Link: Case Summary Document
Citation:  ABCA 390 (Court of Appeal of Alberta, Paperny, Slatter, Brooker JJA)
In this case, the Roman Catholic Bishop of the Diocese of Calgary (the Diocese) appealed an order granted in favour of the Catholic Charities Clothes Bank of Lethbridge (the Clothes Bank) which declared that the Diocese held certain properties in trust for the Clothes Bank and ordered the Diocese to convey title to the properties, to the Clothes Bank within 30 days of the filing of that order.
The two properties were purchased by the Clothes Bank with its own funds and a mortgage, but title was registered is the name of the Diocese. When the Diocese refused the Clothes Bank’s request to approve the sale or refinancing of these properties, the Clothes Bank brought an application for a declaration of ownership and transfer of titles to it.
The Clothes Bank was successful at first instance, with the trial judge finding that there was a resulting trust created in favour of the Clothes Bank. This meant that the Diocese held the properties on trust for the Clothes Bank, and had to transfer the titles to the Clothes Bank on request.
The Diocese argued that there were several legal and factual errors made by the trial judge. The Court of Appeal agreed, and allowed the appeal. The errors of fact involved the financing of the properties, and an issue of whether the properties were ever intended to be owned by the Diocese. The Appeal Court held that there had been no financing of the properties by the Diocese (and therefore they were not held merely as security for loans) and that there was clear evidence of intention that the Diocese should own the properties from the outset. These were ‘palpable and overriding errors of fact’ and reversible on appeal.
As to errors of law, the trial judge had referred to Canon Law. The Appeal Court held that Canon law had no bearing on a case involving ownership of real property. Both the Diocese (a corporation sole incorporated by private statute) and the Clothes Bank (an incorporated society) were incorporated under the laws of Alberta. The issue of ownership of real property had to be determined by the applicable Alberta law on corporations, real property and resulting trusts only.
The central issue was whether the Diocese owned the properties in question outright, or whether they were held in trust for the Clothes Bank. There was no evidence of an express trust, so if there was any trust, it must have been a resulting trust. However, there was no evidence of a trust of any type.
The Appeal Court held that it was the intention of the Clothes Bank to transfer title in the properties to the Diocese from the outset. The reason for this was that the Clothes Bank had always sought an ‘official or formal linkage’ with the Diocese, and was at all material times, operating under the auspices of the Diocese. The evidence showed that the Clothes Bank and its unincorporated predecessor had obtained proper legal advice, and no mention had been made of trust arrangements, and no trust document prepared. Other evidence of dealings with the municipal authorities supported the contention that the Diocese was the owner of the properties.
Therefore, the Court held that the Diocese of Calgary was the legal and beneficial owner of the properties in contention.
The case may be viewed at: http://www.canlii.org/en/ab/abca/doc/2012/2012abca390/2012abca390.html
Implications of this case
Canadian law on trust is similar to that in Australia. A resulting trust arises when title to property is in one party’s name, but that party, because he or she is a fiduciary or gave no consideration (value) for the property, only holds it on trust for the person who did pay for it – and may be under an obligation to return title to the original purchaser or title holder. The presumption of resulting trust is a rebuttable presumption of law but it is a general rule that applies to gratuitous transfers. When a transfer is challenged, the presumption allocates the legal burden of proof. Thus, where a transfer is made for no consideration, the onus is placed on the person to whom it was transferred to demonstrate that a gift (not a trust) was intended.
In this case, there was absolutely no evidence of any trust having been created or intended, so, since the title was given to the Diocese, it remained with the Diocese.