ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: C-100-09
DATE: 20120125
BETWEEN:
Kenneth Lepack and Patsy Lepack Plaintiffs – and – Wanda Lepack Defendant
Andrée Lacroix, for the Plaintiffs
Joseph Marcuccio, for the Defendant
HEARD: January 5, 6 and 10, 2012
Del Frate J.:
Background
[ 1 ] This action relates to the ownership of a property located at 15 Thomas Street in Coniston, Ontario.
[ 2 ] The Plaintiffs are the biological parents of the defendant.
[ 3 ] They allege that their daughter breached the oral agreement entered into when the property was purchased from Serge Pilon, the common law spouse of the defendant.
[ 4 ] The defendant and Serge Pilon had purchased this property prior their separation in early April 2006, for the sum of $18,000.
[ 5 ] To finance this purchase, their matrimonial home was remortgaged. With the division of the family assets, Serge Pilon became the registered owner of 15 Thomas Street.
[ 6 ] He moved into this residence which is described by all parties as a rundown shack. The only source of heat was electric radiators. The windows leaked, the walls were not insulated, and the roof needed replacing.
[ 7 ] Serge Pilon tried to live in this house but, since he was having financial difficulties, he asked Ken Lepack to move in with him. Ken was to pay $300.00 per month. This would help alleviate some of his financial problems. Ken moved in and so did the Lepack’s grandson.
[ 8 ] Since Pilon’s financial situation was deteriorating all the more, he decided to sell the property.
[ 9 ] He approached Ken Lepack to see if he was interested in purchasing this property for the sum of $15,000. Ken was interested but he would have required the financial assistance from his estranged wife Patsy. He thought that between the two of them, they could make the appropriate improvements and it would be less costly for them to live in this house rather than at two separate residences. Patsy at the time was living at a subsidized home paying approximately $480.00 monthly.
[ 10 ] Patsy agreed. However, since both Ken and Patsy had declared bankruptcy they realized the difficulties in obtaining financing to purchase this home. Accordingly, they approached their daughter, Wanda, to inquire whether she was prepared to have the house put in her name and thus obtain the necessary financing.
[ 11 ] Because Patsy and Ken were not sure if Serge Pilon would convey the property under this arrangement, an appointment was set up with all four parties present. According to Serge Pilon, Patsy and Ken, the meeting took place in Patsy’s apartment with Wanda present. Wanda denies that any such meeting ever took place.
[ 12 ] In any event, according to Serge Pilon, Ken and Patsy, the agreement was that title to the property would be in Wanda’s name but once the loan had been repaid, Wanda was to transfer the property to Ken and Patsy.
[ 13 ] A handwritten agreement dated June 1, 2006, was prepared whereby the property would be transferred to Ken Lepack. Subsequently, an agreement of purchase and sale was prepared and it was executed by Ken Lepack on June 8, 2006, and by Serge Pilon on June 9, 2006.
[ 14 ] By letter of direction dated June 22, 2006, Ken Lepack authorized the transfer to be engrossed to Wanda Lepack. The transfer was eventually registered on June 23, 2006, reflecting Wanda Lepack as the registered owner.
[ 15 ] Prior to closing the transaction, the parties agreed that Ken and Patsy would pay the sum of $1,020 monthly towards repayment of the loan, the taxes, and hydro, as well as any other incidental expenses. Patsy and Ken also paid all of the associated expenses with the closing of the transaction.
[ 16 ] Ken and Patsy commenced making the payment of $1,020 on August 1, 2006, and continued until April 4, 2009, at which time, they gave Wanda $2,000 cash to cover the final payment and any other associated expenses. In total, Ken and Patsy advanced Wanda approximately $28,800.
[ 17 ] While Ken and Patsy were living in the home, substantial renovations were performed by all of the parties. Patsy kept some of their receipts for the cost of materials and these were in excess of $5,800. There were numerous other expenses for which no receipts were kept.
[ 18 ] Wanda, for her part, contributed considerable labour and expertise towards these household improvements. However, she could not indicate what the value of her contribution was. Although pressed on this issue, she could not or would not give a value to the services she performed.
[ 19 ] Until shortly before the final payment, the relationship amongst the parties was very amicable. According to Patsy and Ken, the relationship began to deteriorate after April of 2009 when Patsy started asking Wanda when the property would be transferred to Ken and Patsy. It became obvious to them that Wanda was reluctant to do so. Wanda then told them that there was never any agreement that the property would be transferred to them after the loan had been repaid.
[ 20 ] According to Wanda, the first she had heard about a transfer of the property was when her mother was recovering from a heart attack in May of 2007 when supposedly her mother had indicated that she would like to have the property divided amongst her three children.
[ 21 ] Wanda also indicated that she did not raise this issue until after the final payment because she did not want to upset her mother who was recovering from a very serious heart condition.
[ 22 ] In any event, after April 2009, their relationship continued to deteriorate to the point that the police were called by the parents. Wanda called the police as well to evict her parents. Wanda had the hydro cut off, thus necessitating the bringing of an injunction by her parents to reinstate the hydro. Eventually, there was the institution of this lawsuit which has been anything but amicable.
Issue
[ 23 ] Most of these facts are not in dispute, safe and except the “agreement” entered into by the parties prior to the closing of the transaction whereby at the conclusion of the final payment the property would be transferred to Ken and Patsy.
Position of the Plaintiffs
[ 24 ] The plaintiffs submit that the defendant is reneging on the oral agreement entered into by the parties in that once the loan had been paid off, the defendant would transfer them the property.
[ 25 ] The plaintiffs submit that even though the Statute of Frauds , R.S.O. 1990, c. S.19, requires that any contract dealing with land must be in writing, the principles of equity stipulate that no one should be unjustly enriched.
[ 26 ] Further, the plaintiffs submit that if I were to find that there was unjust enrichment, then pursuant to s. 100 of the Courts of Justice Act , R.S.O. 1990, c. C.43, the Court may make declaratory and vesting orders. The plaintiffs therefore are seeking a vesting order transferring the property from the defendant to themselves.
Position of the Defendant
[ 27 ] The defendant qualifies this dispute as a misunderstanding and concedes that the plaintiffs ought to be compensated in a monetary fashion as opposed to being vested with title to the property. In that way, the parties would be placed in the position that they would have been prior to the commencement of this misunderstanding.
[ 28 ] The defendant submits that I should calculate the amounts paid by the plaintiffs towards the loan and the expenses and then deduct from that sum an amount that the plaintiffs would have spent for rent over the course of this arrangement. The defendant submits that rent of $700 per month would be a fair assessment.
Discussion
[ 29 ] Whether one qualifies this as a misunderstanding or a breach of a verbal agreement, there is no doubt that the defendant would be unjustly enriched if she were to keep the property without reimbursing her parents either by transferring the property or by payment of damages.
[ 30 ] In my view, this case is on all fours with Luitenko v. McAleer , 2009 ABQB 144 , aff’d 2009 ABCA 369 .
[ 31 ] The trial judge found that the plaintiff was entitled to judgment since a resulting trust was created and, under the circumstances, he ordered that the property be vested in the plaintiff’s name. The Court of Appeal upheld his decision.
[ 32 ] In the present case, I accept the evidence of the plaintiffs and of Serge Pilon over that of the defendant. The plaintiffs and Mr. Pilon testified in a straightforward fashion and their testimony was not shaken in cross-examination.
[ 33 ] The defendant, on the other hand, was not candid in stating that the meeting amongst the four of them never took place. Her answers to even the simplest of questions were rambling, evasive, and unacceptable. Although she spoke a lot, she said little. Realizing that an answer would hurt her position, she would try to rectify that answer with another rambling and evasive statement.
[ 34 ] Over and above the fact that I do not accept her testimony, logic dictates that the plaintiffs had no reason to enter into the agreement were it not for the understanding that the property would be theirs once the loan was paid off.
[ 35 ] For the duration of the loan, the plaintiffs paid at least $300 per month more just for the rent. Further, they would have had to pay for the hydro which was quite high considering the state of the house. They had spent at least $5,800 towards the repairs not including their labour.
[ 36 ] The actions of the defendant do not support her assertion that she was a concerned daughter who was looking after their welfare. If that were the case, and she truly wanted her parents to have a home for the rest of their days, then one would have thought that she would have made the offer that they should live in that house at the time of its purchase.
[ 37 ] Instead, for a period of time, the house was empty. The house was then transferred to her common law spouse who moved into it with his son following the separation. It was the spouse who suggested to Ken that he should move in. It was the plaintiffs that decided to purchase the house from Serge Pilon. It was the plaintiffs who suggested the transfer in the defendant’s name so that the appropriate financing could be obtained.
[ 38 ] Further, her actions of having the hydro cut off when in fact there were no arrears or, if there were, when the defendant had the responsibility of paying the account from the $2,000 that the plaintiffs had advanced, show a disregard for her parents’ welfare. She also attempted to have the police evict her parents. In my view, these are not actions of a benevolent daughter.
[ 39 ] I have no hesitation in accepting those facts and also that, had it not been for the oral agreement that the house would be transferred to them at the conclusion of payment of the loan, the plaintiffs would not have participated in this venture.
[ 40 ] I conclude that the defendant was holding the property in trust for the benefit of the plaintiffs until such time as the loan was repaid. Since the loan was paid off in April of 2009, the property should now revert to the plaintiffs. Accordingly, a vesting order will issue that the property situated at 15 Thomas Street in Coniston, Ontario, be vested to Kenneth Lepack and Patsy Lepack immediately.
[ 41 ] Even though there was no claim for the value of the defendant’s services, in view of the equity principle, I should address it. Although questioned on the value of her services, she would not or could not give an estimate of what it was. Further, she indicated that she did not expect to be paid for her services. Accordingly, I do not award any amount for the work she performed.
[ 42 ] Should it become necessary to address me on the issue of costs, then the parties can make the arrangements through the trial coordinator’s office within the next 30 days.
Del Frate J.
Released: January 25, 2011
COURT FILE NO.:
DATE: 20120125
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN: Lepack, Kenneth and Patsy Plaintiffs – and – Lepack, Wanda Defendant
REASONS FOR JUDGMENT
Del Frate J.
Released: January 25, 2012