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Trusts - Resulting Trusts (4). Alami v. Haddad
In Alami v. Haddad (Ont CA, 2025) the Ontario Court of Appeal considered a resulting trust situation on appeal:(1) Presumption of resulting trust
[13] The wife argues that the trial judge erred in law and in fact in finding that the husband had a beneficial interest in the former matrimonial home pursuant to the doctrine of resulting trust. She says that because the parties had already divorced by the time he claimed a resulting trust interest in the home, s. 14 of the Family Law Act, R.S.O. 1990, c. F.3, had no application because it refers to “spouses” and not “former spouses.” Further, she states that the trial judge erred in her application of the law to the facts.
[14] The trial judge did not err in applying the doctrine of resulting trust to the determination of ownership of the former matrimonial home. Section 10(1) of the Family Law Act authorizes the court to determine questions of title between spouses. This includes whether legal title actually reflects beneficial ownership. Before property can be equalized, a court must determine the net family property of each spouse. This requires that questions of title be settled: Martin v. Sansome, 2014 ONCA 14, 118 O.R. (3d) 522, at para. 47; Rawluk v. Rawluk, 1990 CanLII 152 (SCC), [1990] 1 S.C.R. 70, at p. 91. In other words, “property entitlements must be determined before they can be equalized”: Korman v. Korman, 2015 ONCA 578, 126 O.R. (3d) 561, at para. 25.
[15] The general rule for gratuitous transfers is that the rebuttable presumption of resulting trust applies. Where a transfer is made for no consideration, the onus is on the transferee to show that the gift was intended: Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, at para. 24. As previously set out by this court, “[t]he presumption of resulting trust flows from the principle that equity presumes bargains and not gifts”: Belokon v. Krygyz Republic, 2016 ONCA 981, 136 O.R. (3d) 39, at para. 56, leave to appeal refused, Entes Industrial Plants Construction & Erection Contracting Co. v. Kyrgyz Republic, [2017] S.C.C.A. No. 74; Qu v. Zhang, 2025 ONCA 391, at para. 11. The presumption may be rebutted on a balance of probabilities by evidence that the transferor intended the transfer to be a gift: Qu, at para. 12; Pecore, at paras. 24,43. The function of s. 14 of the Family Law Act is to codify this equitable doctrine for spouses specifically, and provide two exceptions to the presumption.
[16] On the evidence before her, the trial judge found that both parties contributed the funds used to purchase their first home in 1999, which was registered in the wife’s name alone. When the first home was sold, the proceeds were put towards the second home, which was purchased in 2004. She found it “highly improbable” that the wife alone had provided the funds for purchase of the first or second home, given her evidence that she was primarily responsible for the care of their young children and earned a modest income at that time. She considered the husband’s evidence that he was the primary breadwinner and that he paid most of the purchase price of the homes. She found as a fact that the husband had contributed financially to the acquisition of the second home, and that he did not intend to gift his interest to the wife. These findings were available to the trial judge and we see no palpable and overriding error.
[17] Having found that the general presumption of resulting trust as set out in Pecore applies, it is unnecessary to address the wife’s argument that s. 14 of the Family Law Act, does not apply to former spouses or the reference by the trial judge to that section. In the circumstances of this case, it is of no consequence.
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