ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-11-00003055-00ES

DATE: 20131018

BETWEEN:

JOHN GIRONDA, FRANK GIRONDA

and SALVATORE GIRONDA

Applicants

– and –

VITO GIRONDA and CATERINA GIRONDA

Respondents

Charles Wagner and David Noseworthy,

for the Applicants

Sydney Klotz,

for the Respondent, Vito Gironda

Richard A. Coutinho, for the Public Guardian and Trustee

Gregory Gryguc for Zeppieri & Associates

Alexander Procope for Caterina Gironda (section 3 counsel)

))))

HEARD: October 16, 2013

BEFORE: PENNY J.

REVISED SUPPLEMENTARY REASONS

1In my Reasons of June 21, 2013 in this matter, I found that it was:

…appropriate for Vito [Gironda], for as long as he lives in [35 Ettrick Crescent], to pay market rent in an amount that would include the cost of utilities and property taxes. This obligation shall begin as of May 1, 2011 and continue for as long as Vito continues to live in the house while his mother is still alive. If Vito chooses not to continue to live in the house, a prudent manager of Caterina [Gironda]’s assets would seek to rent 35 Ettrick out on the open market on a relatively short term lease.

There was no evidence lead during the trial from which to determine what an appropriate market rent for 35 Ettrick might be. If the parties are unable to agree on appropriate compensation to be paid by Vito to live in at 35 Ettrick while his mother is still alive, counsel may arrange a date to argue the matter before me at a time convenient to the parties.

2As the parties were unable to agree on the market rental value of 35 Ettrick, I direct that the parties file affidavit evidence going to this issue as their evidence in chief. The hearing took place, as scheduled, on October 16, 2013. No party sought to cross examine on the material filed.

3In addition to the issue of market rent, the Applicants also sought a number of “ancillary orders” to “clarify” a number of issues in my Judgment. The principal orders sought are:

(1) an order that title to 35 Ettrick be transferred from Vito to Caterina;

(2) an order that Zeppieri & Associates transfer Caterina’s monies being held in trust by them to the guardians (Frank and John Gironda) appointed by me in the Judgment;

(3) an order removing a charge on 35 Ettrick placed by Zeppieri & Associates as security for legal fees owed to them by Vito;

(4) an order that Frank and John, as appointed guardians of Caterina’s property, have the legal authority to instruct and authorize insurance personnel in connection with any actions required to inspect and remediate damage to 35 Ettrick resulting from flooding which occurred in July, 2013; and

(5) an order resolving the involvement of section 3 counsel, Mr. Procope.

Market Rent

The Evidence and Parties’ Positions

4The Applicants filed a comparative market analysis for lease of 35 Ettrick prepared by Marvin Newman, a broker with the Sutton Group. Mr. Newman conducted a drive-by inspection but never physically entered the premises. He describes the property as “a solid looking 3-bedroom bungalow situated on a 50' x 125' lot, having a two-car garage and two-car driveway. There is a finished basement with two bedrooms, kitchen, family room and a living room.”

5Mr. Newman analyzed 11 comparables and gave the opinion that during the period May 1, 2011 until July 2013, the approximate rental value of 35 Ettrick Crescent was consistently in the range of $2,150 – $2,200 per month, inclusive of utilities.

6The Applicants also filed the appraisal report of Emil Grossman CRA. Mr. Grossman also did not carry out an interior inspection of 35 Ettrick. Based on an inspection from the street, however, and the analysis of three comparables, Mr. Grossman’s opinion is that 35 Ettrick has a rental value range of $1,850 (plus utilities) to $2,000 (plus utilities) as of August 28, 2013.

7Vito provided a one line “letter of assessment” from Paula Pawlowska, purportedly of Sutton West Realty, which states: “By comparison at area of properties leased or listed for lease, and my opinion, the property (bungalow) at 35 Ettrick Cres. Toronto can be rented for $1500 monthly.” There is no support or analysis provided for this opinion. Nor is there any information about Ms. Pawlowska’s qualifications to provide this opinion, or even superficial evidence that she works for Sutton Real Estate. Further, I note that Ms. Pawlowska has a personal relationship with Vito and was, in this capacity at one stage, on Vito’s witness list for trial, although she was ultimately not called.

8On the day of the hearing, Vito also provided a letter dated October 16, 2013 addressed “To whom it may concern” from Anthony Broomfield of Sutton Kings Realty. Mr. Broomfield did inspect the property post-July flood and made some significant observations, including the observation that “Property rundown, water damage through the entire basement, garbage and building waste all over the property – backyard, front yard and side yard.” Mr. Broomfield opines that it would be difficult to put this property on the market for sale or rent in its present condition. His conclusion is ambiguous but he seems to be saying that if the basement and yard are cleaned up, it could likely be rented for approximately $1,500 per month. He too provides no support or analysis for this conclusion.

9Vito also filed evidence of a City of Toronto Notice of Violation against 35 Ettrick indicating that he “has failed to clean and clear refuse that has been thrown, placed, dumped or deposited on the property” and has failed to cut grass and weeds which have now grown in excess of municipal bylaws.

10Both sides blame the other for the circumstances giving rise to this Notice of Violation. The Applicants say that it is evidence of Vito’s unreliability, intransigence and failure to abide by my Judgment, which awarded title to 35 Ettrick to Caterina and appointed Frank and John as Caterina’s guardians of property.

11Vito says that Frank and John have interfered with his ability to deal with the insurance adjusters, which has, in turn, delayed the insurance inspections and other steps necessary to repair the flood damage. The refuse on the property is damaged furniture and building materials taken from the basement apartment in 35 Ettrick.

12I was advised that a dumpster was about to be delivered to the property and that representatives of the insurer would, in the very near future, be inspecting the damaged material as it is placed in the bin. All parties have an interest in maximizing the value of 35 Ettrick and so it is expected that all parties will cooperate in resolving the insurance issues and repairing the flood damage as soon as possible.

13Vito takes issue with the valuations prepared by Messrs. Grossman and Newman. He argues, for example, that most of Mr. Newman’s comparables were leased for $1,600 per month, an amount considerably below the recommended range. He also notes that one “outlier” comparable, at $2,600, has a significant and disproportionate impact on the average value of the comparable leased prices.

14Most importantly, Vito argues that neither opinion takes into account the post-flood condition inside the home which, he says, has clearly had a significant impact on achievable market rents for this property, at least until the damage is repaired.

15Finally, Vito takes the position that he has performed property management-type services (upkeep, maintenance and small repairs) on the property for many years. He argues that, had he not been providing these services, Caterina or her guardians would have had to pay a property manager. Purporting to rely on Statistics Canada data, Vito argues that, for example, a facility maintenance worker earns approximately $52,000 per year. He calculates that, had he been receiving this amount of compensation since May 1, 2011, he would have been paid more than the accrued arrears of rent since that time, even assuming a market rent of $1,850 per month.

Analysis

16The best evidence of the pre-flood lease value of 35 Ettrick is to be found in the analysis of Mr. Newman. His research included 11 comparables ranging in price from $1,600-$2,600 per month with most occurring at the lower end of the range.

17Mr. Grossman's analysis supports the Newman analysis, although it is based on fewer comparables and tends towards the higher end of the range.

18Both opinions, however, must be subject to some discount because neither valuer actually inspected the property’s interior.

19I find little weight can be attributed to Ms. Pawlowska’s one line letter, given her personal relationship with Vito and the complete absence of any support or analysis for her conclusion.

20I also find less weight can be attributed to Mr. Broomfield’s opinion because he too provides little or no detailed support for his opinion, other than his conclusory reference to other, undefined “comparables.” I do, however, find that some credence can be given to Mr. Broomfield’s value in that he, at least, was shown to have some bona fide real estate credentials, has no apparent prior relationship with Vito and, most importantly, is, on the evidence before me, the only valuer who actually inspected the interior of the premises. I also accept that the flood damage will have some impact on lease pricing post-flood (July, 2013) until the damage is repaired.

21Vito’s claim to a set off for the value of his property management services is subject to several serious flaws. First, his analysis assumes that property management services for 35 Ettrick would be a full-time job. This is, in my view, an absurd proposition surpassing all reason and credulity.

22Even accepting that Vito provided some property management since May 2011, he has provided no evidence of the time it took, and almost no evidence of the specific projects and repairs he took on. His evidence at trial involved no more than des minimus expenses for a few minor repairs.

23In my view, Vito could not reasonably be credited with more than an average of $100 per month on account of basic upkeep and maintenance pre-flood. It is clear that post-flood, Vito has done essentially nothing by way of grounds maintenance or upkeep at 35 Ettrick.

24In these circumstances, I fix market rent for 35 Ettrick, inclusive of utilities and taxes, for the period May 1, 2011 to June 30, 2013, at $1,800 per month less $100 on account of property management services, for a net amount due and owing of $1,700 per month.

25As a result of the July 2013 flooding, it is appropriate that there be an abatement commencing July 1. Mr. Broomfield’s letter suggests the property is un-leasable in its current damaged state. Some of the dilapidation, however, is the result of Vito's failure to keep the property maintained and his intransigence in delaying the insurance inspections. In any event, Vito has an interest in the proper maintenance of 35 Ettrick because he is the potential beneficiary of his mother's request under her 2005 will.

26In these circumstances, I find Vito liable to pay $850 per month on account of rent at 35 Ettrick from July 1, 2013 until flood damage repairs are substantially complete. Vito must, however, keep the property compliant with municipal by laws regarding refuse and the cutting of grass etc.

27For further clarity, these obligations come to an end upon Caterina’s death or if Vito decides not to continue living at 35 Ettrick while his mother is still alive.

Ancillary Issues

28Rule 59.06(2) of the Rules of Civil Procedure provides that:

(2) A party who seeks to…

(c) carry an order into operation; or

(d) obtain other relief than that originally awarded,

may make a motion in the proceeding for the relief claimed.

29The Supreme Court of Canada has said in Doucet-Boudreau v. Nova Scotia (Department of Education) 2003 SCC 62 that this rule “shows that the practice of providing further direction on remedies in support of the decision is known to our courts, and does not undermine the availability of appeal. Moreover, the possibility of such proceedings may facilitate the process of putting orders into operation without requiring resort to contempt proceedings.”

30The following five ancillary issues raised by the applicants in their notice of motion, in my view, fall within this principle. The balance of the requests made by the applicants, I find, do not fall within this principle and involve speculation about future events which may or may not take place. I therefore decline to rule on them.

31It perhaps goes without saying, but these further directions do not, and are not intended to, affect or undermine any parties’ rights of appeal. My further directions, therefore, may well be the subject of additional requests on the pending stay motion before the Ontario Court of Appeal.

Transfer of 35 Ettrick to Caterina

32At paragraph 115 of my Judgment, I found that Caterina did not have the capacity to transfer 35 Ettrick to Vito on October 28, 2008 and that she was unduly influenced to do so. I therefore declared that transfer null and void.

33It necessary follows from my Judgment that title to 35 Ettrick remained with Caterina. Accordingly, Vito must remove the transfer to him of 35 Ettrick from the land register and he must cause title to be transferred back to Caterina.

Funds Held in Trust by Zeppieri & Associates

34In paragraph 118 of my Judgment I found that Caterina’s funds (originally $175,000) which Vito transferred to himself and which have been held in trust by Zeppieri & Associates (and used since then for Caterina’s benefit) are the property of Caterina and must be returned to her.

35I also found that Caterina lacks capacity to manage her property and appointed Frank and John Gironda as her guardians.

36It necessarily follows from my findings on these two issues, therefore, that the funds held by Zeppieri & Associates in trust are Caterina’s funds and that they must be returned to her guardians for property, Frank and John Gironda.

Zeppieri & Associates Charge on 35 Ettrick as Security for Vito’s Legal Fees

37As noted above, in paragraph 115 of my Judgment I set aside the October 2008 transfer of 35 Ettrick from Caterina to Vito, declaring it to be null and void. The Zeppieri charge was registered on title to 35 Ettrick on March 20, 2012. This was at a time when the October 2008 transfer of 35 Ettrick to Vito was clearly being challenged by the Applicants.

38Further, the May 17, 2011 Order of Greer J. provided, in paragraph 7, that any assets formerly in the name of Caterina Gironda or released or assigned to Vito Gironda were to be “secured and preserved.”

39It follows from my Judgment and the language of Greer J.’s Order that the charge placed by Zeppieri & Associates on 35 Ettrick to secure their fees payable from Vito can have no effect as against Caterina. As Vito has no current interest in 35 Ettrick, the Zeppieri & Associates charge against this property is invalid and must be removed.

Insurance Coverage of 35 Ettrick

40My Judgment made the finding that Caterina is the sole owner of 35 Ettrick and appointed Frank and John Gironda as Caterina’s guardians of property. As Caterina has the insurable interest in 35 Ettrick, not Vito, is Caterina’s guardians of property who have the legal authority to direct and negotiate with the property insurers. Vito, of course, has a contingent interest in 35 Ettrick by virtue of his mother’s 2005 will. Further, my Judgment provides Vito with the opportunity, upon paying market compensation, to remain living in 35 Ettrick. Accordingly, the guardians of Caterina’s property must involve and make reasonable accommodation for Vito in all dealings with the property insurers. Legal authority, however, remains with the guardians of Caterina’s property, Frank and John Gironda. In the event of any disagreements with Vito, the guardians have the final say.

Section 3 Counsel

41Mr. Procope, section 3 counsel for Caterina, advised me that he had spoken to his client about the pending appeal and that her instructions were to take no position. On this basis, he wished to be discharged. The Public Guardian and Trustee thanked Mr. Procope for his service and submitted, through counsel, that Mr. Procope’s further services were not required at this time. Counsel for the PGT advised, however, that in the event further need for section 3 counsel arose, he hoped that Mr. Procope would step back in. Mr. Procope indicated a willingness to do so.

42The Applicants agreed with the PGT’s position. I asked the remaining counsel in the courtroom whether anyone had a different view. No one spoke up. On this basis, I allowed Mr. Procope to retire without further involvement on the basis that his services could potentially be requested again in the future.

43Under s. 3(2) of the Substitute Decisions Act, Caterina is responsible for Mr. Procope’s fees for services associated with the pending appeal and the attendance today. This is without prejudice to Caterina’s right, through her guardians of property, to seek indemnity for some or all of these fees from any other party to this litigation as costs of the pending appeal.

Costs

44Any party seeking costs of today’s attendance may do so in writing (not to exceed two typed double-spaced pages), accompanied by a Bill of Costs, delivered to my attention at Judges’ Reception, 361 University Avenue, within 14 days. Any party wishing to respond to such a request shall deliver their written response, subject to the same page limit, within a further seven days.

Penny J.