Zuregat v. 12048728 Canada Inc. Ontario Superior Court 23 March 20
A recent Ontario Court decision highlights a common but dangerous practice in real estate and business: handshake agreements without documentation.
In Zuregat v. 12048728 Canada Inc., the Court was asked to decide who really owned a profitable commercial property despite only one party being on title.
Facts: the Original Deal
Two individuals agreed to:
- Go into a 50/50 joint venture
- Purchase property for a used car dealership
- Share costs and profits equally
The problem? Nothing was put in writing.
One party (Kohgadai):
- Took title in his own company
- Arranged financing
- Later sold the property for a significant profit
The other (Zuregat):
- Claimed he contributed $310,000
- Relied on a signed trust declaration confirming his 50% interest
The Dispute
The defendant argued:
- Zuregat never paid his share
- The deal was effectively terminated
- Therefore, Zuregat was entitled to nothing
Zuregat argued:
- He paid through cash and third-party cheques
- The trust document proved his ownership interest
The Court’s Decision
The Court sided with Zuregat and found:
- He did contribute funds
- The trust declaration confirmed his 50% ownership
- There was no breach or repudiation
The Result
- Property purchased: $2.3M
- Property sold: $3.22M
- Net profit divided
Zuregat awarded: $555,493 + interest. His additional claim for renovation expenses was dismissed due to lack of proof.
Considerations
1. Title Isn’t Everything
Even if someone is the only registered owner, others may still have a beneficial interest.
2. Trust Declarations Are Powerful
A simple signed document can:
- Override title
- Confirm ownership rights
- Decide the outcome of litigation
3. Courts Will Enforce Oral Agreements
If supported by:
- Credible testimony
- Corroborating witnesses
- Supporting documents
4. Lack of Documentation Cuts Both Ways
Here, the absence of paperwork didn’t defeat the claim, it actually reflected how the parties did business.
Real Estate Considerations
If you’re entering a joint venture:
- Always document ownership clearly
- Use shareholder or co-ownership agreements
- Avoid cash transactions without records
- Get legal advice early
When things go wrong, the outcome may depend on: Memory, Credibility and one critical document.
This case could have been avoided entirely with a proper written agreement. Instead, it became a credibility battle over hundreds of thousands of dollars.
In real estate, clarity upfront is always cheaper than litigation later.
Brian Madigan LL.B., Broker
www.OntarioRealEstateSource.com