Court File and Parties

NEWMARKET COURT FILE NO.: CV-17-131662-00 DATE: 20171205 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Massimo Lozzi, in his capacity as Attorney to Malzina (also known as Tremalzina) Lozzi, and Umberto (also known as Bert) Lozzi, in his capacity as Attorney to Malzina (also known as Tremalzina) Lozzi Applicants – and – Giovanna (also known as Joanna) Sacchetti, in her capacity as Attorney to Malzina (also known as Tremalzina) Lozzi Respondent

Counsel: David Lees, for the Applicants Romeo D’Ambrosio, for the Respondent

HEARD: November 3, 2017

Reasons on Application

SUTHERLAND J.:

Overview

[1] The applicants bring an application requesting, among other relief, an order that title to the property municipally known as 9519 Keele Street, Apt. 109, Vaughan, Ontario (the property) be transferred to Malzina (also known as Tremalzina) Lozzi. The applicants are not seeking any other relief.

[2] The two applicants and the sole respondent are siblings. They are the three adult children of Malzina Lozzi (Malzina).

[3] By way of a power of attorney dated August 15, 2008, Malzina named the respondent as her attorney for property and personal care and the applicants as her alternate attorneys.

[4] Malzina executed a last will and testament on August 15, 2008 naming her three children as equal beneficiaries. By Transfer dated August 15, 2008, Malzina transferred the property to the respondent. On that date, a trust declaration was also executed making the respondent a bare trustee of the property (Declaration of Trust), for Malzina as beneficial owner. The Declaration of Trust states:

Notwithstanding the interest in the ownership of the Lands may be registered in the name of the Trustee, the true and beneficial ownership thereof for all purposes is vested in the Beneficial Owner. The Trustee accepts the trust as herein set out and agrees to be bound by them and hereby constitutes herself a Trustee for the Beneficial Owner and agrees at the written request and cost of the Beneficial Owner to transfer title to the Beneficial Owner or as she may direct.

[5] Dr. Giovanni Marotta, a doctor of Geriatric and Internal Medicine, has been Malzina’s physician since 2012. On May 22, 2015, Dr. Marotta declared that Malzina’s power of attorney should be activated. Dr. Marotta completed a health assessment dated September 17, 2015 indicating that Malzina was not fit to make decisions concerning her property and personal care.

[6] On March 3, 2016, the applicants requested an assessment of Malzina’s capacity to authorize powers of attorney for property and personal care. Dr. Brutto, a psychologist, performed an assessment, meeting Malzina twice in March 2016. Dr. Brutto provided an opinion that agreed with Dr. Marotta’s assessment of Malzina’s decision making capabilities, but Dr. Brutto also opined that Malzina was capable of appointing her own attorneys for property and personal care.

[7] On April 27, 2016, Malzina executed another set of powers of attorney, drafted by Riccardo Di Mauro. This power of attorney appointed the applicants and the respondent as her attorneys for property and personal care.

[8] The issue for this court to determine is whether the property should be transferred from the respondent’s name in trust, to Malzina’s name. If so, control of said property will rest with all three of her attorneys, the applicants and the respondent.

[9] There is no challenge to the powers of attorney executed by Malzina in 2008 or in 2016. There is also no challenge to Malzina’s competence in 2008 or her intention, for whatever reason, to transfer the property into trust for herself with the respondent as her sole trustee.

Should the property be transferred to Malzina?

Position of the Parties

[10] The applicants do not contest Malzina’s intention to name the respondent as her bare trustee in 2008, but they contend that the law mandates that the property now be transferred back to Malzina. This contention is based on the new power of attorney executed in 2016 and on the fact that the respondent is a bare trustee with no term in the Declaration of Trust authorizing “a sell over”. The applicants further contend that there is no tax benefit to Malzina to have the property remain in trust with the respondent. It is more beneficial to have all of Malzina’s property under the control of all the named attorneys.

[11] The respondent argues that there is a reason why Malzina did what she did in 2008. The respondent contends that due to the applicants’ actions prior to the transfer in 2008, Malzina was concerned about the applicants’ intentions for her property. Further, Malzina’s intention was to perform some estate tax planning. The respondent contends that it is in Malzina’s best interest to have the respondent remain as her bare trustee for tax purposes and that based on Malzina’s known wishes, the property should not be transferred.

Analysis

[12] The applicants direct the court to section 33.2 (1) of the Substitute Decisions Act, 1992 (SDA). Section 33.2(1) reads:

33.2 (1) A person who has custody or control of property belonging to an incapable person shall,

(a) provide the incapable person’s guardian of property with any information requested by the guardian that concerns the property and that is known to the person who has custody or control of the property; and

(b) deliver the property to the incapable person’s guardian of property when required by the guardian.

[13] In considering the plain and ordinary meaning of the particular provision to the surrounding context where the words are found 2, I read this section to apply in situations where the person who has custody or control of an incapable person’s property is not a guardian of that incapable person’s property.

[14] In the circumstances of this matter, the respondent is a co-guardian of Malzina’s property. The respondent also has control and custody of the property, as a bare trustee.

[15] The applicants directed the court to two cases. Paragon Development Corporation et al. v. Sonka Properties Inc. et al. and Fiacco v. Lombardi.

[16] In Paragon, the Court of Appeal adjudicated whether the trial judge’s conclusion on beneficial ownership of corporate shares was correct. The court enunciated the principle that: “[a] bare trustee holds legal title to property on behalf of another and has no independent power, discretion or responsibility in connection with the property.”

[17] Fiacco is a decision of D.M. Brown J. giving directions to the applicant Guardians of the Property. This proceeding involved a power of attorney for property and personal care executed by the mother, naming her four children, the applicants and respondents, as her guardians. The respondents failed to abide by Cameron J.’s order to provide information and documentation about the mother’s property, along with a copy of the mother’s will, to the applicants. In his order, Cameron J. also appointed the applicants as the mother’s joint guardians of property and personal care.

[18] At the time she executed the Declaration of Trust, Malzina’s intention was to appoint the respondent as her bare trustee. When Malzina changed her power of attorney for property and personal care in 2016, she did not change her intention that the respondent should remain the bare trustee of the property. Mr. Di Mauro was not called to give evidence concerning Malzina’s wishes respecting the Declaration of Trust. All this court can presume from the record is that Malzina continued to want the respondent as her bare trustee of the property, be it for estate tax planning [5] or her concerns about the applicants’ intentions. Whatever the reason, the intention existed at the time Malzina signed the Declaration of Trust and the power of attorney in 2016.

[19] I further do not find the cases that the applicants referred to, or section 33.2 of the SDA helpful. The cases are factually distinguishable. I have not been provided with any case stating that a co-guardian must transfer property back to the incapable person after the incapable person has expressed the uncontroverted intention to have one of the guardians named as a trustee of his or her property.

[20] There is no evidence that the respondent has concealed any information about the property from the applicants. There is no evidence that the respondent has done anything inappropriate with the property in the nine years that she has held the property as a bare trustee.

[21] I find that the question this court needs to answer is whether it is in Malzina’s best interest to have the property transferred back to her as the applicants’ request. In determining what is in Malzina’s best interests, an understanding of the Malzina’s demonstrated intentions are relevant. 6

[22] I am not persuaded that section 33.2(1) of the SDA applies in the circumstances of this proceeding. The respondent is still a guardian of Malzina’s property. The information and documentation concerning the property is available to all of the guardians and the property is under the control of a guardian, namely the respondent.

[23] I am further not persuaded that it is necessary for the property to be transferred back to Malzina. The applicants have not provided me with evidence that Malzina’s transfer of the property to the respondent, as a bare trustee, is not in her best interest.

[24] Malzina made a decision on how she wished to have the property controlled and dealt with for tax purposes and her issues on the conduct of the applicants. This court cannot change her clear intention based on what she deemed to be in her best interest, without compelling evidence to do so. The only reasons I see, underlying the applicants wish to have the property transferred to Malzina, are those of convenience and control.

[25] Accordingly, I am not persuaded that this court should intervene and grant the order requested by the applicants.

[26] I am confident that the parties will be able to act jointly, as is their mother’s wishes, and in their mother’s best interest, in dealing with her property.

Disposition

[27] The order requested by the applicants is not granted.

[28] If the parties cannot agree on costs, the respondent can serve and file her submissions on costs within thirty days from the date of this decision. The applicants will have thirty days thereafter to serve and file their submissions. The submissions are to be no more than 3 pages, double spaced, exclusive of any cost outline, case law and offers to settle. There is no right of reply. Submissions are to be filed with the court. If no submissions are received within the time period set out herein, an order will be made that there will be no costs.

Justice P.W. Sutherland

Released: December 5, 2017