ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-13-0154-00
DATE: 2013 Nov 08
BETWEEN:
JOSEPH MICHAEL JORDAN, TIMOTHY THOMAS JORDAN and FREDERICK JOHN JORDAN
Applicants
– and –
PHILIP PETER JORDAN and KRISTY LEE CHARD
Respondent
R. R. Evenson, for the Applicants
A. Best, for the Respondents
HEARD: November 5, 2013 at Belleville
TRANMER J.
DECISION ON MOTION
[1] The Applicants are three brothers who claim against their fourth brother and his spouse in respect of the real and personal property that once belonged to their parents. In particular, this motion is for a certificate of pending litigation against the Respondents’ current home which the Applicants say was wrongfully purchased by the Respondents with the proceeds of sale of the Jordan family farm property. The Applicants also seek in this motion to restrain the dissipation by the Respondents of the real and personal property formerly owned by their parents and therefore comprising the estate of their mother, who was the survivor of their parents.
THE FACTS
[2] The father died on January 31, 1998.
[3] On March 17, 1999, the mother transferred to the Respondent son Part 2 of the Jordan farm for $2. The Applicants, Tim and Fred, learned of this transfer several months after.
[4] On August 18, 2004, the mother transferred to the Respondents Part 1 of the Jordan family farm for the sum of $100,000, paid entirely as a vendor take back mortgage. This sum was paid off fully by the Respondents subsequently, following the sale of the home that they owned before moving into the home on Part 1. The mother at that point took up residence in the granny flat of the home. The Applicants allege that this purchase price was far below fair market value. The Applicants, Tim and Fred, learned of this transfer several months later.
[5] Also on August 18, 2004, the mother prepared and signed her Will, naming the Applicant Joseph and the Respondent Philip as executors. It provided that the four sons would share equally as beneficiaries of her estate. She also executed a Power of Attorney for property on this date, naming her sons Fred and Philip, jointly.
[6] The Applicant Tim had lived next door to Part 1 since 1986.
[7] In February of 2011, the Respondents sold the entire Jordan farm (Parts 1 and 2 as above) to Her Majesty the Queen (“HMQ”) for $835,000. The Applicants, Tim and Fred, learned of this transfer after. The Applicant Tim had also sold his property to HMQ. It was common knowledge within the area of these properties that CFB Trenton was seeking to acquire properties adjacent to it for expansion purposes.
[8] The Respondents subsequently purchased another home for the sum of $399,000. It is against this home that the Applicants seek the registration of a certificate of pending litigation. They allege that the Respondents used a portion of the proceeds of sale of the Jordan family farm to buy their current home. This allegation is not denied by the Respondent son in his affidavit filed on this motion.
[9] The mother died on January 6, 2012. It is alleged by the Applicants that since the death of her husband as a result of ill health and upset, she has been vulnerable, and that the transfers of property to the Respondent son are suspicious and as a result of misrepresentation, misappropriation, undue influence, coercion and breach of fiduciary duties. The Applicants claim that all four sons were entitled to a share in the Jordan family farm, real and personal property. The result of the above noted transactions is that the Respondent son has acquired about 90% of the estate, leaving 10% of the estate to be divided equally amongst the four of them.
CERTIFICATE OF PENDING LITIGATION
[10] The Applicants submit that there is sufficient evidence to establish a reasonable claim to an interest in the Respondents’ lands. They submit that the interest in land does not have to be an interest belonging to the Applicants, but that a reasonable allegation that the Respondent has an interest in the land is sufficient interest to ground a certificate of pending litigation. The Applicants submit that where there is a transfer of property from a parent to an adult child, there is a rebuttable presumption that the adult child is holding the property in trust for the parent. The onus is on the adult child receiving the property to establish that the transfer was intended by the transferor to be a gift. The Applicants submit that the mother was dependent upon the Respondents at the time of the transfer and that therefore there is a presumption of undue influence, the onus to rebut resting upon the Respondents. The Applicants further submit that the Respondent son was subject to a fiduciary duty under the power of attorney granted to him, which he has breached. The Applicants submit that the granting of the certificate of pending litigation will have little or no prejudice upon the Respondents. The Applicants submit that there is no third-party that would be prejudiced as a result of the registration of a certificate of pending litigation. The Applicants submit that the funds used to purchase the Respondents’ current home are clearly traceable to the mother's estate. The Applicants point out, as noted above, the Respondent son does not deny that he used part of the proceeds of sale of the Jordan family farm property to purchase his current home.
[11] The Respondents submit that the Applicants have no reasonable claim to an interest in land, as is required under the applicable legal principles. They point out that the Applicants knew about the transfers to the Respondents in 1999 and in 2004 and of the transfer to HMQ in 2011, all of which occurred while the mother was alive. The Respondents submit that the time to seek a certificate of pending litigation was then not now.
ANALYSIS
[12] Section 103 of the Courts of Justice Act and the applicable legal authorities direct that in considering whether to issue a certificate of pending litigation, the court must exercise its discretion in equity, taking into consideration all relevant matters between the parties. On the record before me, it is a reasonable allegation that a portion of the monies from the sale of the former Jordan family farm were used to purchase the subject property. There is no evidence of any prejudice that would befall the Respondents if the certificate of pending litigation were to issue. There is no evidence of any prejudice to any third party in the event a certificate were to issue. The issues of the intention and competence of the mother at the time of the transfers by her to her Respondent son cannot be resolved on this motion.
[13] On the evidence in this case, it would be reasonable to expect that the Applicants would have sought a certificate of pending litigation some time ago. Two of the Applicants knew about the transfers to the Respondent son in 1999 and again in 2004. The Applicant Tim, who lived beside the Jordan family farm house, would have known in 2004 that his brother had moved into the house with their mother on a permanent basis, renting and then selling his own home. While the authorities cited by the Applicants support the issuing of a certificate of pending litigation in the circumstances in 2005 or 2006 or 2007, the timing of the present motion in November of 2013 weighs against the granting of the certificate. The evidence of the Applicants, however, is that they did not fully understand the prior transactions until after their mother died.
[14] In considering the equities between the parties on the evidence before me, and the legal principles set out in 1017682 Ontario Limited v. Tanzos, 2008 53830 (ONSC), Roseglen v. Doble 2010 4680 (ONSC) and West v. West, 1997 12137 (ONSC) which are strong authority for the granting of the certificate of pending litigation in this case, I find that there is sufficient evidence to establish a reasonable claim to an interest in the lands within the meaning of these cases. The equities weigh in favour of granting the certificate of pending litigation. If the Applicants are successful at trial, the $399,000 purchase price of the Respondents’ home represents a substantial part of the mother’s estate. There is no evidence of prejudice to the Respondents or to third parties or risk of suit against the estate if the certificate issues.
[15] In my view, the cases cited by the Respondents are distinguishable on their facts. In Belajac v Belajac 2008 CarswellOnt 1489 (OSCJ), the equities of the parties were impacted by a third party purchaser and the potential for a lawsuit against them. In Gulamani v. 1119713 Ontario Ltd, 2007 2389 (ONSC), and in the Divisional Court, the claim was for an incentive bonus under a contract. The court found no evidence that the plaintiffs could have a reasonable expectation to acquire an interest in the hotel properties because of their work given that the contract entitled them to a payment of a sum of money by way of incentive bonus. The Divisional Court found no evidence of a reasonable claim to an interest in land. In Todd v Barefoot 2013 CarswellOnt 1173 (Div. Ct.), the court specifically notes that the pleadings provided no foundation for or evidence of a reasonable claim to an interest in land. The pleadings in the present case and the allegations before me do so as I have indicated.
[16] Accordingly, a certificate of pending litigation as requested shall issue against the Respondents’ property at 730 Foxboro-Stirling Road.
THE PRESERVATION ORDER
[17] At the outset of the hearing before me, counsel advised that they had agreed that a preservation and non-dissipation order should issue. At the conclusion of their submissions concerning the certificate of pending litigation, I asked whether the agreed-upon preservation order was to be in the terms set out at Para 29b of the Applicants’ factum. At that point, it became clear that counsel had not reached an agreement on this issue.
[18] Counsel for the Respondents stated that the Respondents agree to an order that they will preserve and be restrained from dissipating, selling, transferring, disposing of, or encumbering all of the items listed at pages 64 to 77, inclusive of the affidavit of Philip Peter Jordan (even though I observe that the Respondent notes that many of those items are unaccounted for), six cheques that have been written to the estate and the contents of two bank accounts jointly held by Philip and Fred. An order will issue on consent in that regard.
[19] Counsel for the Applicants stated that he repeats and adopts his submissions made for the certificate of pending litigation in regard to the preservation order relief sought. Counsel for the Respondents made no further substantive submissions on the issue.
[20] Rule 45 and an inherent jurisdiction in this court recognized in Couchiching First Nation v Canada (Attorney General), 2010 ONSC 4373, 2010 ONSC4373 (Ont. S.C.J.) provide the authority to grant the preservation and non-dissipation relief sought by the Applicants. In my view, on the evidence before me and balancing the equities as between these parties, it is appropriate that I exercise my discretion to grant this release. There is no evidence before me of any prejudice that would befall either the Respondents or any third parties should such an order be made and in my view it is appropriate that the status quo of the real and personal property of the Jordan farm be maintained pending the outcome of this litigation.
DECISION
[21] For these reasons, I grant the relief sought by the Applicants in paragraphs 29a and 29b at page 9 of their factum. A consent Order shall also issue as indicated.
[22] In the event that counsel are not able to agree upon the costs of this motion, and upon proof that the parties have made bona fide efforts to settle the question of costs, the Applicants may make written submissions as to costs limited to two pages plus a costs outline within five days hereof. The Respondents may reply similarly, within three days of receiving the Applicants’ submissions.
The Honourable Mr. Justice Gary W. Tranmer
Released: November 8, 2013
COURT FILE NO.: CV-13-0154-00
DATE: 2013 Nov 08
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
JOSEPH MICHAEL JORDAN, TIMOTHY THOMAS JORDAN and FREDERICK JOHN JORDAN
Applicants
– and –
PHILIP PETER JORDAN and KRISTY LEE CHARD
Respondent
DECISION ON MOTION
Tranmer J.
Released: November 8, 2013