After signing an agreement to purchase a new home, the appellant was advised that to secure mortgage financing, he would need to obtain a co-obligor who would also be a co-owner. Accordingly, his friend ("Khandaker") agreed to co-sign the mortgage documents and to be placed on title as a co-owner. At the same time as the appellant applied for the new housing rebate, they signed a statutory declaration stating that the appellant was the 100% beneficial owner and that Khandaker held a 0.01% interest in trust for the appellant. The appellant occupied the home as his principal place of residence to the exclusion of Khandaker.
Before citing Davidson, Lyons J stated (at para. 17) that "where a supply is made to the particular individual as [part of] a group, subsection 254(2) applies so that each individual in the group must meet the criteria in paragraph 254(2)(b)." She found (at para. 22) that since both executed the agreements (and, at para. 29, that "Khandaker understood the nature of his involvement and that he was signing as a co-purchaser and co-owner"), "both individuals are the particular individual and both assumed liability" and "each must therefore meet the requirements in paragraphs 254(2)(a) to (g)." Ss. 254(2)(b) and (g) were not satisfied as Khandaker did not purchase as a primary place of residence and for occupation.
Respecting the statutory declaration, she stated (at para. 27):
The creation of a trust must be properly documented containing the requisite elements of a trust, dated, signed and in existence prior to or contemporaneous with the matter that is the subject of the trust arrangement.