COURT FILE NO.: CV-24-0246-00
DATE: 2024-09-12
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
IN THE MATTER OF THE ESTATE OF ANNE JAUN, deceased
Gary Brian Prosser
R. Venn, for the Applicant
Applicant
- and -
Rudy Jaun, by his Litigation Guardians Wendy Jaun and Debbie Jaun, in his Capacity as Estate Trustee for The Estate of Anne Jaun
J. Clark, for the Respondent
Respondent
HEARD: August 1, 2024, at Thunder Bay, Ontario
Mr. Justice S.J. Wojciechowski
Reasons on Motion
Introduction
[1] The applicant, Gary Brian Prosser (“the Applicant”), has brought an application which seeks to address issues respecting a piece of property formerly owned by his mother, Anne Jaun, who died on January 21, 1995.
[2] Before her death, Anne Jaun (“Anne”) owned properties located at Silver Islet in Sibley Township, which were legally described as LT 297-304 PL 431 SIBLEY EXCEPT 55R8612 SRO; TW TBR146345; DISTRICT OF THUNDER BAY, and LT 323-327 PL 431 SIBLEY EXCEPT 55R8612 & PTA111171 SRO; S/T TBR279928; DISTRICT OF THUNDER BAY, together with a right of way over the Ely 10’ of lot 324 and the Wly 10’ of Lot 323 (“the Sibley Properties”).
[3] The Sibley Properties consisted of a portion of vacant land legally described as LT 297-304 PL 431 SIBLEY EXCEPT 55R8612 SRO; TW TBR146345; DISTRICT OF THUNDER BAY and bearing PIN #: 63492-0134 (“the Sibley Vacant Property”) and a portion on which a cottage was located legally described as LT 323-327 PL 431 SIBLEY EXCEPT 55R8612 & PTA111171 SRO; S/T TBR279928; DISTRICT OF THUNDER BAY, bearing PIN #: 62492-0133 (“the Sibley Cottage Property”).
[4] The Sibley Vacant Property is currently in the name of the Applicant.
[5] The Sibley Cottage Property is currently in the name of Rudy Jaun (“Rudy”), who was married to Anne at the time of her death.
[6] The Applicant claims that the Sibley Cottage Property is being held in trust for him by Rudy, and is seeking a declaration that he is the beneficial owner of the Sibley Cottage Property.
[7] This motion brought by the Applicant seeks a certificate of pending litigation and a preservation order with respect to the Sibley Cottage Property so that it cannot be transferred or encumbered until his application has been determined.
Background
[8] Anne was originally married to the Applicant’s father, Gary Prosser Sr. Their marriage ended in divorce in the late 1980s. During their marriage, Anne and Gary Prosser Sr. acquired property at Silver Islet in Sibley Township on which they built a cottage (“Silver Islet Cottage”). As a result of the divorce, Anne took ownership of the Silver Islet Cottage. The Applicant’s affidavit evidence states that Gary Prosser Sr. agreed to transfer his interest in the Silver Islet Cottage to Anne on the basis that it would eventually be transferred to the Applicant.
[9] On November 30, 1990, Rudy and Anne married and began residing at 1554 Melbourne Road, Thunder Bay, Ontario (“the Melbourne Road Property”). The Melbourne Road Property was owned and built by Rudy before his marriage to Anne.
[10] On December 19, 1990, Anne executed a Last Will and Testament which provided, amongst other bequests, that the “cottage located at Silver Islet in Sibley Township” be transferred to the Applicant. At this time, the only Sibley Township property owned by Anne was the Silver Islet Cottage.
[11] On May 9, 1992, Anne purchased the Sibley Properties for $42,000. At that time, only Anne’s name was on title to the Sibley Properties. On May 6, 1992, before the Sibley Properties were purchased by Anne, Rudy took out a mortgage on the Melbourne Road Property in the amount of $50,000.
[12] On August 27, 1993, Anne sold the Silver Islet Cottage.
[13] In May or June of 1994, Anne was diagnosed with terminal lung cancer.
[14] On November 2, 1994, Anne transferred the Sibley Properties to Anne and Rudy as joint tenants for natural love and affection.
[15] Anne died on January 20, 1995.
[16] On October 5, 1995, Rudy transferred the Sibley Vacant Property to the Applicant.
[17] On October 19, 1995, Rudy executed a Last Will and Testament (“the October 1995 Will”) which directed the Sibley Cottage Property be transferred to the Applicant.
[18] Following Anne’s death, Rudy constructed four outbuildings on the Sibley Cottage Property including two bunkhouses, a garage, and a sauna together with various decks, walkways, landscaping, dirt, gravel and beach work.
[19] Before the marriage between Rudy and Anne, Rudy had four children born to his first wife. These are Debbie Jaun, Wendy Jaun, Peter Jaun and Bonnie Jaun (“Debbie”, “Wendy”, “Peter”, “Bonnie”, and collectively “the Jaun Children”).
[20] Following the October 1995 Will, two further wills were executed. The first is dated July 19, 1999, and provides that the Sibley Cottage Property be transferred to the Jaun Children, with a one fifth share of the residue of Rudy’s estate going to the Applicant. The second, dated November 27, 2007, provides for the transfer of the Sibley Cottage Property to the Jaun Children, with no provision to the Applicant on the basis that the Sibley Vacant Property was already transferred to him.
[21] On June 27, 2024, using a power of attorney for property executed by Rudy on July 23, 2019, Wendy and Debbie registered a survivorship application which removed Anne’s name from the Sibley Cottage Property.
[22] Based upon the conversations between the Applicant and Anne, and the fact that Rudy took some steps after Anne’s death which could arguably reflect the Applicant’s understanding of what was to happen with the Sibley Properties, including the Sibley Cottage Property, the Applicant maintains that the Sibley Cottage Property is being held in trust by Rudy for his benefit.
[23] Upon realizing that Rudy made changes to the October 1995 Will that are no longer consistent with the Applicant’s position, and upon seeing the effort of Debbie and Wendy to remove Anne’s name from the Sibley Cottage Property, the application was brought to address the Applicant’s position with respect to the Sibley Cottage Property.
[24] In the interim, to preserve the status quo until the application is decided, the Applicant requests an order for a certificate of pending litigation to be registered on title to the Sibley Cottage Property. The Applicant also seeks a preservation order with respect to the same piece of property.
The Law
[25] Rule 45.01 of the Rules of Civil Procedure outlines a court’s power to grant a preservation order in respect of property.
[26] In this regard, para. 26 of Meade v. Nelson Resources Ltd., 2005 CanLII 44818 (ONSC) sets out a three step test to obtaining such an order, stating that “the moving party must establish that (1) the assets sought to be preserved constitute the very subject matter of the dispute; (2) there is a serious issue to be tried regarding the plaintiff’s claim to that asset; and (3) the balance of convenience favours granting the relief sought.”
[27] Certificates of pending litigation are governed by Rule 42 of the Rules of Civil Procedure and section 103 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended.
[28] A certificate of pending litigation can be issued if a court determines that a triable issue raised by the moving party involves an interest in the subject property. The moving party, in establishing a triable issue, need only provide sufficient evidence that a claim in the subject property could succeed. The court is not to assess credibility or make decisions on disputed issues of fact: see 2254069 Ontario Inc. v. Kim, 2017 ONSC 5003, at paras. 21 and 26; Pauwa North America Development Group Co. Ltd. v. Skyline Port McNicoll (Development) Inc., 2021 ONSC 18, at para. 38.
[29] The responding party, on the other hand, has the onus of demonstrating that there is no triable issue, and that the moving party does not have a reasonable claim to an interest in the subject property.
[30] In exercising its discretion with respect to balancing equities, there are a number of factors a court should consider, including:
a) whether the land is unique;
b) the intent of the parties in acquiring the land;
c) whether there is an alternative claim for damages;
d) the ease or difficulty in calculating damages; and
e) the harm to each party if a certificate of pending litigation is granted.
See Perruzza v. Spatone, 2010 ONSC 841, at para. 20.
[31] Courts are reluctant to grant both a certificate of pending litigation as well as a preservation order which deal with the same property: see Seif v. Hamilton, 2023 ONSC 5489, at paras. 4 and 94.
Decision
[32] My review of the issues raised by the evidence leads me to conclude that there is a triable issue involving the Sibley Cottage Property.
[33] After marrying Rudy, Anne decided that the property she owned at Silver Islet would not be left to Rudy upon her death, but instead would go to the Applicant. This included the Silver Islet Cottage, which was property vested in her name absolutely following her divorce from Gary Prosser Sr.
[34] On this basis, the Applicant asserts that the property owned by Anne, including the Silver Islet Cottage, would be transferred into his name during Anne’s life or upon her death.
[35] While Anne sold this property and acquired the Sibley Properties before her death, she took the Sibley Properties in her own name without Rudy being on title. The evidence filed by the Respondent suggests that Rudy may have mortgaged the matrimonial home he owned to secure funds for the purchase the Sibley Properties. However, if this was the case, no explanation has been provided for why Rudy was not also on title to the Sibley Properties.
[36] Arguably, Anne’s decision to acquire the Sibley Properties in her name absolutely is consistent with the Applicant’s claim that Anne intended this property to be transferred to him in accordance with the terms of her Last Will and Testament.
[37] The Respondent submits that the only property which could be referenced in Anne’s Last Will and Testament is the Silver Islet Cottage, since that was all Anne owned when her Will was prepared. While this position makes sense, the description of the Sibley Township property in Anne’s Last Will and Testament was sufficiently generic to include the Sibley Properties she later acquired before her death. The court addressing the merits of the application will have to determine if Anne’s Last Will and Testament applies exclusively to the Silver Islet Cottage, or whether the Last Will and Testament was not amended to specifically include a reference to the Sibley Properties because it was already included as the “cottage located at Silver Islet in Sibley Township”.
[38] Obviously, Anne decided shortly before her death to transfer title in the Sibley Properties to herself and Rudy as joint tenants. The basis for Anne doing this is not clearly explained in the evidence, but one reason could be that she wanted Rudy to be the sole owner of the Sibley Properties upon her death, without the Applicant receiving any interest. Alternatively, she could have wanted Rudy to only have a life interest in the Sibley Properties, with the understanding that the lands were to be transferred to the Applicant upon Rudy’s death.
[39] However, if the latter was Anne’s intention, she could have done so in a manner which provided a clearer expression of her intent.
[40] Whatever the reason, and whatever discussions she might have had with Rudy before her death, following Anne’s death Rudy transferred the Sibley Vacant Property to the Applicant, and created the October 1995 Will providing for the transfer of the Sibley Cottage Property to the Applicant upon Rudy’s death. The exact reason for doing this is unknown, but again supports the Applicant’s position that Rudy and Anne agreed the Sibley Properties were going to be the Applicant’s at the end of the day. Transferring the Sibley Vacant Property was the first step to implement this possible agreement, with the second step being the October 1995 Will.
[41] Of course, flying in the face of this position is Rudy’s subsequent decision to change the October 1995 Will - not once but twice - with the last change revoking the Applicant’s entitlement to Rudy’s estate as well as the Sibley Cottage Property. Why would Rudy make these changes if he had agreed to hold the Sibley Properties in trust for the Applicant?
[42] In order to sort out all of these unknowns, the Respondent submits that the evidentiary hurdles are too onerous for the Applicant to establish a secret trust. I agree that there are several issues which could impact the Applicant’s ability to succeed with his application including, but not limited to, the following:
a) Anne is dead, and her express intentions are not available for the court’s consideration;
b) Rudy is experiencing the effects of dementia, and no evidence is available from him to confirm or deny the existence of a secret trust;
c) the presumption of joint ownership contained in section 14 of the Family Law Act, R.S.O. 1990, c. F.3, as amended;
d) the presumption of advancement;
e) section 13 of the Evidence Act, R.S.O. 1990, c. E.23, as amended which requires the Applicant’s position be corroborated by some other material evidence; and
f) the evidence necessary to establish the existence of a secret trust described at paras. 49 and 50 of Gefen Estate v. Gefen, 2022 ONCA 174, which includes the intention of the donor and the communication of this intention to a donee who accepts the obligation expressed by the donor.
[43] While these evidentiary issues are significant, I cannot determine based on the record before me that the Applicant’s position is without merit, nor that the evidentiary issues cannot be resolved in favour of the Applicant. A court hearing the application may very well decide in favour of the Respondent due to the absence of compelling evidence. However, in hearing this motion I am not making any rulings which will resolve these issues, nor is the court able to do so at this juncture without a full evidentiary record.
[44] I therefore find that there is a triable issue, one which involves the very subject matter of the application and this motion. The Sibley Cottage Property is uniquely situated adjacent to the Sibley Vacant Property and, as such, if the application is successful, damages would not be an appropriate remedy, nor could damages be easily quantified.
[45] In terms of assessing the harm which would be caused to either the Applicant or the Respondent if a certificate of pending litigation were registered to the Sibley Cottage Property, the evidence of the Respondent suggests that tying up the property could negatively impact the ability of the Jaun Children to provide adequate care for Rudy. At this juncture, the evidence suggests that this potential harm is speculative, and the weighing of the interests of the parties on this point favours the Applicant. However, should additional evidence become available or the circumstances surrounding the care of Rudy significantly change, then leave is granted to the Respondent and the Jaun Children to bring another motion addressing this issue.
[46] Accordingly, based upon my analysis and the weighing of the applicable factors, I am prepared to order that a certificate of pending litigation be registered to the Sibley Cottage Property.
[47] On the basis of a belt and suspenders approach, I decline to order a preservation order as requested by the Applicant. Instead, the parties are encouraged to move this matter forward on an expeditious manner so as to address the issues raised by the application within a meaningful timeline.
[48] In this regard, if it would assist the parties, and if the parties both agree and provide their consent, given my familiarity with the issues and some of the evidence, I would be willing to hear the application and provide case management to ensure this matter proceeds without delay. If this is how the parties wish to proceed, they shall contact the Trial Co-ordinator and arrange a one-hour hearing to determine next steps.
[49] Additional relief was sought as part of this motion, that being the appointment of Debbie and Wendy as Rudy’s litigation guardians. During argument, no objection was made to this relief, and accordingly Debbie and Wendy are appointed as litigation guardians for Rudy.
[50] The parties asked that I let them make submissions as to costs once they received my decision, and if they were unable to come to an agreement with respect to the same. It seems reasonable to me that the costs of this motion be determined within the context of the outcome of the application. However, if the parties would like to make alternate submissions, the party requesting costs shall provide submissions in writing not exceeding three pages, plus a bill of costs, within fifteen days of this decision, and the responding party shall provide its position in writing not exceeding three pages, plus a bill of costs, supporting its effort in this motion within ten days following receipt of the opposing party’s materials.
[51] The balance of the application is adjourned on consent to motions’ court scheduled for September 19, 2024 at 10:00 a.m.
“Original signed by” ___
The Hon. Justice S.J. Wojciechowski
Released: September 12, 2024
COURT FILE NO.: CV-24-0246-00
DATE: 2024-09-12
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
IN THE MATTER OF THE ESTATE OF ANNE JAUN, deceased
Gary Brian Prosser
Applicant
- and –
Rudy Jaun, by his Litigation Guardians Wendy Jaun and Debbie Jaun, in his Capacity as Estate Trustee for The Estate of Anne Jaun
Respondent
REASONS ON MOTION
Wojciechowski J.
Released: September 12, 2024