Resulting Trusts and What It Means to Pay for the House

October 3, 2017 David M Smith Uncategorized Tags: 0 Comments

There are many cases that consider whether a resulting trust is created in respect of real estate. The question that arises is whether the person with legal title to real estate is in fact the true owner or whether, because of contributions made by another, the property should “result” or be returned to the person who actually contributed the proceeds required to purchase the property.

In Andrade vs. Andrade, the Ontario Court of Appeal considered a lower court decision in which the Trial Judge had found that a woman named Luisa who lived in a house had not paid for the house and could therefore not establish an entitlement based on resulting trust.

What is most interesting about the decision of the Court of Appeal is that, in reversing the lower court decision, it peeled the onion on what actually constitutes a financial contribution by someone who purports to be beneficially entitled to real estate:

  •  Luisa paid down the mortgage with money given to her by her children who resided with her.  But it was her money: “once the working children gave their paycheques to Luisa…[it] was no longer their money because they made a gift of it to their mother, knowing she would use it to support the family.”
  • Likewise, the rental income was Luisa’s money: “Luisa was the only person…who advertised for and negotiated with prospective tenants and collected their rent.”
  • And, lastly, Luisa had other sources of money: “Luis received old age security benefits commencing in 1990… and in 2003 she received a settlement of $21,000.”

The takeaway from the case would appear to be that the determination of whether someone paid for a house requires a thorough analysis of the source of the moneys rather than simply looking for cancelled cheques directly written by the purported beneficiary.

Thanks for reading,

David Morgan Smith

Find this blog interesting? Please consider these other related posts:

Resulting Trusts – Protect Yourself

The Purchase Money Resulting Trust

Resulting Trust Reverberations

 

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