Court File and Parties

COURT FILE NO.: CV-23-1105-00 DATE: 2024-03-20

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Nicholas Fiorini Applicant (Self-Represented)

- and-

Alfredo Malanca and Katarzyna Pikula and 197 McKay Barrie Corp Respondents (Counsel: Bevan Brooksbank and Adrian Pel)

HEARD: December 22, 2023

REASONS FOR JUDGMENT

J. SPEYER, J.

A. Introduction

[1] This issue raised by this application is whether the Applicant, Nicholas Fiorini, is legally entitled to receive 10% of the shares of 197 McKay Barrie Corp ["197"], which holds title to a property situated at 197 MacKay Road East in Innisfil, Ontario ["the property"].

[2] Mr. Fiorini alleges that the respondents, Alfredo Malanca and Katarzyna Pikula, promised him a 10% interest in the ownership of the property, or in 197, in return for: 1) finding a private lender to provide a second mortgage on the property; 2) contributing his skills in soil remediation; 3) for assisting them to obtain permits necessary to obtain fill for the property and to permit a waste transfer station to be constructed on the property; and, 4) for assisting them to obtain potential buyers for the property.

[3] The respondents take the position that the application is devoid of merit because the evidence provided by Mr. Fiorini does not ground the relief he seeks. The respondents say the application should be dismissed.

[4] Ms. Pikula is the sole officer, director and shareholder of 197. Mr. Malanca is Ms. Pikula's husband.

[5] Mr. Fiorini is an acquaintance of Mr. Malanca. Ms. Pikula has known Mr. Fiorini for a couple of years, but has had minimal contact with him, mostly in passing while Mr. Fiorini was with Mr. Malanca. Mr. Malanca first met Mr. Fiorini in mid-2021.

[6] Mr. Fiorini commenced this application against the respondents under sections 99 and 101 of the Courts of Justice Act, and section 248 of the Business Corporations Act. He seeks the following relief, as set out in his Notice of Application:

(1) An interim, interlocutory, and permanent injunction prohibiting and restraining the Respondents, ALFREDO MALANCA and KATARZYNA PIKULA and 197 BARRIE CORP., from any attempts to sell the property located at 197 McKay Road East, Innisfil, Ontario, L9S 3R3, including but not limited to attempting or obtaining any mortgage on the said property.

(2) An interim, interlocutory, and permanent injunction prohibiting and restraining the Respondents, ALFREDO MALANCA and KATARZYNA PIKULA and 197 BARRIE CORP., from opening any bank accounts, including but not limited to making any form of deposits, or any form of withdrawals, or any form of money transfers, or any form of email transfers for ALFREDO MALANCA and KATARZYNA PIKULA and 197 BARRIE CORP.

(3) An Order for the payment of damages arising out of the actions of the Respondents, ALFREDO MALANCA and KATARZYNA PIKULA and 197 BARRIE CORP, in relation to their refusal to add the Applicant as a 10% shareholder and ownership of the said property.

(4) An Order for the payment of damages arising out of the action of the Respondents ALFREDO MALANCA and KATARZYNA PIKULA and 197 BARRIE CORP. in relation to oppression remedy for unfair prejudicial to a 10% minority shareholder of NICHOLAS FIORINI.

In his factum, Mr. Fiorini also seeks "An Order to Issue 10% common shares to the Applicant, Nicholas Fiorini for the corporation named 197 McKay Barrie Corp."

B. Analysis

[7] Mr. Fiorini alleges that, pursuant to a promise made to him by Mr. Malanca, he acquired a 10% interest, either in the property or in 197. His position as to the nature of his interest changed during the hearing of the application, but he settled on an assertion that he is entitled to a 10% interest in 197.

[8] Mr. Fiorini does not assert that he reached any agreement with Ms. Pikula. According to Mr. Fiorini, his agreements and discussions were with Mr. Malanca.

[9] There is not a single document, letter, email, text message or other writing that supports Mr. Fiorini's account of any agreement between himself and Mr. Malanca in relation to 197 or the property, or of what occurred that entitles him to any interest in 197 or the property. Mr. Fiorini's claim relies on his affidavit, and affidavits provided by his associates as to their perception or understanding of the relationship between Mr. Fiorini, Mr. Malanca, and 197.

[10] There is simply no credible evidence to support Mr. Fiorini's position. The evidence that I do accept compels the conclusion that Mr. Fiorini has no legal or beneficial claim to any interest in 197 or the property. The reasons that follow explain why I have come to that conclusion.

(a) The documented legal ownership of 197 and the property

[11] 197 was incorporated on November 11, 2021 by Ms. Pikula. Ms. Pikula is, and has always been, the sole director, officer, and shareholder of 197.

[12] Ms. Pikula is an experienced real estate professional in the Greater Toronto Area. She has worked as a commercial mortgage broker since 2001 and is registered with the Financial Services Regulatory Authority of Ontario. She has worked as a real estate developer since 2012.

[13] Ms. Pikula, through her personal holding company, negotiated the agreement of purchase and sale for the acquisition of the property for a price of $8 million. Her offer was accepted by the seller on March 8, 2021. Ms. Pikula decided that her holding company would assign its interest in the agreement of purchase and sale to 197, a company that was incorporated for the purpose of holding title to the property. The purchase of the property by 197 closed on December 8, 2021, and title to the property was transferred to 197. The sole registered owner of the property is 197.

(b) General findings as to the credibility and reliability of Ms. Pikula, M. Malanca, and Mr. Fiorini

[14] Ms. Pikula swore in her affidavit that she never discussed the property or 197 with Mr. Fiorini, and never made any oral or written representations to Mr. Fiorini that he had or would have any proprietary interest in the property or that he was or would become a shareholder of 197. She never signed any agreement with Mr. Fiorini. She never agreed to operate any kind of venture with Mr. Fiorini in relation to the property or 197. She never authorized the transfer or issuance of any shares of 197 to Mr. Fiorini. She never received any monetary contribution or offer of monetary contribution from Mr. Fiorini in relation to the property or shares of 197. She never advised Mr. Fiorini that Mr. Malanca was a duly authorized agent for herself or for 197.

[15] Mr. Malanca's evidence is consistent with that of Ms. Pikula. He confirms that he has no ownership interest in the property or 197, and that he has no authority to conduct business on behalf of 197 or in relation to the property. He states that he never agreed to provide Mr. Fiorini with a share of 197 or the property.

[16] Ms. Pikula and Mr. Malanca's evidence in their affidavits and cross-examination is credible and reliable. It is supported by documented facts. It makes sense. I accept their evidence.

[17] Mr. Fiorini's evidence in his affidavit and cross-examination is deeply flawed. At its core, his position is that promises were made to him by Mr. Malanca "during conversations and negotiation", though he could not recall when that happened. His evidence was vague, and unsupported by any documents. Throughout his cross-examination on his affidavit, Mr. Fiorini repeatedly refused to answer relevant questions. He was evasive. His evidence simply does not make sense. I will provide some examples presently.

[18] For now, I will note that Mr. Fiorini described himself, during his cross-examination, as "a sophisticated businessman". It is inconceivable that a sophisticated businessman who reached an agreement to obtain 10% of the shares of a company that owned a property recently purchased for $8 million would not reduce that agreement to writing and would not make a documented request to Ms. Pikula to transfer to him the shares that he says he is entitled to. Rather than making a documented request to obtain that to which Mr. Fiorini claims he was entitled, he proceeded directly to litigation. This does not make sense.

[19] About one month before Mr. Fiorini commenced this application, Ms. Pikula commenced a claim against Daniela Fiorini, Mr. Fiorini's wife, arising from a failed real estate transaction in Caledon, Ontario. The events giving rise to that action have nothing to do with Mr. Fiorini's claim to a 10% interest in 197. However, the timing of this application suggests that it was brought as a retaliatory legal proceeding. When that suggestion was made to Mr. Fiorini in cross-examination on his affidavit, he responded: "I refuse to discuss that."

[20] Mr. Fiorini submits that Mr. Malanca had authority to bind 197, which authority he expressed and implied in the presence of two witnesses, Mario Villa and Francisco Batres. Mr. Fiorini also submits that Mr. Malanca demonstrated that he was a controlling mind of 197 in the presence of the same witnesses.

[21] The reasons that follow explain why I reject the submission that Mr. Malanca had any authority to bind 197, either expressly or implicitly, and why I have concluded that, even if Mr. Malanca had that authority, he did not agree to provide Mr. Fiorini with a 10% interest in 197 or the property.

(c) Mr. Fiorini's claims about his contribution to 197 and the property

[22] Mr. Fiorini submits that he contributed to 197 and/or the property in four ways that caused Mr. Malanca to agree to provide Mr. Fiorini with a 10% interest in 197 or the property. He claims that he provided value by:

(1) finding a private lender to provide a second mortgage on the property; (2) contributing his skills in soil remediation; (3) assisting 197 or Mr. Malanca to obtain permits necessary to obtain fill for the property and to permit a waste transfer station to be constructed on the property; and, (4) assisting 197 or Mr. Malanca to obtain potential buyers for the property.

None of these claims are supported by credible or reliable evidence. I will address each in turn.

(i) Mr. Fiorini did not find a private lender to provide a second mortgage on the property.

[23] I reject Mr. Fiorini's evidence in his affidavit that "Alfredo Malanca and Katarzyna Pikula asked me for help to find a 2nd private mortgage for 3 million dollars against [the property]. In exchange for me finding a private lender, Alfredo Malanca and Katarzyna Pikula provided [sic] to give me 10% ownership of the said property, which I was able to obtain financing for them". In cross-examination, Mr. Fiorini maintained his position that his claim to a 10% interest reflected, in part, his assistance to Mr. Malanca and Ms. Pikula in sourcing a second mortgage for the property. That evidence makes no sense and is contradicted by the documentary record. Mr. Fiorini contributed nothing to the funds advanced to purchase the property. He acknowledged that he was not involved in arranging any of the mortgages registered on title to the property when it was bought by 197 or thereafter. He was unable to show that he sourced a second mortgage in the amount of $3 million because he did not "know the structure of their financing arrangements, so I can't answer that question correctly". There is no mortgage registered on title to the property in the amount of $3 million, and there has been no such mortgage registered on title to the property since it was bought by 197. Mr. Fiorini's evidence about arranging financing for 197 is not credible and I reject it. I find that Mr. Fiorini had nothing to do with sourcing any mortgage for 197.

[24] Ms. Pikula, in her affidavit, has provided a detailed and coherent account of the history of her acquisition of the property, accompanied by supporting documentation. She, alone, arranged a vendor-take-back mortgage, and another loan secured by a second mortgage from another company that she controlled, to finance the purchase of the property by 197. She arranged for the second mortgage to be refinanced. Ms. Pikula's account of the source of the funds used to acquire the property is supported by documentation.

[25] I accept Ms. Pikula's evidence that she did not require Mr. Fiorini's services to find lenders to finance the purchase of 197, and that she arranged the vendor-take-back mortgage and the successive second mortgages. Ms. Pikula is an experienced mortgage broker with extensive industry connections, and I accept her observation that a commission of 10% of the amount of a mortgage is a well above market commission.

[26] I find that Mr. Fiorini did not find a private lender to provide a second mortgage on the property.

(ii) Mr. Fiorini did not contribute any soil remediation skills to the development of the property.

[27] Mr. Fiorini swore in his affidavit that the respondents required his help as he was "skilled in soil remediation". He was asked in cross-examination what experience he had with soil remediation. He responded: "Through past experience with soil management and transportation and past experience with soil remediation with the hydrovac industry and contaminated soils." He was not familiar with what statute governs soil remediation in Ontario, or whether he was a qualified person under the EPA Regulation 153. He is not a professional geoscientist or engineer. He agreed in cross-examination that he never provided soil remediation assistance at the property.

(iii) Mr. Fiorini did not assist 197 or Mr. Malanca to obtain permits necessary to obtain fill for the property and to permit a waste transfer station to be constructed on the property.

[28] Mr. Fiorini also asserted that his entitlement to a 10% interest arose from assistance he would provide to Ms. Pikula and Mr. Malanca in obtaining a fill permit for soil and a permit for a waste transfer station at the property. Mr. Fiorini claimed to have assisted with obtaining the permits by providing "knowledge and due diligence". "It was all done verbally with Alfredo". Later, when asked what specific permit applications he assisted with, he responded: "No assist; guidance." When asked what previous experience he had obtaining such permits, after several evasive and non-responsive answers, he agreed that he had no such previous experience. I reject Mr. Fiorini's evidence that he assisted with the obtaining of any permits in relation to the property.

(iv) Mr. Fiorini did not assist 197 or Mr. Malanca to obtain potential buyers for the property.

[29] Mr. Fiorini also claims that his 10% interest was to be provided in exchange for his assistance with obtaining potential buyers for the property. In cross-examination he agreed that Ms. Pikula did not ask him to do that, and that Mr. Malanca asked him to find potential buyers as soon as 197 acquired the property. Mr. Malanca, in his affidavit, explained how the 10% figure came up in that context. He stated that Mr. Fiorini, on several occasions beginning in early 2022, suggested that he and others might be interested in acquiring the property. Mr. Malanca states in his affidavit that he was willing to listen informally to Mr. Fiorini's expressions of interest, but made it clear to him that he did not own the property or exercise any control over 197, and that Ms. Pikula was solely in control of all decision-making. Mr. Malanca's account is corroborated by an email exchange.

[30] In 2022, Mr. Fiorini spoke with Mr. Malanca about the possibility of buying the property. Ms. Pikula was not interested in selling the property. That fact was communicated to Mr. Fiorini in the following email exchange:

July 19, 2022 - Mr. Fiorini to Mr. Malanca: Good morning Alfredo, Ok let's try this again, you know the markets are changing daily now and god knows where we will be in a few months from now. I have tried numerous times to offer to purchase the Barrie site on McKay and I know you have shut me down saying you were not interested in selling but I strongly advise you to consider it again because soon there will be more for sale and at better prices. So, again, I figured it would not hurt to ask again but I am a serious buyer and would like to sit down with you guys and work out a deal.

July 19, 2022 -Mr. Malanca to Mr. Fiorini: Sorry Nick. As mentioned before after our last conversation and I said I did ask Kasia [a nickname for Ms. Pikula] as I would love to sell. But Kasia is adamant that the property is not for sale, and it is a long-term hold. She told me not to ever ask her again by the way. Unfortunately it's not my site (as you know) as she is the 100 percent owner, and the ultimate decision is hers.

Thanks again. Sorry, I tried. [Emphasis added.]

This email exchange is persuasive evidence of the fact that Mr. Malanca had no authority to deal with the property on Ms. Pikula's behalf and that Mr. Fiorini knew that Mr. Malanca had no authority to deal with property on her behalf. It is also persuasive evidence that Ms. Pikula had no intention of selling the property, and that it was not for sale.

[31] Mr. Fiorini stated, in cross-examination on his affidavit, that this email was "coerced with Alfredo Malanca", and that it was a fabrication. He then refused to answer additional questions about that allegation. His responses included: "I will not answer any more questions about that"; and, "I refuse all questions in relation to this email". I reject Mr. Fiorini's allegation that the July 19, 2022 emails were anything other than exactly what they appear to be on their face.

[32] Mr. Fiorini stated in cross-examination that he assumed that Mr. Malanca was authorized by Ms. Pikula to act, because he could not act without her approval. I reject his evidence about that, given that he was told in the email set out above that Ms. Pikula was the sole owner of the property and that she was the decision-maker as to what would happen to the property.

[33] Ms. Pikula provided a detailed and coherent account of her plans to develop the property, none of which involve participation by Mr. Fiorini, and none of which involve the sale of the property, except in the long term.

[34] It is undisputed that no one bought the property from 197, which continues to own the property.

[35] Mr. Fiorini relies on the affidavit of Mr. Francisco Batres. Mr. Batres described himself as a self-employed land developer. He was a friend of Mr. Fiorini's. In cross-examination Mr. Batres stated that they have never done any business together. Mr. Batres described eight to ten meetings with Mr. Fiorini and Mr. Malanca. Mr. Batres states that from the time he met them both, "they both implied that they were in partnership not only for the land in Barrie but also for the other projects that we came to discuss". Any information that Mr. Batres needed was provided by Mr. Fiorini. In cross-examination, Mr. Batres confirmed that Mr. Malanca told him that the property was owned by a company belonging to Ms. Pikula. Mr. Batres clarified in cross-examination that he was never interested in acquiring the property. Rather, his interest was to find a potential investor or buyer for the property. Mr. Batres' evidence is not of assistance to me in determining what agreement was or was not reached between Mr. Fiorini and Mr. Malanca and/or Ms. Pikula. I find that Mr. Batres' meetings with Mr. Fiorini and Mr. Malanca were of an exploratory nature only. Their conversations were about things that might happen in the future, not only in relation to the property but also in relation to other ventures. Their conversations were informal and undocumented. Nothing came of them. Their conversations provide no reliable evidence about Mr. Malanca's authority to bind 197.

[36] Mr. Malanca testified in cross-examination that he met Mr. Batres twice, through Mr. Fiorini. Mr. Malanca testified that there was no negotiation with Mr. Batres about the sale of the property. Rather, Mr. Batres and Mr. Fiorini tried to present a possible eventual purchase. Mr. Malanca listened. In Mr. Malanca's words: "It was all talk."

[37] Mr. Malanca states in his affidavit that his only recollection of a conversation with Mr. Fiorini about Mr. Fiorini acquiring a 10% interest in the property was a suggestion by Mr. Fiorini that he should get a 10% interest in the property from a potential purchaser as a "finder's fee". Mr. Fiorini told Mr. Malanca that in early 2022, Mr. Batres promised him a 10% interest in the property if Mr. Batres and his associates ended up buying the property, something that never happened. While Mr. Malanca did meet with Mr. Batres and Mr. Fiorini, at the request of Mr. Fiorini, to discuss Mr. Fiorini's interest in buying the property, and/or the interest of an associate of Mr. Batres buying the property, I find that any such discussions were in the nature of proposals advanced by Mr. Fiorini and/or Mr. Batres, that never resulted in anything, and that Mr. Malanca was not authorized to make any agreement for the sale of the property, and that he made that fact known to Mr. Fiorini and Mr. Batres.

[38] Mr. Fiorini also relies on the affidavit of Mario Villa, who swears that he was interested in buying the property, and that he met multiple times with Mr. Fiorini and Mr. Malanca. During those meetings, according to Mr. Villa, Mr. Malanca "introduced Nick to me as a 10% owner of the property and Alfredo had the remaining 90% ownership". On August 29, 2022, the three men met at the property to "go over the details to potentially purchase the property". When he was cross-examined, Mr. Villa indicated that he and Mr. Fiorini were friends. Mr. Villa had no idea who Ms. Pikula was. He had never met her or spoken with her. Mr. Villa repeatedly answered questions about his financial capacity to buy the property, and how much it might cost by saying: "I can't answer that". The conversations with Mr. Villa about buying the property came to nothing. Given the vagueness of Mr. Villa's evidence, I do not consider it reliable evidence of Mr. Fiorini's status in relation to the property or 197, or of Mr. Malanca's authority to bind 197.

[39] When Mr. Fiorini was asked in cross-examination whether Mr. Malanca's request of him to find potential buyers for the property was ever put in writing, Mr. Fiorini refused to answer this obviously relevant question. He said that Mr. Malanca's request was acknowledged by Mr. Malanca because Mr. Malanca attended meetings with potential buyers. The fact that Mr. Malanca met with people who were interested in buying the property tells me nothing about who initiated those meetings or what Mr. Fiorini's role was in arranging those meetings, or why Mr. Fiorini did what he did.

C. Conclusion

[40] I reject Mr. Fiorini's evidence that he had a legally enforceable agreement, or any agreement at all, with Mr. Malanca or Ms. Pikula to receive a 10% interest in the shares of 197, or in the property. I find that no such agreement existed. The application is dismissed.

[41] The respondents seek substantial indemnity costs against Mr. Fiorini. He is entitled to make submissions on that issue. I will receive submissions, in writing, not to exceed three pages in length, in addition to a bill costs, by email to my assistant. The respondents' submissions are to be provided by April 4, 2024, and Mr. Fiorini's submissions are to be provided by April 18, 2024.

The Honourable Madam Justice Jocelyn Speyer

Released: March 20, 2024