Superior Court of Justice - Ontario

Court File and Parties

COURT FILE NO.: CV-21-369 DATE: 20210409 CORRIGENDA: 20210409

RE: John Holt and Darlene Holt, Plaintiffs AND: Brian Steven Greig in his personal capacity and in his capacity as power of attorney for Dolores Movich and Dolores Movich, Defendants

BEFORE: J. Di Luca J.

Counsel

Sonja Hodis, Counsel for Darlene Holt, Plaintiff/Moving Party Lisa Belcourt, Counsel for the Defendants

HEARD: March 30, 2021

Revised Endorsement

The text of the original Endorsement has been corrected with the text of Corrigendum (Released today’s date)

[1] Cottages often bring joy to generations of family members who seek summer refuge from city life. Children learn to swim and play outdoors. Adults gather to enjoy meals and activities from bonfires to horseshoes. Memories are formed and lives are lived.

[2] As is often the case, some cottage properties are enjoyed by more than one family. The rules of joint use are often left up to tradition, not committed to writing and rarely discussed. Perhaps unsurprisingly, disputes arise over access to the property, financial contributions to maintenance and upkeep, and the use and misuse of the property. In most of these instances, adults, acting responsibly, settle their differences and move on.

[3] However, in a few instances, idyllic cottage life turns irreparably sour. Stubbornness and spite take over. Litigation ensues and matters proceed to determination before the courts. In these cases, there is usually no clear winner. Everyone loses.

[4] While it is too early to determine the ultimate path of this litigation, this may be one such case.

Background Facts

[5] Darlene Holt and Brian Greig are siblings. They are fighting over a cottage property that has been used by their family and extended family for over 60 years. Their aunt, Dolores Movich, is the original owner of the cottage property. Ms. Movich never married and has no children of her own.

[6] Ms. Movich is currently incapable of managing her affairs and is living in a long-term care facility. Her condition is not likely to ever improve. Mr. Greig is her power of attorney for property.

[7] Title to the cottage property is currently in Mr. Greig’s name. However, in accordance with a Court Order obtained in proceedings involving the Public Guardian and Trustee, Mr. Greig holds the property in trust for Ms. Movich. He is also the sole beneficiary of the residue of her estate when she passes away.

[8] Over the years, the cottage property has been used extensively and jointly by the extended family. When Ms. Movich was well, she was regularly at the cottage and would entertain family members and friends. Both Ms. Holt and Mr. Greig grew up at the cottage. After they married and started their respective families, their children did as well.

[9] Around 2007, Ms. Movich began planning her estate. As part of the plan, the cottage property was transferred into Mr. Greig’s name with consideration noted as $160,000. A debt forgiveness agreement was executed between Mr. Greig (as debtor) and Ms. Movich (as creditor). A trust agreement was also executed requiring Mr. Greig to hold the property in trust for the benefit of Ms. Movich.

[10] According to Mr. Greig, it was Ms. Movich’s hope that the cottage property would be used by the extended family for “years and generations to come.” While he believed that she wanted him to act as the “gatekeeper” of the cottage property, he agrees that at some point Ms. Movich indicated a desire that Ms. Holt also share in the ownership of the property, though he suspects that this may have resulted from pressure by Ms. Holt. For her part, Ms. Holt asserts that Ms. Movich’s intentions were that the property was to be owned by both Mr. Greig and herself. She further asserts that part ownership of the property was promised to her by Mr. Greig.

[11] By 2007, the property had fallen into disrepair. Ms. Movich did not have funds to maintain it and neighbours had complained to municipal authorities about the state of the property. The parties agreed that something had to be done and it appears they ultimately agreed to repair and renovate the property.

[12] In October 2008, Mr. Greig purported to transfer the property into his name and Ms. Holt as tenants in common. He did this because he was “feeling a bit guilty” that he was the sole beneficiary of Ms. Movich’s estate. At some point, he also encumbered the property with either a mortgage or credit line.

[13] From approximately 2009 to 2014, the property was extensively renovated. There is a dispute as to who contributed what, but at a minimum, Mr. Greig accepts that Ms. Holt contributed over $75,000, while his contribution was approximately $15,000. According to Mr. Greig, the bulk of the funds for the renovation came from the sale of Ms. Movich’s home. Ms. Holt asserts that she and her husband contributed over $135,000 in funds in addition to over 2,000 hours of labour. Ms. Holt also asserts that she would never have contributed these funds and hours of labour unless she had been promised continued use and part ownership of the property.

[14] In 2015, the Public Guardian and Trustee became involved following concerns that were raised about Mr. Greig’s management of Ms. Movich’s affairs. In the proceedings that followed, Mr. Greig learned that his purported transfer of the property and subsequent encumbrance were invalid in view of the trust agreement. The transfer was set aside, and Mr. Greig resumed sole ownership of the property in trust for Ms. Movich.

[15] The renovated property contains two cottages, a smaller cottage near the lake and a larger cottage near the road. Since 2009, Ms. Holt and Mr. Greig, and their respective families, have enjoyed exclusive use of the cottage property. While there is some dispute over the precise nature of the use of the property, it appears that Mr. Greig and his family have mainly used the waterfront cottage and Ms. Holt and her family have mainly used the roadside cottage. This joint use has required cooperation in terms of access to the lake, parking, and recreational uses of the land in between the buildings. Both families have also contributed to the costs of maintaining and caring for the property, including the costs of utilities, insurance and taxes.

[16] In the fall of 2020, Mr. Greig decided that he no longer wished to share the cottage property with his sister and her family. He asserts that this decision was based on, among other things, Ms. Holt’s alleged misuse of the property and her conflicts with neighbours. On March 2, 2021, Mr. Greig advised his sister, through counsel, that she was no longer welcome to use the cottage property. Locks were changed and security cameras were installed.

[17] Ms. Holt subsequently commenced an action seeking, inter alia, a constructive and/or resulting trust in relation to the cottage property, and in the alternative damages equivalent to one half of the value of the property.

[18] The cottage property has increased in value. In 2008, it was valued at approximately $196,000. In 2012, after the renovations were completed, it was valued at approximately $670,000. It is now estimated to be worth approximately $1 million.

The Relief Sought on this Motion

[19] In this motion, the plaintiff, Ms. Holt, seeks two principal forms of relief: (a) a certificate of pending litigation (“CPL”) on the cottage property, and (b) and interim injunction maintaining joint use of the cottage property pending determination of the action.

[20] Additional items of procedural relief are also being sought, but as they are on consent, I will simply note them at the conclusion of this endorsement.

Certificate of Pending Litigation

[21] Section 103 of the Courts of Justice Act requires that a party wishing to put others on notice of its claim to an interest in land must obtain and register a CPL. When obtained, a CPL warns any interested party that there exists an outstanding claim against the property and, as such, it protects the claim pending final determination on the merits. A CPL does not, however, create an interest in land, see Avan v. Benarroch, 2017 ONSC 4729 at para. 15.

[22] In deciding whether to grant leave to issue a CPL, I am guided by the following principles as discussed by Master Glustein (as he then was), in Perruzza v. Spatone, 2010 ONSC 841 at para. 20:

(i) The test on a motion for leave to issue a CPL made on notice to the defendants is the same as the test on a motion to discharge a CPL (Homebuilder Inc. v. Man-Sonic Industries Inc., 1987 CarswellOnt 499 (S.C.–Mast.) (“Homebuilder”) at para. 1);

(ii) The threshold in respect of the “interest in land” issue in a motion respecting a CPL (as that factor is set out at section 103(6) of the Courts of Justice Act, R.S.O. 1990, c. C. 43) is whether there is a triable issue as to such interest, not whether the plaintiff will likely succeed (1152939 Ontario Ltd. v. 2055835 Ontario Ltd., 2007 CarswellOnt 756 (S.C.J.), as per van Rensburg J., citing Transmaris Farms Ltd. v. Sieber, [1999] O.J. No. 300 (Gen. Div. – Comm. List) at para. 62);

(iii) The onus is on the party opposing the CPL to demonstrate that there is no triable issue in respect to whether the party seeking the CPL has “a reasonable claim to the interest in the land claimed” (G.P.I. Greenfield Pioneer Inc. v. Moore, 2002 6832 (ONCA), 2002 CarswellOnt 219 (C.A.) at para. 20);

(iv) Factors the court can consider on a motion to discharge a CPL include (i) whether the plaintiff is a shell corporation, (ii) whether the land is unique, (iii) the intent of the parties in acquiring the land, (iv) whether there is an alternative claim for damages, (v) the ease or difficulty in calculating damages, (vi) whether damages would be a satisfactory remedy, (vii) the presence or absence of a willing purchaser, and (viii) the harm to each party if the CPL is or is not removed with or without security (572383 Ontario Inc. v. Dhunna, 1987 CarswellOnt 551 (S.C. – Mast.) at paras. 10-18); and

(v) The governing test is that the court must exercise its discretion in equity and look at all relevant matters between the parties in determining whether a CPL should be granted or vacated (931473 Ontario Ltd. v. Coldwell Banker Canada Inc., 1991 CarswellOnt 460 (Gen. Div.); Clock Investments Ltd. v. Hardwood Estates Ltd., 1977 1414 (ON SC), 1977 CarswellOnt 1026 (Div. Ct.) at para. 9).

[23] The core issue I need to determine is whether there is a triable issue that the plaintiffs have an “interest in land” as that term is understood in the context of CPL motions. The core relief sought in the action is the recognition of a constructive and/or resulting trust which operates to vest the plaintiffs with a proprietary interest in the cottage property. The claim seeks, in the alternative, damages equal to half the value of the property.

[24] The parties agree that a claim for a constructive and/or resulting trust can give rise to an “interest in land” sufficient to warrant issuance of a CPL. The respondent argues, however, that the claim in this case, if successful, can be easily remedied by a damages award as the land is not particularly unique.

[25] I disagree. In my view, the property is sufficiently unique to warrant issuance of a CPL. The plaintiffs seek to continue using a cottage property that has been in the family for more than two generations. They take the position that they have contributed to building and maintaining the property and have, by operation of constructive and/or resulting trust principles, acquired an actual proprietary interest in the property. The trust claims advanced have merit. The earlier invalid transfer of title to the plaintiffs and the acknowledged financial contributions by the plaintiffs seem to clearly support the validity of the claims advanced. Moreover, in view of the history and the use of the cottage property, this is not a case where a simple damages award is a satisfactory remedy, even though it is the alternative remedy being sought. It is clear that the central remedy being sought is joint ownership and continued use of the property which has significant and particular meaning to the parties. Lastly, from the record before me, I see no risk of harm to the defendants if leave to obtain a CPL is granted. If circumstances change, they are free to apply to the court to discharge the CPL.

Interim Injunction

[26] In RJR-MacDonald Inc. v. Canada (Attorney General), the Supreme Court of Canada set out the following three-part test which must be satisfied in order to obtain injunctive relief:

a. Is there a serious issue to be tried?

b. Will the applicant suffer irreparable harm if the injunction is not granted?

c. Where does the balance of convenience lie?

[27] For the reasons discussed above in relation to the CPL, I am readily satisfied that there is a serious issue to be tried. This is not an onerous test and the evidence before me supports a clearly arguable case of constructive and/or resulting trust.

[28] In terms of irreparable harm, I note that “irreparable” refers to the nature of the harm and not its magnitude, see Galati v. The Corporation of the Township of Tiny, 2020 ONSC 6442 at para. 33.

[29] The plaintiffs have been served with a trespass notice. The locks on the cottage have been changed and security cameras have been installed. The plaintiffs are no longer welcome to use the cottage they have been using and maintaining for years. In these circumstances, I am satisfied that unless the injunctive relief is granted, the plaintiffs will suffer irreparable harm.

[30] I turn lastly to assessing the balance of convenience. On this issue, the defendant asserts that granting injunctive relief may interfere with his obligations as trustee of the property for the benefit of Ms. Movich. While in theory there is a possibility that the property will need to be further encumbered and/or potentially sold in order to deal with costs of care for Ms. Movich, there is no evidence before me that this is anything more than a theoretical possibility at this stage. Moreover, on the evidence before me, it appears that Mr. Greig has simply decided that he wants to use the entire property for himself.

[31] While I accept that the injunctive relief sought may grant exclusive use of the larger cottage to plaintiff, I do not see that fact alone as manifesting an unfairness tipping the balance of convenience. On the record before me, the cottage by the road is the cottage that the plaintiffs have historically used. It is only recently, likely as of the time that Mr. Greig decided that he wanted to remove his sister from the property, that he has made use of storage space in the larger cottage.

[32] When I consider the evidence before me, I am satisfied that this is an appropriate case for interim injunctive relief. To be clear, the interim injunctive relief I am granting is intended to preserve the status quo pending the resolution of the litigation. The status quo is that both families have used and enjoyed the cottage property for many years. Amicable sharing of the property is obviously and unfortunately not likely feasible at this stage. As such, the parties will be each granted possession and exclusive use over a portion of the property. The Holt family will enjoy exclusive use of the cottage by the road including the upper lawn. The Greig family will enjoy exclusive use of the cottage by the water including the lower lawn. Each family must permit the other access across the property as required in order to give effect to their respective enjoyment of the property.

[33] The parties are expected to cooperate fully and honestly to facilitate the implementation of this order. In other words, they need to act maturely and responsibly. They should not engage in efforts to undermine each other’s rights to use and enjoy the property. They should be accommodating of routine requests which have been part of the traditional use of the property, such as using water from the cottage by the road and the use of extra storage space.

[34] The summer months are as short as they are precious. In a global pandemic, this is even more the case. I urge the parties to use this time wisely, enjoy the cottage property much like they have for over 60 years, and resolve their differences.

Relief Ordered

[35] The motion is granted and the following relief is ordered:

a. Leave is granted to obtain a Certificate of Pending Litigation on the property municipally known as 1257 Hall’s Lake Road, Minden, ON, and legally described as Part Lot 13, Concession 10, Stanhope as in H271868; S/T H271868; Algonquin Highlands being all of PIN 39133-0162 (LT).

b. An interim injunction pending resolution of these proceedings:

i. Prohibiting the defendants from denying Darlene Holt and her immediate family access to the property and interfering with their enjoyment of the property;

ii. Prohibiting the defendants, without Darlene Holt’s express written consent, from entering the cottage by the road or from changing the locks on the cottage by the road;

iii. Prohibiting the defendants from dissipating, transferring, encumbering, selling, wasting, disposing of or otherwise dealing with the property subject to any further court order or agreement between all parties;

iv. Granting the plaintiff Darlene Holt and her immediate family exclusive use of the cottage by the road including the upper lawn area;

v. Granting the plaintiff Darlene Holt and her immediate family the right to change the locks on the cottage by the road; and,

vi. Granting the plaintiff Darlene Holt and her immediate family the right to access the waterfront land, but not the waterfront cottage which shall remain in the exclusive possession and use of the defendant Brian Greig.

[36] In addition, the following orders are granted on consent:

a. The plaintiffs are entitled to file an Amended Statement of Claim as provided in the motion materials;

b. Brian Steven Greig is appointed to act as Litigation Guardian for Dolores Movich; and,

c. Service of the Statement of Claim and motion materials on Dolores Movich by serving Brian Steven Greig is hereby validated.

[37] If the parties are unable to agree on costs, the plaintiffs may file written submission no longer than 3 pages in length within 15 days of the release of this endorsement. The defendants may file responding submissions, also no longer than 3 pages in length, within 30 days of the release of this endorsement. If submissions are not received according to this timeline, no costs order will be made. The submissions may be sent to my judicial assistant, Diane Massey.

J. Di Luca J.

Date: April 9, 2021

Corrigenda

1. Paragraph [35] (a): The PIN number should read PIN 39133-0163 (LT).