a combined monthly insurance payment of $235.01 from her Royal Bank of Canada account ***628.
c. Palle’s share of the combined insurance in 2018 was $124.78 per month, for a total of $1,497.36.
d. In 2018, $1,497.36 transferred from Palle to Margit was for his share of life insurance.
- In 2018, Margit received the sum total of $85,525.00 from Palle.
2019
In 2019, Margit paid Palle’s truck insurance with SGI Canada on his behalf from her MBNA Mastercard ***282 in the amount of $1,300.00. The sum of $1,300.00 transferred from Palle to Margit in 2019 was for his truck insurance.
On or about April 9, 2019, Margit paid $113.00 to change the tires on Palle’s truck. In 2019, $113.00 transferred from Palle to Margit was for his tire change.
On or about May 9, 2019, Margit paid the total legal fees for both her and Palle’s Wills and Powers of Attorney, prepared by Brimage Law Group, in the total amount of $814.73. The sum of $407.37 transferred from Palle to Margit in 2019 was for his share of these legal fees.
On May 23, 2019, Margit paid Palle’s truck repairs with Kal Tire on his behalf from her MBNA Mastercard ***282 in the amount of $1,580.69. $1,580.00 transferred from Palle to Margit in 2019 was for his truck repairs.
On or about June 5, 2019, Margit paid $142.37 for repairs on Palle’s vehicle. In 2019, $142.37 transferred from Palle to Margit was for vehicle repairs.
On or about September 25, 2019, Margit paid $377.70 for new tires for Palle’s cube van. In 2019, $377.70 transferred from Palle to Margit was for the cube van tires.
On or about October 24, 2019, Margit paid the property insurance for the Property with Norfolk Mutual Insurance Company (Adams Insurance) in the amount of $1,694.52, for the period of November 24, 2019 to November 24, 2020.
On or about October 29, 2019, Margit paid $122.04 for a tire change for Palle’s vehicle. In 2019, $122.04 transferred from Palle to Margit was for the cube van tires.
On or about December 16, 2019, Palle transferred $1,990.00 from the joint account to his TD Visa account ***950.
In 2019, Palle contributed $1,414.00 toward building materials for the Property.
In 2019, Margit paid:
a. $2,422.31 in gas expenses for the Property;
b. $2,008.50 in hydro expenses for the Property; and
c. $5,693.58 in property taxes.
50% of these expenses were owed from Palle to Margit.
- In 2019, Margit paid Palle’s life insurance on his behalf, making a combined monthly insurance payment of $235.01 from her Royal Bank of Canada account ***628.
a. Palle’s share of the combined insurance in 2019 was $124.78 per month, for a total of $1,497.36.
b. In 2019, $1,497.36 transferred from Palle to Margit was for his share of life insurance.
- In 2019, Margit received the sum total of $101,890.00 from Palle, from which she paid $27,600.00 on Palle’s TD Visa account ***950 from her Royal Bank of Canada account ***628.
2020
- On November 20, 2020, from his phone number 359-89-242-6933, Palle texted Margit the following:
“We still need prove of how you spend my money from 2017-2019. Household cost was not $7000 per month per you and me ? We agreed to share all costs from day 1. You are not living up to it. Where’s
all the money I have send the last 3 years?”
In 2020, the Property was sold for $890,000.00.
An offer to purchase the Property was made and accepted in April 2020, with a closing date in October 2020, with Palle’s knowledge.
In 2020, Margit paid the property tax for the property in the amount of $4,690.73.
In 2020, Margit paid Palle’s truck insurance on his behalf in the amount of $1,411.00. $1,411.00 transferred from Palle to Margit in 2020 was for his truck insurance.
In 2020, Margit paid Palle’s life insurance on his behalf, making a combined monthly insurance payment of $235.01 from her Royal Bank of Canada account ***628, for the months of January through to September. Palle’s share of the combined insurance in 2020 was $124.78 per month, for a total of $1,123.02. In 2020, the sum of $1,123.02 transferred from Palle to Margit was for his share of life insurance.
Palle paid Margit’s daughter, Kirbie, $1,300.00 for her services in removing his tools and other belongings from the Property.
Palle specifically requested Margit’s assistance in moving his furniture and belongings, in addition to the work performed by Kirbie.
In 2020, Margit paid:
d. $1,930.75 in gas expenses for the Property;
e. $1,969.70 in hydro expenses for the Property; and
f. $4,690.73 in property taxes.
50% of these expenses were owed from Palle to Margit.
- In 2020, Margit received the sum total of $28,590.00 from Palle.
2022
- On or about March 2, 2022, the sum of $150,000.00 was released to Palle toward satisfaction of any interest he may have or have had in the Property.
No Date/Range of Dates
Palle has not obtained a valuation from an independent third party of how or if any other or more significant projects he claims to have undertaken may have improved the value of the Property.
The parties cohabited for a period of approximately five and-a-half years.
Per her Notices of Assessment, Margit’s total income from 2014-2021 was as follows:
2014:
$51,762.00
2015:
$41,227.00
2016:
$36,874.00
2017:
$50,726.00
2018:
$55,431.00
2019:
$71,324.00
2020:
$67,042.00
2021:
$90,725.00
At all material times, Margit has been fully active. She regularly drove a vehicle and did her daily activities without external support.
Margit did not have any physical or mental health issues that could have prevented her from working on a full-time basis before and after the date of the separation.
Margit is 65 years old and Palle is 60 years old.
Margit utilized cash or money on a lower interest rate to fund expenses. Whenever her line of credit or credit cards offered lower interest rates, she borrowed money from her line of credit or credit cards.
Issues
[7] The issues to be determined in this trial are:
What should be the distribution of the net proceeds of sale of the Property as between the parties; and
Should the Applicant be required to pay spousal support to the Respondent?
Assessment
Issue 1: Division of Property
[8] There is no dispute that the agreement between the parties was that, at the time of purchase of the Property, their respective contributions were unequal and that the Applicant intended to make sufficient contributions to reach an equal, 50% interest. There is no dispute that after purchase both parties made contributions to the Property.
[9] The key property issue, and question, in this trial is: did the Applicant make sufficiently significant contributions to the Property after the time of purchase such that he had, by the time of sale in 2020, developed a 50% interest?
[10] The Applicant claims that he did make sufficiently significant contributions. I agree with the submission of the Respondent that the evidence does not support this claim. From the time of purchase and until the time of sale, the Respondent was the higher contributor to the Property.
[11] A Statement of Agreed Facts was made Exhibit 1 in the trial. This included, but was not limited to, confirmation of the parties’ original (unequal) contributions to the Property, the parties’ respective shares of Property-related expenses, personal expenses paid by the Respondent on behalf of the Applicant, and gross amounts received by the Respondent from the Applicant between 2014 and 2020.
[12] In June 2014, the Respondent sold the property municipally described as 37 Lynn Park Avenue in Port Dover, Ontario (“Lynn Park”), which was owned in her sole name, for the sum of $235,052.45. This formed the majority of the down payment for the Property in the amount of $189,851.00, which was facilitated through bridge financing with the Royal Bank of Canada (“RBC”). That bridge financing was repaid to RBC in the amount of $190,123.89. The Respondent received $11,901.42 in net proceeds once all deductions had been made.
[13] The Applicant contributed $67,800.00 to the purchase of the Property, which funds were held in a HaldNor Credit Union bank account owned by the Respondent but used by the Applicant. The Property was put into the sole name of the Respondent, with the Respondent as the sole mortgagor to a $200,000.00 mortgage with RBC. The Applicant guaranteed the mortgage. From the time of purchase, the parties agreed that they would equally share the mortgage, property tax, home insurance, maintenance costs and utility bills for the Property. The parties commenced use of a joint TD Canada Trust bank account in or around January 2017. The Applicant deposited funds into this account and the Respondent transferred funds out, usually to her personal RBC chequing account, for the Applicant’s share of Property-related expenses as well as personal expenses (such as the purchase of a vehicle, vehicle maintenance fees, vehicle insurance, and life insurance.) The gross amounts withdrawn by the Respondent from the joint account are reflected in the agreed statement of facts at Exhibit 1. However, these gross figures do not reflect (a) the Respondent’s flow-through of funds for payment of the Applicant’s personal expenses; (b) the Applicant’s share of joint (capital and utility) expenses; and (c) loans withdrawn by the Respondent and then repaid to the Applicant. For example, further to (a) above, the Respondent advanced a total of $13,005 on the Applicant’s behalf for the purchase of his truck and the parties agreed that of the funds transferred to the Respondent, $13,005 represented reimbursement for the truck purchase. Further to (c) above, in 2018, the Respondent withdrew $9,000, but later reimbursed the Applicant for this sum.
Resulting Trust
[14] It is the Applicant’s position that, at the time of purchase, he became the immediate beneficial owner of a 50% interest in the Property. The Applicant’s assertion that despite the parties’ unequal initial contributions he was a 50% beneficial owner of the Property creates two resulting trust issues, which are: the Applicant’s initial contribution of $67,800; and the resulting trust argument in reverse, as it relates to the Respondent’s initial contribution of $189,851 (defending against the Applicant’s assertion that, despite these unequal contributions, he was a 50% owner).
[15] The leading case on resulting trust in family law is Kerr v. Baranow, 2011 SCC 10. In Kerr, the Court reiterated that a resulting trust is imposed to “return property to the person who gave it and is entitled to it beneficially, from someone else who has title to it. Thus, the beneficial interest ‘results’ (jumps back) to the true owner:” Kerr at para. 16. In the domestic context, resulting trust primarily arises in two situations: gratuitous transfer or the joint contribution by two partners to the acquisition of property, title to which is in the name of only one of them: Kerr at para 17.
[16] The Respondent does not assert that the Applicant’s contribution of $67,800 was a gift, and so there is a presumption of resulting trust in favour of the Applicant with respect to that sum.
[17] However, in making the claim that despite the parties’ unequal contributions the Applicant was a 50% beneficial owner, it may be inferred that the Applicant is claiming the Respondent’s significantly higher contribution ($189,851 vs. $67,800) was a gift.
[18] To assert an “immediate gift” of “beneficial ownership” of the funds contributed (by the other party), the party claiming the gift must rebut the presumption of resulting trust by bringing evidence to support the claim: MacIntyre v. Winter, 2021 ONCA 516, at para. 34. The Respondent was examined on her Last Will and Testament (the “Will”) executed during the parties’ relationship. The Applicant’s position is that the Will signalled the Respondent’s contemporaneous understanding that the Applicant was an equal, 50% owner of the Property from the time of purchase in 2014. However, survivorship can be separated from the intent to gift: MacIntyre at para. 32. It is possible to accept both the assertion that a party’s intent at the time of purchase was to receive back his or her funds deposited if the house was ever sold and, at the same time, accept that survivorship benefits were intended for if one party predeceased the other: MacIntyre at para. 32. The Court of Appeal held that a right of survivorship alone is not sufficient to rebut the presumption of a resulting trust that operates during the parties’ joint lives: MacIntyre at para. 33.
[19] The decision in MacIntyre followed the Court of Appeal’s findings in Christopher v. Freitas, 2019 ONCA 84, wherein the court similarly held that “at its highest” the appellant’s evidence failed to establish that the parties’ original, unequal contributions denoted a gift due to joint tenancy: Christopher at para. 5. While in Christopher there was email evidence which supported that the respondent (the party who made the more significant initial contribution) understood the right of survivorship part and parcel to joint tenancy, it was not unreasonable for the court to conclude that, on this evidence, the appellant still failed to meet her onus to establish that the respondent intended to gift her half the house at the time of purchase: Christopher at para 5. The placing of a property into joint tenancy is a stronger signal of intention to gift than testamentary bequests in a Will. Given that the holding of title in joint tenancy is insufficient to rebut the presumption of resulting trust, a Will is similarly insufficient (particularly given the absence of any other supporting evidence in favour of the Applicant’s claim to this effect).
[20] I agree with the Respondent that the reasonable determination, given the evidence in this trial, is that at the time of purchase of the Property, neither party intended to gift his or her initial contribution to the other. Accordingly, the presumption of resulting trust flows in favour of both parties and establishes that, in June 2014 when the Property was purchased, the parties intended to receive return of their respective investments of $67,800 (or 36% of the equity) by the Applicant and $189,851 (or 74% of the equity) by the Respondent.
Unjust Enrichment
[21] The principles of unjust enrichment, coupled with the possible remedy of a constructive trust, provide “a much less artificial, more comprehensive and more principled basis to address the wide variety of circumstances that lead to claims arising out of domestic partnerships” as compared to resulting trusts: Kerr at para. 28. Accordingly, in considering the parties’ respective claims arising out of the period following the June 2014 date of purchase and the parties’ original (unequal) investments, the appropriate lens through which to view those claims is unjust enrichment, joint family venture, and consideration of proprietary (constructive trust) versus monetary remedies to rectify the unjust enrichment and/or equitably address the joint family venture.
[22] Unjust enrichment arises when there is (1) an enrichment; (2) a corresponding deprivation; and (3) the absence of a juristic reason for the enrichment: Peter v. Beblow, 1993 CanLII 126 (SCC), [1993] 1 SCR 980, at p.10. This approach was adopted and reiterated in Kerr. To establish an enrichment, the plaintiff (or applicant) must show that he or she gave something to the defendant (or respondent) which the defendant received and retained: Kerr at para. 38. There must be a benefit which has enriched the defendant and which can be restored to the plaintiff in specie or by money: Kerr at para. 38. The benefit must be tangible and may be positive or negative insofar as it may spare the defendant an expense he or she would have had to undertake: Kerr at para. 38.
[23] Second, the plaintiff must establish not simply that the defendant has been enriched, but also that the enrichment corresponds to a deprivation which the plaintiff has suffered: Kerr at para. 39.
[24] Finally, the plaintiff must demonstrate that the benefit and corresponding deprivation must have occurred without a juristic reason – or that “there is no reason in law or justice for the defendant’s retention of the benefit conferred by the plaintiff, making its retention “unjust” in the circumstances of the case:” Kerr at para 40. Within the consideration of the absence of a juristic reason, there are two steps: (a) consideration of the established categories of juristic reasons (to deny recovery) and, in their absence, (b) consideration of the reasonable expectations of the parties and public policy considerations to assess whether recovery should be denied: Kerr at para. 43.
[25] Juristic reasons to deny recovery may include the intention to make a gift (donative intent), a contract, or a disposition of law (such as circumstances where the enrichment of the defendant at the plaintiff’s expense is required by law, such as where a valid statute denies recovery): Kerr at para. 41. Juristic reasons to deny recovery are not a closed list and require due consideration of the autonomy of the parties, including the legitimate expectation of the parties and the right of the parties to order their affairs by contract: Kerr at para. 41.
[26] In the present case, at the time of purchase, the parties contributed (unequally) to the down payment for the Property. When title was placed into the sole name of the Respondent despite the Applicant’s contribution of 26% of the down payment ($67,800), there was a benefit conferred to her and a corresponding deprivation to the Applicant. There is no dispute by the Respondent that a failure to compensate the Applicant for his contribution to the down payment for the Property would be unjust. However, to pay to the Applicant 50% of the net proceeds of the Property would create an unjust enrichment in favour of the Applicant, given the Respondent’s significantly larger original contribution and her continued, substantial contributions.
[27] The Applicant says that he spent $31,597.76 on renovation expenses which were dedicated to the Property. The Applicant’s supporting evidence is limited to the provision of his TD Canada Trust Visa card statements and claiming each trip to certain retailers such as TSC, Rona, and Canadian Tire. The Applicant adduced no supporting evidence, beyond his testimony in broad terms, to link most of these transactions to the Property. The Applicant additionally seeks compensation for his time in performing various projects. The Applicant claims that the Respondent has failed to prove that the Applicant’s purchase of materials or tools was for any other purpose.
[28] The Respondent disputes the Applicant’s claim, taking the position that many of these visits were employment-related, unrelated to the Property, or involved the purchase of items (such as tools) which the Applicant has retained. The Respondent also points to the involvement or primary performance of third parties on several of the projects the Applicant claims (for example, the moving of trees and the potting shed project, which the Respondent testified were performed primarily by contractors paid for by her and assisted by her nephew, respectively).
[29] While there may be circumstances in which a court can value work performed without expert testimony, a court cannot do so in situations where there is a dispute about the nature and extent of the work performed, as well as no evidence or agreement about the value of the work or materials contributed: Kyriacou at para 89. The Applicant incorrectly submits that it is the Respondent who bears the burden of disproving the Applicant’s claims. It is in fact the Applicant who bears the burden of proving his claims on the balance of probabilities. It is the claimant who bears the onus to prove the work he did and the value that should be attributed to that work on the balance of probabilities: Kyriacou at para. 90. In Kyriacou, the court found that the lack of credible corroboration rendered the claimant’s evidence “insufficient to meet the onus of proof:” Kyriacou at para. 89. On cross-examination, the Applicant was taken through multiple receipts which did not reflect building materials. Unrelated items included a rug, a de-thatcher, a thermometer, a drain pan, picture hangers, clothing, and antifreeze. Otherwise, the Applicant could not provide any evidence, including in his testimony, linking his purchases at various retailers to any specific project or the Property at all. The Applicant misidentified the businesses he purchased materials from (i.e. Abel Enterprises, which is an employment assistance program and does not sell flagstones) and failed to pursue records or testimony from third parties who could have supported his testimony about materials or labour purchased (i.e. failing to call the owner of Eising’s Greenhouses, who the Applicant claimed to have performed work for in exchange for flagstones upon which he ascribed an arbitrary value). The Applicant provided no independent evidence or legal authority to support his valuations and position on labour (expertise/skill and time required for these projects) and materials.
[30] In Kyriacou v. Zikos, 2021 ONSC 7589, when considering the credibility of the parties, the court opined upon the fact that much of what the parties testified about was “grey” (ambiguous or contradicted, sometimes with an attempted explanation for the discrepancy, but often not): Kyriacou at para 24. Ultimately, the court found that where there is no independent corroboration with contentious issues and/or the testimony had an air of implausibility, neither party’s testimony would be accepted: Kyriacou at para. 24. Much of the testimony in this case was “grey.”
Joint Family Venture
[31] The Applicant relies in his Amended Application on the claim that the parties were engaged in a joint family venture. Joint family venture is a question of fact, assessed having regard to relevant circumstances, such as: a. Mutual effort; b. Economic integration; c. Intention of the parties; d. Priority of the family; and e. Length of relationship: Derakhshan v. Narula, 2019 ONCA 742, at para. 14. The “use of funds for family purposes or situations where one spouse takes all may also indicate a pooling of resources. The more extensive the integration, the more likely it is that they have engaged in a joint family venture:” Derakhshan, at para. 15.
[32] However, where many of the traditional indicia of non-pecuniary contribution by persons claiming unjust enrichment are absent, such as there being no children of the relationship, no participation in a family business, limited expending of effort on joint ventures, lack of joint accounts or savings, equal contribution to day-to-day living expenses, and liability held with one party, there is no joint family venture: Washington v. Cesarini, 2022 ONSC 5574, at para. 48.
[33] The onus is on the claimant to substantiate the necessary elements of a claim in joint family venture, on the balance of probabilities. Where the evidence falls short of establishing mutual effort, economic integration, intent and priority of the family, the claim will fail: Washington, at para. 51. In this case, the only asset to which both parties contributed (albeit unequally) was the Property. There were no joint savings or pooling of resources. One joint bank account was used for the exclusive purpose of acting as a flow-through account. Monies that exchanged hands were primarily for the equal sharing of expenses or operated as loans. Often, and particularly when approaching large projects (such as the 2014 pool project) the parties specifically and separately made their contributions from their own funds, and not from joint/pooled resources.
[34] When considering a remedy based on joint family venture, it is generally appropriate to look at all family assets. It is notable in this case that the purchase of the Property was made possible by the Respondent’s pre-cohabitation assets. The Respondent was the sole owner of the property municipally described as 37 Lynn Park Avenue in Port Dover, which sold for $235,052.45 in 2014. The proceeds of sale of this Property formed the majority (74%) of the initial down payment for the Property. At the commencement of the parties’ cohabitation, the Respondent was a property owner, and the Applicant was not. Based on the parties’ most recent and respective financial statements, both parties are now property owners (the Applicant owns property in Langeland, Denmark, and the Respondent owns property in Port Dover, Ontario, Canada). The Respondent took on significantly more risk at the time of purchasing the Property. She contributed the proceeds from her previously-owned property and was primarily responsible for the mortgage secured to the Property. The Respondent managed and paid all Property-related expenses (in addition to managing a number of the Applicant’s personal expenses). The Applicant benefitted from the Respondent’s domestic labour in the management of his personal finances, for which he did not compensate her.
[35] In this case, the evidence supports the conclusion that there was a mutual, legitimate expectation that the parties would improve the Property. These efforts began immediately in 2014 with the pool project and the various projects that followed. Even where there is mutual effort to improve a property, however, this does not show mutual expectation as to how to deal with the equity created at the time of purchase and, therefore, cannot constitute a juristic reason for the enrichment related to, for example, a down payment: Kamermans v. Gabor, 2018 ONSC 5241, at para. 45.
Remedy
[36] Where unjust enrichment has been established, the court must consider the restitutionary remedies available – namely, a monetary or proprietary remedy: Kerr at para. 46. The first remedy to consider is always a monetary award: Kamermans at para. 50. In this case, a proprietary remedy by awarding the Applicant a remedial constructive trust interest in the Property is moot, as the Property has been sold.
[37] The Applicant provides no supporting jurisprudence to justify his position requesting a constructive trust interest in the Respondent’s current property, municipally described as 17 Spruce Grove Court in Port Dover, Ontario (the “Spruce Property”). Accordingly, this claim will be dismissed.
[38] The Applicant quantifies his claim for a monetary remedy, in the alternative to a remedial constructive trust, by seeking “at least half” of the net sale proceeds. The Trust Ledger Statement in evidence reflects a total purchase price of $889,889.37 and, less the mortgage and legal fees, net proceeds of $857,100.66. 50% of this would be $428,550.33. In Kerr, the court rejected a dichotomous approach to the monetary remedy: Kerr at para. 58. In doing so, it acknowledged the varying ways in which a money remedy may be assessed – such as those circumstances where (a) enrichment consists of the provision of unpaid services; (b) enrichment consists of an unrecognized contribution to the acquisition, improvement, maintenance or preservation of specific property; and (c) joint family venture (where the contributions of both parties over time have resulted in an accumulation of wealth): Kerr at paras. 59-60.
[39] A significant consideration at the restitution stage is the mutual conferral of benefits, as applied against determining adequate compensation: Kerr at para. 48. It is unjust to pay attention only to the contributions of one party in assessing an appropriate remedy, and it is enormously difficult for courts to create, retroactively, a notional ledger to record and value services rendered between the parties – what is colloquially referred to as “duelling quantum meruits:” Kerr at para. 48. Within the context of monetary awards, the court must also consider whether the award is calculated on a quantum meruit (fee-for-service or “value received”) basis or, alternatively, using the more flexible basis of “value survived,” referencing the overall increase in the couple’s wealth during the relationship: Kerr at para. 49.
[40] In this case, the Applicant requests that the court engage in duelling quantum meruits. The bulk of the Applicant’s closing submissions are comprised of a ledger-based approach to transactions that occurred between the parties. This approach is both problematic at law and to calculate, given the parties’ various transactions which were unrelated to the Property (i.e. business loans and vehicles purchases) and the mutual assertion of physical and domestic labour contributions.
[41] The Respondent contributed significantly to a number of projects. These contributions are substantiated through invoices, corresponding cheques, bank records, and the Respondent’s contemporaneous notes. The Respondent testified to her performance of domestic and physical labour for the Property, including but not limited to indoor maintenance, outdoor maintenance, painting, and landscaping. It is not necessary or desirable to conduct a line-by-line analysis of each task accomplished by each party and each expense incurred: Kamermans at para. 56. In rejecting the line-by-line “dueling meruits” approach in Kamermans, the court found that the parties each worked hard and that their respective contribution to tasks/projects were equal in value and a joint effort toward the increase in value of the house: Kamermans, at paras. 56-57.
[42] The Respondent adduced evidence of the large projects which she funded at the Property. While certain of those projects were paid in cash, the Respondent was able to provide evidence which corroborated the expenditures, between the existence of the project’s completion, her contemporaneous notes, and her peripheral financial transactions (such as reimbursing her daughter). The Respondent’s testimony on her projects and their values, when they were performed and by who, was consistent and credible. The Respondent was also prepared to acknowledge and admit to the Applicant’s contributions to the Property, even where cash was involved. The agreed-upon facts, supporting documentary evidence, and testimony reflects that the parties continued to contribute on an unequal basis to projects. For example, for the pool project, the parties’ contributions were on a 42% (Applicant) and 58% (Respondent) basis.
[43] In considering the appropriate remedy to unjust enrichment and joint family venture, the appropriate remedy is a share in the wealth proportionate to the claimant’s contributions: Kerr at para. 102. Determining the proportionate contributions of the parties is not an exact science that calls for the reasoned exercise of judgment in light of all of the evidence: Kerr at para. 102.
[44] I find that the Respondent continued to contribute to the Property at a higher rate than did the Applicant. While the Applicant did perform projects at the Property, there is no supporting evidence adduced as to their value and the Respondent also made significant contributions through her own labour (both physical labour in maintenance and improvement, as well as domestic labour such as managing the Applicant’s finances).
[45] Accordingly, I find that the proportional division of the Property should be on a 70% and 30% basis, or with the net equity of $857,100.66 divided with the Applicant to receive $257,130.19 and the Respondent to receive $599,970.46.
[46] Any payment to the Applicant must take into consideration that an interim disbursement was paid to the Applicant, in partial satisfaction of his claims, in the amount of $150,000.
Issue 2: Spousal Support
[47] There are three grounds for entitlement to spousal support: (1) compensatory; (2) contractual; and (3) non-compensatory: Bracklow v. Bracklow, 1999 CanLII 715 (SCC), [1999] 1 SCR 420. Every spouse has an obligation to provide support for him or herself and for the other spouse, in accordance with need, to the extent that he or she is capable of doing so: Family Law Act, s. 30.
[48] There is no domestic contract between the parties that would give rise to an entitlement to spousal support.
[49] The Respondent has not established an entitlement to spousal support from the Applicant on the basis of need or on a compensatory basis. She has not established that her income is lower than the Applicant’s by a material amount. Because of her non-disclosure of financial documents, and the uncertainty regarding her actual income from her Friday the 13th business (selling merchandise in Port Dover on days when the 13th of a month falls on a Friday, when there is a huge influx of motorcycle enthusiasts in the town), regarding which the Respondent admits she has not reported the income to the Canada Revenue Agency, her income cannot be reliably determined. The Respondent has not established that her career or earning potential was negatively impacted due to family obligations or as a result of her contribution to the Applicant’s career and earning potential over the course of the parties’ relationship. During the parties’ relationship, the parties were never financially dependent on the other. The parties paid and managed their personal expenses using their financial resources. The Applicant never advised the Respondent to take early retirement. This was her own decision. The Applicant never agreed or promised to provide the Respondent with financial support if she took early retirement. In her evidence, the Respondent did not provide any explanation or evidence that would establish any financial loss, struggle, detriment or deprivation she suffered because of her relationship with the Applicant. She has not established that her standard of living is drastically different from that of the Respondent or from the parties’ accustomed standard of living when they were together. Her lifestyle has not deteriorated after the date of separation. After the separation, she lives in a mortgage-free property, her income has increased, and her monthly expenses are lower than the ones she had during the parties’ relationship.
[50] The Respondent has not established a basis for the transitional spousal support of $25,000 which she seeks. The Respondent’s claim against the Applicant for spousal support is dismissed.
Order
[51] The Court Orders that:
The net equity of the Property of $857,100.66 shall be divided on a 30% and 70% basis, with the Applicant to receive $257,130.19 (inclusive of the $150,000 which he has already received), and the Respondent to receive $599,970.46; and,
There shall be no Order for spousal support between the parties.
Costs
[52] The parties are encouraged to agree upon appropriate costs. If the parties are not able to agree on costs, they may make brief written submissions to me (maximum three pages double-spaced, plus a bill of costs) by email to my judicial assistant at mona.goodwin@ontario.ca and to Kitchener.SCJJA@ontario.ca. The Respondent may have 14 days from the release of this decision to provide her submissions, with a copy to the Applicant; the Applicant a further 14 days to respond; and the Respondent a further 7 days for a reply, if any. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs as between themselves. If I have not received any response or reply submissions within the specified timeframes after the Respondent’s initial submissions, I will consider that the parties do not wish to make any further submissions, and will decide on the basis of the material that I have received.
M.R. Gibson J.
Date: September 09, 2024
COURT FILE NO.: FC-21-7 (Simcoe)
DATE: 2024/09/09
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
PALLE SORENSEN
Applicant
– and –
MARGIT BARBARA WAMSLEY
Respondent
REASONS FOR decision
M.R. Gibson J.
Released: September 09, 2024