A recent decision from Justice Mew of the Ontario Superior Court provides a sobering reminder that what looks like a routine OREA-form sale on closing day can be unwound years later, and that a transactional file is never as inert as it seems.

In Halliday v. Bromley, 2026 ONSC 2399, eleven vacant lots on Wolfe Island had been transferred in 2013 from Robert Halliday to his friend Mike Bromley and Bromley’s company for $5,000 per lot, against an appraisal closer to $60,000 each. There was no trust deed, no side letter, no acknowledgement of indebtedness, and no contemporaneous email suggesting the existence of a trust. Nevertheless, 13 years later, the court declared that Bromley held the lots on trust and ordered reconveyance.

The Wolfe Island Transfers

Against the backdrop of mounting creditor pressure, Halliday says that he decided to transfer the eleven vacant lots on Wolfe Island to a third party’s name in order to shield them from his creditors. Halliday initially approached a family friend, but the latter sensibly declined.

After being turned down, Halliday approached Bromley, who agreed to participate in the scheme. The transactions were priced to look more realistic, signed and closed within three business days through two real estate agents who passed drafts back and forth to simulate negotiation, and funded by $80,000 in cash counted on a pool table in a third party’s basement.

Halliday’s solicitor, Jehuda Kaminer, advised that the trust arrangement be documented in writing. Halliday refused. Kaminer proceeded anyway, sent a standard reporting letter, and scribbled two notes on the inside covers of his transaction files, “Trust is for Bob” and “This is the one which is actually all Bob’s money”.

Section 9 of the Statute of Frauds and the Rochefoucauld Principle

Section 9 of the Statute of Frauds requires that any declaration or creation of a trust of land be manifested and proved by writing signed by the party able to declare the trust.

Halliday conceded there was no such writing in the usual sense. Justice Mew nonetheless held that the solicitor’s contemporaneous file-cover notes, signed in the sense of being inscribed on files attributable to a named solicitor acting professionally, satisfied the statute.

In the alternative, the court applied the Rochefoucauld v. Boustead principle, the Statute of Frauds will not shelter fraud, and it is a fraud on the part of a transferee who took on trust to later deny the trust and claim the land outright.

The court found that Bromley knew, at the time of the conveyances, that they were not genuine sales but devices to hold the lots on trust for Halliday. His subsequent denial of the trust and assertion of absolute ownership is precisely the fraud that, as stated in Rochefoucauld, entitles the plaintiff to prove the trust by parol evidence notwithstanding the statute. The oral evidence presented is therefore admissible, and the email correspondence in which Bromley acknowledged holding money “for the lots” and referred to the lots having “gone into my name” constitutes strong corroboration of the express oral arrangement.

Land Titles and Clean Hands

Bromley argued that section 78(4) of the Land Titles Act meant the instruments must be taken to be effective according to their nature, namely, as outright transfers of legal and beneficial title. The court rejected this as a complete answer.

Registration yields to equitable interests, including those arising under express or resulting trust. The court also worked through the awkward question of clean hands. Halliday had openly transferred the lots to defeat his creditors. Ordinarily, that admission would end the case under the line of authority running through Maysels v. Maysels and Khan v. Taji.

Following Palkowski v. Ivancic, however, Justice Mew treated the doctrine as discretionary in the trust context. Two findings tipped the balance, Bromley was a knowing participant in the scheme, and the very creditors the doctrine exists to protect would benefit from reconveyance because Halliday intended to sell and pay them. Denying relief would have transferred a windfall to a complicit trustee.

Lessons for the Transactional File

1. An entire-agreement clause and solemn registry declarations did not insulate a knowing transferee from a later trust claim. If you are acting on a transfer with unusual features such as a sub-market price, a three-day closing, no inspections, no financing, brown envelopes anywhere in the picture, those features will be visible to the court years later.
2. A solicitor’s file is not a private workspace. Handwritten cover notes were held to constitute writing sufficient for the Statute of Frauds. Assume that every annotation, sticky note and margin comment on a real estate file can be produced and treated as a contemporaneous record of instructions and concerns.
3. When a client refuses to document a side arrangement that the solicitor knows exists, declining to act is the safer course. Kaminer’s professional reputation took a serious public hit, with the court describing his conduct as culpable and unprofessional.
4. Registration under the Land Titles Act is not a cure for an arrangement that equity will eventually look behind. Section 78(4) yields to express and resulting trusts.

Takeaways for Transactional Counsel

Treat Halliday v. Bromley as a warning shot against accommodating clients who want to layer informal understandings on top of formal conveyances. Insist that any retained interest, buy-back right, or trust arrangement be reduced to a written, signed instrument before closing. Refuse to sign solemn declarations that you suspect to be false. Document your advice in dated correspondence, not in file-cover scrawls. Watch for the warning signs and remember that an Ontario court is willing to enforce an oral secret trust over land, even one created to defeat creditors, where the trustee was complicit and the equities permit. The cleanest protection against being named in the next such judgment is to ensure that the deal you close is, in writing and in substance, the deal the parties actually made.