) ) BARRY THOMAS Plaintiff (Defendant by Counterclaim) – v. –, 2013 ONSC 794

CITATION : Thomas v. Wales, 2013 ONSC 794 COURT FILE NO.: 25654/11 DATE: 2013-02-05 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: ) ) BARRY THOMAS Plaintiff (Defendant by Counterclaim) – and – JUDY WALES, LAWRENCE WALES AND LOIS THOMAS Defendants (Plaintiffs by Counterclaim) ) ) ) ) ) ) ) ) ) ) ) ) ) ) C. Fitzgerald, for the Plaintiff F. Skeggs, for the Defendants ) ) ) HEARD: October 15 and 16, 2012 REASONS FOR DECISION justice w.l. whalen: A.

The Claim [ 1 ] The Plaintiff asks for an order vesting and conveying title to him of all or some part of Lot 25, Plan H-779 in the Township of MacDonald, Meredith and Aberdeen Additional in the Land Registry Office for the District of Algoma, being PIN 31271-0097 in the Land Registry Office for the District of Algoma. The initial claim included

Part 1, Plan 1R-9016 of the said lot which had been severed for the purposes of transfer to the Plaintiff but had failed as consents had not been filed on time. By the time of trial, however,

Part 1, Plan 1R-9016 had been vested in the Plaintiff by a consent order so that the action focused on the balance of Lot 25. B. Uncontested Background Facts [ 2 ] The Plaintiff Barry Thomas, born October 10, 1962 (hereafter “Barry”) is the son of Lois Thomas (hereafter “Lois”) and the late James Thomas (hereafter “James”). He has two older sisters, Judy Wales and Kelly Rowlinson (“Judy” and “Kelly” respectively) and two younger sisters, Laurie Marino and Darlene Cameron.

Judy Wales and her husband Lawrence Wales are also Defendants in the action. [ 3 ] Lot 25, which James and Lois purchased in the late 1960s, is located on the eastern edge of the village of Echo Bay, Ontario and consists of about 18 acres with a home. Although his principal employment was as a millwright with the steel company in Sault Ste. Marie, as a licensed auto mechanic, James also had an interest in cars. This led him to establish a towing business and automobile scrap yard called Echo Bay Towing.

He operated Echo Bay Towing from Lot 25 as sole proprietor during the early 1970s until sometime in the late 1980s or early 1990s. He paid others to do most of the driving, including Barry.

[ 4 ] Initially, towing was the mainstay of Echo Bay Towing, and scrap the smaller part. James acquired scrap automobiles through the towing operation and locals disposing of their vehicles. The scrap yard was located at one end of Lot 25, half of which was rezoned from “agricultural” to “industrial” in order to accommodate the use. Although the towing business eventually ended sometime in the late 1980s or early 1990s, James continued the scrap component, but more as a hobby. [ 5 ] Around 1992, Barry qualified as a “Class A” mechanic and worked at a number of local garages.

While working at these early jobs as a mechanic, Barry assisted his father at Echo Bay Towing, including on a full-time basis for a period. Even after returning to employment as a mechanic, Barry continued to assist James as he could. He drove as needed and helped with the scrap yard. But for a six-month falling out during the early 1990s, Barry was very close to his father. [ 6 ] In 1992, Barry met his wife, Brenda, and they married in June 1993. On October 26, 1992, Barry purchased Lot 32. Immediately on closing, the couple moved in and has lived there ever since.

Lot 32 is bounded on three sides by Lot 25 and Barry’s home is kitty corner to his parents’. From the time Barry and Brenda moved to Echo Bay, they spent a great deal of time with James and Lois, and the two couples became very close. They visited and dined often at each other’s homes. James and Barry also regularly helped each other with home chores and repairs. [ 7 ] In 1993 or 1994, Barry decided to start his own sole proprietorship, which he ran as “Thomas Auto & Salvage”. To help him, James and Lois gave him

Part 1, Plan 1R-9016, a 150 by 178 foot piece of land that was part of Lot 25 and abutted Barry’s home on Lot 32. As mentioned, the severance was not completed because proper consents had not been filed. However, Barry constructed a garage on the land, and for the next eight to ten years operated Thomas Auto & Salvage as a full time auto repair business.

James took a leading role in the construction of the garage, and Barry acknowledged that without his parents’ generosity and his father’s assistance, he would not have been able to do business there. [ 8 ] By the time Barry started operating Thomas Auto & Salvage, Echo Bay Towing was not very active. Instead, James assisted Barry as needed and together they continued to take in scrap. Barry testified that they operated the scrap business jointly, both for some years before Thomas Auto & Salvage began and after.

As the years went on, Barry took the leadership role in directing the placement of cars in the scrap yard. [ 9 ] Their revenue sharing arrangement was that James would take copper and other valuable metals from the wrecks and sell it in Michigan or Sudbury, Ontario. That revenue was his. Barry would crush and sell the remaining steel scrap, and that revenue was his. James assisted Barry with the crushing process. James always paid the taxes on Lot 25, including for the area where the scrap was located, and he or his wife did all of the paper work and accounting for Echo Bay Towing.

James looked after the financial aspects and books for Thomas Auto & Salvage. If either man needed something for their respective homes, they would often purchase it out of revenues from the sale of scrap. After his retirement in 1994 at age 59, James spent most of his time assisting Barry around the garage or in the scrap yard. [ 10 ] Barry testified that he and his father ran the scrap business on a fifty-fifty basis. He said that they had a good relationship throughout the time of their joint operation and right until the end. He said they did well together and that they had fun with the business.

No detail was placed in evidence as to the revenues of the scrap operation over the years or what each man took from it. [ 11 ] Around 1996, Barry obtained his millwright’s ticket and since then he has worked as a millwright, often away from home. Thomas Auto & Salvage thus ceased full time operation, although Barry continued to do some work in auto repairs and scrap. He testified that it provided about 20% of his income and that he kept it going in order to maintain his Class “A” mechanic’s license.

He did not indicate what proportion of that 20% was attributable to scrap but he said that the business, as a whole, was more of a hobby now, or a source of revenue during times when the millwright work is quiet. He testified that he could always return to it full time if he had to. [ 12 ] James passed away on April 11, 2008, after battling cancer for a year or two and undergoing several difficult surgeries. With the onset of poor health, James became less and less active to the point where he could do virtually nothing. At that time, Barry’s parents became more reliant on him for assistance.

Barry said that he had provided more than 75 cords of firewood to his parents at his own expense before his dad’s passing. Once James was gone, Barry dutifully looked in on his mother to make sure she had firewood, oil, and other basic needs, again at no cost to her. When he worked away, Barry’s friends would look in on Lois. He remained close to his mother after James passed away. [ 13 ] However, things changed radically sometime in the summer of 2011.

That spring, James’ tax-preparers called Lois with questions about T-4’s that had come into their possession and that disclosed income for James they claimed they were not familiar with. They wanted to know whether Lois was receiving the income and what it was for. Lois turned investigation over to Judy, who made enquiries of Canada Life, the company that had issued the T-4’s in question. The result was a letter from Canada Life explaining that, unaware of James’ passing, it had paid out $32,529.55 on a life annuity to which there was no entitlement.

Lois had received the money and used it, thinking it was part of her survivor’s benefits under James’ employment pension. Canada Life demanded repayment immediately and in full. Lois did not have sufficient funds to be able to repay. [ 14 ] This was a catastrophic turn of events for Lois and it upset her greatly. She blamed the tax preparers for not knowing about the annuity income and for failing to inform Canada Life of James’ death. Because of the shared scrap yard revenues, Barry had persuaded his father to engage the same tax preparers.

Because she blamed the tax preparers, Lois also blamed Barry and she was angry about it. Barry testified that he thought they should investigate further and dispute the demand. He tried to reassure Lois that he could borrow the necessary funds and that ultimately everything would be okay. However, Lois was not reassured. Barry acknowledged that she blamed him and told him that she had turned to Judy for help with sorting it out.

Barry said that he subsequently attempted to speak with his mother, but her continued rebuke made him angry and want to walk away from it all. [ 15 ] Three to five months later, Barry said he received a phone call from Kelly on behalf of his mother, telling him that he could purchase Lot 25 with the house and scrap yard for $80,000.00. Barry said he had agreed verbally but indicated that he needed a couple of days to arrange financing. He testified that he did in fact shortly receive verbal approval of the financing from a specified private mortgage broker.

However, a couple of days later he noticed a realtor’s “for sale” sign on the property and he discovered that it had been

listed at a selling price of $129,000.00. After speaking with the listing agent, Barry then retained Mr. Bortolussi for legal advice and acourse of correspondence ensued between Mr. Bortolussi and Lois’ lawyer, Mr. Skeggs. Barry accused Mr. Skeggs of refusing to co-operate. C. Plaintiff’s Factual Perspective [16] Upset and feeling betrayed, Barry testified that he telephoned Kelly to remind her of their earlier conversation. He said thatKelly told him to deal directly with the realtor or to see a lawyer.

As they talked, however, he said he could hear his mother “yelling” inthe background that the scrap yard was his. He said that Kelly told her it was not and when Lois repeated that the scrap yard was his,Kelly told her to “shut up” and the call ended. Under cross-examination on reply evidence, Barry re-confirmed that this had happened ina second telephone conversation with Kelly, after he found out that the property had been listed with a realtor.

However, in an affidavitsworn March 15, 2012, he deposed that it had occurred on the initial conversation when he had indicated willingness to purchase theproperty for $80,000.00. He agreed that the affidavit was correct and that his testimony in-chief on that point was not. [17] Barry said he then retained his own legal counsel and ultimately launched the present action to assert his rights and remedy. The basis of his claim was that his parents had promised him the scrap yard and even told him it was his. He stated that hisunderstanding from both parents “always, always” was that the scrap yard would be his.

He said both parents told him this on manyoccasions, right from the time he and his father had started to work together in scrap and over the years until his death. Indeed, hetestified that James and Lois both told him to get it out of their names before James died or they would end up in court over it. Barrytestified that it was common knowledge in the community that the scrap yard (i.e. the property it was on) was his. [18] His counsel submitted that Barry had relied on the promises made and the expectation that the scrapyard and land it was onwould be his.

Accordingly, he had worked on the land, assisted his parents, cared for them and shared his business revenues with hisfather over a number of years. Barry’s interest was characterized as a constructive trust according to the principles discussed by theSupreme Court of Canada in Soulos v. Korkontzilas, (SCC), [1997] 2 S.C.R. 217. Barry admitted that he had agreedverbally to pay $80,000.00 for Lot 25 although he had also claimed the land was already his by way of gift.

He was also willing thatLois remain in her home during her lifetime or for as long as she was able. [19] Barry presented a number of witnesses to support his position. George Wright lived in Echo Bay and had known Barry andJames for over 40 years. Barry had been his apprentice mechanic and when Barry started his own business he had occasionally driven aflatbed tow truck for Barry. Since James’ passing, he had also looked in on Lois when Barry was working out of the area. Mr.

Wrighttestified that he “assumed” the scrap yard was Barry’s because Barry gave the directions on where to put towed vehicles that were beingscrapped. [20] Robert Wellwood also lives in the Echo Bay area where he operates a trucking business with his brother. He had known theThomas family for over 40 years. He said that he had delivered gravel to the scrap yard for James and had also developed a business andpersonal relationship with Barry. Mr. Wellwood testified that he and Barry would help each other. Barry had occasionally driven forhim, performed mechanical repairs and supplied parts.

He testified that he had called James for scrap parts and had been directed toBarry. Mr. Wellwood said he had pumped septic tanks for Barry and Lois, and helped Barry cut and deliver firewood to Lois. [21] Albert MacPherson had known Barry, his wife, James, and Lois for about 20 years. Mr. MacPherson operated a campgroundnear Echo Bay where Barry and his wife spent a great deal of time. He regarded Barry as a “brother”. He confirmed that the Thomascouples were very close and spent considerable time together: “…they always did everything together”.

He confirmed that Barry helpedhis parents by supplying firewood and doing home repairs. [22] Mr. MacPherson testified that he had also driven a tow truck for Barry on a part-time basis when needed. He said that Barrydirected where vehicles were to be placed in the scrap yard and that James deferred to Barry’s direction. It was his testimony that Barrylooked after the scrap yard and everyone knew it.

The witness also said that when he was helping Barry sometime in the early 1990s hehad heard James remark: “…look at all we’re doing for the little bugger – this is all his anyways and we’re doing all this work and he’sdown in his garage.” Mr. MacPherson acknowledged that while he was aware the scrap yard was on land owned by James and Lois heknew it was really Barry’s: “Jim did pass it off to Barry. I do know that…Jim has always said that the scrap yard was Barry’s. It’s his.” [23] Michael Lauzon had also known Barry for about 30 years. As a teenager, Barry had worked for him and they had becomefriends. Mr.

Lauzon testified that he had spent considerable time helping Barry at the garage and in the scrap yard. As a result, he hadalso come to know James, who he said was frequently present. The witness observed that Barry had directed the work. He did not makeany observation about ownership of the scrap yard. [24] Barry’s wife, Brenda Thomas (“Brenda”), confirmed that they had been very close to Lois and James ever since moving toEcho Bay in 1992. The two couples had regularly spent a great deal of time together at each other’s homes.

Brenda did not think thatEcho Bay Towing was operating when she first met James and Lois. She confirmed that over the years Barry and James had workedtogether in the scrap yard and she corroborated their revenue-sharing arrangement. She stated that there had been “a bit of a discussion”about the scrap yard at a lawyer’s office but she could not say whether a promise had been made. She gave the following testimony nearthe end of her examination in-chief: Q.

And were there ever discussions at home, either your home or Jim and Lois Thomas’ home about the scrap yard and how thatbusiness was going to go on to Barry, or not?

A. Not when I was there. D. Defendants’ Factual Perspective [ 25 ] Lois, who is now 75 years old, agreed that she and James had been very close to Barry and Brenda. Throughout the years they had visited and helped each other frequently. She also agreed that after James died Barry had helped her around the house. He and his friends had also supplied her with firewood.

She said she had offered to pay, but they refused, although she would prepare food for them when they were doing something at her home. [ 26 ] She acknowledged that James and Barry had worked closely together in the scrap yard and she confirmed their revenue- sharing arrangement. She said she had assisted James with paper work and had accompanied him on trips to Michigan to sell scrap. Lois testified that James had received wrecks into the scrap yard even after he had retired and she thought Barry had done so too. She described the scrap yard as James’ “pride and joy” and more of a hobby in his retirement years.

Her daughter Laurie Marino had worked with James in the scrap yard in the 1980s before moving to London in 1989. One of their grandsons had also helped James. [ 27 ] Lois was adamant that there had never been an agreement or understanding between she and Barry that the scrap yard would be his. Nor had it ever been discussed. James had never raised it with her, and she insisted that he had never promised or suggested it to Barry either. If so, he would have discussed it with her, but he had not.

She testified that they had specifically intended the house and property to go to the survivor of them and thereafter to be shared equally amongst the five children. Lois and James had executed wills to that end on November 19, 1987, and of course Lot 25 was held jointly. James’ will was made an exhibit at the trial. [ 28 ] Lois testified that James never suggested that they make changes to their wills so that Lot 25 or some part of it would be Barry’s for the scrap yard. Nor did Barry ever suggest that such changes be made or that any legal arrangement be made to transfer land to him.

She added that after James’ death, Barry had never suggested to her that the land was his or that his father had promised it to him. It had simply never been discussed or considered. Lois testified that she intended to treat her children equally, an intention she and James shared. [ 29 ] Lois described how the problem with Canada Life arose, its development, and the decision to sell the house (see para. 13, supra ).

She also confirmed why she blamed the tax preparers and assigned some of the blame to Barry for getting them to change to the new company. [ 30 ] Lois’ daughter, Kelly Rowlinson, (“Kelly”) testified that from time to time she assisted her mother with financial matters and that she had a power of attorney to do so. She had discussed the problem with her mother of repaying Canada Life, and she said she was present when her mother decided that she would have to sell the house. Lois directed Kelly to phone Barry and advise him that he could purchase Lot 25 with the house for $80,000.00.

Kelly said she often made calls for her mother because of Lois’ hearing deficit. She did not know how Lois had arrived at the amount; she had simply acted at her mother’s direction. She said that Barry indicated he would purchase the property but he needed a couple of days to arrange financing. It was agreed they would meet then. [ 31 ] According to Lois, Kelly, and Judy, however, Barry called his mother back and claimed the property was already his. Lois testified that he “cursed and swore”, making her cry and hang up the phone. The timing of the call was not clear.

Kelly thought it might have been four or five days after she had spoken with Barry about his purchasing the property. Judy thought it was the next day. Kelly and Judy testified that Lois had spoken to each of them about the call and she was extremely upset. Kelly said that Lois had called her right after receiving it, and had expressed fear that Barry would come to her home. As a result, Kelly said that she called an uncle to go to the house, pick Lois up, and keep her until after work when she could pick her up.

Because of this incident, they sought legal advice, which lead to the property being listed with an agent who Lois knew from church. Kelly testified that but for that second call, they would not likely have gone to a lawyer. [ 32 ] Three of Lois’ daughters testified and all three stated that they were unaware of any promise, agreement, or understanding by either of their parents that Barry would have the scrap yard (i.e. the land it was on), or that it was his. Neither parent had ever spoken to them about it. Nor had Barry ever mentioned it.

Judy and Kelly participated in Lois’ meetings with her lawyer and they were all aware of the subsequent correspondence between the lawyers. [ 33 ] Judy testified that after the house had been listed for several months and no formal offers had been received, particularly from Barry, she and her husband decided to move back to Echo Bay. After consulting with their financial advisor, they presented the listing agent with an unconditional written offer dated October 13, 2011, in the amount of $85,000.

I note that the $5,000.00 increase over the price offered to Barry is about six per cent, the equivalent of the usual commission on the first $100,000.00 of sale price. Lois executed acceptance on October 14, 2012, but the closing was suspended pending resolution of this action. According to Lois she was unaware of Judy’s interest until she received the offer, and Judy confirmed that she had not disclosed the offer before presenting it. [ 34 ] Judy testified that she and her husband intended to renovate Lois’ home and eventually build a new home in the area of the scrap yard.

She indicated that they had looked into re-zoning the property back to agricultural status and they were encouraged to do so. If there was environmental clean up to be done, she said they would do it. She thought there were about 20 wrecks in the scrap yard area and that moving them would not be difficult. Judy had received a job offer in the Sault and there was employment opportunity for her husband too.

E. Legal Correspondence [ 35 ] Barry retained Peter Bortolussi, a lawyer experienced in the kind of solicitors’ work common to a city the size of Sault Ste. Marie. Lois retained Frederick Skeggs who is similarly experienced and who ultimately appeared for all of the Defendants in this action. A course of correspondence ensued between the lawyers about the status of Lot 25 and the scrap yard prior to the commencement of the litigation. Counsel at trial agreed to the admissibility of that correspondence, which was entered in evidence. Neither resiled from the positions stated in the letters.

The letters illuminate the parties’ respective positions and what happened (or did not happen). [ 36 ] I propose to summarize the highlights of that correspondence as follows: (

i) Bortolussi to Skeggs July 28, 2011: introduced his retainer and stated that Barry has an “excellent relationship with his mother”; indicated that the sale of Lot 25 should exclude the piece in process of being severed; advised that Barry was prepared to purchase all of Lois’ interest in Lot 25 (and the home) for $70,000.00; and, advised that Barry was arranging financing through Dominion Lending for an anticipated August 25, 2011 closing date. “The intent at this point is to enter into an Agreement of Purchase and Sale which would be required to complete the funding application in any event.” (ii) Bortolussi to Skeggs July 28, 2011: advised that the $70,000.00 proposed purchase price was not correct although Barry still intended to purchase and instructions on price were coming shortly. (iii) Bortolussi to Skeggs July 28, 2011: confirmed the correctness of Barry’s offer of $70,000.00 by which Lois would convey all her interest in the land including “his mother’s house, the 18 acre scrap yard, which he already owns, which was given to him by his father …” (emphasis added); stated that Barry would permit Lois to live in her house during her lifetime or as long as she was able (in accordance with James’ wishes); and, observed that the listing was an issue that must be addressed to the agent’s satisfaction. (iv) Skeggs to Bortolussi August 2, 2011: advised that Barry had talked to him without indication of retaining counsel; stated that Lois had listed “everything” for sale; indicated the $129,900.00 listing price and that release of a copy of the listing agreement was in the works; and, requested documentation supporting that Barry owned or was entitled to any of the property. (

v) Bortolussi to Skeggs August 2, 2011: stated that listing “everything” was based upon inaccurate information, probably from one of the daughters and that Lois could confirm Barry’s entitlement to the land; indicated that Barry was in the process of rectifying the already severed piece of land; and, advised that Barry would purchase “the home property itself given that he is already entitled to the rest (“the property he already owns”). (vi) Skeggs to Bortolussi August 11, 2011: responded that Lois did not acknowledge that Barry was entitled to any interest in the property and that there was no written document substantiating Barry’s claim in spite of his having indicated (by telephone to Mr.

Skeggs) that he would produce same. (vii) Bortolussi to Skeggs August 16, 2011: indicated that there were two expired consents to sever the land next to Barry’s home (i.e. it could not be said there was no written proof of intent to convey land to Barry). (viii) Skeggs to Bortolussi October 4, 2011: acknowledged awareness of the expired consents to sever some land; advised that no other severance applications had been filed with the township and there had been no intent to grant Barry any other land; advised that Barry had been offered the property for $80,000.00 but he subsequently contacted Lois; and “tried to get a better deal than this by upsetting her”; stated that Barry could still purchase the property, which was however now listed with a realtor. (ix) Bortolussi to Skeggs October 24, 2011: responded that Barry was prepared to purchase the property for $80,000.000 as had been offered to him; indicated that Barry was taking steps to revive/rectify the severance; and, asked for Lois’ cooperation to protect Barry’s interest in light of information that one of Barry’s sisters might be interested in purchasing the property. (

x) Skeggs to Bortolussi, October 27, 2011: informed that the property had been sold. (xi) Bortolussi to Skeggs, October 27, 2011: advised that Barry was prepared to purchase the property for $85,000.00; asked that

the intended purchasers assign their right, and; asked again for Lois’ cooperation in completing the failed severance. (xii) Skeggs to Bortolussi November 2, 2011: responded that his client (Lois) could not sign an assignment but that his partner,Mr. Paciocco, who acted for the purchasers, was seeking instructions. (xiii) Bortolussi to Skeggs November 3, 2011: indicated that Lois could not transfer the piece of land that was in process ofseverance; asked for Lois’ cooperation in signing a new consent to severance; and, indicated that he would speak with Mr.

Paciocco. (xiv) Bortolussi to Skeggs November 7, 2011: indicated his attempts to reach both Mr. Skeggs and Mr. Paciocco by telephone inrespect of the status of the proposed sale of the property had been unsuccessful and requested a response. (xv) Skeggs to Bortolussi November 7, 2011: acknowledged the phone calls; advised he was instructed to proceed to closing of theproposed sale; and, requested that any future communication be written. [37] Barry denied that he had telephoned his mother, tried to get her to reduce the price, or that he had sworn at her.

He admittedthat in the telephone call with Kelly he had said he would purchase the property for $80,000.00, but that he had subsequently reduced itto $70,000.00 because he was angry. Although he agreed he had had sufficient time to make arrangements prior to the property beinglisted, he insisted that Kelly had gone behind his back with the listing before he had completed those arrangements. As a result, he saidhe had telephoned Kelly and asked her why she had listed the property when he had agreed to purchase it.

He said her response was thathe should speak to the realtor or to lawyer Skeggs, who failed to get back to him when he did try to contact him or who took too long toreply. [38] It was in this second call with Kelly that he said he could hear his mother shouting in the background that the property washis, to which Kelly ordered Lois to “shut up”. He insisted it had happened in this second call. He was then shown an affidavit swornMarch 15, 2012, in which he had deposed that the stated exchange occurred during the initial telephone conversation with Kelly, whenhe had agreed to pay $80,000.00.

He agreed that the version in the affidavit was the correct one. Neither counsel asked Lois or Kellyabout the alleged background shouting and direction to “shut up”. However, given these witnesses’ testimony that they were completelyunaware of any claim of promise or entitlement until after the listing, it is safe to conclude that they would not have agreed with theassertion. F.

Legal Argument [39] The plaintiff submitted that his parents’ promises over the years, through which he continued to work the scrap yard andassist his parents, imposed a constructive trust under which they were transformed into to trustees with an equitable obligation to conveythe scrap yard with property to him. He relied on the Supreme Court of Canada’s ruling in respect of the equitable remedy ofconstructive trust in Soulos v. Korkontzilas (SCC), [1997] 2 S.C.R. 217. [40] In that case, Soulos had engaged a real estate agent to negotiate the purchase of a specific commercial property.

Offers andcounter-offers were made and rejected. When the vendor finally told the agent the price it would accept, the agent kept the informationto himself and submitted an offer in his wife’s name. When Soulos asked the agent about the status of negotiations, the agent told himthat the vendor was no longer interested in selling. However, the agent’s offer was accepted, the transaction closed, and the propertywas ultimately conveyed into the joint names of the agent and his wife. Only later did Soulos learn about the sale.

By this time themarket value of the property had declined to a point where Soulos could not claim a loss from appreciation over what he had offered,although he had had other reasons for wanting the property. He failed at trial but was successful on appeal.

The Supreme Court ofCanada rejected the agent’s appeal. [41] At paragraph 17 of its Reasons, the court summarized the history of the constructive trust remedy: [T]he constructive trust is an ancient and eclectic institution imposed by law not only to remedy unjust enrichment, but to hold persons indifferent situations to high standards of trust and probity and prevent them from retaining property which in “good conscience” theyshould not be permitted to retain.

This served the end, not only of doing justice in the case before the court, but of protectingrelationships of trust and the institutions that depend on these relationships. These goals were accomplished by treating the personholding the property as a trustee of it for the wronged person’s benefit, even though there was no true trust created by intention. InEngland, the trust thus created was thought of as a real or “institutional” trust. In the United States and recently in Canada, jurisprudencespeaks of the availability of the constructive trust as a remedy; hence the remedial constructive trust.

[42] Observing that Canadian courts had maintained and modified the common law, McLachlin J. (as she then was) stated that aconstructive trust may be imposed in the absence of wrongful conduct where: (1) there is an unjust enrichment of a party; (2) with acorresponding deprivation of the other party, and; (3) the absence of a juristic reason for the enrichment (e.g. a contract or other legalbasis): Soulos, at para. 20. It was no longer necessary to have specific wrongful conduct such as the breach of a fiduciary duty.

Forexample, the principle has been developed and applied in family law cases where parties live in a relationship tantamount to spousal. Where one party to the relationship prejudices herself in the reasonable expectation of receiving an interest in property, and the otherparty freely accepts the benefits thus conferred by the first in circumstances where he knows or ought to know of the reasonableexpectation, a constructive trust may apply where it would be unjust to let that person retain the benefits: Pettkuss v. Becker, (SCC), [1980] 2 S.C.R. 834. [43] Quoting D.M.

Paciocco, MacLachlin J. acknowledged that a constructive trust may even be imposed where there has been nounjust enrichment (at para. 22): [I]n the largest traditional category, the fiduciary constructive trust, there need be no deprivation experienced by the particular plaintiff.

The constructive trust is imposed to raise the morality of the marketplace generally, with the beneficiaries of some of these trustsreceiving what can only be described as a windfall. [44] Justice McLachlin thus concluded that the law of constructive trust in the common law provinces of Canada embracedsituations in which English courts of equity traditionally found a constructive trust as well as the situations of unjust enrichmentrecognized in recent Canadian jurisprudence: Soulos, at para. 25.

Citing American jurist, Cardozo J., she further acknowledged (at para.29) that “good conscience” was the unifying principle of the constructive trust doctrine: A constructive trust is the formula through which the conscience of equity finds expression.

When property has been acquired in suchcircumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him into atrustee. [Emphasis added.] [45] Observing that good conscience not only addresses fairness between the parties but also the larger public interest ofmaintaining the integrity of institutions traditionally supervised by the courts, such as fiduciary relationships, Justice McLachlinconcluded (at para. 34): It thus emerges that a constructive trust may be imposed where good conscience so requires.

The inquiry into good conscience isinformed by the situations where constructive trusts have been recognized in the past. It is also informed by the dual reasons for whichconstructive trusts have traditionally been imposed: to do justice between the parties and to maintain the integrity of institutionsdependent on trust-like relationships. Finally, it is informed by the absence of an indication that a constructive trust would have anunfair or unjust effect on the defendant or third parties, matters which equity has always taken into account.

Equitable remedies areflexible; their award is based on what is just in all the circumstances of the case. [46] There are generally two categories of situations in which Canadian courts recognize and may impose a constructive trust. Thefirst is where a defendant has obtained property by some wrongful act, such as fraud, breach of a fiduciary duty or other duty of loyalty. The second is where the defendant has not acted wrongfully in obtaining the property, but would be unjustly enriched to the plaintiff’sdetriment if he were allowed to keep it. The two categories are not mutually exclusive.

There may be wrongful acquisition withoutunjust enrichment: Soulos, at paras. 36 to 39. [47] Finally, the court articulated the following four-pronged test that should generally be satisfied as prerequisite for the grantingof a constructive trust based on a wrongful act:

(1) The defendant must have been under an equitable obligation, that is, an obligation of the type that courts of equity haveenforced, in relation to the activities giving rise to the assets in his hands;

(2) The assets in the hands of the defendant must be shown to have resulted from deemed or actual agency activities of thedefendant in breach of his equitable obligation to the plaintiff;

(3) The plaintiff must show a legitimate reason for seeking a proprietary remedy, either personal or related to the need to ensure thatothers like the defendant remain faithful to their duties and;

(4) There must be no factors which would render imposition of a constructive trust unjust in all the circumstances of the case; e.g.,the interests of intervening creditors must be protected. [48] The Supreme Court of Canada affirmed these four conditions in Professional Institute of the Public Service of Canada(Attorney General), 2012 SCC 71, at para. 146.

[ 49 ] In Soulos , the court concluded that although there had been no unjust enrichment, the agent had breached a duty of loyalty (i.e. a fiduciary duty) engaging the conscience of the court sufficiently to warrant the imposition of a constructive trust in favour of the plaintiff. It was also an institutional situation meriting court intervention. Agents and others in positions of trust must remain faithful to their duty of loyalty irrespective of whether the plaintiff can establish unjust enrichment. G.

Discussion [ 50 ] On a factual level, I am not satisfied on a balance of probabilities that the promises alleged were made, and that if made, they were sufficiently clear, specific, and authoritative. [ 51 ] Barry conceded that there was no unjust enrichment and I found no evidence of it. Indeed, I conclude that Barry did very well by his father, and in fact by both parents. His parents gifted him a sizeable piece of property abutting his home, and it was on this property that he built and operated his auto repair business.

He credited his father with helping him construct the garage and acknowledged that he would not have had it without James’ assistance. Because the severance was incomplete through a conveyancing error, I expect that James and Lois continued to pay taxes on it over the years. James was also a mechanic, and he apparently assisted Barry with motor vehicle repairs in Thomas Auto & Salvage. There was no evidence that he was ever paid for his assistance or that he ever expected to be paid. He was retired and did it because he enjoyed it and to help his son.

Several witnesses observed that he was often around the garage. [ 52 ] Barry was also given the use of his parents’ property to continue the scrap yard portion of his business. Again, his parents paid the taxes, and probably the insurance too. I was given no real evidence of the size of the scrap yard operation, either as to the revenue it produced overall, or for Barry and James individually, although I was left with the impression that it was relatively modest. Nor was there evidence as to how much scrap was located on the property or how much land it occupied at any given time or at the time of trial.

Again, however, my impression was that it was modest. [ 53 ] Judy testified that there might have been 20 scrapped autos at the time of trial, and she thought they could be moved with relative ease. This was not disputed. It must not be forgotten either that this evidence was given in the context of over 30 years of operation by James and/or Barry, in which interval there was considerable time for the accumulation of wrecks.

As there is no reason not to accept Judy’s testimony on the point, the impression of a modest scrap operation is reinforced. [ 54 ] Barry has dealt with scrap minimally over the past ten years since he has been working as a millwright. I must wonder whether the scrap could not be relocated to the land on which the repair garage is located, and operated there in its current minor scale. It is only a possibility that Barry will ever be active in the business again.

I do not see that possibility as a viable or pressing reason for imposing a constructive trust given all of the circumstances of its development and use, even if there was sufficient other basis. [ 55 ] Once he had ceased active operation of Echo Bay Towing, James’ involvement in automobile scrap was purely as a hobby, although it gave him great pleasure. While he earned income from it, there was no indication that it was a significant part of his income or anything more than part of the hobby.

Similarly, there was no indication that the scrap side of Thomas Auto & Salvage formed a significant part of Barry’s business. Cars were taken in mainly from locals in this small rural community. It is more likely that Barry operated this side of the business because he could, especially given his father’s interest and assistance.

It was a convenient opportunity that earned some income using James’ and Lois’ land, and using James’ physical assistance too (although less in later years). [ 56 ] Barry testified that it was common knowledge that the scrap yard was to be his, and even that it had already been given to him. Robert Welwood had known Barry and his parents for over 40 years. He had developed a business relationship and friendship with Barry but he did not testify on the point. Michael Lauzon had also known Barry for about 30 years and spent considerable time with him, including in Echo Bay (at least monthly).

He did not testify on the point either. [ 57 ] Albert MacPherson, who had known Barry for about 20 years and had assisted him, testified that “everyone” knew the scrap yard was Barry’s. He quoted or paraphrased comments attributed to James: “…this is all his…” He stated that James had always said the scrap yard was to be Barry’s and that he had “passed it off” to his son. He held to this testimony, agreeing that he was aware of the distinction between the business and the land, and aware too that the land was in the joint names of Lois and James.

These details did not seem to pique questions in his mind. [ 58 ] Barry’s wife, Brenda, had not heard any discussion about the passing of the scrap yard. She might have heard “a bit of

discussion” at a lawyer’s office, but she did not even seem certain of that. How could this be if both Lois and James had made the promise repeatedly to Barry over the years, given too that the couples had spent so much time together at each other’s homes. By all accounts, Lois spent very little time at Barry’s garage or the scrap yard because she had her own daytime employment in the city. If she made promises, it would most likely have been in one of their homes, and if that was so why was it not a matter of discussion between the couples?

One would not expect James and Lois to be making secret promises to Barry alone. This was a particularly telling piece of evidence. [ 59 ] This is buttressed by Lois’ testimony that she had made no promises to Barry, that she had never heard James make promises, and that James had never discussed it with her. Lois stated that they intended to leave the land and house to the survivor of them, then equally to their children. Lois testified that it was their common goal to treat the children equally. She said they had specifically discussed it and acted upon it by the execution of wills.

James’ will of November 19, 1987, was presented as evidence of that common intention. [ 60 ] I would expect one spouse to provide for the needs of the other in case of death. That is the ordinary course of a spousal relationship, and one that the law protects. I conclude that it would be very unusual and imprudent for a spouse to do otherwise, especially without good reason and the knowledge and agreement of the other spouse.

James and Lois seemed to get by financially, but they were not wealthy, as the events surrounding the mistaken continued payment of James’ life annuity would prove. [ 61 ] I also accept that parents usually try to be even-handed with their children. That may not be the case if a child has repudiated a parent or the relationship has been damaged for some other reason. However, there was no evidence that was the situation here. There was no evidence that James and Lois were in any way estranged from their daughters. The family dynamics seemed normal enough prior to James’ death.

Barry spent the most time with his parents because he lived next door to them. He may have been closest to James on an emotional level because of proximity and their shared interests. However, there is no reason to believe that James preferred Barry to his daughters. [ 62 ] The other difficulty with the alleged promise is that James could not make it unilaterally. He required Lois’ agreement and co-operation because the land was jointly owned. I accept Lois’ testimony that her husband had never discussed it with her and that she had never made the promise herself.

It is supported by Brenda’s testimony that she never heard promises made. Lois gave her evidence forthrightly and without hesitation or inconsistency. It is also supported by other facts or circumstances as discussed and that were unchallenged. [ 63 ] It was clear that James and Lois could act and carry through when they wanted to benefit their son, as demonstrated by the conveyance of

Part 1, Plan 1R-9016, which required Lois’ agreement and participation. James and Lois obviously understood that there was a process to be followed and they acted upon it. I conclude that had they intended to give Barry all or any part of the rest of Lot 25, they would have acted on that too. If the promise had been a long-standing one, they all had more than ample time to act. [ 64 ] Barry explained that he and his father only did one thing at a time and that when the severance of

Part 1, Plan 1R-9016 was complete they would have tackled the question of the scrap yard. However, I do not find that explanation attractive or sensible. It would have been more economical and efficient to deal with both issues at once; especially since both were related to Barry’s intended business operation.

If James and Lois intended to assist Barry with setting up and establishing his business, why would they distinguish between the land for the garage and the land for the scrap yard, particularly if the promise of the scrap yard had already been made? [ 65 ] The vagueness of the alleged promise is also bothersome, and undermines probability and credibility. Surely James and Lois would not intend to leave the entire Lot 25 and home to Barry just so that he could operate this small scrap yard. If some allowance was going to be made it would surely have been limited to what was needed and defined.

Some degree of precision of description was required, whether it was describing a piece of land, or providing the equivalent of a first right of refusal for Barry to acquire the part or the whole on terms. There was also the complication of being fair to the other children and providing for the survivor of James and Lois. None of these issues were addressed or seemed part of the promise put forward by Barry, which supports the conclusion that there was no well-formed promise. [ 66 ] This is ultimately also the difficulty with Mr. MacPherson’s testimony that he knew that James had passed the scrap yard to Barry.

What exactly had he passed or even intended to pass? In my view, the comments attributed to James are equally consistent with reference to the scrap business itself, as distinguished from the land it was on. Given the other circumstances already discussed, if James made such comments it is as likely that he was saying that the jointly run scrap operation would one day be Barry’s. [ 67 ] George Wright “assumed” the scrap yard and land it was on were Barry’s because he had directed the placement of vehicles brought in.

However, the scrap collected over the previous ten or fifteen years had essentially been assembled in whole or in part within the framework of Barry’s business. Because Thomas Auto & Salvage was Barry’s alone, one would expect him to direct all aspects of the business including where to place scrap brought in by his customers. That Barry directed his own business and that James accepted that direction has no bearing on the question before the court; nor does it shed light on the likely existence or nature of the proposed promise. Also, because his relationship was primarily with Barry, Mr.

Wright would not have been aware of calls taken by James about scrap or parts, as Lois indicated he received at home from time to time. Even then, that James might direct enquiries to Barry is not helpful in respect of the questions at hand. [ 68 ] It is not even clear that James did not have a business interest in the scrap yard even in retirement. While James’ sole proprietorship, Echo Bay Towing, was not carrying on business actively, there was no evidence that it had ever been wound up. Lois was upset that she and her husband had changed to Barry’s tax preparers.

She explained they had done so at Barry’s request so that shared or related business activity could be commonly dealt with for income tax purposes. Barry did not deny or refute this piece of evidence, which suggests that James was dealing with a tax issue common to Barry too. The only shared business activity was the scrap yard and the revenue earned from it. It may well be that James’ income from the scrap yard continued to be channeled through Echo Bay Towing. I conclude that James may well have intended Barry to have his interest in the scrap yard business. This would have been understandable and fair.

It would not have involved a great amount of money either, so there would have been little impact on being even-handed with Barry’s sisters. I find it more likely that James could have expressed such a wish without discussing it with Lois,

Brenda, or any of his other children. If there was a “promise” that is the only one I can find credible on the evidence before me. [ 69 ] The uncertainty of the promise was further apparent from the events that followed Lois’ decision to sell the property. I accept that she was very upset when she made the decision and that she felt she had no choice. I am sure it came as a terrible blow. She decided to offer it to Barry for $80,000.00. Unfortunately, Lois was not asked, either by her own lawyer or Barry’s, why she took the initiative to offer it to him or how she arrived at the price.

Barry’s counsel argued that it evidenced the promise. To argue that point effectively, however, he should have put the question to Lois. [ 70 ] Barry’s evidence was never that there would be a price tag attached to his receiving the property or an amount. His evidence was that “the scrap yard”, i.e. the wrecks and some land, were already rightfully his. On the other hand, Lois’ testimony was that there had never been a promise.

The telephone offer proposing a purchase price of $80,000.00 was inconsistent with an outright gift and consistent with there having been no promise. [ 71 ] Barry’s reaction and actions from the time of the initial phone call with Kelly also undermined his position because they were not clear or consistent. He agreed that he had spoken with Kelly and verbally agreed to purchase the property at the proposed price. There was no suggestion of argument about it and neither Kelly nor Barry testified in chief that in the course of that conversation Barry had asserted a prior interest.

This was inconsistent with Barry’s general evidence that it had been already been promised or given to him. If he was already entitled by promise or gift, why did he agree to pay $80,000.00 and why did he also not tell Kelly it was already his because of promises or a gift made? [ 72 ] His testimony about hearing Lois acknowledging his entitlement in the background was also problematic (see para. 16, supra ).

He insisted in-chief and cross-examination that this had occurred in a second call with Kelly; but under cross-examination in reply, when faced with contradictory affidavit evidence, he said it had in fact taken place during the first conversation. Barry’s first version was consistent with Kelly’s but his second was not. The contradiction undermines Barry’s credibility and evidence to the point that I am not satisfied it happened at all. [ 73 ] The price was clearly what Lois thought fair because she subsequently sold it to Judy for $85,000.00 after it had been listed for $129,900.00.

None of the other siblings complained that the amount was unfair. At trial, Barry was also prepared to pay that sum, which I have already observed would probably have netted Lois $80,000.00 after real estate commissions. [ 74 ] Lois, Kelly, and Judy all testified that Barry telephoned Lois the day following the initial call, claiming that the property was already his. Lois said that he swore at her and upset her greatly. Kelly and Judy testified that they both received calls from their mother immediately or shortly after, reporting what had happened.

They testified that she was very upset and frightened, which led Kelly to find someone to be with her. Because of the consistency of this testimony and subsequent correspondence from Barry’s first lawyer, I accept that the call likely happened, in spite of Barry’s denial. Barry’s confrontational manner is also consistent with Lois’ immediately seeking legal advice and listing the property with an agent. [ 75 ] Barry’s lawyer sent a letter to Lois’ counsel on July 28, 2011, referring to “the 18 acre scrap yard, which he already owns, which was given to him by his father”. I am certain that Mr.

Bortolussi did not make this detail up and that he asserted it on the basis of Barry’s brief and instructions. On the same date, Barry had Mr. Bortolussi write that he would pay $70,000.00 for the property. At trial, Barry indicated that he reduced the amount he would pay from the $80,000.00 agreed to on the telephone because he was angry with his mother. He admitted too that he had a temper and a tendency to use foul language.

The written assertion that he already owned the property because James had given it to him and the admission of anger resulting in reduction of amount, both support the second call to Lois having taken place and her description of an angry son swearing at her and claiming that the property was already his. It also confirms that the offer did not have clear terms, because he asserted both that it was already his and also that he would pay something for it, although the amounts varied. The “promise” was vague even in Barry’s mind.

This inconsistency and vagueness also undermines Barry’s credibility and therefore the likelihood that a clear promise had been made. [ 76 ] Barry did not think it fair that his mother had listed the property for sale. He thought she had gone behind his back, perhaps under pressure from one or more of his sisters. The listing was likely entered into within a week or two of Barry’s telephone conversation with Kelly. As he told Kelly in the conversation, he needed some time to arrange financing, which he testified he had in fact done shortly after and verbally with a named mortgage broker.

He did not indicate to his mother or sisters that financing was in place, nor did he make a written offer before the listing was given. [ 77 ] Having concluded that Barry probably called his mother in anger and claimed that the property was already his, I also conclude that Lois quite reasonably took it as a repudiation of her proposal that he purchase the property. Her fear and perception of Barry’s hostility were also reasonable.

She had to get on with the sale in order to repay Canada Life; so after taking legal advice she listed the property for sale. [ 78 ] I find nothing unreasonable or treacherous in her doing so. Barry brought it on himself by his hostile assertion of ownership. Under those circumstances, Lois’ listing the property at a price recommended by the agent was quite reasonable. By listing and eventually informing Mr. Bortolussi of the details of the listing agreement after he enquired, Lois was not indicating that she would not deal with Barry under any circumstances or that she was rejecting his proposal of $70,000.00.

Mr. Skeggs was simply stating a fact in response to Mr. Bortolussi’s enquiries on Barry’s behalf. Mr. Bortolussi wrote a number of times that Barry wished to purchase the property. [ 79 ] Yet, at no time did he present a written offer. Mr. Bortolussi was experienced in real estate law. Of course he knew that offers had to be presented in writing according to a usual form and through the agent where there was a listing. The interested purchaser also usually presents the offer. In his letter of July 28, 2011, Mr. Bortolussi referred to an agreement of purchase and sale (see para. 36(i)).

I am quite certain that Barry was appropriately advised. It is curious that he did not make a written offer, even after Mr. Skeggs wrote on October 4, 2011, that he could still purchase the property. Barry had plenty of opportunity to deliver a written offer, but he did not. I can only conclude that he was pursuing a deliberate strategy. He could hardly complain when Judy and her husband presented an

offer of their own. Having accepted it, Lois could not back out without the Wales’ consent and they did not agree. I see nothing wrong with Judy and her husband making a written offer under the circumstances, and they were within their rights to refuse to assign it to Barry. I see no reason why the transaction should be interfered with. [ 80 ] Having reached these conclusions there is probably not much to be said in respect of the application of the Soulos ( supra ) case because I am not persuaded on a balance of probabilities that a promise was made or that it was sufficiently clear to be enforced.

However, I will make comment in the event that the matter goes further. For the reasons that follow, I conclude that the Plaintiff cannot satisfy the required tests in Soulos . Nor am I convinced that the Soulos principles apply to the situation before the court. [ 81 ] The evidence before the court painted the picture of a family relationship. James and Lois helped their son, and Barry and Brenda reciprocated as one might expect. Families help each other, especially when they live close by. In this instance they were immediate neighbours and they also appear to have become friends as couples.

On top of this, James and Barry shared an interest in automobile mechanics and the scrap yard. Each brought skills, interests, and resources to the table. But they did it as family and friends. In the early years of this close relationship, James probably contributed significantly because he had more time and resources. The two couples socialized back and forth, assisted and provided for each other as convenience and time permitted. When James encountered poor health, Barry went out of his way to make his father feel wanted and included.

He described bringing him to the garage to be part of what was happening there even though James was too feeble to contribute. After James passed away, Barry looked in regularly on his mother and tried to fill some of the void, including by helping with home maintenance and the provision of wood for burning. [ 82 ] In my view, this relationship was a normal, healthy family one. It was based on mutual affection and respect. Families help each other. In this relationship I do not see anyone as having been taken advantage of in the many years of close association.

The two couples enjoyed mutual generosity and affection in their relationship. They gave freely to each other and accepted mutual kindnesses. I do not see enrichment or deprivation entering the picture.

It is not a situation like Petkuss ( supra ) where the nature of the relationship imported expectations of mutual obligation or dependency, i.e. spouse-like where a partner gave years of life and work without the security that a legally married spouse might reasonably expect and that public policy advocates. [ 83 ] In this case, James and Barry jointly contributed their efforts to a labour of love that had the benefit of some income.

However, neither man was apparently dependent on that revenue as a major source of income and Barry’s earnings were not without his father’s contribution in allowing the use of his land and the costs of maintaining it. I do not see the relationship involving any agency, fiduciary, or other equitable obligation. Nor do I see it as a relationship where conscience would intervene because one party unjustly took advantage of the other to the other’s deprivation, either in a moral or materialistic sense.

There was no wrongful conduct. [ 84 ] It is difficult to regard family dynamics and activities of this kind involving any of the trust-like relationships traditionally supervised by the courts for the greater social good. In fact, such supervision might be dangerous as family generosity and interaction might then be construed to imply a more general legal obligation. This is the responsibility of legislatures, which have enacted family law measures defining the boundaries of rights and obligations in the family context.

Therefore, I do not regard that James and Lois were under an equitable obligation of the type that courts have enforced in relation to the kinds of activities involved here, especially in the absence of a clear promise, unjust enrichment, or wrongful conduct. [ 85 ] While the accumulated scrap is an asset, I am not convinced that it is productive in a meaningful way because the business that it was adjunct to is not really active and has not been for at least ten years.

I am not convinced that the scrap yard business cannot be appreciated and operated in the same way elsewhere or that the land it occupied was a necessary component, particularly in its current near dormant state. The remedy is not pressing and is not needed to ensure that others like the Defendants remain faithful to duties to the Plaintiff – duties that I conclude do not exist here. Further, to grant the Plaintiff the remedy he seeks here would be unjust to the Wales who entered into the agreement of purchase and sale in good faith. They did not “steal” anything from Barry.

He could have made an offer too. [ 86 ] Finally, even if the court concluded that a piece of the property should be severed to accommodate the scrap yard, I would decline to do so without identification and justification of a precise amount. It is not the court’s place to divide the area to be severed and it is not equipped to do so. [ 87 ] The asset at issue here is the land, not the scrap itself or the business operation that generated it. In view of the observations just made, I conclude that the Plaintiff cannot satisfy the first of the four conditions stated in Soulos , at para. 49 .

James and Lois did not owe their son an equitable obligation through fiduciary duty or agency. Quite apart from that, however, the equitable obligation must be owed in respect of the activities giving rise to the assets coming into the Defendants’ hands. The activity of the scrap yard business did not give rise to the land being or coming into the Defendants’ hands. [ 88 ] Similarly, the Plaintiff cannot meet the second of the Soulos tests.

James’ and Lois’ ownership of the land in question was not the result of the scrap business activity, even if there had been a recognized equitable obligation by the Defendants to the Plaintiff. [ 89 ] The Soulos case imposes a constructive trust where property has been acquired through wrongful conduct where an equitable obligation exists or where there has been unjust enrichment. The Plaintiff admitted that there had been no unjust enrichment. There was no wrongful conduct in the acquisition of the land because it was not acquired in relation to or as a result of the operation of the scrap business.

Also, no equitable obligation in the form of a fiduciary duty or other recognized agency existed between James and Lois on the one hand, and Barry on the other. I am not convinced that the Soulos case applies to the claim before the court. H. Conclusion :

[ 90 ] For all these reasons, I conclude that the Plaintiff has not met the burden of proof upon him in establishing on a balance of probabilities either the factual or legal basis of the claim. The claim is therefore dismissed. [ 91 ] If costs are an issue, counsel may arrange make an appointment for submissions through the Trial Co-ordinator. Justice W.L. Whalen Released: February 5, 2013 CITATION : Thomas v.

Wales, 2013 ONSC 794 COURT FILE NO.: 25654/11 DATE: 2013-02-05 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: BARRY THOMAS Plaintiff (Defendant by Counterclaim) – and – JUDY WALES, LAWRENCE WALES AND LOIS THOMAS Defendants (Plaintiffs by Counterclaim) REASONS FOR JUDGMENT Justice W.L. Whalen Released: February 5, 2013