The case involved funds advanced for the purchase, renovation, and sale of the properties
The Ontario Court of Appeal ruled that the appellants had no claim to ownership or proceeds from four properties, affirming that the funds advanced by the respondents were for investments, not loans.
The dispute in Paracha v. Naqi Construction Ltd., 2024 ONCA 816, involved four properties in Ajax, Ontario. The litigation centred on funds advanced by the respondents to the appellants, amounting to at least $363,000, for the purchase, renovation, and sale of four properties. The respondents claimed these funds were investments granting them ownership interests, while the appellants argued the money was a loan.
The trial judge ruled in favour of the respondents, finding that the funds were intended for joint investments, not loans. The trial judge relied heavily on testimony from a real estate agent involved in the transactions, whose evidence was deemed credible. The judge dismissed the appellants’ claims for ownership and compensation related to the properties, citing significant credibility issues with their testimony.
The judge found the respondents held beneficial ownership of three properties and co-ownership of the fourth. For the Coomer Crescent property, the appellants were denied claims to rental income, and their counterclaim for renovation work was dismissed due to poor workmanship. Proceeds from the McSweeney Crescent property were awarded to the respondents under the doctrine of resulting trust. For the Sykes Street property, the court divided ownership among the parties based on their respective contributions. Finally, regarding the CedarOaks Drive property, which served as the appellants’ residence, the trial judge upheld an oral agreement granting the respondents a co-ownership interest.
On appeal, the appellants argued the trial judge misapprehended evidence, failed to resolve contradictions, and provided inadequate reasoning. They also raised a new argument under the statute of frauds concerning the alleged oral agreement for the CedarOaks property.
The Court of Appeal rejected these arguments, emphasizing the deference owed to trial judges on factual findings unless a palpable and overriding error is demonstrated. The court noted the appellants failed to provide a complete trial record, undermining their claims. It also declined to consider the new argument regarding the statute of frauds, as it was not raised at trial and lacked sufficient evidentiary support.
