Court File and Parties

Court File No.: CV-17-573439 Date: 2018-12-21 Ontario Superior Court of Justice

Between: Giovanni Zambri, Plaintiff – and – Jonathan Cooperman, Trustee of the Estate of Paul Zigomanis and Gail MacDonald, Trustee of the Estate of John Zigomanis, Defendants

Counsel: Ryan Steiner, for the Plaintiff Anne Posno and Delna Contractor, for the Defendant, Gail MacDonald

Heard: September 24, 2018

Before: Nishikawa J.

Overview

[1] This proceeding arises from an explosion that occurred at a house at 3356 Brimley Road (the “House”) on April 20, 2015. The Plaintiff, Giovanni Zambri, was driving by the House when the explosion occurred. Mr. Zambri commenced a claim against the Defendants in negligence and under the Occupiers’ Liability Act, R.S.O. 1990, c. O.2, for his injuries from the explosion.

[2] The Defendant, Gail MacDonald, is the daughter and trustee of the estate of John Zigomanis (“John’s Estate”), and brings this motion for a determination of a question of law under r. 21.01(1)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Ms. MacDonald submits that John’s Estate did not own the House at the time of the explosion, and thus owed no duty of care to the Plaintiff and cannot be held liable under the Occupiers’ Liability Act.

[3] Paul Zigomanis, who was John’s son, was living in the House at the time and died in the explosion. The Defendant, Jonathan Cooperman, was appointed as the estate trustee during litigation of his estate (“Paul’s Estate”) by the order of Conway J. dated October 14, 2015. Mr. Cooperman did not participate in the motion.

Factual Background

[4] On April 20, 2015 Mr. Zambri was driving along Brimley Road and was passing in front of the House when it exploded. The Plaintiff’s vehicle was struck by debris, causing the Plaintiff to be jolted. According to the Statement of Claim, Mr. Zambri suffered physical, mental, and psychological injuries as a result of the accident.

[5] Paul Zigomanis lived at the House at the time of the incident. He had been living there since 1991.

[6] When the incident occurred, title to the House was in the name of Paul’s parents, John and Mary Zigomanis. Mary passed away in 2013. John passed away on December 31, 2014, a few months before the explosion.

[7] In the Statement of Claim, the Plaintiff alleges that John’s Estate “at all material times held title, ownership, care and control of” the House. The Plaintiff further alleges that John’s Estate:

• Permitted Paul to reside in the House when they knew or ought to have known that he was unsafe to do so;
• Rented the House to Paul despite knowledge of his history of drug use and psychological difficulties;
• Failed to keep up the House in a safe manner;
• Failed to perform any or regular maintenance or upkeep of the House;
• Failed to take any active measures to ensure that the House was maintained in a reasonably safe condition, was not dangerous, and would not pose danger to motorists using the adjacent roadway;
• Failed to regularly inspect the House at appropriate times despite renting the House to an individual they knew or ought to have known was unsafe, unstable, and careless;
• Failed to call in or hire proper authorities to regularly inspect the House and all its equipment;
• Caused or permitted a hidden or unusual danger to exist;
• Failed to warn the Plaintiff, neighbours, or passersby adequately of the said danger’s presence;
• Failed to adequately or routinely service the natural gas connections at the House, its water heater, and other equipment;
• Failed to maintain the furnace, gas, and water heater connections or have them inspected by the proper authorities;
• Allowed the natural gas union associated with the hot water heater to become disconnected and to cause an explosion;
• Failed to or inadvertently failed to secure and ensure the safety of all ignition sources at the House;
• Failed to install natural gas, smoke, or carbon monoxide detectors at the House;
• Failed to properly secure, service, and maintain all utilities and other high-risk equipment at the House;
• Failed to take steps to evict Paul;
• Failed to appropriately monitor or supervise Paul’s behavior at the House; and
• Failed to exercise proper care and control over the property and all its equipment and utilities to ensure it was safe and did not pose a danger to neighbours and the passersby.

[8] As a result, an issue arose as to whether Paul or John held title to the House at the time of the explosion. After an investigation, Mr. Cooperman brought an application seeking a declaration that Paul was the beneficial owner of the House since 1996 and an order that legal title be transferred to him effective retroactively to January 1, 2015. Since the relief sought would potentially impact the parties with claims arising from the explosion, notice was provided to all interested parties. The Plaintiff, among others, appeared and opposed Mr. Cooperman’s application.

[9] In her decision dated November 17, 2017 Spies J. ruled that the House had been held in trust for Paul since August 1, 1996 and that title to the House be transferred to Paul’s Estate effective January 1, 2015, the day following John’s death (“Spies J.’s Decision”). Spies J.’s Decision made the following findings:

(i) On December 31, 1990 John and Mary purchased the lot at 3356 Brimley Road for $270,000; (ii) In May 1991 John and Mary signed a Transfer/Deed of Land transferring the House to Paul; (iii) Paul paid consideration of $140,000 for the House; (iv) Paul developed a drug addiction that threatened his HVAC business; (v) On August 1, 1996 Paul transferred the House to his parents, John and Mary, for consideration of $2.00. John and Mary held legal title to the House in trust for Paul, who remained the beneficial owner; (vi) Paul transferred the House back to John and Mary to protect the House from creditors in the event that Paul’s HVAC business became insolvent; (vii) Mary died on March 23, 2013 and John died on December 31, 2014; (viii) On January 1, 2015 legal title to the House reverted back to Paul; (ix) Paul resided at the House from May 1991 until his death in the explosion; and (x) At no time did John or Mary live at the House.

Issues

[10] Ms. MacDonald, as Trustee of John’s Estate, brings this motion for determination of a question of law under r. 21.01(1)(a) of the Rules of Civil Procedure, and expressly states that she does not rely upon r. 21.01(1)(b) to strike the claim for failure to disclose a reasonable cause of action. However, the notice of motion seeks an order dismissing the Plaintiff’s claim and does not specify the question of law it seeks to have determined. Based on the arguments presented by the parties, the following questions of law are to be determined on this motion:

(a) Did John’s Estate owe the Plaintiff a duty of care? (b) Did John’s Estate owe any legal or equitable obligation to act on Paul’s behalf in respect of the House that would support any other claim raised by the Plaintiff? (c) Does the Occupiers’ Liability Act apply?

Analysis

Preliminary Evidentiary Issue

[11] At the hearing, the Plaintiff sought leave under r. 21.01(2)(a) to file the Second Report of the Estate Trustee During Litigation dated May 11, 2016 without appendices (the “Cooperman Report”). The Cooperman Report was prepared to report to the court in the application before Spies J. Spies J.’s Decision relies heavily upon the Cooperman Report, which provides valuable factual context regarding the House’s ownership and history. I granted leave and admitted the Cooperman Report. Further to Ms. MacDonald’s request, I have reviewed and considered the Cooperman Report in its entirety, and not solely the portions the Plaintiff relies upon.

[12] The Cooperman Report also referred to the findings of the Fire Marshal’s Office, the Chief Coroner, and an expert retained by the insurer. The explosion was fueled by natural gas, which escaped from a separation in the gas line leading to the hot water heater. The gas line was separated by direct human intervention. However, the ignition source could not be identified. The insurance company’s expert concluded that the explosion was caused by the deliberate act of disconnecting the gas line. However, the Fire Marshal’s report did not conclude that the explosion was due to a deliberate act.

Determination of a Question of Law under Rule 21.01(1)(a)

[13] Under to r. 21.01(1)(a), a party may move before a judge “for the determination, before trial, of a question of law raised by a pleading in an action where the determination of the question may dispose of all or part of the action, substantially shorten the trial or result in a substantial saving of costs[.]”

[14] The “plain and obvious” test applicable to motions to strike claims as disclosing no reasonable causes of action applies equally to motions to determine questions of law under r. 21.01(1)(a): Portuguese Canadian Credit Union Ltd. v. CUMIS General Insurance Co., 2010 ONSC 6107, 104 O.R. (3d) 16, at para. 25.

[15] A motion under r. 21.01(1)(a) is not appropriate where there are material facts in dispute or where the law is not fully settled: Portuguese Canadian Credit Union, at para. 28. In this case, the material facts relevant to the existence of a duty of care and whether the Occupiers’ Liability Act applies are not in dispute. Spies J.’s Decision makes findings of fact regarding the House’s ownership and Paul and John’s respective relationships to the House. These findings of fact were based on a full evidentiary record and the submissions of all interested parties who chose to respond, including Mr. Zambri. Spies J.’s Decision was not appealed. In addition, the test to determine whether a duty of care arises is settled, and the existence of a duty of care is a question of law that may be determined on a r. 21.01(1)(a) motion: Toronto-Dominion Bank, N.A. v. Lloyd’s Underwriters, 2017 ONCA 1011, 21 C.P.C. (8th) 294, at para. 12.

Did John’s Estate Owe the Plaintiff a Duty of Care?

[16] Based on Spies J.’s Decision, John was not the legal owner of the House on the date of the explosion. Since Paul held both legal and beneficial title at the time, John was also not a trustee. The question is thus whether John’s Estate, other than by virtue of being the owner or trustee of the House, owed a duty of care to the Plaintiff.

[17] The relationship between the Plaintiff, a passerby, and John’s Estate, a non-owner of property, is not one in which a duty of care has previously been recognized. As a result, it is necessary to apply the Anns/Cooper test to determine whether a duty of care arises: Irvine v. Smith (2008), 54 C.C.L.T. (3d) 307 (Ont. S.C.), at para. 18. The test to establish a duty of care has two elements:

(i) The relationship between the plaintiff and the defendant is sufficiently close to give rise to a duty of care; and (ii) The risk of harm to the plaintiff was reasonably foreseeable to the defendant so as to justify imposition of a duty.

Irvine v. Smith, at para. 19, citing Odhavji Estate v. Woodhouse, 2003 SCC 69, [2003] 3 S.C.R. 263.

[18] Once the elements of proximity and foreseeability have been established, the court will determine whether any policy reasons exist that would negate a prima facie duty of care.

Proximity

[19] As noted above, on the day of the explosion, John’s Estate was not the legal owner or a trustee of the House. This does not mean, as Ms. MacDonald submits, that John’s Estate was a “stranger” to the House. While he was not the legal or beneficial owner of the House on the date of the explosion, for the purposes of determining whether a duty of care arises, John’s Estate was not in the same position as any third party. The fact that Spies J. determined retroactively that Paul was the legal owner of the House on the date of the incident does not negate certain facts that existed as of the explosion. This includes the fact that John previously held legal title to the House and that he previously held the House in trust for Paul. Also, the bills for the House, such as the utilities, were in John and Mary’s name and were paid by them, although Paul contributed $500 per month toward those expenses. The insurance policy on the House was in John and Mary’s name. The premium on the policy for March 27, 2015 to March 27, 2016 was paid directly from John’s bank account.

[20] Mr. Zambri alleges that John’s Estate failed to maintain and inspect the House, as detailed above. Most of the allegations are premised on ownership. While the Plaintiff argues that the allegations arise from the “care and control” that John’s Estate exercised over the House, he pleads no facts to support the existence of such care and control in the absence of ownership or trusteeship over the House.

[21] The Plaintiff argues that further facts may come to light that would support the allegation that John’s Estate had care and control of the House. The Cooperman Report, however, shows that these facts do not exist. As Spies J.’s decision notes, Mr. Cooperman, an impartial court-appointed officer, conducted a thorough investigation into the parties’ respective relationships and involvement with the House, including obtaining and reviewing the files of various lawyers retained by Paul over the years in relation to the transfers of the House. He found that all of the family members viewed Paul as the owner of the House. John and Mary never lived there. The Cooperman Report makes no mention of John or Mary having any involvement in the House. After Mary’s death, Paul’s sisters sought to transfer the House to him but the transfer was not completed. Consistent with the view of the House as belonging to Paul, John did not make any provision in his will regarding the House. After John’s death, both Paul and his sisters instructed their lawyers to begin drafting documents to effect the transfer of the House. However, the explosion took place before the transfer was effected.

[22] Although John had some involvement with the House, as detailed above, this would not be a sufficient basis to find a relationship of proximity with the Plaintiff to give rise to a duty of care. As noted in Spies J.’s Decision, John and Mary took legal title to the House to protect Paul from the financial repercussions of his addiction and failing business. The utilities bills were in their names and they paid them, but Paul contributed $500 per month to those expenses. The act of paying the utilities bills or ensuring the House was insured, without more, cannot support a relationship of proximity with a passerby giving rise to a duty of care.

Reasonable Foreseeability

[23] In this case, Mr. Zambri alleges that he was injured, not by an act on the part of John’s Estate, but rather by its failure to act. In Childs v. Desormeaux, the Supreme Court stated that “where the conduct alleged against the defendant is a failure to act, foreseeability alone may not establish a duty of care.” Childs v. Desormeaux, 2006 SCC 18, [2006] 1 S.C.R. 643, at para. 31. In the absence of an overt act on the part of the defendant, the relationship between the parties must be examined to determine whether there is some nexus between them: at para. 31.

[24] The Supreme Court considered the cases in which a duty of care arises and identified three situations where parties who are otherwise strangers are brought into sufficient proximity to impose a positive duty to act: (i) where a defendant intentionally attracts and invites third parties to an inherent and obvious risk that he or she has created or controls; (ii) where the parties have relationships of supervision and control, such as those of a parent and a minor child; and (iii) where the defendant either exercises a public function or engages in a commercial enterprise that includes implied responsibilities to the public at large: Childs v. Desormeaux, at paras. 35-37.

[25] None of the situations applies to this case. In this case, John’s Estate was not the owner or trustee of the House, but paid for the utilities and insurance. There was no relationship that would create a positive duty to act in respect of the House or any risk to third parties that Paul might have created. The act of paying the bills did not bring John’s Estate into a relationship with the Plaintiff such that injury to him, a third party who was driving on the public road adjacent to the House, would be reasonably foreseeable.

[26] The Supreme Court has stated that in determining whether reasonable foreseeability is established, “the proper question to ask is whether the plaintiff has offered facts to persuade the court that the risk of the type of damage that occurred was reasonably foreseeable to the class of plaintiff that was damaged”: Rankin (Rankin’s Garage & Sales) v. J.J., 2018 SCC 19, [2018] S.C.J. No. 19, at para. 24.

[27] The type of damage that occurred here was injury to a driver on the public road adjacent to the House caused by an explosion. This injury could not have been reasonably foreseeable to John’s Estate as neither the owner nor a trustee of the House.

Policy Reasons

[28] As I have found that John’s Estate did not owe a duty of care to the Plaintiff, it is not necessary to consider whether policy reasons negate the existence of a duty of care.

Is John’s Estate Subject to Any Legal or Equitable Obligation to Act on Paul’s Behalf?

[29] The Plaintiff alleges that John’s Estate failed to monitor and supervise Paul’s behavior at the House.

[30] In Irvine v. Smith, the defendant’s adult son, who was exhibiting signs of psychosis, ran out into the street and was hit by the plaintiff’s car. The plaintiff brought a claim against the father, alleging that the father had a duty to take his son to the hospital once he was exhibiting signs of psychosis. Rady J. rejected this allegation, finding that the father had no legal relationship of supervision or control over his adult son such that he would owe the plaintiff a duty of care.

[31] There is no legal basis to find that John’s Estate had an obligation to manage the House on Paul’s behalf or to supervise Paul’s behaviour. Paul was an adult, and was the legal and beneficial owner of the House. Until the explosion, he took care of himself and the House. There was no incapacity determination or guardianship arrangement. The Plaintiff has not pled any facts to support that an arrangement existed which made John’s Estate responsible for Paul. There is no evidence that John’s Estate undertook any particular obligations to protect Paul other than to protect him from any potential negative financial repercussions of his drug addiction.

Does the Occupiers’ Liability Act Apply?

[32] The Plaintiff argues that even if John’s Estate was not the legal owner of the House, John’s Estate owed him a duty of care as an occupier under the Occupiers’ Liability Act. Under s. 1 of the Act, an “occupier” includes,

(a) a person who is in physical possession of premises, or (b) a person who has responsibility for and control over the condition of premises or the activities there carried on, or control over persons allowed to enter the premises,

despite the fact that there is more than one occupier of the same premises[.]

[33] As determined above, based on Spies J.’s Decision, John’s Estate did not own the House. Although it is an undisputed fact that the utilities and home insurance were in John and Mary’s name, and were being paid for by John’s Estate at the time of the explosion, this does not necessarily mean that John’s Estate was an “occupier” within the Act’s meaning. Clearly, John’s Estate did not have physical possession of the House. Since it was neither an owner nor a trustee, there would be no basis to find that John’s Estate had responsibility for and control over the condition of the premises or the activities carried on there, or further, control over persons allowed to enter the premises. Paul maintained care and control of the House.

[34] Moreover, even if John’s Estate was an “occupier” under the Occupiers’ Liability Act, s. 3(1) of the Act states:

An occupier of premises owes a duty to take such care as in all the circumstances of the case is reasonable to see that persons entering on the premises, and the property brought on the premises by those persons are reasonably safe while on the premises.

[35] An occupier owes a duty of care to persons entering on the premises but owes no duty to those who do not: Durling v. Sunrise Propane Energy Group Inc., 2013 ONSC 5830, 315 O.A.C. 246, at para. 72. Mr. Zambri was driving by the House on a public road when the explosion took place. At no time did the Plaintiff enter the premises. As a result, the duty of care under the Act does not arise. Even if the duty did arise, it would only extend to ensuring that the Plaintiff is reasonably safe “while on the premises.”

[36] The Plaintiff relies upon two cases which extended the duty of care under the Occupiers’ Liability Act to property beyond the defendant’s premises. In those cases, the court found that special circumstances existed that justified imposing a duty of care on an adjacent owner: Moody v. Toronto (City) (1996), 31 O.R. (3d) 53 (S.C.), at pp. 55-56. No special circumstances exist here.

Conclusion

[37] Based on the foregoing, I determine the questions of law as follows:

(a) John’s Estate owed no duty of care to the Plaintiff; (b) John’s Estate did not owe any legal or equitable obligation to act on Paul’s behalf in respect of the House; and (c) The Occupiers’ Liability Act does not apply.

[38] As a result, the Plaintiff’s claim against John’s Estate is dismissed.

Costs

[39] Ms. MacDonald seeks costs on a substantial indemnity basis for a total of $34,481.29. Her total costs on a partial indemnity basis are $23,361.75. The Plaintiff submitted a bill of costs for a $9,945.97 total on a substantial indemnity basis and $6,954.97 on a partial indemnity basis. All amounts include disbursements and HST.

[40] The bill of costs submitted by Ms. MacDonald is for the motion in this case and in another case arising from the same incident: Chang v. Cooperman (CV-17-573439). Needless to say, the Plaintiff in this case should not be required to pay the costs of the motion in the Chang case.

[41] Counsel notes that seven other claims arising from the explosion against John’s Estate were dismissed on consent. This in itself is not sufficient to order substantial indemnity costs in this case. The Defendant has identified no reprehensible conduct on the Plaintiff’s part that would be worthy of sanction. Under the circumstances, a substantial indemnity costs award is not warranted.

[42] Pursuant to the Courts of Justice Act, R.S.O. 1990, c. C.43, s. 131(1), the court has broad discretion when determining the issue of costs. The overall objective of fixing costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances, rather than an amount fixed by actual costs incurred by the successful litigant: Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.). Rule 57.01(1) of the Rules of Civil Procedure sets out the factors to be considered by the court when determining the costs issue. I have considered these factors, as well as the proportionality principle in r. 1.04(1.1) of the Rules of Civil Procedure, while keeping in mind that the court should seek to balance the indemnity principle with the fundamental objective of access to justice.

[43] The issue on this motion was somewhat novel because of the unusual factual circumstances. The applicable law was not complex, however, and the motion did not require extensive material or preparation.

[44] Given the foregoing, I fix costs of the motion on a partial indemnity basis at $10,000, inclusive of disbursements and HST, to be paid by the Plaintiff within 30 days of this order.

Nishikawa J. Released: December 21, 2018