Furmanov v. Juriansz, 2015 ONSC 3137
COURT FILE NO.: CV-13-00491355
DATE: 20150521
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ALEX FURMANOV
Plaintiff
– and –
HOWARD KEITH JURIANSZ and LIDIA ZAMOSTEAN
Defendants
Patrick Di Monte for the Plaintiff
Ronald Lachmansingh, for the Defendants
HEARD: February 5, 2015
FAIETA, J
REASONS FOR DECISION
[1] The defendant Lidia Zamostean brings this motion for summary judgment to dismiss the action against her pursuant to Rules 20.01(3), 20.02 and 20.04 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
[2] The Statement of Claim, issued October 23, 2013, alleges that the plaintiff built a 5,800 square foot house for the defendant Juriansz pursuant to a contract entered into in December 2011. The plaintiff was to be paid on a costs plus basis for a fixed management fee of $90,000. The work was completed in February 2013 and a final accounting was provided in June 2013. The cost of the project totaled $1,018,052. There remains $195,152 owing under the contract. The plaintiff alleges that the defendant Juriansz is liable for breach of contract. The plaintiff alleges that the defendant Zamostean was a beneficial owner of the property and thus liable on the basis of unjust enrichment.
[3] The defendants make numerous allegations in the Statement of Defence and Counterclaim, dated November 29, 2013. Amongst other things, the defendants allege that the plaintiff was not registered as a vendor or a builder under the Ontario New Homes Warranties Plan Act, R.S.O. 1990, c.O.31 (the “Act”), and thus the defendant Juriansz should be released from any further payment obligations under the contract and should be entitled to the return of all monies ($903,000) paid to the plaintiff. The defendant also alleges that the plaintiff violated section 12 of the Act in that he did not notify the Tarion Warranty Corporation that he was going to construct a new house. The defendants allege that the plaintiff did not complete the house in a timely fashion. Construction started in May 2012 and was completed in May 2013. The defendant Juriansz moved into the house in February 2013. The defendant Juriansz states that the plaintiff is liable for an extra seven months during which he paid a higher rate of interest on his mortgage because he was not able to arrange a new first mortgage in July 2013. The defendants also allege that the plaintiff failed to keep proper accounting records and that there were numerous deficiencies with the work performed under the contract. The defendants counterclaim for the return of $903,000 paid to the plaintiff, damages in the amount of $100,000 for extra mortgage payments incurred by the defendant Juriansz and $9,000 representing extra rent payments incurred by the defendant Juriansz.
Motions for Summary Judgment - Principles
[4] Rule 20.04 states, in part, that:
(2) The court shall grant summary judgment if,
(a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or
(b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment.
(2.1) In determining under clause (2)(a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of just for such powers to be exercised only at a trial.
Weighing the evidence.
Evaluating the credibility of a deponent.
Drawing any reasonable inference from the evidence.
(2.2) A judge may, for the purposes of exercising any of the powers set out in subrule (2.1), order that oral evidence be presented by one or more parties, with or without time limits on its presentation.
[5] The policy objectives of Rule 20.04 were described by the Supreme Court of Canada in Hyrniak v. Maudlin, 2014 SCC 7, [2014] 1 S.C.R. 87, at paras. 1-6, as follows:
Ensuring access to justice is greatest challenge to the rule of law in Canada today. Trials have become increasingly expensive and protracted. Most Canadians cannot afford to sue when they are wronged or defend themselves when they are sued, and cannot afford to go to trial. Without an effective and accessible means of enforcing rights, the rule of law is threatened. Without public adjudication of civil cause, the development of the common law is stunted.
Increasingly, there is recognition that a cultural shift is required in order to create an environment promoting timely and affordable access to the civil justice system. This shift entails simplifying pre-trial procedures and moving the emphasis away from the conventional trial in favour of proportional procedures tailored to the needs of the particular case. The balance between procedure and access struck by our justice system must come to reflect modern reality and recognize the new models of adjudication can be fair and just.
Summary judgment motions provide one such opportunity.
In interpreting these provisions, the Ontario Court of Appeal placed too high a premium on the “full appreciation” of evidence that can be gained at a conventional trial, given that such a trial is not a realistic alternative for most litigants. In my view, a trial is not required if a summary judgment motion can achieve a fair and just adjudication, if it provides a process that allows the judge to make the necessary findings of fact, apply the law to those facts, and is proportionate, more expeditious and less expensive means to achieve a just result than going to trial.
To that end, I conclude that summary judgment rules must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims.
As the Court of Appeal observed, the inappropriate use of summary judgment motions creates its own costs and delays. However, judges can mitigate such risks by making use of their powers to manage and focus the process and, where possible, remain seized of the proceedings.
[6] In Trotter v. Trotter,[^1] the Ontario Court of Appeal, at para 72-75, stated:
In Hryniak, the Supreme Court established a two-step process that motion judges must follow on a summary judgment motion. First, a motion judge is to determine – based solely on the evidence before her – whether there is a genuine issue requiring a trial. If not, then summary judgment should be granted. There will be no genuine issue requiring a trial when the written record (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts and (3) is proportionate, more expeditious and less expensive means to achieve a just result.
The evidence conflicted. The appellants’ evidence demonstrated a genuine issue requiring trial.
At this point, a motion judge may, at her discretion, move to step two of Hryniak, where she must consider whether a trial can be avoided by using the powers granted under rules 20.04(2.1) and (2.2) to weigh the evidence, evaluate credibility, draw reasonable inferences and call oral evidence. These discretionary powers are presumptively available unless it is in the interest of justice to exercise them only at trial.
[7] With respect to the exercise of the power to hear oral evidence on a summary judgment motion, the Supreme Court indicated in Hryniak at para. 65:
…the power to call oral evidence should be used to promote the fair and just resolution of the dispute in light of principles of proportionality, timeliness and affordability. In tailoring the nature and extent of oral evidence that will be heard, the motion judge should be guided by these principles, and remember that the process is not a full trial on the merits but is designed to determine if there is a genuine issue requiring a trial. [emphasis added]
Is There A Genuine Issue Requiring a Trial?
[8] The plaintiff’s claim against the defendant Zamostean is solely based on unjust enrichment. In order to establish unjust enrichment there must be a benefit to the defendant, a corresponding deprivation by the plaintiff, and an absence of juristic reason for the defendant to retain the benefit.[^2]
[9] The defendant Zamostean alleges that there is no genuine issue for trial for the following reasons:
(1) the defendant Zamostean was not enriched as a result of the work performed by the plaintiff because the defendant Zamostean did not hold a beneficial interest in the property;
(2) the plaintiff failed to show “an absence of juristic reason” for the defendant Zamostean to retain the benefit as the deprivation was a result of the construction contract which is a juristic reason;
(3) the plaintiff has “unclean hands” and thus is not entitled to restitution.
[10] Given my decision with respect to the first issue, there is no need to determine the other two issues.
[11] The following evidence was adduced by the parties on the issue of whether the defendant Zamostean had a beneficial interest in the property:
• affidavit of the plaintiff;
• affidavit of the defendant Zamostean;
• two affidavits of the defendant Juriansz;
• cross-examination transcripts of both defendants.
[12] The plaintiff’s affidavit evidence, on which he was not cross-examined, included the following statements:
• “I do have knowledge that Ms. Zamostean was a 50/50 partner in the project with Howard Keith Juriansz”;
• “Ms. Zamostean told me that she and Mr. Juriansz were partners and had purchased the Crestwood property to build a home on it for themselves to live there or resell it to make a profit”;
• “Ms. Zamostean provided considerable amounts of money to pay for the cost of construction which was deposited into a numbered company account to fund the construction”;
• “Ms. Zamostean attended on a frequent and almost daily basis at the construction site, to monitor construction, choose colours, choose other materials, check the progress of construction and follow the progress of building the house from the ground up to and including the finished product...”
• Ms. Zamostean was a Real Estate Broker in my wife’s brokerage, Arc Realty Limited and I am advised by my wife, Marina Zubiashvili and do verily believe that Ms. Zamostean also gave the same information to her”;
• “Ms. Zamostean listed and sold the subject property for the purpose of consummating their joint intention to profit from the construction that I assisted in doing. She told me that she was the one who decided to extend the listing, worried that the listing would go to Mr. Juriansz’s brother also a broker and because Mr. Juriansz according to Ms. Zamostean was very ill (possibly cancer) and she might never see her money”;
• “I was very angry at Lidia Zamostean because she always led me to believe that I would be paid for my services and that the trades and sub-trades would also be paid but …”;
• “Ms. Zamostean indicated to me, that as long as she was involved in the project, I would be paid and she did advance monies from time to time. What made me very upset is that when the property did sell, not only did they oppose the money being paid into court, Ms. Zamostean retrieved her advances before paying the very sub-trades that helped construct the property…”;
• “It is a fair assumption that an individual who advances money, retrieves money at no interest, spent approximately one (1) year working with me to erect the property and took a keen interest in its sale and ultimate distribution of money and retrieved her large advances from the net proceeds of the property, that these indications are the basis of my conclusion that what she told me is true, that is that she was a partner in this project and perhaps more projects.”
[13] The defendant Juriansz’s affidavit evidence and evidence on cross-examination is as follows:
• he purchased the subject property on September 21, 2011;
• the defendant Zamostean advanced $50,000 to Juriansz to facilitate the purchase of the subject property;[^3]
• the defendant Zamostean “was then, and still is, my very close friend and also an employee of Juriansz & Li. She was then working as a broker/agent with Arc Realty Inc. …”
• he has employed Zamostean for 8 years;[^4]
• he has never been involved in a joint venture with Zamostean at any time;[^5]
• he has never owned any property with Zamostean;[^6]
• “At no time was Zamostean my ‘partner’ in any sense of that word, including with respect to the Project or the Property. However, she is my closest friend”;
• “Title to 147 Crestwood was taken in my name alone”;
• “At no time was Zamonstean on title, nor did Zamostean ever have an equity interest in 147 Crestwood”;
• “I purchased 147 Crestwood with the intention of demolishing the existing old house that was there and thereafter building a new house, in which I intended on living as my principal residence”
• “On October 3, 2011, I entered into an Agreement with the Plaintiff pursuant to which he agreed to build a new house at 147 Crestwood”;
• “Zamostean had earlier introduced me to Furmanov …”;
• “Sometime after the execution of the Building Contract, Furmanov commenced work. He stopped work around late May or early June of 2013. I moved into the new house at 147 Crestwood (although it was unfinished at the time) on February 25, 2013 and I resided there until the property was sold. The sale was completed in mid-June 2014”;
• “At no time did Zamostean ever reside at 147 Crestwood”;
• “During the construction process, Zamostean assisted me with numerous matters, including advice regarding colours, materials and design, as requested of me by Furmanov. She often acted as my designated agent in this regard”;
• Juriansz visited the house during its construction about 200 times;[^7]
• “During the construction process, I was extremely busy, as I still am. I retained the final decision with respect to all aspects upon which instructions were sought by Furmanov”;
• “From time to time, while Furmanov was working on building the new house at 147 Crestwood, Zamostean loaned me monies, and on my behalf, advanced monies directly to Furmanov or pursuant to his direction, to corporations associated with him”;
• Zamostean advanced $200,000 to Juriansz to help fund construction costs;[^8]
• There is no written documentation for this advance;[^9]
• “She also purchased certain fixtures which were to be installed in the new house at 147 Crestwood. She did this because I asked her to assist me during that time frame, because the cash flow from Juriansz & Li did not permit me to draw sufficient monies to comply with my obligations under the Building Contract and I did not wish to incur the costs of arranging secondary financing”;
• the plan was for Juriansz to live in the house alone;[^10]
• he lived in the house alone and decided to sell the house because it was too big for him;
• “As noted above, the sale of the property closed in mid-June 2014. From the net proceeds of sale, I repaid to Zamostean all of the monies that she had lent to me or advanced on my behalf, without interest.”
[14] The defendant Zamostean’s affidavit evidence is as follows:
• “Juriansz is a very close friend of mine”;
• Juriansz has helped Zamostean from the time that she moved to Canada;[^11]
• “I am also an employee of the law firm of Juriansz & Ku”;
• She works as an office assistant for Juriansz;[^12]
• She has worked for Juriansz since 2004;[^13]
• “I was then working as a broker/agent with Arc Realty Inc. … [Zubiashvili] represented Juriansz with respect to the APS although I assisted her in that regard”;
• Zamostean has been a licensed real estate broker since 2008;[^14]
• “At no time did I ever reside at 147 Crestwood”;
• Zamostean located the subject property for Juriansz;[^15]
• Juriansz built the house to live in. He had been renting an apartment;[^16]
• “During the construction process, I assisted Juriansz with numerous matters, including advice regarding colours, materials and design, as requested by Furmanov. I often acted as Juriansz’ designated agent in this regard”;
• “During the construction process, Juriansz was extremely busy. At all times, Juriansz retained the final decision with respect to all aspects upon which instructions were sought by Furmanov”;
• “From time to time, while Furmanov was working on building the new house at 147 Crestwood, I loaned Juriansz monies, and on Juriansz’s behalf, advanced monies directly to Furmanov or pursuant to his direction, to corporations associated with Furmanov”;
• “I purchased certain fixtures which were to be installed in the new house at 147 Crestwood. I did this because Juriansz asked me to assist him during that time frame, and I was advised by Juriansz and do verily believe that the cash flow from Juriansz & Li did not permit Juriansz to draw sufficient monies to comply with his obligations under the Building Contract”;
• “As noted above, the sale of the property closed in mid-June 2014. I acted as Juriansz’s agent for the sale. From the net proceeds of sale, Juriansz repaid to me all of the monies that I had loaned him or advanced on his behalf, without interest”;
• “Furmanov has at all material times been well aware that I never had an equity interest in 147 Crestwood”;
• “During the summer of 2013, before commencing this litigation, Furmanov offered me the sum of $5,000 to convince Juriansz to pay to Furmanov the amounts that Furmanov has claimed in this action are owed to him by Juriansz. Had he truly believed that I was an owner of 147 Crestwood, Furmanov would not have made such an offer to me. I summarily declined Furmanov’s offer”;
• Zamostean denies telling Furmanov that she and Juriansz were “50/50” on this project;[^17]
• Zamostean denies telling Furmanov that she and Juriansz were partners;[^18]
• Zamostean states that she was not paid by Juriansz to supervise the construction of the house nor did she receive a percentage of his profit from this house;
• Zamostean did not expect to be paid a percentage of the profit from this house. She stated: “I thought that – maybe a bit later, we’ll build something – like, investing money. Later project. That was – If his house goes well, maybe we’ll build together, because I cannot build together house – I cannot be by my own – on my own house”;[^19]
• Zamostean explained why she lent $200,000 to Juriansz as follows: “I just lended money to a friend who wanted to build a house, and I hope they will make money on buying the house, I make money on my commissions to buy that house. For sale – because he spends his money for selling, I will never charge for the rest of his life when he sells houses. I never charge. So – an probably would go in a project to build – that was my – it’s going to be – like, for the future. If the project goes well for him, he likes the house, then he’ll build with me next. He’ll help me.”[^20]
[15] The plaintiff’s submission that the defendant Zamostean had a beneficial interest in the subject property rests on: (1) Furmanov’s affidavit evidence that Zamostean told him that she and Juriansz were 50/50 on this project; (2) the $200,000 funding that Zamostean provided to construct the house; (3) the work that Zamostean put into assisting with the construction of the house.
Discussion
[16] In my view, the defendant Zamostean has not demonstrated that there is no genuine issue requiring a trial in respect of the claim against her.
[17] The defendants state that they are “very close” friends. There is no dispute that the defendant Zamostean:
is a real estate agent who found the property for the defendant Juriansz;
gave the defendant Juriansz $50,000 to purchase the property;
advanced monies totaling $200,000 directly to the plaintiff during construction;
attended at the construction site almost every day to supervise construction;
provided assistance with numerous matters during the construction process;
provided instructions to the plaintiff during the construction of the house;
provided advice regarding colours, material and design;
paid for fixtures for the house at a cost of about $5,000;
went to the house very often after its walls were up.
[18] The plaintiff states that he was told by the defendant Zamostean that she was a “50/50 partner” in the project with the defendant Juriansz. He was not cross-examined on his affidavit. On the other hand, the defendant Zamostean denies that she made this statement. Both defendants deny that they had any partnership, joint venture or any other type of similar arrangement in respect of the property. The defendant Juriansz’s evidence is that he acquired a property, demolished the house, and built a 5,800 square foot house and then sold it after he decided he it was too big for him alone. He lived in the new house for just over a year before selling the house, which coincidentally would likely have been enough time to have any resulting capital gains exempted from income tax liability on the basis that it arose from the sale of a personal residence. On cross-examination defendant Zamostean testified, “…I thought that – maybe a bit later, we’ll build something…That was – if his house goes well, maybe we’ll build together...”, which seems to imply that this transaction had been intended as a “flip.”
[19] In any event, whether all of the above circumstances reflect a partnership between the defendants in respect of the purchase, construction and sale of this property as alleged by the plaintiff, or merely reflect one very close friend helping another, as suggested by the defendants, remains the issue to be determined.
[20] In my view, the determination of this issue turns on the assessment of the credibility of all three parties which I am unable to make based on the record. While the plaintiff requested an order requiring the parties to present oral evidence on the circumstances surrounding the question of whether the defendant Zamostean held a beneficial interest in the project, it is my view that the examination would likely cover the history of the relationship between the defendants and the relationship between the plaintiff and each of the defendants. In my view, there would be much overlap with the evidence that would be required at trial between the plaintiff and defendant Juriansz even if the defendant Zamostean was successful in her motion to have the action against her dismissed on a summary judgment. It would be an inefficient use of the parties’ and the Court’s resources, as well as contribute to the additional delay of the resolution of this action, to require the Court to receive oral evidence of the parties on the issue of whether the defendant Zamostean held a beneficial interest.
[21] The amount of the claim is $195,152. So far there have been two motions which have not advanced the substance of this litigation and have only resulted in additional cost for the parties.[^21] In my view, judicial intervention is required to direct the parties to focus on the central issues (primarily, the merit of the defences raised in the Statement of Defence and Counterclaim).
[22] Rule 20.05 states that where summary judgment is refused the Court may make an order specifying what material facts are not in dispute and defining the issues to be tried, and order that the action proceed to trial expeditiously. Further, the Court may give such directions or impose or such terms as are just.
[23] I hereby order that:
• this action proceed to trial expeditiously;
• each party set this action down for trial by July 24, 2015 unless another party has already done so.
[24] In addition, Rule 50.13 provides that a judge may at any time, on his or her own initiative; direct that a case conference be held before a judge or case management master.
[25] In an effort to provide more timely and affordable access to the civil justice system, I hereby direct that:
• a case conference shall be held on July 28, 2015;
• the parties and the lawyers for the parties shall appear at the case conference; and,
• each party shall deliver submissions to my Assistant, no longer than five pages in length, at least two weeks prior to the case conference regarding the matters described in Rule 50.13(5) (specifically, identifying the issues for trial; the proposed method(s) for resolving those issues and a timetable for the events in this action) and whether, and if so how, the Court should exercise its powers under Rule 50.13(6).
[26] The defendant Zamostean claimed costs of this motion on a partial indemnity basis in the amount of $21,641.24. The plaintiff claimed costs of $10,073.97 on a partial indemnity basis. Having regard to the principles described in Elbakhiet v. Palmer,[^22] including the need for proportionality, I order that the defendant Zamostean pay to the plaintiff his costs of this motion in the amount of $8,000, forthwith, and in any event of the cause. In accordance with Hryniak,[^23] I remain seized of this action.
Mr. Justice M. Faieta
Released: May 21, 2015
CITATION: Furmanov v. Juriansz, 2015 ONSC 3137
COURT FILE NO.: CV-13-00491355
DATE: 20150521
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ALEX FURMANOV
Plaintiff
– and –
HOWARD KEITH JURIANSZ and LIDIA ZAMOSTEAN
Defendants
REASONS FOR JUDGMENT
Mr. Justice M. Faieta
Released: May 21, 2015
[^1]: 2014 ONCA 841
[^2]: Garland v. Consumers’ Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629, at para. 30.
[^3]: Cross-examination, Question 205
[^4]: Cross-examination, Question 154
[^5]: Cross-examination, Question 161
[^6]: Cross-examination, Question 155
[^7]: Cross-examination, Question 100
[^8]: Cross-examination, Question 58
[^9]: Cross-examination, Question 65
[^10]: Cross-examination, Question 84
[^11]: Cross-examination, Question 78
[^12]: Cross-examination, Question 9
[^13]: Cross-examination, Question 40
[^14]: Cross-examination, Question 13
[^15]: Cross-examination, Question 41
[^16]: Cross-examination, Question 195
[^17]: Cross-examination, Question 239.
[^18]: Cross-examination, Question 243
[^19]: Cross-examination, Question 223
[^20]: Cross-examination, Question 240
[^21]: In addition to this motion, a motion by the plaintiff for an order requiring some of the proceeds of sale of the property paid into court was heard by Justice D. Corbett on June 11, 2014.
[^22]: 2012 ONSC 2529, [2012] O.J. No. 2890; rev’d (2014), 2014 ONCA 544, 121 O.R. (3d) 616 (C.A.)
[^23]: Paragraph 78.