Molinski v. Chebib et al., (2012) 278 Man.R.(2d) 198 (QB)

JudgeSchulman, J.
CourtCourt of Queen's Bench of Manitoba (Canada)
Case DateApril 20, 2012
JurisdictionManitoba
Citations(2012), 278 Man.R.(2d) 198 (QB);2012 MBQB 123

Molinski v. Chebib (2012), 278 Man.R.(2d) 198 (QB)

MLB headnote and full text

Temp. Cite: [2012] Man.R.(2d) TBEd. MY.023

Sandy Lee Molinski (applicant) v. Oubay Ismail Chebib, Farouk Chebib and Laila Chebib (respondents)

(CI 09-01-61810; 2012 MBQB 123)

Indexed As: Molinski v. Chebib et al.

Manitoba Court of Queen's Bench

Winnipeg Centre

Schulman, J.

April 20, 2012.

Summary:

The husband and the wife began living together in the husband's home in 1994. In 1999, they married. In 2002, they separated. The husband's mother loaned him money. In 2006, she obtained a judgment against him for $84,457.61, which she registered against the home's title. In 2007, the parties agreed that the house title would be transferred to the husband's parents with the wife and husband's parents retaining all rights, legal and equitable, that they presently had. The transfer was effected. The wife obtained a judgment in the matrimonial action totalling $115,000, which was filed in the Land Titles office in 2008. Paragraph 6.2 of the judgment declared that the wife was the beneficiary of a constructive trust in the property for a 25% interest worth $25,000 as of 1999. In 2010, the house was sold. The net proceeds were $183,000. At issue was entitlement to the proceeds.

The Manitoba Court of Queen's Bench held that the proceeds were to be distributed, first, to the husband's parents for $14,481 (for an equitable lien for sums paid out by them to preserve the property) and the wife for $25,000; second, to the husband's mother for her judgment; third, to the wife for amounts owing under the matrimonial judgment; and, fourth, the balance to the husband.

Execution - Topic 3971

Sale of land of judgment debtor - Distribution of proceeds of sale - Priorities - General - [See Family Law - Topic 637 ].

Execution - Topic 8206

Memorial or certificate of judgment - General - Priorities - [See Family Law - Topic 637 ].

Family Law - Topic 637

Husband and wife - Marital property - Constructive trusts - The husband and wife began living together in the husband's home in 1994 - In 1999, they married - In 2002, they separated - The husband's mother loaned him money - In 2006, she obtained a judgment against him for $84,457.61, which she registered against the home's title - In 2007, the parties agreed that the house title would be transferred to the husband's parents with the wife and husband's parents retaining all rights, legal and equitable, that they presently had - The transfer was effected - The wife obtained a judgment (by Everett, J.) in her matrimonial action totalling $115,000 (including an equalization payment of $37,829.72), which was filed in the Land Titles office in 2008 - Paragraph 6.2 of the judgment declared that the wife was the beneficiary of a constructive trust in the property for a 25% interest worth $25,000 as of 1999 - In 2010, the house was sold - The net proceeds were $183,000 - At issue was entitlement to the proceeds - The Manitoba Court of Queen's Bench agreed with Everett, J., that the constructive trust in the wife's favour was effective as of 1999 (retroactivity), preceding the husband's mother's judgment - Everett, J.'s order read as a declaration of trust regarding a $25,000 interest in land - As the courts did not recognize dollar interests in land, the court construed paragraph 6.2 as creating an equitable mortgage for the wife with priority over the husband's mother's judgment - On obtaining title, the husband's parents became trustees of the property - The beneficiaries were the husband's mother as judgment creditor, the wife as equitable mortgagee and judgment creditor and the husband for his residual interest - The husband's parents, as trustees, were entitled to an equitable lien against the property of $14,481 for sums paid out by them - The proceeds were to be distributed, first, to the husband's parents for $14,481 and the wife for $25,000; second, to the husband's mother for her judgment; third, to the wife for amounts owing under the matrimonial judgment; and, fourth, the balance to the husband.

Family Law - Topic 868.3

Husband and wife - Marital property - Distribution orders - Equalization payments - [See Family Law - Topic 637 ].

Family Law - Topic 880.17

Husband and wife - Marital property - Distribution orders - Priorities - [See Family Law - Topic 637 ].

Liens - Topic 2745

Equitable lien - Creation at common law - When available - [See Family Law - Topic 637 ].

Mortgages - Topic 207

Equitable mortgages - What constitutes an equitable mortgage - [See Family Law - Topic 637 ].

Real Property - Topic 7968

Title - Registration of instruments, etc. - Priorities - Equitable interests - [See Family Law - Topic 637 ].

Trusts - Topic 625

Creation of trust - Transactions creating trusts - Land held to secure a debt - [See Family Law - Topic 637 ].

Trusts - Topic 2306

Constructive trusts - General principles - When trust takes effect (incl. retroactivity) - [See Family Law - Topic 637 ].

Cases Noticed:

Gordon v. Winnipeg Canoe Club et al. (1999), 134 Man.R.(2d) 213; 193 W.A.C. 213 (C.A.), reving. (1997), 117 Man.R.(2d) 88 (Q.B.), additional reasons at (1997), 120 Man.R.(2d) 155 (Q.B.), leave to appeal denied (2000), 254 N.R. 200 (S.C.C.), refd to. [para. 6].

Hardoon v. Belilios, [1901] A.C. 118 (P.C.), refd to. [para. 6].

Stevens v. Stevens (2006), 214 O.A.C. 201 (C.A.), refd to. [para. 7].

Willman v. Ducks Unlimited (Canada) (2003), 171 Man.R.(2d) 297; 2003 MBQB 41, refd to. [para. 9].

Rawluk v. Rawluk, [1990] 1 S.C.R. 70; 103 N.R. 321; 38 O.A.C. 81, refd to. [para. 12].

Trang v. Nguyen et al., [2011] O.T.C. Uned. 7076; 2011 ONSC 7076, refd to. [para. 12].

Bezuko v. Supruniuk (2007), 428 A.R. 47; 2007 ABQB 204, refd to. [para. 13].

Kaup v. Imperial Oil Ltd., [1962] S.C.R. 170, refd to. [para. 13].

Ehrmantraut (Bankrupt), Re (2008), 229 Man.R.(2d) 157; 2008 MBQB 140, affd. (2008), 231 Man.R.(2d) 176; 437 W.A.C. 176; 2008 MBCA 127, refd to. [para. 13].

Kimwood Enterprises Ltd. v. Roynat Inc. and Canadian Imperial Bank of Commerce (1985), 31 Man.R.(2d) 105 (C.A.), refd to. [para. 14].

Authors and Works Noticed:

Brown, Edward D. (Ned), Can You Trust in the Existence of Trusts (2003), generally [para. 13].

Hayton, David J., Underhill's Law Relating to Trusts and Trustees (13th Ed. 1979), article 86 [para. 14].

Scott, Austin Wakeman, Law of Trusts (3rd Ed. 1967), paras. 244, 249 [para. 14].

Counsel:

Terry P. Beley, for the applicant;

Randie N. Kushnier, for the respondents, F. Chebib and L. Chebib;

O. Chebib, the respondent, did not appear.

This motion was heard by Schulman, J., of the Manitoba Court of Queen's Bench, Winnipeg Centre, who delivered the following judgment on April 20, 2012.

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