Court of Appeal for Ontario
Date: 2019-09-06
Docket: C64144
Judges: Strathy C.J.O., MacPherson and Tulloch JJ.A.
Between
Tecla Tarantino and Rosa Pignatelli Plaintiffs (Appellants)
and
Nellie Galvano (also known as Leonarda Galvano) Defendant (Respondent)
Counsel
Nicholas C. Tibollo, for the appellants
Cameron R.B. Fiske, for the respondent
Heard: September 3, 2019
On appeal from: The judgment of Justice Freya Kristjanson of the Superior Court of Justice, dated July 4, 2017, with reasons reported at 2017 ONSC 3535.
Reasons for Decision
[1] The appellants Tecla Tarantino and Rosa Pignatelli are the granddaughters of the deceased, Rosa Galvano. The respondent Nellie Galvano is the deceased's daughter. A second daughter, Giuseppina, who died in 2007, was Tecla's and Rosa's mother.
[2] All three of the parties (Tecla, Rosa and Nellie) were beneficiaries under Rosa's will. Unfortunately, after Rosa's death the parties were unable to agree on the interpretation of some of the terms of the will.
[3] At the conclusion of a six-day trial, Kristjanson J. of the Superior Court of Justice decided, inter alia, at paras. 93, 114, 131 and 141:
Nellie's conveyance, exercising her power of attorney with respondent to Rosa's property, of Rosa's 80.39 per cent interest in the family home to herself was a nullity; and
Nellie was entitled to a payment of $273,039.54 from Rosa's estate for Nellie's personal care of Rosa from December 6, 2007 to Rosa's death on February 20, 2012.
[4] The appellants appeal from the second of these components of the trial judge's decision. They do so on three bases.
First Ground of Appeal: Occupation Rent
[5] First, the appellants contend that the trial judge erred by not deciding that the respondent had to pay occupation rent once the respondent, and her son Claudio, decided to continue living in the house after Rosa's death. Rosa's will provided that Nellie was entitled to stay in the house for six months after her death. The house was then to be sold, with Nellie having a right of first offer/first refusal. Nellie and Claudio did not leave the house after six months following Rosa's death, nor did they put it up for sale. They continued to live in it, seven years after Rosa's death. The appellants contend that Nellie and Claudio should pay occupation rent for this entire time and that the amount of occupation rent should be set off against the award in favour of Nellie for her long-time personal care of Rosa prior to her death.
[6] We do not accept this submission. The core of the trial judge's reasoning on this issue was:
[148] In November, 2014, the granddaughters sought and obtained an undertaking that Nellie would not sell the house or deal with the property until this litigation was completed. This, in effect, prevented the sale of the house. It would be wrong to have Nellie pay rent to now when she was prevented from selling the house by the granddaughters themselves. Importantly, Nellie was prevented from exercising her right to purchase the house under the Will by virtue of the undertaking, and under the Will, Nellie is beneficial owner of 59.81% of the house. Given that the litigation between the parties left the Estate unable to deal with the house during the time period Nellie was in occupation, it would be unfair now to charge Nellie for "rent" that accrued during that time period and I do not so order. At the same time, given that she did have the benefit of occupancy in this period, the expenses incurred by Nellie such as property taxes and maintenance expenses will be borne by Nellie.
We agree with this reasoning. It reflects the trial judge's approval of Nellie's honest, but mistaken, belief in her legal rights, her sacrifice of her own interests for Rosa's care, and the complex and challenging relationship between Nellie and her nieces both before and after Rosa's death. We cannot say that the trial judge erred in declining to grant the appellants equitable relief.
Second Ground of Appeal: Occupancy Costs Allocation
[7] Second, the appellants submit that the trial judge erred in her calculation of the occupancy costs relating to the house. Nellie and Claudio lived in the house with Rosa for many years before her death. During most of those years they shared occupancy costs. However, the trial judge determined that in the final five years of their shared life together, the occupancy costs of the house should be attributed entirely to Rosa because of her desperate health situation and the extreme burden this imposed on her caregivers, especially Nellie. Referring to an expert report commissioned by the appellants (the "Mak Report"), the trial judge said:
[94] Mak made an "occupancy cost" assumption, which I reject. In Mak's evidence, all utilities are subject to an "occupancy cost" allocation (1/3 to Rosa, 2/3 to Nellie and Claudio). I find that Rosa required 24 hour a day care. Nellie and Claudio, and later Meth Garcia, lived in the house and provided care to Rosa 24 hours a day. In order to be cared for by a caregiver team, it was essential that the water tank held hot water, that the lights were turned on, and the home was heated. Since the decision was properly made to provide care to Rosa in her home, those costs are allocated to Rosa. In each case, I accept the expenses commencing after December 6, 2007, to the most recent bill following Rosa's death on February 20, 2012. Therefore, I accept Mr. Mak's calculations on Schedules 5 and 5.1 for the period December 17, 2007 to March 12, 2012, except that no occupancy cost assumption is to be applied, and I find all the costs are Rosa-related.
[8] The appellants say that this analysis and conclusion are wrong because there was no good reason for a change in the long-time, and mutually accepted, allocation of occupancy costs in the household.
[9] We are not persuaded by this submission. The reality is that in late 2007 Rosa's health began a catastrophic descent and this descent lasted for more than five years, until her death in February 2012. This fundamentally changed the dynamic in the household and introduced a very different role for Nellie and Claudio as full-time caregivers. Accordingly, we agree with the trial judge's ultimate conclusion on this issue:
[96] I attribute all of the occupancy costs in Mr. Mak's schedules to the personal care of Rosa. Having accepted that Rosa's wish was to be looked after at home, and having accepted that in her capacity as attorney for personal care it was appropriate for Nellie to make arrangements for Rosa to be looked after in the home, those expenses are properly attributable to the care of Rosa.
Third Ground of Appeal: Unaccounted Income
[10] Third, the appellants raise a very minor issue, namely, that Rosa's estate is owed either $5,041 or $4,818 for income that has not been accounted for against expenses.
[11] We do not accept this submission. On this minor issue, the trial judge did not fix a specific number to the relevant expenses. She said at para. 106: "The income and expenses require adjustment, pursuant to my findings. The parties may request a case conference if they need to clarify the schedules and amounts." The appellants have not availed themselves of this route.
Disposition
[12] The appeal is dismissed. The respondent is entitled to her costs of the appeal fixed at $15,000, inclusive of HST and disbursements.
"G.R. Strathy C.J.O."
"J.C. MacPherson J.A."
"M. Tulloch J.A."