Karen Morimoto

The trustee in bankruptcy moved for a phase-one determination that profit payments made by Douglas Grozelle to net winners in a fraudulent Ponzi scheme were void as against creditors and recoverable for the estate.

The court found the hallmarks of a Ponzi scheme, held insolvency and fraudulent intent could be inferred globally, and concluded the payments were void under the Fraudulent Conveyances Act and not saved by good-faith or good-consideration defences.

The court approved a two-stage insolvency process: common liability issues resolved summarily now, with individualized quantum determinations in phase two.

The winners’ cross-motion for broad directions attacking the trustee’s process and authority was dismissed.

The plaintiff moved for summary judgment and specific performance of an agreement of purchase and sale (APS) for a residential property, alleging the defendant breached the contract by failing to provide vacant possession and clear the garage on the closing date.

The defendant argued the APS, particularly an appended schedule, did not require vacant possession by the closing date.

The court interpreted the contract, giving precedence to the added schedule over the standard form, and found that the defendant was not obligated to provide vacant possession by the chosen closing date, as the Residential Tenancies Act's notice period extended beyond it.

Consequently, the court dismissed the plaintiff's motion and granted summary judgment in favor of the defendant, concluding no breach occurred.

The applicants in an estate litigation matter brought a motion to remove the respondent Estate Trustee's counsel of record.

The applicants alleged bad faith, a conflict of interest arising from the lawyer's past marriage to the applicants' sister and past representation of two applicants, and the likelihood that the lawyer would be called as a witness at trial.

The court dismissed the motion, finding no disqualifying conflict of interest, no risk of misuse of confidential information, and no real basis to believe the lawyer would likely provide material evidence at trial.

Following dismissal of an estate application concerning whether funds in a joint bank account formed part of the deceased’s estate, the court addressed costs.

The respondent had successfully rebutted the presumption of resulting trust by establishing that the joint account was intended to operate as a trust benefiting specified beneficiaries rather than the estate.

The court held that no Rule 49 offer engaged substantial indemnity consequences and that partial indemnity costs were appropriate.

Costs were fixed at $21,289.68 inclusive of disbursements and HST.

The court also directed payment from security for costs and permitted a set‑off against trust funds otherwise payable to the applicant.

The estate trustee applied for a declaration that funds in a joint bank account between the deceased and the respondent formed part of the estate.

The respondent argued the account was created with a right of survivorship and that he held the funds to distribute according to the deceased’s instructions to specific beneficiaries.

Applying the presumption of resulting trust from Pecore v. Pecore, the court examined contemporaneous documents, handwritten notes, and surrounding circumstances to determine the deceased’s intention.

The court concluded that the deceased intended to use the joint account as an estate planning tool, creating a trust in which the respondent would distribute funds to the deceased’s granddaughter, alma mater, and son.

The presumption of resulting trust was rebutted and the funds were not estate property.