DATE: 20050228

DOCKET: C39050

COURT OF APPEAL FOR ONTARIO

RE:

WILLIAM WHITAKER, JUDY WHITAKER, and WHITAKER ADVERTISING LTD. (Plaintiffs/Appellants) – and – ELLERBY PROPERTIES INC., ELLERBY GENERAL CONTRACTING LTD., JOAN SCIBERRAS, SAM SCIBERRAS also known as SAVIOUR VINCENT SCIBERRAS and JAN POOT (Defendants/Respondents)

BEFORE:

LABROSSE, WEILER and BLAIR JJ.A.

COUNSEL:

Angela Assuras

for the appellants

David W. Dolson

for the respondents Sam Sciberras and Joan Sciberras

Stanley B. Sherr

for the respondent Jan Poot

HEARD & RELEASED ORALLY:

February 24, 2005

On appeal from the judgment of Justice Nancy M. Mossip of the Superior Court of Justice dated October 3, 2002.

E N D O R S E M E N T

[1] The appellants appeal from the judgment of Madam Justice Mossip dated October 3, 2002, dismissing their actions. The appeal has its origins in an agreement of purchase and sale with Ellerby involving the construction of a building. Poot, a lawyer, acted for Ellerby in the agreement and construction. On August 4, 1989, the appellants and Ellerby agreed that $25,000 would be held back from the purchase funds until certain deficiencies were rectified. Poot undertook in writing to hold the sum in trust until advised by Ellerby’s architect that the list of deficiencies had been completed. Poot made two payments from the holdback funds to or on behalf of Ellerby in 1989, one for arrears of realty taxes and the other as a cash advance to Ellerby. Contrary to his undertaking, Poot did not contact Ellerby’s architect, Mr. Tom, before disbursing those funds.

[2] Poot testified, however, that before he made a third and final disbursement to Ellerby in November 1989, he did contact Tom in some manner and confirmed that the work was completed before releasing the balance of the funds. The trial judge accepted this evidence.

[3] In dismissing the appellants’ action against Poot for breaching his escrow agreement and, alternatively, for damages for breach of trust, agency agreement, and undertaking, the trial judge held that any claim Tom had to the holdback funds was limited to an amount needed to remedy a specific deficiency. She further held that no evidence had been presented at trial to prove any damages for failure to complete a specific deficiency. Accordingly, she dismissed the action against Poot.

[4] The appellant contends that the trial judge erred and that Poot was obligated to replenish the holdback funds irrespective of whether the deficiencies were satisfied.

[5] We disagree. While Poot breached his solicitor’s undertaking, the terms of his undertaking were met before the money was finally paid out. The trial judge properly dismissed the action against Poot.

[6] We now turn to the issue of whether the trial judge erred in dismissing the action against Ellerby.

[7] The appellants sued Ellerby in November 1990 claiming that Ellerby breached the agreement and obtained judgment for $120,019.36 plus pre-judgment interest and costs. One week later, Ellerby transferred the property in issue to Joan Sciberras, the wife of Sam Sciberras, the directing mind of Ellerby. The consideration was $2.00, plus the assumption of a mortgage for $113,000.

[8] In 1995, the property was sold to a third party. After the mortgage was discharged and closing costs were paid, approximately $63,000 was applied against a mortgage on the Sciberras’ matrimonial home. The appellants claimed at trial that the transfer of the property from Ellerby to Joan Sciberras was a fraudulent conveyance. The respondents claimed that Ellerby took title to the property as a bare trustee in trust for the respondents Sam Sciberras and Fernando Bruno.

[9] The trial judge concluded that Ellerby held the property in trust taking a number of factors into consideration, including whether the trust was a sham. The appellant challenges the trial judge’s conclusion and submits that she did not go far enough in considering whether the parties behaved in a manner consistent with the carrying out of a trust.

[10] We would not give effect to this submission. The trial judge considered what took place both before and after the relevant time. In particular, the trial judge considered the original purchase and sale agreement, the application for exemption from land transfer tax, Poot’s evidence and correspondence, Ellerby’s transfer of the property to Joan Sciberras, Fernando Bruno’s caution on title following the transfer as well as his allegation that he and Sam owned the property, the litigation between them and its resolution. We are not persuaded that the trial judge made any palpable and overriding error in coming to her conclusion.

[11] Both issues in this case were essentially decided on the credibility of the witnesses and the trial judge was in the best position to make that assessment. Accordingly, the appeal is dismissed.

[12] Costs of the appeal are awarded to the respondent Poot fixed in the amount of $6000 and to the respondent Sciberras at $2000, both all inclusive.

“J. M. Labrosse J.A.”

“K. M. Weiler J.A.”

“R. A. Blair J.A.”