Court File and Parties

Court File No.: CV-23-00703475-0000 Date: 2023-09-05 Ontario Superior Court of Justice

Between: Joy Stothers, Applicant And: John Kazeks, Respondent

Counsel: Gregory M. Sidlofsky and Rebecca Loeb, for the applicant John Philpott and Madeleine Dusseault, for the respondent

Heard: August 29, 2023

Before: Robert Centa J.

Reasons for Judgment

[1] Joy Stothers and John Kazeks lived together from 1998 to 2005 in a house located at 150 King Street. The house was originally owned by Alise Kazeks, Mr. Kazeks’ mother. From 1984 to 2003, the house was held by Alise and Mr. Kazeks together as joint tenants. In December 2003, Alise transferred her interest to her son, who then transferred his sole interest to himself and Ms. Stothers (his common law spouse) as tenants in common for $2.00. Fifteen months later, in April 2005, the relationship ended, and Ms. Stothers moved out. For the next 18 years, Mr. Kazeks, who is now 76 years old, continued to live in his home of 40 years and paid all the expenses associated with the house.

[2] In July 2023, Ms. Stothers brought an urgent application seeking an order to sell 150 King under the Partition Act. [1] She also seeks a declaration that she is entitled to 50% of the proceeds of sale. Ms. Stothers submits that the application is urgent because she has been diagnosed with terminal cancer and may have only a few months to live.

[3] In response, Mr. Kazeks asks the court to exercise its discretion not to order a sale of the house because it would cause him unbearable physical and emotional hardship and impair his ability to earn a living. He has also commenced a separate application under the Family Law Rules seeking orders that Ms. Stothers holds her interest in 150 King in trust for him because of the doctrine of resulting trust or as a remedy for her unjust enrichment, and an order vesting title to the property in his name alone. [2]

[4] I conclude that Mr. Kazeks would suffer serious hardship amounting to oppression if I ordered the sale of 150 King. This hardship would not simply be financial. Mr. Kazeks would suffer personal, emotional, and medical hardships. He would lose ready access to his personal and professional support systems, as described more fully below. He works out of the house and would lose his workspace. He would lose his support system among his neighbours. I also find that it would be oppressive to order a sale of the property and interfere with Mr. Kazeks’ ability to seek a vesting order and to have his trust claims, which are far from frivolous, proceed to trial. I exercise my discretion to refuse Ms. Stothers’ application for the sale of the property.

[5] Ms. Stothers also seeks declaratory relief related to beneficial interests that she and Mr. Kazeks hold together in another property. I decline to make any declarations in respect of that other property because, among other reasons, the issue is hypothetical. In addition, if the issue crystallizes, it should be dealt with either under the dispute resolution provisions of the relevant agreement or in the family law proceeding commenced by Mr. Kazeks.

[6] Given the urgency of this application, I am releasing my reasons for decision as quickly as possible. I have reviewed all of the evidence filed by the parties and carefully considered all of their arguments, even if I do not refer to all of the evidence and issues raised before me.

Facts

[7] Many of the facts necessary for me to decide this application are not in dispute. Many other facts, however, are very much in dispute. Resolving those issues in a fair and just way will require oral evidence and a more complete documentary record. Those issues should be determined in Mr. Kazeks’ family law application.

The parties and key individuals

[8] Ms. Stothers is 67 years old. She has worked as a paralegal, returned to law school as a mature student, and became a successful lawyer working in Toronto. Unfortunately, she encountered serious health problems in 2018. In 2023, she received a diagnosis of a reoccurrence of metastatic breast cancer. In March 2023, her physician advised her that the cancer had spread through her body and that she had only a few months left to live.

[9] Mr. Kazeks is 76 years old. He works part-time as an electrician to supplement his CPP and OAS benefits. He has lived at 150 King since 1982. He lives with osteoarthritis, has had a series of health challenges, including two heart attacks, an aneurysm, and a hip replacement. I emphasize that his health challenges, while significant, are not as acute or serious as those faced by Ms. Stothers.

[10] Alise Kazeks is John Kazeks mother. For the purposes of this application, she is the first relevant owner of 150 King.

The context for the real estate transactions at 150 King

[11] Mr. Kazeks states that he helped his mother pay the bills at 150 King, including mortgage payments and utilities, even before he moved in with her in 1982.

[12] In 1984, Alise transferred her ownership interest in 150 King to Mr. Kazeks and herself as joint tenants. From 1984 to present, except as described below, Mr. Kazeks paid all of the mortgage, utilities, taxes, and insurance expenses for 150 King. He also completed some renovations on the property, updated its appliances, and furnished the home.

[13] Mr. Kazeks and Ms. Stothers started dating in 1991. In 1997, Ms. Stothers began working as a paralegal at a Toronto law firm (the “Law Firm”). In 1998, Ms. Stothers was planning on returning to school and she moved into 150 King with Mr. Kazeks and his mother. The parties never entered into a cohabitation agreement.

[14] Immediately after moving into 150 King, Ms. Stothers enrolled in undergraduate courses at York University. From 2001 until 2004, she attended Osgoode Hall Law School. Shortly before enrolling in law school, Ms. Stothers sold a property that she owned. She used these funds to pay for her own law school education and that of her son, who was attending at the same time.

[15] In 2003, Alise announced that she wanted to move out of 150 King and into a one-level condominium residence in her Latvian community. At this time, Alise and Mr. Kazeks held 150 King as joint tenants. On December 19, 2003, a series of transactions took place with respect to 150 King. According to the parcel register, the following transactions took place in this order:

a. Alise transferred her interest in the house to Mr. Kazeks;

b. For consideration of $2.00, Mr. Kazeks then transferred his sole interest in 150 King to himself and Ms. Stothers as tenants in common (the parcel register does not record the share of the property held by each of Mr. Kazeks and Ms. Stothers);

c. Mr. Kazeks and Ms. Stothers then granted a $195,000 mortgage on the property to the Latvian Credit Union Limited.

[16] The proceeds from the mortgage were given to Alise to allow her to purchase her condominium.

[17] Mr. Kazeks states that he added Ms. Stothers to title in the expectation that she would contribute to the mortgage costs in the future, when she was a lawyer, and he wanted her to have the value of her contributions. He states that he did not think he was giving her an ownership interest in the house at the time she was placed on title.

[18] The legal work on all of the real estate transactions was carried out by the Law Firm where Ms. Stothers had worked as a paralegal and where she would later complete her articling term. Mr. Kazeks states that the Law Firm never told him that that Ms. Stothers would be receiving 50% of the equity in the house if he placed her name on title. He says that he would have taken steps to protect his 100% interest in the house had he understood that his interest was at risk. The parties agree that Mr. Kazeks did not receive independent legal advice. The record before me did not contain the reporting letter or any other documents related to the legal advice provided by the Law Firm to Mr. Kazeks or Ms. Stothers.

[19] Ms. Stothers disagrees with Mr. Kazeks’ understanding of the purpose and effect of these transactions. She states that she went on title so that Mr. Kazeks could take out a mortgage to pay out his mother and to protect Ms. Stothers’ financial contributions and interest in 150 King.

Contributions to the expenses at 150 King

[20] The parties have very different recollections of who made what contributions to 150 King during the fifteen months that they were both on title and living in the house. This is not surprising, since these events took place almost 20 years ago.

[21] Ms. Stothers states that she did a lot of renovation work on 150 King and put a lot of time and effort into maintaining the property. She says that she put in this work because she was a 50% owner of the property. Mr. Kazeks disputes her assertions.

[22] In her reply affidavit, Ms. Stothers attached 11 cancelled cheques, each for $500 and each payable to the Latvian Credit Union. The cheques were dated from January 26, 2004, to July 12, 2004, and each had a memo line stating that the cheques were payments for the mortgage at 150 King. Ms. Stothers stated in her affidavit that these were the only cheques that she could find, but that she believes she made additional mortgage payments. Initially, Mr. Kazeks did not recall Ms. Stothers making these payments, but once she produced the cheques he readily conceded that they were payments made by Ms. Stothers toward the mortgage.

[23] Ms. Stothers states that she “spent most of [her] income for years” on her and Mr. Kazeks’ living expenses. The parties disagree on the extent of Ms. Stothers’ contribution to household expenses, including taxes, insurance, and utilities. The parties also disagree on the extent of Mr. Kazeks’ contribution to Ms. Stothers’ educational expenses, and the scale of the renovations and improvements he made to 150 King after 2003.

[24] The relationship between Mr. Kazeks and Ms. Stothers ended in the spring of 2005. On April 3, 2005, Ms. Stothers moved out of 150 King. After that date, she has neither lived in 150 King nor paid any part of the expenses associated with it. Since April 2005, Mr. Kazeks has made all of the payments associated with 150 King. Mr. Kazeks estimates that he has spent over $400,000 in combined mortgage payments, property taxes, and insurance premiums since 2004. [3] Ms. Stothers never asked for, and Mr. Kazeks never paid any occupation rent to her.

[25] The mortgage on 150 King was renewed in 2010 and was transferred from the Latvian Credit Union to ING Bank in 2013. The 2013 ING mortgage was also for $195,000, suggesting that only a very small amount of the principal amount of the debt was retired between 2003 and 2013. The mortgage was subsequently renewed in 2018 (with the principal amount of $129,560.09), 2020 ($101,784.35) and 2021 ($78,146.84). There is now $23,371.99 outstanding on the mortgage. Ms. Stothers was named on each of the mortgages, which is not surprising given that she was also on title.

[26] To the parties’ credit, they remained on good terms after the end of their romantic relationship. They each performed favours for the other. Mr. Kazeks has provided support to Ms. Stothers during her illness. This includes replacing her mobile telephone when it was stolen and paying the associated monthly bill even to this day. Unfortunately, their friendship was insufficient to avoid litigation between them.

The litigation landscape

[27] On July 24, 2023, Ms. Stothers issued the notice of application in this proceeding. She seeks the following relief with respect to 150 King:

a. an order for the partition and sale of the property; and

b. an order that, after any outstanding mortgage is discharged, the net proceeds of sale be divided equally between Ms. Stothers and Mr. Kazeks.

[28] Mr. Kazeks states that “bringing this matter urgently after not raising any issues for 18 years is malicious to me.” I disagree. I see no evidence of maliciousness in the circumstances of this case. Ms. Stothers was perfectly entitled to seek to put her affairs in order. Mr. Kazeks’ allegation is unfair and unfortunate.

[29] On August 10, 2023, counsel for Mr. Kazeks provided counsel for Ms. Stothers with an application that Mr. Kazeks intended to bring under the Family Law Rules. That same day, the parties appeared in Civil Practice Court. Justice Chalmers was satisfied that Ms. Stothers’ application was urgent and scheduled the application to be heard on August 29, 2023. In his endorsement, Chalmers J. made the following comments about the role of the family division:

Justice Shore was asked to hear the matter in the Family Division of the Superior Court in Toronto. At that time the Family Law application had not been issued or delivered. She directed that the partition and sale issue be dealt with in the Civil Division.

[30] On August 17, 2023, Mr. Kazeks issued an application under the Family Law Rules naming Ms. Stothers as the respondent. [4] In his application, he makes claims relating to property, including:

a. a declaration that Ms. Stothers holds 150 King in trust for him;

b. an order vesting title to the 150 King in his name only; and

c. an order restraining Ms. Stothers from dealing in any way with 150 King.

[31] Ms. Stothers criticizes Mr. Kazeks’ family law application as a “bad faith effort to delay the scheduling and the ultimate determination of my application in order to take advantage of my health condition.” I disagree. There is no evidence to support this claim. The issues between the parties clearly arose in the context of their common-law relationship. This is not a commercial transaction between two investors. Mr. Kazeks’ decision to commence an application under the Family Law Act rules is perfectly reasonable. Ms. Stothers’ allegation is unfair and unfortunate.

[32] Mr. Kazeks did not issue a “counter-application” to Ms. Stothers’ application. [5] Ms. Stothers has not yet responded to the Mr. Kazeks’ family law application.

[33] The record before me consisted of two affidavits sworn by Ms. Stothers on July 31, 2023, and August 21, 2023, and two affidavits sworn by Mr. Kazeks on August 18 and August 23, 2023. Counsel cross-examined the affiants on August 24, 2023, and certain undertakings were provided.

[34] The record before me was not satisfactory. I do not blame the parties or their counsel. In my view, the inadequacies in the record are the product of the accelerated pace of this litigation.

[35] For example, Mr. Kazeks stated as follows in his affidavit:

This application was scheduled on August 10, 2023, and my affidavit is due on August 18, 2023. I have also had to work part time at my job throughout this 8 day time period. The documents I have attached to this affidavit are those I was able to retrieve in the short time I have had to prepare this affidavit. With more time, I will be able to provide further documentation and records from my bank, service providers, professionals, and others, which are important to these matters. I will also be able to provide more information on my renovations and various personal contributions to the property. Ultimately, my contributions were 100% or very close to it of all costs associated with 150 King. To complete an accounting, I will need to stay in 150 King and have time to obtain further documents and prepare more specific figures.

[36] In her reply affidavit, Ms. Stothers described finding the mortgage cheques as a fluke. She also stated that she believes she made more mortgage payments but has not yet been able to locate any additional banking records.

[37] There appears not to have been enough time to search for and collect clearly relevant documents. For example, the Law Firm’s file on the 150 King property transactions should have formed part of the record, given Ms. Stothers’ submissions that she is entitled to an order for the sale of 150 King and a 50% interest in the proceeds of sale, and Mr. Kazeks’ submission that the Law Firm never told him the consequences of putting Ms. Stothers on title.

[38] The banking records included in the application record are significantly incomplete. The parties should have done comprehensive searches of their own banking records and, if necessary, additional documents should have been obtained directly from the banks and credit unions at issue. There are also no contemporaneous appraisals of the value of 150 King in the record.

[39] On this record, it would be impossible for me to determine fairly their respective contributions to and interests in 150 King.

Reliability and credibility

[40] Ms. Stothers and Mr. Kazeks have very different recollections of who did what during their relationship. That is not surprising. They have not lived together since April 3, 2005. Memories fade. Mr. Kazeks is 76. Ms. Stothers is very ill. In these circumstances, I am not surprised that their memories are less than clear. Their evidence would no doubt have been more accurate if they had the opportunity to collect and review all of the relevant documents before swearing their affidavits. I am concerned that both parties may be unreliable narrators.

[41] When I am assessing their affidavits, I will consider the following factors:

a. presence or absence of details supporting conclusory assertions;

b. artful drafting which shields equivocation;

c. use of language in an affidavit which is inappropriate to the particular witness;

d. affidavits which lack the best evidence available;

e. lack of precision and factual errors;

f. omission of significant facts which should be addressed; and

g. disguised hearsay. [6]

[42] I am entitled to accept all, some, or none of their evidence. I will assess the evidence before me according to many factors including, most importantly, if the evidence makes sense by being internally consistent, logical, or plausible. [7]

[43] Each of parties accuses the other of acting in bad faith or telling deliberate falsehoods. I do not agree. In general, I believe that both Ms. Stothers and Mr. Kazeks were trying to tell the truth as best they could recall it in the circumstances. It is unfortunate that this dispute seems to have eroded the bonds of friendship that survived the end of their romantic relationship.

Partition and sale

[44] Ms. Stothers submits that she is recognized as a tenant in common on the parcel register of 150 King. She submits that s. 3 of the Partition Act authorizes her to bring an application for the sale of 150 King and that the court may compel Mr. Kazeks to suffer the sale of the property pursuant to s. 2 of the Partition Act. The relevant provisions read, in part, as follows:

2. All…tenants in common…and all parties interested in, to or out of, any land in Ontario, may be compelled to make or suffer partition or sale of the land, or any part thereof, whether the estate is legal and equitable or equitable only.

3(1) Any person interested in land in Ontario…may bring an action or make an application for the partition of such land or for the sale thereof under the directions of the court if such sale is considered by the court to be more advantageous to the parties interested.

[45] Although the language of the Partition Act appears absolute, the common law has recognized that courts continue to have the discretion to refuse any relief. [8] That said, there is no doubt that a tenant in common has a prima facie right to partition and sale and the court’s discretion to refuse relief is narrow. [9] In this case, Mr. Kazeks has the onus to demonstrate that the court should deny relief to Ms. Stothers. The court will exercise its discretion to refuse relief where a respondent demonstrates circumstances of malice, vexatious intent, or oppression. Circumstances of oppression may arise where the sale would impose a great hardship on a respondent [10] or where ordering a sale would impair the orderly determination of a respondent’s claims at trial. [11]

Malice, vexatious intent, or oppression including hardship

[46] I do not find that Ms. Stothers is acting with malice or a vexatious intent by bringing this application. I do, however, exercise my discretion and refuse to order the sale of 150 King because Mr. Kazeks has met his onus to show that selling the property would cause oppression and hardship to him.

[47] To demonstrate oppression, a respondent must show more than mere inconvenience and adverse financial consequences. [12] Courts have commented that hardship is a more relevant factor in matrimonial cases than in commercial cases, in part because requiring one person to leave a family home may cause hardship beyond mere financial difficulty. [13] Courts have found hardship where a sale would require the relocation of a person with disabilities who would have trouble finding alternative accommodations or where the person was running a business out of their home. [14]

[48] In considering whether or not to exercise my discretion to refuse to order a sale because of oppression including hardship, I am to take a contextual approach and consider the parties’ relationship and how it arose, their reasonable expectations, the nature of the conduct, and the impact of a court-ordered on Mr. Kazeks. [15]

[49] The relationship between Mr. Kazeks and Ms. Stothers was personal and romantic, not commercial. The transactions at issue arose in a quintessentially domestic context: Mr. Kazeks moved in with his mother, then Ms. Stothers moved in with the two of them. Alise transferred her interest in the home to her son. Mr. Kazeks then transferred his interest to himself and Ms. Stothers for $2.00. As the Court of Appeal for Ontario has noted, “the courts are strewn with cases where people in a relationship wound up in litigation because they did not take a commercial approach to their domestic arrangements from the outset.” [16] However, the context matters: this is not a case where two investors bought a property with a shared and single-minded goal of extracting rents and then selling to realize a capital gain.

[50] Related to the nature of the relationship is the reasonable expectation of the parties. The evidence on this point pulls in different directions. On the one hand, Ms. Stothers says that from the moment she became a tenant in common, she held a prima facie statutory right to compel a sale of the property at any time. I accept that the provisions of the Partition Act must inform the reasonable expectations of the parties. On the other hand, Ms. Stothers moved out of 150 King on April 3, 2005, which was over 18 years ago. She did not act on her rights at that time. Moreover, Mr. Kazeks invested his time, energy and money into 150 King for the next 18 years. He alone bore all of the expenses associated with the house. There is a dispute about when Ms. Stothers first requested to be compensated for her interest in the house. I find that she clearly raised the issue for the first time only many years after she departed. The passage of time and Mr. Kazeks’ sole responsibility for the expenses created a reasonable expectation that Mr. Kazeks would not be compelled suddenly to sell the house over 18 years after Ms. Stothers departed.

Ordering a sale would impose a hardship amounting to oppression on Mr. Kazeks

[51] Mr. Kazeks has satisfied me that a court-ordered sale of 150 King would impose a great hardship on him that rises to the level of oppression.

[52] I accept Mr. Kazeks’ evidence on the hardships he would face from a court-ordered sale of the house that he has lived in for 40 years. He itemized the hardships as including:

a. His health is poor, and he has had two heart attacks, an aneurysm, and a hip replacement. He lives with osteoarthritis and is worried about the physical and emotional toll moving would take. He is already experiencing stress associated with the thought of losing his home through this litigation.

b. Having lived in the house for over 40 years, his family doctor, dentist, physiotherapist, and veterinarian are all within walking distance of 150 King.

c. He has family and supportive friends in the neighbourhood, including a niece living with schizophrenia to whom he provides support within his capabilities because he is her only relative in Canada.

d. He uses 150 King as a workspace for preparing his quotes and bids for jobs, for storage of tools and materials, for minor fabricating, and for doing electrical work that is difficult to do on the jobsite. He states that 30% of the home is dedicated to the business. He is not sure he would be able to continue running his business if he is forced to sell the house because he does not believe that he will be able to afford to rent a workspace to carry on. This would cut his monthly income in half and erode his modest standard of living.

e. He is not wealthy and is working part-time at the age of 76 to make ends meet and to supplement his OAS and CPP benefits. Indeed, his expenses currently exceed his annual income by about $18,000 per year. He is drawing on his $250,000 in savings to meet this shortfall.

f. He is concerned about finding adequate rental accommodations given his modest income.

g. The house has significant sentimental meaning and value to him.

[53] I accept Mr. Kazeks’ evidence that an ordered sale will cause him “unbearable hardship – physically, emotionally, and for [his] ability to keep living and earning to sustain [himself].” Mr. Kazeks summarizes his concerns as follows:

I do not know what I will do if 150 King is ordered to be sold or where I will go. I am extremely stressed at this possibility. I do not have children I can go to live with. I do not have the financial means to buy out [Ms. Stothers’] interest and I would not be able to afford a new home in the Greater Toronto Area. I am concerned that I may struggle to even afford or find a rental. Any new accommodations I find are likely to be much smaller and of a significantly lower quality than my current home….

I am also very worried about the physical toll moving would have on me. I have had two heart attacks, an aneurism, and a hip replacement. I have osteoarthritis. Physically, moving my possessions and workshop and doing the work of setting up a new home will be extremely difficult at my age. I am in no position to move my possessions and set up a new home.

Furthermore, on a personal level, the sale of moving 150 King would be devastating for me. 150 King has been my home for over 40 years. I have put my time and money into the property for most of my adult life. I am very attached to it. Almost all of my family has lived here at some point. I have made many friends in the area over the 40 years I have lived here, who I always thought would be there and around to assist me in retirement and older age. I do not know how I will manage without them.

[54] Counsel for Ms. Stothers did not cross-examine on any of Mr. Kazeks’ evidence with respect to the hardships he would face. In her submissions, Ms. Stothers pointed out that Mr. Kazeks has some savings and could purchase or rent accommodations if necessary. I do not find those submissions persuasive. Mr. Kazeks is already using his savings to make ends meet. I accept his evidence about the difficulty of finding appropriate and affordable alternative accommodations. Even if he could make the finances work, that alone would not offset the other types of hardship that he would suffer.

[55] I accept that Ms. Stothers wishes to have this matter resolved so that she can put her affairs in order for her estate. It does not appear, however, that she needs the funds from the sale of the property to provide for her immediate health care or comfort. While I do not want to minimize the peace of mind Ms. Stothers would receive from knowing 150 King will be sold, I do not consider that interest to be as profound as Mr. Kazeks’ interest in staying in the property. This is not a case where the parties are joint tenants, and her interest would pass by survivorship to Mr. Kazeks. Whatever interest she holds in 150 King will form a part of her estate if she unfortunately passes away. The hardship that a court-ordered sale would cause to Mr. Kazeks sale significantly outweighs the inconvenience to Ms. Stothers from the court refusing her request for relief.

[56] I conclude that Mr. Kazeks would suffer serious hardship amounting to oppression if I ordered the sale of 150 King. This hardship would not simply be financial. Mr. Kazeks would suffer personal, emotional, and medical hardships. He would lose ready access to his personal and professional support systems. I exercise my discretion to refuse Ms. Stothers’ application for sale of the property.

Ordering a sale would impair Mr. Kazeks’ trust claims and claim for a vesting order

[57] I also find that ordering a sale would jeopardize Mr. Kazeks’ claims in his family law proceeding. The courts have held that where a partition application is but a piece of a larger litigation puzzle, and the issues raised in the broader litigation are intertwined with the property in question, the court should exercise caution so as not to prejudice the rights asserted in the broader litigation. [17]

[58] In his family law proceeding, Mr. Kazeks seeks a declaration that Ms. Stothers holds her interest in the property in trust for him. He also seeks an order vesting title to 150 King in his sole name. He advances two theories to support the relief sought.

[59] First, Mr. Kazeks submits that he gratuitously transferred his interest in 150 King to Ms. Stothers to whom he was not married. In such circumstances, the law presumes that he intended to create a trust, not to give a gift to Ms. Stothers. [18] Mr. Kazeks’ evidence is that he never intended to gift Ms. Stothers a half-interest in 150 King and that he did not understand that putting her on title as a tenant in common would have had that effect. Ms. Stothers disagrees.

[60] Second, Mr. Kazeks submits that he is entitled to the remedy of a constructive trust in respect of 150 King because Ms. Stothers would been unjustly enriched by receiving an interest (much less a 50% interest) in the proceeds of sale. This enrichment, he submits, would be to his corresponding detriment. He also submits that the mere fact that Ms. Stothers’ name is on title does not amount to a juristic reason for the enrichment and corresponding deprivation. [19]

[61] In his responding factum, Mr. Kazeks requested an order declaring that Ms. Stothers holds her interest in 150 King in trust for him and vesting title in his sole name. In my view, he cannot seek that relief in this proceeding as he was only responding to Ms. Stothers’ application. Mr. Kazeks did not issue his own origination process and request that it be heard at the same time as Ms. Stothers’ application. In the absence of an originating process, it would not be appropriate to award Mr. Kazeks such significant relief.

[62] Moreover, Mr. Kazeks’ claims for a resulting trust or constructive trust remedy require a trial. At the moment, his claims present myriad issues that require live evidence to resolve fundamental credibility issues. Those claims should be adjudicated on a complete documentary record in order to do justice between the parties. This is particularly true where Mr. Kazeks could make out a claim for unjust enrichment but be awarded a constructive trust remedy over some, but not all, of Ms. Stothers’ legal interest in 150 King. It is possible that a complete documentary record could eliminate or reduce the credibility issues that appear at the moment to require a trial.

[63] Based on the record before me, however, Mr. Kazeks’ claims are far from frivolous. Indeed, he has demonstrated close to a strong prima facie case for the relief he seeks. I am satisfied that it would be oppressive to order the sale of 150 King and, thereby, deny him the opportunity to prove his trust claims and seek a vesting order in the family law proceeding.

The 7884 Property

[64] Ms. Stothers also sought a declaration that her interest in a certain property located at 7884 6th Line in Essa, Ontario, is severed from Mr. Kazeks’ interest. Ms. Stothers seeks that declaration because of certain positions Mr. Kazeks took during their negotiations to resolve the dispute over 150 King. I decline to grant the declaration.

[65] St. John’s Evangelical Lutheran Latvian Church of Toronto owned various plots of land in Essa that it leased to various families, including Mr. Kazeks’ family. Because of changes in tax treatment, the church divested itself of the lands. Ms. Stothers set up a corporation to buy the land from the church. Members of the church collected $100,000 for the land and then the church transferred the land to the corporation, which was formed by letters patent. Both Mr. Kazeks and Ms. Stothers are members of the corporation and Ms. Stothers is its secretary.

[66] In 2018, the corporation entered into an agreement with 11 persons, including Ms. Stothers and Mr. Kazeks, who thereby gained a beneficial interest in the land that the corporation continues to own. Although the 11 persons are not on title, they have the right to use the lots in which they hold a beneficial interest. Mr. Kazeks and Ms. Stothers each contributed an equal amount of money, and they have a beneficial interest in two lots.

[67] On May 1, 2023, Mr. Kazeks and Ms. Stothers sold one lot. The agreement of purchase and sale was among the following parties: the corporation, all 11 beneficial lot holders, Ms. Stothers and Mr. Kazeks, and the purchaser. Under the agreement, beneficial lot holders may only sell to buyers who are approved by the corporation and agree to become a member of it.

[68] Ms. Stothers and Mr. Kazeks attempted to sell their second lot, but the transaction did not close.

[69] Ms. Stothers explains the reason underpinning her request for declaratory relief as follows: [Ms. Stothers] is concerned that [Mr. Kazeks] will not honour her 50/50 interest in the 7884 Property, and that he will not split the proceeds with her estate when it is eventually sold. As such, she has sought to make clear that their respective ownership interests were severed and sought declaratory relief to this effect in the application.

[70] For that reason, Ms. Stothers seeks the following declaration:

According to the formal agreement in place concerning the [corporation’s] properties, which includes the 7884 Property and to which both parties are signatories, the owners' interests devolve to their respective estates. Article 15 of the Agreement dated November 26, 2018 states:

DEATH OF A BENEFICIAL LOT OWNER: In the event that a beneficial lot owner passes away, his, her or its interest in the Property shall pass on to the beneficial lot owner's estate, and the estate shall become a party to this Agreement, and be bound by its provisions hereto.

Principles related to declaratory relief

[71] The Supreme Court of Canada recently described the criteria for declaratory relief as follows:

Declaratory relief is granted by the courts on a discretionary basis, and may be appropriate where (a) the court has jurisdiction to hear the issue, (b) the dispute is real and not theoretical, (c) the party raising the issue has a genuine interest in its resolution, and (d) the responding party has an interest in opposing the declaration being sought. [20]

[72] As indicated, declaratory relief is discretionary. Courts may deny declaratory relief for many reasons including standing, delay, mootness, the availability of more appropriate procedures, the absence of affected parties, the theoretical or hypothetical nature of the issues, or the fact the declaration sought is of merely academic importance and has no utility. [21] I decline to grant the declaration for four reasons.

[73] First, this dispute is purely theoretical and hypothetical. There is no transaction pending for the parties to sell their second lot. The parties have not reached an impasse. Happily, neither of the beneficial lot owners has passed away and article 15 has not been triggered. All of these features militate against granting a declaration.

[74] Second, the corporation is not present on this application. The parties’ rights arise as members of the corporation and under the agreement to which the corporation is a party. Whatever rights the parties have must be interpreted in light of the entire agreement. Before interpreting the agreement and declaring the rights arising under it, it would be beneficial to hear from the corporation as to its position on the issue.

[75] Third, there appear to be more appropriate procedures to resolve this dispute (if and when it crystallizes). If Ms. Stothers and Mr. Kazeks cannot agree on the interpretation of their rights as members of the corporation and under the agreement, the agreement provides that the dispute shall be settled through a mediation-arbitration process:

16. DISPUTES - If a dispute arises as to any matter between the Corporation and a beneficial lot owner, the same shall be referred to binding mediation by a mediator chosen by the parties. For greater certainty, a mediator shall be deemed to be chosen by the parties if at least 60% of the directors of the Corporation, and 60% of the beneficial lot owners agree to the mediator. If the parties are unable to agree on a mediator, the parties' dispute shall be referred to three mediators, one chosen by the directors of the Corporation, one chosen by the beneficial lot owners, and a third to be chosen by the two mediators. For greater certainty, binding mediation shall mean that the parties shall first attempt to mediate any disputes. In the event that such mediation fails, and the parties are unable to reach an agreement, the decision of the mediator(s) shall be binding upon the parties hereto, their respective assigns, executors, personal representatives, heirs and administrators.

[76] Fourth, and if the mediation-arbitration process outlined above does not apply, Mr. Kazeks has asserted a trust claim over this property in his family law application and seeks a vesting order with respect to that property. That is a far better process to resolve any disputes that arise between the parties over that property.

[77] For all of these reasons, I exercise my discretion not to grant the declaration sought by Ms. Stothers.

Conclusion and costs

[78] For the reasons given above, I dismiss Ms. Stothers’ application in its entirety.

[79] I urge the parties to resolve costs on agreement. If they are not able to do so, Mr. Kazeks may email his costs submission of no more than three double-spaced pages to my judicial assistant on or before September 12, 2023. Ms. Stothers may deliver her responding submission of no more than three double-spaced pages on or before September 19, 2023. No reply submissions are to be delivered without leave.

Released: September 5, 2023