COURT FILE AND PARTIES

COURT FILE NO.: 11-53100

DATE: 2012/11/05

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Slavia Lukic, Plaintiff

AND: Thomas Zaban personally and in his capacity as personal representative of the Estate of Steve Zaban, deceased et. al. , Defendants

BEFORE: Master MacLeod

COUNSEL: Craig M. Bater and Lauren M. Angle for the Plaintiff

Geoffrey B. Shaw and Colin Pendrith for the Defendants

HEARD: July 10 th and September 18 th , 2012

REASONS FOR DECISION

[ 1 ] The plaintiff brings a motion for interim support against the Estate of Steve Zaban. She also seeks orders granting her temporary possession of an automobile and a home as well as other relief. Because this is an action under the Succession Law Reform Act [1] , it proceeds under the Rules of Civil Procedure and not the Family Law Rules. [2] Accordingly a case management master has jurisdiction to hear the motion pursuant to Rule 37.

[ 2 ] For the reasons that follow I have concluded there should be an order for interim preservation of the automobile under Rule 45 but the motion must otherwise be dismissed.

The motion

[ 3 ] The plaintiff claims that she was in a romantic relationship with the deceased Steve Zaban who passed away on October 24 th , 2011. She claims to be a dependent within the meaning of the SLRA and also claims to have been given an automobile and a home by the deceased when he was alive. It is the position of the defendants that the plaintiff and the deceased were only business associates, that the plaintiff cannot meet the definition of “spouse” set out in the Act and there were no such gifts or if there were then they were invalid.

[ 4 ] Clearly the parties have dramatically different views of the facts and there are essential issues of credibility which will have to be resolved at trial. The question on this motion is whether or not the plaintiff meets the test for interim relief. She asks for an order for interim support and for possession of the motor vehicle and the house.

The Evidence

[ 5 ] Certain facts are undisputed. Steve Zaban was a successful businessman and was married for more than 46 years to Maria Zaban. Maria died in 2002. They had four children who are all alive. In 1998 Mr. Zaban created a family trust, Fam-C Trust, to which he transferred many of his assets including the family home located at 921 Chuckery Hill Rd. in Picton.

[ 6 ] In 2005 Mr. Zaban was involved in a serious car accident which left him disabled. He continued to live at Chuckery Hill but required assistance from personal care workers, family members and other services.

[ 7 ] At sometime in 2007 the plaintiff and Mr. Zaban met while she was visiting Picton. At that time she was a data entry clerk working for the federal government. Some kind of relationship ensued because the following year Ms. Lukic left the public service and opened a lingerie store in Gatineau, Quebec. The store was owned by a corporation incorporated by Mr. Zaban and owned jointly by him and the plaintiff. Mr. Zaban issued 49% of the shares to Ms. Lukic and 51% of the shares to himself. He fully funded the start up and operating costs of the store.

[ 8 ] In 2009 the store in Gatineau was closed and a new store was opened in Picton. Mr. Zaban paid for the leasehold improvements. At that time the plaintiff moved to Picton and rented an apartment. During this time Mr. Zaban purchased a used BMW automobile and Ms. Lukic had the exclusive use of it. She was also given use of his credit cards. For a period of about 8 months she moved into the Chuckery Hill residence where Mr. Zaban lived. Mr. Zaban continued to fund the business and Ms. Lukic drew funds from the business on a regular basis as needed.

[ 9 ] It is also clear that Mr. Zaban’s children became concerned about Ms. Lukic and developed an antipathy towards her. Thomas Zaban and Maria Zaban-Stanley were involved in the decision to have Ms. Lukic leave the Chuckery Hill residence and they insisted her personal possessions be removed as well. They began to record discussions with Mr. Zaban and in fact some of those recordings were played during the hearing of the motion. They took steps to seize the automobile and to close down the business shortly after the death.

[ 10 ] Apparently Mr. Zaban made a will just days before his death. That will leaves nothing to the plaintiff. Following Mr. Zaban’s death the plaintiff has produced two “gift letters” both signed by Mr. Zaban in December of 2010. The first purports to be a declaration that the BMW automobile belongs to Slavica Lukic. She has also produced the ownership for the vehicle on which Mr. Zaban had apparently signed a transfer of ownership. The second gift letter on Fam-C Trust letterhead purports to be a gift of the house. The letter contains directions “that if I am unable to sign documentation giving effect to this gift, that any person or persons who are legally authorized on my behalf or on behalf of my estate shall execute a Transfer/Deed of the Property to the said Slavica Lukic”.

[ 11 ] It is undeniable that between 2007 and 2011 the plaintiff had no employment other than the lingerie business. It is also clear that through the business, by use of Mr. Zaban’s credit cards or by direct payments, Ms. Lukic received a considerable amount of money from Mr. Zaban or from Fam-C Trust.

The evidence for co-habitation

[ 12 ] There are of course significant factual disputes. The most significant is whether or not the plaintiff comes within the definition of “dependant” in the Succession Law Reform Act and therefore is entitled to support . The question is not merely whether the deceased was providing her with support at the time of his death but whether there is an ongoing legal obligation that survives his death.

[ 13 ] For that to be the case the plaintiff must come within the definition of “spouse”. That definition encompasses parties who are not formally married under the following circumstances:

“spouse” ... includes either of two persons who,

(a) were married to each other by a marriage that was terminated or declared a nullity, or

(b) are not married to each other and have cohabited,

(i) continuously for a period of not less than three years, or

(ii) in a relationship of some permanence, if they are the natural or adoptive parents of a child. (“conjoint”) R.S.O. 1990, c. S.26, s. 57 ; 1999, c. 6, s. 61 (1, 2); 2005, c. 5, s. 66 (3-8); 2006, c. 19 , Sched. C, s. 1 (1).

[ 14 ] It will be seen that this is the same definition of unmarried spouses which exists under the Family Law Act. The applicable threshold question is whether or not the plaintiff and the defendant “cohabited” “continuously” for a period of at least “three years”.

[ 15 ] An interim order for support is governed by s. 64 of the Act. That section requires that the court may make such an order if entitlement and need are established. Of course establishing entitlement to interim support on a motion does not necessarily mean that the plaintiff will succeed at trial on a full evidentiary record. But the motion court must be satisfied that there is credible evidence demonstrating both entitlement and need such that an interim order is just.

[ 16 ] There is no doubt that the plaintiff and the defendant were in some kind of relationship for more than three years. Clearly it was more than a business relationship. Mr. Zaban apparently met the plaintiff in a grocery store in Picton when she was on vacation there. They struck up a friendship in the course of which the deceased agreed to set the plaintiff up in business in a lingerie store in Gatineau, Quebec. Subsequently he encouraged her to move the store to Picton and he permitted her to live in his home for several months. He purchased a car for her to use and gave her the use of his credit cards. He poured a considerable sum of money into the business and appears to have paid for many of the plaintiff’s personal expenses.

[ 17 ] Of course the construction to be placed on the plaintiff’s access to funds supplied by the deceased and her brief residence in Chuckery Hill is unclear. It is coloured by the increasing levels of disability suffered by the deceased and inability to live independently without assistance as a consequence of his motor vehicle accident and his diabetes. The estate has a counterclaim against the plaintiff in which it is alleged that she abused the trust placed in her by Mr. Zaban and misused privileges granted to her for the business or to assist Mr. Zaban in his personal life. It is alleged that much of the money she received was misappropriated by her.

[ 18 ] The plaintiff has two difficult hurdles to overcome to qualify as a “spouse”. Firstly there was no period of actual physical co-habitation of anything like three years. The plaintiff resided at Chuckery Hill for no more than 10 months. Secondly the relationship was not conjugal in the sense of sexually intimate because it is conceded that the deceased could not have sexual intercourse and the parties did not share the same bedroom. Whether the relationship was romantic and whether Mr. Zaban considered himself in a marriage is dependant primarily on whether or not the plaintiff herself is believed and suffers from a distinct lack of corroboration. [3] Ironically the gifts of the car and the house inter vivos are perhaps the strongest evidence but the bona fides of those transactions are challenged and Mr. Zaban left nothing to the plaintiff in his will.

[ 19 ] The plaintiff asserts that notwithstanding they did not live constantly at the same address, the relationship was romantic, that they were soulmates, that she attended to Mr. Zaban’s personal needs and they behaved as a couple and they were engaged to be married. These facts are hotly contested by the family and by witnesses such as Mr. Zaban’s care givers who saw him on an almost daily basis but claim to have seen no evidence of a romantic relationship. The plaintiff has not produced the ring, has not been able to find witnesses in Picton to support her allegation that they were regarded as a couple in the community and has trouble explaining various records showing her address as either Gatineau or an apartment in Picton. The defendants have also produced evidence to show that the plaintiff travelled on vacation without the deceased and portrayed herself on social networking sites as single.

[ 20 ] Even if the plaintiff’s evidence that the relationship was romantic and the parties were engaged is accepted however, this does not in itself satisfy the definition. The parties must be “cohabiting” “continuously”. It is self evident that becoming fiancées or romantic partners does not constitute cohabitation. It is possible to co-habit while maintaining separate residences but in that case the evidence will have to be overwhelming that the lives of the parties were so intertwined that they must be considered to be in a spousal relationship despite that fact.

[ 21 ] The parties are in agreement that the applicable test is the “Molodowich test”. That is the plaintiff’s claim should be assessed using the questions set out by Kurisko J. in Molodowich v. Pentinnen . [4] Molodowich has been recognized by the Supreme Court of Canada as setting out the generally accepted characteristics of a conjugal relationship. [5] In simplest terms the characteristics of a conjugal relationship include “shared shelter, sexual and personal behaviour, services, social activities, economic support and children, as well as the societal perception of the couple.” These elements may be present in varying degrees and not all need be present for the relationship to be found to be conjugal. [6]

[ 22 ] Here there is only short term sharing of shelter. If a conjugal relationship is found to have been established it will be on the basis of personal behaviour, services, social activities, economic support and societal perception of the couple. On these points there is very little independent evidence and the preponderance of that evidence does not support the plaintiff. Certainly she can prove some level of economic support, she can prove gifts and some sharing of meals and activities that go beyond a mere business relationship. The evidence at this stage is sufficiently contested, nuanced and equivocal however that the plaintiff cannot be said to have established a prima facie case to entitlement.

[ 23 ] The evidence of need is also lacking. The plaintiff’s evidence is that she was receiving roughly $5,000.00 per month from the deceased. The evidence demonstrates that the family of the deceased acted harshly and abruptly in causing the business to be terminated without due consideration for her rights as a 49% shareholder and the impact this would have on her income. There is however little in the way of updated financial information. The plaintiff has not provided the kind of information that would be found in a financial statement required under the family law rules nor has she updated that information.

[ 24 ] The plaintiff has apparently moved back to Gatineau. She is an experienced bilingual data entry clerk. She has not disclosed her current income or expenses.

[ 25 ] For these reasons I am not persuaded that an order for interim support is appropriate and that aspect of the motion will be dismissed. Of course this is without prejudice to the plaintiff’s claim at trial to retroactive support to the date of death if she is ultimately successful.

The Chuckery Hill Residence

[ 26 ] The plaintiff has produced a “gift letter” by which the deceased apparently purported to give her the house. The legal sufficiency of that letter is very much in doubt. Firstly

[ 27 ] the house is owned by Fam-C Trust and the trustees of the trust at the time the letter was apparently signed were Steve Zaban and Maria Zaban-Stanley. Steve had no right under the terms of the trust to treat the property as if it were his own.

[ 28 ] To succeed in enforcing the gift letter the plaintiff must effectively break the trust. Mr. Bater asserts that there is law to the effect that if the settlor of a trust continues to deal with the trust property as if it is his own then the trust is a sham and will be invalid. There is some evidence to suggest that Steve Zaban did not treat the trust as an arms’ length party. For example prior to his accident he paid rent to the trust but he ceased doing that afterwards. There is some evidence that funds were disbursed from the trust without the specific approval of the co-trustee. It may well be determined that Steve Zaban was in the habit of accessing the trust as needed and it may be determined that he did not seek approval from his daughter when he did so.

[ 29 ] The question on the motion however is whether to order interim exclusive possession. My jurisdiction to do so was questioned. Quite apart from the question as to whether a master has such jurisdiction, any such order must have a basis in law. In proceedings in Family Court there is a statutory provision for ordering exclusive possession of a “matrimonial home”. This is a statutory power set out in s. 24 (1) of the Family Law Act. The only analogous provision in the SLRA is the power under s. 63 of the Act to order possession of property as a necessary component of dependant’s relief. Even had I been persuaded that interim support should be ordered I would not have been persuaded on this evidence that putting the plaintiff in possession of the house would be necessary relief.

[ 30 ] There is no power to grant interim relief under the Partition Act. The only other power would be injunctive relief. Masters cannot grant injunctions. [7] In any event the evidence does not support that the balance of convenience would favour putting the plaintiff into possession of the property. The plaintiff claims an interest in the land. There is no immediate plan for the estate to sell the property. The estate appears to be paying the carrying costs. All that is needed to protect the plaintiff is to ensure the property is not sold without notice of her claim.

[ 31 ] The plaintiff is entitled to a Certificate of Pending Litigation. If she has not already registered a CPL leave is granted to do so.

The motor vehicle

[ 32 ] In the case of the motor vehicle the evidence is more persuasive. The gift letter does not suffer from the same legal impediments as the letter relating to real property as the motor vehicle was personal property owned by Steve Zaban. There is no doubt that the plaintiff had the exclusive use of the vehicle. Mr. Zaban also appears to have signed the transfer portion of the ownership certificate. Finally there is a recording of the deceased in which he was specifically asked about the vehicle and he is heard to say that the car is the plaintiff’s. Unless the authenticity of the documents can be challenged, it appears probable that the plaintiff can establish an inter vivos gift of the vehicle.

[ 33 ] There are two different types of order the court can make with respect to personal property. The first is an order under s. 104 of the Courts of Justice Act . This is an order for the recovery of personal property which appears to have been unlawfully taken from the possession of the plaintiff. If such an order is granted then the plaintiff would be entitled to possession of the vehicle but would be obligated to pay the necessary fees and expenses associated with transfer, licencing, insurance and maintenance. Moreover she would be liable for any loss suffered by the estate if the estate is ultimately found to be entitled to possession. Rule 44 is the rule giving effect to s. 104. Rule 44.03 (1) provides for the court to order the party retaining possession to pay twice the value of the property into court as security or to make such other order as may appear just. Under this rule the court has the discretion to order either party to post security as a condition of retaining possession.

[ 34 ] Rule 45 is a separate power to order interim preservation of personal property. That is an order for custody or preservation of property pending the outcome of the litigation. For example the court could order the estate to store the vehicle safely, to maintain it in good repair and not to permit it to be used or sold. Alternatively if the goods in question are found to be likely to deteriorate the court may order them sold to preserve the value.

[ 35 ] The plaintiff has established a strong prima facie case to ownership and possession of the BMW. It appears that the transfer of ownership by the estate, reporting to the police and seizure of the vehicle were high handed and unwarranted actions by the estate.

[ 36 ] Under those circumstances the court could make a range of possible orders including the following:

a. The estate to deliver the vehicle to the plaintiff and to transfer the ownership. The plaintiff to be fully responsible for the vehicle and to be liable to the estate for damages in the event she is unsuccessful on this point at trial and to post security for the value of the vehicle.

b. The estate to retain possession of the vehicle but to post security and to be liable to the plaintiff in the event she is successful at trial.

c. The vehicle to be preserved pursuant to Rule 45; or,

d. The vehicle to be sold and the proceeds paid into court.

[ 37 ] In the circumstances it seems fair to permit the plaintiff to make an election. She may either demand possession of the vehicle and pay security into court by cash, bond or letter of credit in the amount of $35,000.00 in which case the estate is to surrender the vehicle to her and transfer the ownership. Alternatively, at the option of the plaintiff, the estate may retain possession of the vehicle but shall pay $35,000.00 into court. As a further alternative, if the parties agree, the vehicle shall be sold and the proceeds of sale paid into court.

[ 38 ] I anticipate counsel will wish to make submissions on the question of costs. This may be done in writing or by way of conference call. Counsel are to confer and seek agreement on the timing and format of submissions and are to contact my office within 30 days.

[ 39 ] There is also a motion to change the venue to Picton. Counsel advised they were content it be dealt with in writing. It may be however that now that the motion is disposed of there is no real issue about the venue of the trial. Accordingly I will not deal with that motion until I hear from counsel if it is necessary to do so.

Master MacLeod

Date: November 5, 2012

[1] “SLRA”, R.S.O. 1990, c. S.

[2] Courts of Justice Act, R.S.O. 1990, c. C.43 as amended, s. 21.8 (1) and Schedule

[3] In this regard the plaintiff must also overcome s. 13 of the Evidence Act, R.S.O. 1990, c. E.23

[4] (1980) 1980 1537 (ON SC) , 17 R.F.L. (2d) 376 (Ont. Dist. Ct.)

[5] M. v. H. [199] 2. S.C.R. 3 @ para. 59

[6] ibid

[7] S. 101 , Courts of Justice Act