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division of assets
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BACKGROUND

The Plaintiff Aghdasi (the “Plaintiff”) and the Defendant Asiyaban (the “Defendant”) were common-law partners from 2002 until 2017. During this relationship, the parties operated a property business together wherein they purchased various properties in each other’s names or jointly to rent, renovate or sell for a profit. The litigation concerns two of those properties. The first, located on Deerfield Avenue (the “Deerfield Property”) was owned on title by 2468692 Ontario Ltd (“262 Corp.”). This corporation was solely owned by the Defendant. The second property, located on Ellis Avenue (the “Ellis Property”) was owned on title by the Plaintiff who had already sold the property at the time of the trial.

The Plaintiff sought a declaration that the Deerfield property was jointly owned by herself and the Defendant as well as declaration for resulting trust or constructive trust as a remedy for unjust enrichment against the Defendant. The Plaintiff also claimed damages against the sales proceeds of the Ellis Property, arguing that the price was distressed by the Defendant unreasonably registering a Caution and Certificate of Pending Litigation (“CPL”) against the property.

In contrast, the Defendant sought a declaration that all the properties the parties had acquired and sold during their relationship were part of a joint family venture (“JFV”). This was specifically directed toward the Ellis Property wherein the Defendant was not on title.

ISSUES

  1. Is the Plaintiff entitled to a 50% interest in the Deerfield Property by way of purchase money resulting trust or by constructive trust as a remedy for unjust enrichment?
  2. Does the Defendant have a claim to 50% of the proceeds of sale of the Ellis Property by virtue of resulting trust or by way of constructive trust as a remedy for unjust enrichment? As part of this analysis, can the parties’ relationship in respect of the Ellis Property or otherwise be characterized as a JFV?

ANALYSIS

The Court found that the Plaintiff made out the case for resulting and constructive trust for the Deerfield Property. The parties bought the property did the numbered corporation for tax reasons. The Plaintiff provided the deposit, two additional payments and held a private mortgage for the property which was also registered on another property that the Plaintiff solely owned. Furthermore, funds provided by the Defendant to finance the Deerfield purchase could not be separated from the Plaintiff’s contributions. The Plaintiff had provided $95,000 to purchase the Defendant’s property which was sold to purchase the Deerfield Property. The Defendant attempted to rebut the resulting trust presumption which arose in that he repaid funds to the Plaintiff in a supposed refinancing of the Deerfield Property when shares of the 262 Corp. were distributed solely to him (262 Corp. was the mortgagor of one of Deerfield’s mortgages). The Court disagreed with this argument as this was not evidence that the Plaintiff’s contributions had ever been repaid.

Regarding the Ellis Property, the Court found the Plaintiff bought the property with her own funds. the Plaintiff temporarily advanced money to discharge mortgages for the Deerfield Property using the proceeds of sale from one of her previously solely owned properties. She then took these funds from one of the Deerfield Property’s other mortgages to purchase the Ellis Property. This was deemed repayment of her previous financing of the Deerfield Property. The Plaintiff conducted renovations on the Ellis Property and all bills were in her name. The evidence submitted by the Defendant of his contributions included fake invoices and other claims that generally were not credible given his absence of supporting documents. The Court further found the parties were not engaged in a JFV. Though they agreed to share certain properties, both parties had properties they operated on their own. Their finances were not fully integrated.

CONCLUSION

The Court found that 246 Corp. held the Deerfield Property as to 50% on behalf of the Plaintiff either by way of resulting or constructive trust as a remedy for unjust enrichment. The threshold for constructive trust was further met as there were concerns the Defendant would not pay a monetary award. The Court also dismissed the Defendant’s claims for JFV and an interest in the Ellis Property.