Court File and Parties
COURT FILE NO.: 16-67299 DATE: 2016/05/24 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
STEPHEN JAWORSKI as co-Executor of the Estate of Joseph Donald Jaworski, Plaintiff – and – ANITA RICCI, JANE FOTI and PETER JAWORSKI, Respondents
COUNSEL: Miriam Vale Peters, for the Applicant (Stephen Jaworski, Respondent to this motion) Christopher Spiteri, for the Respondent Anita Ricci (Applicant for this motion)
HEARD: May 19th, 2016
BEFORE: C. McKinnon J.
Reasons for Judgment
[1] This motion seeks to set aside the order of Master Champagne made on January 29th, 2016 permitting the applicant Stephen Jaworski to register a Certificate of Pending Litigation with respect to property registered in the name of his sister, Anita Ricci. The applicant and his sister Anita are co-executors of the estate of their father Joseph Donald Jaworski, pursuant to a will dated September 20th, 2000. The will provides that the residue of the estate will be split evenly among the four Jaworski children: Stephen, Anita, their sister Jane, and their brother Peter.
[2] Anita is the registered owner of property known municipally as 153 Glenncastle Drive, Carp, Ontario. The property was purchased by Anita on January 18th, 2011 for the sum of $500,000 dollars, using her own funds as well as funds obtained from her parents. The mother Isabelle Jaworski passed away in November 2013 and the father Donald Jaworski passed away on August 10th, 2015. Eleven days after his death, Anita Ricci placed a mortgage on the property in the amount of $50,000.
[3] Important to this motion is the fact that by a continuing general Power of Attorney dated September 20th, 2000, Donald Jaworski appointed Stephen and Anita as attorneys for his property.
[4] Because Donald and Isabelle were aging, discussion ensued among the children as to whether their parents should be placed in a retirement home. They preferred to remain in their own home. Eventually it was decided that they would sell their own home and live with their daughter Anita and her husband in a new home. They sold their home for $280,000, investing the money in the home acquired by Anita for the purchase price of $500,000, with Anita providing the balance of the funds. It was understood that Donald and Isabelle would own the property as tenants in common with their daughter Anita.
[5] On December 3rd, 2015, following the death of their father, the applicant Stephen wrote his sister, asking that the property be sold and the proceeds distributed in accordance with the will. By letter dated December 10th, 2015, Anita, through her counsel, advised that the property did not form part of the estate’s assets. By letter dated January 8th, 2016, Stephen, through his counsel, asked whether it would be necessary to commence an application regarding the estate’s ownership and hoped to settle the dispute without the need for court proceedings. On January 14th, 2016, counsel for Anita told counsel for Stephen that Anita’s position would be conveyed on Monday, January 18th. On Monday, January 18th, an email was sent to counsel for Stephen, confirming that Anita’s position set out in the December 10th correspondence “remains unchanged”, namely that the home to which the parents had contributed was solely owned by Anita and not held as tenants in common by Anita and her parents. In the face of that communication, counsel for Stephen brought an ex parte application for a Certificate of Pending Litigation, which was granted by Master Champagne, on January 29th, 2016.
[6] Counsel for Anita seeks to set aside the Certificate on the basis of material non-disclosure. Mr. Spiteri submits that in the information put before Master Champagne, no mention was made of the fact that Anita and her husband acted as care-givers for the parents for a five year period, that brother Stephen had given little assistance to his aging parents, that he strongly advocated placing them in a retirement home, and that the registration of the property in Anita’s name was known to Stephen at the time, (a fact which Stephen denies). Had this crucial information been known to Master Champagne, it is submitted Master Champagne would not have issued the Certificate of Pending Litigation.
[7] I disagree. In my view, the disclosure made by Stephen in the material placed before Master Champagne did not omit material facts that would have likely changed the determination of whether a Certificate should have issued.
[8] It is not disputed that there is a high onus upon an individual seeking ex parte relief to make full and frank disclosure, even if it harms the case being mounted by the applicant. The test of non-disclosure is whether the facts omitted would have made the order doubtful. Mere assertions are not material facts: Notarfonzo v. Goodman (1981), 24 C.P.C. 127 (Ont. H.C.); Hess v. Mandzuk (1984), 44 C.P.C. 179, 34 R.P.R. 90 (Ont. H.C.), Passarelli v. Di Cienzo (1989), 34 C.P.C. (2d) 54, 67 O.R. (2d) 603 (H.C.); 931473 Ontario Ltd. v. Coldwell Banker Canada Inc. [1991], O.J. No. 1150, 5 C.P.C (3d) 238 (Ont. C.J. Gen. Div.); 1376273 Ontario Inc. V. Woods Property Development Inc. [2001] O.J. No. 2372; 43 R.P.R. (3d) 19.
[9] In reviewing the material placed before Master Champagne, I am satisfied that at the time of the application, Stephen Jaworski was not in possession of much of the information that Mr. Spiteri now alleges he should have included in his material. Specifically, much of the information arises from an affidavit filed by his client after the issuance of the Certificate in question, setting out the circumstances surrounding the transfer of the parents’ interest in the home to Anita for the reason that she and her husband would be providing care to their aging parents. Anita refers to this as a “secret transaction”, in order to avoid the possibility of Stephen placing them in a retirement home. I pause to observe that this explanation raises as many questions as it answers.
[10] Rule 42(3) of the Ontario Rules of Civil Procedure permits a motion for an order granting a Certificate of Pending Litigation to be made without notice. Impliedly, one must conclude that to proceed without notice requires serious and compelling reasons: Golf Islands Navigation v. SIU Canadian District (1959), 18 D.L.R. (2d) 216, 27 W.W.R. 652 (B.C.S.C.).
[11] The material placed before Master Champagne included the entire exchange of correspondence and emails between the parties. Master Champagne was aware of the last communication between counsel for the parties and specifically the blunt email message that Anita Ricci’s position had not changed, namely that she owned the property and it did not form part of the assets of the estate. It was also revealed in the abstract of the land registry filed before Master Champagne that a $50,000 mortgage was placed on the home just 11 days after the death of Donald Jaworski.
[12] Given these facts, Master Champagne must have concluded that an ex parte order was justified in the circumstances.
[13] Placing myself in Master Champagne’s position, I would conclude on the material placed before her that Anita Ricci was not only treating the property as her own but also mortgaging it, thus putting at risk the equity in the home originally intended by Joseph Donald Jaworski to be for the benefit of the four children of the marriage, in accordance with the terms of his will.
[14] A further difficulty facing Anita is the fact that she is a joint executor of the estate of her father and also a joint attorney with her brother Stephen, pursuant to the powers of the Ontario Powers of Attorney Act and the Substitute Decisions Act. As such, Anita assumed a fiduciary duty to her father with respect to his property. In circumstances where a parent has made a gratuitous transfer to an adult child, the presumption of resulting trust applies. The adult child is presumed to hold those assets by way of resulting trust for the benefit of the parent or the parents’ estate. In order to rebut the presumption, the adult child must prove, on a balance of probabilities, that the donor’s intention was a gift. The underlying principal is that equity presumes a bargain as opposed to a gift: Pecore v. Pecore, 2007 SCC 17, at para. 24.
[15] It seems clear to me that the estate of Donald Jaworski has a triable interest in the property registered in the name of Anita Ricci.
[16] Both counsel agree that the file of the law firm that acted for the father, Joseph Donald Jaworski, will be relevant in determining whether or not the transfer of property to Anita was the result of his true intention.
[17] There are two matters that deserve comment. First, the affidavit placed before Master Champagne was that of a law clerk employed by counsel for Stephen Jaworski. That affidavit set out contentious facts based on information and belief from Stephen Jaworski. The affidavit should have been made by Stephen Jaworski so that he could be subject to cross-examination on the contentious facts included in it. Law clerks should not be engaged in the process of filing affidavits that touch on contentious facts: Mapletoft v. Service, [2008] O.J. No. 693 per Master MacLeod, at para. 9.
[18] Second, in an application such as this, where an ex parte order is sought to be set aside for reasons of material non-disclosure, the application should be brought before the judicial official who made the original order. That official is in the best position to determine whether there has been material non-disclosure. A reviewing judge such as myself is not in the position of being aware of whatever oral submissions might have been made to the judge who made the original order.
[19] Having said that, I am satisfied on the written material placed before Master Champagne that there was sufficient cause to issue the certificate in question. In the result, the application for an order vacating the certificate of Pending Litigation is denied.
[20] Further, and on consent, it is ordered that the applicant Stephen and respondent Anita are entitled to the release of the solicitor’s records, notes and files relating to Donald Jaworski and Isabelle Jaworski from Stephen Francispillai, solicitor, or any predecessor or successor in possession, power or control of such records. The reasonable costs of such production shall initially be payable out of the estate, though ultimate liability for costs will be determined by the application judge.
[21] On consent, It is further ordered that the Respondent Anita Ricci direct Stephen Francispillai or any predecessor or successor in possession to release to the Applicant, Stephen Jaworski, all solicitors’ records, notes and files with respect to the 2011 purchase of 153 Glenncastle Drive, Carp, Ontario, legally described as lot 21, plan 4M1006, West Carleton.
[22] On consent, it is further ordered that no solicitor and client privilege shall attach to any communications made between the deceased Isabelle Jaworski, Anita Ricci and their solicitor Stephen Francispillai and any notes or records of the solicitor Stephen Francispillai, or any documents in the possession, power or control of any of the parties in connection with the deceased Donald Jaworski, his daughter Anita Ricci and his deceased wife Isabelle Jaworski’s instructions.
[23] On consent, it is further ordered that any claim in respect of the deceased Donald Jaworski or the deceased, Isabelle Jaworski or Anita Ricci of solicitor client privilege with Stephen Francispillai, financial advisor/client privilege, or any other professional privilege or the duty of confidentiality, instructions from, making of, or execution of, any of the documentation of the deceased relating to property or real estate, inclusive of any privacy regulations and legislation which may prohibit the obtaining of such information, including personal health information in respect of the deceased, Donald Jaworski and Isabelle Jaworski’s documentation governed by the Personal Information Protection and Electronic Documents Act and the Personal Health Information Protection Act, shall be and is hereby waived.
[24] On consent, it is further ordered that Rule 30.1.01(3) of the Ontario Rules of Civil Procedure shall not apply with respect to the use of evidence or information by any of the parties relating to the issues in these proceedings, except insofar as evidence or information is obtained from Stephen Francispillai.
[25] On consent, it is further ordered that the parties are hereby granted leave pursuant to Rule 31.10 of the Ontario Rules of Civil Procedure to examine for discovery the solicitor Stephen Francispillai. The application judge shall determine if Stephen Francispillai should be entitled to reasonable fees for his preparation and attendance.
[26] On consent, it is further ordered that Stephen Francispillai shall produce to the Applicant and the Respondents all files and records relating to the deceased within 10 days of receipt of the order.
[27] On consent, it is further ordered that the Respondent Anita Ricci shall produce to counsel for the Applicant within 10 days of receipt of the order all records and documents relating to the property located at 156 Glenncastle Drive, Carp, Ontario, legally described as lot 21, plan 4M1006, West Carleton.
[28] The Respondent to this Motion, Stephen Jaworski, shall be entitled to his costs of this proceeding. In the event the parties are unable to agree on costs, I shall accept short written submissions on a schedule agreed to by counsel.