Court File and Parties

Court of Appeal for Ontario Date: 20210506 Docket: C68450

Huscroft, Nordheimer and Harvison Young JJ.A.

Between

Adriana Hornstein Plaintiff (Appellant)

and

Anatoly Kats and Rachel Higgins Defendant (Respondents)

Counsel: Stephen R. Dyment, for the appellant Mark A. Ross and Sharon A. Sam, for the respondent, Anatoly Kats Rachel Higgins, acting in person

Heard: April 29, 2021 by video conference

On appeal from the judgment of Justice Carole J. Brown of the Superior Court of Justice, dated May 5, 2020.

Reasons for Decision

[1] This case arises out of an alleged partnership for the purchase of a residential property. The appellant’s argument that she was in a partnership with the respondent Kats was rejected by the trial judge following an 18-day trial. The trial judge found that, on an objective view, the appellant’s actions were not consistent with a partnership and that no partnership was created. The trial judge also found that the appellant had not contributed any monies to the purchase or maintenance of the property and had no beneficial interest in the property she alleged was owned by the partnership.

[2] The trial judge found, further, that the appellant was not a credible witness, whereas she found that the respondent Kats was credible and preferred his evidence. She found that the appellant took advantage of Kats, his relative lack of sophistication in dealing with properties, and his difficulties with the English language. Among other things, the trial judge found that the appellant took out a second mortgage in Kats’ name, secured against his family home, without his knowledge.

[3] The trial judge’s findings are entitled to deference. The appellant has not succeeded in establishing that the judge made any error, let alone a palpable and overriding error, requiring this court’s intervention.

[4] The appeal is dismissed as against the respondent Kats.

[5] The trial judge found that the respondent Higgins had neither a claim for slander of title nor a claim for damages for breach of s. 132 of the Land Titles Act, R.S.O. 1990, c. L.5. Nevertheless, she ordered the appellant to pay Higgins punitive damages in the amount of $35,000, citing the egregious, unreasonable, and malicious nature of the appellant’s actions.

[6] It is well established that there is no basis for an award of punitive damages in the absence of an independent actionable wrong: Whiten v Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595. Punitive damages cannot be awarded simply on the basis of a party’s misconduct. Given that the trial judge did not identify an independent actionable wrong, the award of punitive damages cannot stand.

[7] Accordingly, the award of punitive damages must be set aside. The appeal is allowed only to this extent.

[8] The respondent Kats is entitled to his costs on the appeal, fixed in the agreed amount of $15,000, all-inclusive.

[9] It is not appropriate to award costs to the appellant against the respondent Higgins in this court, and no such costs are ordered. The costs order below remains unchanged.

“Grant Huscroft J.A.”

“I.V.B. Nordheimer J.A.”

“Harvison Young J.A.”