Court File and Parties

COURT FILE NO.: CV-20-00644100-0000

DATE: 20201007

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: SANGARASIVAMPILLAI KIRUBAKARAN, Plaintiff

– and –

HELEN MARTHA TILLER, Defendant

BEFORE: E.M. Morgan J.

COUNSEL: Sanarasivampillai Kirubakaran, on his own behalf

Gillian Gondosch, for the Defendants

HEARD: Motion in writing

MOTION TO DISCHARGE CPL

[1] On August 24, 2020, Master Jolly issued an Order granting leave to the Plaintiff to register a certificate of pending litigation (“CPL”) against title to a property legally described as Unit 5, Level 14 and Unit 130, Level B, Toronto Standard Condominium Plan No. 1479, City of Toronto (being PIN 12479-0209 & 12479-0560 LT), and municipally known as 61 Town Centre Court, Unit 1405, Toronto, Ontario (the “Property”). This registration came about two months after registration by the Plaintiff of a Caution on title to the Property on June 26, 2020.

[2] The Defendant moves under section 103(6) of the Courts of Justice Act and Rule 42.02(1) of the Rules of Civil Procedure to discharge the CPL and, if it has not already expired, the Caution as well.

[3] Title to the Property is registered in the name of the Defendant. The Defendant has sold the Property to an arm’s length purchaser under an Agreement of Purchase and Sale dated August 4, 2020. The purchase price of the Property is $482,000. The transaction is scheduled to close on October 16, 2020. If the Defendant is unable to remove the CPL from title she will not be able to finalize the transfer of title to the purchaser and will be liable to the purchaser for that breach of the agreement.

[4] The Order of August 24, 2020 was issued upon the Plaintiff bringing an ex parte motion. It is axiomatic that in these circumstances, all material facts must be put before the court. “The Court has said many times that when a lis pendens is to be granted with its serious consequences, there is a very strong onus upon the applicant to make complete disclosure”: J & P Goldfluss Ltd. v. 306569 Ontario Ltd., [1977] OJ No 1438, at para 4; JDM Developments Inc. v. J. Stollar Construction Ltd., [2004] OJ No 4572, at para 36. Furthermore, where leave to register the CPL would not have been granted in the first place had the material facts been disclosed, the CPL is to be vacated upon motion by the registered title holder: Passarelli v. Di Cienzo (1989), 1989 CanLII 4353 (ON SC), 67 OR (2d) 603.

[5] In a nutshell, the Plaintiff concedes that, having purchased the property in 2007, he “transferred legal ownership” to Defendant in 2010. He claims, however, that he retained full beneficial ownership and that the Defendant was simply a “bare trustee” of the Property.

[6] The Plaintiff’s explanation for this transaction was that it was done for “estate planning purposes”, so that other members of his family would not be able to lay claim to the Property. The Plaintiff was married at the time of his purchase of the Property and its transfer to the Defendant. For a period of 14 years, from 2006 to 2020, the Plaintiff carried on an extra-marital affair with the Defendant, who was also an employee of his restaurant business.

[7] The Defendant has lived in the Property since 2007. The Plaintiff does not deny that the Defendant has been living in the Property, but claims that he cohabited with the Defendant in the Property during the course of their relationship. The Defendant deposes that, in fact, the Plaintiff lived with his wife and children full time for the entire 14 years of their relationship. Although she concedes that he often visited her at the Property, she states that he only slept over at the Property once during all of that time.

[8] The Plaintiff states that he paid the majority of expenses for the maintenance and upkeep of the Property. The Defendant states that, in fact, it was she who paid all of the expenses of the Property; specifically, she deposes that she has made all of the mortgage payments and has paid all property taxes for the past 10 years out of the wages she has received. She has produced her banking records to show the mortgage payments and other household expenses coming directly out of her account. The Plaintiff states that he gave the Defendant the money to make these payments. It is the Defendant’s evidence that any monies flowing from the Defendant to her were part of her salary for working in the Plaintiff’s business.

[9] None of these conflicting positions need to be resolved definitively on this motion. They are all the subject of the action commenced by the Plaintiff by issuance of a Statement of Claim on July 16, 2020. The action will proceed on its course regardless of the outcome of the present motion. As the Court of Appeal has observed, “the role of the Court on a motion to discharge a CPL under section 103(6)(a)(ii) of the CJA is limited to deciding whether there is a triable issue in respect to whether the registrant has a reasonable claim to the interest in the land claimed… [N]o adjudication of the registrant’s interest in the land is required on a motion to discharge a CPL”: G.P.I. Greenfield Pioneer Inc. v. Moore, 2002 CanLII 6832, at paras 20, 23.

[10] In his factum filed in response to the Defendant’s motion, the Plaintiff has done an impressive amount of legal research. He has reviewed the law of resulting trust and cited a long line of jurisprudence which sets out the circumstances of a presumption of trust where property is the subject of a gift. He has referenced the case law describing a conditional advance on inheritance and has expounded on the revocable nature of such mechanism. He has gone on at some length to elucidate the limited powers of a bare trustee and the onerous trappings of fiduciary responsibility.

[11] All of this interesting law, however, is beside the point. The central concern is whether the Plaintiff, in obtaining the CPL, took unfair advantage of the fact that the motion was brought without notice. The courts have long held that a CPL can be vacated in the event that its registration comes pursuant to an abuse of the court’s processes: Freedman v. Lawrence (1978), 1978 CanLII 1422 (ON SC), 18 OR (2d) 423, at para 8. Material non-disclosure by the registrant of the CPL is one of several factors that can ground such an analysis: Clock Investments Ltd. v. Hardwood Estates Ltd. (1977), 1977 CanLII 1413 (ON CA), 16 OR (2d) 6, at para 7 (Div Ct).

[12] In moving for leave to register the CPL, the Plaintiff relied on his own affidavit with no supporting documentation. That is somewhat unusual. Needless to say, presenting the court with an undocumented real estate transaction, apparently for no consideration, certainly supports the Plaintiff’s contention that the transfer of title from him to the Defendant raises a presumption of resulting trust. In fact, in paragraph 12 of his affidavit dated July 28, 2020 submitted to the court on the without notice motion to obtain the CPL, the Plaintiff swore that the entire transaction was undocumented as between him and the Defendant:

The level of trust that I had with the Defendant was complete at the time of the transfer. I did not feel that a written agreement with the Defendant was necessary.

[13] To say that this statement was misleading would be an understatement. The transaction was not undocumented. It was thoroughly documented, in much the same way that most sale/purchase transactions are documented.

[14] There was an Agreement of Purchase and Sale dated April 7, 2010 and signed by the Plaintiff as vendor and the Defendant as purchaser. There was a statement of adjustments and trust ledger statement prepared by a real estate solicitor who acted on the closing. Those statements showed, among other things, the $10,000 deposit paid by the Defendant at the signing of the purchase agreement and the balance paid to the Plaintiff on closing. There was a CIBC mortgage obtained by the Defendant, and a proper registration of the sale transaction in the land registry office showing the purchase price of the Property and land transfer tax paid.

[15] The documentation shows that the Defendant paid the Plaintiff $248,000 for the purchase of the Property.

[16] As indicated, the Plaintiff has a number of explanations for the transfer to the Defendant, and he goes on for a number of pages in his factum elaborating on why the transaction appears to be one way but should actually be understood in another way. However, he has no explanation for his non-disclosure to the court that authorized the CPL. None of the purchase and sale documentation was contained in his motion record on the ex parte motion.

[17] I cannot think of any evidence more material to this dispute than the documentation on which the transfer of title to the Defendant was based. Any judge or master hearing a motion for a CPL would want the moving party to ensure that the court was cognizant of the express written terms of the deal. The Plaintiff, however, left it all out of his motion record; indeed, he went so far as to depose that it does not exist.

[18] Rule 39.01(6) reiterates in unqualified terms the requirement of transparency in without notice motions:

Where a motion or application is made without notice, the moving party or applicant shall make full and fair disclosure of all material facts, and failure to do so is in itself sufficient ground for setting aside any order obtained on the motion or application.

[19] The Plaintiff cannot sustain the CPL in the face of his non-disclosure of material facts. He may or may not have a viable explanation for the way in which the transfer to the Defendant was documented in 2010, but he was under an affirmative duty to place the documentation before the court. In not doing so, he obtained leave to register a CPL on title to the Property when he should not have obtained leave.

[20] The Order of Master Jolly dated August 24, 2020 is hereby set aside. The Land Titles Registrar at Toronto shall register a discharge against title to the Property with respect to the CPL. If necessary, the Land Titles Registrar at Toronto shall also register a discharge with respect to the Caution registered on title to the Property on June 26, 2020 as instrument number AT5460638.

[21] Counsel for the Defendant may prepare a formal Order and send it by email directly to my assistant for my signature. The need for the Plaintiff’s approval as to form and content of the Order is dispensed with.

[22] The parties may make written submissions with respect to costs. They should be no more than 2 pages in length (not counting the Bill of Costs) and may be sent by email to my assistant. I would ask that counsel for the Defendant send her submissions (with a copy to the Plaintiff) by two weeks from today, and that the Plaintiff send his submissions (with a copy to Defendant’s counsel) within two weeks thereafter.

Morgan J.

Date: October 7, 2020