BACKGROUND
This case was uncontested which means that only the party making the claim (the Applicant) provided evidence and submissions. The parties began living together in February of 2014 and separated on July 31, 2023. As of the trial date, the Applicant, Ms. Salgado, and Respondent, Mr. Sabando, were both still living at their home purchased in July of 2015. The Applicant owned 99% of this home and the Respondent owned 1%.
In December of 2017, the parties started a business together when they purchased the Tenoch Restaurant in Toronto (“Tenoch”). The Applicant retired from her previous cleaning job to help operate Tenoch. Although the couple jointly funded the purchase through a shared savings and credit, Tenoch is held by a company where the Respondent is the sole shareholder, and the Applicant was not given a salary.
When the parties separated, the Applicant served the Respondent with her Application Record, however, he did not respond, file material, nor any financial statement. Ultimately, the Respondent did not take part in the proceedings whatsoever.
ISSUES
- Should temporary and permanent spousal support from the date of separation be awarded to the Applicant?
- Should the sale of the home be ordered with the division of the proceeds being in accordance with the parties’ ownership share?
- Should the Applicant be entitled to 50% ownership of the restaurant business by virtue of resulting trust?
ANALYSIS
- Spousal Support
Applying section 29 of the Family Law Act and Kelly v Kelly 2016 ONSC, the parties have cohabitated continuously for more than three years, establishing the Applicant as a “spouse” for the purpose of entitlement. Based on factors outlines in section 33(9) of the Family Law Act, the mutual contribution to the success of Tenoch, and the Applicant’s decision to leave her paid employment to work, unpaid at Tenoch entitles her to compensatory spousal support. She is also entitled to non-compensatory spousal support due to the length of relationship and her stage in life, needing support at age 67. The court found the Respondent able to pay spousal support based on the profitability of the restaurant and the Applicant’s estimate of the Respondent’s income. Accordingly, the court imputed annual income of $200,000 to the Respondent and granted the Applicant’s request for mid-level spousal support.
- Resulting Trust Claim to 50% Share in Tenoch
Per the Ontario Court of Appeal in Andrade v Andrade 2016 ONCA, an example of a “classic resulting trust situation” is “where a person advances a contribution to the purchase price of property without taking legal title”. According to Pecore v Pecore 2007 SCC, this resulting trust is a presumption that can only be refuted by demonstrating that the monies provided were given as a gift. The uncontested evidence available showed that the Applicant, together with the Respondent, financed and worked to make their restaurant a success. The court ordered that the Applicant was, therefore, entitled to own 50% of the restaurant and its income.
- Order for Partition and Sale of Home
The Applicant requested an order for the sale of the home and for the proceeds to be divided in accordance with the ownership share (namely, 99% for the Applicant and 1% for the Respondent). The Court cited Kamil v Bouchir 2024 ONSC in declaring that the sale should be granted unless the moving party is conducting themselves in a “malicious, vexatious, or oppressive” manner toward the responding party in relation to that sale. Since there was no evidence of oppressive or malicious impact on the Respondent, the Court granted the sale as requested.
CONCLUSION
The Court ordered the Respondent to pay retroactive spousal support in the amount of $2,625 per month lasting for the period of time between the separation date of the parties and the date of this judgment. The Court further ordered the parties’ home to be listed and sold with the net proceeds being divided 99% to the Applicant and 1% to the Respondent. The Court lastly ordered that the Respondent holds 50% of the Tenoch Restaurant in trust in favour of the Applicant.
This case is a cautionary example of the importance of filing materials and actively participating in court proceedings.