Court of Appeal for Ontario

Date: 2024-12-20 Docket: COA-23-CV-1170

Before: Brown, Huscroft and Miller JJ.A.

Between: Afroditi Tzouanakis, Plaintiff (Respondent)

And: Sandy Tzouanakis and William Triantafyllopoulos, Defendants (Appellants)

And: Kelly Tzouanakis, Third-Party (Respondent)

Counsel: Joel Vale and David Fogel, for the appellants Alnaz I. Jiwa, for the respondents

Heard: December 12, 2024

On appeal from the judgment of Justice Julia Shin Doi of the Superior Court of Justice, dated May 14, 2024, with reasons reported at 2024 ONSC 2734.

Reasons for Decision

1This appeal arises from a dispute between a mother (the respondent), and her daughter and son-in-law (the appellants) over their respective interests in two residential properties. The trial judge found that the property located at 275 Strathmore Blvd., Toronto (the “Strathmore Property”) was beneficially owned by the respondent by way of a resulting trust. With respect to the second property – the appellants’ former matrimonial residence at 2374 Goodison Ave., Mississauga (the “Goodison Property”) – the trial judge found that the respondent held a 35.6% interest.

2For the reasons that follow, we have concluded that the trial judge made no reviewable error and dismiss the appeal.

Factual Overview

3The trial judge accepted that the respondent and her late husband purchased the Strathmore Property in 2003 as an investment. Under their succession planning, the family home ultimately would be left to one daughter, and the Strathmore Property would go to the other. The two daughters were on title to the Strathmore Property as the registered owners. The purchase price was paid by way of $100,000 in cash, which was supplied by the respondent’s late husband, and mortgage proceeds in the amount of $160,000. The two daughters were the mortgagors, and the mortgage was guaranteed by the parents. The parents arranged the mortgage financing. The mortgage payments and the property expenses were funded through rental income that was deposited to a bank account held jointly by the parents and daughters. The purchase was entirely the initiative of the parents.

4The daughters were living rent-free at home at the time of the purchase of the Strathmore Property, and the trial judge found that their contributions to the upkeep and operation of the property were minor and irregular, with the exception that the daughters declared the rental income and paid income tax on it.

5After Sandy married, she and her husband (the appellant William Triantafyllopoulos), wanted to purchase the Goodison Property as their matrimonial home, but did not have sufficient funds for the $561,000 purchase price. The trial judge found that the respondent contributed $100,000 in cash plus a further $98,984.71, which she obtained by refinancing the Strathmore Property. The appellants obtained a $411,000 mortgage and William contributed a further $41,031.36. Although the combined funds exceed the purchase price, this was explained by the fact that some of the funds were used for renovations. There is no finding that the funds advanced by the respondent were used for anything but purchase.

6The appellants contend that the respondent’s $100,000 cash contribution was intended as a gift, and the $98,984.71 was simply funds borrowed by Sandy using Sandy’s ownership interest in the Strathmore Property as mortgage security.

7There was a breakdown in the relationship between the respondent and Sandy after the respondent discovered that Sandy had, without the respondent’s approval or prior knowledge, withdrawn over $16,000 from the joint bank account.

8The respondent commenced the action for a declaration of resulting trust over the Strathmore Property and over two thirds of the Goodison Property. The trial judge announced her judgment from the bench on September 22, 2023, immediately following the close of submissions, declaring the respondent to be the beneficial owner of the entirety of the Strathmore Property, and having an ownership interest of 30% of the Goodison Property.

9Unusually, the trial judge provided a written endorsement later that day, in which the respondent’s interest in the Goodison Property was increased to 35%. A few days later, on September 25, 2023, she issued a revised endorsement increasing the interest to 35.6%. Ultimately, when the written reasons for judgment were issued on May 14, 2023, the respondent’s interest in the Goodison Property remained at 35.6%.

The Argument on Appeal

The Strathmore Property

10The appellants’ main argument on appeal is that the trial judge misapprehended the evidence about the parties’ intentions at the time of the purchase of the Strathmore Property. The appellants accepted that there was a presumption that the parents did not intend to make a gift of the Strathmore Property to the daughters, but argued that the trial judge erred by not finding that the appellants had defeated the presumption. The appellants argued that the daughters had provided valuable consideration in the form of “sweat equity”, paying income tax on the rent, and in supplying the mortgage funds. We do not agree that the trial judge erred. She found these contributions to be either minimal or, in the case of the mortgage proceeds, no contribution at all by the daughters, and not able to displace the presumption of a resulting trust. These findings were open to her. Similarly, the trial judge was unpersuaded by the evidence from the conveyancing solicitor that had there been a trust, he would have documented it, and made no error in not giving this evidence greater weight.

11The appellants urged the court to interpret the respondent’s evidence about the Strathmore Property and joint bank account being a “family venture” as evidence that the parents’ intention was not to take a 100% beneficial interest in the Strathmore Property, but to share it with the daughters from the beginning. We do not agree that the trial judge erred in rejecting this reading of the respondent’s evidence. When the respondent, whose first language is not English, appeared on cross-examination to agree with the proposition that the property was a family venture, she was clearly referring to the parents’ ultimate purpose in acquiring the property; it was part of a succession plan to provide a house for each of the daughters. It was purchased by the parents with the intention that it ultimately benefit the daughters.

The Goodison Property

12The conclusion that the trial judge did not err with respect to the respondent’s 100% beneficial interest in the Strathmore Property disposes of a significant part of the appellant’s argument about the Goodison Property. The funds which were contributed by the respondent by remortgaging the Strathmore Property were attributable entirely to her and not to the appellants.

13Accordingly, there is no error in the finding that the respondent contributed $198,948.71 to the purchase of the Goodison Property. There is, however, some uncertainty about what the trial judge ordered with respect to the Goodison Property.

14Prior to the close of argument, the trial judge announced that she would give her judgment from the bench at the close of argument, with reasons to follow. The appellants argued that this gave rise to a reasonable apprehension of bias, specifically because it suggested that the trial judge had predetermined the outcome. We do not agree. The mere fact that a trial judge, after days of evidence and submissions, expressed an expectation that she would be in a position to render judgment the next day, after hearing all submissions in a reasonably simple trial, does not suggest predetermination.

15That said, although there was nothing in how the trial judge proceeded that would give rise to a reasonable apprehension of bias, giving an oral decision from the bench without even taking a brief recess after the close of submissions was ill‑considered and not best practice. Parties, and the administration of justice in general, of course benefit from decisions being made expeditiously. But in cases such as this one that require some amount of computation, the better practice is to recess for some time at least in order to clear one’s head, double check the figures, and give the parties the confidence that some time has been taken in listening to what has been said, reflecting on it, and giving careful consideration.

16In this case the trial judge gave an oral decision stating the respondent was entitled to a 30% interest. That was changed in her September 22, 2023, written endorsement to state that the respondent “owns 35% of shares that are held by the [appellants] and is therefore, entitled to 35% of the profits from the sale of the Goodison Property.” That was superseded by a revised endorsement dated September 25, in which the trial judge amended the respondent’s share to 35.6% of the profits from sale. The 35.6% figure was repeated when the reasons for judgment were issued in May 2023, which was calculated to be $134,030.11, plus pre and post-judgment interest, on net sale proceeds of $376,489.09.

17In the result, the respondent advanced nearly $200,000 for the purchase of the Goodison Property, but received a payout of only $134,030.11. The property was sold for $1,000,701.86, but had been subsequently encumbered with an additional mortgage, substantially reducing the equity. The trial judge found that the respondent did not advance the funds for the purchase of the Goodison Property as a gift or a loan, but rather an investment. It appears that the trial judge found the terms of the investment were that the respondent was a part owner in proportion to the amount she contributed to the purchase, and would receive back the same proportion of the sale proceeds. The respondent’s expectation was that the value of the property would grow, as it did. The trial judge does not explain why the respondent’s interest was permitted to be diminished by the appellants’ subsequent remortgaging, other than to say that “she assumed some financial risk” that included this possibility. However, this was brought to the application judge’s attention in a colloquy following the oral reasons, and she responded that the result was “fair and equitable”.

18The respondent asked that the judgment be varied from granting a 35.6% interest in the profits from sale to 35.6% of the sale price. We cannot accede to this submission. The respondent could have returned to the trial judge to seek to vary the judgment if the respondent thought the trial judge had made a slip in referring to profits rather than proceeds of sale. Alternatively, the respondent could have brought a cross-appeal if it was believed that the trial judge erred otherwise. Neither path was taken, and the matter is not properly before this court.

Disposition

19The appeal is dismissed. The respondent is awarded $12,000 in costs of the appeal, inclusive of disbursements and HST.