ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 05-70/13
DATE: 20130612
IN THE MATTER OF THE ESTATE OF ALLAN LANTEIGNE, deceased
BETWEEN:
ROSALINE LANTEIGNE
Applicant
– and –
DEMITRY PAPASOTIRIOU, also known as Demitry Papasotiriou-Lanteigne and GEORGIA TSITSOS and HARALABOS TSITSOS
Respondents
Jane E. Martin, Counsel for the Applicant
John J. Adair, Counsel for the Respondent, Demitry Papasotiriou, also known as Demitry Papasotiriou-Lanteigne
Alex Van Kralingen, Counsel for the Respondents Georgia Tsitsos and Haralabos Tsitsos
HEARD: JUNE 10, 2013
REASONS FOR DECISION
GREER j.:
[1] The Respondent, Demitry Papasotiriou, moves to set aside the Order of Mr. Justice McEwen made May 27, 2013, in this proceeding, on an ex parte basis, without notice to the Respondent (“Papasotiriou”) or to the other Respondents, Georgia Tsitsos and Haralabos Tsitsos (“the Tsitsoses”). In that Order, the Judge granted a Certificate of Pending Litigation to the Applicant, Estate of Allan Lanteigne, by Rosaline Lanteigne, the Mother of the deceased, Allan Lanteigne (“the deceased”), with respect to a pending sale of property municipally known as 934 Ossington Avenue, Toronto. The information now before the Court shows that the registered owners of that property are Papasotiriou and the Tsitsoses, as joint tenants.
1. Some background facts
[2] Papasotiriou and the deceased were married in 2004. The Ossington property was purchased on January 25, 2006 for $375,000. The mortgage registered against the property on Closing was $360,000. All 3 Respondents are shown on title as joint tenants and are joint mortgagors. The Tsitsoses are the Aunt and Uncle of Papasotiriou, and live in Thompson, Manitoba. They were approached by their nephew in the Fall of 2005 to discuss the possibility of purchasing a home in Toronto, where the nephew would live and where “a portion” would be rented out to “help pay down the mortgage”. Neither of them knew that their nephew and the deceased were married.
[3] The Tsitsoses say that they provided the down payment of $20,000 for the purchase of the property. There is evidence to that effect. The mortgagee, Scotia Mortgage Corporation, provided the funds through its office in Thompson, Manitoba. The Tsitsoses opened up a joint bank account at Scotiabank with their nephew, Papasotiriou.
[4] The mortgage document registered on title shows the monthly payments were to be $2,016.62 with the mortgage coming due in 2011. The joint bank account for payments was set up in Toronto. The Tsitsoses were able to produce copies of certain bank statements showing deposits made and mortgage payments debited starting in 2006-07. Sometimes the deposits were regular amounts such as $1,509.67 and others for $1,000, $2,000, etc. There is no clear evidence who made these payments or the source of the funds.
[5] What is known is that the deceased and Papasotiriou occupied the property together as a married couple from the date of purchase to the date of Lanteigne’s death on March 3, 2011. The deceased died without a Will leaving his spouse, Papasotiriou, his mother Rose Lanteigne, the Applicant, and several brothers and sisters, mainly residing in New Brunswick. One sister, Jocelyn Sterritt (“Sterritt”) has agreed to act as the Estate Trustee during litigation and has applied to be such, given the Mother’s age. In Sterritt’s Affidavit sworn May 17, 2013, she says she does not know why the deceased was not on title to the property with Papasotiriou. In paragraph 20 of that Affidavit, Sterritt says, “Demitry has acknowledged that he and Allan purchased 934 Ossington Avenue together.”
[6] Papasotiriou was examined under R.39.03 on November 2, 2012 on this issue. When asked in Q. 10 how long he lived at the address of the property, he answered, “Since we bought the property, in 2006”, and when asked who he meant by “we”, he said “Myself and Allan”. Sterritt says in para. 19 that the deceased told her that he was making the mortgage payments on the house and was concerned he was not on the deed. Sterritt has other evidence in her Affidavit about the mortgage payments but it is hearsay, on this Motion.
[7] The deceased died on March 3, 2011 in the property he called his home. The property was listed for sale and it was only then that the Lanteigne family read about the sale at $900,000. They then moved to obtain the Certificate of Pending Litigation. The newspaper article said it took 16 months to sell the property. The Closing date is June 14, 2013.
[8] The deceased was living alone at the time he died. Papasotiriou had been living in Greece for some time before his spouse died. Someone was therefore paying the mortgage payments during Papasotiriou’s sojourn in Greece.
[9] Papasotiriou has been charged with the first degree murder of the deceased, as has a second man.
2. The Certificate of Pending Litigation
[10] It is the position of the Respondents that the Certificate of Pending Litigation (“the CPL”) must be set aside and struck from the title to the property to allow the sale to close on June 14, 2013. The Tsitsoses say they require their money out of the property to retire a loan obligation in Manitoba that has come due. They say that a Line of Credit was arranged against the property in 2009, which they think has been used to make some mortgage payments. There is no documented evidence in this regard. The parties are all co-operating to try to obtain the documented evidence as to who made what payments on the mortgage.
[11] The Respondents say that the Estate failed to disclose material facts in the Motion before Mr. Justice McEwen and that legal principles weigh against the ex parte relief that was granted. They say that the Estate has no claim to the property since its claim, if any, is really a claim in damages so the CPL should be discharged. Thirdly, they say that the Estate is not entitled to a Rule 45.02 preservation order because it cannot establish that there is a serious issue to be tried because it is statute-barred by virtue of s. 38(3) of the Trustee Act.
[12] Papasotiriou claims that there is “extremely frail hearsay evidence” that was put forward on the CPL Motion, and the balance of convenience does not favour the granting of a preservation Order. He is presently in jail and has been since the criminal charges were laid against him. He is waiting for a bail review hearing and no Trial date has been set, so there is little likelihood of a dissipation of assets by Papasotiriou.
[13] The Order of Mr. Justice McEwen did more than grant the CPL. It put all persons having an interest in the property put on notice in para. 3, including the realtor for the vendors, the mortgagee, the Bank of Nova Scotia and the realtor for the purchasers as well as all Respondents. Para. 2 dealt with the deceased’s personal effects and some household goods as listed, to prevent their sale or disposition. Para. 4 dealt with notice to the solicitor acting on the sale of the property, and in Para. 5, the Judge ordered that the sale of the proceeds be paid to the Accountant of the Superior Court of Justice, subject to closing costs and other registered claims/mortgage/ and executions.
3. The position of the Estate
[14] The Estate concedes that it is not trying to impede the interest of the Tsitsoses in the property from being realized. It acknowledges their interest on title and as joint mortgagors.
[15] Contrary to what position Papasotiriou has taken in saying the Judge was not aware that he had counsel, that information was in the record before Mr Justice McEwen but as counsel on an insurance matter. Sterritt opposes having paras. 21-24 of her Affidavit in support of the CPL, struck out, even if they are “frail” as claimed by the Respondents. She did not overstate her knowledge, says counsel for the Estate.
[16] I agree that para. 21 and 23 are double hearsay, and I do not rely upon that evidence in this Motion. The Estate, however, will want to try to obtain direct Affidavit evidence from those persons for future reference. All of para. 22 is not hearsay. In his examination, Papasotiriou admits that through most of his marriage he was either a student or did not work as a lawyer (called to the Bar in 2003) and was unemployed in November 2012 and for the previous year and a half. See: Q. 20-43 Transcript. The second half of para. 22 is struck. During that year and a half, he was living in Greece. Para. 24 is partly struck in line 1 to the word “and” and the whole of the last line. The balance remains. The paragraph could have further specific facts to support it but remains.
[17] Counsel for the Estate says she did not know Papasotiriou had retained his insurance claim counsel to act on the Estate matter, but the Statement of Defence in the insurance claim was before Mr. Justice McEwen. The Estate has been having difficulties obtaining the deceased’s financial records but is in the process of doing so. Therefore, some evidence is “frail”.
4. The position of the Tsitsoses
[18] The Affidavit sworn by Georgia Tsitsos sets out their combined knowledge about the purchase, the mortgage and the need for the sale of the property. It was originally listed by them in February 2012, nearly a year after the deceased’s death. Papasotiriou did not return from Greece until November 2012 so he was not occupying it in 2011.
[19] In her Affidavit sworn June 8, 2013, Georgia Tsitsos says in para. 15 that she and her husband have been solely responsible for keeping up the mortgage payments on the property since the deceased’s death in March 2011. What she does not say is who specifically made the mortgage payments during the years 2006 to March 2011, and what proof there is that any of the Respondents made those payments.
5. Analysis
[20] It is the position of the Respondents that the CPL must be discharged because the Estate has no interest in the land. They rely on S.103(6) of the Courts of Justice Act, R.S.O. 1990, c. C.43, s. 103 that a Court may make an Order discharging a certificate where the party at whose instance it was issued does not have a reasonable claim to an interest in the land or where its interests can be adequately protected by another form of security or on any other ground that is considered just. It allows for the court, if it discharges the CPL, to impose such terms as to the giving of security or otherwise as the Court considers just.
[21] In Sepanary v. Sepanary, 2011 CarswellOnt 3718, 2011 ONSC 3155, 201 A.C.W.S. (3d) 1072 (S.C.J.), Madam Justice Pierce held in para. 26 that where there is no pleading that the property is unique and no claim for possession of the property, then damages are a satisfactory remedy.
[22] In my view the CPL must now be discharged to allow the sale of the property to close and I order that the CPL be discharged accordingly, subject to the reasons which follow and on terms which follow.
[23] I do not disagree that the claim of the Estate is one against Papasotiriou and not against the Tsitsoses’ interest in their 2/3 interest in the land and in its legal share to the net proceeds from such sale. The Estate agrees it is not trying to impede such sale.
[24] In my view, the Estate did not deliberately fail to disclose material facts. It had no right or way to enter the property after the deceased died in the house. It was a crime scene, for at least some time. The Estate did not learn of the sale of the pending sale of the property until someone brought their attention to a newspaper article in the Toronto Star headed “Toronto murder house on Ossington Ave. sells for $900,000.” This evidence was before Mr. Justice McEwen. The date of the article is May 3, 2013. See: para. 17 of Sterritt’s Affidavit.
[25] In my view, the Judge had sufficient material facts on which to grant the Order, knowing that there was an early returnable date for all parties to come forward. Rosaline Lanteigne, the deceased’s Mother, and no family members live in Toronto. She is 76 years old and lives in New Brunswick. Two brothers live in New Brunswick, one in Edmonton and one in New Brunswick. One sister lives in Saskatchewan, one in Ottawa and New Brunswick as does the Affiant Sterritt. She says that their Mother “has been devastated by the death of Allan”. To say that they should have moved with haste to make a claim within the limitations of the Trustee Act, R.S.O. 1990, c. T.23, S.38(2) for a tort as a person “wronged”, does not fit these circumstances.
[26] An “interest in land” can include an interest less than a fee simple, as noted in Davidson v. Hyundai Auto Canada Inc., 1987 4270 (ON SC), 1987 CarswellOnt. 1737, 59 O.R. (2d) 789 at para. 24 (S.C.J.) (Master). In the present circumstances, the Estate, is looking to Papasotiriou as holding a portion of his interest on a constructive or resulting trust for the Estate or in restitution or if none is so found, for damages for contributions made by the deceased to improvements, decorating, repairs, and mortgage payments or assistance of part-payments. The Estate’s claim is founded in equity and the limitation period, if any, has not expired. See: Mosiaco v. Rate, 2010 CarswellOnt 2929 at para. 35 (S.C.J.) citing McCracken v. Kossor, 2007 4875 (ON SC), 279 D.L.R. (4th) 431 (Ont.S.C.J.) at para. 37.
[27] I agree that the Estate is not entitled to a Rule 45.02 Order with respect to any of the proceeds the Tsitsoses are entitled to from the sale of the proceeds of the property. Papasotiriou says that the Rule 45.2 preservation Order should also be set aside with respect to any net proceeds he is entitled to from the sale of the property. The Rule must be “approached carefully because the Order represents a form of execution prior to judgment.” In Sadie Moranis Realty Corp. v. 1667038 Ontario Inc., 2012 CarswellOnt 8327 at para. 17 (C.A.), the Court held:
However, where the plaintiff asserts a general claim and looks to the assets only as a means of satisfying a likely or possible monetary judgment against the defendant, interference with the defendant’s assets is more difficult to justify.
[28] In the case before me, there are sufficient facts, in my view, to order that the interest of Papasotiriou in a third of the net proceeds, be paid into Court to the credit of this action, pending further Order of this Court. These facts are:
Papasotiriou and the deceased were spouses, jointly occupying the property as their matrimonial home. The deceased was not a stranger to the property. He lived there for 5 years.
When Papasotiriou left for Greece, he was unemployed and remained so. There is no evidence that the Tsitsoses were paying the mortgage during his absence, while the deceased remained living on the property.
There is no evidence to show that the deceased was not making payments towards the mortgage during the parties’ marriage, as Papasotiriou’s evidence about what he did since marriage, points to him being a student obtaining a Master’s degree, a doctoral student and a student at one point in Switzerland and with no little income.
The deceased was not a “tenant” as he never rented part of the premises but occupied it as Papasotiriou’s spouse.
Papasotiriou’s own evidence is that he meant the deceased when he said “we bought the property”.
The Tsitsoses never occupied the property, did not know of the parties’ marriage, and dealt with their bank in Manitoba to provide the mortgage. It was an investment for them. All parties are trying to obtain the appropriate bank records so that the mortgage payments and other payments can be traced to particular bank accounts.
[29] In News Marketing Inc. v. TD Evergreen, 2000 CarswellOnt 3544, 100 A.C.W.S. (3d) 145 (S.C.J.), the Court held in para. 14 that the appropriate test for relief under rule 45.02 should be that the plaintiff is required to establish that:
(a) the plaintiff claims a right to a specific fund;
(b) there is a serious issue to be tried regarding the plaintiff’s claim to that fund;
(c) the balance of convenience favours granting the relief sought by the plaintiff.
[30] The Estate has, in my view, met the test in (a) as the fund is Papasotiriou’s interest in the sale proceeds of the property. The test in (b) is met, as there is a serious issue to be tried as to the Estate’s claim against the proceeds. The deceased lived in the property for 5 years before his death. This is not a Mareva injunction type Order where all assets of the respondent are frozen. Part (c) is met. The balance of convenience favours the granting of the relief sought against Papasotiriou. The Estate is not saying that these proceeds are to be frozen until after the criminal trial takes place. They are only frozen until all parties are able to obtain the proper banking records for each to prove who paid what towards the mortgage payments. Papasotiriou can give his consent to obtain his records to show his payments, if any, on the mortgage, and the source of his funds. The deceased worked at 2 jobs during their marriage, at U. of T. as an accounts person and at night at North 44, a restaurant, doing bookkeeping services. The Tsitsoses will be able to provide Affidavit evidence to show if they paid anything towards the mortgage except for those months after the deceased’s death. The issue respecting the mortgage and any other contributions the deceased may have made to improve the house over those years, is a discrete issue, which can be quickly dealt with.
6. Conclusions and Orders
[31] The CPL shall be discharged on the day of the closing of the sale of the property to allow it to close. The net proceeds of the sale shall be paid to the real estate lawyer acting on the sale, in trust, such monies to be held in a specific trust and not co-mingled with that solicitor’s general trust fund.
[32] The solicitor shall pay to the Tsitsoses the following amounts out of that trust:
(a) their $20,000 down payment
(b) the monies advanced by them on the mortgage payments and other house expenses from March 11, 2011 to the date of closing, upon proof of payment
(c) two-thirds of the balance of the net remaining proceeds.
[33] The solicitor shall pay the balance of the net proceeds to the Accountant of the Superior Court of Justice to the credit of this action.
[34] The balance of the funds shall remain in Court until the issue between the Estate and Papasotiriou is settled and or is finally disposed of in Court or until further Order of this Court.
[35] If the parties cannot otherwise agree on Costs, I will receive brief written submissions from them no longer than 3 pages in length plus dockets plus case law, plus a Bill of Costs, within 30 days of this Order.
[36] Orders to go accordingly.
Greer J.
Released: June 12, 2013
TYPED VERSION OF
HAND-WRITTEN ENDORSEMENT
COURT FILE NO.: 05-70/13
DATE: 20130612
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE ESTATE OF
ALLAN LANTEIGNE, deceased
BETWEEN:
ROSALINE LANTEIGNE
Applicant
– and –
DEMITRY PAPASOTIRIOU, also known as Demitry Papasotiriou-Lanteigne and GEORGIA TSITSOS and HARALABOS TSITSOS
Respondents
REASONS FOR DECISION
Greer J.
Released: June 12, 2013
TYPED VERSION OF
HAND-WRITTEN ENDORSEMENT