SUPERIOR COURT OF JUSTICE – ONTARIO
COURT FILE NO.: CV-14-3661-ES
DATE: 20150721
IN THE ESTATE OF JOHN KOZUSKO, deceased
RE: PETER KOZUSKO, DANIEL KOZUSKO and IRENE GUSZ – and – JOHN MICHAEL KOZUSKO, in his capacity as the former Attorney of Property for John Kozusko and Estate Trustee of the Estate of John Kozusko
BEFORE: André J.
COUNSEL:
A.H. Wu, for the Applicant/Moving Parties
M. Visoiu, for the Respondent/Responding Party
HEARD: July 8, 2015
E N D O R S E M E N T
[1] The applicants bring a motion for court orders declaring that the transfer of land from the deceased, John Kozusko (the “deceased”), to the respondent, John Michael Kozusko (the “respondent”), was void due to undue influence or alternatively, that the transfer gave rise to a resulting trust for the benefit of the deceased’s estate. The respondent maintains that there is no evidentiary basis for either of the applicants’ contention and that accordingly, their motion should be dismissed.
BACKGROUND FACTS
[2] John Kozusko died on April 13, 2014 at the age of 87 years. His wife predeceased him in April 2003.
[3] He was survived by four children, including the respondent.
[4] Three of John Kozusko’s children moved out of his home many years before his death. The only child who remained in the house was the respondent, John Michael Kozusko.
[5] On November 26, 2004, the legal title of Mr. John Kozusko’s home was transferred from Mr. Kozusko to Mr. Kozusko and his son, John Michael Kozusko as joint tenants for no consideration. At the time of the transfer the deceased was 77 years old and was living with the respondent.
[6] The deceased also signed a Will and a Power of Attorney for Property and another for Personal Care on November 26, 2004. The deceased named the respondent as his estate trustee, attorney for property and for personal care.
[7] The deceased had three meetings with his solicitor, Ms. Oksana Miroutenko, (“Ms. Miroutenko”) in November, 2004. The respondent was present during the third meeting when the deceased signed his Will and Powers of Attorney. Following the transfer of title, the deceased paid all the expenses associated with the ownership, use and maintenance of his property. He continued to do so even after moving out of his home on or about May 2012.
ANALYSIS
[8] The applicants’ motion raises two issues, namely:
Whether the 2004 gratuitous transfer of the title to the deceased’s house to the deceased and the respondent as joint tenants was void as having been tainted by undue influence?
Alternatively, whether the transfer of title in 2004 gave rise to a resulting trust for the benefit of the deceased’s estate instead of an outright gift to the respondent.
ISSUE NO. ONE – Is the transfer of title void due to undue influence?
[9] In Geffen v. Goodman Estate, 1991 69 (SCC), [1991] 2 S.C.R. 353, at paras. 25-26, the Supreme Court of Canada noted that there are two classes of undue influence, first, influence expressly used for the purpose of obtaining the gift; second, where the relations between the donor and donee have, at or shortly before the execution of the gift, been such as to raise a presumption that the donee had influence over the donor.
[10] The court further noted in Geffen, at paragraph 40, that influence relates to the ability of a person to dominate the will of another either through manipulation, coercion or outright but subtle abuse of power. To dominate the will of another means to exercise a persuasive influence over him or her. The ability to exercise such influence may arise from a relationship of trust or confidence but it may arise from other relationships as well.
[11] The plaintiffs submit that the circumstances establish a presumption that the respondent exercised undue influence over his deceased father such that the 2004 transfer of title should be declared void. They point to the following factors to support their position about undue influence:
- The deceased spoke little English.
- The deceased was 77 years and in poor health.
- The deceased’s wife had passed away in 2003.
- The deceased was unsophisticated and socially inactive.
[12] I am not convinced that these factors create a presumption of undue influence. First, the deceased had a long work history as a plumber and worked for many years as Team Leader at the Toronto Transit Commission. He had his own plumbing business at one point. He was therefore not as unsophisticated as the applicants suggest.
[13] Second, there is no evidence that the deceased had any difficulty with the English language. If he did, he mitigated that difficulty by seeking legal advice from a Ukrainian speaking lawyer, Ms. Miroutenko, about his property. There is no evidence that the death of the deceased’s wife may have affected him to such an extent that he became vulnerable to the machinations of the respondent. Neither is there evidence that his declining health may have affected his mental faculties in any way.
[14] Even if I am wrong that the circumstances do not create a presumption of undue influence, it would be my view that the respondent has rebutted the presumption of undue influence. He has done so based on the following evidence.
[15] First, Mr. Miroslav Shvicki, a former neighbour of the deceased for thirty years, has deposed that the deceased advised him on several occasions that the home would go to his son, John Michael Kozusko, upon his death.
[16] Second, the circumstances surrounding the deceased’s interaction with Ms. Miroutenko disproves any suggestion of undue influence on the deceased.
[17] The respondent was not present when the deceased initially met Ms. Miroutenko. Ms. Miroutenko testified during her Examination for Discovery on May 21, 2015, that Mr. Kozusko wanted to transfer title of his house to the respondent. She asked him to think about it and he went home. He returned two days later. She testified that:
At that meeting on November 5th, he confirmed his instructions to transfer the title of the property as joint tenants as it was main issue for him to make sure that the house after Mr. Kozusko’s death goes to John Kozusko.
[18] Ms. Miroutenko further testified that before the deceased signed his will and powers of attorney on November 26, 2004, “I took Mr. Kozusko through each paragraph summarizing each paragraph of the Will”. She stated that she did so in Ukrainian “and then in English” (at page 27). After the deceased signed the will, the respondent was summoned into her office and he then signed the transfer documents.
[19] Furthermore, Ms. Miroutenko wrote a Memorandum dated November 3, 2004, following her meeting with the deceased, summarizing what had transpired with the deceased on that day. At the end of the Memorandum she noted that:
Note: Client’s intention was to leave his house to his son, John Michael Kozusko who is currently residing with our client and takes care of him. In order to avoid tax consequences, client decided to transfer his house to himself and his son John Michael Kozusko at this time as JT. This will achieve his intention to transfer the house outside of the Will and lower his probate taxation. Also, client was concerned that after his death his other children might challenge his Will and, therefore, his son John might not be able to get his whole house as it is intended by our client. Client met with me alone and discussed his options. After discussing a few options, e.g., JT and TinC, client decided to do JT in order to avoid any future dispute within the family.
[20] Additionally, Ms. Miroutenko made notes related to her November 5, 2004, meeting with the deceased. Ms. Miroutenko described the deceased as having been “in good health [and] good mental condition to provide instruction.” She also noted that: “I didn’t see any duress from son’s side.”
[21] In my view, Ms. Miroutenko’s evidence in combination with that of Miroslav Shvicki rebuts any presumption of undue influence in this matter. The evidence clearly establishes that the deceased had unequivocally decided to transfer his house to the respondent.
[22] The applicants further submit that Ms. Miroutenko did not fully explain the legal implications of a joint tenancy to the deceased and specifically, did not advise him of the irrevocable feature of a joint tenancy. Neither did she discuss any other options other than a joint tenancy to the deceased. That failure made the transaction void abinitio.
[23] Ms. Miroutenko testified that she explained the contents of the will to the deceased on November 26, 2004 before he signed it. Second, at page 30 of her Examination for Discovery, she testified that she always made sure that her clients understood the difference between joint tenants, and tenancy in common. She further testified that it was her view that the deceased intended the transfer of title in 2004 to be a gift to the respondent.
[24] Based on this evidence, I find no evidence of any undue influence between the deceased and the respondent when the former transferred his house to the latter in 2004.
ISSUE NO. TWO – Does the transfer in question give rise to a Resulting Trust in favour of the deceased’s estate?
[25] In Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, the Supreme Court of Canada held at paragraph 24 that:
The presumption of resulting trust is a rebuttable presumption of law and general rule that applies to gratuitous transfers. When a transfer is challenged, the presumption allocates the legal burden of proof. Thus, where a transfer is made for no consideration, the onus is placed on the transferee to demonstrate that a gift was intended: see Waters’ Law of Trusts, at p. 375, and E.E. Gillese and M. Milczynski, The Law of Trusts (2nd ed. 2005), at p. 110. This is so because equity presumes bargains, not gifts.
[26] The applicants submits that there was no gifting intent in this case for the following reasons:
- It is unclear whether the transfer was of a legal title only or a legal and beneficial ownership of the land.
- The deceased continued to pay all expenses related to his house until his death.
- The deceased told his friends and his other siblings that he wanted all his children to inherit his house.
[27] Regarding the first point, the evidence of Ms. Miroutenko suggests that the deceased intended to convey legal and beneficial ownership of his house to his son. She recorded in her notes on November 5, 2004, under the heading “Joint Tenancy” From John…to John + John Michael after death 100% to John Michael.
[28] The fact that the deceased continued to pay the expenses associated with the house does not detract from the fact that the deceased gifted his house to his son. Lastly, even if the deceased indicated at some time prior to 2004 that he wished to bequeath his house to all of his children, his specific instructions to Ms. Miroutenko was that he wished to leave his house to the respondent.
[29] For the above reasons, the evidence before me clearly refutes the doctrine of resulting trust.
DISPOSITION
- The applicants’ motion is dismissed.
COSTS
[30] The respondent seeks costs in the amount of $27,465.25 on a partial indemnity basis and $44,297.53 on a full indemnity basis.
[31] In determining what quantum of costs could be considered fair and reasonable in this matter, I consider the following:
- The respondent was substantially successful in this motion.
- The respondent had to respond to a number of motions in this matter brought by the applicants.
- The respondent was required to conduct an Examination for Discovery of a witness.
- The matter, while not necessarily complex, required a fair amount of preparation and required a fair amount of court time.
[32] Based on the above, costs in the amount of $20,000 inclusive are fair and reasonable.
ORDER
[33] The applicants shall pay costs fixed in the amount of $20,000 inclusive to the respondent within sixty (60) days of today’s date.
André J.
DATE: July 21, 2015
COURT FILE NO.: CV-14-3661-ES
DATE: 20150721
SUPERIOR COURT OF JUSTICE – ONTARIO
IN THE ESTATE OF JOHN KOZUSKO, deceased
RE: PETER KOZUSKO, DANIEL KOZUSKO and IRENE GUSZ – and – JOHN MICHAEL KOZUSKO, in his capacity as the former Attorney of Property for John Kozusko and Estate Trustee of the Estate of John Kozusko
BEFORE: André J.
COUNSEL: A.H. Wu, for the Applicant/Moving Parties
M. Visoiu, for the Respondent/Responding Party
ENDORSEMENT
André J.
DATE: July 21, 2015