) ) ERROL M. WALTERS Plaintiff (Defendant by Counterclaim) – v. –, 2019 ONSC 22

CITATION : Walters v. Nusseiri, 2019 ONSC 22 COURT FILE NO.: CV-16-4996 DATE: 2019 01 02 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: ) ) ERROL M. WALTERS Plaintiff (Defendant by Counterclaim) – and – LUBNA (a.k.a. SUSAN) NUSSEIRI Defendant (Plaintiff by Counterclaim) ) ) ) ) ) ) ) ) ) Harvey Swartz, for the Plaintiff Sukh Jagpal, for the Defendant ) ) ) HEARD: June 19, 20, 21, 2018 REASONS FOR JUDGMENT PETERSEN J. OVERVIEW Introduction [ 1 ] This action involves a dispute over the proceeds of sale of a residential property on La Rose Court in Brampton, Ontario. The property was sold in 2016.

At the time of the sale, the plaintiff, Erroll Walters, and the defendant, Lubna Nusseiri, were both registered owners on title. The property had initially been purchased in Ms. Nusseiri’s name alone on July 29, 2005. Title was transferred to both parties as joint tenants on September 28, 2005. [ 2 ] When these transactions occurred, the parties were involved in a relationship. The nature of that relationship is in dispute. Mr. Walters characterizes it as a committed common-law spousal relationship. Ms.

Nusseiri concedes that it began as a boyfriend- girlfriend dating relationship, but by 2005, she describes it as a toxic working relationship between an exploited sex worker (herself) and a controlling pimp (Mr. Walters). [ 3 ] When the property was sold, Ms. Nusseiri received half of the net proceeds of sale. The other half, an amount of $169,774.01, is being held in trust pending resolution of this action. Parties’ Positions [ 4 ] Mr. Walters claims entitlement to the trust funds by virtue of the fact that he was a registered 50% owner of the property. Ms.

Nusseiri counter-claims that, when she transferred 50% of her ownership interest to him, she was acting under duress and/or in circumstances that constituted undue influence. She argues that the transfer was therefore invalid and that she remained the exclusive owner of the property. [ 5 ] Mr. Walters denies that he threatened, harassed or intimidated Ms. Nusseiri or did anything to force her to make the transfer. He says that they mutually intended to co-own the property from the start.

He asserts that title was initially registered in her name only because he had credit issues that would have made it impossible for them to obtain mortgage financing if his name had also been on title. He says they agreed that ownership of the home would be transferred into both of their names and registered as joint tenants after the mortgage was secured by Ms. Nusseiri. [ 6 ] In the alternative to her arguments based on duress and undue influence, Ms. Nusseiri claims that the transfer of 50% of her ownership interest to Mr. Walters resulted in a presumptive trust in her favour. She asserts that Mr.

Walters paid no consideration for her conveyance of the half interest and therefore held his interest for her benefit, based on the doctrine of resulting trust.

[ 7 ] Mr. Walters disputes her claim to a beneficial interest in his 50% ownership share of the property. He asserts that he made a substantial financial contribution to the initial purchase of the property in July 2005. He further claims to have contributed at least equally to mortgage, property tax, and utilities payments over four years that he lived there (2005-2009). He states that he also made significant improvements to the property during those years. He argues that his conduct is consistent with his ownership interest. Ms.

Nusseiri disputes that he made any financial or other contributions to the acquisition, maintenance or improvement of the property. Procedural History [ 8 ] This action began as an Application by Mr. Walters under the Family Law Rules , O. Reg. 114/99. He initially sought an order for partition and sale of the property, equal distribution of the net proceeds of sale according to the registered title and occupation rent from Ms. Nusseiri from January 1, 2010 onward. His Application was subsequently re-filed under the Rules of Civil Procedure , R.R.O. 1990, Reg. 194. Ms.

Nusseiri also filed an Application under the Rules of Civil Procedure . [ 9 ] On October 13, 2016, Justice Bloom ordered a trial of the issues raised by the Applications. He directed Mr. Walters to re- commence the proceeding as an action by filing a Statement of Claim. Ms. Nusseiri’s Application effectively became her counter-claim. [ 10 ] By the date of trial, the motion for partition and sale was moot. Mr. Walters withdrew his claim for occupation rent and proceeded based only on his claim to half of the proceeds of sale. [ 11 ] I mention this procedural history because it created an unusual trial record.

The record contains not only the testimony of the parties and other witnesses at trial, but also affidavits sworn by the parties and witnesses at an earlier stage in the litigation, as well as depositions given by the parties during cross-examinations on their affidavits. As set out below, I have relied on the entirety of the evidence in arriving at my decision.

FACTUAL CONTEXT [ 12 ] In order to provide a contextual framework for my reasons, I will first review the evidence relating to the nature of the parties’ relationship and summarize my findings of fact regarding their financial affairs. [ 13 ] It has been a challenge to determine the facts in this case because of deficiencies in the credibility of both parties. Plaintiff’s counsel argues that Ms. Nusseiri’s testimony cannot be trusted because she has a criminal record for offences involving dishonesty, including fraud over $1,000 and use of a credit card obtained by crime.

I give this record little weight in my assessment of her credibility because it is very dated. Her last conviction was in 1993. She was a young adult at the time of the offences. There is no evidence that she continued with a life of crime in the intervening decades. Her past record is not necessarily an indication that her testimony in this trial should not be trusted. [ 14 ] My primary concern with Ms. Nusseiri’s testimony is not one of fabrication, but rather that she has a tendency for hyperbole. During the trial, she sometimes embellished and sometimes downplayed facts to serve her own self-interest.

Her evidence is, however, more reliable overall than that of Mr. Walters. His evidence was riddled with internal contradictions, multiple inconsistencies, frequent implausibility and apparent fabrication. I will elaborate on my reasons for these credibility findings below. Parties’ Living Arrangements and Nature of their Relationship [ 15 ] The parties agree that they first met in the late fall of 2001. At that time, Ms. Nusseiri was living with her two sons in an apartment on Inverlochy Boulevard in Thornhill. Mr. Walters was living with his parents on Fallingbrook Drive in Mississauga.

He attended the strip club where she was working as an erotic dancer. They started talking. Shortly thereafter, in early 2002, they began a sexual relationship. He would sleep over at her Thornhill apartment on weekends when her sons were visiting their father. She introduced him to her children in the spring of 2002. After he got to know the children, he started staying over at her apartment more frequently. [ 16 ] The parties’ respective descriptions of the progression of their relationship diverge significantly after this point in time. Mr.

Walters claims that they cohabited as spouses in a common-law relationship for seven years. He testified that he moved into the Thornhill apartment and started living with Ms. Nusseiri and her two sons in the fall of 2002. He said they all moved together to the house on La Rose Court in the summer of 2005 and lived there as a family unit until he left in 2009. [ 17 ] Ms. Nusseiri asserts that they never had an exclusive relationship, sexually or otherwise, and never cohabited as spouses. She testified that Mr.

Walters slept over sometimes, both at her Thornhill apartment and at the house on La Rose Court, but stated that he always maintained his primary residence at his parents’ house on Fallingbrook Drive. She concedes that he kept some belongings at the house on La Rose Court but insists that it was not his permanent address. [ 18 ] For the reasons set out below, I find that Mr. Walters did not reside with Ms. Nusseiri and her children at the Thornhill apartment. His testimony on this issue was not credible.

Although he claimed that he lived “full time” in the Thornhill apartment from 2002-2005, he could not remember the address of the apartment building. He could not even recall the street name, let alone the street number or unit number. During cross-examination on an affidavit, he was not even sure of the floor on which the apartment was situated. Notwithstanding the passage of time, if it had been his permanent address for almost three years, I would expect him to be able to remember more detailed information about the apartment’s location.

The most information he could provide the Court about the apartment is that it was in a “white building”. His lack of recall is more consistent with someone who visited the apartment than with someone who occupied it as his permanent residence for three consecutive years. [ 19 ] Furthermore, Mr. Walters’ evidence is contradicted by that of two other witnesses. Ms. Nusseiri’s son, Maurice, lived with his mother in the Thornhill apartment except for a few months in 2005, when he lived with his father. Maurice testified that Mr. Walters

visited them at the Thornhill apartment but was not living there. Moreover, Ms. Nusseiri’s brother, Jason Nusseiri, testified that he visited Ms. Nusseiri at the Thornhill apartment on three or four occasions and that, to his knowledge, Mr. Walters was not living there. [ 20 ] Even Mr. Walters’s own testimony is not internally consistent on this point. Although he stated that he cohabited with Ms. Nusseiri in the Thornhill apartment “full time” from 2002 to 2005, he also testified that he maintained another address at his parents’ house throughout this entire period.

He stated that he kept some clothes at his parents’ home in Mississauga and some at the Thornhill apartment. Documentary evidence in the record establishes that he was using his parents’ address for auto insurance purposes in November 2004. Had he been living full time with Ms. Nusseiri in Thornhill since the fall of 2002, I would expect his insurance records to reflect that residential address. [ 21 ] Mr. Walters relies on correspondence and testimony from a lawyer named Jerry Saltzman to support his claim that he and Ms. Nusseiri cohabited as common law spouses from 2002 to 2005. Mr.

Saltzman is the lawyer who handled both real estate transactions involving the La Rose Court house in 2005. After the transfer of the property to the parties as joint tenants, Mr. Saltzman wrote them a reporting letter dated October 1, 2005, in which he stated that they had “been living in a common law relationship for over 3 years”. At trial, he testified that he would not have written that statement in his letter unless one of them told him they had been cohabiting for more than three years. [ 22 ] Mr. Walters relies on this evidence to support his claim that he and Ms.

Nusseiri cohabited for at least three years prior to September 2005. Ms. Nusseiri testified that Mr. Walters falsely told Mr. Saltzman they had been living together for more than three years in order to evade paying land transfer taxes when she conveyed 50% of her ownership interest to him. Mr. Saltzman confirmed that no land transfer tax was paid on the transaction. He also confirmed that taxes would have been imposed had the parties not been treated as common law spouses.

He testified that he had no independent knowledge of their living arrangements and did not obtain any documentation from them to confirm their common law status at the time of the transaction. [ 23 ] The out-of-court hearsay statement reproduced in his reporting letter cannot be accepted for the truth of its content. It constitutes evidence that one of the parties told Mr. Saltzman that they were common law spouses, but it is not proof that they were, in fact, common law spouses who had been cohabiting for more than three years prior to September 2005. [ 24 ] I accept as credible Ms. Nusseiri’s testimony that Mr.

Walters misrepresented their common law status to Mr. Saltzman in order to avoid paying land transfer taxes. I note that this is consistent with other evidence in the record establishing that both of them concealed income on their personal tax returns in order to avoid paying income taxes. [ 25 ] Based on the totality of the evidence, I find on the balance of probabilities that Mr. Walters did not reside at the Thornhill address with Ms. Nusseiri. [ 26 ] I will now turn to the issue of whether he ever resided at the La Rose Court address and if so, whether he and Ms.

Nusseiri were cohabiting as spouses. [ 27 ] There is little documentary evidence regarding Mr. Walters’s address from 2005 to 2009. The record includes only a few documents from 2008 and they contain contradictory information, listing both the La Rose Court address (driver’s licences) and his parents’ Fallingbrook address (receipt for an emissions test for one of his vehicles). I find these documents to be unhelpful, not only because of their inconsistency, but also because they do not necessarily reflect where Mr. Walters was actually living at the time. Ms. Nusseiri testified that Mr.

Walters put her La Rose Court address on his driver’s licence in late 2007 so that he could claim that they were common law spouses and thereby avoid paying sales tax when she transferred ownership of a vehicle to him. I make no finding as to whether or not this allegation is true. Its plausibility, however, undermines the probative value of the drivers’ licences as evidence of Mr. Walters’s address. [ 28 ] There is credible non-documentary evidence that supports Mr. Walters’s claim that he cohabited with Ms. Nusseiri at the house on La Rose Court from July 2005 until sometime in 2009. Ms.

Nusseiri’s brother, Jason, testified that Mr. Walters was present most times when he visited the house during that time period. He also testified that Mr. Walters joined him and his family when they had dinners together with Ms. Nusseiri. Mr. Walters’s father, Derrick Scarlett, recalled visiting Mr. Walters while he was residing with Ms. Nusseiri at the La Rose Court address. Both Jason Nusseiri and Mr. Scarlett testified that they assisted Mr. Walters with some renovations to the property. Mr. Scarlett also testified about occasions when Ms. Nusseiri and her sons came to his house with Mr.

Walters for dinner and for overnight stays. [ 29 ] I reject Ms. Nusseiri’s suggestion that Mr. Walters only visited the La Rose Court house periodically and was not living there with her. I note that she gave a contradictory statement to the police in June 2010, when she reported that Mr. Walters had threatened to harm her. In her witness statement, she wrote: “I was in an intimate relationship with Errol Walters for approximately 4 years. We were not married and we have no children together.

In May of 2009, I ended the relationship with Errol, and he moved out.” This police statement is inconsistent with her assertion that Mr. Walters merely visited her house on occasion as a casual boyfriend. [ 30 ] Based on the totality of the evidence, I find that the La Rose Court house was Mr. Walters’s principal residence for approximately four years. The evidence establishes on the balance of probabilities that he cohabited there with Ms. Nusseiri from July 2005 until he moved out in 2009. [ 31 ] Although I have rejected Ms.

Nusseiri’s assertion that they were not cohabiting as domestic partners, I accept the accuracy of her description of Mr. Walters as a domineering and parasitic partner. For the reasons that follow, I find that Mr. Walters increasingly controlled most of Ms. Nusseiri’s activities and exploited her financially. He lived in the house without contributing anything to expenses. He confiscated her major assets and appropriated a substantial portion of her earnings. Parties’ Financial Affairs [ 32 ] Ms.

Nusseiri’s uncontested testimony is that she started doing erotic dancing in November 2001 because she was desperate for

money. She stated that she had only $60 to her name and did not know how else to escape poverty. While this may be an example of her propensity for exaggeration, I nevertheless accept that she was struggling financially. She was a single mother with two kids. [ 33 ] Ms. Nusseiri testified that she did not receive any income directly from the club where she danced, but she received cash tips from clients. She admitted that she did not declare all of her cash earnings on her tax returns. I accept her evidence that dancing was lucrative work. [ 34 ] Ms. Nusseiri testified that Mr.

Walters started taking control of her money in 2002. She said their relationship was “ok at the time”. She believed that he would take care of her money and save it for her, so that she would not spend it frivolously. She said, “In the beginning, everything was honky dory, I trusted him” but over time, “things got sticky” and he became more controlling. By 2005, she realized that he was spending rather than saving the money she was giving him. She said that by then, she “didn’t have much movement”, meaning that Mr. Walters was restricting her activities.

She testified that she had to “ask him permission for a lot of things”. She said, “There was nothing I could do. I had to go with the flow, whatever he told me to do, I did.” [ 35 ] Ms. Nusseiri stated that theirs was not a typical boyfriend/girlfriend relationship. She testified that Mr. Walters would find escort clients for her and she would be expected to do whatever the clients wanted sexually, then she would be required to hand over the money she received for her services to him. She said that she was also required to give Mr. Walters most of her earnings from erotic dancing. [ 36 ] Mr.

Walters disputes all of these allegations. He agrees that Ms. Nusseiri performed sex work and erotic dancing, but he denies procuring clients for her and denies living off of her income. [ 37 ] Upon review of all of the evidence in the record, I find that Ms. Nusseiri exaggerated when she testified that Mr. Walters took “all of” her money. Her bank account statements establish that from 2002 onward, she deposited cash and cheques to the account and used the money to pay her rent and other personal expenses.

Moreover, she was able to invest some of her earnings by depositing money into a Registered Retirement Savings Plan. She testified that she contributed only $50/month to her RRSP, but the bank account statements show larger RRSP contributions in the amount of $250 in January 2004 and $400 in April, July, October and November 2004. Many of her monthly bank account statements are not included in the record, so it is not possible to discern the amounts deposited in other months, but the evidence is not consistent with a monthly $50 contribution. [ 38 ] The record also shows that Ms.

Nusseiri purchased a $10,000 GIC as part of her investment portfolio. She explained that she was able to make that purchase using child tax credits that she received (in excess of $9,000) after filing her personal income tax returns a few years late. I accept this explanation as credible, but note that it is inconsistent with her claim that Mr. Walters confiscated “all of” her money. [ 39 ] Although I find that Ms. Nusseiri exaggerated the extent to which Mr. Walters confiscated her earnings, I accept that he procured escort clients for her and took a substantial portion of her income.

I make this finding, in part, because I believe that he had no other means to support himself. [ 40 ] Mr. Walters gave inconsistent evidence about the source of his income during the years that the parties cohabited (2005- 2009). When he was cross-examined on his affidavit, he said he was working as a roofer at that time. At one point during the trial, he testified that he was working as an escort and male stripper in those years. At another point during the trial, he testified that he was working as a heavy machinery operator and forklift driver.

He submitted no corroborating evidence to substantiate any of these claims. His story changed so often that I am unclear as to his position on the purported source of his income. [ 41 ] When Mr. Walters commenced his Application under the Family Law Rules , he was required to disclose his income tax returns for the previous three years. Those returns show that he declared zero income on his personal tax returns for 2010, 2011 and 2012. During cross-examination on his affidavit, he undertook to produce his Canada Revenue Agency Notices of Assessment for the years 2004 to 2009.

They were not produced and he provided no explanation for his failure to comply with this undertaking. Based on his lack of disclosure, I draw an adverse inference against him that his tax returns for the years when he resided with Ms. Nusseiri (2005- 2009) would also show zero income earned. [ 42 ] Based on a balance of probabilities, I accept Ms. Nusseiri’s testimony that Mr. Walters had no employment income.

I conclude that, from at least July 2005 until he moved out of the La Rose Court house in 2009, he lived off of her earnings from sex work and erotic dancing. [ 43 ] It is undisputed that the parties had a joint RBC bank account while they were living at La Rose Court. Mr. Walters relies on this fact as an indication of their mutual trust and commitment to their relationship. Ms. Nusseiri, on the other hand, submits that Mr. Walters pressured her to convert her personal bank account into a joint account so that he could monitor and control her finances. [ 44 ] Mr.

Walters’s evidence about the joint account is contradicted by the documentary record. During his cross-examination on an affidavit, he stated that they opened the joint RBC account together in 2002. In fact, bank records show that the account was not opened jointly. Rather, it was originally opened by Ms. Nusseiri alone. Moreover, Mr. Walters was only added to the account in 2005. [ 45 ] Bank account statements in the record show that Ms. Nusseiri was using the account to pay her rent and day-to-day expenses prior to 2005. The statements confirm that she continued to do so after it became a joint account.

There are withdrawals for Johnson insurance and Bell Mobility payments, as well as regular expenditures at various beauty salons, tanning salons and spas, both before and after the account was converted to a joint account. [ 46 ] Ms. Nusseiri testified that her clients sometimes paid her by cheque, which she would deposit into the account. She said that she also sometimes deposited cash earnings from her sex work to cover her expenses. There is no evidence that Mr.

Walters used the joint bank account to pay for his own personal expenses, which is consistent with her claim that he was added to the account for the sole purpose of facilitating his surveillance and control over her finances.

[ 47 ] Mr. Walters deposed, during cross-examination on his affidavit, that he deposited money to the joint account every month when the rent for the Thornhill apartment was due. That cannot be true, since there was no joint bank account at that time. [ 48 ] At trial, he testified that after July 2005 he deposited approximately $900 or $1,000 monthly to the joint account in order to cover his half of the mortgage payments and property taxes for the house on La Rose Court. He stated that he deposited cash at a bank teller and did not use Automatic Teller Machines for these transactions.

In light of my previous finding that he had no source of income during that time period, I find it to be implausible that he would have had the means to make these monthly contributions. [ 49 ] The Personal Deposit Account History for the joint RBC bank account shows frequent cash deposits in an amount of $1,000 between July 2005 and 2009. Many of the deposits were made at an ATM, which Mr. Walters expressly stated he did not use. I find on the balance of probabilities that the cash deposits to the account were made from Ms. Nusseiri’s earnings.

I accept her testimony that she deposited both cash and cheques from her clients in order to make the monthly mortgage payments. I conclude that Mr. Walters lived in the La Rose Court house without contributing to the carrying costs for the property. [ 50 ] During his cross-examination on an affidavit, Mr. Walters stated that he and Ms. Nusseiri had only one joint bank account. At trial, he contradicted himself, stating that there had been another joint account at a different bank but it was closed. He claimed to have added Ms. Nusseiri’s name to one of his personal TD accounts.

He provided no documentary evidence to support this claim, which ought to have been readily available from the bank, even if the account was closed. Mr. Walters could have at least produced evidence from the bank confirming that its records of closed accounts are not kept on file. The failure of Mr. Walters to produce any evidence of this joint account leads me to draw an adverse inference that it did not exist. [ 51 ] I find that there was no second joint account. Mr. Walters likely changed his story and fabricated the existence of a joint account at another bank in an effort to portray reciprocity.

His fabrication was designed to counter the impression that he was controlling Ms. Nusseiri’s finances by having his name added to her personal bank account. [ 52 ] There is other evidence to corroborate Ms. Nusseiri’s description of the controlling and parasitic dynamics of their relationship. In particular, documents in the record show that in November 2007, she purchased a used 2003 Cadillac Escalade in her own name, then transferred ownership to him only four days later. She testified that a client had paid for the car for her, but Mr. Walters insisted that she hand it over to him. [ 53 ] Mr.

Walters denies that he took the Escalade from her. He has given multiple different accounts of what transpired with that vehicle. Initially, he took the position that he purchased the Escalade but put it in Ms. Nusseiri’s name. In a letter dated February 27, 2013 addressed to Ms. Nusseiri’s lawyer, his former lawyer asserted that he purchased the vehicle with cash “due to credit issues” that he was having. The letter asserted that Mr. Walters and Ms.

Nusseiri later agreed that the ownership of the vehicle would be transferred to his name “as he had paid for the vehicle and was solely responsible for all of the vehicle’s ongoing expenses.” These statements make little sense. Mr. Walters’s credit issues may explain why the vehicle was purchased with cash, but they provide no explanation for why the vehicle was initially registered in Ms. Nusseiri’s name. Moreover, ownership of the vehicle was transferred only four days after its initial purchase, so there was no intervening period during which Mr.

Walters could have been responsible for vehicle expenses. [ 54 ] When Mr. Walters was cross-examined on his affidavit on October 29, 2015, he was asked whose proceeds were used to buy the Cadillac Escalade. He answered, “We get the proceeds from dancing, it’s stuff – dancing – what she do – she go around meet clients and that’s a story you don’t want to get into.” In other words, he deposed that Ms. Nusseiri’s sex work and erotic dancing generated the income that was used to buy the Escalade.

However, he resiled that position shortly thereafter. [ 55 ] During that same cross-examination, he was asked why ownership of the vehicle was transferred to his name. He responded, “Because the insurance problem – it was mine.” He confirmed that the transfer of ownership occurred only four or five days after the vehicle was purchased. He denied having any insurance problems during those four or five days. He changed his story and stated that they had agreed, back when the car was purchased, that they would buy it in her name and later transfer it to his name.

He provided no explanation for why that was done. [ 56 ] At trial, Mr. Walters gave yet another account of the purchase of the vehicle and another reason for the transfer of ownership. He testified that the Escalade was jointly purchased with money that both he and Ms. Nusseiri earned working as escorts and erotic dancers. He stated that auto insurance premiums in Brampton were very high, so they transferred ownership of the vehicle into his name in order to benefit from a lower rate by using his parents’ address in Mississauga. [ 57 ] I have accepted Mr.

Walters’s testimony that he was residing at La Rose Court in the fall of 2007, when the Escalade was purchased. He relied on his January 2008 driver’s licence as proof that La Rose Court was his principal residential address at that time. Given that La Rose Court was registered as his address with the Ministry of Transportation, I find it unlikely that he would have been able to deceive his auto insurer into believing that he was living at his parent’s Fallingbrook address in Mississauga. If he were able to use his parents’ address for insurance purposes despite not actually living there, then presumably Ms.

Nusseiri could have done the same. His evidence therefore does not provide a logical explanation for why ownership of the Escalade was transferred to his name. [ 58 ] Moreover, if the parties wanted to put the car ownership in his name in order to obtain lower insurance premiums (or for any other reason), why wouldn’t they have simply registered it in his name in the first place? The very brief time between the purchase of the vehicle and its transfer to Mr. Walters makes it more likely that he discovered that one of Ms.

Nusseiri’s clients had purchased a car for her and immediately demanded that ownership be transferred to him. I conclude, based on the balance of probabilities, that Ms. Nusseiri purchased a car with money from a client and then was forced to hand it over to Mr. Walters. [ 59 ] Mr. Walters argued at trial that Ms. Nusseiri was in no way controlled by him financially or otherwise. He submitted that she was able to extricate herself from their relationship at any time.

Indeed, he claimed that she forced him out of the La Rose Court house in 2009 by reporting to the police that he had threatened her, which resulted in a charge against him and a restraining order preventing him from returning to the house. He claimed that she did this in order to evict him from the property so she could live there with her new boyfriend. He argued that this proves she was not intimidated by him, but rather was resourceful and capable of terminating their relationship without fear of any repercussions.

[ 60 ] An examination of the record, including the evidence relating to the criminal charge against Mr. Walters, demonstrates that his claims are untrue. [ 61 ] Ms. Nusseiri met her current partner, Giulio De Angelis, in early 2009 and began a romantic relationship with him. According to her testimony, she fell in love with him and stopped doing sex work and erotic dancing at his request. She testified that her new relationship gave her the confidence she needed to extricate herself from Mr. Walters’s influence. She said he voluntarily moved out of the house on La Rose Court as a result.

Throughout this proceeding, her evidence has consistently been that Mr. Walters left the house around April or May 2009 and never returned. [ 62 ] Mr. Walters has given inconsistent accounts of when he moved out of the house. In his family court Application and in the affidavit supporting that Application, Mr. Walters stated that he left the house in December 2009. However, when he was cross- examined on his affidavit, he said he left around the middle of 2009. At trial, he testified that he moved out around June 2009.

He attempted to explain his prior inconsistent statements by stating that, after he moved out, Ms. Nusseiri would call him, he would go by the house and they would have sex. He testified that this occurred repeatedly in the second half of 2009, without Mr. De Angelis’s knowledge. I reject this explanation as a fabrication likely designed to cause friction in Ms. Nusseiri’s current relationship. [ 63 ] Ms. Nusseiri testified that Mr. Walters left the house voluntarily in the spring of 2009. Her account of the timing of Mr. Walters’s departure is corroborated by Mr.

De Angelis, who testified that he started dating Ms. Nusseiri in March 2009 and that he stayed over at her house for the first time in April 2009. Mr. De Angelis said he stayed there off and on until May 2010, when he moved in with her. He testified that Mr. Walters was never at the house. [ 64 ] The evidence establishes that Mr. Walters was not “forced out” of the house because of a restraining order resulting from Ms. Nusseiri’s report to the police. The threat she reported to the police (and for which Mr. Walters was ultimately convicted) was made during a telephone conversation that occurred long after Mr.

Walters had already moved out of the house. Ms. Nusseiri’s testimony on this point is corroborated by her written police witness statement which was made in June 2010. [ 65 ] Moreover, there is evidence that Mr. Walters was living with his parents when the threat was reported to the police. Ms. Nusseiri testified that Mr. Walters was on “house arrest”, forbidden from leaving his parents’ residence, pending trial for weapons charges, so her police complaint could not have resulted in him being ejected from the house on La Rose Court. Her account is corroborated by Mr.

Scarlett, who confirmed that he acted as a surety for Mr. Walters. Mr. Scarlett recalled that one of the conditions of release was that Mr. Walters was required to stay home (i.e., stay at his parents’ home). Mr. Walters testified that his bail conditions were changed such that he could go wherever he pleased. Even if that were true, it would not corroborate his claim that he was still living with Ms. Nusseiri at La Rose Court at the time of the police report. [ 66 ] Based on all of the evidence, I accept Ms.

Nusseiri’s account of how their relationship ended, namely that she gained sufficient self-confidence from her new relationship with Mr. De Angelis to ask Mr. Walters to leave. Realizing that he had lost his control over her, Mr. Walters left voluntarily. [ 67 ] Despite her occasional exaggeration during her testimony, I accept Ms. Nusseiri’s description of a domineering relationship in which Mr. Walters increasingly controlled her activities and exploited her financially, living in her home without contributing anything to the expenses and confiscating much of her income from sex work and erotic dancing.

This parasitic dynamic continued until the spring of 2009, when Ms. Nusseiri established a supportive relationship with Mr. De Angelis and found the personal fortitude to extricate herself from her relationship with Mr. Walters. [ 68 ] All of the above provides a factual context for the resolution of the issues raised in this action. MS. NUSSEIRI’S RESULTING TRUST CLAIM [ 69 ] Ms. Nusseiri claims that, when she transferred 50% of her ownership interest in the La Rose Court property to Mr. Walters, a trust resulted, such that he held his registered 50% ownership interest in trust for her benefit.

Resulting Trust Principles [ 70 ] When one person purchases property and puts it in the name of another person but does not intend to make a gift of the property, the person who acquires legal title to the property holds that title in trust for the benefit of the person who contributed to its acquisition. The purchaser can ask for his or her own property back or for the recognition of his or her proportionate interest in the asset that the other person has acquired with that property. The idea is that the beneficial interest in the property “results” back to the true owner: Kerr v.

Baranow , 2011 SCC 10 , [2011] 1 S.C.R. 269, at para. 25 ; Kim v. Kim , 2014 ONSC 4774 at para. 8 . [ 71 ] Resulting trusts can arise in a variety of different circumstances. Two of the most common circumstances are: (1) the gratuitous transfer of property from one person to another or (2) the joint contribution by two persons to the acquisition of property, title to which is taken in the name of only one of them. As the Supreme Court of Canada explained in Kerr v.

Baranow (at para.17): “In either case, the transfer is gratuitous, in the first case because there was no consideration for the transfer of the property and in the second case because there was no consideration for the contribution to the acquisition of the property.” [ 72 ] There is a general presumption of resulting trust that applies to such gratuitous conveyances of property. The presumption allocates the burden of proof.

Where a conveyance of property is made without consideration, the onus is placed on the grantee (i.e., the person who gratuitously receives title to the property) to rebut the presumption by demonstrating that a gift of the property was intended by the grantor. This is so because equity presumes bargains and not gifts: Pecore v. Pecore , [2008] 1 S.C.R. 795 , at para.24; Kerr v. Baranow , at para.19; Kim v. Kim , at para.9.

[73] In this case, Plaintiff’s counsel argued that Ms. Nusseiri bears the onus of proving that a trust existed for her benefit becauseMr. Walters’s name was registered on title to the property as a joint tenant. I disagree. Our common law has recognized, since at least the 18th century, “that the trust of a legal estate … whether taken in the names of the purchasers and others jointly… whether in onename or several, whether jointly or successive, results to the [person] who advances the purchase money”: Dyer v. Dyer (1788), 2 Cox92. [74] However, the presumption of resulting trust is not universal.

In some circumstances, a presumption of advancement appliesinstead. Advancement is a gift during the transferor’s lifetime to a transferee who, by virtue of a particular relationship, is financiallydependent on the transferor: Pecore v. Pecore, at para. 21. When a presumption of advancement applies, it falls on the partychallenging the transfer to rebut the presumption of a gift: Pecore v. Pecore, at para. 27. [75] Historically, the presumption of advancement applied in two situations: (1) where a father transferred property to his child and(2) where a husband transferred property to his wife: Pecore v.

Pecore, at para. 28. The presumption of resulting trust applied togratuitous transfers of property from a wife to her husband. [76] In modern times, the presumption of advancement applies equally to transfers of property from a mother or father to a child,but only to a minor child: Pecore v. Pecore, at paras. 29-41. The presumption of advancement from a husband to his wife was abolishedin Ontario by legislative enactment in 2005.

There is now a statutory presumption of resulting trust that applies in property ownershipdisputes between married spouses, unless the spouses hold the property as joint tenants (in which case there is a rebuttal presumption infavour of joint tenancy): Family Law Act, R.S.O. 1990, c.F.3, as amended, s. 14(a). The presumption of joint tenancy in s. 14 of theFLA does not apply to Mr. Walters and Ms.

Nusseiri because they were not married. [77] The Supreme Court of Canada has expressly refrained from commenting on whether the presumption of advancement appliesto unmarried couples, noting that the issue “may be … controversial”: Kerr v. Baranow, at para. 20. The Ontario Court of Appeal hasnot ruled on the issue. In Novakovic v.

Kapusniak, 2008 ONCA 381, the Court of Appeal decided the case without resolving thequestion of whether a presumption of resulting trust arises in circumstances where a party makes a contribution to the purchase price ofproperty owned by his or her common law spouse (see paragraphs 34-36). [78] Lower courts have, however, found that the presumption of advancement does not apply to unmarried partners: Lazier v.Mackey, 2012 ONSC 3812, at para. 62; Gaunt v. Woudenberg, (ON SC), [2005] O.J. No.2413, at para. 15. I agreewith these decisions for the following two reasons.

First, s. 14 of the Family Law Act states that the presumption of resulting trustapplies to married spouses “as if they were not married”. This provision can reasonably be interpreted to mean that the presumption ofresulting trust applies to unmarried spouses. Second, there is no basis in the jurisprudence to find that common law spousal relationshipsshould be treated as the type of relationship of dependency that historically has given rise to a presumption of advancement. [79] For these reasons, I find that the presumption of resulting trust applies to gratuitous property conveyances between commonlaw spouses.

In order to decide whether the presumption of resulting trust applies in this case, I must first determine whether there was agratuitous conveyance of property between the parties. Did Mr. Walters contribute to the acquisition of the property? [80] The parties agree that there was no consideration for Ms. Nusseiri’s transfer of 50% of her ownership interest to Mr. Walterson September 28, 2005. However, Mr. Walters claims that he contributed to the initial purchase of the property by Ms.

Nusseiri on July29, 2005. [81] If he contributed to the acquisition of the property, his contribution was not reflected in the legal title that was registered inMs. Nusseiri’s name alone. That would give rise to a presumptive trust in favour of Mr. Walters, equivalent to the proportionate share ofhis contribution. In these circumstances, the subsequent transfer of title to both parties as joint tenants would not constitute a gratuitousconveyance. Rather it could simply reflect the pre-existing co-ownership arrangement in which Ms. Nusseiri held a proprietary interestin trust for Ms.

Walters. [82] The parties gave very different accounts of the amounts contributed by them to the purchase of the La Rose Court house. Ms.Nusseiri testified that she paid an initial deposit of $5,000 and paid a subsequent down-payment of $37,500 to close the transaction,without any contribution from Mr. Walters. She acknowledged that he gave her a money order in the amount of $15,000 toward thedown-payment, but she claimed that was her own money that he returned to her. She said he had been seizing most of her income for acouple of years and had no income of his own, so the money he advanced was actually hers.

She testified that she expected him to havesaved more than $15,000 of her earnings and was shocked to discover that he had been spending her money rather than holding it forher. She said she was required to liquidate her RRSPs in order to come up with the down-payment to close the real estate transaction. Documentary evidence in the record establishes that she redeemed the $10,000 GIC in her RRSP account and withdrew other RRSPfunds on July 27 and 28, 2005. [83] Mr. Walters testified that Ms. Nusseiri paid only $5,000 toward the purchase of the property.

He said he gave her a $15,000money order, as well as $10,000 in cash, from his own money, which she used to make a $30,000 down-payment required to close thereal estate transaction. He testified that he “saved up” these funds and also used the proceeds of two insurance claims. [84] Documentary evidence in the record confirms that he received insurance benefits in connection with two separate motorvehicle accidents. A State Farm Statement of Loss Details shows that he received accident benefits in the total amount of $26,718.13 inrelation to an accident that occurred on August 29, 2000.

The date of that payment is not discernable from the statement. A letter fromhis insurer confirms a second payment of $8,516.00 on November 8, 2004 in respect of a claim for the total loss of his vehicle resultingfrom another accident on September 28, 2004. [85] At trial, Mr. Walters stated that his two car accidents occurred in 1987 and 2000. He insisted that he did not have an accidentin 2004. He claimed to have received the larger benefits payment of $26,718 (in connection with the 2000 accident) sometime in 2004.

However, during the cross-examination on his affidavit, he stated that he received that payment in 2000. [ 86 ] I find the documentary evidence to be more reliable than Mr. Walters’s memory regarding the dates of the accidents. Given the fact that the first accident occurred in August 2000, I find it likely that he received the $26,718 accident benefits payment a few years prior to the purchase of the La Rose Court property in July 2005. It is unlikely that he saved those insurance proceeds and accumulated other savings, because he was unemployed.

Moreover, that claim is inconsistent with his other claim that he was experiencing credit problems in July 2005. If he had in excess of $25,000 saved, why would he not pay his creditors? [ 87 ] The documentary evidence in the record establishes that the amount of the down-payment made to close the deal was $37,500, not $30,000 as asserted by Mr. Walters. An initial deposit of $5,000 was made by Ms. Nusseiri when she signed the Agreement of Purchase and Sale on April 17, 2005. There is no evidence that Mr.

Walters contributed to the deposit and he did not take that position at trial. [ 88 ] The final down-payment of $37,500 was paid to Mr. Salzman in trust in the form of a RBC bank draft on the date of closing (July 29, 2005). The bank draft was purchased with funds withdrawn from the parties’ joint bank account. The relevant bank statement shows a cash withdrawal of $37,505 made on July 28, 2005. The statement also shows a number of deposits to the account in the days immediately prior to the closing, including a total of $10,369.42 from the redemption of Ms.

Nusseiri’s GIC (on July 26, 2005) and deposits of $2,082.78, $5,112.00, and $4,404.43 from her RRSP accounts (on July 28, 2005). The statement also shows a $15,000 deposit that the parties agree represents the money order from Mr. Walters. [ 89 ] Mr. Walters testified that Ms. Nusseiri used her RRSP funds to purchase a BMW and pay for breast enhancement surgery. This strains credulity. The timing of the withdrawals coincides precisely with the closing of the real estate transaction. I find it more likely that the money was used for that purpose.

Moreover, documentation from the Canada Revenue Agency establishes that the RRSP funds were withdrawn by Ms. Nusseiri pursuant to a Home Buyers’ Plan. This corroborates her testimony that the RRSP funds were used to purchase the disputed property. [ 90 ] I find it improbable that Mr. Walters used insurance proceeds or other savings to fund the down-payment. Had the accident benefits cheque been deposited to his personal bank account, as he claimed, then it would make little sense for him to provide Ms. Nusseiri with a $15,000 money order and $10,000 in cash, rather than a $25,000 money order.

Furthermore, the fact that he had the money order made out to Ms. Nusseiri instead of to Mr. Saltzman is consistent with Ms. Nusseiri’s claim that he was returning her money. [ 91 ] Mr. Walters’s position regarding the parties’ respective contributions to the purchase of the property has not been consistent over time. In a letter dated August 6, 2010, his former lawyer, Allen Collins, wrote to Ms. Nusseiri’s counsel that the home was purchased with “a down payment of $30,000 equally split” between the parties. In a subsequently letter dated October 8, 2010, Mr.

Collins changed his earlier statement and wrote that “the deposit monies and all monies to close the transaction, including the balance of down-payment were all cash advanced” by Mr. Walters to Ms. Nusseiri. [ 92 ] During his cross-examination on an affidavit, Mr. Walters stated that he did not know why Mr. Collins had written these things because he had told Mr. Collins that he “put up most of the money”. Mr. Collins swore an affidavit dated August 18, 2016, in which he deposed that his letters were written on Mr. Walters’s instructions using information provided by Mr. Walters. I have no reason to question Mr.

Collins’s credibility. [ 93 ] I find that the first letter from Allen Collins likely represents the actual amount of money that Mr. Walters gave Ms. Nusseiri toward the down-payment, namely $15,000 (i.e., half of $30,000). Based on the totality of the record, including evidence of the parasitic dynamics of the parties’ relationship, I accept Ms. Nusseiri’s testimony that this $15,000 was her own money and not insurance proceeds saved by Mr. Walters. [ 94 ] I therefore conclude that Mr. Walters made no contribution to the initial purchase of the La Rose Court property by Ms. Nusseiri in July 2005.

The gratuitous transfer of 50% of her ownership interest to him only two months later therefore gave rise to a presumptive resulting trust. Has the presumption of resulting trust been rebutted? [ 95 ] Mr. Walters has the onus of rebutting the presumptive trust. He led evidence of renovations that he performed at the property, which he argued were consistent with his ownership interest. This evidence is not relevant to the question of the existence of a trust. In cases of presumptive resulting trusts, it is only the grantor’s intention at the time of the gratuitous conveyance that counts: Kerr v.

Baranow , at para. 25 ; Kim v. Kim , at paras. 10 and 13. In order to displace the presumption of resulting trust, Mr. Walters must prove on the balance of probabilities that Ms. Nusseiri intended to give him half of her ownership interest in the property. [ 96 ] Mr. Walters led no evidence that Ms. Nusseiri intended a gift. The presumption of a resulting trust has not been rebutted. I conclude that Mr. Walters therefore held his one-half interest the La Rose Court property in trust for Ms. Nusseiri’s benefit.

CONSTRUCTIVE TRUST CLAIM [ 97 ] The doctrine of resulting trust focusses solely on the acquisition or conveyance of property, at the moment in time when title is gratuitously put in the name of a person who advanced no consideration for its purchase. The doctrine of constructive trust, on the other hand, takes into account the entire history of the couple in question. A remedial constructive trust compensates for unjust enrichment.

A claim of unjust enrichment requires consideration of each party’s contributions to the maintenance of and improvements to the property subsequent to its purchase, as well as the exchange of mutual benefits during their cohabitation: Kamermans v. Gabor , 2018 ONSC 5241 , at para. 31 .

[ 98 ] Mr. Walters did not make a constructive trust claim, but the Supreme Court of Canada in Kerr v. Baranow (at para. 109 ) ruled that, in cases involving domestic partners, the mutual exchange of benefits “should be taken into account at the defence and/or remedy stage … whether or not the defendant has made a formal counterclaim.” In this case, Mr. Walters relies on the labour and expenses he incurred in renovating and maintaining the La Rose Court property as a defence to Ms. Nusseiri’s counter-claim.

He testified that he felt he deserved half of the proceeds of sale because of all the renovations work that he performed on the property. [ 99 ] Since I have found that he held his half interest in trust for Ms. Nusseiri, I must consider whether I should impress this same interest (or a portion of it) with a constructive trust in his favour by reason of his contributions to the maintenance and improvement of the property, or by reason of other benefits he provided Ms. Nusseiri during their cohabitation. [ 100 ] Mr.

Walters admits he made no payments toward the mortgage or other carrying costs for the house after he moved out in 2009. I have already rejected his claim that he paid half of the mortgage payments and property taxes during the four years that he resided with Ms. Nusseiri. [ 101 ] With respect to improvements to the property, Mr. Scarlett and Jason Nusseiri testified that Mr. Walters assisted them in performing renovations.

Their evidence corroborates his claim that he did some exterior stone work, refinished a deck, replaced a closet door, put up walls in the basement and built a fireplace in the living room of the home. There is, however, insufficient evidence to conclude that the work he performed enhanced the value of the house. In any event, the evidence in the record establishes that all of the work was redone after he moved out in 2009 and before the property was sold in 2016. There is, therefore, no basis upon which to conclude that Ms.

Nusseiri was enriched by his contributions to the property. [ 102 ] There is also no evidence that Mr. Walters suffered a deprivation. Any benefit enjoyed by Ms. Nusseiri by virtue of the work he performed did not outweigh the benefit that he received by living at her house for four years without contributing toward expenses. [ 103 ] There was no unjust enrichment and there is therefore no basis for the imposition of a constructive trust in Ms. Walters’s favour. CONCLUSION [ 104 ] I conclude that Mr. Walters held his registered one-half interest in the La Rose Court property in trust for Ms. Nusseiri’s benefit.

She is therefore entitled to all of the proceeds of sale that are currently being held in trust. The proceeds shall be released to her immediately. [ 105 ] Mr. Walters’ action is dismissed. Ms. Nusseiri’s counter-claim based on resulting trust is allowed. It is unnecessary for me to decide her other claims based on duress and undue influence. [ 106 ] If the parties are unable to resolve the issue of costs, they may make brief written submissions of no more than two pages (excluding Bill of Costs, authorities and any offers of settlement). Ms.

Nusseiri shall serve and file her costs submissions by January 18, 2019. Mr. Walters shall serve and file his responding costs submissions by February 1, 2019. Petersen J. Released: January 2, 2019 CITATION : Walters v. Nusseiri, 2019 ONSC 22 COURT FILE NO.: CV-16-4996 DATE: 2019 01 02

ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: ERROL M. WALTERS Plaintiff (Defendant by Counterclaim) – and – LUBNA (a.k.a. SUSAN) NUSSEIRI Defendant (Plaintiff by Counterclaim) REASONS FOR JUDGMENT Petersen J. Released: January 2, 2019