COURT FILE NO.: CV-18-00078312-000
DATE: 2021/04/12
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Gaetana Fichera by her Litigation Guardian Aldo Fichera
Plaintiff
– and –
Alex McAllister and Morgan McAllister in their capacities as Estate Trustees for the Estate of Salvatore Fichera
Defendants
Miriam Vale Peters, for the Plaintiff
Helmut Brodmann, for the Defendants
HEARD: March 25, 2021
REASONS FOR decision
RYAN BELL j.
Overview
[1] Gaetana Fichera and her husband Carmelo had three sons: Aldo, Paul, and Salvatore.[^1] Salvatore lived with his parents for a period of time at their residence at 1027 Dynes Road (the “Property”). After Carmelo’s death in 2009, Salvatore continued to live with his mother at the Property until his own death in 2018.
[2] In July 2017, Gaetana instructed her solicitor to prepare a new will for her and to transfer the Property to Salvatore for consideration of $1. In the amended statement of claim, Gaetana seeks declarations that the July 2017 will and the transfer of the Property to Salvatore are invalid.
[3] Aldo is Gaetana’s litigation guardian. Salvatore died intestate. The defendants Morgan McAllister and Alex McAllister are Salvatore’s adult children and the estate trustees of their father’s estate. Paul has been estranged from the family for many years.
[4] In November 2020, Gaetana moved to a retirement residence in Stittsville. The parties agreed that the Property should be sold. The sale of the Property was completed on March 12, 2021. As agreed by the parties, the net proceeds are being held in trust with the solicitors for the defendants, pending agreement between the parties or court order.
[5] The issue before the court on this motion is how the proceeds of the sale of the Property should be disbursed. Gaetana requests that the proceeds be transferred to her, to subsidize her ongoing care needs. Gaetana maintains that the transfer of the Property to Salvatore was not a valid inter vivos gift. In support of her position, Gaetana relies on the doctrines of resulting trust and unjust enrichment. Gaetana also asserts that even if the transfer was a valid inter vivos gift, the transfer was unconscionably procured by Salvatore.
[6] The defendants assert that the transfer of the Property was a valid inter vivos gift from Gaetana to her son, Salvatore. They say that the presumption of resulting trust is rebutted because the evidentiary record shows Gaetana intended to gift the Property to Salvatore. The defendants also argue that the doctrine of unconscionable procurement has no application to this case.
[7] The issues I must determine are the following:
(i) Did Gaetana intend to gift the Property to Salvatore at the time of the transfer in July 2017?
(ii) If so, did Salvatore unconscionably procure the transfer?
[8] For the following reasons, I find that Gaetana intended to gift the Property to Salvatore in July 2017 and that Salvatore did not unconscionably procure the transfer of the Property.
Factual Background
[9] Gaetana and Carmelo immigrated to Canada in the 1950s. Over the years, they acquired various real estate assets, including investment properties and the Property where they resided.
[10] Gaetana is now 92 years old and suffers from liver cancer. Her first language is Italian, and her English is very limited. The evidentiary record discloses a shortfall between Gaetana’s monthly income and her monthly expenses at the retirement residence.
[11] By the time of Salvatore’s death in 2018, Salvatore and Aldo had been at odds for years. It is not disputed that Salvatore struggled with substance abuse and other health issues throughout much of his adult life. In his affidavit, Aldo describes Salvatore as “emboldened” after the death of his father and states that Salvatore was able to “manipulate [Gaetana] unchecked.” Morgan, Salvatore’s daughter, describes Aldo as resentful of her father and jealous of the attention Salvatore received from Gaetana and Carmelo.
[12] In 2008, Gaetana and Carmelo executed “mirror” wills, drawn up by their solicitor Ross Talarico. Each will provided that on the passing of both Gaetana and Carmelo, Paul was to receive the property at 1134 Woodroffe Avenue and Salvatore was to receive the Property. Each will specifically noted that Gaetana and Carmelo had previously paid the full balance of the home mortgage on 35 Wheatland Avenue, borne by Aldo.
[13] In November 2009, shortly after Carmelo’s death, Gaetana transferred the property at 1134 Woodroffe Avenue to Paul. The transfer from Gaetana to Paul was prepared by Mr. Talarico.
[14] In November 2009, Gaetana also sold two investment properties located at 71 Pamilla Street and 73 Pamilla Street. The net proceeds of sale were approximately $500,000. Paul and Salvatore each received $125,000. Aldo received a total of $250,000, being his one quarter share of the proceeds and Gaetano’s quarter share. Aldo testified on his examination, “[m]y mother gave me her portion because she wanted me to have it.”
[15] Gaetana’s evidence as to her intent at the time of the transfer of the Property is not before me. However, the parties examined Gaetana’s solicitor, Mr. Talarico, as a non-party witness. Mr. Talarico also produced for inspection his file in connection with his retainer by Gaetana in July 2017.
Issue 1: Did Gaetana intend to gift the Property to Salvatore?
[16] A valid inter vivos gift – one that is intended to take effect during the lifetime of the donor – consists of a voluntary transfer of property to another person with the full intention that the property will not be returned. To establish a gift, one must show an intention to donate, sufficient delivery of the gift, and acceptance of the gift: Jansen v. Niels Estate, 2017 ONCA 312, at para. 40. In this case, the requirements of delivery and acceptance are not at issue; the sole issue is Gaetana’s intention at the time of the transfer.
[17] When a parent gratuitously transfers property to an adult child, the law presumes that the child holds the property on a resulting trust for the parent. The onus rests on the adult child to rebut the presumption by proving the contrary intent on the balance of probabilities. The judge must begin her inquiry with the presumption and then weigh all of the evidence in an attempt to determine the parent’s actual intent at the time of the transfer: Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, at para. 44.
[18] Evidence of intention that arises subsequent to the transfer must be relevant to the intention of the transferor at the time of the transfer. In assessing what weight is to be given to post-transfer evidence, the judge must guard against evidence that is self-serving or that tends to reflect a change in intention: Pecore, at para. 59.
[19] Weighing all the evidence, I find that the defendants have rebutted the presumption of a resulting trust. I find that in July 2017, Gaetana intended to make an inter vivos gift of the Property to Salvatore. Mr. Talarico’s testimony compels this conclusion.
[20] Mr. Talarico first represented Gaetana and Carmelo in 2001. Over the years, he represented either Gaetana or Carmelo on real estate acquisitions and in the preparation of wills. Mr. Talarico testified that when he met with Gaetana in July 2017, he conversed with her in Italian.
[21] When asked if Gaetana had a “disposing mind”, Mr. Talarico testified:
And I was satisfied that her instructions were clear, her instructions were coherent and you know, there simply were not any red flags that I could point to that would raise any concern about her capacity.
[22] Mr. Talarico met with Gaetana at his office on July 11 and again on July 18, 2017. He was “fairly certain” that it was Gaetana who called him to set up the appointment. Mr. Talarico testified that Gaetana came with Salvatore on both occasions, but he met with Gaetana alone. Her instructions were “to transfer the home into Salvatore’s name and to prepare a will that would leave everything to Salvatore.” When asked if Gaetana provided him with any explanation, Mr. Talarico responded:
There were a couple of things she had mentioned; one was the fact that Salvatore had serious health issues and needed the support which would be provided by that bequest and secondly that he was providing her with care and companionship. It was my understanding that he was living with her at the time.
[23] Consistent with Mr. Talarico’s testimony on this point, paragraph 5 of the July 2017 will specifically states, “I make this will with the knowledge that I have already transferred all my real estate assets to my sons and I herein declare that I leave my entire estate to my son Salvatore Fichera to assist him in coping with his severe health challenges.” Mr. Talarico testified that Gaetana also told him that she had taken care of her other sons in terms of earlier dispositions, being the transfer of the Woodroffe property (to Paul) and “the paying off of that mortgage of Aldo’s property.”
[24] The explanation provided on the land transfer tax document for the nominal consideration of $1 is also consistent with Mr. Talarico’s evidence: “conveyance from mother to son for the sum of one dollar and natural love and affection.”
[25] Mr. Talarico was satisfied that Gaetana’s instructions to him in July 2017 to transfer the Property (among other instructions) were clear, he had no concerns that she had been influenced by anyone, and he was certain that Gaetana intended to gift the Property to Salvatore:
Q. Right. When you met with her in July 2017 to take these instructions on the will, the powers of attorney and the transfer, did you have any concerns about her testamentary capacity?
A. No.
Q. She was clear in her instructions to you?
A. She was.
Q. Okay. Any concerns about her somehow being influenced in some way in terms of preparing these documents or transferring title?
A. No, I had no such indication.
Q. Okay, and just on that issue as a gift, did you have any question in your mind that Ms. Fichera was making a gift to her son of the property?
A. I was absolutely certain in my mind that it was a gift, yes.
[26] On the transfer document, Mr. Talarico responded “no” to the question whether the transferee is acting as a trustee or a nominee because, “in this case, he [Salvatore] became the beneficial owner...[i]t was a gift.”
[27] The plaintiff’s position is that the evidence of Mr. Talarico is not sufficient to rebut the presumption and that Mr. Talarico took no steps to explain the consequences of the transfer to Gaetana. I disagree. Mr. Talarico was specifically asked about his handwritten notes pertaining to the file. He explained that the notation “mother to son natural love and affection” is a standard term used when there is an “interfamily gift” of real estate. Mr. Talarico also explained that his note reflects that,
I would have presented the option of not simply transferring the title to Salvatore alone, but perhaps the option of transferring the title to herself and Salvatore as joint tenants and she said no, I just want you to give it to Salvatore solely.
[28] The uncontradicted evidence is that Mr. Talarico presented an option to Gaetana for her consideration, one that would have resulted in her retaining a joint interest in the Property. Gaetana rejected that option in favour of transferring the Property to Salvatore. There is clear evidence that Gaetana intended to give all rights in the Property to Salvatore.
[29] I place no weight on Aldo’s evidence that, when he asked Gaetana in 2018 about the transfer of the Property, Gaetana was “shocked” to learn she no longer owned the Property and did not believe that she had transferred the Property to Salvatore. Aldo’s evidence is post-transfer and it sheds no light on what Gaetana’s intention was in July 2017.
[30] In my view, the evidence is overwhelming that Gaetana intended to gift the Property to Salvatore in July 2017 and I so find. This is not a case of Salvatore’s estate being unjustly enriched: Salvatore was the beneficiary of a gift from his mother that she fully intended to make.
Issue 2: Did Salvatore unconscionably procure the transfer?
[31] The doctrine of unconscionable procurement renders an inter vivos gift voidable; at issue is the “donor’s necessary understanding to make a transaction conscionable when it takes place in circumstances that suggest, on a prima facie basis, the contrary”: Gefen v. Gaertner, 2019 ONSC 6015, at para. 158, citing John E.S. Poyser, Capacity and Undue Influence (Toronto: Thomson Reuters Canada, 2014), at p. 571.
[32] The onus rests on the party attacking the transaction to prove, on a balance of probabilities, that it was unconscionably procured. Once the party challenging the transaction has established a significant benefit and the active involvement on the part of the person obtaining the benefit in the procurement or arrangement of the transfer, then there is a presumption that the donor of the gift did not truly understand what she was doing in making the transaction: Gefen, at para. 159. This presumption is not determinative. Both parties must adduce evidence about the donor’s understanding of what she was doing; the “issue turns on whether the donor appreciated the effect, nature and consequence of the transaction in a manner sufficient to render it fair, just and reasonable”: Gefen, at paras. 161-162, citing Poyser, at pp. 570 and 574.
[33] There is no evidence that Salvatore was actively involved or participated in arranging the transfer of the Property. The evidence before me establishes that Salvatore drove or accompanied Gaetana to the meetings she had with Mr. Talarico, nothing more.
[34] Based on Mr. Talarico’s evidence, I find that Gaetana appreciated the nature and effect of the transfer of the Property. She explained to her solicitor of many years, why she wanted to transfer the Property to Salvatore. She had already taken care of her other sons in terms of earlier dispositions. She wanted to give the Property to Salvatore solely, and she did not want to retain an interest in the Property as a joint tenant. Mr. Talarico was satisfied that Gaetana had not been influenced by anyone regarding the transfer. I am satisfied that Gaetana appreciated the effect, nature, and consequence of the transfer of the Property so as to render the transfer “fair, just and reasonable.”
[35] I find that Salvatore did not unconscionably procure the transfer of the Property.
Conclusion
[36] The motion is dismissed, with costs. I am confident that the parties will be able to cooperate so as to ensure that Gaetana’s ongoing care needs are met.
[37] If the parties are unable to agree on costs of the motion, they may make written submissions limited to a maximum of three pages. The defendants shall deliver their costs submissions by April 26, 2021. The plaintiff shall deliver her responding costs submissions by May 10, 2021. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs as between themselves.
Madam Justice Robyn M. Ryan Bell
Released: April 12, 2021
COURT FILE NO.: CV-18-00078312-000
DATE: 2021/04/12
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Gaetana Fichera by her Litigation Guardian Aldo Fichera
Plaintiff
– and –
Alex McAllister and Morgan McAllister in their capacities as Estate Trustees for the Estate of Salvatore Fichera
Defendants
REASONS FOR decision
Ryan Bell J.
Released: April 12, 2021
[^1]: Throughout these Reasons, I have used first names to avoid confusion.