Court File and Parties

Court File No.: CV-13-493578 Court File No.: CV-15-5272-00 (Brampton) Date: 20160610

Ontario Superior Court of Justice

Between:

Court File No. CV-13-493578 TERESA SCALAMOGNA and LILIANNA SIGGILLINO Plaintiffs – and – ROSANNA DI TORO, EGIDIO DI TORO, 1416134 ONTARIO LIMITED, 2377544 ONTARIO INC., DANIELA DI TORO, ROBERT DI TORO and MAURIZIO OCCHIUTO Defendants

Court File No. CV-15-5272-00 (Brampton) And Between: FILOMENA SIGGILLINO Plaintiff – and – ROSANNA DI TORO, LILIANNA SIGGILLINO, TERESA SCALAMOGNA, EGIDIO DI TORO, DANIELA DI TORO, ROBERT DI TORO and 2377544 ONTARIO INC. Defendants

Counsel: Nella Macchia for Plaintiff Teresa Scalamogna Cameron Fiske for the Plaintiff Lilianna Siggillino Brian Radnoff and Meredith Jones for the Defendants Rosanna Di Toro, Egidio Di Toro and Daniela Di Toro Alan Price for the Defendants Robert Di Toro and 2377544 Ontario Inc. William S.M. Cord for the Plaintiff Filomena Siggillino

Heard: June 7, 2016

Endorsement

Diamond J.:

[1] On June 7, 2016, I heard two motions brought within two separate but related legal proceedings. The underlying dispute has been previously described as a “Family Feud” episode. If interlocutory matters are not soon brought to a head, these proceedings will turn into an entire season.

[2] Teresa Scalamogna (“Teresa”), Lilianna Siggillino (“Lilianna”) and Rosanna Di Toro (“Rosanna”) are all sisters and the daughters of Filomena Siggillino (“Filomena”). Robert Di Toro (“Robert”) is one of Rosanna’s two children.

[3] In late November 2013, Teresa and Lilianna commenced a legal proceeding (“the 2013 action”) against, inter alia, Rosanna, Robert and corporations owned and/or controlled by Robert seeking, inter alia, damages and declaratory relief arising out of the alleged improper and unlawful transfer of a property municipally known as 13940 Airport Road, Caledon East, Ontario (“the property”).

[4] The property was purchased in 1977 by Filomena and her late husband as joint tenants. After her husband’s death, Filomena acquired full ownership of the property.

[5] There is no dispute that the property was ultimately transferred to 1416134 Ontario Ltd. (a defendant in the 2013 action and a company controlled by Robert) by way of registered quit claim, and with a purchase price of $750,000.00.

[6] The transfer was carried out through a Power of Attorney previously granted by Filomena in favour of Teresa and Lilianna. The purchase price of $750,000.00 was fully paid. Teresa, Lilianna and Rosanna split the net proceeds equally.

[7] In the 2013 action, Teresa and Lilianna both plead that their mother advised them in 2007 that the property was to be passed down to her three children in 2007 with each of them receiving a 1/3 interest in the property. It was Filomena’s evidence on cross-examination that in or around early 2007, she wished to transfer the property to her three daughters in equal 1/3 shares, but that the property was not to be sold until after her death.

[8] The theory of Teresa and Lilianna’s case in the 2013 action is that Rosanna and Robert misrepresented the true value of the property (i.e. it was worth more than $750,000.00) and clandestinely “scooped” Teresa and Lilianna’s interest in the property for far below market value as part of an improvident and unconscionable transaction.

[9] Within the 2013 action, Teresa and Lilianna previously brought a motion seeking leave to obtain and register a Certificate of Pending Litigation (“CPL”) against title to the property. At that time, Robert had located a third party purchaser and entered into an Agreement of Purchase and Sale to sell the property. Teresa and Lilianna’s motion was opposed by the defendants.

[10] By Reasons for Decision released on August 5, 2015, Master Short granted Teresa and Lilianna leave to register a CPL but ordered that the CPL “will be vacated simultaneously with the payment of $1,500,000.00 in the event the pending sale is completed in accordance with its terms”. As explained hereinafter, that transaction is still live with a closing date to be scheduled pending the disposition of these motions.

[11] Master Short’s order was not appealed by any party. It remains in full force and effect.

[12] When Robert attempted to arrange for the closing of the sale of the property with payment of the $1,500,000.00 into court in accordance with Master Short’s order, Teresa and Lilianna apparently tried to “run interference” by directly contacting the third party purchaser. As a result, Robert has brought this motion on behalf of 2377544 Ontario Inc. (“237”) seeking an order vesting legal and equitable title in 237 with a view to assuring the third party purchaser that 237 has legal and equitable title in the property to be conveyed on closing, on the condition that the $1,500,000.00 is paid into court from the sale proceeds.

[13] Even though Master Short’s order was not appealed, Filomena subsequently commenced her own legal proceeding in late November 2015 (“the 2015 action”). In her proceeding, Filomena seeks, inter alia, declaratory relief that she holds the property by way of constructive and/or resulting trust for her benefit, and that both Teresa and Lilianna fraudulently misused the Power of Attorney which she signed in 1995 to cause the property to be transferred out of Filomena’s name for no consideration, and without her knowledge or authority.

[14] In response to Robert’s motion seeking a vesting order, Filomena had brought a cross-motion seeking leave to register her own CPL against title to the property (which would presumably derail Robert’s efforts to close the sale of the property to the third party purchaser).

[15] During argument, counsel for Teresa and Lilianna conceded that I have no jurisdiction to vary the terms of Master Short’s order as it was never appealed to this Court. As such, Teresa and Lilianna oppose Robert’s motion by way of their support of Filomena’s cross-motion for her own CPL. As discussed hereinafter, I find the positions of Teresa and Lilianna to be awkward, and arguably contrived, as their support of Filomena’s position seems to fly in the face of the positions they advanced before Master Short in the 2013 action.

[16] The factors to be considered by the Court in determining whether to exercise its equitable discretion and grant leave to issue as CPL are well known. As held in 572383 Ontario Inc. v. Dhunna 1997 CarswellOnt 551 (Gen. Div.), those non-exhaustive factors are as follows:

a) Is the moving party a shell corporation without assets to compensate the responding party? b) Is the land unique? c) What was the party’s intention in acquiring the land? d) Is there an alternative claim for damages? e) What is the ease or difficulty in calculating such damages? f) Are damages a satisfactory remedy? g) Is there a willing purchaser for the property? h) What is the harm to each party if the CPL is granted or refused (with or without security)?

[17] No one factor is determinative. The test is discretionary and the Court is required to weigh all the factors in deciding what is just in the circumstance.

[18] In order to succeed on her motion, Filomena must show that there is sufficient evidence to establish a reasonable claim to an interest in the property. In her affidavit, Filomena alleged that she “intended that the property remain in her hands until her death after which she would pass it to her three daughters in equal shares” (i.e. the property would be bequeathed to her three daughters under her Will). This is in direct contrast to Filomena’s evidence on cross-examination when she testified that she was going to “give them the farm in 2007 with her three daughters being responsible to earn rental income and pay whatever expenses related to the property”.

[19] Filomena’s theory of her case against Teresa and Lilianna is relatively straight forward. She alleges that Teresa and Lilianna intentionally breached their duties and obligations owed to Filomena to act in accordance with her instructions and her best interests under the Power of Attorney.

[20] This, in and of itself, does not give rise to a reasonable claim to an interest in the property, and especially in light of the fact that Robert paid $750,000.00 to acquire it. In my view, Filomena must advance a tenable cause of action against Robert/237 in order to raise a reasonable claim to an interest in the property. I have reviewed Filomena’s Statement of Claim in detail. While her Claim asserts that all the defendants owed her trust and/or fiduciary duties and obligations, no particulars whatsoever are provided in support of that position. There is no specific cause of action advanced against Robert/237 in the Claim, other than requests for the rescission of the transfer of and an order that all the defendants hold the property in constructive and/or result in trust for the benefit of Filomena.

[21] During argument, counsel for Filomena (supported by counsel Teresa and Lilianna) seemed to be advancing an argument that Robert was liable for misconduct akin to the tort of knowing receipt. Nowhere in Filomena’s Claim does she advance a cause of action in knowing receipt against Robert/237. Notwithstanding, and even though such a cause of action typically gives rise to a claim in damages, I will assess the merits of this argument.

[22] As held by Justice Horkins in Pardhan v. Bank of Montreal 2012 ONSC 2229, the essential elements of knowing receipt are as follows:

a) The property received was subject to a trust in favour of the plaintiff; b) The property was taken from the plaintiff in breach of that trust (whether it was done fraudulently or not); c) The defendant had knowledge of facts efficient to put a reasonable person on notice or inquiry of the breach of trust; and d) The defendant received the trust property and applied the property for his/her own use and benefit.

[23] Although the tort of knowing receipt is not pleaded in Filomena’s Statement of Claim, counsel for Filomena pointed me to an excerpt in Robert’s responding affidavit which stated as follows:

“11. I verily believe that in 2007 the Plaintiff decided to sell the property as she no longer wished to carry the expenses of ownership and because of her advancing age. I strongly believe my grandmother advised her daughters of her wish to sell the property and also advised them that as she had bequeath (sic) the property to the sisters in her Will but once the property was sold prior to her death she would distribute the proceeds of the sale to the sisters by an inter vivos trust to avoid probate tax and pass the proceeds to her daughters as a gift”.

[24] Counsel for Filomena argues that the above paragraph confirms Robert’s actual knowledge that the transfer of the property was carried out in breach of a trust arrangement. I do not agree. To begin, at the time of the registration of the quit claim both Teresa and Lilianna were acting pursuant to the Power of Attorney, and the validity of that document is not in dispute.

[25] Further, on cross-examination Filomena was asked why Robert was named as a defendant in the 2015 Action if her intention was to transfer the Property in equal shares to her three daughters. In response, Filomena testified that she did not know why Robert was a party to the 2015 action, but “when she dies everything goes to her daughters”. Filomena could not offer a basis, even a factual one, for the inclusion of Robert as a defendant to the 2015 action.

[26] Placing a reasonable claim to an interest in land in question is not a high threshold. That said, there must be a tenable cause of action pleaded to support a claim to an interest in land, and sufficient evidence filed in support of that theory. The property has been owned by Robert for several years. Filomena’s Claim baldly alleges fiduciary duties owed by Robert to her, and there are no facts in the record before me to support such a claim.

[27] There is no claim in knowing receipt. There are no facts advanced by Filomena in support of the 2015 action against Robert. At most, Filomena has raised tenable causes of action against Teresa and Lilianna arising from the alleged breaches of their duties and obligations owed to her under the Power of Attorney.

[28] In addition, Teresa and Lilliana are supporting their mother’s efforts in the 2015 action. Such a position appears quite disingenuous given that by throwing their support behind their mother, Teresa and Lilliana are expressly undermining their own causes of action in the 2013 action. In Toronto (City) v. C.U.P.E. Local 79, [2003] S.C.R. 77 (S.C.C.), the Supreme Court of Canada held that the doctrine of abuse of process in civil proceedings engages the inherent power of the Court to prevent the misuse of its procedure, in a way that would bring the administration of justice into disrepute.

[29] The Court has an inherent and residual discretion to prevent an abuse of process. In my view, granting Filomena leave to issue a CPL when Master Short already granted leave to issue a CPL upon her daughters’ contrary position would amount to an abuse of process.

[30] On the record before me, I do not find the presence of a triable issue that could entitle Filomena to an interest in the property. I also find that damages would be appropriate compensation in the event Filomena is successful in the 2015 action.

[31] Filomena’s motion is therefore dismissed.

[32] I grant 237 the relief sought in paragraphs (a) – (e) of its Notice of Motion dated September 29, 2015. A vesting order is granted permitting the closing of the sale of the property to the third party purchaser in compliance with Master Short’s order requiring the sum of $1,500,000.00 paid into court. I further order that the sum of $1,500,000.00 shall be paid into court to the credit of both the 2013 action and the 2015 action.

[33] At the conclusion of the hearing, counsel for the parties advised that a previous unrelated motion had been abandoned, and that the costs of that abandoned motion had been resolved. In accordance with that agreement, I order Filomena to pay the costs of that abandoned motion to Maurizio Occhiuto in the all-inclusive amount of $3,500.00 within 30 days.

[34] With respect to the costs of these motions, including the costs of another prior motion to add Filomena as a party to the 2013 action, in the event the parties cannot agree upon the issue of those costs, they may exchange and deliver costs submissions totaling no more than four pages (including a Costs Outline) in accordance with the following schedule:

a) Costs submissions of Rosanna Di Toro, Egidio Di Toro, 2377544 Ontario Inc., Daniella Di Toro and Robert Di Toro within 10 days of the release of this Endorsement; and b) Costs submissions of Teresa Scalamogna, Lilianna Siggillino and Filomena Siggillino within 10 days of the receipt of the costs submissions of the above parties.

Diamond J. Released: June 10, 2016