Court File and Parties
COURT FILE NO.: CV-14-511191 DATE: 2016/05/25 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
LAURA MAMMONE, ANTONIO MAMMONE and DANIELE MAMMONE, ESTATE TRUSTEES of the ESTATE of FRANK MAMMONE Applicants – and – EMILIO MAMMONE and DENSITY GARDENS ENTERPRISES INC. Respondents
Counsel: Alastair McNish, for the Applicants David M. Pomer, for the Respondents
HEARD: April 4, 2016
G. DOW, J.
REASONS FOR DECISION
1The Estate of Frank Mammone seeks an order for the sale of two properties, 7912 and 7918 Kipling Avenue, Woodbridge, dividing the proceeds equally between the applicant and respondent after an accounting to determine the value, if any, either party is entitled to credit for since the untimely death of Frank Mammone May 3, 2006.
2The respondent seeks transfer of the one half interest of the respondent, Emilio Mammone in exchange for the $110,000 sum Emilio Mammone alleges the deceased accepted for his interest in each property just prior to his death.
Background
3The residential home at 7912 Kipling Avenue was a rental property owned equally as tenants in common by the late Frank Mammone and Emilio Mammone in 2006. The nearby residential home, 7918 Kipling Avenue, is the sole asset of the corporate respondent, Density Gardens Enterprises Inc. (“Density Gardens”), the shares of which were owned equally in 2006 by Frank Mammone and Emilio Mammone.
4It is clear the brothers had discussions about the refinancing of these assets given the paperwork that exists. HSBC Bank has a note dated March 17, 2006 that Emilio and Frank Mammone were seeking refinancing for 7918 Kipling Avenue and a new mortgage for 7912 Kipling Avenue. By April 21, HSBC Bank notes “Emilio Mammone is buying out partner of property, brother Frank Mammone, and replacing with his wife Rosa Mammone. Transaction to be completed by customer’s lawyer on or before April 28/06.”
5However, the letter from Emilio Mammone’s lawyer, Leonard Naymark at Batcher, Wasserman & Associates to Carla Tatangelo at Richardson, Tatangelo LLP details the properties involved and that HSBC had started paperwork to have Frank released from his obligations under the mortgages. Mr. Naymark proposes Ms. Tatangelo contact Frank Mammone for further information and asks her “Kindly advise how you wish to proceed”. The letter did not confirm the agreement to sell, or the price.
6The evidence of Carla Tatangelo is that while there was no formal retainer, there was a discussion about her acting for Frank Mammone with regard to “a contemplated transaction involving the transfer of his interest in two properties on Kipling Avenue to his brother, Emilio Mammone”. However she also testified “I do not recall an agreement being reached”.
7Other paperwork was prepared by HSBC including a mortgage loan agreement dated April 26, 2006 with Emilio and Rosa Mammone as borrowers. There is a bank draft from the Toronto Dominion Bank payable to Batcher, Wasserman & Associates dated April 27, 2006 in the amount of $111,660 which is deposited by Batcher, Wasserman & Associates but never forwarded to Frank Mammone or any representative empowered to accept the funds on his behalf. (It is subsequently returned to Emilio Mammone). There is an unsigned assignment of Frank Mammone’s 33.33 shares in Density Gardens without a specific date in May, 2006 and an unsigned resignation by Frank Mammone as director, secretary and treasurer of Density Gardens dated May 5, 2006.
8The respondents also produced the April 28, 2006 business banking statement of Density Gardens from the Bank of Montreal that showed a deposit of $108,103.83 on April 3 adding to a balance of $8,188.91. There were withdrawals of $50,000 on April 6 and April 10 which Emilio Mammone testifies was for him to transfer to his brother and $10,500 on April 27. Emilio Mammone says this was the basis for the $111,660 draft to his lawyer.
9The death of Frank Mammone triggered a dispute amongst his family as he apparently sought to benefit his grandchildren at the expense of his children and spouse. His spouse exercised her right to an equalization share pursuant to the Family Law Act.
10The spouse, Sandra Mammone, testified that prior to the death of Frank Mammone she “wasn’t on speaking terms” with her husband. She did overhear him on the telephone advising he was getting rid of “those two houses”. When she inquired of Emilio Mammone for additional details “about a week before my husband died”, she was told to call her lawyer or ask her husband.
Issue
11The issues to be decided in this application is whether there is an enforceable agreement between Emilio and Frank Mammone in respect of the transfer of Frank’s interest in 7912 Kipling Avenue and 7918 Kipling Avenue prior to the death of Frank Mammone. If the agreement is not enforceable, ought the properties be sold and the proceeds divided? The parties have agreed the potential third issue regarding an accounting is not before me to decide.
Analysis
12The disposition of this matter has been delayed and complicated by challenges to the last will and testament of Frank Mammone. Further, the interests of Frank Mammone’s grandchildren, as beneficiaries who are also persons under disability requires consideration of their best interest.
13The problem facing the respondents is the application of section 13 of the Ontario Evidence Act, R.S.O. 1990, c.E. 23 which (paraphrasing) states in an action by or against heirs, next of kin or administrators of a deceased person, the opposite or interested party shall not obtain a decision unless his or its own evidence in respect of any matter occurring before the death of the deceased, unless such evidence is corroborated by some other material evidence. In this regard, as submitted by counsel for the applicants, the essential terms of the transaction the respondents seek to enforce is all from the respondents or persons and entities to whom Emilio Mammone has described the purported agreement. This includes the lawyer for the respondents and HSBC Bank from whom refinancing was sought.
14The respondents rely on comments made by Justice Laskin in Burns Estate v. Mellon, [2000] O.J. No. 2130 where section 13 of the Evidence Act, supra, and the phrase “by some other material evidence” was considered noting it could be direct or circumstantial, a single piece of evidence or several pieces considered cumulatively. However, in dismissing the appeal and upholding the initial decision of Justice Roberts, the court looked to the actions of the deceased by reviewing the detailed nature of his will and the absence of any documentation indicating the gift made was actually a loan as alleged by the appellant.
15In the matter before me, there is no evidence directly from Frank Mammone that he had agreed to complete this transaction. Specifically, there is no acknowledgement from the lawyer he had retained as to the agreed upon price. Frank Mammone had not executed any of the documents by HSBC Bank confirming he was to receive the funds available from the refinancing being proposed. (In this regard, I note there is a mortgagor’s acknowledgement dated March 21, 2006 in the HSBC Bank documents signed by Frank Mammone in which he and Emilio Mammone, also a signatory, have “applied to HSBC Bank Canada (“HSBC”) for a loan/mortgage, which will be secured, against my residence.”)
16My conclusion is reinforced by consideration of section 4 of the Statute of Frauds, R.S.O. 1990, c.S. 19 which again (paraphrasing) requires the sale of land to be in writing and signed by the parties in order to be enforceable. The respondents attempted before me to exclude operation of section 4 based on the doctrine of part performance.
17As I understand this legal doctrine, and relying on the reasons of Justice Gillese in Erie Sand & Gravel Ltd. v. Seres’ Farms Ltd., 2009 ONCA 709, at paragraph 78, it is “the performance by one party, coupled with the standing by of the other party, which would make it inequitable for the other party to rely on the Statute of Frauds to be relieved of its obligation to perform”. Justice Gillese goes on to state in the following paragraph that this proposition flows from first, detrimental reliance and second, acts of part performance sufficient to indicate the existence of the alleged contract.
18Taking the acts noted by the respondents into consideration, I conclude they have not been successful in demonstrating part performance. In my view, for the respondents to have succeeded, a combination of the following would have been required:
a) Frank Mammone having signed something with HSBC Bank confirming his awareness of an agreement to the proposed deal such that he would receive $110,000;
b) an exchange of correspondence between the lawyers for the parties confirming the essential detail of the transaction (price), for example, Mr. Naymark identifying the agreed upon price in his letter of April 21, 2006 and that Ms. Tatangelo provided her acknowledgement in writing;
c) alternatively, Ms. Tatangelo responding to the April 21, 2006 letter detailing her instructions to proceed with completion of the transaction with her client to receive $110,000;
d) the forwarding of the funds for the purchase price, apparently held by counsel for the respondents for some time to counsel for Frank Mammone, presumably in trust;
e) evidence that a substantial portion of the agreed upon price had been paid to Frank Mammone, for example either of the $50,000 sums indicated were withdrawn from Density Gardens’ Bank of Montreal account April 6 and April 10, 2006 instead of to Emilio Mammone;
f) Frank Mammone’s signature on the corporate documents created by Emilio Mammone’s lawyer and thus dated before Frank Mammone’s death on May 3, 2006.
Conclusion
19As a result, the cross-application by the respondents is dismissed. There shall be an order directing the sale of each property in accordance with the relief sought in paragraphs (a), (b), (c), (d), (e) and (h) of the Notice of Application. The respondents are not precluded from being the purchaser of either property. As it was uncontested that Emilio Mammone has carried on with management of the property since May 3, 2006, collecting rent, doing or arranging for maintenance, causing statements and tax returns to be prepared and filed as well as attending to the needs (and eviction of tenants), the accounting agreed to by the parties shall include an assessment of the services performed by Emilio Mammone for the purpose of calculating its value, which can then be agreed upon or may be determined upon the tendering of further evidence and hearing of this application.
Costs
20The respondent submitted a Costs Outline in the amount of $20,721.35 on a full indemnity basis (inclusive of fees, HST and disbursements). On a partial indemnity basis, the claim was reduced to 60 percent or $12,432.81. Counsel for the applicants failed to submit a Costs Outline contrary to Rule 57.01(6) but acknowledged his outline would be in a similar amount. There was no compelling submissions made that costs should not be payable on a partial indemnity basis. The applicants were successful and thus are entitled to partial indemnity costs in the amount of $12,432.81 inclusive of fees, HST and disbursements payable by the respondents forthwith.
Mr. Justice G. Dow Released: May 25, 2016