Ruling upholds order for ex-husband to pay his former spouse rent
Regarding the beneficial ownership of a house, the Ontario Court of Appeal upheld a finding that an ex-wife gave enough evidence to overturn the presumption of a resulting trust under s. 14 of Ontario’s Family Law Act, 1990 (FLA).
In Qu v. Zhang, 2025 ONCA 391, the dispute revolved around a house that a couple held as joint tenants during their brief marriage. The parties married in July 2016 and separated in August 2017. The ex-wife lived in China. The ex-husband, who resided in Canada after immigrating from China, added her to one of his bank accounts during their marriage.
The ex-wife alleged that she deposited money in the joint account because she wanted to invest in Canada and never planned to give her ex-husband the funds subsequently used to purchase the house.
The ex-husband countered that they both owned the house and that the money deposited in the joint account was his ex-wife’s gift to him, despite their short marriage and the brief time they spent together in Canada.
In May 2024, an application judge of the Ontario Superior Court of Justice ordered the transfer of the house’s title solely into the ex-wife’s name. The judge found a resulting trust, which made the ex-wife the house’s 100-percent beneficial owner, and alternatively found a constructive trust in her favour.
The judge deemed the ex-husband a poor witness and overwhelmingly rejected his evidence. On the other hand, the judge considered the ex-wife straightforward and consistent in delivering her evidence. The judge accepted the ex-wife’s claims that she:
The judge ruled that the ex-wife provided sufficient evidence to rebut the presumption of a resulting trust under s. 14 of the FLA, which provides that the spouses’ holding of property as joint tenants or the deposit of money in both spouses’ names sufficiently proves joint ownership if no evidence disproves that on a balance of probabilities.
In other words, the provision reverses the burden in these circumstances and requires the transferor to overturn the presumption that they intended to transfer the property or funds as a gift.
The judge also ordered the ex-husband to pay his former spouse occupation rent from the house’s purchase date in August 2017 until October 2023, minus his financial contributions, such as carrying costs.
Lastly, the judge directed the ex-husband to pay his former spouse an amount of money to repair damage to the house due to a roof leak that occurred when he occupied the property alone.
In the main appeal, the ex-husband challenged the judge’s order. He alleged that the judge made errors in ordering occupation rent, finding the ex-wife the sole beneficial owner via a resulting or constructive trust, and determining that she rebutted the presumption created by s. 14 of the FLA.
In the cross-appeal, the ex-wife asked the appeal court to vary the judge’s order and require her former spouse to pay a larger sum for the house repairs.
The Court of Appeal for Ontario dismissed the appeal and cross-appeal. Regarding the main appeal’s resulting trust issue, the appeal court found that the application judge gave detailed reasons for accepting the ex-wife’s evidence of her intentions at the relevant times.
The appeal court noted that the judge observed that the ex-wife, an experienced real estate investor in China, claimed that she informed her daughter of her plan to buy an investment property in Canada and transfer the title in her daughter’s name. The ex-wife’s daughter confirmed this claim in her testimony.
The appeal court explained that the judge considered this circumstantial evidence to support the ex-wife’s evidence of her intentions when she deposited the funds to purchase the house.
The ex-husband pointed out that his former spouse’s evidence used the pronoun “we” in connection with buying the house and furniture and calculating the potential earnings from renting out rooms in the property.
The appeal court explained that this phrasing could show the ex-wife’s intentions to reside in the house and build a life together with her former spouse, but not her intentions to give substantial funds to him.
The appeal court deemed it unnecessary to address the judge’s finding of a constructive trust in the ex-wife’s favour since it already agreed with the ex-wife’s position on the resulting trust issue.
Regarding the occupation rent issue, the ex-husband argued that he contributed to the house value through specific improvements and that the higher house value weighed against awarding rent, which would lead to an unfair windfall for his former spouse.
The appeal court disagreed. The appeal court found the ex-wife entitled to any increase in the house value as its sole beneficial owner, subject to the carrying cost credits awarded in the ex-husband’s favour.
The appeal court noted that the judge observed that the ex-husband ceased his renovation work soon after the marriage broke down, which supported a finding that he did not believe he had a beneficial interest in the house.
Regarding the cross-appeal, the appeal court saw no error in the judge’s decision to limit his award in the ex-wife’s favour to the actual damage shown by the evidence, rather than a larger amount for speculative damage.
