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Remember, it is a Rebuttable Presumption of Resulting Trust – Cvetkovic v. Perrier AND Perrier v. Cvetkovic

Cvetkovic v. Perrier[1] concerns competing claims to ownership of properties known as 192 and 194 Wentworth Avenue in Kitchener, Ontario (the “property”). Ms. Cvetkovic (the “applicant”) claims ownership of 100% of the property while Mr. Perrier (the “respondent”) claims 50% ownership.

The property was purchased in 1996 by the applicant’s parents. In 2003 title was transferred from the parents to the applicant and her sister. In 2008, the sister asked the applicant to buy out her interest in the property. The applicant agreed and sought out a mortgage.

The applicant was unable to obtain a mortgage on her own and asked the respondent, her boyfriend at the time, to co-sign. The lawyer acting for the applicant sent a letter to the bank stating that the property would be held such that the applicant would own 90% and the respondent would own 10%. The bank rejected this and demanded that the parties be registered on title as 50% co-owners of the property. The applicant agreed.

The applicant took the position that the respondent did not hold beneficial interest in the property. Rather, the respondent held 50% interest in trust for the applicant. Her plan was to rent out the property to help pay for the mortgage and did not expect the respondent to pay the mortgage or any expenses. Shortly after closing the property, the respondent moved into the property and paid less than $1,000.00 per month.

Relying on Precore v. Precore[2], the applicant maintained that the transfer respondent was gratuitous, as the respondent gave no value for the property thus giving rise to a resulting trust.

The respondent, however, was under the assumption that he, in fact, owned a percentage of the property though he was unclear on what exactly that percentage was. It was discovered in 2016 that the respondent was paying more than one half the expenses on the property and it was not until he requested that the property be sold that the applicant took the position that the respondent was not a 50% owner of the property.

Cheques from the respondent were made payable to CIBC which were being applied to the mortgage and not collected as rent. Further, a review of the evidence determined that the respondent was, in fact, paying half of the mortgage and guaranteed it in full.

Given the lack of any evidence establishing the intention to create a trust and no indication of a gratuitous transfer, the court determined that both parties borrowed money from CIBC and held an equal interest in the property.

[1] 2019 ONSC 1634

[2] 2007 SCC 17

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