COURT FILE NO.: CV-10-399375
DATE: 20121221
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
KAZYS JUZUMAS
Plaintiff
– and –
GALINA BARON
Defendant
Rita Chrolavicius and Krystyne Rusek, for the Plaintiff
David Mario Farmani, for the Defendant
HEARD: October 29, 30, November 1, 2, 5, 16 and December 12, 2012
COURT FILE NO.: CV-10-399376
DATE: 20121221
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
CHARLES JUZUMAS
Plaintiff
– and –
YEVGENI BARON
Defendant
Rita Chrolavicius and Krystyne Rusek, for the Plaintiff
David Mario Farmani, for the Defendant
HEARD: October 29, 30, November 1, 2, 5, 16 and December 12, 2012
COURT FILE NO.: FS-11-374286
DATE: 20121221
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
GALINA BARON
Plaintiff
– and –
KAZYS (CHARLES) JUZUMAS
Defendant
David Mario Farmani, for the Plaintiff
Rita Chrolavicius and Krystyne Rusek, for the Defendant
HEARD: October 29, 30, November 1, 2, 5, 16 and December 12, 2012
LANG J.A. (ad hoc)
REASONS FOR JUDGMENT
OVERVIEW
[1] In 2007, Kazys Juzumas, then age 89, married his housekeeper, Galina Baron, then age 65. At the time Galina lived with her son, Yevgeni Baron, then age 23. In contemplation of marriage, Kazys named Galina as the executor and beneficiary of his will. A month later, he added Galina’s name to his bank account. In 2009, he signed a document purporting to transfer his only substantial asset, his home, to Yevgeni, albeit subject to the retention of a life interest. Kazys seeks to set aside that transfer. Galina and Yevgeni oppose that relief and Galina seeks judgment for $120,000, an amount that she claims to have lent Kazys, in partial consideration for the transfer of the home. Additionally, both Galina and Yevgeni advance claims in quantum meruit.
[2] For the reasons that follow, I grant Kazys’ requested relief and set aside the transfer since in my view it was tainted at least by undue influence and unconscionability. I grant the requested divorce. All other claims are dismissed.
PROCEEDINGS
[3] This case involves three proceedings: Kazys’ action seeking an annulment of his marriage to Galina; Kazys’ action seeking a declaration to set aside the transfer of his house (14 MacKenzie Crescent, Toronto, Ontario); and Galina’s application for various relief, including a divorce, spousal support, equalization of net family property, as well as quantum meruit claims by Galina and Yevgeni for compensation for work they allegedly performed for Kazys. In addition, Galina claims $120,000 that she allegedly lent Kazys.
[4] During the trial, the parties agreed not to pursue a number of claims. Kazys did not pursue his claim for an annulment and Galina did not pursue her claim for spousal support. Neither party pursued an argument for an equalization payment. Even if they had, in light of the findings that follow, such a claim could not have succeeded.
ISSUES
[5] The following issues are outstanding:
(1) Should the transfer of Kazys’ property to Yevgeni be set aside?
(2) Did Galina lend Kazys $120,000, and if so, did it form part of the consideration for the transfer or is Galina entitled to its return?
(3) If the property transfer is set aside, is the property a matrimonial home part of net family property and subject to equalization?
(4) Are Yevgeni and Galina entitled to compensation for their quantum meruit claims?
(5) Should a divorce be granted?
(1) The transfer of 14 MacKenzie Crescent
(a) The law respecting the transfer
[6] Kazys’ counsel argues that the transfer to Yevgeni (or Yevgeni in trust for Galina) should be set aside on the basis of the common law concepts of undue influence, unconscionability, and lack of consideration.
[7] The parties essentially agree on the applicable law, which I now canvass in brief in order to give context to the factual findings that follows.
[8] In his text, The Law of Contracts, John McCamus addresses the “cluster of doctrines” that apply “where a stronger party takes advantage of a weaker party in the course of inducing the weaker party’s consent to an agreement.” John D. McCamus, The Law of Contracts, 2nd ed. (Toronto: Irwin Law, 2012), at p. 378. The cluster of doctrines includes undue influence and unconscionability. If any one of these doctrines applies, the weaker party has the option of rescinding the agreement.
[9] McCamus describes the equitable doctrine of undue influence as providing a “basis for setting aside a gift or a transaction where the transfer of value has been induced by an ‘unconscientious use by one person of power possessed by him [or her] over another.’” McCamus, at p. 402; see also Morrison v. Coast Finance Ltd. (1965), 1965 493 (BC CA), 55 D.L.R. (2d) 710 (B.C.C.A), at p. 713; and Knupp v. Bell (1968), 1968 540 (SK CA), 67 D.L.R. (2d) 256 (Sask. C.A.), at p. 259. He addresses the distinction between the two categories of undue influence: actual and presumptive undue influence. As an example of actual undue influence, McCamus refers to Re Craig, [1970] 2 All E.R. 390, in which a caregiver threatened an elderly dependent with abandonment: McCamus, at p. 403-404. The onus is on a plaintiff to establish actual undue influence.
[10] A presumption of undue influence arises from the nature of a recognized relationship (e.g., solicitor and client, doctor and patient etc.). The presumption can also arise from the particular circumstances of the case, where one party has the ability or potential to “dominate the will of another, whether through manipulation, coercion, or outright but subtle abuse of power.” *Geffen v. Goodman Estate*, 1991 69 (SCC), [1991] 2 S.C.R. 353, at p. 377.
[11] Such a presumption is rebuttable by evidence that the transaction was an exercise of independent free will: Geffen, at p. 379; and Bank of Montreal v. Duguid, 2000 5710 (ON CA), 47 O.R. (3d) 737 (C.A.), at para. 24-25. Evidence of free will may be demonstrated by evidence of independent legal advice, or at least an opportunity for the individual to give a fully-informed and considered consent to the proposed transaction.
[12] While I am persuaded that actual undue influence is proven in this case, there is also good reason to find presumptive undue influence, since the relationship in this case concerns a caregiver and an elderly person who was both psychologically and physically vulnerable. No rebuttal was made out on the evidence in this case.
[13] The doctrine of unconscionability also gives a court the jurisdiction to set aside an agreement resulting from an inequality of bargaining power: McCamus at 424-25; see also Mundinger v. Mundinger, 1968 250 (ON CA), [1969] 1 O.R. 606 (C.A.), at p. 609; and Ferraton v. Shula [2012] O.J. No. 5613 (S.C), at paras. 59-62. Since I conclude that the transfer of the property, on its face, is improvident, and that there was an inequality of bargaining power in favour of Yevgeni (and Galina), the onus falls on Yevgeni to establish the fairness of the transaction. Neither Yevgeni nor Galina discharged this burden.
[14] Finally, although I find it unnecessary to make a determination, the facts of this case may well support a finding of non est factum as well as an absence of consideration for the transfer.
[15] In my view, on the application of the law to the following facts, Kazys is entitled to an order setting aside the transfer to Yevgeni.
(b) The background facts
[16] Since the applicability of these legal concepts usually depends on the facts, I begin with explaining the facts in this case that demonstrate the power imbalance between Kazys on the one hand, and Galina and Yevgeni on the other. I take the factual findings from the evidence at trial, which included that of Kazys; his tenant, Pamela Detlor; his neighbour, Ferne Sinkins; the hospital nurse and social worker as well as Kazys’ family doctor; and significant documentary evidence. Galina and Yevgeni also testified as did Mr. Mamak, the lawyer who prepared Kazys’ September 2007 will and the May 2009 documentation. Finally, bank staff testified regarding Galina’s access to bank accounts with others, which established her familiarity with banking in large sums of cash.
[17] It is helpful to place Kazys and Galina in their pre-marriage settings. Kazys was born in Lithuania in 1918 and immigrated to Canada at age 25. He met and married his first wife with whom he lived in their matrimonial home - the property now claimed by Yevgeni - until her death in 1995. Kazys speaks a dated form of Lithuanian and his English is basic. He had no family in Canada, but he did have family in Lithuania, including a niece with whom he remained in contact. After his wife died, Kazys lived on the lower floors of the house and rented out the third floor to supplement his retirement income of approximately $1,300 per month.
[18] For an unidentified period of two years, the third floor was occupied by a woman named Zita. Zita paid no rent on the understanding that she would provide a daily lunch for Kazys. In addition, Zita was apparently named to receive a modest bequest of approximately $3,000 in Kazys’ January 2007 will.
[19] Galina, who was born in Lithuania, identifies as Russian. She is fluent in Lithuanian, Russian and Polish. Her command of English is limited. Galina has three years of specialized training in accounting. She married several times. Although she seems unsure of the number, a best estimate appears to be that she has been married at least six to eight times. Her son, Yevgeni, was born in 1984. At one point, she moved to Israel with her then husband, who died within two years thereafter.
[20] In 1995, Galina married Waclaw Czulada and, in 1996, left Israel to come to Canada with Yevgeni. Her marriage to Mr. Czulada apparently failed quickly, although their divorce did not become final until 1998. Mr. Czulada plays a role in the narrative because Galina alleges that the $120,000 she says she lent to Kazys was in fact Mr. Czulada’s money.
[21] In January 1999, Galina married again, but separated after nine months.
[22] In 2000, Galina applied for and received a government disability pension and subsidized housing for herself and her son. At her hearing, she took the position that she was unable to work as a result of many disabilities.
[23] That said, from 1999 until 2007, Galina took care of an unnamed older man who lived in her building. While he paid her from time to time, Galina testified that the pay was inadequate. She described the man as “greedy”. She testified that she expected to inherit something from him, but he eventually moved into a retirement home. When he did so he apparently wrote her a cheque for $10,000.
[24] I make note of this relationship for two reasons. First, Galina had previous relationships in which she cared for men whom she expected to name her as a beneficiary in their will. Consequently, she knew that such an expectation was not enforceable. There is sufficient other evidence, including advice from Mr. Mamak, to establish that Galina was quite sophisticated in her knowledge of such matters. Since she knew testamentary dispositions were easily reversed, she knew that she had to be careful to ensure the testator did not execute another will. Second, the information is important because Galina claims she worked with Kazys starting in January 2006 and moved in with him in 2007. However, this is unlikely, at least on a full-time basis, because she testified she took care of the other man at least into 2007.
[25] It is common ground, to use Kazys’ word, that Galina “befriended” him at some point in 2006. She visited his house, suggesting that she could help with housekeeping. Although Kazys recalls that he did not feel he needed help at that point, Galina began coming regularly, increasing to two to three times weekly. She brought some food and assisted with Kazys’ housecleaning, although even then, Kazys continued to do his laundry as well as some shopping.
[26] Kazys testified that he paid Galina for her work, as he had others who had helped him out in the past. He says he initially paid her $800 monthly, which was the amount of rent he received from his upstairs tenants. Kazys was initially glad of Galina’s help because the most important thing to Kazys was to die in his own home. He saw Galina’s care as alleviating his fear/dread/terror of being placed in a nursing home. He came to believe that his ability to remain at home depended on Galina’s ongoing care.
[27] Galina testified that Kazys proposed marriage as a natural progression of their interest in each other. While traditional intercourse was impossible for Kazys due to surgery, Galina testified that they had a close, affectionate, romantic relationship and sexual interest in each other. On the basis of the evidence called at trial, I do not consider that likely. I will explain why.
[28] Kazys testified and I accept that Galina initiated talk of marriage on the basis that she would then be entitled to a widow’s pension following his death. I observe that Kazys, at the time, thought Galina was dependent on her disability payment and the income she received from him so that a small pension would be useful for her. Galina professed to Kazys that she had no interest in his money or property. At the time, most importantly, Galina promised to take better care of Kazys and to live in the house after they were married. She undertook not to send Kazys to the dreaded nursing home. It was for this reason that Kazys married Galina.
[29] Galina arranged for the wedding to take place on September 27, 2007 at her apartment. She chose the location because Kazys did not want anyone to know about the marriage. Perhaps he was embarrassed by his dependency on Galina, or perhaps, as he said, he had concerns the marriage would not go well. In any event, the day before the wedding Kazys and Galina attended at a lawyer’s office. The lawyer, Mr. Mamak, operated a store front sole practice where clients could drop in from the street or make an appointment. Mr. Mamak provided expeditious same-day preparation and execution of requested documentation.
[30] Galina and/or Kazys asked Mr. Mamak to prepare a will in contemplation of their marriage naming Galina as sole executor and beneficiary of Kazys’ estate. Mr. Mamak did so and attended to the will’s immediate execution. Mr. Mamak testified that he considered Kazys to be his client. However, there is little basis to support that conclusion apart from the facts that his account was addressed to Kazys and it was Kazys’ will that he prepared. Regarding the first point, while Kazys signed the cheque in payment, Mr. Mamak or Galina likely filled out the particulars for him. Regarding the second point, Mr. Mamak does not appear to have given Kazys any advice about the terms of the will and the consequences of those terms. While Mr. Mamak had some basic discussion to satisfy himself that Kazys had the capacity to execute the will and that he understood what he was doing, Mr. Mamak did not meet separately with Kazys. Galina was present throughout. Despite the parties’ age difference and their impending marriage, Mr. Mamak did not ask Kazys about the value of his house (then $600,000), or discuss with him whether a marriage contract might be appropriate. The absence of discussion in 2007 is a portent to the meeting in May 2009 when Kazys executed the impugned and improvident transfer of his house to Galina’s son.
[31] Kazys executed the September 2007 will believing that he had a wife who would take care of him, as had his first wife. However, it did not work out that way. After the ceremony, Galina, then 65 years of age, dropped Kazys, then 89, at a subway stop. He took the transit home alone. Although she says otherwise, I conclude that Galina continued to live in her apartment with her son Yevgeni, who was then a 23-year-old university student. Yevgeni continued to be a student and is still awaiting his degree. Over the course of his studies, Yevgeni has taken on occasional tutoring work.
[32] Over the 21 months following the ceremony, Galina continued her role as housekeeper. Kazys continued to pay Galina with the $800 monthly rental income from the upstairs tenants. She regularly attended at Kazys’ house for several hours many week days.
[33] On October 17, 2007, Kazys signed documents making his bank account joint with Galina. That bank account had a balance of just under $6,000 at the date of marriage.
[34] It appears that the then tenants moved out of Kazys’ house the next month, although at whose instance is unclear. In the immediately following months, Galina, with some help from Kazys and Yevgeni, did some repairs and painting in preparation for new occupants. I do not find that the repairs amounted to major renovations as described by Galina and Yevgeni, or that they amounted only to the minimal work described by Kazys. It seems Galina may have hoped Yevgeni would move into the house, but Kazys refused, perhaps because he wanted the rent he would get from the paying tenants to compensate Galina.
[35] In March 2008, Yevgeni advertised the unit for $900 and Yevgeni and Galina met with prospective tenants. They reached a deal with new tenants, one of whom was Ms. Detlor.
[36] During negotiations, Galina increased the $900 rent to $1,300. While this was a higher rent than advertised, the new tenants proposed to occupy both the second and the third floor of the house. Galina was described as difficult and rude in the negotiations to the extent that Ms. Detlor and her co-tenants requested assurance that she would not be living on the premises before they agreed to become tenants. Galina assured them she lived elsewhere.
[37] Galina demanded that the new tenants pay their $2,600 deposit in cash. While she attributed this demand to Kazys, Kazys actually remained silent throughout the negotiations. However, this demonstrates Galina’s personal preference for cash transactions as well as her tendency to attribute words or thoughts to Kazys that he had not articulated.
[38] When Ms. Detlor returned a few days later with $1,600 cash and $1,000 by way of a certified cheque, Galina was upset. She wanted all cash. Nonetheless, after lengthy discussion with Yevgeni, Galina finally accepted the funds. Despite that acceptance, Galina produced a receipt that referred only to the certified cheque amount, without any acknowledgement of the $1,600 cash. Ms. Detlor insisted on and was given a correction.
[39] Yevgeni produced a paragraph-long tenancy agreement that he had prepared, which described Ms. Detlor’s co-tenants as her children. Galina and Yevgeni refused to correct that erroneous characterization saying that it was of no moment. Yevgeni put the agreement in front of Kazys and told him where to sign. There was no suggestion that Kazys read the agreement and no evidence that Yevgeni interpreted it for him. In my view, Kazys’ signature on the cheque and the tenancy agreement was merely pro forma. Galina and Yevgeni were already controlling the content of the documents they required Kazys to sign. Indeed, Ms. Detlor found Kazys’ silence and his downcast appearance remarkable. She initially assumed he was incapable of speech.
[40] In addition to the deposit given by the tenants, Galina kept $1,200 of the monthly rental income of $1,300. She acknowledged this was her compensation, but considered it to be insufficient, particularly since she also bought supplies. Galina allowed Kazys to have the remaining $100. Kazys also continued to have access to his pension income, from which he paid household expenses.
[41] Kazys’ evidence was difficult to follow for several reasons. First, there were translation problems because Kazys knew Lithuanian as it was spoken in 1947 and the language had evolved in some important ways in the intervening years so that he did not always understand the interpreter nor she him. Second, Kazys was 95 years old by the time of trial and suffered from some memory loss. Third, by the time of trial, he also suffered from significant hearing and visual impairment brought on in part by recent surgeries. Fourth, his speech and ability to read in English were and are limited. That said, Kazys was able to provide evidence that, by February 2009, he felt ill-treated by Galina and frustrated with her failure to live at the house and care for him as he anticipated she would. In his view, she did not live up to her bargain, and neither would he. He took action.
(c) The February 2009 will
[42] On February 24, 2009, Kazys went to a lawyer (not Mr. Mamak) and executed a new will. I note parenthetically that this is another indication that Kazys did not consider Mr. Mamak to be his lawyer, but rather the lawyer for both of them. More importantly, he did not want Galina to know what he was doing and was apparently concerned that she would find out from Mr. Mamak. He was afraid Galina would persuade him not to make the change or want it reversed. This will turned out to be Kazys’ last show of independence.
[43] In his new will, Kazys named Mr. Stanulis as one of his executors. Mr. Stanulis had also been named as one of his executors in Kazys’ pre-marriage will of January 2007. While the earlier will had left much of his estate to Canadian Lithuanian charities, the new will left much of his estate to his niece in Lithuania, perhaps because Kazys hoped she might care for him if Galina did not. The will also left a modest bequest of $10,000 to Galina, interestingly the same amount of money Galina received from the last senior for whom she cared. Kazys explained his decision this way: “[i]f this is my testament, this is my house, I can do whatever I want.”
[44] Galina found out about the new will near the end of April 2009. It matters not how it came to her attention, although it was likely by going through Kazys’ papers, rather than from Kazys’ niece, as Galina testified at trial. There is no evidence to support Galina’s argument that the February 2009 will resulted from pressure exerted on Kazys by Mr. Stanulis, a named executor, or by his relatives in Lithuania.
(d) Galina’s reaction to the new will
[45] Galina’s reaction to the will is important. Galina was extremely upset. Despite the fact that she was receiving $1,200 monthly, she had been confident that she had also secured access to Kazys’ estate. From her perspective, the will change was a betrayal, as apparently at least one other person had betrayed her in the past. She reacted by embarking on a campaign to ensure she got the house and that campaign continued over the next two months.
[46] We know Galina consulted Mr. Mamak because, although he did not keep dockets, his file contained an undated note referencing her adamant belief that she wanted adequate provision from Kazys’ assets for all the work she described that she had done for Kazys. She described Kazys’ “unreasonable demands”, including his desire she said to limit the time she spent with her son. It seems Mr. Mamak developed the perception that Galina portrayed of a wronged, vulnerable spouse/caregiver. I conclude that she and Mamak talked about a solution and eventually came up with the idea of a transfer of the house initially to Galina and later to Yevgeni, subject to a life interest to Kazys. Galina knew that a transfer to Yevgeni’s name would divert any suspicion from her and at the same time the transfer would not impact her disability pension or her entitlement to subsidized housing. In my view, Galina was sophisticated in matters of this nature and, to some extent, took advantage of Mr. Mamak who saw himself more in the role of family counsellor trying to resolve the conflict between wife and husband.
[47] I am unable to accept Mr. Mamak’s recollection that he also reviewed the proposal of the transfer with Kazys in a meeting over the same period and asked him to think about it. There are three reasons I conclude Mr. Mamak’s recollection is in error on this point. The first is that there was no note indicating that Mr. Mamak ever met with Kazys alone or that he advised him on the advantages and disadvantages of the proposed transfer or explained its consequences.
[48] The second is that Mr. Mamak testified that he had the discussion in Polish, which had to mean that it was with Galina and not with Kazys, because Kazys does not speak Polish. As Mr. Mamak recalled the discussion in Polish, he initially suggested to Galina that she be the person to whom the property was transferred. The transfer to Yevgeni was a secondary proposal. While Mr. Mamak may have expected and indeed asked Galina to discuss and explain the proposed transfer to Kazys, in my view, she likely did not do so, or if she did, she only provided a partial explanation. Mr. Mamak’s records show that a subsearch was conducted on the property on May 11 and Mr. Mamak said that he would not have incurred that expense unless he had been told that the transfer would proceed. Most likely, the instructions to proceed came from Galina. I do not accept that they came from Kazys.
[49] Third, Kazys was totally and genuinely surprised to find that he had executed a transfer. He would not have been surprised if he had been part of the discussion, understood the proposal, and had the opportunity to give it independent consideration.
[50] By the time of the proposal to transfer the house, Kazys was vulnerable and completely dependent on and dominated by Galina, who likely persisted in her threats that he would otherwise be abandoned to a nursing home. The escalation in the abuse was evident to both the tenant, Ms. Detlor, and the neighbour, Ms. Sinkins. I will digress to explain the foundation for and the breadth of their knowledge of the relationship.
(e) The neighbour and the tenant
[51] Ms. Sinkins had known Kazys for 20 years and had attended his first wife’s funeral. After her retirement, and particularly in good weather, Ms. Sinkins saw Kazys more regularly, since both often spent afternoons on their respective verandahs. Ms. Sinkins assisted Kazys, including by bringing him groceries and treats, helping him locate tenants and cleaning the upper floors of his house in between tenancies. Kazys testified that Ms. Sinkins helped him “lots and lots”, for which he insisted on paying her as much as she would allow, which was a total of $500. Until Galina’s arrival on the scene, Ms. Sinkins saw Kazys as a largely independent widower. At some point, she noticed Galina’s presence. She came to understand Galina to be Kazys’ housekeeper. Ms. Sinkins had ample opportunity to observe Galina’s interactions with Kazys.
[52] Ms. Detlor was a tenant from April 2008 until October 2010. Galina had introduced herself to Ms. Detlor from the outset as Kazys’ niece and introduced her son Yevgeni as Kazys’ great nephew. As there was no separate entry for her unit, and Ms. Detlor was recovering from injuries that left her largely housebound, Ms. Detlor also had significant opportunity to observe Kazys’ life on the first floor.
[53] I found the evidence of both witnesses to be highly credible. Apart from their apparent concern for Kazys, neither had any personal interest in the outcome of the litigation. In my view, both witnesses took care to avoid being unfairly partisan even though they both, quite independently, developed negative impressions of Galina and her treatment of Kazys.
[54] Ms. Sinkins confirmed Ms. Detlor’s evidence that Galina did not live at the house. Both described Galina as leaving around 4:00 p.m. on the weekdays. Both witnesses testified that Galina did not come on weekends or on the major holidays and both testified that Galina did not stay over at Kazys’ home. Ms. Detlor recalled one exception, also described by Kazys, where Galina stayed on the couch one night, at least for several hours, because she was feeling too unwell to go back to the apartment she shared with Yevgeni. Neither neighbour nor tenant saw any sign of intimate or affectionate interaction between Galina and Kazys. Indeed, Ms. Detlor described Galina as an “abusive, controlling” and “domineering” niece. According to her, Galina spent much of her day yelling at Kazys.
[55] When she heard Galina yelling at Kazys in what she thought was an abusive way, Ms. Detlor or her co-tenants would turn up their music for the primary purpose of letting Galina know that they could hear what was going on. However, Galina’s yelling did not stop. Kazys could not be heard responding and was never heard to raise his voice. As this behaviour continued, starting at about six months into her tenancy (mid-fall 2008), Ms. Detlor recalled she began going downstairs to ask Galina to stop yelling. Galina became rude and curt to Ms. Detlor.
[56] Ms. Detlor described Kazys as downtrodden when in Galina’s presence. In contrast, in Galina’s absence, Kazys was “bright-eyed”, “lovely and cheerful”, “funny” and “outgoing”, at least initially. She saw him virtually daily and they would talk about the weather, flowers, and their cats. Sometimes, Ms. Detlor would sit with Kazys on the front verandah and Kazys would refer to his tenants as his “family”. Ms. Detlor considered Kazys to be more than a landlord, he was her friend.
[57] In Ms. Detlor’s perception, matters worsened. Galina became more aggressive and Kazys more vulnerable. She spoke to Kazys about it. He expressed fear of Galina, but asked Ms. Detlor not to call the police because the situation would only become worse. On another occasion, Ms. Detlor talked with Kazys about Galina taking his money to which he responded simply, “I am a stupid old man.” As she testified at trial, Ms. Detlor saw Kazys as an abused man who did not deserve the treatment he received at Galina’s hands.
[58] In May 2009, after a row between Galina and one of the co-tenants over a cat, Galina ordered Ms. Detlor to move out. In response to Ms. Detlor’s refusal to do so and her comment that it was Kazys’ house, Galina responded that it was now her house. When Kazys later came to the second floor, Ms. Detlor described him as cowering in fear. She testified that he cried and begged Ms. Detlor not to move because he was afraid to be alone with Galina whom he described as “crazy”. Ms. Detlor promised to stay.
[59] In clement weather, Ms. Sinkins heard Kazys and Galina speaking in a foreign language on Kazys’ verandah. Galina seemed particularly angry most of the time. While Kazys was hard of hearing, Ms. Sinkins described Galina, not as talking loudly, but as screaming at Kazys in harsh tones. Ms. Sinkins became concerned when the yelling seemed to increase. She found Galina’s confrontational approach to Kazys to be in marked contrast to the quiet conversations she had observed Kazys having with his first wife.
[60] Galina argues that she only yelled at Kazys because he had trouble hearing. She also argues that the tenant and neighbour could not have known the content of their conversation because she yelled in Lithuanian. However, I do not accept Galina’s explanation. First, both Ms. Detlor and Ms. Sinkins were able to communicate with Kazys without yelling at him. So could Mr. Mamak, who said it simply required one to speak loudly or directly into Kazys’ ear. Second, both Ms. Detlor and Ms. Sinkins testified that the yelling was not in a tone of usual conversation, but in one of anger and abuse. I accept their evidence.
[61] In Ms. Detlor’s description, Galina yelled at Kazys even more in the last months of their relationship and Kazys seemed more afraid. Ms. Sinkins confirmed the evident increase in Kazys’ despondency. Ms. Detlor was concerned by the increase in vitriol and about a decrease in Kazys’ functioning. Although Kazys’ faculties were still very good, with increasing frequency, sometimes as often as twice a week, he seemed incoherent, as though drugged, dizzy or high. Ms. Detlor noticed that this change seemed to occur after he ate meals prepared by Galina. She also testified that Kazys would often appear unwell and disoriented after eating food that Galina had prepared and that his health would improve when he did not eat her food.
[62] Kazys testified that he began to suspect that Galina was putting something in his food. Sometimes after eating it, he felt weak and drowsy, sometimes as though he was drunk. He found it more difficult to walk.
[63] Let me pause at this juncture to be clear about this issue of the allegations that Galina deliberately chemically interfered with Kazys’ food. Kazys, Ms. Detlor, and Ms. Sinkins acknowledge that there is no proof of this allegation. That said, there was more than sufficient evidence to explain their concern that something was amiss. Their concern was confirmed by Galina when she later told the hospital that Kazys was over-medicated, although she blamed Kazys for the problem. Whether the over-medication was by his own error or that of Galina, it is important to note that, in the time period of the May 14 meeting, Kazys was experiencing increased disorientation and drowsiness. I also observe that Kazys’ health rebounded after he stopped eating Galina’s food and his medication was brought under control.
[64] On the basis of all the evidence, I conclude that, over the two to three weeks preceding the May 14 meeting, Galina consistently pressured Kazys by telling him that unless he reversed the provisions of the February will, he would end up in a nursing home because either Mr. Stanulis would put him there or she (Galina) would stop providing services, with the same result.
[65] In the meantime, Galina and Yevgeni prepared an “agreement”. I will explain.
(f) The agreement
[66] In my view, Galina and Yevgeni came up with terms of an “agreement” that would suit their purpose of securing the house for themselves and satisfy Kazys that Galina would take care of him in his house until his death. Since he lived in horror of going to a nursing home, if Kazys was satisfied about the latter point, he could be influenced to sign what they asked. Moreover, for the purposes of the outside world, such an “agreement” might make it seem that there was a quid pro quo for the transfer of the house to Yevgeni.
[67] The “agreement” prepared by Yevgeni was carefully worded. It made no reference to an irrevocable transfer of the house to Yevgeni, whether as a gift to him or as a gift to Yevgeni in trust for his mother. To the contrary, the agreement only set out obligations on the parts of Galina and Yevgeni. It obliged Galina to live in “Kazys’ house” and stipulated that Yevgeni would not live in “Kazys’ house”. This was something Kazys had been firm about even after the work was done upstairs. He wanted the rental income to pay Galina. Accordingly, the agreement stated that there was not enough room for Yevgeni in the house, but he could come and visit. I emphasize that the agreement referred to “Kazys’ house”. I also note that the agreement included a term that Galina would “live with my husband during reasonable hours”, which supports the finding that she had not been doing so.
[68] The “agreement” also acknowledged that “Kazys does not want to be submitted to an ‘old-peoples’ home. Kazys wants to die in his home.” In addition, on Kazys’ death, Yevgeni would pay out three $10,000 bequests to three named individuals. The agreement provided that the Barons would not otherwise be responsible for any “debts or donations made by Kazys after the signing of this document”. Finally, the agreement stipulated: “Kazys wants his funeral to be conducted with the inclusion of his church. To conduct a supper-reception for visitors attending Kazys’ funeral.”
[69] Even if it was shown to him, Kazys’ English would not likely have allowed him to appreciate the terms of the agreement. Moreover, reading it would not have enlightened him about the transfer part of the transaction. It seems the agreement used language relevant to Galina’s obligations, which may well have been acceptable to him, but it contained no reference to a transfer of Kazys’ most significant asset, to which Kazys would not have freely agreed.
[70] In summary, I conclude that by May 14, 2009, Kazys was under Galina’s control and domination. He was at times muddled, confused, despondent, disoriented and vulnerable. Gone were the bravado and sparkle that Ms. Detlor had identified in Kazys in the earlier months, at least when Kazys was not in Galina’s presence. Galina’s threat of Kazys being put in a nursing home ensured that Kazys would sign what she wanted.
(g) Relationship with Yevgeni
[71] Galina and Yevgeni argue that the transfer and agreement signed on May 14 represented a 25th birthday present from Kazys to Yevgeni. Indeed, the transfer was described as a gift in the documentation. However, I do not accept this explanation because there was no real relationship between the two that would explain such a gift.
[72] Yevgeni testified that he had a “father/son” relationship with Kazys who was proud of his university career and who enjoyed talking politics and history. Yevgeni testified that he spoke with Kazys on the telephone on a regular basis and met with him 12 – 15 times. In the course of approximately a year, he estimated he shared no more than six or seven meals with Kazys, which he said occurred at the wedding and at Christmas and Easter. In contrast, Kazys testified that he met Yevgeni on only three occasions that he could remember. One was on the date of the wedding. On two other occasions, Yevgeni came to the house to help with the rental of the upstairs suite, including the negotiation of the terms of the rental. Kazys denied any significant further relationship with Yevgeni.
[73] I find support for the conclusion that there was little relationship between Kazys and Yevgeni in the evidence of Ms. Detlor. She testified that she only saw Yevgeni at the house on the two occasions when they initially negotiated the terms of their rental and then signed the tenancy agreement. There was no sign of Galina or Yevgeni at either Christmas or Easter. She said that, in any event, Kazys had no respect for Yevgeni, whom he considered “lazy”. Kazys spoke about the number of years Yevgeni had spent on his education without ever holding a job of any kind. Ms. Sinkins, the next-door neighbour, never saw Yevgeni before the trial.
[74] Yevgeni essentially recognized this at trial. He said he understood that he was under a “moral obligation” to hold the property, or at least part of it, for his mother, who was the one who had done the regular work for Kazys.
[75] In my view, the relationship between Kazys and Yevgeni was virtually non-existent. Although they likely had the odd perfunctory phone call about Galina’s whereabouts, Yevgeni led a completely separate life from the apartment he shared with his mother. He was rarely at the house. Occasionally, he drew up papers such as the tenancy agreement, the November 2008 “receipt” bearing Kazys’ signature and the May 22 “agreement” that I will discuss later. I conclude there was no mutual bond of affection and respect, let alone one that would explain the transfer of the house to Yevgeni.
(h) The May 14 meeting
[76] This then was likely the sad state of affairs when Kazys and the two Barons attended at Mr. Mamak’s office on May 14. Kazys was unable to recall much about that meeting. He testified that on the day he signed the documents, he had eaten a bowl of soup given him by Galina and that he felt “dizzy as if I had taken a strong drink.” He explained that he believed he was drugged by medication in his food. He did not remember or understand what happened. In his words, as he more than once explained: “I didn’t know what I was signing. I was doped.”
[77] I accept Kazys’ evidence that he was not as functional as usual on the day of the meeting. Kazys refuted Galina’s evidence that it was he who had called Mr. Mamak’s office to make the appointment. He also refuted the evidence that he had telephoned Yevgeni to invite him to the lawyer’s office, explaining that he wanted to give him his house. This evidence simply does not make sense. If Kazys was giving a gift of his house, it seems unlikely that Yevgeni would have felt as reluctant as he professed to go to the lawyer’s office.
[78] Yevgeni testified that once at Mr. Mamak’s office, he wanted assurance that Kazys would continue to pay all the household bills, including fire insurance. Yevgeni says he did not ask or even think about the value of the house. That too seems unlikely. He neither felt nor expressed gratitude or delight at Kazys’ generosity. Instead, Yevgeni’s response in the meeting was seemingly flat and unemotional. In my view, Yevgeni was being careful not to show gratitude because he knew that Kazys was unaware that he was effectively giving away his financial security in the form of his house.
(i) Mr. Mamak as counsel
[79] Galina and Yevgeni also argue that Mr. Mamak was acting as Kazys’ counsel at the May 14 meeting. Mr. Mamak testified that as such he explained the nature and effect of the document to Kazys, who willingly executed it to bring peace to the family. However, Mr. Mamak did not show the transfer or the agreement to Kazys. Apart from the fact that he knew Kazys’ ability to read in English was limited, it was his custom to tell clients only the “concise”, “Reader’s Digest” version of what they were signing.
[80] Mr. Mamak acknowledged that he never met with Kazys alone on May 14, just as he had not in September 2007. In addition, a significant part of the meeting was in Polish, which Galina understood, but Kazys did not. Mr. Mamak further acknowledged that he gave legal advice to Galina and Yevgeni. He explained he did so out of a sense of “fairness”.
[81] Mr. Mamak says he explained to Kazys, albeit in the presence of Galina and Yevgeni, that the transfer meant that Kazys could not sell his house and that he would have to pay its ongoing expenses. However, Mr. Mamak acknowledged that he did not tell Kazys that the transfer was irrevocable or that it meant he could not take out a mortgage on his property. I accept Kazys’ evidence that he had no discussion or understanding of the term a “life tenancy” before, during or after the meeting. Mr. Mamak did not ask Kazys the value of the property that he was alienating, which on the best evidence available at trial was $665,000 at the time. Similarly, he did not explain to Kazys that he was virtually eviscerating the will he had executed only one month earlier or suggest that he might consider writing a new will.
[82] To the extent Mr. Mamak testified otherwise about the extent of his explanation based on his notes, I must conclude that his recollection is faulty because his notes are not reliable. I arrive at this conclusion because there were significant differences in what Mr. Mamak recalled saying at the subsequent May 26 meeting and what was reflected in the transcript made from an audio recording of that meeting. This was likely also the case at the May 14 meeting.
[83] The side “agreement” prepared by Yevgeni was presented to Mr. Mamak, who said he “fluffed” its important points. How he did so is further confirmation that Mr. Mamak was not Kazys’ lawyer. Mr. Mamak’s version qualified Galina’s obligations under the agreement so that she would only have to care for Kazys “as long as her health permits”. Mr. Mamak brushed off a concern raised by Kazys about this caveat by responding that Yevgeni would try to care for him if Galina could not. Galina offered the comforting thought that nothing would happen to her because she was younger.
[84] Importantly, the Mamak agreement was different in a fundamental way from the Yevgeni agreement: it now stated that the agreement was “in consideration of the transfer … to Yevgeni Baron subject to a life interest to” Kazys. This had not been part of the Yevgeni agreement. The Mamak agreement also obliged Yevgeni to make the three bequests, but provided him a twelve-month window after Kazys’ death to do so. Kazys’ wishes about his funeral were not included because Mr. Mamak did not consider them significant. There was apparently no discussion about this omission. All changes Mr. Mamak made to the agreement were to the benefit of Galina and Yevgeni and none to the advantage of Kazys.
[85] Moreover, Mr. Mamak drafted the agreement so that only Yevgeni and Galina were parties. Accordingly, in his view, there was no need for Kazys to see or sign the document and it appears that he did not. In addition, the agreement would likely have posed enforcement problems for both practical and legal reasons.
[86] The meeting at Mr. Mamak’s office was brief. Nineteen minutes elapsed from the first draft of the transfer to its execution and registration. In the intervening time, Mr. Mamak testified that he explained the terms to Galina in Polish and Kazys in English, obtained their signatures and had it registered.
[87] Finally, I observe that both Mr. Mamak and Galina testified that Kazys was provided with a cooling-off period to reflect on the proposed transfer. Mr. Mamak said that occurred in the two weeks preceding his signature on May 14. Galina testified it was given at the May 14 meeting and that Kazys gave his approval for the registration of the transfer at Mr. Mamak’s office on May 26. Such a time for reflection is not supported by Mr. Mamak’s notes and the delay until May 26 attested to by Galina is belied by the May 14 registration.
[88] Moreover, such a cooling- off period would not have been of assistance given that Kazys did not understand the nature of the proposal or its consequences. In turn, Mr. Mamak apparently did not appreciate the need for particular care because he did not appreciate the power imbalance that existed in May 2009. To the contrary, Galina had persuaded him of her own vulnerability.
[89] Mr. Mamak’s reporting letter reflects his impression that Galina was the one to be protected. He reported to Kazys that he had recommended to Galina and Yevgeni that they obtain independent legal advice and that they declined to do so. It is puzzling that they would need independent advice when they already had advice from Mr. Mamak and they were acquiring Kazys’ only source of financial security.
[90] I am further supported in the conclusion that Galina and Yevgeni considered Mr. Mamak to be their lawyer by their subsequent conduct. Both Galina and Yevgeni separately attempted to enlist Mr. Mamak to act as their lawyer after the June rupture in the relationship with Kazys. Along the same lines, when Mr. Mamak transferred the file to Kazys’ new lawyer, he did so with a caveat given to him by Galina: her suggestion that Kazys’ mental functioning had been compromised by his June 17 fall. Mr. Mamak was clearly not in Kazys’ camp. He was not his lawyer.
[91] I note the difference in Mr. Mamak’s own characterizations of Kazys’ participation in the September 2007 and in the May 2009 meetings. While Mr. Mamak recalled that Kazys was fully engaged in the 2007 meeting, and he noted that he raised one issue at the pivotal May 14 meeting, Mr. Mamak primarily described Kazys at the latter meeting as “cooperative”. That word, I think accurately, suggests that Kazys was acceding to someone else’s direction. It seems likely, in addition to being psychologically beaten, that Kazys felt disoriented on the day of the meeting, whether from over-medication or emotional exhaustion.
[92] I also find support for the conclusion that Kazys did not understand the transfer based on his genuine reaction of total surprise and consternation when Ms. Sinkins explained to him the effect of Mr. Mamak’s reporting letter. Kazys extemporaneously noted that he was so tired at the lawyer’s office that he did not know what he was signing and that he believed Galina had given him something in his soup to put him in that state.
[93] At his request, Ms. Sinkins drove him to Mr. Mamak’s office. She waited with him in the waiting room for about one hour. When Mr. Mamak finally came out of his office, he prevented Ms. Sinkins from entering, even though Kazys indicated he wanted her to accompany him. Ms. Sinkins waited in the waiting room. Shortly thereafter, Galina arrived. Mr. Mamak told her to also wait. At that point, Ms. Sinkins learned for the first time that Galina was Kazys’ wife. When Kazys came out of the office, he told Ms. Sinkins that Mr. Mamak said the transfer was “in the computer; it can’t be changed” and Ms. Sinkins drove Kazys and Galina home.
(j) The May 26 meeting
[94] About a week later, on May 26, Kazys asked Ms. Sinkins to drive him again to Mr. Mamak’s office. Again, when they were in the waiting area, Galina appeared unexpectedly. Ms. Sinkins thought she must have been alerted to what was happening. Although Mr. Mamak denied alerting Galina, her sudden appearance on both occasions is an unexplained coincidence. I find it probable that Ms. Sinkins’ initial impression was correct.
[95] After this meeting, and concerned about how things were transpiring, and Mr. Mamak’s repeated position that nothing could be changed because the transfer was “in the computer”, Ms. Sinkins advised Kazys to get his own lawyer.
[96] In the meantime, when Galina joined the meeting in progress on May 26, she wanted Mr. Mamak to prepare a new will and powers of attorney for Kazys in her favour. Her recording of the meeting shows that the various documents were not fully explained to Kazys. Indeed, a quite substantial part of the recorded discussion was in Polish, which Kazys would not have understood. Mr. Mamak did explain that Galina would have control over decisions about certain matters, including whether he should have a particular surgery if he was taken to hospital. Galina responded that she did not think a person of Kazys’ age would have surgery. Without clarification, this statement too might have raised a red flag, or at least merited some discussion. However, such a discussion did not happen. Kazys simply signed the documents.
[97] On three different visits in May and June, Kazys asked Mr. Mamak to reverse the transfer. Mr. Mamak acknowledged that Kazys’ conduct in so doing was consistent with his stated belief that he had understood he could reverse the transaction. Despite that, Mr. Mamak responded each time that the transfer could not be reversed because “it was in the computer”. At no time did he suggest that Kazys consult another lawyer.
[98] After these events, Kazys appeared very depressed.
(k) June 2009
[99] One day in mid-June, Ms. Sinkins noticed a large gash on Kazys’ forehead. Kazys told her that he had passed out and that Galina told him he had fallen down his basement stairs. Ms. Sinkins was surprised because Kazys was not prone to falls.
[100] When Kazys suffered the injury, Galina offered to call an ambulance. Kazys refused, likely for fear he would be taken from hospital to a nursing home. While Galina testified that she stayed over at the house to take care of Kazys, I accept his evidence that she refused to do so.
[101] On June 25, 2009, about 11:30 p.m., Galina called 9-1-1 reporting that Kazys had fallen and was suffering from low blood pressure. The ambulance arrived. Kazys maintains that he had been sleeping until wakened by the attendants, who removed him from his bed, put him on a stretcher and took him to the hospital. The tenant and the neighbour both heard the ambulance arrive and went outside. Independently, they thought that Kazys looked fine and he did not appear to be in any physical distress. When Ms. Sinkins tried to speak with Kazys, Galina approached. When Kazys saw her, he would say no more to Ms. Sinkins. Both Ms. Sinkins and Ms. Detlor expressed their concern at the time, and concern is a significant understatement, about Galina’s intentions towards Kazys.
[102] Ms. Detlor and Ms. Sinkins both noted that it was odd for Galina to be at the house during the evening. The next day, Galina and Yevgeni called Ms. Detlor and tried to persuade her that Kazys was a bad man who told lies and made false accusations against his tenants.
[103] Kazys was kept at the hospital (Mount Sinai) overnight and throughout the next day met with hospital staff, including a social worker. The staff found him to be alert and responsive. He did not present with dementia or confusion and he was able to hear. Later in the afternoon, Galina was questioned. She told the hospital staff that Kazys had always been a liar and aggressive. She reported that his aggression had increased since his fall earlier that month, and that he had threatened her with a knife.
[104] Galina was apparently particularly angry that two days earlier Kazys “had met with his lawyer of 20 years to address” the house transfer. She stated that if Kazys did not give her the house, she would no longer care for him. In the end, she told the hospital to keep Kazys or to send him to a retirement home. Instead, the hospital made arrangements for Kazys to go home with twice-weekly homecare.
(l) Conclusion on transfer
[105] At the time he executed the transfer, the then 91-year-old Kazys was in failing health. He was vulnerable and in fear of being abandoned to a nursing home. He signed the transfer under the domination, control, and intimidation of his significantly younger wife/housekeeper Galina, as well as under the influence of her son, Yevgeni. The transfer in my view resulted from their undue influence of a vulnerable elder. Kazys did not have the benefit of legal advice or any understanding of the irrevocable nature of the document he signed. In addition, the inequality of the bargaining power and the unfairness of the transaction render it unconscionable. The transaction must be set aside.
[106] In coming to this conclusion, I reject Galina’s argument that Kazys was a manipulator who took advantage of other people’s labour in exchange for empty promises of testamentary dispositions. As an example, Galina points to the removal of the apparent $3,000 proposed bequest to Zita when Kazys wrote the will in contemplation of marriage benefiting Galina. This argument cannot succeed. Zita was paid for her services. There is no evidence she was underpaid or in any way felt aggrieved. In any event, Kazys’ testamentary dispositions were not intended to be nor were they enforceable substitutes for payment for services performed. As I have said, in my view, it was Galina who took advantage of Kazys and not the other way around.
[107] Finally, I observe that Galina and Yevgeni argued that the transaction was not unfair because Kazys owed Galina (really Mr. Czulada) $120,000 in cash that she allegedly lent him in November 2008. I will explain why I do not accept that any such loan has been established before turning to the issue of equalization of net family property.
(2) The $120,000 loan
[108] Galina says she advanced $120,000 cash to Kazys in November 2008 for him to send to relatives in Lithuania. She claimed that Kazys needed to send the money because his relatives were provoked because he had left his estate to Galina in his September 2007 will.
[109] In support of this claim, there is documentary evidence that Galina transferred $120,000 from the joint account she held with one of her former husbands, Waclaw Czulada, to an account she held jointly with Yevgeni. There is also documentary evidence of her subsequent withdrawal from that account of the same amount in cash. However, the paper trail stops there.
[110] Galina maintains she took the $120,000 cash and gave it to Kazys, after a weeks’ delay. Kazys denies this. Kazys has made full disclosure of his banking records and there is no evidence to support Galina’s allegation. Galina did not make full disclosure of her banking records; some were obtained by way of subpoena to the individual banks.
[111] To support her claim of a loan, Galina relies heavily on a “receipt” allegedly provided by Kazys. The receipt is a $120,000 cheque written on Kazys’ bank account in the hand of Yevgeni and signed by Kazys. I do not accept the purported receipt for two reasons. First, Galina by this point had control over Kazys’ bank account and his cheque book. Once the cheque was prepared by Yevgeni, Kazys likely would have signed it, just as he had signed other documents produced by Yevgeni. It is also not implausible that Galina had Kazys sign blank cheques for the purpose of paying household expenses and that she used one of those cheques for that purpose. Second, a cheque is not a receipt and Galina, who as I have mentioned had a certain degree of financial sophistication, knew that. Indeed, she had had Yevgeni prepare a more usual form of receipt for Ms. Detlor to sign at the time of the rental, albeit that receipt initially omitted any mention of the cash paid by Ms. Detlor. Perhaps, Galina used the cheque format instead of the usual receipt because Kazys may have asked questions about any other form of document she asked him to sign. While the answer will remain unknown, I do not accept that Kazys gave a receipt for cash received. In any event, provision of a receipt would have been illogical if it had been Kazys’ intention to conceal the transaction.
[112] In any event, Galina’s evidence about Mr. Czulada’s acquiescence to the alleged loan is implausible. Why would Mr. Czulada agree to provide $120,000 of his money on Galina’s request, even with her explanation that she thought she would inherit when Kazys died? There was no evidence that Mr. Czulada had anything to gain from such a transaction. Moreover, there was conflicting evidence about the state of Galina’s relationship with Mr. Czulada. Galina testified that when she found legal papers for divorce among Mr. Czulada’s papers in 1996, she was angry. She expressed considerable animosity and bitterness towards Mr. Czulada, who had returned, she said, to live at an address she provided in Poland. She testified at trial that she nonetheless maintained a “wonderful relationship” with Mr. Czulada, evidenced by her joint name on an account she says contained his funds. However, her story at trial about their wonderful relationship is inconsistent with the story given when she applied for disability benefits in 2000. In her disability benefits submissions at the time, prepared by her representative, Galina described Mr. Czulada as a physically abusive, mentally ill, husband living on the streets of Toronto as a transient.
[113] The evidence that Kazys insisted on a cash transaction is also implausible. Kazys’ banking records are largely straightforward. Galina’s records on the other hand show frequent transactions dealing with large amounts of cash deposits and withdrawals both before and after her relationship with Kazys. One was a $100,000 withdrawal in December 2010 of money Galina took from an account with Pranas Zibunas, another senior with whom Galina had a friendship. (Mr. Zibunas, who was a witness at the Galina/Kazys wedding, provided Galina with a power of attorney in December 2010. In February 2011, the account had a balance in excess of $640,000.) No explanations were forthcoming at trial, and I take from this evidence only that Galina has a proven degree of sophistication with moving cash from and between bank accounts.
[114] Finally, I observe Galina continues to maintain that the money “lent” to her belonged to Mr. Czulada. However, no evidence was tendered from Mr. Czulada demanding the return of his money.
[115] In the result, I do not accept Galina’s evidence about the loan. Her claim in relation to that loan is dismissed.
(3) Matrimonial home and equalization
[116] Since I have concluded that the property is Kazys’, and there is no outstanding debt to Galina, I turn to the equalization of the parties’ net family property. Galina claims that the property is a matrimonial home, the value of which is subject to equalization, which precludes deducting a matrimonial home even if it was owned before the marriage ceremony. The *Family Law Act,* R.S.O. 1990, c. F.3 s. 4(1) provides for the deduction from net family property of “the value of property, other than a matrimonial home, that the spouse owned on the date of marriage.”
[117] However, in my view, on the basis of the evidence before me, the property was not a matrimonial home. A “matrimonial home” is defined under s. 18(1) of *Family Law Act*: as “[e]very property in which a person has an interest and that is or, if the spouses have separated, was at the time of separation ordinarily occupied by the person and his or her spouse as their family residence” (emphasis added).
[118] In my view, Galina never ordinarily occupied the home as a family residence with Kazys. I say this for two reasons. First, the evidence was clear that Galina sent Kazys home by himself after the marriage ceremony. I accept Kazys’ evidence that they did not live together as husband and wife after that for “a minute even”: Galina did not reside in the house as a family resident that day or indeed any day after thereafter. Indeed, I conclude that the parties separated on the same day as they married, September 27, 2007, when Galina had acquired what she was seeking: entitlement to a survivor’s pension and a will naming her as Kazys’ executor and beneficiary.
[119] While Ms. Detlor could only attest to the fact that Galina did not live at the house since March 2008, Ms. Sinkins was able to confirm Kazys’ evidence that Galina had never lived at the house at all.
[120] Galina’s evidence that she lived in the house until March 2008 does not ring true. She maintained her own family residence with Yevgeni both before and after the date of marriage. In all relevant documentation throughout the period, Galina described her marital status as single and gave her Bloor Street address as her place of residence.
[121] Since I conclude that the house was not a matrimonial home, Kazys is entitled to deduct its value on the valuation date (the date of separation) from his net family property. Moreover, since the date of marriage and the date of separation are one and the same, there was no appreciation in the value of any assets. Accordingly, there is no basis for an equalization payment. That claim is dismissed.
[122] Even if I am wrong in this conclusion, in my view, Galina would be disentitled to any equalization under s. 5(6) of the *Family Law Act* on the basis that any award to her would be unconscionable given the factual findings I made in dealing with the issue of the transfer.
(4) Claims in *quantum meruit*
[123] A claim for quantum meruit or unjust enrichment requires the claimant to establish three elements: the conferring of an enrichment or benefit, a corresponding deprivation, and the absence of a juristic reason for the enrichment: *Peel (Regional Municipality) v. Canada*, 1992 21 (SCC), [1992] 3 S.C.R. 762, at p. 784. Where the claim for restitutionary relief is based on quantum meruit, the services in question must have been furnished “at the request, or with the encouragement or acquiescence, of the opposing party in circumstances that render it unjust for the opposing party to retain the benefit”: *Consulate Ventures Inc. v. Amico Contracting & Engineering (1992) Inc.* (2007), 2007 ONCA 324, 282 D.L.R. (4th) 697 (Ont. C.A.), at para. 99.
(a) Yevgeni’s claim
[124] Yevgeni claims compensation at $15 per hour for various work he alleges he did for Kazys. That work included removal of junk and garbage and purchase of supplies and painting during the period from November 2007 to February 2008 in refreshing the second and third floors. Yevgeni also claims a further 10 hours of work during the summer of 2008 for cleaning, garbage removal, and delivery of material for winter salt and sand. Finally, Yevgeni claims he provided 15 hours of labour between September 2007 to June 2009 to assist Kazys with respect to various pieces of paperwork. Yevgeni’s total claim amounts to $675.
[125] I accept that Yevgeni helped prepare the second and third floors for rental, including by general clean-up and painting. As I have already concluded, the characterization of the work as renovations is a significant overstatement. Moreover, I conclude that all aspects of any work Yevgeni completed, including paperwork, were voluntarily undertaken to help his mother and for her benefit without any expectation of compensation. At the time, and now, Yevgeni is financially dependent on his mother. I would dismiss this claim.
(b) Galina’s claim in *quantum meruit*
[126] I now turn to Galina’s claim in quantum meruit.
[127] Galina claims a total of $136,500 for her services, supplies and meals she says she provided between 2006 to 2009, a period both before and after the 2007 wedding ceremony.
[128] In my view, Galina’s pre-marriage claim must be dismissed for two reasons. First, Galina initially undertook household services for Kazys when she first “befriended” him. She did so with no promise or expectation of compensation. Within short order, she persuaded Kazys to pay her $800 monthly for the services and supplies she provided. I am satisfied that Kazys did so by turning over his then rental income of $800 monthly to her. This is the bargain Galina made and, in my view, there is no basis to change that bargain.
[129] However, in September 2007, in exchange for Galina’s promise to live with him full-time, to attend to his needs, and to prevent his removal to a nursing home, Kazys agreed to marry her and to make her the beneficiary of his estate. At that point, Galina expected to be compensated for her services and Kazys agreed that she would be.
[130] In considering Galina’s quantum meruit claim, I eliminate from the calculation any compensation for the two-month period from the end of April to the end of June 2009. During at least that period, Galina was working not in Kazys’ interest but exclusively in her own.
[131] Accordingly, I restrict her claim to only 19 months from October 2007 until March 2009.
[132] Although Kazys recalled that Galina was only at the house about two hours a day, I prefer Ms. Detlor’s evidence that Galina would arrive in the morning and leave later in the afternoon. This is consistent with Ms. Sinkins evidenced of Galina’s departure about 4:00 p.m. on the weekdays. Accordingly, I calculate Galina’s quantum meruit claim on the basis of approximately seven hours of work on the weekdays. Galina did not work on weekends or holidays.
[133] I use the minimum wage figures filed by Kazys’ counsel, ranging from $8.00 per hour to $9.50 per hour. Assuming a 35-hour work week, Galina would be entitled to roughly $24,000 over the relevant 19-month timeframe.
[134] However, I would discount this award to reflect my conclusion that Galina did not always attend five days a week and did not always work seven hours a day. In my view, a reasonable discount is 15%, which would reduce the award for services provided to approximately $20,400.
[135] In addition to her claim for personal services, Galina (post trial) filed particulars that included alleged expenses for buying indoor and outdoor supplies for the house as well as some groceries, fast-food meals, and TTC tickets for herself and Kazys. Galina produced no receipts, no log and no reliable explanation for these expenses. During the relevant period, Kazys was mobile and picked up supplies himself, often on his scooter. In addition, I do not accept that Galina’s transportation to and from the house is a valid claim as part of her compensation. Undoubtedly, Galina did incur some modest expenditures for items such as coffee, eggs, and bread. I estimate those expenses somewhat generously at $100 monthly for a total award I round up to $2,000.
[136] Finally, Galina claims for meals she prepared for Kazys at her own apartment. She claims $10 for each lunch and $5 for each supper. I do not accept that Galina provided meals for Kazys with complete regularity even three days a week. The evidence was that Kazys often ate his own food, particularly during the last months of their relationship. There was very little evidence about the type of meals Galina prepared, although the little testimony there was indicated the meals were extremely basic in nature. Kazys’ own recollection was that Galina brought food only once or twice a week. I would allow $2,000 for the total cost of meals prepared by Galina over the relevant period.
[137] Thus, the total allowable amount of Galina’s quantum meruit claim is $24,400 ($20,400 in services, $2,000 in supplies and $2,000 in meals).
[138] Against this claim, I would deduct the money given by Kazys to Galina. This money apparently came for the most part from the rents he received from his tenants. At the time of the marriage, Kazys’ then tenants were paying $800 monthly. Although it is not clear, it would seem that those tenants vacated the premises in late fall, likely by the end of November 2007. This means that Galina would have received $1,600 in rent for the months of October and November. Kazys maintains that he continued to pay Galina $800 a month thereafter. However, Kazys memory is not reliable on this point and his banking documentation does not support his position. I am not satisfied that Galina was paid in the four months that there were no tenants in occupation.
[139] However, in March 2008 when the premises were re-rented, Galina received the rental deposit totalling $2,600. She also received $1,200 of the $1,300 rent for the next fourteen months for a further $16,800. This is the best I can glean from the evidence provided. In addition, Kazys’ banking records show that on April 6, 2009, the rent was deposited and two withdrawals were made totalling approximately $2,400, an amount $1,200 in excess of Galina’s regular withdrawal. As well, on May 4, 2009, the rent was deposited and $1,800 was withdrawn, instead of the usual $1,200. From this, I assume Galina took an additional $1,800 ($1,200 + $600). This would be consistent with the escalation in her domination of and control over Kazys.
[140] Thus, I would conclude that Galina received approximately $22,800 from Kazys ($2,600 + $16,800 + $1,800). Accordingly, the maximum amount that Galina could receive for her quantum meruit claim is $1,600 ($24,400 – $22,800).
[141] However, as a matter of general principle, the equitable nature of restitutionary relief provides the court the ability to “refuse full restitution or to relieve [a party] from full liability where to refrain from doing so would, in all the circumstances, be inequitable.” International Corona Resources Ltd. v. Lac Minerals Ltd. (1987), 1987 4308 (ON CA), 44 D.L.R. (4th) 592 (C.A);, at p. 661 see also Peter D. Maddaugh and John D. McCamus, The Law of Restitution, loose-leaf (Toronto: Canada Law Book, 2012), at pp. 3-47 to 3-48. In other words, “[i]t is a matter of discretion for the trial judge whether to refuse to grant equitable relief on the basis that a litigant has not come to court with clean hands.” Sorrento Developments Ltd. v. Caledon (Town), [2005] O.J. No. 349 (C.A.), at para. 5; and Dunlop v. Major, [1998] O.J. No. 2553 (C.A.), at para. 4.
[142] In my view, Galina’s exercise of undue influence and unconscionable conduct pervaded the relationship and left her with “unclean hands”. Although this conduct was most prominent during the final months of her relationship with Kazys, when it is considered along with “all the circumstances” of this case, the magnitude of her reprehensible behaviour is such that it taints the entire relationship. Accordingly, I find that Galina is not entitled any amount for her quantum meruit claim.
(5) Divorce
[143] I grant the divorce requested by Galina, having found that the parties separated on the day they were married on September 27, 2007. I observe that Kazys did not press his claim for an annulment. As well, I observe that an annulment would not have affected the main issue concerning Kazys’ property because s. 5(1) of the *Family Law Act* provides for equalization even when a marriage is declared a nullity.
RESULT
[144] In the result, the transfer of the property to Yevgeni Baron dated May 14, 2009, receipted as AT2069123 is set aside. That property, known municipally as 14 MacKenzie Crescent, Toronto, and more particularly described in Schedule A to the Further Amended Statement of Claim in Court File No. CV-10-399376, vests in the name of Kazys (Charles) Juzumas pursuant to s. 100 of the *Courts of Justice Act*, R.S.O. 1990, c. C.43. A declaration will also issue that the transfer to Yevgeni Baron is void and that Kazys Juzumas, named as Charles Juzumas in the transfer, holds title to the property free of any claim by Yevgeni Baron and/or Galina Baron. Galina Baron’s claim for $120,000 is dismissed. As I conclude that the property was not a matrimonial home and that the parties separated on the date of marriage, I dismiss Galina’s claim against the property and for equalization of net family property. I also dismiss both Yevgeni’s and Galina’s quantum meruit claims. I grant the requested divorce to take effect in the usual 31 days. In the event the Barons are no longer represented by counsel, their approval to the form and content of the judgment is hereby dispensed with, provided that, as counsel have agreed, the vesting order shall not be registered on title before the expiration of the appeal period.
COSTS
[145] Kazys Juzumas is the successful party and is entitled to costs. A costs endorsement will issue separately.
LANG J.A. (AD HOC)
Released: December 21, 2012