Clancy v. Gough, 2011 ABQB 439

Court of Queen ’ s Bench of Alberta Citation: Clancy v.

Gough, 2011 ABQB 439 Date: 20110711 Docket: 0801 01802 Registry: Calgary Between: Michael Clancy and Catherine Clancy Plaintiffs - and - Mary Gough, Paul Gough, Heather Gough, Steven Gough, Sean Gough, Carol Bancroft, Barry Pearse, Cheryl Young, Doug Christensen, Kevin Christensen, Alvin Malin, Gerry Malin, Julie Gough, Terry Zimmerman, Drew Devries, Darryl Lyczewski, Sherry Lyczewski, Roger Blackwood, Jerry Blake, Albert Johnson and Robert Airth Defendants And Between: Mary Gough, Paul Gough, Heather Gough, Steven Gough, Sean Gough, Carol Bancroft, Barry Pearse, Cheryl Young, Doug Christensen, Kevin Christensen, Alvin Malin, Gerry Malin, Julie Gough, Terry Zimmerman, Drew Devries, Darryl Lyczewski, Sherry Lyczewski, Roger Blackwood, Jerry Blake, and Robert Airth Plaintiffs by Counterclaim - and - Michael Clancy, Catherine Clancy, Interprovincial Lottery Corporation and Western Canada Lottery Corporation Defendants by Counterclaim

_______________________________________________________ Reasons for Judgment of the Honourable Madam Justice S.M. Bensler _______________________________________________________ I. Introduction [ 1 ] The Plaintiffs, Michael and Catherine Clancy were regular participants in a lottery pool at the Elks Club in Okotoks, Alberta. On November 23, 2007, a Super 7 lottery ticket, purchased that evening, was the winning ticket of a $20 million jackpot. The issue in this case is whether the Plaintiffs are entitled to two shares of the lottery winnings. II.

Facts [ 2 ] The Plaintiffs were regular patrons of the Elks lounge in Okotoks since the 1990's. A lottery pool was initiated by some patrons where money would be collected if the lottery jackpot for the Super 7 or 6/49 exceeded $10,000,000. Some people participated regularly including the Plaintiffs, Messrs. Albert Johnson, Kevin Christensen, Randy Burns and Drew Devries, but the lottery pool was open to anyone who wanted to buy a share for $5. Mrs. Clancy was in charge of collecting money for many years until she encountered health issues in March 2007. Then, Mrs. Mary Gough took over.

The Plaintiffs had a disagreement with some people at the lounge in September of 2007. They stopped attending the Elks Club around that time period, but were still participants in the lottery pool. In fact there is evidence that they participated in every pool except for the November 23, 2007 Super 7 draw. On November 23, 2007, they did not attend the Elks lounge.

Their names did not appear on the envelope used to collect the money for the shares for the November 23, 2007 Super 7 draw, but their names appeared on the 6/49 draw for November 24, 2007. [ 3 ] The parties have filed an Agreed Statement of Facts which states: 1. On November 23, 2007, Mary Gough was given money by a number of the Defendants who will be identified at trial, to be used for the purchase of Super 7 lottery tickets for the prize to be drawn November 23, 2007.

Mary Gough purchased Super 7 tickets with the funds and one of the tickets purchased was the winning ticket of the $20 Million prize (the "Prize"). 2. The Plaintiffs made a claim for a 2/23 interest in the Prize. The claim of the Clancys is not admitted by the remaining Defendants (the remaining Defendants are all Defendants except for Albert Johnson). 3.

The Plaintiffs and the Defendants, including Albert Johnson, agreed that Interprovincial Lottery Corporation ("ILC") would pay the Prize to Fraser Milner Casgrain LLP ("FMC"), and that the monies would be invested in an interest-bearing trust account, and distributed or held subject to the terms and conditions described below. 4. ILC paid to FMC the sum of $20,048,541.80 (the $20 Million Prize plus interest) (the "Funds") on or about the 11th day of January, 2008. 5. By agreement of the parties, 21/23rds of the Funds were distributed to the remaining Defendants, including Albert Johnson. In

relation to that distribution of funds, the Plaintiffs, for themselves, their heirs, executors, administrators, successors and assigns, remised, released and forever discharged FMC and the Defendants of and from all manner of action and actions, cause and causes of actions, suits, debts, dues, sums of money, general damages, cross-claims and demands whatsoever at law or in equity, which the Plaintiffs ever had or now have or which they can, shall or may have by reason of any matter, cause or thing whatsoever existing up to and including the date of distribution. 6. 2/23rds of the Funds ($1,743,351.47) were placed in an interest-bearing trust account by FMC, on the terms and conditions that the funds not be released to any party except in the following event: (

a) Upon an Order or Judgment of the Court of Queen's Bench directing the payment of the remaining funds, after all appeal periods have expired or after any determination of a higher Court; or (

b) The Defendants, including Albert Johnson, and the Clancys agree to a direction for the payment of the Funds plus interest earned thereon (the "Remaining Funds"). 7. The Remaining Funds have been held in an interest-bearing trust account by FMC and as at September 14, 2010, the Funds, including interest, are in the amount of $1,795,057.47. 8. Since the deposition of the Funds in FMC's trust account, the financial institution holding the Funds has issued T-5 statements in relation to the interest income earned on those funds. The T-5 forms for the 2008 and 2009 tax years are attached to this Agreement.

Counsel for the parties agreed that the Defendants including Albert Johnson, would include the interest income in their tax returns and have paid taxes on the interest income. The Plaintiffs have not paid any tax on the interest income. It is agreed that if it is ultimately determined by a Court that the Plaintiffs are entitled to any share of the Remaining Funds, then the amount of that share must be adjusted for the taxes paid on the interest income by the Defendants. III.

Positions of the Parties [ 4 ] In their Statement of Claim, the Plaintiffs plead breach of contract, resulting or constructive trust arising from the payment of funds to Mr. Kevin Christensen, unjust enrichment and negligence. However, at trial, counsel for the Plaintiffs said that the case and the thrust of the evidence is that there was an arrangement or an agreement between approximately six parties: Transcript, p. 93. The Plaintiffs argue that the content of the agreement is that the members of the core group being the Plaintiffs, Messrs.

Kevin Christensen, Albert Johnson, Randy Burns and Drew Devries all agreed that they would ensure that everyone was entered for the lottery pool if they could not attend the Elks lounge to personally pay their $5 per share. The Plaintiffs submit that Mrs. Gough knew of the agreement and that they are therefore entitled to two shares of the lottery winnings. [ 5 ] The Plaintiffs seek judgment or alternatively damages against the Defendants jointly and severally in the amount equal to 2/23 of the lottery winnings or $1,739,130.43.

The Plaintiffs seek a declaration that the Defendants hold this amount as trustees for the Plaintiffs. In the alternative, they seek judgment or alternatively damages against the core group jointly and severally in this amount. Of note, the members of the core group referred in the Plaintiffs' Statement of Claim differ from what the Plaintiffs described at trial.

In the alternative, the Plaintiffs seek a declaration that the core group holds an amount equal to 2/23 of the lottery winnings or $1,739,130.43. [ 6 ] In this judgment, "Defendants" mean all the Defendants except for Albert Johnson unless otherwise specified. [ 7 ] The Defendants argue that no agreement existed and that the Plaintiffs' missed opportunity is not sufficient to extend liability against the Defendants. They argue that there was no breach of trust nor breach of fiduciary duty.

The Defendants argue that this is not a typical lottery case where all the winners of the lottery pool have a non-arm's length relationship with each other or where there is a lottery pool with the same people who enter draws together each week. In this case there was no common intention, fiduciary duty or trustee relationship. They argue that in the case at bar, there was an ad hoc collection of money paid by some individuals who regularly participated and, others who occasionally participated, and others who were first time participants.

They submit that some of the Defendants did not even know who the Plaintiffs were on November 23, 2007. The Defendants argue that the evidence shows that the collection of money was not done on a regular or frequent basis particularly considering that the April 4, 6 and 13, 2007 draws

represented one collection (April 4) and replay of winning tickets (April 6 and 13) and that there were no collections for draws in the summer months. [ 8 ] Further, the Defendants submit that, in light of the evidence, none of the members of the alleged "core group" were acting as agents for the others in the collection of money at any material time. Therefore the claim against the remaining Defendants must fail. They argue that based on the Plaintiffs' own testimony, the Plaintiffs never looked to or expected any of the Defendants, except they allege Mr.

Kevin (Barney) Christensen, to buy them a ticket the night of November 23, 2007. [ 9 ] Generally, the Defendants submit that other lottery cases decided by the courts are of little assistance to determine any general principles of law applicable to these circumstances other than the principles applicable to assessing credibility. The Defendants argue that the issues are dependent on the credibility of the witnesses. IV.

Analysis [ 10 ] The Plaintiffs have the burden of proof to establish that they had an interest in the winning ticket of November 23, 2007 and that they are entitled to two shares of the lottery winnings. A. Whether there was an agreement 1. Evidence [ 11 ] From the evidence presented at trial, the way the lotto pool worked was that every share was worth $5. Starting from 2003, collections were done for any Lotto 6/49 or Super 7 pot starting around $10,000,000. The pots for each draw were kept separately. The lottery group was open to everyone. Mrs. Clancy did the collecting up to March 2007 at which point Mrs.

Mary Gough took over. Mrs. Mary Gough said at trial that people would give her $5 per share and she would write their names on an envelope. [ 12 ] At trial, except for Mr. Drew Devries, the core group members agreed that there was a discussion with respect to what would happen if a jackpot was won and they were not part of the lottery pool. However, they did not all see this conversation as a binding oral agreement. [ 13 ] One of the main issues in this case is whether there was an agreement and a meeting of the minds.

In an effort to determine the intention of the parties, I have included several direct quotes from the witnesses' testimonies given at trial.

a) The Plaintiffs [ 14 ] At trial, the Plaintiffs testified that in approximately 2003, there was a discussion at the Elks Club in Okotoks between themselves and Messrs. Randy Burns, Albert Johnson, Kevin Christensen and Drew Devries, to which the Plaintiffs refer to as the "core group". Mr. Clancy testified that during that discussion, Mr. Randy Burns said that the last thing he needed was that the lottery be won without him being part of the group. Mr. Clancy said that he suggested that the core group buy into the lottery pool for any of them who were not present for the draw. Mr.

Clancy testified that the core group agreed that if a person was not present for a big draw he would not miss it as someone else would be obligated to buy his tickets. According to Mr. Clancy, this arrangement was faithfully fulfilled from that point until at least November 23, 2007. At trial, Mr. Clancy said that although he could not swear to it, he thought that Mrs. Mary Gough had to have known about this arrangement of putting in for other people who were not present. [ 15 ] At trial, Mrs. Clancy said that in approximately 2003 or 2004, there was a discussion among the core group.

The members of the group did not want to be excluded if, for whatever reason, someone could not be present the night of the collection. Mrs. Clancy said that she was quite sure that Mr. Randy Burns brought this up. Mrs. Clancy's understanding was that the core group was all in agreement.

During the discussion, Mr. Randy Burns proposed that the group would cover for each other if, for one reason or another, a member of the group was not present. Mrs. Clancy testified that as near as she could tell, it was totally agreed upon by all the members of the core group. To her knowledge, the core group honoured the agreement. She said that there was no requirement for anyone to pay in advance, nor was there any expectation that anyone would have to specifically ask to be put in or specify which draw they wish to be included in. Mrs.

Clancy said that she was not aware of any change in the core group's arrangement when Mrs. Gough took over. Mrs. Clancy said at trial that Mrs. Gough saw that people were putting monies in for other people. [ 16 ] The Plaintiffs testified that if there was a lottery pool they participated 100% of the time. They were not always present at the Elks Club, but they expected that people would cover for them and ask them for money afterward. [ 17 ] On November 24, 2007, the day after the winning draw, the Plaintiffs saw Mr. Kevin Christensen who told them that they owed him $20. Mr. Clancy paid. Mrs.

Clancy testified that she knew that the money was for lotteries, as that would be the only reason that the Plaintiffs would owe him money. Mrs. Clancy further testified that the $20 would represent two draws for herself and two draws for her husband at $5 per draw per person. Mrs. Clancy said that Mr. Kevin Christensen did not specify what he was collecting for and he did not tell her that he had only put her in for one of the two draws nor that it was for some other type of debt or earlier draw. She explained that Mr.

Kevin Christensen would typically seek reimbursement the very next time he saw them. [ 18 ] The Plaintiffs did not understand the fact that they were not put in for the winning draw. They were devastated.

b) Mary Gough [ 19 ] Mrs. Gough said at trial that she was aware that some people purchased tickets for others. For instance, Mr. Kevin Christensen would pay for Mr. Doug Christensen and a lot of times he paid for the Malin brothers. She said that Mr. Albert Johnson would pay for the Plaintiffs and that Ms. Cheryl Young would pay for her daughter and her husband. Mrs. Gough said that Mr. Drew Devries very seldom bought tickets for others, he bought only for his wife. However, Mrs. Gough said that she was not aware of any obligation on anybody to cover for somebody else in case they were not there.

She said that nothing was said to her about any rules or a core group. Mrs. Gough said at trial that she did not feel under an obligation to ensure that any particular person had his name on the envelope. She testified that if no money was provided, a name would not be listed on the envelope. At trial, Mrs. Gough presented a chart which showed that the Plaintiffs were always participants except for the November 23, 2007 draw. [ 20 ] On November 23, 2007, Mrs. Gough collected the money for the November 23, 2007 Super 7 draw and the November 24, 2007 Lotto 6/49 draw.

They were both big jackpots so it was her practice to collect for both. Mrs. Gough arrived at the Elks lounge at 4:30 p.m. and handed Ms. Carol Bancroft two envelopes with her family's names on them and asked her if she would have anyone that came in, put their names on and she would be back. Mrs. Gough then went over to the Christmas bazaar and then over to a store where she ran into a friend. She returned to the Elks lounge at about 5:45 p.m. [ 21 ] Mrs. Gough went in and asked Ms. Bancroft where the envelopes were. Ms. Bancroft told her that she only put her name and Robert Airth's name on.

She told her that the envelopes were behind the bar. Mrs. Gough said that she went up to the bar and that people started to come up to her right at the bar. She had her two envelopes and started taking names and making change. She gave the 6/49 envelope to Mr. Kevin Christensen because she still had people she had to go around to and she continued with the Super 7 envelope. Mr. Kevin Christensen continued collecting money and names for the Lotto 6/49 draw. [ 22 ] Mrs. Gough was getting ready to run across the street and saw Ms. Julie Gough and Mr. Terry Zimmerman, her sister-in-law and her boyfriend.

She thought she had 18 names on the list, so she decided she would get two more names as then she would have 20 names for a $20,000,000.00 jackpot. She did not realize that Darryl and Sherry Lyczewski's names were on the same line. As a result, there were 21 names for the $20,000,000.00 Super 7 jackpot. Mrs. Gough said that the Plaintiffs were not at the Elks lounge that night and no one put in for them. Their names did not appear on the envelope. To her knowledge, the Plaintiffs did not pay any money towards the winning Super 7 ticket after the fact. [ 23 ] Mrs.

Gough found out about the win on Saturday, November 24, 2007 at about 8:30 a.m. She did not inform anyone beyond her family of the win on that day. Calls were made to the lottery corporation on Monday morning. Mrs. Gough and Mr. Steven Gough started contacting the winners. They told everyone there was going to be a meeting on November 27, 2007 underneath the Elks lounge. The purpose of the meeting was to inform the winners of what the lottery board needed and to move matters forward. Near the end of the meeting, Mr. Johnson asked who was going to tell the Plaintiffs.

Someone said that they should keep it on the low-key until they found

out what was happening. Mr. Johnson had been drinking and was upset. Mr. Kevin Christensen had put the Plaintiffs in for the 6/49 and not the Super 7. He told Mrs. Gough that "he didn't have much money on him that night, and he put them in for the larger draw". Mr. Kevin Christensen said the $20 that Mr. Clancy had given him at In Cahoots on November 24, 2007 was for the 6/49 on November 16 and 24, 2007.

c) Core Group [ 24 ] The members identified by the Plaintiffs as part of the core group are not all in agreement as to whether there was in fact an agreement and what individuals agreed to be bound. Moreover, the evidence shows that even if there was an agreement among the members of the core group, it was not faithfully followed.

d) Randy Burns [ 25 ] At trial, Mr. Burns said that often people would put in for one another and said that it was expected in some circumstances. He said that if he was not there, Mr. Johnson would typically put in for him. If Mr. Johnson did not, then Mr. Clancy would. Mr. Burns testified that an arrangement was discussed in a roundabout way. He did not think they ever sat down and said the way it was going to be, but he said that at one point there was a discussion about, "if I'm not here, put me in." He thought what had precipitated the discussion at one point was Mr.

Kevin Christensen would say "you know, come on, you know, 5 bucks let's go and if you wouldn't, he -- he would go, you know, if I don't win -- you know, if you don't go in and I win, then I'm going to, you know, gloat a bit about it." That prompted them to say if we are not there then they expected to be in. This agreement was amongst himself, the Plaintiffs and Albert Johnson. Mr. Burns testified that he was sure Mr. Kevin Christensen had heard him. He also thought that Mr. Drew Devries had heard that same kind of conversation. Mr.

Burns testified that "I wouldn't say I initiated it, I would say it evolved, sort of, you know -- I didn't organize it, I didn't formalize it, it just -- you know, it was just -- you know, none -- none of this took on that kind of importance and -- of course until there was $20 million won.

You know, so it's really difficult for me to say the rules were established beforehand or they weren't, but it was -- it was -- it was an agreement between those -- that group of people that we should kind of stick up for each other but -- that's my feeling..." He testified the following day that he remembered how it started was by Mr. Kevin Christensen mentioning that if they did not have their money in, he would do this "na-na-na-na-na thing" on the horn of his car by their houses, Mr. Burns' house in particular. This precipitated the conversation between the Plaintiffs, Messrs.

Kevin Christensen, Drew Devries, Albert Johnson and Randy Burns that "if we're [sic] here, we want to be in." [ 26 ] Mr. Burns said that Albert Johnson agreed that he would often put him in the draws. Mr. Burns thought the Plaintiffs would probably agree that they would cover for him. When asked if Mr.

Kevin Christensen had agreed to the commitment, he answered that " -- it was an understanding and -- you know, I can't say he -- he stood up and said yes Randy I will put in for you always if you're not here, you know it wasn't an out and out -- we didn't have it notarized or, you know, I think it's just -- it evolved." Mr. Johnson took the obligation seriously, and Mr. Kevin Christensen put in for some as well. Mr. Burns did not recall ever putting in for anybody. He could not say what Mr. Drew Devries would have done, but he would have been reluctant to put out too much money for anything like that. [ 27 ] Mr.

Burns testified that the following day he felt an obligation to the Plaintiffs, Messrs. Johnson, Drew Devries and Kevin Christensen. He would have expected to be put in if he was not there. There was no expectation that a member of the core group would have to ask in advance to be included in the draw. Reimbursement was collected promptly. Mr. Kevin Christensen was quite generous, often putting in for two or three people, and was prompt about obtaining reimbursement. Mr. Burns said that if a collection was being taken for both the 6/49 and the Super 7, one collection would be taken for both. Mr.

Burns testified that if the group was going to go in for both, "you would have to ante up the $10 and say, both [...]". [ 28 ] At trial, Mr. Burns said that when Mrs. Mary Gough took over the record keeping, the arrangement between the core group members did not change. [ 29 ] In September 2007, Mr. Burns permanently relocated to Salt Spring Island. His participation in the lotto pool was over.

e) Albert Johnson

[ 30 ] Mr. Albert Johnson is retired. He has resided in Okotoks for 36 years. He has known the Plaintiffs for 14 years and met them through the Elks Club. At trial, he testified that there was a conversation among the core group that "it was said if somebody is not here, we should put in for them." Mr. Johnson was not sure if Mr. Kevin Christensen was present during that discussion. Mr. Johnson testified that Mr. Burns had said that the others better put him in because he did not want to hear one of the guys come ripping around the house saying "na-na-na-na-na" because he did not win and that Mr.

Drew Devries said "you'd better include me in here because I'd never forgive you if you didn't." Mr. Johnson felt that if the others were not there he would put in for them, and assumed that they would put in for him if he was not there. Mr. Johnson said that the arrangement subsisted for a few years, during which it was carried out. Mr. Johnson said that the Plaintiffs, Mr. Kevin Christensen and Mr. Burns, if he was there, would cover for other people. Mr. Johnson did not know if Mr. Drew Devries was ever there early enough to put in for people. Mr.

Johnson said that it was not decided who would put in for which people if they were missing, but if someone was not there then Mr. Johnson would put in for him, or the Plaintiffs would do the same, or Mr. Burns, or other people. Mr. Darryl Lyczewski, who was not a member of the core group, put in for Mr. Johnson for that draw. [ 31 ] Mr. Johnson said that it was not expected that people would put in requests in advance. He said at trial that there was very seldom an expectation to have to specify which draw that you were going in, because it was rare that there were two draws happening at the same time. Mr.

Johnson had no expectation whatsoever that he would have to prepay. He assumed somebody would put in for him if he was not there. He would reimburse people the next time he saw them. Mr. Johnson was not aware of any changes to or further discussions of the arrangement after the initial discussion. [ 32 ] Mr. Johnson said that after Mrs. Mary Gough took over the lottery pool, the core group did not change the way they operated. No one indicated to him they were withdrawing from the arrangement. If Mr. Johnson put in for somebody, he would ask to be reimbursed the next time he saw the person.

He said he observed the other members of the group do the same. He said Mr. Kevin Christensen was good at seeking reimbursement. [ 33 ] On November 23, 2007, Mr. Johnson was at the Elks lounge later that evening. Mr. Johnson did not think that a collection for both the Super 7 and the 6/49 draws had ever been done until that night. [ 34 ] On November 24, 2007, Mr. Johnson had breakfast at In Cahoots with the Plaintiffs, Mr. Kevin Christensen and Mr. Doug Christensen. Mr. Johnson said Mr. Kevin Christensen asked Mr. Clancy to "buck up" and Mr. Clancy paid him $20. [ 35 ] Mr.

Johnson was originally a Defendant in this action, but settled with the Plaintiffs for $100,000. The Plaintiffs consequently discontinued their action as against Mr. Albert Johnson.

f) Kevin Christensen [ 36 ] Mr. Kevin Christensen lives in Okotoks. He has been a member of the Elks Club for 28 years. He is one of the 21 people claiming an interest in the prize from the Super 7 lottery of November 23, 2007. How frequently he would visit the Elks lounge in 2007 would vary on the time of the season. He would see the Plaintiffs at the Elks lounge and for lunch at In Cahoots the next day. Prior to September 2007, the Plaintiffs were always present at the Elks lounge when he was there. Mr. Clancy came into the Elks lounge once after September 2007, on November 2, 2007. After September 2007, Mr.

Johnson told him the Plaintiffs had no intention of returning. [ 37 ] Mr. Kevin Christensen had observed the collection of money for lottery tickets at the Elks lounge for 20 to 25 years. Whenever the pot was over $10,000,000, they would participate. Mr. Kevin Christensen said the Plaintiffs took over the collection in 2003 or 2004. Then, Mrs. Mary Gough took over collection in the spring of 2007. Mr. Kevin Christensen testified he would put in for other people and his brother Douglas and that the Plaintiffs had purchased a ticket for him. Mr.

Kevin Christensen said the Plaintiffs had no obligation towards him. [ 38 ] Mr. Kevin Christensen was present at the Elks lounge on November 23, 2007. He said he arrived at the Elks lounge between 5:00 and 5:30 p.m. He went and sat down at the big table. Around 5:45 p.m., Mrs. Mary Gough arrived and asked Mr. Christensen if he wanted to purchase a ticket, which he did. He bought both a Super 7 and a 6/49 tickets for himself. He also purchased tickets for both draws for his brother Douglas, for Messrs. Gerry Malin and Alvin Malin. He said that he also bought 6/49 tickets for Mr. Clancy, Mrs. Clancy and Mr.

Jim McLeod. At trial, Mr. Kevin Christensen said that none of those people requested he purchase tickets for them. He purchased the tickets because Douglas was his brother and with respect to the others, he did it out of friendship. He said at trial he had no agreement with the Plaintiffs that he would buy tickets for them. It was very rare collections for two draws were taken on the same day.

Mr. Christensen explained at trial that he did not put Mr. Jim McLeod on the Super 7 envelope "[b]ecause I'd run out of money that night. I didn't even have enough money left in my pocket to pay for my own beer, at that time, and everything else. I don't borrow money in the Elks, I don't run a tab in the Elks, and I don't use the debit machine in the Elks. I also know that night, when I was sitting there, that brother Darryl noticed this, that I was out of money, and he bought me a beer because I didn't have funds to even buy that." He stated that he did not put the Plaintiffs in for the same reason.

He said that he chose to put the Plaintiffs in the 6/49 as that was the larger pot and testified during cross-examination that the Plaintiffs "always wanted their names in on a draw together". [ 39 ] Mr. Kevin Christensen said he had purchased shares for the Plaintiffs on November 16, 2007. He collected the money for that ticket from the Plaintiffs on November 24, 2007 at In Cahoots. Mr. Christensen told Mr. Clancy he owed him $20 and Mr. Clancy reached into his pocket and gave him a $20 bill. Mr. Christensen did not tell him what it was for. Mr.

Christensen testified that it was for "the tickets that I had purchased for -- on -- for him on November 16th. There was a Super 7 ticket I had spent $10 on, and for the $10 of tickets that I had bought for him on November 23rd, for the November 24th draw on 6/49." Mr. Christensen said that his practice was to get his money back the next time he saw someone, if he remembered. He was not certain whether he had seen the Plaintiffs at In Cahoots on November 16, 2007. He had not asked for payment for the November 16, 2007 draw before November 24, 2007. [ 40 ] At trial, Mr.

Christensen testified there was no agreement. He said he did not agree to make sure that people were covered when they did not attend, nor did he ever agree with anyone to be responsible to cover anyone if they were not there or if funds were not put in for them by others. Mr. Christensen stated Mrs. Clancy had commented "[i]f you're not here to pay for your own ticket, it sucks to be you." Mr. Clancy also had his own expression. [ 41 ] At trial, it was clear that Mr. Christensen remembered that Mr. Burns raised the issue regarding not being in if the pool won: Q. But Randy Burns was concerned? A.

That's his prerogative. Q. Well, you're arguing with me, sir. It's simply a yes or no answer. Was Randy Burns concerned? A. No. Q. He wasn't concerned? Never expressed concern to you? A. Well, he once had come out with that -- the statement that he couldn't stand himself if he wasn't involved -- or in the draw and all the rest of us were. Q. You remember that statement? A. Yes. Q. And you were in the Elks bar when that statement was made? A. I believe so. Q. Okay. And, to the best of your recollection, Mr.

Burns was present, you were present, Albert Johnson was present, the Clancys were present, Drew DeVries would be present? A I don't really believe that -- that conversation could have come up any night in the Elks. Q. I'm sorry? A. That conversation could have come up any night, numerous nights, in the Elks.

Q. Oh, okay. A. It didn't have to be once that night. Q. Well, you remember the comment being made, though? A. On one night, yes. Q. Yes, and it may have been repeated on other nights, but you remember -- what you recounted here is a particular remembrance of that statement being made by Mr. Burns? A. Yes. Q. And he was concerned that, if he was late, because he was -- tended to come late because of his job, right? He would -- A. Not necessarily. Q. -- that he would miss the draw? A. Not necessarily. Randy didn't always show up late. Q. Not always, but sometimes he did.

He was a supervisor of a new home building -- for a new home building? A That is true. Q. That's right. And sometimes he would come late, and he was concerned -- expressing a concern that he might miss the draw. That's why he was saying how he couldn't stand it if you guys were -- had put in and -- and won and he was missed and left out? A. I suppose that's true. [ 42 ] After learning about the win, Mr. Christensen phoned Mr. Burns and said "na-na-na-na-na" to his voicemail. When asked what that meant, Mr.

Christensen explained that "[w]ell, this was a phrase that Randy Burns would say from time to time in the Elks. It was that he's -- said to us he couldn't stand himself if somebody in here won and he wasn't in part -- part of it and then drove by his place and went, Na-na, na-na, na na. He would not be involved in this, is where this statement come from." Mr. Burns phoned back and Mr. Christensen told him about the win. Mr. Burns asked who was involved and Mr. Christensen rattled off a bunch of names. Mr. Burns asked about the Plaintiffs and Mr.

Christensen said that he had put them in for the 6/49 draw but did not put them in for the Super 7. Mr. Burns asked why the Plaintiffs were not involved and Mr. Christensen said that "they had a hissy fit with members in the Elks and they had stopped coming in." [ 43 ] Mr. Christensen saw Mr. Pedersen and Ms. McLeod at In Cahoots on December 1, 2007. He said that it was either he or Douglas who told them about the lottery win. They said congratulations and then asked about whether the Plaintiffs were in, and Mr. Christensen told them that they were not.

He did not say anything to them about making the decision to put the Plaintiffs in for the 6/49 and not the Super 7.

g) Drew Devries [ 44 ] Mr. Drew Devries has lived in Okotoks for about 40 years. Mr. Devries is one of the 21 people claiming an interest in the prize from a Super 7 lottery of November 23, 2007. He has been a member of the Elks Club for about 30 years. From 2005 to 2007, Mr. Devries was going to the Elks lounge every Friday and said that sometimes he dropped in the odd time during the week, maybe once or twice. He did not see the Plaintiffs at the Elks lounge after September 2007.

[45] At trial, Mr. Devries said that he never put in money for anyone else in the group lottery purchases, and that someone put infor him once. He also was in the practice of taking long vacations in the winter. He said that he has been going down South for about 20years and usually goes for about 3 months in the period of February until May. He did not take this trip in 2007. He said that when hewas down South, no one put his name in the draws.

He added that he never expected anyone to put him in the draws and he never heardof an agreement with anybody that they would put in money for him to ensure his name was in for the draw if he was not there. Mr.Devries denied being in a core group of people who had an obligation to cover each other. [46] Mr. Devries was present at the Elks lounge on November 23, 2007. He put in money for the Super 7 with Mrs. Mary Goughand for the 6/49 with Mr. Kevin Christensen. He found out about the win on either November 25 or 26, 2007 from Mr.

Steven Gough.He was also present at both meetings of the lottery group on November 27, 2007 and December 4, 2007. Mr. Devries spoke to Mr.Clancy on December 3, 2007. He felt sad for them, being a good friend and considering that they were not included in the winnings. Mr.Devries wanted to talk to Mr. Clancy so he went there the night before right after supper and he told Mr. Clancy that he was sorry thatthey were not in the winnings. And before he left, he also said to Mr. Clancy that he would do his best to convince the group to givethem some money. At the meeting on December 4, 2007, Mr.

Steven Gough had just met with the Plaintiffs who had said they werevery disappointed, they expected some money and if they did not get it they might sue for two shares. Mr. Devries said to the group"why don't we all get together and raise enough money so they can probably at least have one share." Mr. Devries testified that he saidthat because the Plaintiffs were pretty close friends and he would have liked to see them in the money, but everyone voted it down rightaway. [47] The Plaintiffs' Statement of Claim did not indicate that Mr. Devries was part of the core group.

However, at trial, bothPlaintiffs testified that Mr. Devries was part of the agreement. 2. Positions of the Parties and the Law [48] The Plaintiffs submit that in order to find the existence of an agreement between any of the parties, it must be found on abalance of probabilities that the parties had in fact mutually agreed to a course of conduct in relation to their participation in the grouplottery purchase arrangement, and there was common intention between each of these parties to create legally binding obligationsbetween them.

They submit the exchange of mutual promises between the parties constitutes adequate consideration. The Plaintiffs referto Osorio v. Cardona (1984), (BC SC), 59 B.C.L.R. 29 (S.C.). In order to determine whether there was commonintention to create binding legal obligations the Court in Osorio looked at the conduct of the parties to determine if, when viewedobjectively, the parties intended their agreement be enforceable. The Plaintiffs in the case at bar add that to make such a determination,the Court must look at the context and surrounding circumstances in which the lottery agreement was made.

The Plaintiffs argue thatthose circumstances may provide indicators of an intention to create legally binding obligations. They refer again to Osorio where theCourt found that the negotiation process which led to the agreement as well as the past pooling or sharing arrangements between theparties was evidence of such an intention.

The Plaintiffs acknowledge that the determination of the Court will depend in each case on thecircumstances of the particular parties and their particular agreement. [49] The Defendants submit the Plaintiffs' claim can only succeed, and then only against the members of the core group, if thePlaintiffs prove on a balance of probabilities that:

i) there was an agreement, something more than a bare promise, between the Plaintiffs,Messrs. Burns, Devries, Johnson and Kevin Christensen; ii) the agreement remained in effect as of November 23, 2007; and iii) there wasa breach of the agreement. The Defendants submit that in order for the Court to find that there was more than a bare promise, the Courtneeds to find there was an offer and an acceptance, and determine who was part of the agreement. [50] Parties to an agreement need to intend to contract. There must be a meeting of the minds.

The author Fridman writes: "[a]greement is at the basis of any legally enforceable contract. The absence of assent prevents the creation of a binding contract": G.H.L.Fridman, The Law of Contract in Canada, 5th ed. (Toronto: Thomson Carswell, 2006) at 13. [51] In Osorio, referring to the intention to create legal obligations, the Court stated that an agreement is not enforceable unless theparties intend their agreement to be legally binding and enforceable. The Court stated at 32 that "promises stated to be binding ‘in honouronly' and social engagements and jests are not enforceable".

The Court added that the test for intention to create legal relations isobjective. The Court referred to S.M. Waddams, The Law of Contract, 2nd ed., at 113: No one supposes that a promisor can excuse himself by making a secret mental reservation to the effect that he does not intend to belegally bound, like a 16th century theologian subscribing to a heretical confession.

[ 52 ] The author Fridman explains that what the parties intend needs to be expressed to the outside world, what is important is the manifested intentions of the parties. He writes at 15: Constantly reiterated in the judgments is the idea that the test of agreement for legal purposes is whether the parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract. The law is concerned not with the parties' intentions but with their manifested intentions.

It is not what an individual party believed or understood was the meaning of what the other party said or did that is the criterion of the agreement; it is whether a reasonable man in the situation of that party would have believed and understood that the other party was consenting to the identical terms. [ 53 ] It is clear from the evidence that some people who attended the Elks Club contributed for others and that it happened regularly. The Plaintiffs assert that there was an agreement which was binding upon what they identify as the core group. The issue in this case is whether there was an agreement.

I believe that there was a conversation where Mr. Randy Burns expressed a concern of not being included in the lottery pool in the event that it was a winning pool. However, the Plaintiffs have not convinced me that there was acceptance from the members of the core group or that there was a legally binding agreement in place. The evidence leads me to believe that there was most certainly a discussion. Mrs. Clancy testified that as near as she could tell, it was totally agreed upon by all the members of the core group. Mr.

Clancy testified that the core group agreed that if a person was not present for a big draw he would not miss it as someone else would be obligated to buy his tickets. According to Mr. Clancy, this arrangement was faithfully fulfilled from that point until at least November 23, 2007. When Mr. Randy Burns was asked if Mr.

Kevin Christensen had agreed to the commitment, he answered that " -- it was an understanding and -- you know, I can't say he -- he stood up and said yes Randy I will put in for you always if you're not here, you know it wasn't an out and out -- we didn't have it notarized or, you know, I think it's just -- it evolved." Mr. Johnson took the obligation seriously, and Mr. Kevin Christensen put in for some people as well. Mr. Burns did not recall ever putting in for anybody. He could not say what Mr. Devries would have done, but he would have been reluctant to put out too much money for anything like that. Mr.

Kevin Christensen acknowledged at trial that Mr. Burns voiced some concerns, but denied that there was an agreement. Mr. Devries denied being in a core group of people who had an obligation to cover each other. In light of the evidence, I conclude that there was a discussion, but I cannot conclude that the parties' intention, even if I could conclude that some may have had the intention of being bound by an agreement, was made clear on an objective assessment. [ 54 ] In some cases, the subsequent conduct will be treated as acceptance. On this issue, S.M.

Waddams, The Law of Contracts , 6th ed. (Toronto: Canada Law Book, 2010), at paras. 92-93 writes the following: As was shown above, a subjective mutual consensus is neither necessary nor sufficient for the creation of an enforceable contract. As a general rule, it is not enough for one to whom an offer is made to assent inwardly; the offeree must communicate acceptance to the offeror, or to someone authorized by the offeror to receive it. Ordinarily, therefore silence will not operate as an acceptance even though the offeree should prove an intention to accept.

This is not a technicality but part of the requirement of a bargain. No reasonable person, on receiving a proposal that looks for a reply, considers the bargain concluded until the manifestation of assent.

Nor will a reasonable offeror ordinarily consider that silence on the part of the offeree manifests the latter's acceptance. [...] Conduct may constitute acceptance, but an offeror cannot impose on the offeree by specifying that conduct which might be engaged in without contractual intent shall have the effect of operating as an acceptance of the offeror's terms. [ 55 ] Even if there was an offer, it was not accepted by subsequent conduct of the members of the core group. The evidence is that the members of the core group did not in fact make sure that everyone was part of the pool every week.

On the balance of probabilities, the evidence presented at trial does not convince me that there was an agreement between the Plaintiffs and Messrs. Randy Burns, Drew Devries, Albert Johnson and Kevin Christensen. It is very unfortunate that no one contributed for the Plaintiffs for the November 23 Super 7 jackpot. I believe that the Plaintiffs sincerely thought that they would be in the lottery pool every time and that their friends would ensure that they would be in. However, in law the facts do not support that there was a legally binding agreement which could be enforced. [ 56 ] At trial, Mrs.

Mary Gough testified that she was not aware of any obligation on anybody to cover somebody else in case they were not there. She said that nothing was said to her about any rules or with respect to a core group. Mrs. Gough said at trial that she did not feel under an obligation to ensure that any particular person had his name on the envelope. She testified that if no money was provided, a name would not be listed on the envelope. I believe Mrs. Mary Gough's evidence that she was not aware of any agreement that would have been binding upon the whole lottery pool. I find that she was forthright and credible.

I also believe the Plaintiffs' testimonies, but even if I concluded that there was an agreement among the core group members, it is clear that it would not have been binding on the whole group.

3. Conclusion [57] Accordingly, I find that there was no legally binding agreement among the core group members nor was there any agreementwith the whole group. B. Breach of Trust 1. Positions of the Parties and the Law [58] In order for an express trust to arise there must be certainty of intention, subject matter and object. There must also be atransfer of property to the trustee. [59] The Plaintiffs argue that in this case, the certainty of the subject matter and the certainty of the object are clear.

The subjectmatter of the arrangement was the lottery tickets and the object was the sharing of the benefits derived from those lottery tickets betweenthe parties to the arrangement. The Plaintiffs say that the certainty of intention between the parties is the issue in this case that the Courtmust determine. The concept of certainty of intention pertains to the intention to create a trust. The Plaintiffs refer to Byers v. Foley(1993), (ON SC), 16 O.R. (3d) 641(Ont. Ct. J. (Gen.

Div.)) where, regarding certainty of intention, the Court stated at645 that in the absence of formal trust documentation, it "must look at the surrounding circumstances and the evidence as to what theparties intended, as to what was actually agreed and as to how the parties conducted themselves to determine whether there was‘certainty of intention'". The Plaintiffs submit that the types of circumstances and conduct that might be considered to determine theissue are not closed. The Plaintiffs rely on Taylor v. Smith (1995), (ON SC), 26 O.R. (3d) 50 (Ont. Ct. J.(Gen. Div.)),Byers and Chamberland v.

Provincial, [2008] O.J. No. 5168 (Ont. Sup. Ct. J.), aff'd 2009 ONCA 733. [60] The Defendants submit that in order for the Court to find a breach of trust, the Court must find that there has been a transfer ofproperty with the intent to create a trust. In this case, this means the Court must find that the Plaintiffs paid money to Mr. KevinChristensen with the intention that the monies were for the November 23, 2007 Super 7 draw or the monies were contributed by otherson behalf of the Plaintiffs for that draw.

The Defendants argue that in light of the evidence, the Court cannot conclude there was anytransfer of money in relation to the November 23, 2007 draw. They point to the following evidence: (

i) To participate in lotteries at the Elks Lounge, money had to be paid when money was collected and a name had to be written onthe envelope as a pre-condition to sharing in any lottery winning; (ii) The evidence was that neither the Plaintiffs nor anybody on their behalf contributed money to the pool for the November 23draw; (iii) Since no money was paid for the Plaintiffs, their names were not written on the envelope for the November 23 Super 7 draw; (iv) The Plaintiffs say that they paid $20 to Mr. Kevin Christensen the following day, but testified that they did not know what drawsthe money was for; and (

v) Mr. Kevin Christensen's evidence is that the $20 he collected from the Plaintiffs was for money he contributed on behalf of thePlaintiffs for the Super 7 for Friday November 16 and for the Lotto 6/49 draw for Saturday November 24, 2007. The Defendants say thatMr. Clancy admitted that the purchase of the 6/49 ticket was done out of friendship. [61] The Defendants submit that at the end of the day, only Mr. Kevin Christensen knew what lottery draws the $20 he collectedfrom the Plaintiffs on November 24, 2007 was for. His evidence was that the $20 he collected from Mr. Clancy on November 24, 2007was for that night's 6/49 draw as well as the November 16, 2007 draw.

[ 62 ] In Taylor , the plaintiff and the defendants were all members of a lottery pool of 12 members who purchased 12 sets of numbers to be played regularly in the Lotto 6/49 draws. The plaintiff did not contribute every time. All those participating in each draw were entitled to share equally in the winning. Four dollars was collected from each person by Smith, the self appointed treasurer. The Court found that Smith was acting as trustee of the group. He had used all the money for one of the draws instead of both the Saturday and Wednesday draws.

The plaintiff did not know about that and refused to contribute more money when asked to do so, because he had already paid. The plaintiff did not confirm, accept or acquiesce to the decision to use all of the money collected for the Saturday draw. The Court found the terms of the trust were breached by Smith when he used the plaintiff's money without his permission to purchase tickets for the Saturday draw and when he failed to use the $2 paid by the plaintiff to purchase tickets for the Wednesday draw.

The Court found the terms of the trust were also breached by all the defendants when they voted at the meeting not to include the plaintiff in a share of the winnings. The Court concluded at 55 and 56 that the plaintiff was entitled to his share of the winnings: I find as a fact that Marcus Smith, acting on behalf of the members of the group, breached his position of trust with the plaintiff in not using the plaintiff's money for the purpose for which it was paid, that is, to buy a ticket on each of the June 5 and June 9 draws. The lottery pool group had no process by which the "majority ruled" as alleged.

The plaintiff's money was not placed on the Wednesday draw as it should have been and he is therefore to be considered a paid member of the pool for the June 9, 1993 draw. Accordingly, the plaintiff is entitled, as a co-owner of the pool for June 9, having properly paid his $2.00 ticket fee, to a proportionate share of the winnings, which would be a one-thirteenth share.

Each of the defendants are also each entitled to a one-thirteenth share. [ 63 ] In Byers , the six plaintiffs sought a declaration that: (1) they and the two defendants were joint and equal owners of all rights in two season tickets for seats at Toronto Blue Jays baseball games; and (2) defendants held the tickets in trust on behalf of each of the plaintiffs and each of the defendants.

Considering the long waiting list for season tickets, the plaintiffs could not get their own tickets. [ 64 ] The defendants said they had purchased the tickets in question in 1982, and thinking they would not be using them for all home games, offered to allow the plaintiffs, mostly fellow-members of a softball team, to buy in temporarily. Prior to the 1988 baseball season, the defendants realized that they required greater access to the tickets and informed the plaintiffs that they could no longer share the tickets. [ 65 ] In Byers , the plaintiffs' version differed.

They said that the defendants had suggested that a group of softball team members collectively obtain two season tickets. In fact, when two of the original participants in the arrangement had dropped out and their shares had reverted to the group. In 1984, another person joined the group. While the tickets were held in the defendants' names, the plaintiffs were under the impression, until 1988, that the subscription was a group subscription. Each year, the group met prior to the season, and the tickets were allocated to all participants, who participated equally.

The cost was divided equally among the group members. When the defendants advised they were claiming sole right to use the tickets after a certain date, the reaction of the plaintiffs was one of surprise, shock and dismay. [ 66 ] The issue before the Court in Byers was whether a trust was created and whether the defendants held the tickets in trust for everyone. The Court found that the evidence as a whole indicated there was an intention on the part of plaintiffs and defendants to create a trust.

The Court found that the three certainties - intention, subject matter (the tickets) and object (the plaintiffs and the defendants) - were satisfied. With respect to the certainty of intention, the Court stated at 645 that in the absence of formal trust documentation, "the Court must look at the surrounding circumstances and the evidence as to what the parties intended, as to what was actually agreed and as to how the parties conducted themselves to determine whether there was ‘certainty of intention'".

The Court referred to a judgment in which it was noted that cases are always fact specific and that the onus rests on the plaintiffs to show that they have a claim to the tickets. [ 67 ] The Court found at 647 and 648 that there were many indicia which led it to believe that the tickets were not intended to be owned exclusively by the defendants: There are many indicia in my view of the evidence that the tickets were never intended to be owned exclusively by the defendants.

Firstly, shortly after the formation of the group, the two participants who were not members of the Markham Men's Fun League discontinued their participation. Their shares in the tickets were not returned to the defendants but were reallocated to the group as a whole. Secondly, the decision to permit the plaintiff Thomas P. Kealey to participate in the group was made jointly by all members of the group. If the defendants had been the owners of the tickets, events would not have unfolded in that manner. The facts in the case at bar are not like those in Eng v.

Evans , where the defendants had made a decision to cut off two of the three couples without consulting the other members which suggested that the plaintiffs' interest could also be terminated at the will of the defendants. This case, like that

of Thomas v. Whitwell, is distinguishable from Fobasco Ltd. v. Cogan in that discussions about getting tickets were held prior to thetickets being retained. The defendants knew they were getting the tickets for the members of the group. Thirdly, every year, when an invoice was issued by the Toronto Blue Jays Baseball Club, the defendants would contact each member ofthe group who would make a cheque for his pro rata share payable to the defendants. The defendants never experienced any problems incollecting from the plaintiffs their respective share of the cost of the subscription.

The most revealing indicia is that, immediately following the 1988 draw, when the defendants raised the proposal that the group wouldonly continue on for the next two seasons, the reaction of the other members of the group was one of surprise, shock and dismay. Indeed, at least one of the defendants had some advance notice by one of the plaintiffs that any effort to alter the existing grouparrangement would be ill-advised. He then instructed that particular plaintiff not to reveal that conversation to the others.

The willing andfull participation of the two defendants in the 1989 draw on the basis of the "Walker proposal" speaks volumes regarding the initialintention of the parties in this arrangement. Walker not only provided the defendants with increased access to tickets from another sourceand gave up his share in the group tickets to be split between the defendants, but he also made the proposal on the understanding that theinitial and ongoing position of the other plaintiffs would not be altered. The defendants and the plaintiffs were in agreement.

It was notuntil months later that one of the defendants found himself emotionally incapable of being at the game at the same time or near one ofthe plaintiffs. The negative repercussions of these events upon the parties, their families and friends are indeed unfortunate. But, notunlike emotional reactions subsequent to other situations of failed agreements, they must not cloud the real issues in dispute. [68] In Byers, the Court concluded that in light of the evidence, the tickets were never intended to be owned exclusively by thedefendants. [69] In Chamberland, the parties worked together.

They participated in a group lottery pool for several years. Each party wouldgenerally contribute $5 per week to the pool and their combined contributions were used to buy lottery tickets. They lost together andshared any of the winnings equally. The main issue that the trial judge had to decide was whether the plaintiff, in a one-on-oneconversation, had asked Mr. Provincial, the person in charge of the pool, to spot him the $5 purchase price for participation in thewinning lottery draw and whether Mr. Provincial agreed to do it. The Court found that on the balance of probabilities that Mr.

Provincialaccepted the plaintiff's request to participate in the draw and agreed to spot the plaintiff for it. [70] The Plaintiffs refer to Chamberland to argue that in that case the Court was prepared to accept that there was a fiduciary dutyof good faith and loyalty owed between the participants of the lottery pool, and further found at para. 261 that there was an implied termto treat one another in the lottery fairly and in good faith. The Court held that this applied as well to part-time participants in the lotterypool.

However, it must be noted that in Chamberland, the Court found that there was an enforceable agreement as to the winning ticket.The Court concluded that the money in the hands of each defendant was held in trust for the plaintiff and needed be returned. [71] The Defendants submit that all of the cases referred to by the Plaintiffs are distinguishable on their facts. They argue that inTaylor, the plaintiff was part of a workplace where the lottery pool was regularly used to purchase tickets for draws held every Saturdayand Wednesday, that the pool was fixed and closed.

The Defendants say that the following are distinguishing facts of the Taylor case: 1)there was no dispute that there had been a payment of money to Smith in advance of the lottery win (transfer of property); and 2) therules of the lottery pool were that $2 was to be applied to the Saturday draw and $2 to the Wednesday draw. Taylor paid his money onthose terms, but the funds were not applied to both draws. The Defendants say that in the case at bar, the pools were not frequent andthere was no pre-payment. At discovery, Mr. Clancy's evidence was that he did not think that the $20 given was for the November 23draw.

So they say that in this case there was no pre-payment and there was a lack of intention to contribute to the winning draw. [72] The Defendants submit further that, in this case, the Plaintiffs have failed to prove on a balance of probabilities that theycontributed money for the winning tickets or someone on their behalf contributed the funds towards the purchase of the winning tickets.The Defendants refer to Miller v. Carley (2009), (ON SC), 98 O.R. (3d) 432 (Sup. Ct. J.).

They submit that the realreason the Plaintiffs feel entitled to a share of the lottery winnings is because they had regularly participated in the lottery pools, not onlyat the Elks but also at the Willington, but not because they felt they had given money to Mr. Kevin Christensen towards the purchase ofthe winning ticket or because someone had contributed on their behalf.

[ 73 ] In Miller , the trial judge was of the opinion that the crucial factual issue to be determined before the Court was whether the plaintiff provided $10 to the defendant toward the purchase of lottery tickets. The plaintiff acknowledged in Miller that if the Court did not find that it was the case, the claim should be dismissed. The agreement to pool funds and share winnings was described as follows in the plaintiff's statement of claim: 4.

On or about February 21, 2006, the plaintiff and the defendant entered into an agreement whereby the plaintiff and the defendant would pool funds for the purchase of "Ontario Big Win" lottery tickets and share equally between them any winnings that resulted from the purchase of such lottery tickets. In the alternative, such an agreement was implied. 5. Pursuant to the agreement, the plaintiff contributed $10.00 towards the purchase of the tickets.

Further, the plaintiff provided transportation to the plaintiff and the defendant for the purpose of the purchase of such tickets and also selected an Avondale store for the purchase of such tickets. [ 74 ] The trial judge in Miller did not believe the plaintiff and dismissed the claim: [210] During this trial, truth was only an occasional visitor. [211] Mr.

Mahoney [Counsel for the Plaintiff] is probably correct in his submission that, in their relationship, the defendant "was the leader" and the plaintiff "was the follower", but not, I think, to the extent that the plaintiff would be muzzled into silence about his alleged $10 contribution to the defendant and his espoused entitlement to a share of the winning ticket. [212] The plaintiff has attempted to build his case on a series of telephone conversations with others.

However, his conduct and admissions throughout, particularly at the OLGC offices and Scotiabank, are consistent with only one conclusion: his claim is a brazen fabrication. [213] The admission by the plaintiff that he did not tell anyone that he had contributed to the cost of the lottery tickets, while having had ample opportunity to do so, his express denial to the lottery officials that he was claiming a share in the ticket and his silence at Scotiabank, are insurmountable evidentiary obstacles for the plaintiff. [214] In the end, the plaintiff has failed to satisfy the onus he bears of proving, on a balance of probabilities, that he gave $10 to, and pooled his money with, the defendant as alleged. [215] The plaintiff acknowledged in his testimony that he believed he and Delisle are "entitled to something" because they were friends of the defendant and present when the ticket was purchased and scratched.

Despite the pleadings and the disavowal of that position by his counsel, I think it is the real reason the plaintiff feels he should share in the $5-million. [ 75 ] I have found that there was no agreement between the core group members. In this case, in order for the claim for breach of trust to succeed, there must be an intention to create a trust. The surrounding circumstances, the way the parties conducted themselves and, generally, the evidence as a whole lead me to conclude that there was no "certainty of intention". There was no agreement, but only a conversation between the core group members.

Furthermore, I believe that Mr. Kevin Christensen was not part of an agreement according to which he would, personally, have had to ensure that the Plaintiffs were entered for the draw of November 23, 2007. Mr. Clancy candidly admitted that when he gave his $20 to Mr. Kevin Christensen, he did not know for what draw he was contributing. I therefore conclude that neither the core group members nor Mr.

Kevin Christensen agreed to ensure that the Plaintiffs would be in the draws every time. [ 76 ] The evidence leads me to believe that some money was contributed on behalf of the Plaintiffs but not for the winning draw. I believe Mrs. Gough when she testified that she made sure that all the names of the people contributing were on the envelope. The evidence does not lead me to believe that Mrs. Gough made any mistake on the envelope regarding the November 23, 2007 draw. I also believe that Mr. Kevin Christensen did not put the Plaintiffs in both draws because he ran out of money and I accept Mrs.

Gough’s testimony that she was told by Mr. Kevin Christensen that he did not have a lot of money on him that night, and that he put the Plaintiffs in for the larger draw. Mr. Kevin Christensen said the $20 that Mr. Clancy had given him at In Cahoots on November 24, 2007 was for

the 6/49 on November 16 and 24, 2007 and I believe him in this regard. 2. Conclusion [77] Accordingly, I find that there was no intention to create a trust, that no one contributed or agreed to contribute for thePlaintiffs to the lottery group regarding the November 23, 2007 Super 7 draw. The Plaintiffs cannot succeed under this claim. C. Unjust Enrichment [78] As recently reiterated in Kerr v.

Baranow, 2011 SCC 10, in order for a claimant to successfully prove a claim for unjustenrichment there need be (1) benefit to the defendant; (2) corresponding detriment to the claimant; and (3) absence of any juristic reasonfor the enrichment. [79] Considering my findings that the money given to Mr. Kevin Christensen by the Plaintiffs was not for the November 23, 2007draw, but to reimburse his contribution for other draws, and that the Plaintiffs did not contribute to the purchase of the winning ticket, Iconclude that there is no unjust enrichment: see for example Helmy v. Helmy, (ON SC), [2000] O.J.

No. 4456 (Ont.Sup Ct. J.); Lilly v. Phillips, [2006] O.J. No. 3410 (Ont. Sup.Ct. J.). D.

Resulting Trust and Constructive Trust [80] The following is pleaded in the Plaintiffs' Statement of Claim: Further or in the alternative, the Plaintiffs claim a beneficial interest in the lottery funds in the amount of 2/23 of the lottery winnings or$1,739,130.43, particularly as Kevin Christensen, a member of the Core Group, had collected funds from the Plaintiffs for theacquisition of the lottery tickets, the Plaintiffs state that they are entitled to a declaration that the Defendants hold $1,739,139.43 in trustfor the Plaintiffs by way of a resulting trust or constructive trust. [81] The Plaintiffs did not elaborate further in their written argument as to why they believe that a resulted trust should arise or aconstructive trust should be imposed. [82] The Defendants suggest that in this case, this claim would be appropriate in the context where the Plaintiffs argued that therewas a common intention resulting trust.

Very recently in Kerr, rendered after the hearing of this trial, Cromwell J., writing for the Court,concluded that the resulting trust arising solely from the common intention of the parties no longer had a useful role to play in resolvingproperty and financial disputes in domestic cases. He wrote: [24] This, in my view, is as it should be, and the time has come to say that the common intention resulting trust has no further role to playin the resolution of domestic cases.

I say this for four reasons. [25] First, as the abundant scholarly criticism demonstrates, the common intention resulting trust is doctrinally unsound. It is inconsistentwith the underlying principles of resulting trust law. Where the issue of intention is relevant to the finding of resulting trust, it is theintention of the grantor or contributor alone that counts.

As Professor Waters puts it, "In imposing a resulting trust upon the recipient,Equity is never concerned with [common] intention (Waters', at p. 431)." The underlying principles of resulting trust law also make ithard to accommodate situations in which the contribution made by the claimant was not in the form of property or closely linked to itsacquisition. The point of the resulting trust is that the claimant is asking for his or her own property back, or for the recognition of his orher proportionate interest in the asset which the other has acquired with that property.

This thinking extends artificially to claims that arebased on contributions that are not clearly associated with the acquisition of an interest in property; in such cases there is not, in anymeaningful sense, a "resulting" back of the transferred property: Waters', at p. 432. It follows that a resulting trust based solely on

intention without a transfer of property is, as Oosterhoff puts it, a doctrinal impossibility: "... a resulting trust can arise only when oneperson has transferred assets to, or purchased assets for, another person and did not intend to make a gift of the property": p. 642. Thefinal doctrinal problem is that the relevant time for ascertaining intention is the time of acquisition of the property. As a result, it is hardto see how a resulting trust can arise from contributions made over time to the improvement of an existing asset, or contributions in kindover time for its maintenance.

As Oosterhoff succinctly puts it at p. 652, a resulting trust is inappropriate in these circumstances becauseits imposition, in effect, forces one party to give up beneficial ownership which he or she enjoyed before the improvement ormaintenance occurred. [26] There are problems beyond these doctrinal issues. A second difficulty with the common intention resulting trust is that the notion ofcommon intention may be highly artificial, particularly in domestic cases.

The search for common intention may easily become "a merevehicle or formula" for giving a share of an asset, divorced from any realistic assessment of the actual intention of the parties. Dickson J.in Pettkus noted the artificiality and undue malleability of the common intention approach: at pp. 843-44. [27] Third, the "common intention" resulting trust in Canada evolved from a misreading of some imprecise language in early authoritiesfrom the House of Lords.

While much has been written on this topic, it is sufficient for my purposes to note, as did Dickson J. in Pettkus,at p. 842, that the principles upon which the common intention resulting trust jurisprudence developed are found in the House of Lordsdecisions in Pettitt v. Pettitt, [1970] A.C. 777, and Gissing. However, no clear majority opinion emerged in those cases and four of thefive Law Lords in Gissing spoke of "resulting, implied or constructive trusts" without distinction.

The passages that have been mostinfluential in Canada on this point, those authored by Lord Diplock, in fact relate to constructive rather than resulting trusts: see, e.g.,Waters', at pp. 430-35; Oosterhoff, at pp. 642-43. I find persuasive Professor Waters' comments, specifically approved by Dickson J. inPettkus, that where the search for common intention becomes simply a vehicle for reaching what the court perceives to be a just result, "[i]t is in fact a constructive trust approach masquerading as a resulting trust approach": D. Waters, Comment (1975), 53 Can.

Bar Rev.366, at p. 368. [...] [83] Even if I were to assume that a resulting trust can arise as a result of common intention of the parties in non-matrimonial ornon-cohabitation situations, considering the evidence, and my findings in this case, including the fact that there was no legally bindingagreement and that the $20 given to Mr. Kevin Christensen served for repayment of two draws (November 16 and November 24), I findthat there would be no common intention resulting trust in this case. I find that there was no common intention expressed or impliedamong the core members or between Mr.

Kevin Christensen and the Plaintiffs that the ownership of the tickets or the proceeds of theNovember 23, 2007 draw would be shared with the Plaintiffs: see for example Helmy. [84] Regarding the reference to a constructive trust in the Plaintiffs' pleadings, they have not explained how and on what basis theCourt should impose a constructive trust. Perhaps the Plaintiffs were only referring to constructive trust in the context of their claim forunjust enrichment. [85] My finding that the $20 given to Mr.

Kevin Christensen was to reimburse him for having paid for the Plaintiffs' sharesregarding the November 16 and 24 draws, the Plaintiffs have not convinced me that a constructive trust should be imposed in equity:Soulos v. Korkontzilas, (SCC), [1997] 2 S.C.R. 217. The Defendants argue that it is not entirely clear whether thePlaintiffs are claiming institutional constructive trust in respect of the lottery prize notwithstanding that they have not pled breach offiduciary duty.

The Defendants submit that the pleadings are closed and that it is too late and would be prejudicial to them for thePlaintiffs to argue something that has not been pled. I agree with the Defendants that if the Plaintiffs raised constructive trust becausethey meant that there was a breach of a fiduciary relationship, this was not part of their pleadings. I will not deal with this issue anyfurther. E. Negligence [86] The Plaintiffs submit in the alternative that the Defendants agreed to contribute funds for them or knowing of the agreementfailed under a duty to contribute funds for the Plaintiffs.

Considering my finding that there was no legally binding agreement, this claimcannot succeed. V. Conclusion

[ 87 ] The Plaintiffs' story is sad. I believe the Plaintiffs. They have convinced me that they sincerely thought that their friends would ensure that they would be in the draw every time. For their friends and acquaintances, except for Mr. Johnson, money became more important than friendship. One must be reminded that the Defendants' wealth was acquired by luck, not by hard work.

This though does not give right to two or even one share of the lottery winnings. [ 88 ] The Plaintiffs' claim is dismissed. [ 89 ] Generally, I must question the decision of counsel to represent the totality of the remaining Defendants, considering that they have argued that if there was an agreement, it would only be an agreement between the core group members. There is no doubt that, from the very beginning of the process, the possibility of conflict of interest was clear. In fact, the core group was mentioned in the Plaintiffs' Statement of Claim.

Fortunately, in this case, the conflict did not prejudice them. [ 90 ] The Defendants (Plaintiffs by counterclaim) did not present any evidence with respect to their counterclaim. Therefore, their counterclaim for damages is dismissed. [ 91 ] In accordance with the Agreed Statement of Facts, I order that the funds held in an interest-bearing trust account by Fraser Milner Casgrain LLP shall be released to the remaining Defendants and Mr.

Albert Johnson in equal shares. [ 92 ] If the parties cannot agree on the release of the funds in trust or any entitlement to interest with respect to the monies in trust or with respect to costs, counsel may appear before the Court within 60 days of this judgment. Heard on the 20 th day of September, 2010 to the 1 st day of October, 2010. Dated at the City of Calgary, Alberta this 11 th day of July, 2011. S.M. Bensler J.C.Q.B.A. Appearances: Brian N. Clark, Clark & Associates for the Plaintiffs D. Brian Foster, Q.C. and Natasha E.A. Bazant,

Fraser Milner Casgrain LLP for the Defendants