COURT FILE NO.: 5853/12
DATE: 2018/05/18
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Maria Marino
Don Morris, for the Plaintiff
Plaintiff
- and -
Charlotte Marino and Gerlandina Jones by her Litigation Guardian, Paul Jones
Andrew D. Ruzza and Daniel Yudashkin, for the Defendant Charlotte Marino
Defendants
HEARD at Welland, Ontario: May 14 & 15, 2018
The Honourable Justice D. L. Edwards
DECISION ON SUMMARY JUDGMENT MOTION
[1] This summary judgment motion is brought by the defendant Charlotte Marino seeking an order to dismiss the plaintiff’s claim against her. The plaintiff resists the motion.
[2] For the following reasons I grant the summary judgment motion and dismiss the plaintiff’s claim against Charlotte Marino.
Background
[3] In 2001 the plaintiff, Maria Marino, and her now deceased husband, Domenico Marino, executed a mortgage which was secured against 318 Albany Rd. Fort Erie (“Albany mortgage”) in favour of the defendant Charlotte Marino (“Charlotte”) and her sister Gerlandina Jones (“Dina”), having a face value of $100,000. When this property was sold the proceeds were applied to pay the encumbrances on title which included the Albany mortgage. The discharges were handled by a lawyer in the normal way that private mortgages are discharged.
[4] Charlotte’s evidence is that the proceeds of sale were not sufficient to pay the mortgage in full, but that she and Dina executed discharges of the mortgage.
[5] Maria now disputes the validity of the Albany mortgage and states that the mortgage was placed to avoid creditors that she and her husband had, whereas her son Joseph Marino’s evidence was that the scheme was to protect against potential creditors of his parents. Maria asserts that the funds paid to Charlotte and Dina were funds held in trust for herself and her husband.
[6] Maria, Domenico and their son, Joseph Marino, owned a property municipally known as 264 Lakeshore Rd. Fort Erie (“Lakeshore”). In 2001 the owners of Lakeshore gave a mortgage in the amount of $28,650 in favour of Dina and her now deceased husband, David Jones, secured against Lakeshore (“Lakeshore Mortgage”). Joseph’s evidence is that this mortgage was intended to charge only his 50% interest in the lands. The parties do not dispute the validity of this mortgage.
[7] When Lakeshore was sold in 2003 the Lakeshore Mortgage was paid off. In total, the solicitor acting on the sale sent the sum of $115,674.25 to Dina and David. The payout statement that was signed by the Lakeshore owners indicates that $38,274.25 was for the Lakeshore mortgage, $60,781.07 for 1st mortgage payments, $14,766 for taxes paid out, and an extra bonus of $1,852.33.
[8] Also, a mortgage in the face amount of $100,000 given by Maria, Domenico and Joseph in favour of Charlotte was registered against Lakeshore in February 2003. This was discharged without payment when Lakeshore was paid.
[9] Charlotte and Dina at some point prior to the sale of Albany opened a joint account. The proceeds that they received from the Albany Mortgage discharge were paid into that account. Charlotte’s evidence is that after the sale of Lakeshore, Dina and David sent to her the sum of $77,400, which she deposited into the joint account.
[10] Charlotte testified that she borrowed $100,000 of Dina and David’s money from this joint account and combined it with her own money to buy in April 2003 a condominium known as Unit 122-1001 Cedarglen Gate, Mississauga (“Condominium”). She paid the sum of $158,500 plus closing costs for the condominium and placed title into her own name.
[11] Maria and Joseph’s evidence is that, other than the $28,650 Lakeshore Mortgage, the other mortgages were shams intended to protect Maria and Domenico’s equity against creditors. Maria also states that with her permission, Charlotte purchased the Condominium and that the initial intention was that title would be placed in the names of herself and Domenico. Later when she found out that title was in Charlotte’s name, they agreed that Charlotte would hold the Condominium in trust for Maria and Domenico.
[12] Maria began this action by way of a Statement of Claim which was issued on October 12, 2012. In that action she named her daughters, Charlotte and Dina as defendants.
[13] In the Statement of Claim, Maria alleged that:
a. In 2003 she and her husband gave to the defendants in trust proceeds of the sale of two properties, namely 318 Albany Rd. Fort Erie and 264 Lakeshore Rd. Fort Erie.
b. Subsequently, she instructed the defendants to utilize approximately $168,000 to purchase a condominium known as 1001 Cedarglen Gate in Mississauga.
c. At the plaintiff’s instruction, title to the Condominium was taken in Charlotte’s name and to be held in trust for the plaintiff and her husband.
d. Charlotte has refused to transfer title to the Condominium back to the plaintiff.
[14] In the Statement of Claim, Maria sought return of approximately $192,000 and alternatively a declaration that Charlotte held the Condominium in trust for her.
[15] Maria brought a motion to amend her Statement of Claim. However, by agreement, that motion will not go forward until after this summary judgment motion has been dealt with. The parties consented to an order to that effect, which order is dated September 11, 2017.
[16] On May 14, 2018 I heard and granted a summary judgment motion brought by the defendant Dina. As a result, the plaintiff’s claim against Dina was dismissed.
[17] The parties have had discovery of each other for this motion. As well, there has been cross examination on all of the affidavits provided for this motion, with the exception of Tatiana Marino, who did not present herself for cross examination. Maria did not file an affidavit for this motion. The discovery transcripts and cross examination transcripts overfill a banker’s box. There were two days of oral submissions on the two summary judgment motions.
[18] Domenico and David are both deceased. Dina has been declared mentally incompetent. Maria is now a 90 year old lady whose memory by her own testimony is fading with respect to the issues of this litigation.
Law on Summary Judgment Motions
[19] There is no issue as to what the test for granting summary judgment is. Hyrniak, the Rules of Civil Procedure and cases after Hyrniak make it very clear.
[20] I must grant summary judgment if I am satisfied that there is no genuine issue requiring a trial with respect to a claim or defence. There is no genuine issue requiring a trial when I am able to reach a fair and just determination of the merits of the motion for summary judgment.
[21] This will be true when the process allows me to make the necessary findings of fact, to apply the law to those facts, and the process is a proportionate more expeditious and less expensive means to achieve a just result.
[22] As noted in Hyrniak, I should first determine if there is a genuine issue requiring a trial based only on the evidence before me, solely on the written record filed and without using the fact-finding powers permitted in Rule 20.04(2.1).
[23] If there appears to be a genuine issue requiring a trial, I should then determine if the need for trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). I may at my discretion use those powers provided that their use is not against the interests of justice.
[24] In determining whether there is a genuine issue requiring a trial Rule 20.04(2.1) grants me the power to weigh evidence, evaluate the credibility of deponents and draw any reasonable inference from the evidence.
[25] I also have the power to order that oral evidence be presented by one or more parties. (Rule 20.40(2.2))
[26] I would also refer to Rule 1.04 which requires that the rules be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.
Parties’ Positions
[27] Charlotte submits that this is a proper case for a summary judgment motion. Her counsel’s overall position is that the plaintiff’s claim must fail because the evidence before me is that the funds in question were the proceeds of discharges of mortgages. The evidence is that Dina and Charlotte held a mortgage secured by the Albany property; that at the time of the sale of the Albany property a mortgage discharge statement was provided; and the mortgage proceeds were forwarded to Dina and Charlotte by the lawyer acting on the sale of the property.
[28] Charlotte also asserts that the claim by the plaintiff with respect to the funds paid following the sale of Lakeshore must fail because she had no involvement with that property. The mortgagees were Dina and David. The proceeds were paid to them pursuant to a written direction of the vendors.
[29] Charlotte also submits that there are other deficiencies in the manner in which this cause of action is constituted. For example, the allegation is that the funds were trust funds of the plaintiff and her deceased husband. However, the estate of her husband is not a party to this action, nor is there evidence that the plaintiff is in anyway entitled to bring an action on behalf of the deceased husband, or that she inherited his interest in the funds. Further, the Lakeshore was owned by the plaintiff, her husband and her son Joseph. Joseph has not been made a party to this action. Finally, the mortgage discharge on the Lakeshore property was in favor of Dina and her deceased husband David. David’s estate has not been made a party to this action.
[30] Maria’s position is that there is a genuine issue requiring trial. She submits that Charlotte has not proven that she advanced the funds purported secured by the Albany Mortgage and that there is a triable issue as to whether the funds in the joint account of Charlotte and Dina were trust funds held for the benefit of Maria.
[31] Further, Maria asserts that the Condominium was purchased by those trust funds and held in trust by Charlotte for Maria and Domenico. This can only be determined through a trial.
[32] Maria’s counsel submits that there are mysteries and murkiness because of conflicting evidence, all of which requires a trial to determine the issues properly. He points to Charlotte’s testimony regarding her loan from Dina and David as being unclear. As well, he notes that Charlotte’s evidence is that she had records of the advances of money to Maria and Domenico, but that she got rid of that after the mortgages were registered and cannot produce them. Further, she does not have the bank records for the joint account that she had with Dina.
Analysis
Summary Judgment Motion
[33] The parties disagree that this is a proper case for the matter to be decided by way of summary judgment.
[34] After a review of the evidence without using the fact-finding powers permitted in Rule 20.04(2.1), I am satisfied that there is a genuine issue requiring a trial. However, after employing those special fact-finding powers, I am satisfied that there is no genuine issue requiring a trial.
[35] I will now provide my reasons as to why I reach that conclusion.
Evidence
[36] The parties have had ample opportunity to put their best foot forward. Each have filed affidavits in support, and all but Tatiana were cross examined on those affidavits.
[37] Maria did not file an affidavit in support of this motion. I am entitled to draw an adverse inference from this failure. However, I am disinclined to do so because of her age, 90, and her inability to speak or read English.
[38] I do however, conclude that Maria has put her best foot forward in the materials filed on her behalf and that she has nothing further to add to support this claim.
[39] I am also of the view that a trial would be prohibitively costly. In fact, a trial likely would cost more than the amount of the claim which is approximately $192,000.
[40] The summary judgment motion alone occupied two days of argument and that does not include the time spent for cross examinations on the affidavits filed for the motion. Proportionality is an important factor which I must consider in my assessment of this issue.
[41] I am satisfied that I can weigh evidence, evaluate the credibility of deponents and draw reasonable inferences from the evidence so as to reach a conclusion that there is no genuine issue that requires a trial.
Proposed Amended Statement of Claim
[42] The parties agreed to an Order on September 11, 2017 that set out a timetable which included a provision that the motion regarding the proposed amended Statement of Claim would not be heard until after this summary judgment motion.
[43] Counsel for Maria invites me to conclude that rather than proceed on that basis, this matter should not be determined as a summary judgment matter until after the motion to amend the Statement of Claim is heard because in his view, without that amendment, relevant material evidence would not be before the court.
[44] I am not prepared to do so as that would be the effect of overturning an order of this court without the benefit of it proceeding via an appeal.
[45] I must therefore consider this summary judgment based upon the Statement of Claim and the admissible evidence for this motion.
Entitlement to the Funds
[46] Fundamental to Maria’s claim is the issue as to whether she is entitled to the funds which ended up in the joint account of Dina and Charlotte.
[47] Maria’s evidence is that she and her husband gave the proceeds of the sale of the Albany and Lakeshore properties to Dina and Charlotte.
[48] However, Charlotte’s evidence and the documentary evidence indicate that the funds in question were paid pursuant to discharge statements to discharge mortgages registered against the Albany and Lakeshore property, and that the Albany funds were paid to Charlotte and Dina, but that the Lakeshore funds were paid to Dina and David.
[49] I prefer Charlotte’s evidence and the documentary evidence to the plaintiff’s evidence, and find that the funds in question were paid by the lawyer acting on the sale of those properties to discharge validly registered mortgages.
[50] The plaintiff has failed to raise a genuine issue requiring a trial with respect to the ownership of those funds.
[51] As the plaintiff’s entitlement to those funds is the foundation to her claim, if she had no entitlement to the funds, the funds were not held in trust and the plaintiff had no right to direct the use of those funds.
[52] Since I have found that the plaintiff had no entitlement to those funds, she cannot claim the return of the funds or any declaration of interest in the condominium. Her claim must fail.
[53] There is not therefore a genuine issue requiring a trial.
[54] Charlotte argued that the issue of the validity of mortgages was not properly before me; whereas Maria submitted that the pleadings brought the issue into question, as did the questions asked by the defendant’s counsel in discovery and cross examination.
[55] I am satisfied that the plaintiff is entitled to raise the issue on this motion. However, I find that the documentary evidence is inconsistent with her position, and I prefer Charlotte’s evidence, which is corroborated by the documentary evidence, to Maria and Joseph’s evidence. Maria’s claim must fail.
[56] Further, the plaintiff’s claim is for interest in land via the mortgages which mortgages were discharged in 2003. Not only does that claim offend the Statute of Frauds as there is nothing in writing evidencing that interest, but also, the mortgages are clear written documents with no ambiguity. No parole evidence would be admissible on this issue.
[57] I reject the plaintiff’s submission that the obligation lies upon the defendant as mortgagee to prove the advances under the mortgage. This is not an enforcement of a mortgage proceeding. The mortgages were discharged pursuant to discharge statements and payout statements to which Maria had agreed in 2003.
[58] The mortgagors clearly agreed at that time to the payout amounts for those mortgages. The onus lies on the mortgagor/plaintiff to prove that these were sham transactions.
[59] I find that the narrative that the mortgages were sham mortgages to protect the parents’ equity is inconsistent with the documentary evidence. Further, it is a shifting narrative. It is agreed that there were no creditors at the time of the sham mortgage transactions, and yet Maria’s evidence is that there was a creditor at the time, whereas Joseph’s evidence is that it was a merely preventative, precautionary scheme to protect his parents’ equity from potential creditors. Finally, any potential creditor was gone from the scene long before Maria made any claim to have the Condominium title transferred back into her name and her husband’s name.
[60] The sham mortgage scheme is simply not credible, and I reject that evidence.
Trust Allegation
[61] Maria had alleged a trust existed with respect to those funds. There are three possible types of trusts: express, constructive, or resulting. However, each requires as a condition that the plaintiff establish entitlement to the funds in questions.
[62] As I have found that she has failed to do so, it is not necessary for me to analyse the other elements of those trusts.
[63] Finally, I would note that the constructive and resulting trusts are equitable remedies. I have a concern that Maria does not come to court with clean hands. She alleges that a fraudulent scheme was devised to defeat potential or existing creditors by the placing of sham mortgages, and yet she asks for equitable relief from this court.
[64] Even if I were to conclude that the funds were transferred into Charlotte and Dina’s hands via sham mortgages, I would be very reluctant to grant equitable relief to reward Maria for this fraudulent scheme.
Limitation Period
[65] Although, in light of my finding regarding entitlement to the funds I need not consider the limitation period issue, I will do so for the sake of completeness.
[66] The parties disagree as to whether the plaintiff has claimed an interest in land or whether her claim is a monetary one. They also disagree on when the claim was discovered.
[67] I am satisfied that the request for a declaration that the Condominium be held by Charlotte in trust for the plaintiff is a claim for an interest in land. Therefore, the limitation period is 10 years.
[68] Significant portions of Maria’s discovery were read into the record. After considering that this was an elderly lady who neither speaks nor writes English well, I am satisfied that on numerous occasions she stated that the Condominium was her house; that she instructed Charlotte to buy the house for her; and that Charlotte was holding the house for her. Clearly, she was making a claim for an interest in land.
[69] The law is clear that a claim for money can shelter under a claim for an interest in land. Therefore, her claim for the money is protected and falls into the 10 year limitation period provided with respect to an interest in land.
[70] I am also satisfied from Maria’s evidence that she went to a lawyer about this issue in or about 2006 and that she was aware of her claim at that time. Further, Maria’s evidence is that since June 2005 she asked repeatedly for the payment of rent or for the Condominium to be put up for sale.
[71] I find that Maria discovered her claim in June 2005 at the earliest and sometime during 2006 at the latest.
[72] Therefore, the limitation period defence fails as the claim was commenced within the 10 year period after the claim was discovered.
Irregularities in the Style of Proceedings
[73] I find that there are irregularities in the style of proceedings. The plaintiff’s evidence is that the funds were owned by herself and her husband. The estate of her husband is not a party and there is no evidence that the plaintiff was entitled to bring a claim for 100% of the funds.
[74] Further, Joseph was a part owner of the Lakeshore property and he is not a party. Based upon the plaintiff’s narrative, Joseph would have an interest in a portion of the Lakeshore funds.
[75] However, those irregularities would only impact upon the amount of the claim of the plaintiff and would not be a complete defence to the entire action.
[76] The defendant also raised the issue of delay as a reason to grant the summary judgment motion. In light of my other findings, I need not deal with this issue.
[77] I do note, however, that Domenico and David are deceased, and Dina has been declared mentally incompetent. Also, Maria is now a 90 year old lady whose answer to many questions was that she did not recall. Finally, there are no bank records with respect to Dina and Charlotte’s joint bank account available as the bank only maintains seven years of records.
Summary
[78] I find that there is no genuine issue that requires a trial. I dismiss the plaintiff’s claim against the defendant, Charlotte Marino.
[79] If the parties cannot agree upon costs, Charlotte shall provide her submissions within 14 days; Maria within 10 days thereafter; and Charlotte’s reply, if any, within 5 days. Costs submissions shall be limited to 3 pages.
___________________________
D. L. Edwards J.
Released: May 18, 2018
COURT FILE NO.: 5853/12
DATE: 2018/05/18
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Maria Marino
Plaintiff
- and –
Charlotte Marino and Gerlandina Jones, by her Litigation Guardian, Paul Jones
Defendants
DECISION ON SUMMARY JUDGMENT MOTION
D. L. Edwards J.
Released: May 18, 2018