BARRIE COURT FILE NO.: CV-08-1445 and CV-11-0310-OT

DATE: 20130107

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Court File No. CV-08-1445

LILA WASSILYN

Plaintiff

– and –

RICK ZERON STABLES INC. and 1146938 ONTARIO LTD.

Defendants

W.J. Leslie, Q.C. and A. McInnis, for Lila Wassilyn

L.J. Levine, Q.C., for Rick Zeron Stables Inc. and 1146938 Ontario Ltd.

Court File No. CV-11-0310-OT

BETWEEN:

RICK ZERON STABLES INC.

Plaintiff

-and-

LILA WASSILYN and MICHAEL WASSILYN

Defendants

L.J. Levine, Q.C., for Rick Zeron Stables Inc.

W.J. Leslie, Q.C. and A. McInnis, for Lila Wassilyn and Michael Wassilyn,

HEARD: November 20, 21, 22, 2012

REASONS FOR JUDGMENT

DiTOMASO J.

INTRODUCTION

[1] A dispute arose between the parties regarding a 50 acre parcel of vacant land located on Bayfield Street, in the Township of Springwater, near Barrie, Ontario. Michael Wassilyn by Agreement of Purchase and Sale dated September 4, 2003 agreed to purchase the land from his friend James Sabiston on certain terms. It was Mr. Wassilyn’s intention to “flip” the property in hopes of realizing a quick profit. He knew Rick Zeron as they both raised and raced standard bred horses. They also became friends. Mr. Wassilyn offered to sell the property to Mr. Zeron but Mr. Zeron lacked the funds to purchase the entire parcel.

[2] Ultimately, Mr. Wassilyn and Mr. Zeron agreed that Mr. Zeron through his company Rick Zeron Stables Inc. would acquire a one-half interest in the parcel with the other one-half interest being held by Rick Zeron Stables Inc. as bare trustee for Mr. Wassilyn’s wife Lila Wassilyn. Representations made by Mr. Wassilyn to Mr. Zeron regarding this transaction are at the heart of this dispute. Each party has commenced an action which by court order were tried together.

The Lila Wassilyn Action

[3] Lila Wassilyn claims that Rick Zeron Stables Inc. owes her $100,000 plus interest on a Promissory Note which formed part of the consideration for the purchase price of Rick Zeron Stables Inc.’s one-half interest in the Bayfield property.

[4] Rick Zeron, the principal of Rick Zeron Stables Inc., denies every executing or ever intending to execute such a Promissory Note and further denies that Rick Zeron Stables Inc. received any consideration for the alleged Promissory Note that might support Lila Wassilyn’s claim.

The Rick Zeron Stables Inc. Action

[5] In this action, Rick Zeron Stables Inc. (“Stables”) claims that Michael Wassilyn and his wife Lila through Michael’s direction participated in the manipulation of fraud of Rick Zeron and his company. It is alleged that Mr. Zeron was induced to provide all of the purchase monies for the property and that the Wassilyns should not benefit from their fraud. Stables seeks entitlement to the whole parcel of land.

[6] The Wassilyns deny any fraudulent misrepresentation or that Rick Zeron or his company was mislead in any way. Rick Zeron was fully informed about Michael Wassilyn’s deal with James Sabiston and was fully informed of his deal with Mr. Wassilyn to acquire a one-half interest in the property. The Wassilyns maintain that Rick Zeron and Stables have not established any fraudulent misrepresentation and Stables is not entitled to unjust enrichment or any other equitable remedy.

[7] The Wassilyn and the Rick Zeron Stables Inc. actions were tried together on November 20, 21 and 22, 2012.

[8] At trial, the parties advised the Court that the declaratory relief sought by Stables for sole legal and beneficial ownership of the lands was abandoned. The parties agreed to a court directed sale of the Bayfield property on terms pending the outcome of this trial.

[9] Further, Stables abandoned the following claims:

(a) damages for fraudulent misrepresentation;

(b) breach of fiduciary duty and damages; and

(c) punitive damages.

[10] At trial, Stables proceeded with its claim for fraudulent misrepresentation with equitable relief and defended Lila Wassilyn’s claim for payment of the Promissory Note.

[11] For their part, the Wassilyns defended the fraudulent misrepresentation claim and pursued their claim for payment of the Promissory Note in the amount of $100,000 plus interest.

OVERVIEW

[12] In the Summer of 2003, Michael Wassilyn became aware of the sale of 50 acres of vacant land located on Bayfield Street just west of the Barrie City limits in the Township of Springwater.

[13] James Sabiston, under a corporate name, wanted to sell the Bayfield Street property together with other properties which he owned. Michael Wassilyn through his associate Bill Marko (now deceased) learned of Mr. Sabiston’s intentions to sell. Mr. Marko knew Mr. Sabiston and introduced him to Mr. Wassilyn. Mr. Wassilyn and Mr. Sabiston eventually became friends.

[14] After considering a number of other Barrie properties for sale by Mr. Sabiston, Mr. Wassilyn expressed an interest to purchase the Bayfield property and Mr. Sabiston was prepared to sell. They agreed on terms eventually set out in their Agreement of Purchase and Sale dated September 4, 2003. Those terms regarding the purchase price can be found in Schedule A to the Agreement. They agreed on a purchase of $300,000 with Mr. Wassilyn to pay a deposit of $10,000, $40,000 on closing and Mr. Wassilyn would give Mr. Sabiston (or his company) a Vendor-Take-Back Mortgage for $250,000 with a three year term.

[15] Prior to making the deal, Mr. Wassilyn knew Mr. Sabiston purchased the property in March of 1989 for $1,750,000. Mr. Sabiston also told Mr. Wassilyn the property was in a buffer zone which impeded development. This disclosure did not deter Mr. Wassilyn who believed he had made a great deal as there was development both commercial and residential all around the property. Because of prior dealings with Mr. Sabiston where Mr. Sabiston was able to sell his Cookstown property for a substantial amount, Mr. Wassilyn believed he was able to purchase the Bayfield property at a favourable price.

[16] Mr. Wassilyn, who is not a realtor or developer, made no independent assessment of the property, did not seek out a real estate appraiser or realtor, and did not go to the Township of Vespra (now Township of Springwater) offices to make inquiries about the property. Mr. Wassilyn believed that he had struck a good deal with Mr. Sabiston and profit could be made. It was Mr. Wassilyn’s intention to “flip” the property quickly.

[17] As soon as Mr. Wassilyn signed the Agreement of Purchase and Sale, he began to promote the sale of the property. Mr. Wassilyn knew and became friends with Rick Zeron who raised and raced standard bred horses at Mohawk Raceway. Mr. Wassilyn also raised and raced horses. Mr. Zeron showed an interest in the property. Apart from Mr. Zeron speaking to his daughter who worked for a Barrie realtor, Mr. Wassilyn did not know what other independent steps Mr. Zeron took to assess the property. There was no pressure or time constraint on Mr. Zeron to enter the deal.

[18] As Mr. Zeron could not afford to purchase the entire property but still wanted to acquire an interest, Mr. Wassilyn and Mr. Zeron agreed that Zeron would acquire a one-half interest in his company’s name and that his company as bare trustee would hold a one-half interest for Lila Wassilyn.

[19] In issue is the purchase price for Mr. Zeron to acquire a one-half interest in the property.

[20] Mr. Wassilyn’s evidence is that the purchase price for Mr. Zeron to acquire a one-half interest was $400,000 on the following terms:

(a) Zeron was to pay on closing $40,000;

(b) Mr. Zeron was to take over the Vendor-Take-Back Mortgage for $250,000 for a term of three years;

(c) As Lila Wassilyn was to acquire a one-half interest in the property, Mr. Zeron agreed to pay $100,000 by way of an interest free Promissory Note to Lila Wassilyn due in three years at the same time as the Vendor-Take-Back Mortgage became due.

[21] Rick Zeron’s evidence is that the purchase price to acquire a one-half interest was $300,000 and there was nothing whatsoever in the transaction about a $100,000 Promissory Note. The sum of $50,000 cash would be paid by Mr. Zeron and Mr. Zeron or his company would assume the Vendor-Take-Back Mortgage of $250,000 for a three year term.

[22] The parties further disagree as to what was disclosed by Mr. Wassilyn to Mr. Zeron before they made their deal.

[23] After the Agreement of Purchase and Sale was signed, Mr. Wassilyn advised Earl Heiber, his lawyer who drew the Agreement of Purchase and Sale, of his deal with Rick Zeron. Mr. Wassilyn introduced Mr. Zeron to Earl Heiber who became the solicitor for Mr. Zeron.

[24] The purchase of the Bayfield property was to close November 7, 2003. The closing was extended to January 29, 2004 by Mr. Zeron and again, a day later to January 30, 2004 when the transaction eventually closed. Mr. Zeron paid the balance due on closing and assumed a Vendor-Take-Back Mortgage.

[25] Prior to the closing, Mr. Wassilyn directed title in the name of Rick Zeron Stables Inc. and that company would take title to 50 percent of the property and became a bare trustee of the remaining 50 percent of the property in trust for Lila Wassilyn. A Trust Declaration and Promissory Note were prepared by Earl Heiber’s office. The Trust Declaration was signed by Mr. Zeron but Mr. Zeron denies he ever signed any Promissory Note.

[26] With January 2007 approaching, Mr. Sabiston advised Mr. Zeron through counsel that the mortgage was due and owing. Mr. Zeron negotiated replacement financing, obtained a new mortgage and discharged the Sabiston Vendor-Take-Back mortgage.

[27] In December of 2006/January 2007, the relationship between Mr. Wassilyn and Mr. Zeron began to deteriorate to the point where they were not talking to each other directly any longer.

[28] The Wassilyns became concerned that Mr. Zeron was speaking to potential purchasers without Lila Wassilyn’s consent. One unsolicited offer had been received. The Wassilyns also were concerned when Mr. Zeron refused to consider the offer.

[29] Pursuant to Lila Wassilyn’s instructions, Mr. Heiber registered a Caution on title on January 10, 2007. Thereafter, the parties agreed to transfer to each other a 50 percent interest in the property which they held as tenants in common – one-half interest by Rick Zeron Stables Inc. and one-half interest by Lila Wassilyn.

[30] Lila Wassilyn agreed to be responsible to repay certain expenses regarding the property excluding mortgage payments which Stables would pay. The Transfer took place on April 19, 2007 and the Caution had been previously removed from title. During this time, Mr. Zeron and his company were represented by a different solicitor, Dean Leifso.

[31] By letter dated May 24, 2007, Mr. Heiber made formal demand upon Rick Zeron Stables Inc. to pay the amount due on the Promissory Note of $100,000 by June 8, 2007.

[32] With no monies having been paid and not having heard anything from Rick Zeron or his company, Lila Wassilyn commenced her action for payment of the Promissory Note on November 21, 2008. Rick Zeron Stables Inc. countered with its action against Lila Wassilyn and Michael Wassilyn for fraudulent misrepresentation (and another remedies) on September 9, 2009.

ISSUES

[33] The issues to be determined are as follows:

(1) whether the Wassilyns made fraudulent misrepresentations to Rick Zeron (or his company) and, if so, what is the appropriate remedy; and

(2) the validity and enforcement of the Promissory Note.

ANALYSIS

[34] The evidence supports the following contextual background and findings of fact.

[35] Despite their limited formal education both Michael Wassilyn and Rick Zeron achieved success. Michael Wassilyn sold tickets for sporting and entertainment events. Later, he bought a farm where he raised horses and also raced them.

[36] For many years, Rick Zeron had been a successful owner and driver of standard bred horses which he raced primarily at Mohawk Raceway. He was well known in the harness racing sport. Through the raising and racing of horses, Michael Wassilyn and Rick Zeron came to know each other and became friends.

[37] They also became better acquainted when Michael Wassilyn approached Rick Zeron with an opportunity to purchase 50 acres of vacant land on Bayfield Street near Barrie, Ontario in the Fall of 2003.

[38] Though successful men in what they knew best, neither of them had any extensive knowledge in the purchase and sale or development of real estate. Their career experiences were confined either to horses or ticket selling although they owned the properties where they lived.

[39] The evidence of Michael Wassilyn is that he acquired a 50 acre parcel from James Sabiston for $300,000 on the following terms set out in the Agreement of Purchase and Sale dated September 4, 2003 between Michael Wassilyn in trust for a corporation to be incorporated and 819317 Ontario Limited (Mr. Sabiston’s company). Michael Wassilyn paid a $10,000 deposit and was to pay a further $40,000 on closing. Mr. Wassilyn was to give James Sabiston (or his company) a Vendor-Take-Back mortgage in the amount of $250,000 which was due and payable in three years time.

[40] The transaction was to close on November 7, 2003. The closing date was later extended to January 29, 2004 and again one further day to January 30, 2004 when the transaction eventually closed.

[41] Michael Wassilyn testified as to his deal with James Sabiston. Mr. Sabiston who is elderly with health problems did not attend at trial to give oral evidence. However, counsel agreed that his letter dated November 15, 2012 marked as Exhibit 6 would constitute his evidence. This letter summarizes the dealings between Mike Wassilyn and Mr. Sabiston and confirms the evidence of Mr. Wassilyn. Earle Heiber, Mr. Wassilyn’s Toronto real estate solicitor and also solicitor for Mr. Zeron, testified at trial. He drafted the Agreement of Purchase and Sale and confirmed the deal between Mr. Wassilyn and James Sabiston as to the purchase of the Bayfield property for $300,000 on specified terms.

[42] Mr. Wassilyn was convinced this was a great deal as James Sabiston had acquired the property in 1989 for $1,750,000. The abstract of title in evidence confirms Mr. Sabiston did indeed purchase the property initially for that price. Even though the land was in a buffer zone, Michael Wassilyn was not concerned because it was so well located close to commercial and residential development in Barrie. He described the location as being “the Yonge Street of Barrie”. As he put it, Mr. Wassilyn’s intention was to “flip” the property and make a profit. The evidence is clear that Michael Wassilyn was not in the business of “flipping” properties nor had he ever done so before. All he knew was that there was a great opportunity for him to make a lot of money through a quick sale. It was not his intention to retain the property for investment or retirement purposes.

[43] In the Fall of 2003, Michael Wassilyn set about looking for buyers for the property. He discussed the property with drivers at Mohawk Raceway and eventually with Rick Zeron.

[44] Mr. Zeron was interested in the opportunity to purchase. However, the evidence of both Mr. Wassilyn and Rick Zeron is that Zeron did not have enough money to purchase the entire 50 acre parcel. However, Mr. Wassilyn and Mr. Zeron did discuss Rick Zeron purchasing a one-half interest in the 50 acres and they came to terms. It is those terms which are in dispute as Rick Zeron claims Michael Wassilyn made fraudulent misrepresentations to induce Zeron to put up all the money to purchase all the property for a one-half interest with Michael Wassilyn paying nothing to acquire Wassilyn’s one-half interest.

[45] The Wassilyns deny any such fraudulent misrepresentations or that Rick Zeron or his company was mislead in any way. They say he knew what he was buying and nothing was concealed from him.

[46] Michael Wassilyn and Rick Zeron presented in their evidence very different versions of their discussions leading to their agreement. I will deal with that evidence separately. Unfortunately, no one witnessed those discussions and as between Mr. Wassilyn and Mr. Zeron neither of them reduced their agreement to writing. As one might expect, credibility is very much in issue.

[47] Against this contextual background we come to the first issue to be determined.

Issue 1: Whether the Wassilyns made fraudulent misrepresentation to Rick Zeron (or his company) and, if so, what is the appropriate remedy?

The Evidence

[48] In the Fall of 2003 Mr. Wassilyn testified that Rick Zeron saw the property on two occasions – once with Mrs. Zeron and once only with Mr. Wassilyn. Mr. Wassilyn’s evidence was that Mr. Zeron was “in awe” of the property.

[49] Mr. Zeron testified he only saw the property after the closing of the transaction in February 2004 when he, his wife and Mr. Wassilyn drove to the property. The property was snow covered.

[50] Mr. Wassilyn’s evidence is that Mr. Zeron did not have the money to buy the property but wanted to own an interest. Mr. Zeron asked if Mr. Wassilyn would sell Mr. Zeron half. It is Mr. Wassilyn’s evidence that at no time did he state to Mr. Zeron that Mr. Wassilyn was working on a 1.9 million dollar deal. Further, Mr. Wassilyn never said he had a purchaser to sell the property to on a 1.9 million dollar “flip”. I find there was no evidence at trial of any 1.9 million dollar purchaser.

[51] Mr. Wassilyn testified that he told Mr. Zeron the following facts:

(i) the land was in a buffer zone;

(ii) James Sabiston had purchased the property for $1,750,000; and

(iii) Mr. Wassilyn had negotiated a deal to buy the land from Mr. Sabiston for $300,000.

[52] Mr. Zeron had no questions and asked Mr. Wassilyn how much he wanted for a one-half interest in the property. Mr. Wassilyn told Zeron he would sell a one-half interest to him for $400,000. Mr. Zeron declined. Mr. Wassilyn then asked Rick Zeron what he could come up with and Mr. Zeron said he could come up with $50,000 down. Mr. Wassilyn testified as to the terms they ultimately agreed to:

(a) a $50,000 down payment;

(b) Rick Zeron was to assume the Vendor-Take-Back mortgage for $250,000 from Mr. Sabiston;

(c) Rick Zeron would give a $100,000 Promissory Note payable to Lila Wassilyn who had a one-half interest the property. The Promissory Note would be payable at the same time as the mortgage was due, payable on January 29, 2007.

[53] Mr. Wassilyn told Mr. Zeron about his deal with Mr. Sabiston. Mr. Wassilyn testified that Mr. Zeron knew about the price, the buffer zone and what Sabiston paid for the property. Mr. Zeron knew that Mr. Wassilyn paid $10,000 down to buy the whole 50 acre parcel. Zeron knew he was buying 25 acres for $400,000.

[54] Further, Mr. Wassilyn testified that he informed Mr. Zeron that all the paperwork for the deal was at the lawyer’s office, Earl Heiber and that Mr. Zeron should go and speak with Mr. Heiber at his office. The evidence is that Mr. Zeron did go to see Mr. Heiber and did sign documents at Mr. Heiber’s office without Mr. Wassilyn being present. The closing date after two extensions and the payment of an additional $10,000 by Mr. Zeron closed on January 30, 2004.

[55] Mr. Wassilyn testified that Mr. Zeron was under no pressure to either commit to the deal or to close the deal. Mr. Wassilyn’s evidence is corroborated by the evidence of Mr. Heiber that the Mr. Wassilyn had funds and was prepared to close the deal and that he did not need Mr. Zeron for this purpose.

[56] Rick Zeron’s evidence at trial is different. Mr. Zeron testified that he was approached by his friend Michael Wassilyn in the Fall of 2003 and was asked if he would be interested in getting involved in a “sweet deal” with Mr. Wassilyn. Mr. Zeron’s evidence was that Mr. Wassilyn said “it would be nice if you would be my partner and we would buy the land together”. Mr. Zeron replied “okay” and “would buy a little”.

[57] Mr. Zeron knew that the land was in Barrie but did not see it at any time before closing. Mr. Zeron testified that Mr. Wassilyn told him that Mr. Wassilyn had paid a lot of cash for the property. After a while, Mr. Wassilyn said he paid $400,000 for the property. Further, Mr. Wassilyn wanted Mr. Zeron to hold the mortgage for $250,000 and for a one-half interest Mr. Zeron would pay $300,000 - $250,000 by way of assuming the Sabiston Vendor-Take-Back mortgage and $50,000 cash.

[58] Mr. Zeron’s evidence is that Mr. Wassilyn told him it was a great deal and they might be able to flip the property quickly for 1.9 million dollars. Mr. Zeron agreed to the deal. After a while, the potential resale fell through and Mr. Wassilyn and Mr. Zeron decided to hold the land and when it was sold split everything between them. Everything would be “okay”.

[59] Mr. Zeron testified he had no involvement in the preparation of the paperwork and he had no time to read documents as he was hard at work “every day except Sunday”.

[60] Subsequently, Mr. Zeron learned at the Examinations for Discovery that Mr. Wassilyn paid nothing for the land and felt “devastated”, like he was “the most gullible person on earth”.

[61] In cross-examination, Mr. Zeron testified that he made no investigation about the property. He relied on Mr. Wassilyn whom he trusted. He admitted he did not have $300,000 but could carry the mortgage. He considered the land, unlike horses, was a safe investment. He testified “land is a piece of dirt”. He relied on Mr. Wassilyn who said the purchase of the property was a great deal. Mr. Zeron admitted that Mr. Wassilyn told him that Mr. Sabiston bought the property for $1,750,000 but only to make the deal more attractive.

[62] Mr. Wassilyn did not tell Mr. Zeron that the property was in a buffer zone and did not even know what a buffer zone was until trial.

[63] All that Mr. Zeron knew was that Mr. Wassilyn told him that they would “buy, flip and do large”. Mr. Zeron agreed it did not matter what the zoning was when the property was purchased but at trial, Mr. Zeron had a different view. He testified that it was the worst deal he ever purchased, “thank God it was not a horse”.

[64] Further in cross-examination, Mr. Zeron testified that he possibly saw the Statement of Adjustments because he signed the documents in Mr. Heiber’s office and that the purchase price was $300,000. Mr. Zeron assumed this was the price of his share and that Mr. Wassilyn had paid $400,000. He acknowledged receiving a reporting letter from Mr. Heiber on the transaction but did not read it although his wife did. Mr. Zeron acknowledged that Mr. Heiber was his lawyer and could have called him before the deal closed. When it was suggested that before the deal closed Mr. Zeron could have learned that what Mr. Wassilyn had invested in the deal and if Mr. Zeron had gone to the Township Office he would have learned the property was in a buffer or greenbelt zone, Mr. Zeron responded that he “takes responsibility for his actions”. He went to see the property with his wife and Mr. Wassilyn in February 2004 at her insistence because it was a slow time for racing. Lastly, he confirmed that he made no inquiries about the deal.

Fraudulent Misrepresentation

[65] At this point, it is appropriate to consider the law regarding fraudulent misrepresentation, as those principles relate to the pleadings and the evidence.

[66] To succeed in an action for fraudulent misrepresentation, the onus rests on the plaintiff, in this case Rick Zeron Stables Inc., to establish each of the following elements:

(a) that representations were made by the Defendant(s);

(b) that the representations were false;

(c) that they were known when made to be false or recklessly made, that is, without knowing if they were true or false;

(d) that the representations were made to induce the plaintiff to enter the Agreement, and the Plaintiff did enter the Agreement to its detriment; and

(e) that within a reasonable time after the discovery of the falsity of the representations, the Plaintiff elected to repudiate the contract.[^1]

[67] Where allegations are framed in fraud, and have criminal or quasi-criminal undertones, the Plaintiff is required to prove such allegations on a standard of proof higher than the common civil standard or balance of probabilities. The evidence must be scrutinized in a manner commensurate with the gravity of the allegation.[^2]

[68] A misrepresentation, to be material, must be one necessarily influencing and inducing the transaction and affecting and going to its very essence and substance. Moreover, representations which are alleged to have been made must be construed with reference to the circumstances present in the minds of all the parties when they were made.[^3]

[69] In addition to proving the constituent elements of a fraudulent misrepresentation action, the onus lies on the Plaintiff to lead conclusive evidence that the misrepresentation was, in fact, relied upon.[^4]

[70] For the following reasons, I am not persuaded that Rick Zeron Stables Inc. has satisfied its onus in establishing that fraudulent misrepresentations were made by Michael Wassilyn or Lila Wassilyn. In coming to this conclusion, I have considered the constituent elements of what Rick Zeron Stables Inc. was required to prove and failed to do so in relation to the evidence.

(a) Were representations made by Michael and Lila Wassilyn?

[71] In this case, the entire fraudulent misrepresentation claims are based upon two statements allegedly made by Michael Wassilyn. They can be found in Rick Zeron Stables Inc.’s Statement of Claim: (a) para. 5 – that Mr. Wassilyn was working on a 1.9 million dollar sale; and (b) para. 6 – that Michael Wassilyn had paid $400,000 into the deal.

[72] Regarding the allegation found at para. 5 of the Rick Zeron Stables Inc. Statement of Claim, I find that Mr. Wassilyn did not represent that he had a potential purchaser for 1.9 million dollars. Mr. Wassilyn’s evidence was that he never told Mr. Zeron that he had a potential buyer at 1.9 million dollars. Mr. Zeron’s evidence is that Mr. Wassilyn stated to him that he might be able to flip the property quickly for 1.9 million dollars. Mr. Zeron’s only other evidence in-chief was that after a little while the 1.9 million dollar potential resale fell through and that he and Mr. Wassilyn came to an agreement to hold the property for a longer term. Mr. Zeron did not call any evidence to support the allegation at para. 5 that Mr. Wassilyn made the representation he was working on a 1.9 million dollar resale. Neither was it pleaded that Mr. Zeron relied upon it.

[73] I accept as more plausible Mr. Wassilyn’s evidence that if he had such a potential buyer he would simply sell to him without Mr. Zeron’s involvement whatsoever. Mr. Wassilyn testified that if he had a 1.9 million dollar buyer in the wings, “why wouldn’t I just sell it”. I further reject as not credible Mr. Zeron’s evidence that they would go into the deal as partners. They were not partners at all. It was Mr. Wassilyn’s deal and Mr. Wassilyn did not need Mr. Zeron to close the transaction with Mr. Sabiston to purchase the property.

[74] Further, the parties were agreeable to extending the closing from November 7, 2003 to January 30, 2004. I find that if there did exist the 1.9 million dollar resale in the wings, and if such a representation was made by Mr. Wassilyn, then the parties would have pressed to close at the earliest date being November 7, 2003 in order to be in a position to flip the property quickly to the “potential purchaser” for 1.9 million dollars. This never happened as evidenced by the conduct of the parties which reflected the purchase of the property from Mr. Sabiston in the ordinary course, including closing extensions. No one was in any hurry to “flip” the property because no purchaser existed.

[75] I find and accept Mr. Wassilyn’s evidence on cross-examination. He was unshaken where he denied making such a representation. Even if I were to find (which I have not) that Mr. Wassilyn represented he was working on a 1.9 million dollar deal, such a statement does not rise to the level of fraudulent misrepresentation. It amounts to nothing more than simply a possibility or an expectation and not an ascertainable fact with clear parameters.[^5]

[76] I find that Rick Zeron Stables Inc. has not satisfied its onus on all the evidence to prove that this alleged allegation was a fraudulent misrepresentation.

[77] Regarding the allegations found at para. 6 of Rick Zeron Stables Inc.’s Statement of Claim, it is alleged at the time that Mr. Wassilyn urged Mr. Zeron to participate in the venture, Mr. Wassilyn advised Mr. Zeron that Wassilyn had paid $400,000 to the original vendor for Mr. Wassilyn’s 50 percent share in the lands.

[78] I find that there is no evidence as to when this alleged representation was made. The timing of this alleged representation is critical for Rich Zeron Stables Inc. to establish its case. Mr. Zeron testified that Mr. Wassilyn told him that Mr. Wassilyn paid a lot of cash for the property. “After a while”, Mr. Wassilyn said that he paid $400,000 for the property. Mr. Wassilyn testified he never made such a statement to Mr. Zeron and that he disclosed to Mr. Zeron before Mr. Zeron entered the transaction all of the details of Mr. Wassilyn’s agreement with Mr. Sabiston.

[79] I find Mr. Wassilyn’s evidence in this regard more credible than the uncorroborated evidence of Mr. Zeron and I reject Mr. Zeron’s evidence for the following reasons:

(a) both parties agreed that Mr. Wassilyn advised Mr. Zeron that all the paperwork for the transaction was located at Mr. Heiber’s office;

(b) there is no dispute that Mr. Zeron went to Mr. Heiber’s office without Mr. Wassilyn and met with Mr. Heiber;

(c) Mr. Zeron admitted in cross-examination he understood that Mr. Heiber was acting for him and that he could request to see documents as he pleased (see the evidence of Earl Heiber);

(d) Mr. Zeron attended at Mr. Heiber’s office to sign documents before closing with two of his children; and

(e) Mr. Heiber testified that it was his practice to show clients the Statement of Adjustments prior to closing detailing everything between Mr. Wassilyn and Mr. Sabiston. Mr. Zeron admitted in cross-examination that possibly he saw the Statement of Adjustments when he attended at Mr. Heiber’s office to sign documents.

[80] I find possibly the Statement of Adjustments was shown to Mr. Zeron and at the very least was readily available for Mr. Zeron to review. The Statement of Adjustments clearly sets out the deal between Mr. Wassilyn and Mr. Sabiston (or his company). Mr. Wassilyn was to purchase the property for $300,000 subject to a Vendor-Take-Back mortgage for $250,000 and a cash payment of $50,000. This is confirmed by Mr. Sabiston’s evidence in accordance with his letter marked Exhibit 6.

[81] On Mr. Wassilyn’s evidence, he never represented paying $400,000 for a 50 percent share in the lands. To the contrary, the evidence establishes that Mr. Wassilyn acquired the entire parcel of 50 acres for $300,000. This is consistent with Mr. Heiber’s reporting letter dated February 17, 2004 with enclosures sent to Mr. Zeron which included a copy of the Agreement of Purchase and Sale and Statement of Adjustments amongst other documents. Mr. Heiber’s reporting letter corroborates Mr. Wassilyn’s evidence setting out the terms of the transaction between Mr. Wassilyn and Mr. Sabiston (or his company). When confronted with the reporting letter on cross-examination, Mr. Zeron testified the letter was received, was reviewed by his wife and she had no issues. Mrs. Zeron was not called as a witness at trial.

[82] Further, I accept the evidence of Mr. Wassilyn that he did not misrepresent to Mr. Zeron that Mr. Wassilyn purchased a 50 percent share in the property from Mr. Sabiston for $400,000. Mr. Wassilyn encouraged Mr. Zeron to attend Mr. Heiber’s office to review documents which showed the true nature of the deal between Wassilyn and Sabiston. There was nothing to prevent Mr. Zeron from making his own direct inquiries of Mr. Sabiston regarding the nature of Sabiston’s deal with Wassilyn. I do not find that Wassilyn misrepresented that he paid $400,000 for a 50 percent share in the property because the true details speak to the contrary and were both easily and readily available to Mr. Zeron. However, Mr. Zeron chose to make no inquiries.

[83] I find Mr. Wassilyn’s evidence more plausible and credible on this issue for these reasons. His evidence was compelling particularly when supported by the evidence of Mr. Sabiston, the evidence of Mr. Heiber and the documents which clearly establish that Mr. Wassilyn was buying the entire 50 acre parcel for $300,000 for a full interest and not a 50 percent interest for $400,000 as alleged by Mr. Zeron. If Mr. Zeron thought so, it was his misunderstanding not caused by anything said by Mr. Wassilyn.

[84] In conclusion I find that on all the evidence, neither of the two allegations of fraudulent misrepresentation were made either by Mr. Wassilyn or Lila Wassilyn.

[85] Having found that neither (a) fraudulent misrepresentations were made, it is not necessary for me to consider (b) whether the representations were false or (c) that the representations were known when made to be false or recklessly made.

[86] Having found that no representations were made by Mr. Wassilyn or Mrs. Wassilyn as alleged by Mr. Zeron it is also unnecessary for me to consider whether the representations were made to induce Rick Zeron Stables Inc. to enter the agreement, and it did enter the agreement to its detriment.

[87] That having been said, for the sake of completeness, I find there were no representations made by either of the Wassilyns to induce Mr. Zeron to enter into the agreement and Mr. Zeron did not enter the agreement to his or his company’s detriment. There was no rush to commit to the deal by Mr. Zeron. The evidence of Mr. Wassilyn, which I accept, is that he provided Mr. Zeron with as much time as he needed. I find Mr. Wassilyn did not pressure Mr. Zeron to do anything. Further, there is no evidence adduced by Mr. Zeron that he relied on misrepresentations to his detriment – no evidence Mr. Zeron relied on the two alleged representations in the Statement of Claim to enter the transaction. Mr. Zeron’s evidence was that the transaction looked like a great deal but then it turned out to be the worst deal of his life. However, as bad as the deal was, Mr. Zeron decided to hold onto the property as he stated “land appreciates in value”. This was the first transaction between Mr. Zeron and Mr. Wassilyn. There was no reason for Mr. Zeron to rely on any representations by Mr. Wassilyn. Mr. Zeron had every opportunity to make inquiries about the transaction on his own but chose to do nothing.

[88] Neither has Mr. Zeron established that relying on the representations (which I have found were not made) caused him to suffer a loss or detriment. Mr. Zeron failed to adduce any evidence of detriment. To the contrary, there was evidence of offers to purchase the property in 2006 and 2007 for $750,000 and $1,750,000 which Mr. Zeron refused to consider. He also refused to consider buying out the Wassilyns if he was having “second thoughts” about his involvement in this deal (see Mr. Heiber’s letter dated May 31, 2006 to Mr. Zeron).

[89] I have also considered constituent element (e) that within a reasonable time after discovery of the falsity of representations, Rick Zeron or his company elected to repudiate the contract.

[90] Once again, I have found that there were no representations made by the Wassilyns as alleged by Mr. Zeron. Regarding this element, even up to trial, Mr. Zeron has not repudiated his agreement with Mr. Wassilyn although he bemoaned the fact that this was the worst deal in his life. The evidence establishes the property is valuable and Mr. Zeron does not wish to divorce himself from it. I find Mr. Zeron has sat on the Bayfield property deal for years, but declares he was induced to enter a fraudulent transaction. I totally reject Mr. Zeron’s evidence in this regard. If he was mislead (which he was not) he would have discovered the misrepresentation on any number of occasions in 2004 when he attended Mr. Heiber’s office to sign documents before closing or after closing when he received Mr. Heiber’s reporting letter with enclosures of the Agreement of Purchase and Sale and Statement of Adjustments. Mr. Zeron knew or ought to have known about the alleged misrepresentations in 2004 as opposed to learning about them for the first time as he claimed at the Examinations for Discovery in 2008.

[91] For these reasons, I find that neither Mr. Zeron nor his company Rick Zeron Stables Inc. have established that any misrepresentations fraudulent or otherwise were made by the Wassilyns as alleged. Neither Mr. Zeron nor Rick Zeron Stables Inc. have satisfied their onus in this regard. Therefore Rick Zeron Stables Inc.’s claim based on fraudulent misrepresentation is dismissed.

Damages

[92] Counsel for Rick Zeron Stables Inc. submits that if by reason of their fraud, the Wassilyns received a benefit, Rick Zeron Stables Inc. is entitled to the whole property because Mr. Zeron or his company paid all the money for the Bayfield property and the Wassilyns paid nothing. There is evidence that Wassilyn paid $10,000. Nevertheless, a restitution or equitable remedy is sought as it is submitted that the Wassilyns should not profit from their fraud and they have been unjustly enriched.

[93] This argument is rejected. I have found that there were no fraudulent representations made by the Wassilyns. They did not commit fraud upon Mr. Zeron or his company. It has not been established that the Wassilyns have obtained a benefit through their fraud or that somehow they have been unjustly enriched by their actions. No case law could be supported by counsel to support his argument. I considered the materials submitted by counsel for Rick Zeron Stables Inc. (see Chapter 24 The Law of Restitution, August 2010 pp. 24-18 to 23).[^6] I find those authorities cited do not apply to the facts of our case.

[94] Accordingly, I dismiss Rick Zeron Stables Inc.’s claim for the restitutionary remedy sought for ownership of the entire 50 acres. The evidence discloses that Rick Zeron Stables Inc. was only entitled to own a one-half interest in the property which it owned initially and continues to own today. I find Rick Zeron Stables Inc. owns nothing more than a half-interest in the 50 acre Bayfield property.

Issue 2: The validity and enforceability of the Promissory Note.

The Evidence

[95] The evidence supports the following contextual background and findings of fact. Mr. Wassilyn testified that the Promissory Note for $100,000 was part of his agreement with Mr. Zeron for the purchase of one-half interest in the property, Mr. Zeron was to pay $50,000 cash, assume the $250,000 Vendor-Take-Back mortgage held by Mr. Sabiston’s company and execute a Promissory Note for $100,000 in favour of Lila Wassilyn.

[96] Mr. Wassilyn’s evidence was clear and credible in this regard. It was also reliable as it was supported by the evidence of Mr. Heiber, lawyer for Wassilyn and later for Zeron.

[97] Mr. Heiber testified he had received instructions from Mr. Wassilyn after the Agreement of Purchase and Sale had been executed between Mr. Wassilyn and Mr. Sabiston. Those instructions were that Mr. Zeron would hold one-half interest in trust for Lila Wassilyn and that a Promissory Note was to be prepared in favour of Lila Wassilyn payable by Mr. Zeron when the mortgage was due and payable. Found at Exhibit 1 Tab 1 is a copy of Mr. Heiber’s handwritten notes – Memorandum to his Law Clerk Barbara Ernst.

[98] Mr. Heiber wrote “talk to me re: 1) trust ­k 2) prom. note”.

[99] Mr. Heiber testified that he spoke with Barbara Ernst who wrote next to 1) “RZ holds ½ IT Lila”. Underneath the 2): “RZ 100k” (in Sep – indecipherable)

[100] Mr. Heiber testified he did not include a docket for the preparation of the Promissory Note as it was his practice to docket for his own work but for his Law Clerk to submit dockets.

[101] Mr. Wassilyn had paid a deposit in accordance with the Agreement of Purchase and Sale. Prior to closing, Mr. Wassilyn directed title to be taken in the name of Rick Zeron Stables Inc. That company would take title to 50 percent of the property and become bare trustee for the remaining 50 percent of the property to be held in trust for Lila Wassilyn.

[102] Mr. Heiber in his testimony reviewed the various documents contained in Exhibit Books 1 and 2, evidencing the purchase by Mr. Wassilyn from Mr. Sabiston which eventually closed on January 30, 2004 after having been extended from November 7, 2003 to January 29, 2004 and then to January 30, 2004. Mr. Zeron paid a further deposit of $10,000. I find there is no evidence contrary to Mr. Zeron’s evidence that Mr. Wassilyn received two deposits of $10,000 each from Mr. Zeron.

[103] Mr. Heiber testified the purchase price for the 50 acre parcel was $300,000 as supported by the Statement of Adjustments and Land Transfer Tax Statement. There was no reference in Mr. Heiber’s reporting letter to Mr. Zeron dated February 17, 2004 of any Promissory Note because, as Mr. Heiber testified, the Promissory Note was between Wassilyn and Zeron.

[104] Before closing, Mr. Heiber never received any call from Mr. Zeron asking any questions.

[105] Mr. Heiber was shown an original Promissory Note dated January 30, 2004 marked as Exhibit 3 and a copy of the same Note marked as Exhibit 4. He testified that Barbara Ernst probably prepared the original Promissory Note which is printed on special paper used by Mr. Heiber at his office. Exhibit 4 would be a copy of the original. He was not present when the Promissory Note was signed and he did not recall how he obtained a copy. The Promissory Note would have been prepared prior to closing. Mr. Heiber further testified that he prepared a Trust Declaration dated January 30, 2004 to be signed by both Rick Zeron and Lila Wassilyn (see Exhibit 7A and 7B). He testified the Trust Declaration was executed and bears both the signatures of Mr. Zeron and Lila Wassilyn.

[106] As evidenced by Mr. Heiber’s Memorandum dated December 16, 2004, Mr. Wassilyn had called requesting another copy of the Promissory Note to be signed by Mr. Zeron. The payment of the Promissory Note was to coincide with the maturity date of the Vendor-Take-Back mortgage dated January 29, 2004. The Memorandum was sent to Mr. Wassilyn with instructions to have Rick Zeron sign the Promissory Note and then Lila Wassilyn should keep the Promissory Note in a safe place.

[107] Also enclosed were four copies of the Trust Declaration with instructions that Lila Wassilyn should sign all four copies and then Rick Zeron should also sign all four copies. Mr. Zeron was to retain two copies of the Trust Declaration for his records, Lila Wassilyn to retain one copy for her records and one fully executed copy was to be returned to Mr. Heiber. Mr. Heiber testified that the Trust Declaration had not been signed on January 30, 2004 and that the Promissory Note needed to be executed.

[108] Mr. Wassilyn testified that upon receiving the Memorandum with enclosures from Mr. Heiber, he drove to Mr. Zeron’s office located in a barn at Mohawk Raceway. Mr. Wassilyn and Mr. Zeron were alone when they met. This meeting took place within two weeks of Mr. Wassilyn receiving Mr. Heiber’s Memorandum dated December 16, 2004. Mr. Wassilyn recalled that Mr. Zeron was seated at his desk and signed the Promissory Note using his own pen. Mr. Wassilyn testified that he kept the original and one copy and Mr. Zeron kept his copy of the Promissory Note. Mr. Wassilyn testified that Mr. Zeron was still happy with the transaction and had no complaints that he had put more money into the deal than Mr. Wassilyn. Mr. Wassilyn testified that Mr. Zeron was a gentleman throughout the signing of the Promissory Note.

[109] No explanation was given in evidence as to why the Promissory Note and Trust Declarations were not signed on closing or earlier than December 16, 2004.

[110] The evidence establishes that by December 2006/January 2007 the relationship between the Wassilyns and Mr. Zeron had deteriorated to the point that they were not on speaking terms. The Sabiston mortgage came due January 29, 2007. Mr. Zeron had retained a different lawyer, Dean Leifso, who assisted Mr. Zeron in discharging the Sabiston mortgage and putting a new mortgage on title.

[111] In the meantime, the Wassilyns were concerned about Mr. Zeron dealing with unsolicited offers to purchase the property without Lila Wassilyn’s consent. Mr. Heiber wrote to Rick Zeron about this concern.

[112] As a result, Mr. Heiber received instructions to register a Caution on title, which he did on January 10, 2007. There were further negotiations between Mr. Heiber and Mr. Leifso. As a result of those discussions, Mr. Zeron agreed to transfer one-half interest of the property into Lila Wassilyn’s name. The Caution was removed from title on January 25, 2007. The transfer was registered on title on May 4, 2007.

[113] At Exhibit 2, Tab 109 is a copy of Rick Zeron’s affidavit detailing the Agreement between Rick Zeron Stables Inc. and Lila Wassilyn where Zeron’s company was always a bare trustee as to one-half interest in the land for Lila Wassilyn.

[114] Mr. Heiber reported to Lila Wassilyn by his reporting letter dated May 11, 2007 enclosing a copy of the Transfer and Affidavit of Rick Zeron confirming that she had purchased a one-half interest in the property with the other one-half interest owned by Rick Zeron Stables Inc. The Trust Declaration is referenced in the reporting letter.

[115] When the Promissory Note became due and owing on January 29, 2007 no payments were made. Ms. Wassilyn asked Mr. Heiber to send a Demand Letter for payment of the Promissory Note. Mr. Heiber sent a Demand Letter enclosing a copy of the Promissory Note to Rick Zeron. Mr. Zeron admitted receiving this letter and the enclosed Promissory Note. Mr. Heiber believed he received no response from Mr. Zeron to the Demand Letter. Lila Wassilyn commenced her action for payment on the Promissory Note against Rick Zeron Stables Inc. on November 21, 2008.

[116] In cross-examination, Mr. Wassilyn was steadfast when he testified that the Promissory Note was part of his agreement with Rick Zeron. While the Promissory Note was not signed on January 30, 2004, along with the other closing documents, he testified that he saw Rick Zeron sign the Promissory Note after receiving Mr. Heiber’s Memorandum. In cross-examination, Wassilyn testified “I can say that is Rick Zeron’s signature”. He denied someone else applied Mr. Zeron’s signature in December of 2004.

[117] Lila Wassilyn testified at trial. Her evidence was not particularly helpful. She confirmed some of the documents were prepared by Mr. Heiber and the chronology of events dealing with Mr. Zeron and his company including the Transfer and Affidavit of Rick Zeron dated April 19, 2007. She agreed the contents of that Affidavit set out the arrangement between her and Rick Zeron Stables Inc.

[118] Once again, the evidence of Rick Zeron regarding the Promissory Note is much different. While he admits receiving Mr. Heiber’s Demand Letter of May 24, 2007 enclosing a copy of the Promissory Note, he denied ever signing it. Instead, Mr. Zeron called a lawyer friend of his (not Dean Leifso) who said he would look into the matter or look after the matter. However, he never heard anything more from this unidentified lawyer. Mr. Zeron could not remember his name.

[119] Mr. Zeron heard nothing more about the Promissory Note claim until he was served with Lila Wassilyn’s Statement of Claim. Thereafter, he retained current counsel.

[120] In cross-examination, Mr. Zeron identified his signature on the Trust Declaration which he recalled signing at Mr. Heiber’s office. However, he denied signing the Promissory Note. He testified he never signed any Promissory Note or alleged Promissory Note at any time. Mr. Wassilyn was in his office only on two occasions and not for the purpose of having Mr. Zeron sign a Promissory Note. He denied the signature on the Promissory Note was his and said that it must be a forgery.

[121] When asked about his response to the Demand Letter, Mr. Zeron recalled the unidentified lawyer who said he would look after it but never called Mr. Zeron back. Mr. Zeron thought it was a dead issue. He testified that he did not call Dean Leifso about Mr. Heiber’s letter or the Wassilyns about the letter.

[122] He explained that Mr. Heiber was Wassilyn’s lawyer and he was not talking to them. Because he did not sign anything, Mr. Zeron did not think much of it and just thought it was “another one of Wassilyn’s antics”.

[123] When pressed on the matter regarding his response to the Demand Letter, Mr. Zeron denied he was embarrassed. Mr. Zeron responded that he addressed problems or issues in life “whether he was right or wrong”. When asked why he chose not to address this one, Mr. Zeron responded “why should I?” and agreed that it was not important to him.

[124] I find that Mr. Wassilyn’s evidence is more credible and plausible regarding the Promissory Note for $100,000. I accept his evidence that he told Mr. Zeron that a Promissory Note for $100,000 without interest was due and payable at the same time the Sabiston Vendor-Take-Back mortgage became due on January 29, 2007. I accept Mr. Wassilyn’s evidence that he called his lawyer Earl Heiber and advised how title would be taken and that Mr. Zeron would execute a Promissory Note in the amount of $100,000 in favour of Lila Wassilyn. This is confirmed by the evidence of Mr. Heiber who made handwritten notes along with the notes of Barbara Ernst made at the time.

[125] I find both the Promissory Note and the Trust Declaration were not executed in Mr. Heiber’s office in January of 2004. I reject Mr. Zeron’s evidence that he saw the Trust Declaration among the documents he signed at Mr. Heiber’s office in January 2004 and signed it there. Mr. Zeron’s evidence that he was a very busy man and hired lawyers to prepare documents. He just went in to the office to sign documents when asked to do so. He explained that different times in his evidence that he had no time. Reviewing the documents concerning the transaction was not his concern.

[126] I further accept the evidence of Mr. Heiber that he required the signature of Mr. Zeron on the Promissory Note and Trust Declaration along with Lila Wassilyn’s signature. In support of Mr. Heiber’s evidence there exists his Memorandum dated December 16, 2004 responding to Michael Wassilyn’s inquiry about the Promissory Note and giving Michael Wassilyn explicit instructions to attend upon Mr. Zeron to obtain his signature on both the Promissory Note and the Trust Declaration.

[127] I further accept Mr. Wassilyn’s evidence and find that he did precisely what he was instructed to do by Mr. Heiber.

[128] I find he attended upon Rick Zeron at his office at Mohawk Raceway and witnessed Mr. Zeron signing the Promissory Note. The original Note was made Exhibit 3. Mr. Zeron also identified his signature on the Trust Declaration. I find that he also signed that document when it also was brought by Mr. Wassilyn to Mr. Zeron’s office for signature. The Declaration was not signed on January 30, 2004 or prior to closing as Mr. Heiber testified. Rather, the Trust Declaration could have only been signed when presented to Mr. Zeron at the time he executed the Promissory Note. I reject Mr. Zeron’s evidence that he never signed any Promissory Note, that the signature on the Promissory Note was not his and that someone must have forged his signature.

[129] The parties agreed that given the nature of Mr. Zeron’s signature it would have been a fruitless exercise to retain a handwriting expert to give opinion evidence as to whether or not the Promissory Note bore Mr. Zeron’s signature.

[130] Even so, I accept the evidence of Mr. Wassilyn and Mr. Heiber regarding the creation, existence and execution of the Promissory Note. The Promissory Note was created in Mr. Heiber’s office. It existed along with the Trust Declaration and taken by Mr. Wassilyn pursuant to Mr. Heiber’s December 16, 2004 instructions for execution by Mr. Zeron at his office. I accept as credible the evidence of Mr. Wassilyn that he saw Mr. Zeron sign the original and two copies – Mr. Zeron kept his copy, Mr. Wassilyn kept the original and one copy.

[131] Mr. Zeron acknowledged signing the Trust Declaration and identified his signature. Mr. Zeron’s signing of the Trust Declaration could only have taken place at his office at the same time he signed the Promissory Note.

[132] If Mr. Zeron felt he was not obliged to sign the Promissory Note when presented by Mr. Wassilyn, he had an opportunity to protest. He did not do so.

[133] I further find that Mr. Zeron’s conduct is not consistent with someone served with a claim based upon the payment of $100,000 Promissory Note. When Mr. Zeron first received Mr. Heiber’s Demand Letter and copy of a Promissory Note, he called an unidentified lawyer once and according to Mr. Zeron that lawyer said he would look after the matter but never called him back. Mr. Zeron never followed up with that lawyer. I have considerable doubt as to whether this unidentified lawyer ever existed.

[134] Furthermore, during this time, Mr. Zeron was represented by Mr. Leifso who was acting for him regarding the new mortgage, Lila Wassilyn’s Caution and the eventual transfer between Rick Zeron Stables Inc. and Lila Wassilyn. Not once did Mr. Wassilyn consult with Mr. Leifso about the matter of the Promissory Note demand. His evidence was he just never thought to do so.

[135] Despite his protestation that he addresses issues “right or wrong”, Mr. Zeron did not complain about the Promissory Note to either Mr. Heiber, the Wassilyns or Mr. Leifso. He thought it was a dead issue and another one of Mr. Wassilyn’s “antics”. He did not treat the Demand seriously and he did not consult counsel until after he was served with Lila Wassilyn’s Statement of Claim in November 2008.

[136] I find that if Mr. Zeron had been truly surprised by Mr. Heiber’s Demand Letter enclosing a copy of the Promissory Note, he would have done more than make one telephone call to an unidentified lawyer who said he would either look into it or look after it. No such lawyer came to give evidence at trial. Mrs. Zeron who received the Demand Letter and Promissory Note at first also did not testify at trial.

[137] Rather, it is clear that Mr. Zeron did nothing about the Promissory Note just as he made no inquiries or investigations about the purchase of property.

[138] According to Mr. Zeron, he relied on Mr. Wassilyn and everybody else because he had no time and was too busy. The fact is that Mr. Zeron allowed the issue of the Promissory Note to sit until he was served with the Statement of Claim in November of 2008 – about a year and a half after receiving Mr. Heiber’s Demand Letter.

[139] I find Mr. Zeron’s conduct is inconsistent with a person who confronts problems or issues and addresses them “right or wrong”. Mr. Zeron only responded to the Promissory Note issue in November of 2008 when it was advanced in this litigation. He chose not to address the issue earlier because he said it was not important to him when clearly it should have been. He simply maintained a denial that he ever signed a Promissory Note which did not require him to do anything.

[140] I do not find Mr. Zeron’s evidence to be credible regarding the Promissory Note. Apart from his bald denial and that some unknown person must have forged his signature, Mr. Zeron had nothing more to say about the subject. He became argumentative when pressed in cross-examination. To the contrary, Mr. Wassilyn had specific recall regarding why he attended upon Mr. Zeron, when and where that occurred and what happened when he met Mr. Zeron at his office. Mr. Wassilyn’s evidence was unshaken in cross-examination about Mr. Zeron signing the Promissory Note.

[141] The evidence of Mr. Heiber supports the existence of the Promissory Note and the circumstances surrounding its execution. I accept Mr. Wassilyn’s evidence that Mr. Zeron executed the Promissory Note (Exhibit 3). As a result, I find that Rick Zeron Stables Inc. is obligated to pay Lila Wassilyn $100,000 plus accrued interest. For these reasons, I conclude that the Promissory Note is both valid and enforceable. I find in favour of Lila Wassilyn against Rick Zeron Stables Inc. for payment in the amount of $100,000 together with accrued prejudgment interest.

CONCLUSION

[142] For these reasons, I dismiss the action of Rick Zeron Stables Inc. Judgment is awarded in favour of Lila Wassilyn for $100,000 together with accrued prejudgment interest pursuant to Exhibit 10 (interest calculation on the Promissory Note). The prejudgment interest runs from the due date of January 29, 2007 to November 19, 2012 at the rate of 3.3 percent per annum for the sum of $19,176.16. From November 19, 2012 to the date of judgment, the per diem interest rate is $9.04. Prejudgment interest is further calculated from November 19, 2012 to the date of judgment January 7, 2013 (49 days) in the amount of $442.96. Accordingly, the total amount of prejudgment interest payable to the date of judgment is the sum of $19,619.12.

[143] Counsel have agreed that the property is to be sold pursuant to Court Order. They have agreed to provide a draft judgment containing terms of sale including reference to the dismissal of the Rick Zeron Stables Inc. action and the judgment in favour of Lila Wassilyn against Rick Zeron Stables Inc. in the amounts specified.

[144] As for costs, the parties have agreed that costs are to be determined by way of written submissions. The parties shall serve a brief and concise summary on costs no longer than two pages together with a draft Bill of Costs, Costs Outline and any supporting authorities within 14 days of this judgment. Written submissions are to be delivered to my judicial assistant at Barrie within the time prescribed.

DiTOMASO J.

Released: January 7, 2013

[^1]: Lee v. 1071397 Ontario Inc.(1999), 1999 CarswellOnt 20 (Ont.Gen.Div.) at para. 8 [^2]: 999007 Ontario Inc. v. Corvese (2003), 2003 CarswellOnt 6400 (Ont.S.C.J.) at para. 17 [^3]: Hinchey v. Gonda (1954), [1955] O.W.N. 125 (Ont.H.C.) at paras 2 and 3 [^4]: Lee (supra) at para. 25 [^5]: Hinchey (supra) at para. 5 [^6]: The Law of Restitution, Peter D. Maddaugh and John D. McCamus, Aurora Canada Law Book, 2010, August 2010, pp. 24-18 to 23.