Herunter v. Kostiuk, 2011 ABQB 452

Court of Queen ’ s Bench of Alberta Citation: Herunter v. Kostiuk, 2011 ABQB 452 Date: 20110711 Docket: 1003 11928 Registry: Edmonton Between: Helen Herunter Applicant - and - Kurt Kostiuk and Sharon Renton Respondents _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice K.D. Yamauchi _______________________________________________________ I. Introduction [ 1 ] The Applicant Helen Herunter (“Helen”) applies to have this Court invalidate a registered transfer of land that she and her late husband, Joe Herunter (“Joe”) signed (“Transfer 1”).

Transfer 1 transferred their home (the “Home”) into a joint tenancy between them, and the Respondents Kurt Kostiuk (“Kostiuk”) and Sharon Renton (“Renton”). Helen also applies to have this Court remove Kostiuk and Renton (together, “the Respondents”) from title to the Home, and resolve what interest, if any, they have in that property.

[ 2 ] Justice Verville granted Helen a court order on July 22, 2010, under the Alberta Protection Against Family Violence Act , R.S.A. 2000, c. P-27, inter alia , prohibiting the Respondents from communicating with Helen. Helen obtained a further order from Justice Goss under that same act on December 16, 2010, requiring the physical separation of the Respondents from Helen in the Home, with the parties to proceed to a special chambers application to determine the matters that are presently before this Court.

On January 19, 2011, Justice Lee ordered that the special chambers application may include viva voce evidence. II. Testimony [ 3 ] This Court heard viva voce evidence over two days from five witnesses. It then adjourned the matter and heard counsels’ arguments on a separate day. This

section of these reasons provides what this Court considers to be the relevant and material viva voce witness evidence. Where the parties have relied on evidence taken from the many affidavits that they have filed in this matter, this Court will specifically identify that evidence. A.

Helen Herunter's Testimony [ 4 ] All of Helen’s affidavits advise this Court that Joe and Helen (together, the “Herunters”) were married on December 21, 1991, and remained married and living together until Joe passed away on June 14, 2009. [ 5 ] Before she married Joe, Helen was in an extremely physically and emotionally abusive relationship with her ex-husband, which resulted in a divorce. [ 6 ] In 1995, the Herunters built the Home, which is located in Edmonton, Alberta. They moved into the Home once it was completed. Helen was a realtor at the time and the Herunters built the Home as a show home.

The Home is wheelchair accessible, energy efficient and easy to clean. [ 7 ] Both the Herunters were in poor health in the time leading up to Joe’s death. Joe had ongoing heart problems, having had multiple surgeries. Helen suffered from her own health problems, including diabetes, high blood pressure, and painful dental problems. The latter caused her such difficulty that she was constantly on painkillers and antibiotics.

All of her family knew of her health problems, including Kostiuk who is Helen’s son. [ 8 ] With their poor health, Helen became increasingly anxious about how she and Joe would be taken care of and if she would be able to care for Joe. The Herunters discussed this dilemma as early as 2007. However, they wanted to “get old” in the Home. [ 9 ] Helen’s daughter Lori Kostiuk (“Lori”), was of great assistance to Helen.

In fact, Helen referred to Lori as her “confidante.” However, Lori was going to move to Calgary in 2009 and Helen did not want to burden Lori with the Herunters’ problems. [ 10 ] Kostiuk and his common law spouse, Renton, had been to the Home to visit the Herunters, from time to time. In May 2009, the Respondents approached the Herunters with a proposal that the Respondents would live in the Home and “take care” of the Herunters for the rest of the Herunters’ lives. In exchange, the Herunters would execute Transfer 1. Kurt convinced the Herunters that it was in their best interests to execute Transfer 1.

Helen was adamant during her cross-examination that it was the Respondents who approached the Herunters, not the other way around. [ 11 ] Helen was elated by this prospect and thought of it as “a gift” that one of her children would take care of her. Kostiuk was her son and she trusted him. The Herunters wanted to stay in the Home, as it was handicap-accessible; Helen was using a walker. They wanted someone to assist them with chores and cleaning. [ 12 ] The Herunters, without legal advice, signed Transfer 1 on May 29, 2009.

Helen did not feel that the Herunters needed a lawyer; after all, Kostiuk was her son and she was his mother. The Respondents paid no consideration for their execution of Transfer 1.

The primary consideration flowing from the Respondents to the Herunters was that the Respondents promised to look after the Herunters. [ 13 ] Helen knew what she was signing when she signed Transfer 1. She was, after all, a former real estate agent. Helen denies that she discussed the same arrangement with one of her other sons, Kim Kostiuk (“Kim”), before speaking with the Respondents.

She recalls that after the Herunters completed the transaction with the Respondents, Kim told her she was “stupid” for doing this. [ 14 ] Before they attended the Land Titles Office (“LTO”) to sign and register Transfer 1, the Herunters and the Respondents met with a Toronto Dominion Bank (“TD”) official, Yvonne Carlson (“Yvonne”), to discuss the proposal. The proposal included the parties obtaining a refinancing, which involved a consolidation of all the parties’ debts, including the mortgage on the Home, into one amount secured against the Home. This would be done by way of a line of credit (“LOC”).

Yvonne said that the group would first have to ensure that the Respondents were on the title to the Home. [ 15 ] Thus, all the parties attended at the LTO to effect the transaction contemplated by Transfer 1. Lori also went along with them. The parties signed and registered Transfer 1. [ 16 ] A couple of weeks later, Joe suffered a stroke and passed away. Five days after Joe’s death, on June 19, 2009, Joe’s name was removed from the title to the Home (“Transfer 2”).

After that Helen heard Renton telling others that it was “her” house now. [ 17 ] Within a month of Joe’s passing away, Kostiuk began putting pressure on Helen to transfer the Home solely into the Respondents’ names. Helen refused. Kostiuk’s requests became increasingly aggressive and verbally abusive. Kostiuk refused to let Helen see any financial documents relating to the Home and told her “it was none of her business.” [ 18 ] On or about July 21, 2009, about six weeks after Joe’s death, Helen and the Respondents completed the refinancing by way of the LOC. The LOC was for $260,000.

Security for the LOC was registered against the Home. Helen’s affidavit, which she swore on July 12, 2010, shows that the LOC went to pay the following: (

a) the original mortgage on the Home, which was $170,132.52; (

b) the Herunters’ debts of $19,044.57; (

c) Renton’s debts of $55,032.33; (

d) Kostiuk’s debts of $13,073.18; (

e) interest in the amount of $252.20; (

f) insurance in the amount of $109.96; and (

g) legal fees for $335. (collectively, the “Refinancing”) [ 19 ] Although Helen’s name is on the LOC, she has no access to it. Helen vaguely remembers going to the TD to sign the

documents specifically regarding the LOC. Kostiuk has refused to provide any of the documents to Helen. Helen does not recall when the Herunters and the Respondents met with Yvonne concerning the Refinancing. [ 20 ] Helen’s relationship with the Respondents deteriorated dramatically after Joe’s death. It was as though she did not exist, “like she was dead.” Almost immediately following Joe’s death Kostiuk began to bully Helen, and was particularly aggressive and verbally abusive. Helen provided this Court with numerous examples of this abuse in her July 12, 2010 affidavit, as well as through her testimony.

These included yelling, intimidation, ordering her to do things and abuse of Helen’s guests. This bullying went on for about 11 months and finally stopped after Helen told Renton that she was going to call 911 if the bullying did not stop. Renton did not want this, because it would affect her right to run a day home that she was operating out of the Home. All Helen wanted was a helping hand and some compassion.

Instead, she is afraid of Kostiuk. [ 21 ] Renton was moving items that the Herunters owned into the living space occupied by Renton and the Respondents started using Helen’s living space to store Renton’s possessions. As well, within a few days of Joe's death, Renton went through Joe’s belongings and disposed of some of them without Helen's consent. [ 22 ] Helen began spending most of her time in her room with the door locked and kept a telephone nearby.

Helen’s July 12, 2010 affidavit indicates that she contacted the United Victim’s Assistance Foundation for support, contacted Constable Andrew Sibbald of the Edmonton Police Service on May 11, 2010, and prepared a witness statement. Helen also contacted the Senior Resource Coordinator with the Elderly Adult Resource Service at Catholic Social Services to help her create a Safety Plan. Helen’s evidence that she contacted the police and gave them a statement was a response to a leading question.

Nothing turns on this, as this Court already had this evidence before it by way of one of Helen’s affidavits. [ 23 ] Helen believes that Kostiuk took advantage of her. [ 24 ] The Respondents moved into the Home soon after Helen signed Transfer 1. They have had use of the Home’s basement since that time. For a period of time Renton operated her day home business in the Home. The Respondents have had exclusive use of the basement of the Home. [ 25 ] The Respondents have paid for insurance, utilities, municipal taxes, and the interest on the LOC, and for some improvements on the property.

Kostiuk testified that the total amount that they have paid is: 1. $21,180.53: from May 29, 2009 to November 11, 2010, and 2. $10,073.37: from November 11, 2000 to the application date. Since the Respondents moved into the Home, Helen acknowledged she has made no payments towards utilities, improvements or other expenses concerning the Home. As well, Kostiuk supplied copies of invoices for materials respecting some improvements to the basement and property. [ 26 ] Helen, through Lori, felt that the arrangement between Helen and the Respondents had to be documented.

There were various versions that the parties exchanged but none of them were signed. Lori prepared 2 versions and the Respondents prepared one. B. Sharon Renton’s Testimony [ 27 ] Before they moved into the Home, the Respondents lived in a small house not far from the Home. Renton operated a day home before and after she moved into the Home. She stopped operating the day home after this litigation started.

[ 28 ] The Respondents’ lease on their small house was about to expire. Their landlord wanted to give them a 2-year lease. They thought, however, that it might be a good idea to start looking around for a house to buy, so they enlisted Helen’s assistance.

In May of 2009, Helen contacted Renton to ask whether she had heard the “good news.” This news was that the Herunters had spoken to Kostiuk with a proposal in which the Respondents would pay off all of the Herunters’ debts in exchange for a transfer of the Home into the Respondents’ names. [ 29 ] After Kostiuk told Renton other details, they met with the Herunters to discuss the amount necessary to pay out their respective debts. All of them were in agreement with this proposal. Renton went by herself to the TD to see how to get a loan to effect this transaction.

The TD is the bank that held the Herunters’ mortgage. Renton met with Yvonne. Renton explained to Yvonne roughly the details of the transaction. Yvonne said if everyone was in agreement, they could go to the LTO and effect the necessary transfer. They could then speak to Yvonne to deal with the Refinancing. [ 30 ] The parties attended the LTO, much in the way Helen described it. Following their attendance at the LTO, they returned to TD and visited with Yvonne to complete the forms.

Joe had a stroke and died before TD approved the transaction. [ 31 ] The transaction that Renton described was slightly different from the transaction as Helen described it. In Renton’s view, the Respondents were going to buy the Home, pay out the mortgage, pay the Herunters’ debts, and in exchange the Herunters would be able to live there for the rest of their lives or until they needed to move to a senior’s residence. [ 32 ] Renton denies that the Respondents helped themselves to Joe’s property. Helen invited them to take various items.

Renton also denied that the Respondents discarded Joe’s property (without Helen’s consent or direction). In fact, Renton testified that Helen asked them to do this and she was thankful for their help. [ 33 ] About one month after Joe died, Helen talked to Renton about having Lori’s child move into the Home. Renton did not want that child to live in the Home. Thereafter, Helen started “acting weird” and became “snooty.” [ 34 ] Renton treated Helen as best she could in the circumstances. She would make her healthy meals.

Renton kept trying this even though Helen would refuse to take these meals. [ 35 ] Renton did not witness Kurt yelling, bullying or badgering Helen, nor did Renton do any of this. She did see a heated discussion between Lori and Kostiuk, which she tried to defuse. She was not part of the discussion. Lori then became very aggressive with Renton. [ 36 ] Renton confirmed much of Helen’s testimony concerning the Refinancing, in terms of amounts and how the transaction would be structured.

She also confirmed that the LOC has monthly payments and that the Respondents made these payments from the time they moved in, to the present day. In fact, the only thing for which Helen pays is her personal expenses, such as groceries, telephone and automobile insurance. Beyond that, the Respondents pay all other expenses related to the Home. [ 37 ] The Respondents kept receipts for all these expenses. The receipts were attached to Helen’s lawyer’s brief in support of this application.

Evidence of the most recent payments were submitted and marked as an exhibit in these proceedings. [ 38 ] During cross-examination, Renton testified that she did not see any money change hands between Kostiuk and Helen at the LTO. There was no lawyer involved in any of the transactions. [ 39 ] In the end, Renton believes that she owns one-third of the Home. At first, she got a one-quarter interest, but then Joe died. [ 40 ] Renton confirmed that she owned a van and that the Respondents together had about $65,000 in debt. They did not have

enough money for a down payment on a house. Yvonne did not discuss with the Respondents the necessity for a down payment, Canada Mortgage and Housing Corporation fees and they were not pre-approved for a mortgage. [ 41 ] The Respondents were not aware of the Herunters’ health problems at the time of their discussions with the Herunters. [ 42 ] The reason the parties were in a rush to get Joe’s name off the title and eventually to get Helen’s name off the title was that they “all wanted to get it over with quickly.” Even though Helen’s name was off the title, she would remain in the Home as a “guest.” C.

Kurt Kostiuk's Testimony [ 43 ] Kostiuk confirmed many of the things to which Renton testified. There would be no useful purpose in repeating them. This Court will refer only to his testimony that differs from or expands on Renton’s testimony. [ 44 ] His relationship with Helen was quite good. He visited the Herunters quite often and he saw Joe as his father, even though Joe was his stepfather. [ 45 ] His version of how Transfer 1 came about was somewhat more detailed than that of Renton, as he was directly involved from the beginning in the discussions between himself and the Herunters.

Kostiuk had gone to have coffee with Helen. Joe was not present. Kostiuk noticed an Epcor bill in the Home that was very high. Kostiuk told Helen that the Respondents’ lease was coming up for renewal and that they were considering the thought of looking for a house on a rent-to-own basis or some other basis. [ 46 ] Helen advised Kostiuk that she wanted to continue living in the Home.

Helen said “we want to stay here, you want to buy a house, do you want to buy this house and allow us to stay here.” Helen then called Renton to say “have you heard the good news.” Helen said to Kostiuk, “let me work on Joe.” Joe thought it was a wonderful idea. [ 47 ] Kostiuk returned to his residence and discussed this with Renton. Renton was reluctant, but Kostiuk convinced her that this was a win-win situation, as they did not have sufficient funds for a down payment to purchase a house.

Helen did not have a very good credit record, but the Respondents did. [ 48 ] Before the Herunters decided that they wanted to proceed with this transaction, Helen wanted reassurance from her other son, Kim Kostiuk (“Kim”). Lori got wind of this, so Kim and Lori met with the Respondents “to find out what the deal was all about.” Lori was concerned with the transaction, but Kostiuk testified that “she came around.” [ 49 ] When the parties went to the LTO, Kostiuk paid for the registration of Transfer 1.

Helen said to Kostiuk that “you have to give me $1 to make this legal and binding,” so Kostiuk paid her a “toonie.” The Herunters seemed to know what they were doing. [ 50 ] Because of his relationship with Joe, Kostiuk thought he might get an inheritance from Joe’s estate. He did not. [ 51 ] Following Joe’s death, Kostiuk, Kim and Lori met to talk about whether this transaction should proceed.

Kim and Lori said that it should still proceed. [ 52 ] Kostiuk testified that Yvonne recommended obtaining Joe’s death certificate and getting Joe’s name off the title to the Home. [ 53 ] Like Renton, Kostiuk testified that it was Helen who gave guidance on what to move from the Home and where to move the items. The Respondents did not do anything without Helen’s instruction or permission. Throughout their move into the Home, the

rapport among them was “excellent.” [ 54 ] Things started breaking down when Lori returned to Edmonton from Calgary. She was “trying to change things.” Things took a turn for the worse when the issue concerning Lori’s son arose. From that point, Lori became physically and verbally abusive to Renton, and said “inappropriate things.” [ 55 ] At that point, Helen said that the Respondents had “no leg to stand on” if she wanted to extricate them from the Home. [ 56 ] On Renton finalizing her divorce, the Respondents intended to remove Helen from the LOC and the certificate of title to the Home.

When Kostiuk advised Helen of this, she said that she had no intention of taking her name off the title. Kostiuk called Helen a liar. The parties used extremely caustic, profane, obscene and foul language that really adds nothing to this judgment. Suffice it to say that one would be shocked to hear this type of language during a longshoreman’s dispute, much less a discussion between a mother and her son. [ 57 ] The reason Kostiuk gave for Renton’s divorce having anything to do with the Home and its ownership was that the Respondents wanted to ensure that Renton’s ex-spouse could not make a claim to the Home.

This idea was communicated to the Herunters before the Respondents’ names were placed on the certificate of title to the Home. As well, Lori and Kim knew this. [ 58 ] Lori continued to be abusive and instigated much of the trouble. Kostiuk, for his part, continued to do the best that he could, in the view of the circumstances. Not surprisingly, Kostiuk developed an animosity towards Lori.

Kim told Kostiuk to uphold his end of the bargain, which Kostiuk testified that he did. [ 59 ] Kostiuk confirmed Renton’s testimony that he has paid all household expenses, including the mortgage payments, utilities, taxes, insurance and maintenance. [ 60 ] Kostiuk denies that he has bullied Helen. He loves his mother and treated her with the utmost respect.

He acknowledges that he might have pressured her too often, but he never became assertive with her until January 2010, when she said she would not remove her name from the title. [ 61 ] During cross-examination, Kostiuk testified that the transaction into which the Respondents entered with the Herunters was such that the Respondents would assume the Herunters’ debts. They would “earn” equity in the Home by paying off those debts.

At the time of the transaction, Joe and Helen’s debts represented about two-thirds of the value Home. [ 62 ] A portion of Renton’s affidavit that she swore on October 5, 2010, to which Kostiuk concurred by his affidavit sworn on the same date, is important and formed the subject-matter of some questioning by Helen’s counsel. It provides: 3. ...

What [the Herunters] proposed was that we move in, that title would be put into the names of [the Herunters], as well as [the Respondents] as joint tenants. [The Respondents] would make the payments on the existing mortgage as well as other living expenses and costs, and [the Herunters] would live in the home until they needed to move into a seniors residence or passed away; Kostiuk testified that there was more to the transaction than what is contained in this paragraph and then he explained the part about Renton’s divorce.

When questioned why he felt it was important that Helen transfer title into his and Renton’s name following the finalizing of Renton’s divorce, he responded by saying that the Respondents “wanted control over the house.” As well, he wanted Helen’s name off the title so the Respondents “could move on with their lives without involving anyone else in their financial affairs.” [ 63 ] There was an interesting exchange between Helen’s counsel and Kostiuk concerning Helen’s status in the hypothetical situation where Helen’s name is taken off title and Helen is moved into a senior’s care facility.

At first, Kostiuk said that Helen’s care would be attended to as a “joint family effort.” When questioned further, he changed his mind and said that he would take care of her because he had always helped her, he would always help her and he would not take advantage of Helen.

[ 64 ] Kostiuk, during cross-examination, testified that he was upset when Helen was not going to take her name off title, but he had no trouble with this. D. Kim Kostiuk’s Testimony [ 65 ] Kim is Helen’s eldest son. By the time he learned about the transaction between the Herunters and the Respondents, things were already in motion. Despite this, Kim wanted to ensure that all of them were getting a fair deal. In Kim’s mind, Kostiuk was going to own the Home. [ 66 ] He was uncomfortable with the transaction from the beginning because of the past history between Kostiuk and Helen.

He testified that Helen and Kostiuk had similar personalities, but Kostiuk could intimidate Helen. Kim, however, felt that this was a good deal for all concerned, although he did not feel that Kostiuk had Helen’s best interests in mind, when they were discussing the deal. To Kim’s mind, the only way this arrangement would work would be if Kostiuk and Helen got along. Kim was hoping it would work. Kim also felt it could work because Joe was around to protect Helen.

When Joe died, Kim testified that “everything went South.” [ 67 ] When Kim expressed his concerns to Helen, she said to him, “Never you mind, Kurt needs a chance in his life” and “Kurt will be the white knight in my life.” [ 68 ] Kim attempted to broker a deal among the parties before the dispute got to court, but to no avail. He had at least six meetings with the Helen and the Respondents. When it became obvious that things were not working out, Kim suggested that the best way to proceed was to figure out the Herunters’ debt and then try to sell the Home quickly and split the equity three ways.

Based on a $320,000 value, this would result in Helen receiving about $40,000. Kim would put this into a trust account for Helen and take care of it on her behalf. Helen initially agreed with this arrangement but changed her mind after she spoke with Lori. Lori said that there is “no way her brother is getting the house.” Again, more profanities were exchanged. [ 69 ] During cross-examination, Kim confirmed his understanding that the deal would be that the Respondents would get the Home and the Herunters would live in the Home debt free for the rest of their lives.

It would be just the Respondents’ names on the certificate of title. To get the Herunters’ equity, Kostiuk would pay nothing. Despite that, Kim thought this arrangement was fair because this was the only way Helen would be able to stay in the Home. He did not feel that, financially, the Herunters could keep the Home. E. Yvonne Carlson's Testimony [ 70 ] Yvonne is the bank officer and financial advisor who handled the Refinancing and LOC component of this transaction. Her initial dealings were with the Herunters. The Herunters first came to visit Yvonne at the beginning of May 2009.

They were having a difficult time financially. Because of their fixed incomes, Yvonne told them that it would be difficult for her to recommend that they borrow money without selling the Home or getting someone else to help them with their financial situation by way of guarantee or as a co-signer on a loan. [ 71 ] The Herunters made no decisions at that time. The Herunters brought the Respondents with them to the next meeting with Yvonne, which occurred near the end of May 2009.

The parties had made a decision on their transaction before they came in to visit Yvonne. [ 72 ] Yvonne’s understanding of the transaction, as explained by the parties, was: 1. all four of the parties would go on title to the Home,

2. everyone’s debts would be paid off with a secured line of credit, 3. the Respondents would pay the line of credit, 4. the Herunters would live in the Home, and 5. the Herunters would live in the Home for free until they could no longer take care of themselves or died. Yvonne does not recall who explained this to her. [ 73 ] She explained to them that the first step was for all of them to attend the LTO to have the title transferred. The loan transaction could only proceed once the property against which the TD would register its security was registered in the correct names.

The parties left the TD to attend the LTO. One week later, Yvonne received a telephone call that they had changed the title. Yvonne ordered a “legal package” which was essentially the security documents that the parties would have to sign to obtain the loan and effect the registration of the security against the certificate of title to the Home. [ 74 ] Joe passed away, so TD could not proceed until the certificate of title was changed a second time. Yvonne had spoken with Helen about all these things. Once the parties had effected this change, Yvonne met with them again to have the documents signed.

One condition of the loan was that it would be used to pay off the parties’ debts. This was done through the TD. [ 75 ] Yvonne had not met with Renton before she met with all the parties. [ 76 ] Yvonne's understanding was that title would transfer to the Respondents once Renton’s divorce was completed. This part of the conversation occurred after Joe died, not before. [ 77 ] Yvonne always recommended to her customers that they obtain legal advice. In fact, in some cases she would insist on it if it was obvious to her that someone was being forced into a transaction.

In this case, Yvonne highly recommended it, but did not insist because it appeared to Yvonne that Helen did not appear to need that kind of information. This was despite the fact that Joe had died two weeks earlier. [ 78 ] Strangely, she felt that it was insignificant that Helen was going to be removed from title to the Home, even though, to Yvonne’s mind, Helen had about $260,000 in equity in the Home. Why? Because Helen was being taken care of in other ways. Yvonne could not tell this Court how she could ensure that Helen was being taken care of; she testified that she was not Helen’s caretaker or lawyer. F.

Findings of Fact [ 79 ] The parties’ testimony is, in part, inconsistent. For clarity, this Court makes the following findings of fact: 1. the planned arrangement between the Herunters and the Respondents was that:

a) all parties would be shown on the certificate of title to the Home,

b) the Herunters would not be responsible for any costs associated with the Home,

c) the Respondents would be responsible for all costs associated with the Home, and would provide caregiving support for the Herunters,

d) all the parties’ debts would be secured against the Home through the LOC, but only the Respondents would be liable for payment of that debt,

e) the Herunters would stay in the Home until their death or their requiring more specialized caregiving facilities, and

f) the Respondents would ultimately be legal owners of the Home; 2. the Herunters and the Respondents did not understand the legal implications of registration as joint tenants of the Home; 3. the transactions underlying Transfer 1 and Transfer 2 were not reduced to a written form; 4. the Refinancing amounts identified by Helen are accurate; 5. the billed amounts that the Respondents report are accurate; 6. the Respondents used exclusively the Home’s basement, which is secured by a locked door, and was the site of a day home business; 7. none of the parties consulted a lawyer in relation to the transaction underlying Transfer 1 and Transfer 2; 8.

Helen would not have been able to live in the Home without financial and personal assistance; 9. both Helen and Kostiuk fully participated in the conflict and hostilities that emerged; and 10. Kostiuk exerted pressure on Helen to remove her name from the Home’s certificate of title. [ 80 ] The evidence does not provide a basis to conclude with confidence whether Helen or Kostiuk first proposed the planned arrangement. However, that fact is not relevant to the analysis that follows. III. Issues [ 81 ] The common law of property recognizes two kinds of interest: legal and equitable.

Both are relevant to the issues before this Court. Briefly, a legal interest recognizes the person who has formal title to property. An equitable interest, however, uses fairness as its cornerstone, i.e. given contributions and actions, who, in fairness, should have an interest in property? [ 82 ] This Court will first examine as a preliminary issue the effect of the land registrations on legal ownership of the Home.

[ 83 ] The next issue also relates to the legal ownership of the Home, by determining whether this Court should: (

a) rescind the transaction that resulted from Transfer 1 in which the Respondents obtained a legal interest in the Home, along with the Herunters, because: 1. the transaction was unconscionable, or, 2. the transaction was the result of undue influence. (

b) rescind the transaction that resulted from Transfer 2, in which the Respondents obtained a further legal interest in the Home, along with Helen, because: 1. the transaction was unconscionable, or, 2. the transaction was the result of undue influence. [ 84 ] There is a further basis on which to question whether the alleged agreement that resulted in Transfer 1 and Transfer 2 is enforceable, as that agreement was never reduced to any written form. [ 85 ] Depending on this Court’s findings with respect to the preceding issues, the final issue for this Court to determine is to: (

a) evaluate the parties’ equitable interests in the Home, (

b) resolve legal title and debts attached to the Home, and (

c) if appropriate, order the partition and sale of the Home, in accordance with section 12(2) (

c) of the Law of Property Act , R.S.A. 2000, c. L-7 (“ LPA ”). IV. Preliminary Issue - Legal Ownership of the Home [ 86 ] Transfer 1 purported to transfer ownership of the Home to the Herunters and the Respondents as “joint tenants.” Joint tenancy is a peculiar state in which more than one person owns a piece of property, but each do not have individual ‘shares’ of that property. Rather, all co-owners hold the property together.

Joint tenants must have “four unities”: unity of title; unity of time; unity of possession; and unity of interest. “These describe the need for virtually perfect equality as between (or among) all of the joint tenants,” citing Blackstone’s analysis: Bruce Ziff, Principles of Property Law , 4th ed., (Toronto: Thomson Canada Limited, 2006) at 312. [ 87 ] A key feature of a joint tenancy is the “right of survivorship.” When a joint tenant dies, the deceased’s interest becomes an interest of the surviving joint tenants.

For example, if the Herunters and the Respondents were joint tenants, Joe’s death would result in the Home being equally owned by Helen and each of the Respondents. Joe’s interest in the Home would not be affected by his will, nor would that interest become a part of his estate. [ 88 ] Another form of shared ownership is tenancy in common, where each owner has a discrete share in a property. When a tenant

in common dies, the deceased person’s share in the property becomes part of their estate, then transferred according to their will orintestacy legislation. [89] Neither Helen nor the Respondents dispute that Transfer 1 created a joint tenancy.

This Court’s review of the facts, however,indicates that the arrangement does not meet the requirements of a joint tenancy. [90] As is noted by Professor Ziff, a key feature of a joint tenancy is that the joint tenants are ‘virtually perfectly equal’.MacKinnon, J. in Speck (Re) (1983), (BC SC), 51 B.C.L.R. 143 (B.C.S.C.) succinctly explains this as: 4 One of the essential features of a joint tenancy is that the owners share the whole of the property. Their interests are identical. Theinterest of each joint tenant is the same in "extent, nature and duration".

The joint tenants may have separate rights but they are equal inevery respect ... [Citation omitted.] [91] That equality is reflected in the ‘unity of possession’ and ‘unity of interest’. Unity of possession means joint tenants canequally use and have access to the whole of the property. It can only exist where “... each joint tenant is entitled to undivided seisin orpossession of the whole of the property and none holds any part separately to the exclusion of the others”: Murdoch v. Barry (1975), (ON SC), 10 O.R. (2d) 626 at para. 14, 64 D.L.R. (3d) 222 (Ont.

H.C.J.). [92] Unity of interest means each joint tenant has the same interest in a property. In Speck, Justice MacKinnon, when confrontedby an attempt to create a joint tenancy with unequal shares, concluded “... what the applicants seek to create is a monster unknown to thelaw” (at para. 5). [93] Recently, Justice Moen, in Lemoine v. Smashnuk, 2008 ABQB 193, 166 A.C.W.S. (3d) 979, commented on the four unities.In her case, like this one, she had no issue with the unity of time and unity of title.

She concluded that no ‘unity of possession’ existswhere only one ‘joint tenant’ lived in a home and the other never had any plan to occupy that residence (at para. 31). Significantly,Moen, J. also determined that different ownership interests disrupted the ‘unity of interest.’ She said: 32 As to unity of interest, "there can be no joint tenancy between those with interests of a different nature": A. J. Oakley, Megarry'sManual of the Law of Real Property, 8th ed., (London: Sweet & Maxwell Ltd. 2002). 33 Although Smashnuk's name appears on the title he has paid nothing for the Property ...

He has contributed nothing to the Property.There is nothing in writing except the loan and the Certificate of Title that suggests that he is entitled to any interest in the Property. 34 As to contributions to the Property, that is the renovations to the basement, ...

Smashnuk cannot claim both payment for therenovations under contract and an interest in the Property because of those renovations. 35 He has put himself personally at risk through the CMHC insurance on the loan as discussed above and he is entitled to be protectedas to that interest but that does not create a unity of interest as required for a joint tenancy. This means that his interest in the Property isdifferent than that of Lemoine. 36 I find that the four unities are not present.

The fact of Smashnuk’s personal risk does not create the four unities in the Property andtherefore, Smashnuk is not a joint tenant with all four unities. [94] An analogous situation arose in Christensen v. Leigh, 2009 ABQB 247 at paras. 7-8, 6 Alta. L.R. (5th) 160, where an allegedjoint tenancy was negated by occupation by only one joint tenant and unequal contributions to the property’s costs.

[95] Unity of possession was, at a minimum, disrupted when the Respondents installed the door and lock that prevented Helenfrom accessing the lower floor of the home. Similarly, Renton’s operating a day home from the lower floor is not compatible with jointtenancy. [96] If this Court were to find that the Respondents earn their interest in the Home by paying for the equity, as Helen argues, thereis no unity of interest. The parties do not hold the same interest.

Helen holds her fully paid interest and the Respondents hold anunearned interest that they are earning as they continue to make payments and continue to “take care” of Helen. If, on the other hand,this Court were to find that the Respondents are entitled to their full interest in the Home, their interest is not the same interest as thatwhich Helen holds, as they have paid nothing for their interest. Granted, they have paid the ongoing operating costs, certain renovationsand interest on the LOC, but they did not pay anything to purchase the property, or even seek to pay down the principal amount of theLOC.

As in Lemoine, there is nothing in writing except the LOC and the certificate of title that suggests that they are entitled to anyinterest in the Home. The arrangement by which the Respondents took on a sole obligation to pay all costs associated with the Home andthe LOC does not create a unity of interest. In fact, it shows that no unity of interest exists. On this basis, this Court concludes that firstattempt to form a joint tenancy through Transfer 1 failed. [97] A failed attempt to create a joint tenancy results in a tenancy in common: Ziff, at p. 313; LPA, s. 8.

When the Herunters andthe Respondents registered as joint tenants, they in law became tenants in common, each with a one-quarter share of the Home. [98] On Joe’s death his one-quarter legal share in the Home became part of his estate. Helen, if alive, is the beneficiary of Joe’sentire estate. Thus, after Joe’s death the Home was legally owned one-half by Helen, one-quarter by Kostiuk, and one-quarter by Renton,as tenants in common. [99] Transfer 2 did not create a joint tenancy for the same reasons that Transfer 1 did not.

At most, the Respondents might arguethat Transfer 2 created a tenancy in common with Helen and each of the Respondents having a one-third share of the Home. V. Status of Transfer 1 and Transfer 2 [100] Helen argues that she should not be bound by the agreement that resulted in Transfer 1 and Transfer 2. In this alleged agreementthe Respondents received an interest in the Home, in exchange for which, they would pay for the maintenance and upkeep of the Homeand “take care” of the Herunters for the rest of their lives. (

a) The Law Related to Unconscionability and Undue Influence [101] In Canadian Imperial Bank of Commerce v. Ohlson (1997), 1997 ABCA 413 , 154 D.L.R. (4th) 33 at para. 22, 209A.R. 140 (Alta. C.A.), the Alberta Court of Appeal said that unconscionability “aims to temper the idea of freedom to contract with theneed to prevent abuse and to protect the weak.” It went on in that same paragraph to differentiate unconscionability from undue influenceby providing a quotation from Morrison v.

Coast Finance Ltd. (1965), (BC CA), 55 D.L.R. (2d) 710, 54 W.W.R. 257at 259 (B.C.C.A.): The equitable principles relating to undue influence and relief against unconscionable bargains are closely related, but the doctrines areseparate and distinct. The finding here against undue influence does not conclude the question whether the appellant is entitled to reliefagainst an unconscionable transaction.

A plea of undue influence attacks the sufficiency of consent; a plea that a bargain isunconscionable invokes relief against an unfair advantage gained by an unconscientious use of power by a stronger party against aweaker. On such a claim the material ingredients are proof of inequality in the position of the parties arising out of the ignorance, need ordistress of the weaker, which left him in the power of the stronger, and proof of substantial unfairness of the bargain obtained by thestronger.

On proof of those circumstances, it creates a presumption of fraud which the stronger must repel by proving that the bargainwas fair, just and reasonable … [Emphasis added, citations excluded]. [102] Thus, pleas of undue influence and unconscionability are equitable in nature. See also Kassian v. Hill, 2002 ABQB 106, 305A.R. 148. Accordingly, this Court must look at the substance of the transaction, and not simply its form: Brown v. Northey (1991), 1991ABCA 75 , 115 A.R. 321, 25 A.C.W.S. (3d) 825 (Alta. C.A.); Helm v.

Simcoe & Eerie General Assurance Co. (1979), 1979ABCA 257 , 108 D.L.R. (3d) 8, 19 A.R. 326 (Alta. C.A.). Unconscionability involves a power imbalance that results in an

unfair bargain, whereas undue influence deals with the sufficiency of consent. [103] In Ohlson, the Alberta Court of Appeal went on to say: 52 The relationship of elderly parent/adult child is frequently one of dependency and therefore one which can be subject to abuse orpressure. ...

The person who is not gaining from the financial transaction may be subject to pressure arising from the relationship. [104] Finally, the court said that in a situation of an elderly parent/adult child transaction where the elderly parent is risking an assetfor the sole benefit of the child, the elderly parent should be sent for independent advice, ibid. Unconscionability [105] In Lydian Properties Inc. v.

Chambers, 2007 ABQB 541 at para. 46, 427 A.R. 304, aff’d 2009 ABCA 214, 57 A.R. 211,Graesser, J. held that when there is an allegation that a transaction is unconscionable, “there is a burden on the party seeking to avoid ... atransaction to prove that the transaction is in reality something different than what the documentation describes it as.” [106] In Lydian at para. 59, Graesser, J. goes on to outline the four essential elements of an unconscionable transaction as follows: (1) a grossly unfair and improvident transaction; (2) the victim's lack of independent legal advice or other suitable advice; (3) overwhelming imbalance in the bargaining power caused by the victim's ignorance of business, illiteracy, ignorance of thelanguage of the bargain, blindness, deafness, illness, senility, or similar disability; and (4) the other party's knowingly taking advantage of this vulnerability. [Citation excluded]. [107] In Floyd v.

Couture, 2004 ABQB 238 at para. 108, 349 A.R. 1, Coutu, J. said that when a court evaluates whether a settlementis substantially unfair, it must look at “the circumstances known to the stronger party or those he ought to have known (or those whichwere foreseen or foreseeable), at the time of the settlement” [emphasis in original]. As well, Her Ladyship relied on McCullough v.Hilton (1998), (BC CA), 110 B.C.A.C. 293, 63 B.C.L.R. (3d) 272 (B.C.C.A.), where the court held that the trialjudge erred by considering subsequent facts (at para. 120). The McCullough court went on to say: 27 ...

That is not to say that there will never be cases when events subsequent to the settlement will have some relevance. But thatcan be so only if the events are of a kind which, on the basis of the facts known at the time of settlement, could be regarded as at least areasonable possibility. ... Undue Influence [108] Whereas an argument of unconscionability attacks the overall fairness of a transaction, a party attacks the sufficiency of consentwhen they advance the argument of undue influence. The Supreme Court of Canada in Geffen v.

Goodman Estate, (SCC), 1991 CarswellAlta 91 at para. 24, [1991] 2 S.C.R. 353, 81 D.L.R. (4th) 211 [cited to Carswell], described the purpose of

analyzing a transaction to determine whether one party unduly influenced the other to enter into it, as being, “not to save people from theconsequences of their own folly but to save them from being victimized by other people” [citations excluded]. Wilson, J. cites, at para.38, Professor Ogilvie, “Undue Influence in the House of Lords” (1986), 11 Can. Bus.

L.J. 503 at 511: Undue influence is designed to protect more than mere commercial interests; rather it is meant to protect the integrity of the weak or themomentarily weak from entering into disadvantageous transactions, however measured. [109] Geffen provides this Court with a road map it may use to analyze whether the Respondents unduly influenced Helen when sheentered into the agreement that underlies Transfer 1 and Transfer 2. First, we must examine the relationship between the parties todetermine whether there is a potential for domination because of the nature of the relationship itself.

Second, we must examine thenature of the transaction. In the case of a gift, Geffen said that the presence of a dominant relationship may be sufficient. In the case of acommercial transaction, however, the plaintiff must show that the plaintiff was disadvantaged or the defendant unduly benefited from thetransaction. In other words, is the transaction inherently unfair? If Helen proves these factors, the onus shifts to the Respondents to rebutthe presumption that they unduly influenced Helen.

Geffen says: 46 ... [T]he plaintiff must be shown to have entered into the transaction as a result of his own "full, free and informed thought".Substantively, this may entail a showing that no actual influence was deployed in the particular transaction, that the plaintiff hadindependent advice, and so on. [110] In Kovach v. Beardsley (1991), (AB KB), 123 A.R. 48 at para. 21, 81 Alta. L.R. (2d) 202 (Alta.

Q.B.),Shannon, J. observed “[c]ourts have not been hesitant in finding that a relationship giving rise to the presumption exists where thedominant relationship is that of a child and aged or infirmed parent.” [111] In Wannamaker v. Livingston (1918), 43 O.L.R. 243 at 258-59 (S.C. Ont., App. Div.) the court said: ... [I]f such a transaction takes place when the grantee or donee is in a position ... to exercise influence over the grantor, it is not necessaryto the setting aside of such a gift, on the ground of undue influence, that there should be proof of the exercise of undue influence.

Undueinfluence is presumed, and it rests upon the grantee or donee to rebut that presumption by proving that the transaction was righteous andwas fairly conducted as between strangers; that the grantor was not unduly impressed by the influence of the grantee; and by satisfyingthe court that the grantor, knowing and appreciating the effect of the transaction, acted voluntarily and deliberately, free from theinfluence of the grantee ... [Citations omitted.] [112] In Kovach, Shannon, J. said that in many cases, “... the easiest way to meet the onus of proof is to furnish proof of independentlegal advice” (at para. 32).

Even more serious is where: ... the applicant lacked the benefit of an "independent and informed judgment," and even lacked the bare minimum, as he was unaware ofthe ".... reasonable alternatives to the impugned action." (at para. 33). [113] Here, there was no such independent advice. (

b) Is the Agreement that Resulted in Transfer 1 and Transfer 2 Unenforceable as Unconscionable or a Product of UndueInfluence? [114] The certificate of title to the land on which the Home is situated is registered jointly in the names of each of the Respondentsand Helen. This Court has previously concluded that, in law, the registration is inaccurate, as this is a tenancy in common. Thus,according to Lydian, Helen bears the burden of proving that this Court should find that the transaction into which the Herunters and theRespondents entered is something different from what the certificate of title shows.

[ 115 ] Helen is obliged to demonstrate that the Respondents were in a position of dominance over the Herunters, and then her alone. She is not required to demonstrate that the Respondents actually exercised influence over her. If Helen can demonstrate a position of dominance, then she establishes a presumption of undue influence: Kovach at para. 21 ; Wannamaker at 258-59. [ 116 ] As the court in Geffen stated, we must first look at the relationship among the parties to determine whether there was a potential for domination.

The court in Kovach says that courts will not hesitate to find a presumption of undue influence in a situation of a child and an aged or infirm parent. [ 117 ] Helen testified that she knew what she was signing when the Herunters signed Transfer 1. This Court finds that this is not surprising, as she was a former real estate agent. In fact, although this was not tendered in evidence, it appeared as though she maintained her real estate license at the time the Herunters signed Transfer 1, as she was helping the Respondents look for a house.

She may have been in weak health, but even today, she is certainly not of weak mind. Kostiuk has a dominant personality, but this Court finds that his dominance had no influence over the Herunters when they executed Transfer 1. Whether Kostiuk or Helen initially raised the proposal matters not, as both of them were eager to proceed with it. Helen saw it as a “gift” and Kostiuk saw it as a way to obtain a home without a down payment. [ 118 ] According to Geffen we must then examine the nature of the transaction. Is the transaction inherently unfair?

Did the Herunters enter into this transaction voluntarily and deliberately, free from the influence of the Respondents? Is it unconscionable? A lack of independent legal advice may enter into the analysis, as this stage. [ 119 ] One aspect of the “overwhelming imbalance” element set forth in Lydian is whether the Herunters had “ignorance of the language of the bargain.” This issue has two aspects. [ 120 ] First, there is the question of the kind of interest the parties had intended to create when they registered the new ownership structure with the LTO. As mentioned earlier, Helen was a real estate agent.

Does this mean that she knew the difference between joint tenancy and tenancy in common? Because of the nature of the transaction, it appears that she did not. This Court concludes that she (and Joe) did not intend that Joe’s legal interest in the Home would immediately pass on Joe’s death to the Respondents.

Further, had Helen understood the legal and operational character of a joint tenancy, she would have known that the planned living arrangements, each couple on a separate floor, is inconsistent with a joint tenancy’s ‘unity of possession’ requirement and that there was no ‘unity of interest.’ [ 121 ] Second, there was a substantial difference between the Herunters’ understanding of the transaction and that of the Respondents. The Respondents understood that the Herunters would transfer title to the Home into their names alone on the finalizing of Renton’s divorce.

Helen understood that the transaction was conditional; it required the Respondents to “take care” of the Herunters for the rest of their lives or until one or both of them had to be placed in a senior’s residence, but Helen (and Joe) would retain her (their) legal interest in the Home. [ 122 ] The lack of the parties being ad idem on the nature of the transaction is best illustrated when one considers the question, what if the Respondents did not fulfill their end of the bargain?

If the Respondents obtained complete title to the Home, without the Herunters’ names on it, they were free to do what they wanted with the Home and even “evict” the Herunters. If Helen retained a legal interest, they could not do this. [ 123 ] This Court acknowledges that the Respondents made all of the payments that relate to the Home from the time they moved into the Home. Is that enough? This Court finds that it was not. Kostiuk acknowledged that he used extremely foul language against Helen when she refused to sign a further transfer into the Respondents’ names alone.

Kim testified that Kostiuk could intimidate Helen. There was tension between Kostiuk and Helen. That was palpable even while they were giving their testimony. This Court finds that the Respondents did not fulfill their end of the bargain to “take care” of Helen. Surely, the Herunters did not intend that the Respondents would obtain title to the Home without fulfilling their end of the bargain. [ 124 ] Furthermore, this Court finds that Renton did, indeed, meet with Yvonne soon after she and Kostiuk had their discussion about the proposal.

This was testimony against Renton’s interest and she was forthright in her testimony concerning this. Yvonne seemed to have an understanding of the transaction once the Respondents, together with the Herunters, met with her. But she obtained her understanding of the transaction from Renton, not from the Herunters. Had Yvonne heard what the parties were attempting to accomplish, surely she would (or should) have sent the Herunters for independent legal advice. The Herunters should have received

independent advice. Real estate agents do not know the intricacies of real estate or conveyancing laws and the differences among proprietary interests in land and their effect. First year law students spend much of their first year of law school learning about such things. [ 125 ] Helen was vulnerable and eager to complete a transaction that would ensure lifelong care from one of her sons. Kostiuk wanted to own a home, but did not have the financial wherewithal to purchase a home at the time he entered into the transaction with the Herunters.

The Herunters were vulnerable; Kostiuk was not and he took advantage of their vulnerability. [ 126 ] Helen’s vulnerability was even more severe once Joe died. She had just lost her husband, and her health was not sound. The Respondents, for some reason, wanted to rush through the transfer into their names and Helen’s name. Had they known the nature of a joint tenancy, they would know that there was a right of survivorship, in any event. There was no rush.

As well, they easily could have waited to complete the Refinancing until after Helen regained her emotional and physical health and received independent legal advice. They did not. [ 127 ] Had the Respondents fulfilled and continued to fulfill their obligation to the Herunters and, later, to Helen, to “take care” of them for the rest of their lives, this Court might be inclined to find that the transaction was not grossly unfair or improvident. However, when one views this transaction contextually, it is grossly unfair and improvident, especially given what has occurred since Joe died.

This is not an executed contract, where consideration is paid and the goods are delivered. This is an executory contract. The “taking care” requirement is an ongoing obligation and encompasses more than just “paying the bills.” [ 128 ] This Court finds that the Respondents knew that they could (or would) mistreat Helen at the time they entered into the agreement that resulted in Transfer 1 and Transfer 2.

Certainly, it is conceivable that one would treat a person properly before the parties enter into an agreement, but badly after it is consummated, for any number of reasons. [ 129 ] Floyd says that for a court to intervene the contract must be so “substantially unfair it offends our conscience” (at para. 151). In this case, Helen gave up a part of her legal interest in the Home and allowed the Home to be used as security for the Respondents’s substantial debts. In exchange, she had someone paying for upkeep of the Home, including taxes and utilities, but she felt unsafe in it.

This was her home that she shared with Joe. Although she felt safe and secure while Joe was alive, she did not feel safe once he died. Surely, she deserves better than that. This type of arrangement substantially offends society’s conscience. [ 130 ] What does all this mean? This Court finds that even though the agreement that resulted in Transfer 1 was unfair, the Herunters went into it with their eyes open. This Court should not stand in the way of the parties’ ability to contract. However, the Herunters lacked on knowledge of the nature of the interest they were surrendering to the Respondents.

The Respondents did not fulfill their end of the bargain. The agreement that resulted in Transfer 1 and Transfer 2 is unconscionable. [ 131 ] To this moment, this Court has no idea why Renton’s divorce judgment would have anything to do with this transaction. At the time the parties signed Transfer 1, Renton arguably had an interest that her ex-spouse could attach. Her ex-spouse could even argue that she constructively held a property interest in trust for him. A court does not look kindly on purported “game-playing” with its processes involving a matrimonial property dispute.

In any event, had this matter not been the subject of a court application, the Respondents had a right of survivorship. There was no need for Helen to transfer her interest to the Respondents, unless the Respondents had nefarious objectives. This Court need not make that finding. However, if it was required so to do, it would be inclined so to find. [ 132 ] As for the signing of Transfer 2, this Court finds that it was obtained through undue influence. Helen was in an extremely vulnerable position when she signed Transfer 2. She had historical vulnerability issues and she had just lost her husband.

She was not in very good health and Kostiuk has a powerful personality, or at least she saw him as such. What was her choice? Continue to be subjected to Kostiuk’s bullying until she capitulated, or risk having the Respondents move out, in which case she would be left on her own to fend for herself. In the end, this finding makes no difference because of the way in which this Court has characterized the agreement that resulted in Transfer 1. [ 133 ] This Court therefore concludes the Respondents do not have a joint tenancy interest or tenancy in common interest in the Home.

Nevertheless, they did provide certain services, contribute to the Home’s upkeep, and made some payments that relate to the Home, including payments to the LOC. This Court will deal with the potential property interest effect of those actions later in this judgment.

(

c) Do Transfer 1 and 2 Offend the Statute of Frauds? [134] In any event, and despite this Court’s findings on the unenforceability of the agreement underlying Transfer 1 and Transfer 2,the parties did not reduce the alleged agreement to writing. After the open conflict emerged, Helen (through Lori) and the Respondentsprepared draft documents in an attempt to evidence the alleged agreement between Helen and the Respondents. None of those draftdocuments was accepted by all three parties. [135]

Section 4 of the Statute of Frauds, 29 Car. II. c. 3 [A.D. 1676] prohibits enforcement of bargains that involve land if there is nowritten contract. Côté, J.A. in Austie v. Aksnowicz, 1999 ABCA 56 at para. 23, 232 A.R. 118, leave refused [1999] S.C.C.A.

No. 172restated the rule in this manner: No action shall be brought whereby ... to charge any person ... upon any contract or sale of lands ... unless the agreement upon whichsuch action shall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith,or some other person thereunto by him lawfully authorised. [136] A “memorandum” that is written and is signed by the parties can be a basis to establish a contract in writing. Read, J. provides ahelpful

summary of when a “memorandum” is a sufficient written basis for an enforceable contract in land: 642718 Alberta Ltd. (c.o.b.CNE Centre) v. Alberta (Minister of Public Works Supply and Services), 2004 ABQB 539 at paras. 50, 368 A.R. 53, statute of fraudsanalysis specifically affirmed at 2005 ABCA 292 at para. 9, 371 A.R. 390: [50] A memorandum of an oral contract must contain all of the essential terms of the contract and must show that the parties haveagreed to those terms: Austie v. Aksnowicz, supra at para 26.

However, the writing to satisfy the Statute need not be a formal documentand may be made of several pieces of writing: Kevel Holdings Ltd. v. 408230 Alberta Ltd. (1994), (AB KB), 17 AltaL.R. (3d) 1 at 13 (Q.B.). [Emphasis added.] [137] On appeal Costigan, J.A. expanded on the question of necessary terms: 9 ... The trial judge found as a fact that responsibility for subdivision costs was a material term of the contract and that absentagreement on that term, the contract was too uncertain to be enforced.

There is ample evidence to support the finding that this term wasmaterial and it is clear that subdivision costs were not discussed at the May meeting nor referenced in the offer to purchase or the internaldocuments. Accordingly, if an agreement was reached on the other terms, it was both too uncertain to be enforced and insufficientlydocumented to meet the requirements of the Statute of Frauds. ... [Emphasis added.] [138] Transfer 1 records that the Herunters transferred an interest in the property to the Respondents for consideration of $1.

Allparties have testified that this was not the actual arrangement. [139] Thus, this Court has no documentation of the actual consideration flowing from the Respondents to the Herunters (or, later,Helen). This is an essential term of the contract. In the words of Costigan, J.A., there is inadequate documentation to prove thetransaction to the standard required by the Statute of Frauds. Consequentially, the alleged agreement that formed the basis of Transfer 1nor 2 is not enforceable. V. Resulting Trust [140] In Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795 and Madsen Estate v. Saylor; Saylor v.

Brooks, 2007 SCC 18, [2007] 1S.C.R. 838, the Supreme Court of Canada discussed issues involving gifts, joint property and resulting trusts. It also discussed thepresumption of advancement, which does not apply to this case.

[ 141 ] Pecore describes a resulting trust as arising: 20 ... when title to property is in one party’s name, but that party, because he or she is a fiduciary or gave no value for the property, is under an obligation to return it to the original owner ... [Citations excluded.] See also Kerr v. Baranow , 2011 SCC 10 , at paras. 1-21 . [ 142 ] This Court has found that the Respondents have no legal interest in the property on which the Home is located, based on the facts it has found and the law as it applies to those facts.

Thus, there is no need for this Court to embark on a discussion of whether the Respondents hold their interest in trust for Helen through a resulting trust. Had it been necessary, this Court would have found that the Respondents hold their interest in the property on which the Home is situate in trust for Helen. [ 143 ] Further, because of its findings, there is no need for this Court to discuss the issue of whether Helen holds the property on which the Home is located in trust for the Respondents.

The LPA gives this Court the authority to deal with the distribution of the proceeds of the sale of the Home and a balancing the parties’ respective interests in those proceeds, without the necessity of analyzing entitlement using a trust. VI. Remedy (

a) Legislation and Principles [ 144 ] The LPA provides: 14 In this Part, (a) “co-owners” means joint tenants or tenants in common of an interest in land but does not include joint tenants or tenants in common of an interest in land who are holding the interest for common beneficiaries; ... 15(1) A co-owner may apply to the Court for an order terminating the co-ownership of the interest in land in which the co-owner is a co-owner.

(2) On hearing an application under subsection (1), the Court shall make an order directing (

a) a physical division of all or part of the land between the co-owners, (

b) the sale of all or part of the interest of land and the distribution of the proceeds of the sale between the co-owners, or (

c) the sale of all or part of the interest of one or more of the co-owners’ interests in land to one or more of the other co-owners who are willing to purchase the interest.

(3) A sale under subsection (2)(

b) or (

c) and the distribution of the proceeds of the sale shall be under the direction of the Court.

(4) In making an order under subsection (2)(c), the Court shall fix the value of the land sold and the terms of the sale. 17(1) In making an order, the Court may direct that (

a) an accounting, contribution and adjustment, or any one or more of them, take place in respect of the land, and (

b) compensation, if any, be paid for an unequal division of the land.

(2) In determining if an accounting, contribution or adjustment should take place or compensation be paid for an unequal division of the land, the Court shall, without limiting itself from considering any matter it considers relevant in making its determination, consider whether (

a) one co-owner has excluded another co-owner from the land; (

b) an occupying co-owner was tenant, bailiff or agent of another co-owner; ... (

e) a co-owner has made improvements or capital payments that have increased the realizable value of the land; (

f) a co-owner should be compensated for non-capital expenses in respect of the land; (

g) an occupying co-owner claiming non-capital expenses in respect of the land should be required to pay a fair occupation rent; (

h) a co-owner has at the time the application is made under this Part rights in the land for which the co-owner would receive compensation under the Dower Act if an order had been made under that Act dispensing with that co-owner’s consent to the disposition of that land. 18 If an order is made with respect to an interest in land other than a fee simple estate, the Court may impose any terms and conditions it considers necessary to ensure that the obligations imposed in respect of the interest are performed. 19 If the interest in land that is the subject of an order is held in joint tenancy, the order on being granted severs the joint tenancy. [ 145 ] The LPA provides a court with a broad authority to resolve questions that relate to land.

This Court’s task is to resolve the title to, and any interests in, the Home. [ 146 ] In Gonzalez v. Soto , 2009 ABQB 454 at para. 44 , 81 R.F.L. (6th) 125, Veit, J. held that the LPA allows courts to consider equitable principles when they consider whether and how to resolve issues concerning the division of proceeds of jointly-owned property. Veit, J. earlier held:

42 … Naturally, the fact that property has been taken in joint tenancy has implications for the division of proceeds. But, if title were the end of the analysis, none of the case law could ever have been developed; equity is the discretionary aspect of law which cures potential unfairness . [Emphasis added.] [ 147 ] Veit, J. went on to say that, a combination of legislation, along with equitable and common law principles, is to provide the court with the tools it requires to obtain a fair result, when she said: 44 ...

These equitable principles, just like the statutory factors are, of course, matters which the court considers, not matters which are decisive. The objective of both the Legislature in enacting [ LPA ] s. 17 and the common law in developing equitable principles is to achieve fairness; in other words, the statutory factors and the equitable principles are discretionary tools, not inevitable results. [Emphasis added.] [ 148 ] Like the parties in Gonzalez , the parties in this case have invited this Court to resolve their differences without the necessity and cost of a trial.

This makes sense, as a trial will require expert evidence on valuations, cost of borrowing, the amounts that can be credited to various payments and the like. [ 149 ] Justice Veit reviewed much of the law that will apply to this case. The principles from Gonzalez that this Court will apply are as follows:

(1) The LPA does not explicitly state that the distribution of proceeds on a court-ordered sale of co-owned real estate will, prima facie , be made proportionately according to the ownership, but that is the conclusion that can be fairly drawn from the statute and which is reflected in the case law: Gonzalez at para. 30 ; (2) prima facie joint tenants are jointly entitled to the property, but that is a rebuttable presumption: Gonzalez at para. 32 ; (3) a co-owner who requests an unequal distribution of proceeds bears the burden of establishing entitlement to a greater than equal share of those proceeds: Gonzalez at para. 33 ; (4) for a constructive trust to grant a property right rather than a mere claim to a money judgment, there must be a direct link between the contribution and the property.

A similar link must be made if a person is basing their claim on a contribution based on capital payments under LPA s. 17(2)(e): Gonzalez at para. 36 ; (5) for non-capital contributions, it is inappropriate to engage in an audit of the parties’ respective financial contributions to the property; it is sufficient to note that the financial contribution of each of the parties to the property was substantial: Gonzalez at para. 38 ; (6) what was the parties’ intention?: Gonzalez at para. 46 ; (7) if the parties created a joint tenancy, the onus is on the party who is challenging that tenancy to prove that the parties intended some other type tenancy: Gonzalez at para. 54 ; (8) would the Respondents be unjustly enriched if this Court were to hold that they are entitled to their registered interest in the Home?: Gonzalez at para. 55 et. seq. [ 150 ] The overriding principle that this Court must apply in this situation is fairness.

Justice Veit said in Gonzalez at para. 44 :

The overall task here is to determine what is a fair distribution of the proceeds. “Fair” in this context means fair according to law andequity, not according to the judge’s personal view. (

b) Analysis [151] Inasmuch as this Court has found that the agreement that formed the basis for Transfer 1 and Transfer 2 is unenforceable, it isleft with a certificate of title showing Helen, Renton, and Kostiuk holding the Home jointly. This Court has previously concluded thatlegally this is properly considered a tenancy in common. This Court also held that a joint tenancy was not the parties’ intention; Helenwas to have an interest in the property until the Respondents fulfilled the “taking care” condition. They did not.

Thus, the legal interest inthe Home could be proportionate, with the Herunters, on the one hand, and the Respondents, on the other, each legally having a 50%interest in the Home. [152] However that alternative is essentially irrelevant as the unenforceable character of the contract that formed the basis forTransfer 1 and Transfer 2 means Helen retains both her legal interest and Joe’s legal interest in the Home. Thus, Helen has a right to theentire proceeds of any sale of the Home. [153] The Herunters lived in the Home for about 14 years before the Respondents came into the picture.

However, when theHerunters were in failing health and then, when Joe died, the Respondents offered to help them out. That is a juristic reason for theRespondents to be entitled to an interest in the Home’s sale proceeds. As well, Helen could not continue to live in the Home without theRespondents contributing financially and, as well, she benefited from the Respondents’ assistance during the time in which they livedthere.

To replace those services and financing would have cost her money. [154] Counsel for the Respondents argues that the Respondents paid various utility and tax arrears related to the Home and all theexpenses related to the Home, including the mortgage payments and improvements. In Folia v. Trelinski (1997), (BCSC), 36 B.L.R. (2d) 108, 32 R.F.L. (4th) 209 (B.C.C.A.), the court held that these types of payments would fulfill the requirement of achild “taking care” of an ageing parent.

In that case, however, the plaintiff received legal advice before she executed the transfer, thedefendants forgave a debt that the plaintiff owed to them, they assumed a mortgage on the property and they paid tax arrears. [155] Here the Herunters had no existing financial obligation to the Respondents and the Herunters certainly did not have legal advicebefore they signed Transfer 1 and Helen did not have legal advice when she signed Transfer 2. [156] The LPA allows this Court to order a partition and sale of the Home. This Court will use partition and sale to illustrate how thismatter should be resolved.

However, if the parties choose not to sell the Home, then the parties can use the principles this Court outlinesbelow to guide them through the calculation of the amounts to which each of the parties is entitled and pay to the other an equalizationpayment. In Gonzalez, Justice Veit says that courts need not go through an audit of the parties’ respective contributions.

However,because of the short time that the Respondents spent in the Home, it would be difficult not to use the parties’ respective contributions todetermine who is entitled to what in terms of the sale proceeds. [157] The Respondents have made a contribution. The Herunters had planned that the Respondents were entitled to a proprietaryinterest if the Respondents fulfilled their obligations. They did not, and this Court has concluded that the agreement that formed the basisfor Transfer 1 and Transfer 2 is unenforceable.

That negates the Respondents’ equitable right to a 50% interest in the Home’s value. [158] However, the Respondents are entitled to something. “[E]quity presumes bargains and not gifts”: Kerr at para. 19. If theRespondents have no legal interest in the Home, then their contributions create a right in equity. Helen cannot on the basis of havinglegal title to the Home, deny that she has received benefits from the Respondents living in the Home. Helen and the Respondents gainedthe use and benefits of the Home.

The Respondents paid for the costs of preserving and maintaining the Home, as well as someimprovements. [159] However, Helen, in fairness, is not obliged to compensate the Respondents for the full amount of their contributions. While theRespondents did fulfill part of their bargain by their paying the various bills, shovelling the sidewalks, mowing the lawn and “takingcare” of Helen (and Joe, before Joe died), ultimately Helen received something less than what she bargained for; the Home devolved into

a siege rather than a place of retirement. Thus, this Court concludes that Helen is not liable for 50% of the costs incurred during the period of ‘split occupancy.’ This Court finds her share to be a 25% obligation with respect to certain amounts. This might seem arbitrary, but it is not intended so to be.

Rather, it represents partial fulfillment of the original bargain between the Herunters and the Respondents. [ 160 ] Helen therefore must pay to the Respondents 25% of the taxes, insurance and utility costs in relation to the Home that the Respondents actually paid. [ 161 ] The parties advised this Court that the Respondents paid interest-only on the LOC. Thus, the principal amounts of the various debts have remained static, so the foregoing calculations should not prove to be difficult. The amount of LOC interest attributable to the mortgage on the Home will be split.

The Respondents will be responsible for 75% of that amount and Helen will be responsible for 25%. [ 162 ] The Respondents argue that they are entitled to be credited for the payments they have made towards certain “improvements.” This Court finds that some of the “improvements” are not improvements at all. For example, a door was installed to keep Helen away from the basement of the Home, so that Renton could operate her day home. In fact, one could say that the installation of the wall and door actually takes away from the Home’s value.

The entire cost of that “improvement” falls to the Respondents. [ 163 ] Kostiuk is entitled to be reimbursed for 100% of the cost of other improvements, including, but not limited to, the fence that Kostiuk paid-for and built. Helen owns the Home and she will be the one to benefit from those improvements when she either uses or disposes of the Home. This Court concludes that any equitable benefit to the Respondents from these improvements during the ‘split occupancy’ is minimal. [ 164 ] Both parties encumbered the Home with their personal and non-mortgage related debts.

The parties will remain responsible for the principal amount of their non-mortgage debts. Helen is liable for LOC interest payments on the Herunters’ non-mortgage debts. The Respondents will remain liable for the LOC interest payments on their respective non-mortgage debts. [ 165 ] Part of the LOC total (interest, insurance, and legal fee amounts) appears to relate to the costs of the Refinancing and registration of Transfer 1 and Transfer 2. In effect, these appear to be transaction costs.

If that is indeed the nature of these amounts, then these costs and associated interest will be born 75% by the Respondents, and 25% by Helen. However, if these amounts are personal costs, then the party that incurred the costs will be responsible for 100% of these amounts and associated interest. [ 166 ] Assuming that the parties never entered into the transaction at all, Helen would sell the Home, pay off the mortgage and retain the proceeds. The parties must obtain an appraisal of the Home and determine its value as at the day the Respondents moved in and the value of the Home today.

Assuming that the Home’s value has increased, Helen is entitled to 75% of the increase in that value and the Respondents are entitled to 25% of the increase. [ 167 ] This table summarizes the various financial obligations relating to the Home and LOC: Item Helen The Respondents Home mortgage 100%: $170,132.52 0% Herunters’ debts 100%: $19,044.57 0% Renton’s debts 0% 100%: $55,032.33 Kostiuk’s debts 0% 100%: $13,037,18 Refinancing interest* 25%: $63.05 75%: $189.15

Refinancing insurance* 25%: $27.49 75%: $82.47 Refinan

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