Legal Blog

Constructive Trust, Express Trust

Serbian League of Canada v. Stojanovich 2020 Ont SCJ

Three members of a charitable organisation purchased property in 1964 for the use of the charity. In doing so, they paid $3,000 and gave a mortgage of $15,000. Approximately 54 years later, the charity wanted to sell the property and realised that title was still in the name of the individuals, who were long since dead. Their estates claimed that the property was theirs. The judge found that, aside from the payment of the $3,000, the individuals paid nothing towards the mortgage or improvements to, or upkeep of, the property. The judge held that there was no bare trust or express trust. Merely because the deed had the words “in trust” appearing in it was not sufficient to satisfy the necessity for certainty of object; no one had been able to give any evidence as to the intention of the parties at the time the property was purchased because the individuals who purchased it were dead. The court also held that the trust did not comply with section 9 of the Statute of Frauds because there had to be evidence in writing signed by the owners (i.e. the individuals) evidencing the trust. The judge did find that there was unjust enrichment and, in this case, a constructive trust. Since the property had been sold and the sale proceeds held in trust, the judge decided that the estates should receive 25% of the sale funds and the charity the remaining 75%.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.