COURT FILE NO.: CV-20-2756
DATE: 20230201
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
FANY XYNOS (BY HER LITIGATION GUARDIAN, JOHN XYNOS)
Plaintiff
– and –
TONY XYNOS
Defendant
Krum Dochev, for the Plaintiff
Robert Kalanda, for the Defendant
HEARD: November 29, 30, December 1, 2, and 6, 2022
SPEYER J.
JUDGMENT
A. Introduction
[1] Fany Xynos is an 88-year-old widow. She holds legal title to a house at 106 Purpledusk Trail in Scarborough (“Purpledusk”). She lived there with her husband, until he died in 2007. She wishes to sell Purpledusk. She needs the proceeds to pay for the long-term care residence where she now lives. She is unable to sell Purpledusk because it is occupied by her youngest son, the defendant Tony Xynos, who claims that he owns the house.
[2] This dispute has its origins in a conversation that occurred in 2010, when Fany Xynos was attempting to sell her house after her husband’s death. There is no dispute that in 2010 she told Tony Xynos that she would sell Purpledusk to him for $350,000. There is also no dispute that he has not paid that amount to his mother, and that legal title has not been transferred to him. What is in dispute is whether the 2010 conversation created an enforceable contract for the sale of Purpledusk by Fany Xynos to Tony Xynos.
[3] Fany Xynos, by her litigation guardian, her oldest son John Xynos, seeks a declaration that Tony Xynos has no interest in the property, an order that he vacate the property, an order that the property shall be immediately listed for sale and that the net proceeds of the sale be disbursed to her, an equitable set-off for the fair market value of the rent for the use of the property by Tony from 2009 to the present, an order deleting the defendant’s notice registered against the property, interest and costs.
[4] Tony Xynos claims that he holds an enforceable interest in Purpledusk pursuant to an agreement that he reached with his mother in 2010, that allows him to purchase Purpledusk at the price agreed on in 2010, subject to some significant deductions for payments he says he made to his mother, at an undefined future time. Tony counterclaims against his mother for an order declaring that he has an interest in the property and for an order directing her to sell her interest in the property to him for $135,000, or in the alternative for an order that she reimburse him for all amounts he has invested to maintain and renovate Purpledusk, plus interest and costs.
B. Background
[5] I will refer to the parties by their first names for clarity, because they share the same last name. In doing so I mean no disrespect. I do so to avoid confusion.
[6] Fany and her late husband, Peter, immigrated to Canada from Greece. They have two sons: John, Fany’s litigation guardian, and Tony, the defendant. Fany and Peter bought 106 Purpledusk Trail, a four-bedroom house in Scarborough, in 1981 and moved there with John and Tony. According to Tony, they were a happy family.
[7] Peter died in 2007. Peter and Fany held title to Purpledusk jointly. Fany became the sole owner of the property when Peter died.
[8] After Peter’s death, Fany moved in with her son John, and listed Purpledusk for sale. Despite several reductions in the asking price, Purpledusk did not sell for over a year. Fany permitted Tony to move into Purpledusk.
[9] In 2010, Fany’s niece, Mary, made a verbal offer to buy Purpledusk for $350,000. Fany agreed. When Tony heard about that, he telephoned his mother and offered to buy Purpledusk for that amount. John was with his mother when that call occurred and participated in the call. Both John and Tony recall that Tony told his mother that he would buy Purpledusk and that Fany told Tony that she would sell Purpledusk to him.
[10] Any agreement between Fany and Tony was never reduced to writing.
[11] Title to Purpledusk was never transferred and remains in Fany’s name. No steps were ever taken to have title transferred.
[12] Tony has lived in Purpledusk since at least 2010, pursuant to an agreement he had with his mother. The terms of that agreement will be described presently.
C. The issues
[13] The issues to be decided are:
Did Tony and Fany form an oral contract for the sale of Purpledusk in 2010?
If there is such an oral contract, are there sufficient acts of part performance to take the agreement outside s. 4 of the Statute of Frauds?
If there is not an enforceable contract, has Fany has been unjustly enriched by Tony’s contributions to Purpledusk?
D. The Evidence
(a) The evidence of the witnesses
[14] Six witnesses testified in this short trial. John and Tony each provided their account of the alleged agreement and the circumstances in which it occurred. Fany, who suffers from dementia, did not testify.
[15] John and Tony are the only persons who were present, in addition to Fany, when the alleged agreement was made. As there are no documents that memorialize what agreement, if any, was reached, the proof of any such agreement turns on the credibility and reliability of John and Tony.
(i) John Xynos
[16] John Xynos is Fany’s eldest son. He is a machinist who runs his own company, with several employees. After his father died, John invited his mother to reside at his house in a self-contained, 1,200 square foot, apartment above his garage. Fany no longer wanted to live in her house because it reminded her too much of her late husband. She moved into John’s apartment in August 2007. Fany lived in John’s apartment until July 6, 2022, when she moved into a retirement residence, where she is looked after very well. The residence costs $4,500 per month. Fany’s income is about $1,800 per month. John has paid the difference.
[17] John testified that Tony moved into Purpledusk following a discussion between him, Fany and John when they had dinner at a Keg restaurant after Peter’s funeral. Fany suggested that Tony move into Purpledusk because it was empty, Tony was separated from his wife, was paying rent, and his lease was up. John testified that Tony paid nothing when he moved into Purpledusk, and that he lived there for free. John testified that Tony moved into Purpledusk in August 2007.
[18] Purpledusk was listed for sale but did not sell. Four MLS listings for Purpledusk are in evidence and reveal that Purpledusk was listed for sale on June 5, 2007 for $395,000, and re-listed on September 6, 2007 for $375,000, on April 12, 2008 for $354,000, and finally on September 25, 2008 for $348,800. It did not sell.
[19] John testified that his cousin, Mary Kritsonis was going to get married. She was looking for a home. Mary and her fiancé visited Fany in her apartment. John was there too. John recalled that Mary’s fiancé offered Fany $418,000 for the home, and that no formal agreement was produced. In cross-examination, he agreed that it was possible that Mary agreed to pay $350,000 for Purpledusk. According to John, Tony telephoned within a few days and was upset that Fany was going to sell Purpledusk for that amount. He said that he would buy it for $400,000. John testified that he walked upstairs to Fany’s apartment and told her what Tony was proposing. He testified that Fany said “okay”, that she would sell Purpledusk to Tony for $400,000 and that of that amount, $50,000 would go to John as an advance on his inheritance and that Tony would receive a $50,000 reduction in the price of Purpledusk, for the same reason. In cross-examination, John testified that his mother and Tony agreed that Tony was going to buy Purpledusk for $350,000, and that part of the arrangement was that he would receive a $50,000 discount on the purchase price as a gift, equivalent to the $50,000 gift that Fany would give to John. John testified that Fany and Tony also agreed that $8,000 that Tony had given to Fany to do renovations on her apartment would come out of the purchase price.
[20] As to when Tony was to pay the purchase price of Purpledusk, John was “pretty sure” that Tony was to pay for Purpledusk when John and Fany received an architect’s renderings for the installation of an elevator to Fany’s apartment. John’s evidence about this was quite uncertain. He had a clear recollection, and gave a detailed account, of his dealings with the architect. He was much less certain about his conversations with Tony, and it appeared to me that he was trying to reconstruct his dealings with Tony based on what made sense to him in the context of things that he did remember.
[21] John testified, and there is no dispute about this, that Tony took Fany to the bank and assisted her to obtain a line of credit (“LOC”) secured by Purpledusk. Tony co-signed for the LOC. John recalled that the LOC was for about $103,000, and once the money was received from the LOC, Fany gave John $71,852: $50,000 as a gift, and the rest to reimburse him for his father’s funeral expenses that he had paid. The funds were deposited to John’s account on March 10, 2010. The parcel register for Purpledusk indicates that on April 16, 2010, the CIBC registered a charge on title to Purpledusk in the amount of $103,000.
[22] John testified that Fany told him Tony gave her $8,000 to make some renovations to her apartment. Fany also told him that they would close the sale once everything was in place to proceed with the elevator construction, and that the LOC would then be paid off. According to John, there was never any agreement that the sale of the property was to be concluded on any particular date.
[23] John testified that after the elevator drawings were ready, Fany told him to call Tony to get the money, so that the renovations could begin. John called Tony and asked for the money so that they could close the deal for the sale of Purpledusk. He recalled that there was a heated discussion about whether the elevator should be built. Tony said that the elevator would cost too much. John told Tony that if he did not pay for Purpledusk, the deal was dead. John told his mother that Tony could not pay because he was broke. Fany responded that her son needed help and she could not throw him out on the street, and that if he could not close, he could live in Purpledusk and pay the expenses, including the interest on the LOC, the property taxes, and the utilities. John could not recall how this was communicated to Tony. There was no discussion then about Tony buying Purpledusk at a future time.
[24] After the summer of 2010, John had no discussions with Tony about the arrangement. Tony continued to live in Purpledusk. He paid the interest on the LOC, the property taxes (for a time), and the utilities. Fany told John that Tony could stay in Purpledusk as long as he wanted, as long as he paid the interest on the LOC, the property taxes, and the utilities.
[25] John recalled that in 2014 or 2015, Tony wanted to buy a condominium in Florida. Tony called John and said that he wanted to talk to John and Fany. They met in Fany’s apartment. John testified that Tony wanted to have Purpledusk put in his name so that he could take out a mortgage to buy a condo in Florida. There was no discussion about Tony purchasing Purpledusk. He just wanted Fany to transfer Purpledusk to him so that he could get the mortgage. Fany told Tony that he was crazy and that it was not his house. Tony said that it was his house. Fany said that was ridiculous because he had paid nothing for Purpledusk. Tony never spoke to John again about getting a mortgage on Purpledusk.
[26] John and Fany were aware that Tony made renovations to Purpledusk. Tony did not consult with Fany or seek her permission to do any of the renovations.
[27] About April 2019, John learned that Tony had not been making the interest payments on the LOC since the fall of 2018. A copy of a letter from the CIBC to Fany dated October 12, 2018, states that an interest payment was not made. Some of the interest payments were then made by Fany. There was confusing evidence about why the interest payments were not made, related to the bank’s actions in processing, or not, automatic withdrawals from Tony’s account. Eventually, Tony paid the outstanding interest payments.
[28] In June 2019, Fany asked John to take her to the property tax office. They learned that the property taxes for Purpledusk were in arrears since 2014. Only a single payment had been made, for the taxes owing for 2018. The total overdue amount owing in 2019 for unpaid property taxes, water bills, interest, penalties, and fees was $19,766.70. The account had been assigned to a collector for pre-registration of tax lien proceedings.
[29] John and Fany were understandably upset when they learned that the taxes on Purpledusk were in arrears. John testified that Fany told him that she wanted to sell Purpledusk, pay the property taxes, and clear things up. John called Tony a few times and asked him to pay the taxes. He refused. He told John that it was his house and if he did not want to pay the taxes, he did not have to pay them. John told Fany what Tony had told him. She was not happy with that. She and Peter had always paid their taxes. She was embarrassed when she found out that the taxes were not paid.
[30] After Fany lost her driver’s licence, sometime in 2019, John had to drive her anytime she needed to go somewhere. He lived in the country. She suggested that she move back into her house with Tony because she could walk to a nearby plaza from there. According to John, Tony told Fany that he did not want her to live with him and yelled at her that Purpledusk was his. Although Tony sent a text message to John on March 2, 2020, stating: “I have no problem with her coming here I just didn’t like how you guys did it”, Fany told John that she had to sell Purpledusk because she could not live with Tony.
[31] On March 6, 2020, acting on the instructions of John, who by then was acting under Fany’s power of attorney, lawyer Maria-Christina Spingos wrote a letter to Tony advising him that his mother wished to sell her house and that he was required to vacate Purpledusk by March 18, 2020. He did not comply with that demand. The statement of claim was issued on October 2, 2020.
[32] John gave his evidence in a forthright and careful manner, for the most part. His answers to the questions that were put to him, during direct examination and in cross-examination, were given calmly, responsively and coherently. He was, I find, wrong about the price discussed by Fany and Tony for Tony’s purchase of Purpledusk. The property had been listed for sale for $348,000 and had not sold. There was no reason for either Mary or Tony to pay more than that for Purpledusk.
[33] While John’s evidence about the price at which Tony offered to purchase Purpledusk was wrong, this does not diminish John’s credibility or reliability generally. Rather, his account of the brief conversations that are said to give rise to Tony’s ability to purchase Purpledusk for the price agreed on in 2010 at an unspecified future time underscores the imprecise, informal, and hurried nature of those conversations.
(ii) Tony Xynos
[34] In contrast, I find that Tony Xynos’ evidence is unreliable and that he is not a credible witness. His evidence was neither clear, convincing, nor cogent. His answers, both in chief and in cross-examination were shifting, contradictory, and confusing. I found him to be impulsive and careless with language. He was argumentative, unresponsive, and deflecting in cross-examination.
[35] Tony is 56 years old. He is a self-employed licenced automotive technician.
[36] Tony recalled that after his father passed, Purpledusk was put up for sale. He cleaned out Purpledusk, arranged for some renovations to be done and retained a real estate agent. According to him, John was not much involved in that effort, and “it was all me”. That may explain why John has little memory of the details of their efforts to sell Purpledusk during that time.
[37] Tony testified that he learned that Mary and her fiancé were looking for a house when he had dinner with them. He suggested that they meet with Fany and John to discuss a possible purchase of Fany’s house. Tony recalled that after Mary and her fiancé met with Fany and John, John called him and told him that they were buying Purpledusk for $72,000 below what they were asking. Tony recalled that Purpledusk was listed for $426,000. John told him that Purpledusk would be sold to Mary for $350,000. Clearly, Tony’s memory of the price at which Purpledusk was listed, like John’s memory about that, was wrong.
[38] When Tony heard that Fany would sell Purpledusk to Mary for $350,000, he told John that at that price, he would buy Purpledusk, minus his “inheritance” (the $50,000 gift that Fany was going to give each of her sons), for $300,000. Tony called his mother immediately and told her that he would buy Purpledusk, and she thought that was great. Tony then called Mary and told her that he would buy Purpledusk.
[39] Tony testified that his discussions with John, his mother, and Mary took, in total, no more than ten minutes, during quick, short telephone calls. There was nothing said then about any arrangements about paying for Purpledusk. According to Tony, they did not say that he could buy Purpledusk for $350,000 at any future time.
[40] Tony testified that in calculating how much he was to pay for Purpledusk, he also deducted the amount he gave to his mother to renovate her apartment at John’s house. He testified in chief that he paid for new windows and/or a sliding door. He also thought that he bought the chairlift that was installed in lieu of the elevator. He knew “for sure” that he paid $15,000. He did not know if he gave that money to John, or to his mother, or maybe to the trades.
[41] Tony explained that he went to the bank with his mother to get a LOC on Purpledusk because she could not get a LOC because she was in her 70’s. He co-signed for the LOC. He provided no explanation for why his mother needed a $100,000 line of credit. He testified that he has been paying the interest on the LOC and that it has cost him $40,000. He testified that he gave John $57,000: $50,000 for his inheritance and $7,000 for the cost of their father’s funeral. This money did not, according to Tony, come from the proceeds of the LOC. Rather, according to Tony, the cash he gave to John “came out of a bag”. He said that he had enough money sitting in his safe to pay for Purpledusk. He testified that the LOC had not yet been obtained when he paid John. There is support for his evidence about this. The funds were deposited to John’s account on March 10, 2010, while the charge against Purpledusk was registered by CIBC more than a month later, on April 16, 2010. Tony testified that the funds obtained from the LOC, $100,000, were given by him to Fany to pay for the purchase of Purpledusk. No records were produced that document how the funds from the LOC were disbursed. If Tony obtained those funds from CIBC and gave them directly to Fany, it should have been an easy matter for Tony to obtain and provide bank records to document those transactions.
[42] Tony explained that after deducting his $50,000 credit from the purchase price, and deducting the $50,000 that he gave to John, and deducting the $15,000 that he had contributed to the renovations of Fany’s apartment, and also deducting the $100,000 that was obtained from the LOC which he said he paid to his mother, he was left owing his mother $135,000 for his purchase of Purpledusk. It was his position that he had paid his mother $165,000 towards the purchase price, leaving an amount owing of $135,000. He surmised that his mother did not take him up on his numerous offers to pay that amount to her because it was her intention to gift him the $135,000. Tony’s evidence about this made no sense. The $100,000 generated from the LOC was not his to contribute to the purchase price of Purpledusk. It was Fany’s money, secured by her equity in her house. He testified that he has not paid anything towards the principle of the LOC, the entire amount of which remains outstanding. He did not explain the source of the $50,000 cash that he said he gave to John – money that John testified that he received from Fany after she obtained the funds from the LOC. Tony’s evidence about all of this was very confusing. No bank records or other documents were produced to corroborate any of it.
[43] Tony did not apply for a mortgage to buy Purpledusk. He testified that this was because there was no date set for the closing, and that he had the money in 2009 and 2010 to buy Purpledusk. Later, he testified that he had assets he could borrow against to raise the money to buy Purpledusk. He could have obtained a mortgage on Purpledusk. Although he testified that he had documents to show that he had the funds to close in 2010, none were produced in evidence. Tony was cross-examined about his personal income tax returns for 2006, 2007, and 2008. His declared income in each of those years did not exceed $11,500. In 2008, his business was also in financial difficulty. He signed a Notice of Intention to Make a Proposal to creditors in 2008. It indicated that his business had debts in the amount of $226,850. In an apparent attempt to show that he was not then in financial difficulty, Tony testified that the information in the Notice was “creative accounting” and that he did not owe money as stated in the Notice. He agreed that he signed a document that misrepresented the financial position of his business but deflected the blame for that onto his accountant and the trustee. Tony’s willingness to lie about his financial circumstances tells against his credibility. I reject Tony’s evidence that he had sufficient funds to buy Purpledusk in 2010 and find that he did not.
[44] Tony testified that if his mother ever asked for the money, he would give it to her. He never hired a real estate agent or lawyer because John never asked him for the money. If the deal was dead, he would have left. He said that he stayed in Purpledusk because he bought it.
[45] Tony testified that he bought a condominium in Florida in 2013. He testified that he told John and Fany that he wanted to borrow more money on the LOC on Purpledusk and Fany said that was not a problem. However, that did not happen. Tony did not ask Fany to put Purpledusk in his name so that he could get a mortgage. Tony testified that he, or John, suggested that Purpledusk be put in John’s name because Tony did not want Purpledusk in his name, though that may have been in 2011 or 2012. This was somehow, perhaps, related to his matrimonial litigation, and as Tony’s evidence evolved, was also apparently unrelated to his purchase of the Florida condominium. His evidence about this was incomprehensible. What is clear is that in 2013 Tony chose to buy a condominium in Florida rather than to pay his mother for Purpledusk and conclude the agreement he says they reached. His failure to conclude the agreement he says he had with his mother when he had the means to do so tells against his position that there was such an agreement.
[46] Throughout the time when Tony lived in Purpledusk, including after the property taxes went into arrears, he caused renovations to be done to the property. He relies on this to show that he owned Purpledusk. Alternatively, he seeks to be compensated for the amounts he put into the renovations. Invoices said to be paid by him for the renovations are in evidence. He did not provide receipts for payment of the invoices, at least in part because he sometimes paid cash or by a reciprocal work arrangement. He testified that he dealt with people on a “tit for tat” or “you scratch my back and I’ll scratch yours” basis, which involved him working on vehicles owned by the people who worked on Purpledusk. These exchanges in kind were not documented and render impossible any accurate assessment of what Tony in fact spent out-of-pocket for the renovations.
[47] There is no dispute that the property taxes on Purpledusk fell into arrears starting in 2014. When asked why he did not pay the property taxes, Tony responded that he did not know why. He did his best to pay them but had a lot of bills. By June 18, 2021, when Tony was examined for discovery, that amount exceeded $28,000. When it was put to him that he did not “have any urgency in paying the property taxes” he responded:
I’ll pay tomorrow – I’ll pay it tomorrow morning, tomorrow morning. What’s today? It’s Thursday. I’ll go tomorrow morning and pay it. What is it, $27,000? I’ll go tomorrow and pay it, all of it right now. Write that down. Whatever the figure is, 27, 26, 29, 30, 35,000. I’ll pay it first thing in the morning if that’s a concern.
[48] He did not pay the tax arrears the following morning, or anytime until the eve of trial. He did not pay the tax arrears when he was ordered by O’Connell J. on February 9, 2022, to pay the entirety of the outstanding property taxes by May 31, 2022, and to repay Fany an amount she had paid towards the arrears, an Order to which he consented. He did not pay the tax arrears until after Bird J. ordered, on November 23, 2022, six days before the trial began, that Tony pay the tax arrears by 4:00 p.m. the following day, failing which his statement of defence would be struck at that time.
[49] The history of Tony’s failure to pay the tax arrears, in breach of his arrangement with his mother, in breach of his promise under oath at his examination for discovery, and in breach of O’Connell J.’s order gives rise to two irresistible inferences: 1) he did not have the funds needed to pay that amount; and 2) he will lie to get himself out of a situation that is disadvantageous to him.
[50] When he was confronted with the fact that he did not pay the tax arrears after his examination for discovery as promised under oath, Tony’s response was nonsensical. He said variously that he misunderstood or that he was misunderstood. He testified that he meant to say that he would pay the outstanding balance of the purchase price, $135,000, the following morning, although the question clearly referred only to the outstanding property taxes and he did not pay $135,000 the next morning. The simple fact was that he made a promise, under oath, and did not keep that promise. The simple truth would have been to acknowledge that fact. Instead, Tony chose to evade, obfuscate, and lie.
[51] Tony’s responses in cross-examination when asked why he did not comply with the order of O’Connell J. tell strongly against his credibility. He was asked whether, on May 31, 2022, the deadline contained in the order for payment of the tax arrears, he had the funds to pay. His answers to this straightforward question were anything but. The answers included: “I could have arranged to get money”; “I had to free up money”; “I think so”; “I’m not sure, probably, I could’ve maybe got access to the money”; “I’m not sure if I had access, I’m not sure”; “Probably not; “Kind of yes, no, yes”; “You could say yes, I guess”; and, “I guess I did”. What is clear is that he did not comply with O’Connell J.’s order. He did not pay the tax arrears by May 31, 2022. He did not provide a coherent or credible answer to the question why he did not pay the arrears by May 31, 2022.
[52] Tony was also unable to provide a credible answer to the question “when did your mother agree to the final net price of $135,000? His responses included: “I don’t know”; “She knew what it was”; “She has it written down”; “Just before she went to Greece”; “I don’t know the date. It was probably just before she went to Greece, cause I gave her money to go to Greece and we probably discussed it”; “I’m sure that’s probably when she went to Greece”; “We know the agreed price is $350,000, minus the deductions And I gave her a 100 so she knows I gave her 100 so she knows that the number is 250. She always knew what the number was ongoing”; and “We did speak about it. She knows.” I do not believe Tony’s evidence that he and Fany agreed that he owed a net amount of $135,000 to buy Purpledusk. No such conversation about the net purchase price was mentioned by Tony until he was pressed in cross-examination. There is no credible evidence that Fany knew of Tony’s calculation of the final net price, or that she agreed with Tony about the final net price.
[53] Tony was either unable or unwilling to give a coherent account of his living arrangements before he moved into Purpledusk. In his evidence in chief, he testified that after he moved out of the house that he owned jointly with his wife, he moved into a condominium on Meadowvale, and then moved to 61 Yorkville Avenue in Toronto “for three years”. In cross-examination, he initially testified that he started living in Purpledusk sometime in 2008 or 2009. Later, he testified that he paid $5,500 per month in 2007 to rent a condo. Still later, he testified that he only helped out his ex-girlfriend with the rent by contributing a little bit. Sometimes he paid the full amount. Other times, he paid nothing. It is likely that his shifting position reflected his changing perception of what the cross-examination was directed at. His evidence about this was typical of his evidence in general.
[54] Tony testified about an encounter he had with John in 2019 or 2020, during which John said that he wanted the property tax arrears to be paid by Tony and that Tony should pay Fany the money he owed her. Tony testified that he had only $70,000 cash at his house, which he offered to Tony in part satisfaction of the outstanding purchase price of Purpledusk. Tony said that John turned him down and Tony said that he would get all of the money in a few weeks. That did not happen. What also did not happen was Tony’s payment of the tax arrears. It is impossible to give credence to Tony’s evidence that he had $70,000 cash on hand to contribute to the purchase price for Purpledusk, when it is beyond dispute that he had not paid the property taxes for several years.
(b) Some evidentiary issues
[55] Before coming to any conclusions about the facts of this case, it is necessary to address some evidentiary issues that arose during the trial because those issues must be resolved to determine what evidence is properly available to me for my consideration in determining the facts of this case.
(i) The documentary evidence
[56] In addition to the evidence of the witnesses, the plaintiff and defendant each filed a volume of documents headed “Exhibit Book for the Plaintiff” and “Exhibit Book of the Defendant”. The parties did not comply with an order made by Sutherland J., at a conference on July 4, 2022. Sutherland J. ordered:
Joint document books to be completed. Plaintiff to provide an index of documents in two weeks. The defendant to provide response to the index within two weeks thereafter. All documents agreed upon in the joint document book are admissible as to authenticity and contents. There is no dispute on those documents. Any documents that there is an issue of admissibility to be put in separate document book(s) for the trial judge to determine.
[57] I considered it an unproductive use of court time to sort out which party was responsible for this failure, or why it happened. Counsel were directed to attempt to agree on the documents that were admissible. They purported to do so on the first day of trial, apparently without regard for the rules of evidence that govern admissibility. Ultimately, very few of the documents provided were referred to by the witnesses or in submissions. In the interests of bringing this matter to a timely resolution, I have relied in this judgment only on the documents to which I make reference, which constitute admissible evidence because they are relevant to a material issue in the trial and are not subject to any exclusionary rule.
(ii) The hearsay issue
[58] Fany was unable to testify. She suffers from dementia. There is no dispute about this.
[59] Both sides introduced evidence as to statements Fany made about her dealings with Purpledusk. John’s evidence about that was received without objection. When I raised the question whether any of this evidence, and the anticipated evidence of other witnesses was hearsay, and whether it was admissible, both sides objected to the admissibility of the hearsay evidence the other intended to adduce, including a retroactive objection by the defendant to the admissibility of John’s evidence about Fany’s statements. Neither party had brought a motion to admit hearsay evidence. I chose to hear the evidence on a provisional basis, leaving the hearsay issues to be determined at the conclusion of the trial when I would know what the evidence was, how it related to the issues in the trial, and the basis on which counsel submitted that it was admissible.
[60] The parties agree as to the legal framework that governs the admissibility of Fany’s various statements but argue for different outcomes as to the admissibility of the statements she made to various witnesses.
(a) Statements introduced to prove that they were made are not hearsay
[61] A statement is not hearsay if it is not adduced for proof of its truth, but rather for the fact that the statement was made.
[62] The primary issue in this case is what agreement, if any, did Fany and Tony make?
[63] As I will discuss later, the test as to whether parties have reached an enforceable agreement, or contract, is an objective one -- would an objective, reasonable bystander conclude that, in all the circumstances, the parties intended to contract? Given that this issue is to be resolved through the lens of an objective reasonable bystander, it follows that evidence about what the parties said to each other about the existence and terms of any agreement by Fany to sell Purpledusk to Tony is not hearsay because such evidence is admissible to prove the fact that the words were said.
[64] In R. v. Evans, 1993 CanLII 86 (SCC), [1993] 3 S.C.R. 653, at pp. 663-4, the Supreme Court of Canada explained why statements offered as proof that the statement was made are not hearsay:
The admission of this kind of evidence is not hearsay because the only issue is whether the statement was made, and the veracity, perception and memory of the witness relating the statement can be fully tested by cross-examination. Since the truth of the declarant’s assertion is not in issue, deprivation of the right to cross-examine the declarant, on which rejection of hearsay is premised, is of no consequence.
[65] Evidence about what Fany said to Tony in 2010 during a series of telephone calls when their contract is said to have been formed is not hearsay and is admissible evidence of what Fany agreed to do in relation to Purpledusk.
(b) Statements admitted to show Fany’s state of mind are not hearsay
[66] Both parties agree that evidence of Fany’s statements to others is not hearsay when the statements provide evidence of Fany’s state of mind.
[67] Evidence of a declarant’s statement may be admitted to demonstrate the intentions, or state of mind, of the declarant at the time the statement was made: R. v. Starr, 2000 SCC 40, [2000] 2 S.C.R. 144, at para. 168. The party seeking to introduce the statement must show that the statement is of “a present existing state of mind, and must appear to have been made in a natural manner and not under circumstances of suspicion”: Starr, at para. 168; R. v. Cote, 2018 ONCA 870, 143 O.R. (3d) 333, at para. 22; R. v. Griffin, 2009 SCC 28, [2009] 2 S.C.R. 42, at para. 55.
[68] Two statements, or series of statements, made by Fany are admissible to show her state of mind when the statements were made, because the statements do reveal her then existing state of mind, and because her state of mind when the statements were made is relevant to the material issues in this case.
[69] First, statements made by Fany to John in the summer of 2010 after John told her that Tony could not afford to close, in response to which Fany said that Tony could continue to live in the house and pay the expenses are admissible to show Fany’s state of mind at that time, which was that she was willing to permit Tony to remain in Purpledusk provided that he pay the expenses. This evidence permits an inference that Fany believed at that time that the house was hers (why else would her permission be required?), and that she was then willing to continue to assist Tony by providing him with rent-free accommodation.
[70] Second, evidence about Fany’s state of mind expressed to Maria-Christina Spingos, her lawyer, in 2019 is admissible. Ms. Spingos first met Fany in July 2019. Ms. Spingos speaks Greek fluently and conversed with Fany in the Greek language, which is Fany’s first language. The purpose of her first meeting with Fany was to discuss the preparation of powers of attorney. They discussed Fany’s history, her marriage, and her wishes. The relevant aspects of this meeting to the present dispute are that Ms. Spingos did a property tax look-up for Purpledusk and became aware that there were substantial arrears. When she brought that to Fany’s attention, Fany was confused and surprised. She did not understand why there were so many arrears or why the taxes had not been paid. She had assumed that the taxes were being paid. Ms. Spingos met with Fany again in November 2019 in relation to the preparation of a will. The arrears of property taxes were again discussed, and Fany was upset and confused. Ms. Spingos also testified that Fany did not want to upset either of her sons. Ms. Spingos’ evidence about Fany’s reactions when she found out about the property tax arrears is admissible evidence of Fany’s state of mind at that time and supports an inference that Fany believed that she was ultimately responsible for the payment of the property taxes, because she owned Purpledusk, and that her arrangement with Tony required him to pay the taxes and she believed he was paying them, which is evidence of the nature of the arrangement between them.
(c) The principled exception
[71] Both parties seek to have statements that Fany made to others admitted in evidence for proof of the truth of their contents pursuant to the principled exception to the rule against hearsay. To establish the admissibility of those statements, the party seeking to rely on the statements must demonstrate:
On a balance of probabilities, that it is necessary that the statements be admitted.
On a balance of probabilities, that the statements meet the requirements of threshold reliability: R. v. Khelawon, 2006 SCC 57, [2006] 2 S.C.R. 787, at para. 2; R. v. Bradshaw, 2017 SCC 35, [2017] 1 S.C.R. 8, at para. 23.
[72] The application of the principled exception to the rule against hearsay is a flexible and case-specific exercise that employs a functional approach: R. v. Youvarajah, 2013 SCC 41, [2013] 2 S.C.R. 720, at para. 21.
[73] The requirement of necessity “is founded on society’s interest in getting at the truth”: Khelawon, at para. 49. Generally, when a witness is unable to testify for reasons of physical or mental incapacity, necessity will be established.
[74] The requirement of threshold reliability was explained by the Supreme Court of Canada, in Bradshaw, at para. 26:
To determine whether a hearsay statement is admissible, the trial judge assesses the statement’s threshold reliability. Threshold reliability is established when the hearsay “is sufficiently reliable to overcome the dangers arising from the difficulty of testing it” (Khelawon, at para. 49). These dangers arise notably due to the absence of contemporaneous cross-examination of the hearsay declarant before the trier of fact (Khelawon, at paras. 35 and 48). In assessing threshold reliability, the trial judge must identify the specific hearsay dangers presented by the statement and consider any means of overcoming them (Khelawon, at paras. 4 and 49; R. v. Hawkins, 1996 CanLII 154 (SCC), [1996] 3 S.C.R. 1043, at para. 75). The dangers relate to the difficulties of assessing the declarant’s perception, memory, narration, or sincerity, and should be defined with precision to permit a realistic evaluation of whether they have been overcome.
[75] Threshold reliability can be established in two ways. Hearsay dangers can be overcome, and threshold reliability can be established when: 1) there are adequate substitutes for testing truth and accuracy (procedural reliability); or, 2) there are sufficient circumstantial or evidentiary guarantees that the statement is inherently trustworthy (substantive reliability). While either one of these bases of admission standing alone may be sufficient, they are not mutually exclusive: Bradshaw, at para. 27; Khelawon, at paras. 2, 61 – 63.
[76] Procedural reliability is concerned with whether there are adequate substitutes for the usual trial features of presence, oath or affirmation, and cross-examination such that the trier of fact will be in a position to rationally evaluate the evidence: Khelawon, at para. 76. In Bradshaw, at para. 28, the Supreme Court described the circumstances in which procedural reliability may be established.
Procedural reliability is established when “there are adequate substitutes for testing the evidence”, given that the declarant has not “state[d] the evidence in court, under oath, and under the scrutiny of contemporaneous cross-examination”. These substitutes must provide a satisfactory basis for the trier of fact to rationally evaluate the truth and accuracy of the hearsay statement. Substitutes for traditional safeguards include a video recording of the statement, the presence of an oath, and a warning about the consequences of lying. However, some form of cross-examination of the declarant, such as preliminary inquiry testimony or cross-examination of a recanting witness at trial, is usually required. [Citations omitted.]
[77] Substantive reliability is established if an out-of-court statement is inherently trustworthy. In Bradshaw, at para. 30, Karakatsanis J. offered the following direction to trial judges:
To determine whether the statement is inherently trustworthy, the trial judge can consider the circumstances in which it was made and the evidence (if any) that corroborates or conflicts with the statement (Khelawon, at paras. 4, 62 and 94-100; R. v. Blackman, 2008 SCC 37, [2008] 2 S.C.R. 298, at para. 55).
[78] Karakatsanis J. went on, at para. 31 of Bradshaw, to state that “the trial judge must be satisfied that the evidence is ‘so reliable that contemporaneous cross-examination of the declarant would add little if anything to the process’ (Khelawon, at para. 49)”, and at para. 32, that “the statement must be sufficiently reliable to overcome the specific hearsay dangers that it presents”. Karakatsanis J. described the different ways in which the Supreme Court has explained the level of certainty required to establish substantive reliability, and concluded that substantive reliability is established when:
(1) The statement “is made under circumstances which substantially negate the possibility that the declarant was untruthful or mistaken”: Smith, at p. 933.
(2) The statement is made “under such circumstances that even a skeptical caution would look upon it as trustworthy”: Khelewon, at para. 62.
(3) The statement is so reliable that it is “unlikely to change under cross-examination”: Khelawon, at para. 107; Smith, at para. 937.
(4) “There is no real concern about whether the statement is true or not because of the circumstances in which it came about”: Khelawon, at para. 62.
(5) The only likely explanation is that the statement is true: R. v. U. (F.J.), 1995 CanLII 74 (SCC), [1995] 3 S.C.R. 764, at para. 40.
[79] Bradshaw also provides direction as to when corroborative evidence can be relied on to establish substantive reliability, at para. 57.
In sum, to determine whether corroborative evidence is of assistance in the substantive reliability inquiry, a trial judge should
identify the material aspects of the hearsay statement that are tendered for their truth;
identify the specific hearsay dangers raised by those aspects of the statement in the particular circumstances of the case;
based on the circumstances and these dangers, consider alternative, even speculative, explanations for the statement; and
determine whether, given the circumstances of the case, the corroborative evidence led at the voir dire rules out these alternative explanations such that the only remaining likely explanation for the statement is the declarant’s truthfulness about, or the accuracy of, the material aspects of the statement.
[80] There is no dispute that Fany cannot testify. The requirement for necessity has been established.
[81] None of the hearsay statements alleged to have been made by Fany that either party seeks to rely on for proof of the truth of the statements satisfy the requirement of procedural reliability. There are no adequate substitutes for the usual trial features of presence, oath or affirmation, and cross-examination. The statements were not made under oath, they were not recorded in any fashion, and Fany was not warned about the consequences of lying.
[82] If any of the hearsay statements are admissible because they pass the reliability threshold, it can only be because they are inherently trustworthy and therefore substantive reliability is established.
[83] The substantive reliability of each of the hearsay statements sought to be admitted must be scrutinized individually. The alleged statements were made in different circumstances, at different times, to different people. None of the statements sought to be admitted pursuant to the principled exception to the rule against hearsay satisfy the requirement for threshold reliability.
(i) Ms. Postoff assessed Fany’s capacity to instruct counsel in 2020. The plaintiff submits that Fany’s statements to Ms. Postoff are not hearsay, because they are lead not for the truth of their contents, but to show Fany’s state of mind. I disagree. These statements provide Fany’s account in 2020 of what Tony said to her (that the house was his) and why she let him live in the house (so that he would not have to pay rent). The plaintiff invokes the state of mind exception to the rule against hearsay in support of the admission of Ms. Postoff’s evidence. Fany’s account of what Tony said to her does not show her state of mind. Fany’s state of mind in 2020 as to why she let Tony stay in the house does show that she believed the house to be hers (and to this extent confirms the evidence of Ms. Spingos), but it is not admissible evidence of Fany’s state of mind in 2010 as to what agreement Fany and Tony reached for the sale of the house. The plaintiff seeks to rely on Ms. Postoff’s evidence for the latter purpose.
The plaintiff submits that if Fany’s statements to Ms. Postoff are hearsay, they are admissible pursuant to the principled exception. They are not admissible pursuant to the principled exception. Ms. Postoff’s account of anything Fany said during the assessment does not meet the reliability threshold. The reason for the capacity assessment was that Fany was then suffering from dementia. Fany communicated with Ms. Postoff through a Greek interpreter. There is no evidence as to the identity of the interpreter or the quality of the interpretation. Also, John was present for the assessment, and I am concerned that his presence may have affected Fany’s statements, not because he overtly interfered in the assessment in any way, but because it is possible that Fany may have been reluctant to say anything that would upset him. The hearsay dangers presented by Ms. Postoff’s evidence relate to concerns about Fany’s memory, the risk that meaning was lost in translation, and that Fany may have been influenced by John’s presence. I cannot conclude that these statements are so reliable that they are unlikely to change under cross-examination, and the circumstances in which the statements were made do not substantially negate the possibility that Fany was mistaken.
(ii) John Kritsonis, Fany’s brother-in-law, spoke with her in 2010, 2011, and 2018 or 2019. In 2010, Fany visited Mr. Kritsonis at his house. Mr. Kritsonis asked Fany what had happened because his daughter had made an offer to buy Purpledusk and Fany took it back. Fany told Mr. Kritsonis that she sold Purpledusk to her son for $350,000, that she had received some of the money, but not all of it, that she did not need it all then, and that when she needed it, she would ask for it and he would give it to her. The 2011 conversation occurred at a family dinner at the Kritsonis residence. Mr. Kritsonis asked Fany if Tony had paid her, and she said no and that she had decided not to ask him for any money. The 2019 conversation happened on the phone, when Fany told Mr. Kritsonis that she was looking to sell Purpledusk, at a time when she did not appear to Mr. Kritsonis to be “100%”. Fany did not tell Mr. Kritsonis why she wanted to sell Purpledusk.
The hearsay dangers presented by Mr. Kritsonis’ evidence is that Fany’s accounts in 2010 and 2011 may have been influenced by a perceived need to justify why she reneged on her agreement with Mr. Kritsonis’ daughter and so her sincerity when making the statements is in question. Moreover, the social context in which the 2010 and 2011 interactions occurred was not conducive to a careful narration of the events. I cannot conclude that these statements are so reliable that they are unlikely to change under cross-examination, and the circumstances in which the statements were made do not substantially negate the possibility that Fany was mistaken or that she did not provide a complete account. The hearsay dangers inherent in the later statement are obvious, given Mr. Kritsonis’ assessment of Fany’s condition at that time.
(iii) Elly Triantafillou is Tony’s former girlfriend. They began dating in 2009. Their relationship ended in 2020. Ms. Triantafillou met and spoke with Fany frequently during those years. Ms. Triantafillou was not present when the agreement between Tony and Fany was made. Ms. Triantafillou could not recount Fany’s words about anything verbatim. She recalled Fany’s words as “more or less” what she recounted. Ms. Triantafillou “did not want to get too into everything”, and “It was small talk about Purpledusk.” Her evidence about these conversations was very imprecise. She said that on one or two or occasions Fany may have told her about how much Tony paid her but could not recall what she said about that. She believed that Fany may have told her about how much Tony still owed her but testified that: “I try to tune out because that’s none of my business”; and, “I’m not one to be absorbing that information. It was not my business. It was between Tony and Fany.”
Ms. Triantafillou’s evidence as to statements made to her by Fany does not surpass the reliability threshold. She has no meaningful recollection of exactly what Fany said to her about any agreement that she had with Tony. She testified that she tried to tune out conversations about money owing because it was not her business. That was not an unreasonable thing to do. Ms. Triantafillou’s hearsay evidence about statements made to her by Fany is inadmissible because it is impossible to assess Fany’s perception, memory, narration or sincerity when she spoke to Ms. Triantafillou given the latter’s inability to recount what Fany said to her.
E. Factual Conclusions
[84] Based on the evidence that I accept, I find that during a series of telephone calls that occurred in quick succession within ten minutes in 2010, Fany agreed to sell Purpledusk to Tony for $350,000, rather than to her niece Mary for that amount. That is all that was agreed to at that time. No other aspects of the sale were then discussed.
[85] I also find that earlier, after her husband died, Fany wanted to help her youngest son when he was going through a divorce, his business was struggling, and he was paying rent for an apartment. She offered to let Tony live in her house and he took her up on that offer. Later, when the 2010 discussions occurred, she was content to maintain the status quo and permit Tony to continue to live in her house, so long as he paid the expenses associated with maintaining the house.
[86] There was no agreement as to when Tony was to pay Fany for the house. There was no agreement as to the net amount Tony was to pay Fany for the house. There was no agreement that that the net amount was $135,000. There was no agreement that the $100,000 proceeds of the LOC were to be credited to Tony as a contribution by him to the purchase price. There were no steps taken, by Tony or Fany to reduce their agreement to writing, or to retain a lawyer to conclude the purchase and transfer title.
F. Legal Framework
[87] It is common ground that under the Statute of Frauds, RSO 1990, c S.19, any agreement between Fany and Tony under which she agreed to sell Purpledusk to him is unenforceable unless it is evidenced in writing. Section 4 of the Statute of Frauds provides that no action for an interest in land is enforceable,
unless the agreement upon which the action is brought, or some memorandum or note thereof is in writing and signed by the party to be charged therewith or some person thereunto lawfully authorized by the party.
[88] The law requires written evidence of an agreement affecting land to protect against fraudulent oral claims.
[89] Despite the requirements of the Statute of Frauds, an agreement concerning land can be enforced where the buyer has partly performed the agreement. Where a party can prove that they acted on an oral agreement that can be discerned from the actions themselves, fraud is not likely: Hill v. Nova Scotia (Attorney General), 1997 CanLII 401 (SCC), [1997] 1 S.C.R. 69, at para. 10.
[90] To ensure that the acts of part performance actually support the existence of an agreement, the acts must be “unequivocally referable” to the alleged oral agreement. It is only where the acts of part performance have no other purpose or reason that they effectively can prove the existence of the oral contract. Where acts of alleged performance are equivocal, or do not point only to an agreement to transfer an interest in the land, then they provide too little assurance against fraud to displace the writing requirement in the statute: Erie Sand and Gravel Ltd. V. Seres’ Farms Ltd., 2009 ONCA 709, 97 O.R. (3d) 241, at paras. 49, 79, and 94.
[91] Before I consider the equitable doctrine of part performance, I will consider whether there was an oral agreement between Fany and Tony, as alleged by Tony. The law that applies to this case requires Tony to prove there was an oral contract for the sale of Purpledusk and to prove the terms of that contract. If it were otherwise, the purpose of enacting the Statute of Frauds would be frustrated.
[92] A contract is formed when one party makes an offer that the other accepts, the parties intend to create legal relations, and there is consideration. A contract is created only where the parties “have formed a mutual intention to enter into a bargain with each other and further, are in agreement as to the terms of that bargain”: John McCamus, The Law of Contracts (3d ed., 2020), p. 31.
[93] The Ontario Court of Appeal set out the basic requirements underpinning enforceable contracts in UBS Securities Canada, Inc. v. Sands Brothers Canada, Ltd., 2009 ONCA 328, 95 O.R. (3d) 93 at para. 47:
For a contract to exist, there must be a meeting of minds, commonly referred to as consensus ad idem. The test as to whether there has been a meeting of the minds is an objective one -- would an objective, reasonable bystander conclude that, in all the circumstances, the parties intended to contract? As intention alone is insufficient to create an enforceable agreement, it is necessary that the essential terms of the agreement are also sufficiently certain.
[94] The court should look at all of the circumstances surrounding the alleged agreement to decide whether the parties came to an agreement, and if they did, to decide the terms to which they agreed. These circumstances include words and conduct, future actions and representations by both parties, and reliance: UBS Securities Canada Inc. v. Sands Brothers Canada Ltd., 2008 CanLII 19507, 45 B.L.R. (4th) 105, at para. 41 (Ont.S.C.), per Pepall J. (as she then was), appeal dismissed 2009 ONCA 328.
[95] For there to be a contract, there must be agreement as to the essential terms. “The determination of whether the parties have agreed to all the essential terms of a particular agreement rests on an assessment of whether, in a case where there are missing terms, the omitted terms are so important that they warrant a conclusion that the parties have not yet reached an agreement”: John McCamus, The Law of Contract (3d ed., 2020), p. 99.
[96] Tony relies on the decision of the Ontario Court of Appeal in Mountain v. TD Canada Trust Company, 2012 ONCA 806, 112 O.R. (3d) 721, at para. 66, to support his position that the essential terms of an oral contract for the sale of real property are the parties, property, and price, and that a closing date is not an essential element of such a contract.
[97] This reliance is misplaced. In Mountain, in the passage relied on, the Court of Appeal held that “the essential terms of an oral contract for the purchase and sale of real property are the parties, property and price [citation omitted]. If these terms are agreed on, then a contract may be found without the need for evidence of a written agreement.” [Emphasis added.]
[98] Mountain does not stand for the proposition that if there is an agreement as to the parties, the property, and the price, that a contract will be found to exist. An agreement as to these essential terms means that a contract may be found to exist without evidence of a written agreement. In Mountain, at para. 58, the Court of Appeal found that the trial judge erred in concluding that because there were no signed documents, there was no oral agreement. At para. 66, the Court of Appeal stated: “the issue whether a valid and binding oral agreement exists does not depend on a formal written document between the contracting parties”.
[99] In Simcoe Vacant Land Condominium Corporation No. 272 v. Blue Shores Developments Ltd., 2015 ONCA 378, 126 O.R. (3d) 39, at para. 37, Lauwers J., in dissent though not on this issue, identified the essential terms of an agreement for the purchase of land as “the parties, the properties, the price and the date of conveyance”.
[100] As is usual, context matters. The relevant context in this case includes that Fany and Tony were not business associates. They were family. Their brief conversation about the sale of Purpledusk to Tony occurred hurriedly and impulsively. It occurred in circumstances where Fany was already assisting Tony by permitting him to live in Purpledusk rent free. The conversation was about who would buy Purpledusk, Mary or Tony. It was not about the specifics of any agreement.
[101] Fany and Tony did not agree on significant aspects of the proposed sale of Purpledusk by Fany to Tony. The time within which Tony would have to purchase Purpledusk was not agreed. It was not even discussed. Tony’s present position that the agreement permits him to close on a date of his choosing at some unascertained future time was never discussed with or agreed to by Fany.
[102] The net purchase price to be paid by Tony to Fany was not discussed or agreed upon, and indeed appears to have been a moving target from Tony’s perspective. While the evidence indicates that in 2010, Fany agreed to sell Purpledusk to Tony for $350,000, there is no credible and reliable evidence that they agreed to a net purchase price of $135,000, as calculated by Tony. There is no evidence that Fany was aware of the various amounts that, in Tony’s mind, were to be deducted from the purchase price. In particular, there is no credible evidence that the $100,000 proceeds of the LOC on Purpledusk was to be deducted from the purchase price. An honest, reasonable bystander could not conclude that Tony and Fany had agreed on the price Tony was to pay for Purpledusk.
[103] The closing date and net purchase price are essential terms in this case, and the absence of agreement as to those terms compels me to conclude that Tony has not proved on a balance of probabilities that he and his mother agreed as to the terms of their bargain. Fany and Tony had a brief discussion, but that discussion did not amount to a contract.
[104] The absence of any settled intention by Tony to agree to buy Purpledusk from his mother is evidenced by his suggestion at one time that Purpledusk be transferred to John’s name to assist Tony’s position in his matrimonial litigation. It appears that Tony knew that Purpledusk was not his, and that at one point, when it suited him, he sought to avoid any suggestion that he had any interest in Purpledusk.
[105] An objective, reasonable bystander could not conclude that, in all the circumstances, Any and Tony intended to contract because the essential terms of the agreement are either non-existent or insufficiently certain.
[106] Because the evidence before me does not establish that Fany and Tony formed a mutual intention to enter into a bargain with each other and that they agreed as to the essential terms of that bargain, it is not necessary to consider the equitable doctrine of part performance which allows the court to enforce an oral agreement if it is unconscionable to apply the Statute of Frauds to render a contract unenforceable. There was simply no contract made in this case. However, in the event I am wrong about this, I will consider whether any oral agreement that was made is unenforceable under the Statute of Frauds.
[107] If the existence of an oral agreement for the sale of land is proven, s. 4 of the Statute of Frauds renders that agreement unenforceable unless the equitable doctrine of part performance applies. The equitable doctrine of part performance allows the court to enforce an oral agreement in cases where it is unconscionable to apply the Statute of Frauds to render a contract unenforceable. As explained by Gillese J.A. in Erie Sand, at para. 49, “the requirements of s. 4 of the Statute of Frauds must give way in the face of part performance because the acts of part performance fulfill the very purpose of the written document – that is, they diminish the opportunity for fraudulent dealings with land based on perjured evidence”.
[108] The doctrine of part performance has two requirements:
Detrimental reliance; and,
Acts of part performance that sufficiently indicate the existence of the alleged contract, because the acts are unequivocally referable in their own nature to some dealing with the land.
[109] None of the acts on which Tony relies to try to prove an agreement is unequivocally referable to an oral agreement under which he obtained the enforceable right to buy his mother’s house at the price she would take in 2010, less amounts deemed by Tony to be contributions to the purchase price, whenever it suited him. Tony submits that his expenditures of money to maintain and improve Purpledusk evidence his detrimental reliance on the agreement he alleges. All of Tony’s actions in relation to Purpledusk are equally consistent with those of a son who is grateful to his mother for providing him with a house in which to live rent-free, his desire to continue that advantageous arrangement, and his unilateral choice to treat Purpledusk as his own. None of his actions are unequivocally referable in their own nature to the agreement for the purchase and sale of Purpledusk that he alleges.
[110] The context of this case includes the fact that Tony’s occupancy of Purpledusk was unrelated to any agreement between him and Fany for the sale of the house. She permitted him to live there, rent-free, before they had any discussion about him buying the house. He moved into Purpledusk because his mother generously offered free accommodation to her son. His dealings with Purpledusk occurred independently of any discussion with his mother about who was to buy Purpledusk. He did work on the house to ready it for sale on the open market after his father died, years before they spoke about him buying the house.
[111] I am unable to discern any evidence that Tony relied to his detriment on the alleged agreement with his mother. To the contrary, he has lived in Purpledusk without paying any rent for at least 12 years. It is Tony’s position that he partly performed his contract with Fany by 1) giving her money to renovate her apartment at John’s house; 2) giving John $50,000; 3) giving Fany $100,000 drawn on the line of credit, for which he made the interest payments; and 4) maintaining the Purpledusk property and investing in that property when he could have used that money to buy another property. I have rejected Tony’s evidence about much of this. There was no agreement that monies paid by Tony to Fany were in part payment of the amount he was to pay her for Purpledusk. I have explained that Tony’s actions to assist Fany to obtain the LOC do not amount to a part payment by him of the purchase price of Purpledusk. His actions in maintaining Purpledusk are not unequivocally referable to the existence of an agreement with Fany to buy Purpledusk at the 2010 price whenever he chose to do so. His actions are entirely consistent with his desire to improve his surroundings for his own benefit, for as long as he stayed at Purpledusk, an arrangement that was advantageous to him and that he wished to continue.
[112] Tony claims that Fany stood by and benefitted from his detrimental reliance on their agreement. I disagree. The only benefit she has gained has been the knowledge that she was able to assist her son, who was experiencing financial difficulties.
G. The counterclaim
[113] The foregoing is sufficient to dismiss the counterclaim insofar as Tony seeks an order declaring that he has an interest in Purpledusk, and an order directing Fany to sell Purpledusk to him for the sum of $135,000 or other amount as may be determined by the court.
[114] Tony also seeks an order that Fany reimburse him for all amounts he has invested into maintaining and renovating Purpledusk by which Fany has been unjustly enriched. He submits that the evidence establishes that he spent about $100,000 to maintain and improve Purpledusk. He submits that he spent more but acknowledges that additional expenditures were not documented. I am unable to discern how much he actually spent, as the invoices he provided for the most part do not document how much he spent, as a result of his “you scratch my back, I’ll scratch yours” arrangements that he had with the people who did work on Purpledusk.
[115] It is as likely that Tony benefitted from his arrangement with his mother than that she has been unjustly enriched at his expense. He has benefitted by living rent-free for at least 12 years. Although he spent money to renovate Purpledusk and he has paid the expenses associated with Purpledusk, there is no evidence that he spent more that he would have paid if he had paid Fany the fair market rental value of Purpledusk. There is no evidence as to what the fair market rental value of Purpledusk has been during Tony’s stay there. However, John testified that Tony was paying $1,500 rent before he moved into Purpledusk. That adds up to $18,000 per year, and $216,000 over 12 years. Tony did not contradict the evidence that he was paying $1,500 per month before he moved into Purpledusk. Taking Tony’s evidence at its highest, he contributed less than $216,000 to Purpledusk., Given the uncertainty of the evidence as to how much Tony spent, and how much he saved by not paying rent, I am unable to decide who benefitted most from the arrangement that allowed Tony to reside in Purpledusk. It is more likely than not that the amounts are roughly equal. This finding also governs the plaintiff’s claim for fair market value of the rent she could have received for Purpledusk.
[116] Tony has not proved that Fany has been unjustly enriched. Therefore, his counterclaim based on unjust enrichment is dismissed.
H. The orders to be made
[117] It is ordered:
Tony Xynos has no interest in the property municipally known as 106 Purpledusk Trail, Toronto (hereafter “the property”).
There is no enforceable agreement between Tony Xynos and Fany Xynos for the sale of the property.
Tony Xynos shall vacate the property within 30 days of the release of this judgment.
The property shall immediately be listed for sale through a realtor designated by the Plaintiff, with the net proceeds of the sale to be disbursed to the Plaintiff. Tony Xynos is to co-operate fully to facilitate the listing and showing of the property while he remains resident in the property.
Pursuant to section 71 of the Land Titles Act, R.S.O. 1990, c. L.5, the Defendant’s notice registered against the property shall immediately be deleted.
[118] If counsel are unable to agree as to costs, I will receive written submissions, not to exceed 3 pages in length in addition to any bill of costs and offers to settle. The plaintiff’s submissions are to be submitted not later than three weeks following the release of this judgment. The defendant’s submissions are to be submitted not later than five weeks following the release of this judgment. The submissions are to be provided, by e-mail, to my assistant, at Joanna.Skalko@ontario.ca.
The Honourable Madam Justice J. Speyer
Released: February 1, 2023