“The Respondent argues that his unequal financial contributions to the Property unjustly enriched the Applicant. He points to payments for a bridge financing loan, closing costs, a larger down payment, mortgage loan installments, property taxes, and home insurance.
The Applicant opposes the Respondent’s claims, asserting entitlement to a fifty percent (50%) legal or beneficial interest in the Property, thereby precluding an unequal trust. She bases her claim on her financial and non-financial contributions to the domestic partnership, which benefited the Respondent. She contends that the Respondent’s financial contributions at the time of purchase were not intended as a gift, considering their long-standing relationship and lifestyle.
As established in Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, at para. 20 (“Pecore”), a resulting trust is founded on the obligation to return property to the original title holder. This obligation arises when the current title holder acts as a fiduciary or has provided no consideration for the property. While legal title is typically held by the trustee, equitable title may also be held in exceptional circumstances.
There is a rebuttable presumption of resulting trust that generally applies to gratuitous transfers; because equity presumes bargains, not gifts: Pecore, at para. 24. However, as noted by Cory, J., this presumption depends on the relationship between the transferor and the transferee. In certain relationships, such as between spouses or parent and child, the presumption of a resulting trust does not arise. Instead, there will be a presumption of advancement: Pecore, at paras. 27-28.
The “judge will commence the inquiry with the applicable presumption and will weigh all of the evidence in an attempt to ascertain, on a balance of probabilities, the transferor’s actual intention”: Pecore at para.44; Chechui v. Nieman, 2017 ONCA 669, 136 O.R. (3d) 433, at para. 59.
Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269 (“Kerr”), is a leading case regarding trust claims in domestic relationships. The crucial element in both situations is the “gratuitous” nature of the transaction. The absence of an exchange of value leads the law to presume that a gift was not intended.
The common law of unjust enrichment recognizes that some unmarried domestic arrangements, may justify remedies when one party disproportionately retains assets acquired through joint efforts. Such sharing, however, is not presumed, nor is it presumed that jointly acquired wealth will be equally shared. Cohabitation alone does not entitle one party to another’s property or other relief. However, where there are joint efforts, demonstrated by the nature of the parties’ relationship and dealings, that led to wealth accumulation, unjust enrichment law should provide a remedy. It is an equitable remedy. The circumstances of the relationship should be considered, focusing on how they actually lived their lives rather than how they should have lived their lives: Kerr, at paras. 85-87.
Relevant factors to consider in domestic relationships include the parties’ mutual effort, their economic integration, their actual intentions, and their prioritization of the family: Kerr, at para. 89.
There is no dispute that there was a disproportionate share in the downpayment for the purchase of the Property. The Applicant paid $50,000 and the Respondent paid $100,000 toward the downpayment. The Respondent paid the additional expenses relating to the transfer of the Property at the time of purchase. The Respondent subsequently paid for the mortgage, taxes and insurance.
At the time of the purchase of the Property, however, the evidence does not support that the Respondent’s higher financial contributions to the Property were intended to be a gift. The conduct of the parties shows that there was an intention that the Property be held jointly with an equal sharing. In this case, it is compelling that the parties were in a long-term domestic relationship by the time they purchased the Property. As explained in more detail below, they had, and continued, to manage their financial affairs in the same manner prior to purchasing the Property, with the Respondent disproportionately paying for the lifestyle they enjoyed together.
It is undisputed that they regularly sought financial advice together as a couple, engaged in income splitting and other tax planning strategies, including financial planning for retirement. The parties shared their lives and wealth during their relationship. The Respondent was the higher income earner both before and after retirement. He holds significant assets, substantially higher than the Applicant. The Respondent accepts that he paid the “lion’s share” of their expenses throughout.
While the Respondent paid for the Property’s direct expenses, the Applicant contributed to other jointly beneficial expenses and provided domestic services, as well as enhancements to the Property. The Applicant’s contributions included purchasing groceries, home furnishings, managing renovations, performing most of the domestic chores, and jointly caring for the Property and their animals.
This conduct, in my view, supports a finding that the parties operated under shared, perhaps unspoken, understandings or assumptions about their future together, before and after they purchased the Property.”
