Court File and Parties

COURT FILE NO.: CV-16-128704 DATE: 20170420 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Caroline Sorensen and Lucie Giguere, Plaintiffs AND: Keith Ellis, Defendant

BEFORE: Justice J. Di Luca

COUNSEL: Donald Zaldin, Counsel, for the Plaintiffs David Mende, Counsel, for the Defendant

HEARD: April 13, 2017

Endorsement

[1] The Plaintiff, Caroline Sorensen, and the Defendant, Keith Ellis, were once a common law couple living together in a home located at 126 Longford Drive in Newmarket, Ontario [the “property”]. For financial reasons, Mr. Ellis could not take title in his name. As a result, title was held by Ms. Sorensen and the co-Plaintiff, Lucie Giguere, who is Ms. Sorensen’s mother. As well, for a period of time early on, Ms. Sorensen’s father, Michel Sorenson, was also on title.

[2] The couple lived in the residence for a number of years with both contributing to the cost of upkeep and ownership, though the proportion of contribution is now in dispute. The plan was for the parties to get married and perhaps use the property as their matrimonial home.

[3] Alas, the relationship did not last. In January 2016, following the demise of the relationship, Ms. Sorensen left the property and returned to live with her parents. Mr. Ellis has continued to reside in the home and has since April 29, 2016 not paid any money towards the carrying costs of the home.

[4] Not surprisingly, this has caused tension. Attempts to resolve the matter were unsuccessful and on November 10, 2016, the Plaintiffs commenced an action seeking, inter alia, a Declaration that the Plaintiffs are solely entitled to possession of the property, a Declaration that the Defendant has no right, title or interest in the property, an Order that the Defendant vacate the property, an Order that the Defendant pay certain expenses and account for others and an Order awarding damages.

[5] In his statement of defence and counterclaim, Mr. Ellis claims a 50% interest in the value of the property on constructive trust principles. He also claims a right to possession.

[6] The Plaintiffs now bring a motion seeking, inter alia:

a. An interim Order that the Defendant and anyone else residing at the property vacate the property; b. An interim Order that the property be immediately prepared and listed for sale; c. An Order that 50% of the net proceeds of the sale be released directly to the Plaintiffs and that the other 50% of the proceeds be paid into Court or into a lawyer’s trust account, to be disbursed in accordance with any agreement of the parties or in accordance with any further Order of this Court. d. An Order directing the Defendant to pay $500 per month from May 2016 to present to the Plaintiffs’ counsel to be held in trust pending an accounting.

[7] The Defendant brings a cross-motion wherein he seeks:

a. An Order that the parties prepare the property for sale as soon as possible and share the costs to do so equally, following which the Defendant shall vacate the property forthwith and the parties shall tender all keys to the chosen listing broker; b. An Order directing the Plaintiffs to forthwith list the property for sale using a broker approved of by the Defendant acting reasonably; c. An Order directing the parties to agree upon a reputable arms-length lawyer to act on the sale of the property and who shall hold in trust the entire net proceeds of the sale pending agreement by the parties or further Order of the Court.

[8] The Defendant seeks ancillary relief regarding the trial of an issue as well as an Order directing the Plaintiffs to make certain documentary productions. These issues were not pressed in submissions so I decline to rule on them.

[9] On my review of the material filed and in view of the submissions made, it is clear that the parties are ad idem on the core of what needs to happen in this case: the property needs to be sold at fair market value as soon as possible. It is also clear that the property will need to be prepared for sale in order to realize the best potential outcome.

[10] The parties are also ad idem that Mr. Ellis needs to vacate the property, though the Plaintiffs argue this should be forthwith and the Defendant suggests that it should be forthwith once the parties prepare the property for sale.

[11] Lastly, during the course of submissions, the parties agreed that a reputable listing agent should be chosen and that an independent real estate lawyer should be retained to act on the sale.

[12] The more contentious issue is what should be done with the net proceeds of the sale. In his statement of defence and counterclaim, the Defendant acknowledges that the Plaintiffs are entitled to a 50% interest in the home. The argument at trial will centre on whether constructive trust principles apply to give the Defendant the remaining 50% interest in the value of the home. The amount that is ultimately awarded to the Defendant, if any, will be subject to an accounting and potential set-off for amounts paid by the Plaintiffs since April 2016 when the Defendant stopped contributing to the carrying costs of the property. It may also involve an accounting in favour of Mr. Ellis for proceeds from a re-financing of the property, lost rent and repair costs he claims.

[13] Based on the material before me, it does not appear likely that the Defendant will recover more than 50% of the net proceeds. Even if this does happen, the Defendant will merely be put in the position of seeking enforcement of only the portion in excess of his 50% interest which will be held in trust.

[14] In my view, placing 50% of the net proceeds of the sale in trust for the Defendant pending the outcome of the action is more than fair in the circumstances. Indeed, the Defendant is content to have this happen. However, the Defendant goes further and says it would cause irreparable harm if the Plaintiffs received their 50% share ahead of him.

[15] I disagree. I find that there will be no irreparable harm to the Defendant if the Plaintiffs are given access to 50% of the net proceeds in advance of the determination of the action.

[16] The Plaintiffs own the property, are responsible for the financing and have been paying the carrying costs since April 2016. The Defendant has been using his possession of the property as leverage in the negotiations. However, he agrees that the time has come for the property to be sold. He also accepts that the Plaintiffs are entitled to a 50% share of the net proceeds. His claim for the other 50% is at issue and the constructive trust claim is his to advance in this proceeding. He may or may not be successful in the claim, but he has not established a basis upon which the Plaintiffs’ 50% share of the net proceeds should be withheld from them pending that determination.

[17] As a result, I order:

a. That the Defendant, Keith Ellis, forthwith vacate the property and deliver up possession of the property to the Plaintiffs; b. That the property be prepared for sale as soon as possible by the Plaintiffs at their expense; c. That the property be listed for sale forthwith on the local Multiple Listing Service using a reputable, independent, arms-length real estate broker chosen by the Plaintiffs and agreed to by the Defendant acting reasonably. If the parties cannot agree on a broker, they can seek direction of the Court; d. The Plaintiffs shall take all reasonable steps to promptly sell the home at fair market value; e. That the parties will jointly select a reputable, independent, arms-length lawyer to act on the sale of the property. If the parties cannot agree on a lawyer, they can seek the direct of the Court; and, f. The net proceeds of the sale, after payment of real estate commissions owing, realty taxes, mortgage, insurance, repairs, maintenance and utilities shall be disbursed as follows: i. One-half of the net proceeds of the sale will be paid to the Plaintiffs; ii. The other half of the net proceeds will be held in trust by the lawyer selected to act on the sale of the property and will be so held until a written agreement between the parties or further Order of this Court directs disbursement.

[18] I decline to Order the Defendant to pay, at this time, any amounts claimed by the Plaintiffs relating to his possession of the property since April 2016. Those amounts will be determined by these proceedings and will be the subject of an accounting and potential set-off.

[19] The parties are encouraged to expeditiously and thoroughly exchange required documents and information so that this matter can be resolved in a fashion that best serves all parties.

[20] The Plaintiffs’ motion is granted. The Defendant’s cross motion is dismissed. I will entertain written submissions on costs, no longer than 3 pages, submitted within 15 days of this decision, failing which no Order of costs shall be made.

Justice J. Di Luca Date: April 20, 2017