Court File and Parties
Newmarket Court File No.: FC-17-55176-00 Date: 2020-01-13 Ontario Superior Court of Justice
Between: Sammy Kiriakou, Applicant – and – Stravoula Pentzos, Respondent
Counsel: Reesa Heft, Counsel for the Applicant Paul D. Slan and Annie Yektaeian, Counsel for the Respondent
Heard: November 18-21, 2019
Judge: McGee J.
Reasons for Decision
[1] Joint family venture is a remedy that first requires a finding of unjust enrichment. An unjust enrichment is more than the exchange of mutual benefits arising from cohabitation or the sharing of expenses. As stated by Justice Cromwell at paragraph 31 of Kerr v. Baranow, 2011 SCC 10, it is an unequal retaining of benefits that equity does not permit.
[2] In this decision I find there to be no unjust enrichment in a relationship of nine to ten years during which the parties split the mortgage, utilities and taxes for a home owned solely by the respondent. Neither do I find there to be a resulting trust as the applicant contributed no purchase monies to the acquisition of the home.
The Relationship Chronology and Credibility
[3] Mr. Kiriakou and Ms. Pentzos began dating in 2006. Each had two children from a previous marriage and appeared to be well established. Mr. Kiriakou was a part owner in a Markham Shoeless Joe’s restaurant, was living with his parents in Scarborough and spending regular time with his children who lived in Newmarket.
[4] Ms. Pentzos was a Toronto marketing executive who had recently finalized her matrimonial issues and was living with her children in a new home purchased the prior September for $305,000. The house was in an up-and-coming, trendy area of Scarborough. She had conscientiously chosen the location as it was a short distance from her supportive parents and her children’s co-parenting father.
[5] The parties agree that it was a whirlwind romance sealed with a Christmas diamond engagement ring; but from Christmas on, the parties relate very different experiences and expectations of the relationship. Where their evidence differs, I prefer the evidence of Ms. Pentzos. She was clear, concise and accurate in every aspect of her testimony. She had a remarkable recall of events, dates and figures. She answered every question directly. She gave credit when it was due, even if it did not assist her case.
[6] In contrast, Mr. Kiriakou had a narrow range of answers to every question. Everything about their relationship had been wonderful. None of the stated concerns had troubled him at the time, nor ought they now. If something untoward had happened, it was an error or a misunderstanding. He knew nothing about why he had been so slow to provide financial disclosure during the litigation, or why that disclosure contradicted what he had represented to Ms. Pentzos at the time. Even when his own witness’ testimony contradicted his evidence, he remained certain that it could be little more than a misunderstanding of no regard.
The Acquisition of 326 Savage Road, Newmarket, Ontario
[7] Mr. Kiriakou pressed Ms. Pentzos to purchase a home together, and with a ring on her finger, she was ready to dive once again into the real estate market. She graciously offered to move her children to the Newmarket area so that Mr. Kiriakou could be closer to his children. She worked out a budget based on each of them contributing $80,000 to $100,000: her contribution would come from the sale of her Scarborough home and his, with funds from his business. She calculated the mortgage that they could carry on their joint incomes and they started looking at homes in the range of $650,000.
[8] In February of 2007 she put her Scarborough home on the market. It sold the following month for $330,000 only $25,000 more than she had paid for the home about eighteen months previously. Given the costs of moving: realty fees, taxes, transferring utilities and legal fees, she hoped to at least avoid the mortgage penalty for her five-year locked in mortgage by porting it into joint financing for the new home.
[9] The parties prepared a joint mortgage application and Ms. Pentzos sent it to her mortgagor. She was shocked by the result. Mr. Kiriakou did not qualify for a mortgage. He was not credit worthy even as a joint mortgagor.
[10] The second shock came quick on its heels. Only days after the sale of her Scarborough home firmed up, Mr. Kiriakou confessed that he couldn’t contribute any money to the purchase of a new home. He told her that the government had taken all his money and “he had walked away from Shoeless Joes’s.”
[11] Ms. Pentzos and her children would be homeless in about 60 days.
[12] It is difficult to say how much Ms. Pentzos knew about Mr. Kiriakou’s finances in 2007 because even with the benefit of this trial 12 years later, I find it difficult to piece together an accurate picture.
[13] Placed before me during this trial were random statements which showed: (a) March 28, 2007 CRA notice of $53,108.88 in outstanding GST/HST since 2000; (b) June 27, 2007 Notice of Garnishment issued by the Ontario Court of Justice (Family Division) for $8,782.74; (c) December 2, 2008 notice letter for the collection of $39,746.50 owing by Mr. Kiriakou to AMEX Bank of Canada; (d) August 21, 2009 Due Diligence request showing Mr. Kiriakou to have $81,428.53 outstanding in Director’s Liability for Retail Sales Tax which survived the bankruptcy of 2009571 Ontario Inc. (Shoeless Joe’s Markham); (e) September 8, 2009 CIBC Aerogold Visa outstanding balance of $19,495.95; (f) November 3, 2009 Statement of Arrears showing personal tax arrears of $226,959; and (g) January 14, 2012 offer to settle an outstanding credit card debt with Royal Bank of Canada for $20,000.
[14] In 2007 Ms. Pentzos took action. She narrowed her search and reduced her budget. A five-bedroom fixer-upper home was found: 326 Savage Road Newmarket, and her Offer of Purchase and Sale for $390,000 was accepted with a quick closing date of May 22, 2007.
[15] The following facts are agreed or not contested: (a) Ms. Pentzos provided the down payment of $10,000 that accompanied the Offer of Purchase and Sale from her savings; (b) Ms. Pentzos arranged for the bridge financing between the sale of her Scarborough home on May 22 and the purchase of the Newmarket home on May 27; (c) From the sale proceeds of her Scarborough home; Ms. Pentzos solely paid the monies due on closing, including the bridge loan, legal fees, and adjustments; (d) Ms. Pentzos paid an additional amount for an unexpected adjustment from her savings; (e) 326 Savage Road was registered in her title alone; (f) The mortgage of $270,000, increased by approximately $40,000 from the Scarborough home was in her name alone; (g) Mr. Kiriakou never attended at the lawyer’s office; (h) The parties had agreed that Mr. Kiriakou would contribute one half of the mortgage and utilities for 326 Savage Road, and he did so from November 2007 until December 2017; and (i) The parties have never had a joint account or joint savings. They never had a joint credit card or line of credit. They never did a Will together or named each other as beneficiaries on a policy of life insurance. Only for a short time did Ms. Pentzos put Mr. Kiriakou on her employment benefits.
[16] The bridge loan gave the couple a few days to get the Newmarket home ready for occupation. There was a flurry of activity. Each of their children was assigned their own bedroom.
Post Acquisition
[17] There was one more development that would indelibly shape the course of the relationship. On June 27, 2007, exactly one month after the purchase of 326 Savage Road, the Family Responsibility Office garnished $8,782.74 from Mr. Kiriakou’s checking account.
[18] Immediately, he asked Ms. Pentzos to open an account at RBC in her name, for his use. He assured her that it would be a temporary arrangement until he could sort things out. He made light of the situation, painting it as an error by FRO. Even at trial he waved the whole thing off as a misunderstanding that was not worth the time to correct.
[19] The sheltering account proved to be permanent. Until Ms. Pentzos put an end to it nine years later, Mr. Kiriakou deposited his entire paycheque into this RBC account in her name, using its debit card for his purchases and cash withdrawals. Ms. Pentzos did not monitor the account. She never set up on-line banking. She never saw the monthly statements.
[20] Ms. Pentzos did have the cheques to the account; and they made an arrangement that she would write herself a cheque on the account every month to cover his agreed share of the mortgage and utilities, plus any reimbursements.
[21] Reimbursements were primarily for the expenses that she covered for Mr. Kiriakou on her credit card because his card had a $500 limit. They included his gym membership, dry cleaning, meals out, parking, items for his children, his son’s tuition, his vehicle expenses and vacations. Before depositing the cheque for his half of the home expenses and the reimbursements, she would always check with him whether there were sufficient funds in the account.
[22] Ms. Pentzos did not recall Mr. Kiriakou working between his departure from Shoeless Joe’s in March of 2007 and the start up of a Sunset Grill franchise in Whitby. She testified that he and his brother were each advanced $250,000 from their father to purchase and open the franchise. She stated that when it opened in November 2007, it ended eight months of Mr. Kiriakou having no income. At all times, she understood from Mr. Kiriakou that it was his and his brother’s business funded through a loan from their father.
[23] Much more could be said about the franchise that was not known to her at the time. During this litigation, Ms. Pentzos learned that negotiations for the Whitby Sunset Grill franchise agreement began as early as January 2007 and that it was ultimately purchased by The Nedelkov Group Inc.: a company incorporated March 28, 2007. Mr. Kiriakou is the President of the corporation. Its shares are solely owned by Mr. Kiriakou’s father.
[24] A reasonable inference from the timeline established through corporate documents is that Mr. Kiriakou chose not to contribute to the purchase of a home because he was prioritizing any available funds for the start up of his and his brother’s franchise.
[25] The franchise has had a life of its own, entirely unrelated to the relationship between the parties. The brother is no longer involved. The franchisor has had to take legal action to force Mr. Kiriakou to comply with the franchisee agreement. Tendered by Ms. Pentzos during this trial was a plethora of correspondence from franchise counsel to Mr. Kiriakou personally, threatening to revoke the license due to six ongoing failures, most significant of which was the failure to install a mandatory Point of Sales System. Default proceedings were started by the franchisor in 2017 after years of warnings. A final notice was issued in 2018.
[26] Mr. Kiriakou made no answer to the franchise issues, but for blanket denials. He replied that he only recently found out about the problems, and that they had all been fixed. He continues to operate the store and to draw a salary.
[27] Fourteen months after the parties moved into 326 Savage Road, Ms. Pentzos asked Mr. Kiriakou for extra help with the groceries. His teenage son had moved in with them and she was now covering all his additional expenses on her modest salary. Mr. Kiriakou agreed to an amount of $200 a month and to bring home more food from the store. The food never appeared, but Ms. Pentzos was sure to add the $200 to every monthly reimbursement cheque.
[28] The relationship had its ups and downs, and by 2016 it was mostly downs. Ms. Pentzos described a very poor relationship between Mr. Kiriakou and her children, and a difficult one between her and his children.
[29] She knew nothing about the issues affecting his business, but she suspected all was not well. His creditors were constantly calling the home. She had to change their home phone number. She began to worry about her credit rating. If she asked about the business, or disagreed with him, he would shut her out. She began to think that she really didn’t know him. She testified that in hindsight, he was “a mystery, a complete enigma who compartmentalized his life.”
[30] In their nine years together, Mr. Kiriakou always filed his Income Tax Returns as separated and used his parents Scarborough address as his legal address; although some things did come to the house from time to time. Ms. Pentzos always filed her Income Tax Returns as divorced and used her actual address of 326 Savage Road.
[31] She reclaimed the debit card for the RBC account and told Mr. Kiriakou it was no longer his to use. Unknown to her, he took (or had already taken) some of the cheques. He kept using the account. Ms. Pentzos did not realize that he was still using the account until he wrote a cheque to cover the insurance on a car that he had just purchased for his daughter.
[32] Ms. Pentzos was incensed that he had taken the cheques and that the bank had processed a cheque on an account for which he had no signing authority. She reported the events to the police as a fraud.
[33] Incidentally, Mr. Kiriakou was asked in cross examination where the money came from to purchase a car for his daughter. He answered that he had saved his tips, extra income and money that he kept separate. He agreed that no such moneys were disclosed on his Form 13.1 Financial Statement.
[34] On May 13, 2016, the day after her birthday, they had a huge argument. She saw the relationship as toxic, built on lies and deceit, and she confronted him on his comings and goings. She declared it to be over.
[35] In June of 2016 it soon became clear to Ms. Pentzos that Mr. Kiriakou was not going to leave voluntarily, so she called her realtor with the intention of listing 326 Savage Road for sale.
[36] Everything came to a stop when Mr. Kiriakou suffered a minor heart attack on July 22, 2016. She agreed to defer the sale until he recovered. His recovery was marked by apologies and efforts to reconcile. She recalled it as a difficult and erratic period. There were good days and very bad days. He was disruptive in the home, causing physical damage on more than one occasion. Important items, such as jewelry that he had gifted her went missing. On one occasion the police were called.
[37] Well into 2018 he was still coming and going from the home.
[38] What Ms. Pentzos couldn’t know at the time was that he was using this period to set up and renovate a home in Whitby – purchased in his father’s name in November of 2017. That was only later discovered. He did not disclose in his April 30, 2018 Financial Statement that he had moved into the Whitby house. During that time, he was actively seeking spousal support from Ms. Pentzos and he deposed in an affidavit that he was living with his parents and could not live independently until he received spousal support and half of the house sale proceeds.
[39] At trial, Mr. Kiriakou testified that his father had purchased the home in November 2017 and that he was holding it for him until the money from this litigation became available. Mr. Kiriakou informed the court that his father will transfer the Whitby home to him for the same amount for which it had been purchased. In the interim, he pays no rent and covers all its costs.
Mr. Kiriakou’s Trial Testimony Related to this Period
[40] In marked contrast to Ms. Pentzos’ account, Mr. Kiriakou testified that their time together was always wonderful and that his goal was forever the protection of the family. He was certain that he had discussed his financial troubles with Ms. Pentzos after Christmas of 2006 and that she had understood. He assured the court that most of the debts were errors or misunderstandings and the rest had been paid by the business. That testimony directly contradicted his earlier testimony that his partners had stolen from him
[41] He boasted that he had great credit and access to several credit cards. He mused how he had worked so hard to make sure that Ms. Pentzos would enjoy “Freedom 55”. He talked about how great the kids and the extended families got along. They were a family and he never looked at the finances because he trusted her. He was positive that but for his grandfather’s prolonged illness, they would have been married.
[42] It was only during trial when Mr. Kiriakou was pressed for details that his demeanor changed. He became evasive. For example, he could never consistently answer when he actually moved out of 326 Savage Road. He stated that he left the home in March 2018 but then later said June 2018. At another point he thought it was May 2018 because he moved into his Whitby home in April 2018.
Mr. Kiriakou’s Claims for an Interest in 326 Savage Road
[43] Mr. Kiriakou advances several claims for joint title of 326 Savage Road: resulting trust, unjust enrichment, constructive trust, and joint family venture.
[44] All his claims rest from the same proposed chronology. First, that he fully intended to contribute $60,000 to the purchase of the new home: $30,000 of which would come from his business partners who owed him money. Second, that he only learned after Christmas 2005 that his partners would not advance him the $30,000 and that in fact, one or more of them had been stealing from the business. And third, that he did pay Ms. Pentzos $30,000 by giving her the $20,000 that he borrowed from his father and $10,000 or $12,000 by depositing his paycheques into her account prior to the purchase of 326 Savage Road. He supplements this third point by proposing that his ongoing payment of $200 a month was agreed by the parties to be a repayment of the outstanding $30,000 that would take his total contribution to $60,000.
[45] For ease of analysis, I will organize and address Mr. Kiriakou’s claims separately, then deal with his claim for the return, or payment in lieu of chattels which was added on the first day of trial. But first, I must address the proposed chronology and why it held no ring of truth.
[46] There were several inherent contradictions between the course of litigation and the theory asserted at trial. Mr. Kiriakou claimed in his Application that he deposited $10,000 in cheques to Ms. Pentzos’ account, but at trial he changed that figure to $12,000.
[47] I do not find credible Mr. Kiriakou’s allegation of a payment of $10,000 or $12,000 through a deposit of his paycheck into Ms. Pentzos’ account. It is a rounded number for which he could provide absolutely no details or documentation. He could not even say what he was earning at the time or its source. I accept Ms. Pentzos’ evidence that Mr. Kiriakou had no source of income after March 2007 because he had walked away from Shoeless Joe’s.
[48] The parties never had a joint account and the account in Ms. Pentzos’ name to which he did deposit his pay was not set up until the month after the house purchase closed. In his Application he also plead that Ms. Pentzos “told [him] that the $200 a month would go towards the mortgage, so [he] could catch up with [her] larger contribution to the purchase.” The larger contribution was not identified. The $60,000 figure appears to have been calculated only after the exchange of pleadings that showed Ms. Pentzos’ payment to the house purchase to be $120,000. Mr. Kiriakou was surprised to learn during the trial that her down payment (exclusive of mortgage) after adjustments was actually closer to $131,000.
[49] As for the $200 per month, Mr. Kiriakou repeatedly testified that it was to “equalize” his intended contribution, not to cover his son’s additional costs. But he could not provide any details of the payment or why they did not start until 14 months after the purchase closed. He acknowledged that he had never “done the math,” kept track of any of the payments, and that until March 15, 2017 he had not even realized that $200 per month was being added to the monthly reimbursement cheque. At trial he had no idea how much had been paid or remained owing. His assertions regarding the $200 a month were not credible.
[50] But the fatal flaw in his proposed chronology was the testimony of his accountant, Mr. Rashid Haddard, during cross examination. Mr. Haddard stated that there was absolutely no basis upon which Mr. Kiriakou could have represented in 2006 that his partners would pay him $30,000 because they owed him money for purchasing Joe’s [a minor shareholder] shares.
[51] The accountant explained that Mr. Kiriakou (also a minor shareholder at the time) had bought out Joe’s shares three years earlier in 2003 and that there was no reason for him to think that monies would be owing to him from the other partners in 2006. The accountant testified that the business was in fact, in trouble in 2006. Sales were declining, bills and remittances were not being paid.
[52] The accountant’s affidavit (his evidence-in-chief) contained another assertion that was key to Mr. Kiriakou’s theory of the case: that the parties had come to see him six months before the closing of the sale of the home, that he had advised them to defer the purchase for a year due to the uncertainty around the business, and that in the face of Ms. Pentzos’ eagerness to proceed, it was he who had suggested that the house be purchased in her name alone.
[53] In cross examination, the accountant was less certain about the meeting. He had not kept notes and thought that there had been two meetings, one in November or early 2007 and another one in February. He didn’t recall discussing the house in the first meeting but restated with certainty his advice in the second meeting to put the house in Ms. Pentzos’ name.
[54] The accountant then went on to testify that Mr. Kiriakou called him a few weeks later to say that they had bought the house and that his Dad was putting $20,000 into it. This could not have been true because Mr. Kiriakou’s father testified that his son’s request for a loan did not come until a week before the house sale closing: May 27, 2007.
[55] I prefer Ms. Pentzos testimony that she never met with the accountant to discuss the house purchase and would have had no cause to do so. She had a long-term relationship with her own financial services provider through whom she had arranged previous financing. I accept her evidence that “if I had known that he had no money, I would never had sold my home.”
Resulting Trust
[56] A presumption of a resulting trust arises in favour of persons who contribute financially to the purchase of property but do not take title in their own name, and do not intend to give a gift of the entire beneficial interest in the property to the registered or recorded title holder.
[57] The non-titled party is treated as the equitable holder of the beneficial interest; and the extent of his or her beneficial interest is proportionate to the financial contribution made to acquire the property.
[58] Subsequent mortgage payments are irrelevant in the context of a resulting trust claim. The contribution must be a direct contribution to the actual purchase of the property. See Hamilton v. Hamilton, 1996 CarswellOnt 2421 citing Oosterhoff and Gillese, Text, Commentary and Cases on Trusts, 4th ed. (1992) and Hovius, Family Law: Cases Notes and Materials, 3rd ed. (1992).
[59] As confirmed in the caselaw provided by respondent’s counsel, including Dale v. Salvo; courts have strictly interpreted the rule in Hamilton v. Hamilton by only admitting contributions directly made at the time of purchase, see Kerr (supra), Schwartz v. Schwartz, 2012 CarswellOnt 4362 (Ont. C.A.), Korman v. Korman, 2015 ONCA 578, and Andrade v. Andrade, 2016 ONCA 368, 2016 CarswellOnt 7727 (Ont. C.A.).
[60] The evidence was clear that the purchase monies that acquired the property were wholly from Ms. Pentzos. She paid the deposit and the closing adjustments from her savings, and the down payment came from the proceeds of sale of her Scarborough home. The payment of $20,000 cannot support a claim of resulting trust. It is agreed that the $20,000 came from his parents two weeks after the purchase of 326 Savage Road.
[61] The claim of resulting trust must fail.
Unjust Enrichment
[62] To establish unjust enrichment, Mr. Kiriakou must prove three things: an enrichment of or benefit to Ms. Pentzos, a corresponding deprivation to him, and the absence of a juristic reason for the enrichment. A juristic reason can be a contract, a disposition of law, donative intent, and other valid common law, equitable or statutory obligations, see Kerr v. Baranow, 2011 SCC 10.
[63] When the benefits of the relationship offset the contributions, there can be no unjust enrichment and the claim must be dismissed, see: Peters v. Swayze, 2018 ONCA 189.
[64] There are two possible remedies when unjust enrichment is established: a monetary award or should a monetary award be an insufficient remedy, a proprietary award.
[65] As explained by the Ontario Court of Appeal in Martin v. Sansome, 2014 ONCA 14, and Reiter v. Hollub, 2017 ONCA 186 each citing Kerr, a monetary award may be based on: (a) quantum meruit, or value received, or a (b) value survived.
[66] If a party seeks a remedy on a value survived basis, he must first show that there was a joint family venture and that there was a link between his contributions to the joint family venture and the accumulation of assets and/or wealth.
[67] A joint family venture is a question of fact to be assessed on the whole of the evidence, including the four non-exclusive factors of mutual effort, economic integration, actual intent and priority of the family.
[68] Each case is fact specific and as emphasized by Justice Cromwell at paragraph 88 of Kerr, the court must assess how the parties actually lived their lives, not on subsequent reconstructions or the court’s view of how they ought to have organized their affairs.
Analysis: Was Ms. Pentzos Unjustly Enriched by her Ownership of 326 Savage Road?
[69] Mr. Kiriakou claims that Ms. Pentzos has been enriched, that he has suffered a corresponding deprivation because his contributions to the mortgage and utilities did not increase his own savings or build equity in his name, and that there is no juristic reason for the enrichment.
[70] Because I have found that Mr. Kiriakou contributed nothing to the acquisition of 326 Savage Road, his claim of enrichment is limited to its increase in equity since purchase, almost all of which is the consequence of market increase.
Market Increase
[71] I cannot find the market increase in the value of the property to be an enrichment to Ms. Pentzos because she would have enjoyed the same (possibly a greater) increase in the market value of her Scarborough home. But for the relationship, she had no reason to move. She was only recently re-established, the move created a longer commute and her children had to change schools. Her starting home equity in the Newmarket home was diminished by the costs of the move.
$20,000 Payment
[72] Another potential cause of enrichment would be the $20,000 from Mr. Kiriakou’s parents. Ms. Pentzos acknowledged receipt of this amount two weeks after the May 22, 2007 closing. She testified that it was a gift from Mr. Kiriakou’s mother who felt terrible about her and her children’s situation. Mr. Kiriakou’s mother was present at trial and was not called in reply to refute Ms. Pentzos’ assertion.
[73] Ms. Pentzos explained that she used the money to cover Mr. Kiriakou’s expenses until the Whitby Sunset Grill was up and running and Mr. Kiriakou could start paying his agreed one-half share of the mortgage and utilities.
[74] As an issue, the $20,000 bore a disproportionate amount of time at trial because Mr. Kiriakou refashioned it as his contribution to the purchase of the home. Although it came too late, and too indirectly to support a claim of resulting trust, can it be found to be a contribution to the equity in the home? I find that it cannot.
[75] Mr. Kiriakou did not dispute Ms. Pentzos’ stated use of the funds, perhaps because what she did with the money was of little concern to him. He stated repeatedly that he trusted her and gave her “free reign” with the money.
[76] Neither party suggests that the money was applied to the mortgage, used to purchase capital items for the home or to pay for home improvements, so I have no basis to find that it was a source of enrichment for Ms. Pentzos. Moreover, I was persuaded by the cross examination of Mr. Kiriakou’s father that the $20,000 was in fact, a gift from him and his wife and not a contribution from Mr. Kiriakou.
[77] Mr. Kiriakou’s father confirmed that his evidence-in-chief affidavit had been prepared for him in advance, and that his son was present at the lawyer’s office when it was signed.
[78] Mr. Kiriakou’s father was hesitant but forthright. He was clearly uncomfortable having to attend court. He did not know why his affidavit said that he had opened a line of credit with the TD Bank to loan his son $20,000 to help with the home purchase, because he had that line of credit for over 30 years. He had no other line of credit.
[79] He testified that only he and his wife had signing authority on the line of credit and that only they had the chequebooks – they were kept in his home. He was shown his affidavit which states at paragraph 26 that their son “had the cheque book for the line of credit in his possession at all material times and it was [their son] who actually wrote the cheque.” This confused and seemed to upset him.
[80] He testified that his son had only asked for money the week before the house sale closed and that his wife had later written the cheque. He could not remember how, when, or if the money had been paid back, despite his affidavit stating that it had been paid. As above, Mr. Kiriakou’s mother was present at trial and was not called to give testimony.
Household Improvements
[81] Pages could be spent detailing the parties’ contradictory assertions of household improvements. Below is a sampling. I have placed Mr. Kiriakou’s statements in regular font and Ms. Pentzos’ answers in italics: (a) He paid $2,500 for landscaping in 2010. (b) She paid $2,500 for landscaping in 2008. (c) He paid $3,000 in 2011 to replace the sliding backdoors to the house. (d) The patio doors were a gift to her and cost only $1,600. (e) The parties shared the cost of a new HVAC system in 2012. (f) She paid for the HVAC through 60-month finances of $100 per month. (g) He paid $1,400 in 2014 to replace the kitchen backsplash. (h) The backsplash tiles were a gift and cost $600. (i) He paid $1,400 for fencing in 2015. (j) He contributed $4,000 towards kitchen and bathroom counter-tops, sinks and faucets. (k) She paid $1,700 for laminate counter tops in the kitchen and two bathrooms, with new stinks and faucets in 2008. (l) They shared the costs of a new back deck, new appliances, painting the home and purchasing furniture. (m) She paid for the deck with Air Miles. (n) His parents gifted them new garage doors. (o) Her parents paid for a new vacuum and carpeting.
[82] The parties clearly effected a series of minor home and decorating improvements that enhanced their quality of life in the residence and made their children more comfortable. The specific details of what was done, and who paid remains in dispute, but I am satisfied on the whole of the evidence that the parties conducted the improvements on a voluntarily basis to improve their and their children’s enjoyment and use of the home.
[83] I have no evidence that the improvements increased the market value of the home, or that the improvements proposed to have been funded solely by Mr. Kiriakou were significantly disproportionate to those funded by Ms. Pentzos. Each party received a mutual and corresponding benefit from the improvements as did their children who each had their own room. It cannot be said that Ms. Pentzos was unequally enriched by the household improvements.
The Payment of the Mortgage and Utilities
[84] The parties had an agreement that Mr. Kiriakou would contribute half of the mortgage, utilities and taxes, and that Ms. Pentzos would manage all the household accounts and most of the domestic chores. It is agreed that Mr. Kiriakou paid one half of the mortgage, utilities and taxes from November 2007 to December 2017. Their agreement was not based on their incomes, or their means, but rather their joint use of the home.
[85] In Montgomery v. Schlender, 2012 ABQB 332 the court held that when the contributions of the parties are matched and fair, it is not just to require one party to pay back the value of the benefit received. On the facts of that case, Justice Burrows found that the bargain of joint contributions constituted a juristic reason for retaining the benefit.
[86] In Reiter v. Hollub, 2017 ONCA 186 the parties also had a mutually beneficial agreement to share living expenses. Each of the parties paid his or her share of utilities, vacations, living expenses and mortgage. There was no finding of unjust enrichment because both benefitted.
[87] As was found in Reiter, I find that Mr. Kiriakou and Ms. Pentzos equally benefitted from the arrangement created in 2007. Although it was not the future that Ms. Pentzos had been led to believe would follow a move to Newmarket; she not only continued in the relationship, she participated in hiding Mr. Kiriakou’s income from his creditors, including the FRO. In exchange, his payment of half the mortgage, utilities and taxes helped to build equity in a home held in her name alone.
[88] Although not a ground advanced by Mr. Kiriakou, I have considered the reduction of the mortgage attributable to his payment of one half the mortgage. I can estimate that the reduction would have been about $42,000. I found within the agreed exhibits a May 12, 2016 statement of mortgage of $184,823. Half of the reduction in principle from the face mortgage amount of $270,000, rounded would be $42,500.
[89] For two reasons, I do not consider this reduction sufficient to a finding of enrichment. First, Ms. Pentzos led evidence of typical rents in Newmarket for similar residences which averaged $2,200 per month, at or above Mr. Kiriakou’s half of the mortgage, utilities and taxes. In effect, he contributed at or below market rent for the use of the home that through shared efforts had been optimized for his and his children’s use.
[90] In summary, Mr. Kiriakou equally if not more so benefitted from their arrangement. He had the use of a residence of his choice, finished to his liking for both he and his children that was protected from his creditors at a monthly cost at or below market rent. He had the unfettered use of a creditor protected bank account, and the as needed use of a credit card. He had a lifestyle and financial opportunities that were otherwise unavailable to him given his state of finances.
[91] And as his finances improved – thanks in no small part to his ability to avoid his creditors – he was able to build his future separate and apart from the relationship. It is not unfair to observe that living in a home owned by another person appears to suit Mr. Kiriakou: whether it is a partner’s home, his parent’s home or a home held in the title of his father.
[92] Moreover, at all times, the parties kept all their financial affairs separate, and with respect to most of Mr. Kiriakou’s dealings: secret.
[93] Ms. Pentzos knew very little about the Sunset Grill in Whitby. She only learned during litigation that it was held by a corporation called Nedelkov Group Inc. whose shares are not owned by Mr. Kiriakou. At all times during the relationship he spoke of the business to her and conducted the business as if it was his own.
[94] The parties did not plan for each other. They did not share savings or have any common goals. They did not even file spousal Income Tax Returns. I saw no evidence of Mr. Kiriakou ever taking steps to secure what he referred to during trial as her “Freedom 55.” There was no evidence that he took any steps to benefit her directly or indirectly but for the payment of half the home expenses. To the contrary, he openly preferred his own financial interests, cleverly circumventing her attempt to remove his access to the RBC account in her name.
[95] Even after his financial circumstances improved, Mr. Kiriakou did not offer, or take steps to go on the mortgage, pay down its balance or purchase an interest in the property. At no time during the relationship did he bear any financial responsibility for 326 Savage Road. I find that Mr. Kiriakou suffered no deprivation corresponding to his occasional contribution of labour and maintenance, or his monthly contribution to the costs of the home.
[96] To find that a party has been unjustly enriched, all three elements of an enrichment, a corresponding deprivation and the absence of a juristic reason must be found. I can make none of those findings. The claim for unjust enrichment is dismissed.
No Quantum Meruit or Joint Family Venture
[97] Having found no unjust enrichment it is unnecessary to consider the remedies of quantum meruit or joint family venture; but I will offer short reasons why in any event, I would not have ordered such a remedy.
[98] First, I am not satisfied that a clear picture of Mr. Kiriakou’s holdings was ever before the court. There can be no mutual effort or economic integration in the absence of transparency. A joint family venture is not a one-way entitlement to another’s asset.
[99] Mr. Kiriakou’s father was cross examined on the Nedelkov Group Inc.’s purchase of the Whitby Sunset Grill. He appeared to know very little about the corporation other than it provides him with a car. He agreed with the accountant’s evidence that Mr. Kiriakou is the President of the corporation, has the ability to independently manage and bind the corporation, write cheques on its behalf and enter into contracts.
[100] The accountant was also questioned about the 2008 purchase of the Sunset Grill franchise for $450,000 – a different figure than that provided by Mr. Kiriakou, or his father, but perhaps he was describing a different aspect of its acquisition or building out. The accountant confirmed that Mr. Kiriakou had researched the franchise, met with the franchisor, inspected the premises, negotiated the lease and the royalties and supervised the build-ins.
[101] Ms. Pentzos was not involved in any aspect of the business start-up. The money and resources deployed to Sunset Grill from January to November 2006 were kept wholly separate from Ms. Pentzos’ purchase of 326 Savage Road during the same period. She was left to place all her resources and increase her debt facility to insure the closing of the home while Mr. Kiriakou put his efforts into the franchise.
[102] Mr. Kiriakou’s father also testified about the purchase of the Whitby home for $635,000 in November 2017. The certainty with which he stated that he would transfer title to his son for the original purchase price, asking for no moneys in consideration of interest or notional rent, begs the question of beneficial ownership, and Mr. Kiriakou’s actual means.
Dismissal of Mr. Kiriakou’s Claims against 326 Savage Road, Newmarket
[103] Mr. Kiriakou’s words during the trial spoke to a heartfelt intention to economically intertwine his and Ms. Pentzos’ life and to prioritize their families. His actions did not. He solely retains whatever benefits he has acquired or hidden within the franchise and his new Whitby residence - each of which are in his father’s name.
[104] I dismiss Mr. Kiriakou’s claim of resulting trust, unjust enrichment and constructive trust or any other interest in 326 Savage Road, Newmarket. The temporary Orders of April 27, 2018 and May 7, 2018 preventing Ms. Pentzos from dealing with 326 Savage Road are vacated.
Return of Personal Property
[105] At the start of trial Mr. Kiriakou brought a motion for 25 items to be returned to his possession. Perhaps not fully thought through was item #25 on the list of items, being: “Point of Sale System from Sunset Grill” which Mr. Kiriakou testified during trial had long since been installed to resolve issues with the franchisor.
[106] Ms. Pentzos reviewed the list and I accept her evidence that the remainder of items either do not exist, are already in his possession or did not belong to him. She agreed that there were a few items of furniture that had no value and after four months of waiting for him to attend to collect them, she disposed of them.
[107] This should not have been a trial issue. My Order on motion of October 17, 2018 created a consent process for Mr. Kiriakou to have a representative attend at the house on November 11, 2018 to collect a specific list of items – which at that time was shorter than the list asserted at trial. Ms. Pentzos waited for the day and the representative did not attend. She offered an extension to December 31, 2018. Mr. Kiriakou continued to be a no-show. In January she gave notice that the remaining items would be disposed. Still no word. At the end of January, she paid for a disposal bin. Although she seeks the costs of the bin as an Order at trial, given the result herein, I decline to make the Order.
[108] The additional claim for the return of personal property is dismissed.
Costs
[109] The Respondent has been the successful party. If the parties are unable to resolve costs, Ms. Pentzos is to deliver her submissions by January 29, 2020, response to be filed by February 14, 2020 and reply, in necessary by February 24, 2020. Costs submissions are limited to three pages exclusive of Offers to Settle and a Bill of Costs. Submissions are to be filed in the Continuing Record. Parties are to advise the judicial assistant at Nicole.Cruise@ontario.ca when submissions have been filed.
The Honourable Justice H. McGee Date: January 13, 2020