Court of Appeal for Ontario

Citation: Malitza v. Iclanzan, 2012 ONCA 611

Date: 20120917

Docket: C54505

Before: Cronk, Epstein and Pepall JJ.A.

Between

Florian Malitza

Plaintiff/Respondent

and

Augustin Iclanzan

Defendant/Appellant

Counsel:

Jarvis K. Postnikoff, for the appellant

Frank Miller, for the respondent

Heard and released orally: September 7, 2012

On appeal from the judgment of Justice Christopher M. Bondy of the Superior Court of Justice, dated September 28, 2011.

ENDORSEMENT

[1] The appellant advances four grounds of appeal.

[2] Firstly, he asserts that he was neither a trustee nor a fiduciary. Secondly, even if he were, any fiduciary relationship terminated when the respondent entered into mortgage agreements with the appellant’s son.

[3] We would not give effect to these arguments. The trial judge expressly found that the appellant was a trustee and a fiduciary. In this regard, for example, he held, at paragraphs 95 and 98:

As to intention, the defendant drafted the document acknowledging firstly that he was accepting the plaintiff’s money, and secondly that the “purpose” in doing so was for “safekeeping” (see Exhibit 4 and testimony of the witnesses). As to the certainty of subject matter, the parties agree that the original subject matter was $46,000 and that as of December 1, 1996, it had grown to approximately $70,000 (see Exhibit 4 and testimony of the witnesses). With regards to the “certainty of object”, there was consensus that both the “entire deposited amount” and any “resulting interest” were to be held for the benefit of Mr. Malitza (see Exhibit 4 and testimony of the witnesses).

In this case the defendant had physical possession of the plaintiff’s money. He invested it as he saw fit. There were no regular reports and so, accordingly, the plaintiff relied heavily upon the defendant’s integrity. Once the Mortgage Agreement was signed, the plaintiff dispersed the funds over a 12-month period. There was no consultation with or reporting to the plaintiff throughout that year.

[4] The trial judge further found that the appellant’s trust relationship with the respondent continued notwithstanding the respondent’s agreements with the appellant’s son in December 1996, given that the appellant continued to hold the respondent’s money.

[5] There was evidence to support each of these critical findings. We see no basis for appellate intervention with them.

[6] We note that the appellant’s counsel, quite properly, acknowledges that if the trial judge’s finding that the appellant was a fiduciary of the respondent is sustainable, the record supports the trial judge’s additional findings that the appellant breached the fiduciary duties he owed to the respondent. We agree.

[7] The appellant thirdly submits that the respondent did not come to court with clean hands and, therefore, that he was disentitled from any equitable relief.

[8] The misconduct asserted by the appellant, namely “keeping his money away from women”, was not directly connected to the matter at issue between the parties – whether the appellant breached fiduciary duties owed to the respondent. Furthermore, no actual misconduct in that regard was proven. The appellant also argues that the respondent is disentitled to equitable relief on the additional ground that he allegedly attempted to mislead the court. The trial judge’s reasons contain no findings to anchor this argument. Accordingly, there is no basis for this ground of appeal.

[9] The fourth ground of appeal advanced by the appellant is that the trial judge erred in dismissing his counterclaim relating to the over-payment of $10,000, since the respondent filed no defence to the counterclaim. The appellant says that, in these circumstances, the respondent should have been taken to have admitted the facts underlying the counterclaim. Again, we disagree.

[10] The plaintiff is not entitled to judgment at trial unless the facts entitle him to judgment. The absence of a defence to a counterclaim does not relieve the appellant from proving the amounts claimed by him. The trial judge was justified in both considering and concluding that no amounts other than those ordered were owing to the appellant.

[11] For the foregoing reasons, the appeal is dismissed. The respondent is entitled to his costs of the appeal, fixed in the amount of $7,500, inclusive of disbursements and all applicable taxes.

“E.A. Cronk J.A.”

“Gloria J. Epstein J.A.”

“Sarah Pepall J.A.”