DATE: 20041012

DOCKET: C39916

COURT OF APPEAL FOR ONTARIO

RE:

PIETRO CAPANNELLI and NATALINA CAPANNELLI (Respondents) – and – WALTER MUROFF, HENRY SAMUEL MUROFF, WALTER MUROFF, TRUSTEE, THE EQUITABLE TRUST COMPANY, DOONE TOWER LIMITED, DIETRICH INVESTMENTS LIMITED, ESSEXVILLE INVESTMENTS LIMITED AND SAGINAW INVESTMENTS LIMITED (Appellants)

BEFORE:

MCMURTRY C.J.O., MACPHERSON and ARMSTRONG JJ.A.

COUNSEL:

Arthur M. Barat, Q.C.

for the appellant

Myron W. Shulgan, Q.C.

for the respondent

HEARD:

October 7, 2004

RELEASED

ORALLY:

October 7, 2004

On appeal from order of Justice Robert J. Abbey of the Superior Court of Justice dated March 17, 2003 and the supplemental order dated April 3, 2003.

E N D O R S E M E N T

[1] The appellants, Henry Muroff, and Walter Muroff, trustee (“the Muroffs”) appeal from the order of Abbey J. dated March 17, 2003, and the supplemental order dated April 3, 2003. The essence of those orders was a finding that the Muroffs breached the fiduciary duties they owed to the respondents Pietro and Natalina Capannelli (“the Capannellis”) with respect to the financing component of a co‑venturer project relating to the construction of an apartment building in Windsor.

[2] Following a seven day trial, Abbey J. wrote comprehensive and lucid reasons dealing with all of the issues presented by the litigation, including the specific questions framed by this court in its judgment allowing an appeal from an earlier decision in the same matter by Quinn J.

[3] The appellants contend that the trial judge erred in finding that the Muroffs breached fiduciary duties owed to the Capannellis by failing to properly advance funds necessary to complete the construction of the apartment building.

[4] We disagree. The trial judge considered the leading cases dealing with fiduciary relationships in commercial relationships, including Frame v. Smith (1987), 42 D.L.R. (4th) 81 (S.C.C.), Hodgkinson v. Simms (1994), 117 D.L.R. (4th) 161 (S.C.C.) and Wonch Construction Co. v. National Bank of Canada (1990), 75 D.L.R. (4th) 732 (Ont. C.A.). His conclusions that the Muroffs violated their duty of full disclosure, that they were in a serious conflict of interest position, and that they made secret profits on a mortgage which they set up, are all amply supported by the evidence.

[5] On the other issues, raised by the appellants – namely, the trial judge’s calculation of the amount owing by the Capannellis to the Muroffs pursuant to the Joint Venture Agreement ($230,667 plus relevant interest) and the Walter Muroff, Trustee Mortgage ($0) – we agree with the trial judge’s reasons and conclusions.

[6] The appeal is dismissed with costs fixed at $12,500, inclusive of disbursements and GST.

“McMurtry C.J.O.”

“J. C. MacPherson J.A.”

“R. P. Armstrong J.A.”