Court File and Parties
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: IN THE MATTER OF THE ESTATE OF GEORGE FOTIS GOUTZIOULIS
BETWEEN:
CATHY GOUTZIOULIS-LAVOY, LUC LAVOY, and SAMUEL LAVOY by his Litigation Guardian CATHY GOUTZIOULIS-LAVOY, Applicants
AND:
FRANK GOUTZIOULIS, in his personal capacity and in his capacity as Estate Trustee of THE ESTATE OF GEORGE FOTIS GOUTZIOULIS and STEPHAN GOUTZIOULIS, Respondents
BEFORE: M. D. Faieta J.
COUNSEL: Nima Hojjati and Bryan Gilmartin, for the Applicants Allan D.J. Dick, for the Respondent Frank Goutzioulis Andrew Felker, for the Respondent Stephan Goutzioulis Elaine Yu, for the ETDL
HEARD: September 27, 2024
ENDORSEMENT
faieta J.
1The main issue raised by this motion is whether the applicant should be permitted to discontinue this proceeding one day before the start of trial having settled her claims with one of the respondents.
BACKGROUND
2George Fotis Goutzioulis died on May 5, 2020. He was predeceased by his spouse. The deceased was survived by his three adult children – Cathy Goutzioulis-Lavoy, Frank Goutzioulis and Stephan Goutzioulis – who are parties to this proceeding. For brevity, I will refer to the parties by their first names. Cathy’s two children, Luc Lavoy and Samuel Lavoy, are also parties to this proceeding and support her position. Both children are now adults. All parties reside in Ontario other than Stephan who resides in the United States.
3Cathy commenced this application more than four years ago. Amongst other things, she seeks a declaration that the deceased’s wills are invalid and dependent support relief. The respondents are her brothers Frank and Stephan. Frank is the Estate Trustee of the deceased’s estate. Stephan is her oldest brother and he resides in the United States.
4In June 2020, the plaintiffs commenced this application for the following relief:
(a) A declaration that the primary and secondary Wills of the deceased, dated April 30, 2020, were invalid.
(b) A declaration that Cathy, Luc and Samuel were dependents of the deceased and entitled to support, and interim support, pursuant to Part V of the SLRA on the basis that the deceased failed to provide adequate support for them in his Will.
(c) An order setting aside the transfer of 178 Mill Pond, Richmond Hill, Ontario into joint tenancy with Frank that was registered on May 1, 2020.
(d) An order that Frank pay occupation rent for his use of 178 Mill Pond.
(e) An order requiring Frank, as the deceased’s attorney for property, to commence an application to pass his accounts within 30 days.
(f) An order requiring Frank, as the de facto estate trustee for the deceased’s estate, to commence an application to pass his accounts within 30 days.
5On August 18, 2020, Cathy was awarded interim support. Conway J. noted that Stephan “support[ed] Cathy’s request for this motion.” Stephan’s supporting affidavit states that the Will makes no provision for him or Cathy and that this was inconsistent with George’s expressed intention of ensuring that “all of his children inherited from the restaurant … and his life’s work.”
6On consent of the parties, the following Order Giving Directions was granted on November 9, 2020. It includes the following provision:
THIS COURT ORDERS that the following issues be tried:
i. Frank Goutzioulis (“Frank”) affirms, and the applicants and Stephan Goutzioulis (“Stephan”) deny, that the late George Fotis Goutzioulis (the “Deceased”) had testamentary capacity at the time of execution of the last wills and testaments of the Deceased on April 30, 2020 (the “Impugned Will”);
ii. Frank affirms, and the applicants and Stephan deny, that the Deceased had knowledge of and approved the contents of the Impugned Will;
iii. The applicants and Stephan affirm, and Frank denies, that there were suspicious circumstances surrounding the preparation and execution of the Impugned Will;
iv. The applicants and Stephan affirm, and Frank denies, that the following transactions were procured by undue influence:
a. the execution of the Impugned Will;
b. the transfer of 178 Mill Pond Ct, Richmond Hill, Ontario L4C 4W5 (“178 Mill Pond”) to Frank; and
c. the change in beneficiary designation of the Deceased’s life insurance policy to Frank;
v. The applicants and Stephan affirm, and Frank denies, that 178 Mill Pond is being held by Frank on a resulting trust for the Estate;
vi. The applicants assert, and Frank denies, that the applicants were dependents of the Deceased at the time of his death, as defined under Part V of the Succession Law Reform Act, R.S.O. 1990, c. S. 26 (“SLRA”), to whom the Deceased was providing support immediately before his death;
vii. The applicants assert, and Frank denies, the applicants’ entitlement for an Order that adequate provision be made out of the Estate pursuant to Section 58 (1) of the SLRA
7On February 1, 2021, Cathy’s motion for the appointment of an ETDL and for interim costs was granted. The court appointed Justin de Vries as the ETDL and ordered that the Estate pay Cathy interim costs of $187,871.40 on a staged basis with the final payment of $67,841.40 to be made 60 days prior to trial. In his Endorsement, Cavanagh J. notes that “Cathy’s application [to challenge the deceased’s primary and secondary will] is supported by Stephan who is named as a respondent …”
8In her Endorsement following a scheduling appointment heard on March 14, 2023, Dietrich J. states, amongst other things, the following:
The parties are agreed that the application in this matter should be converted to an action. I so order such conversion.
9Although the parties, including Stephan, approved a draft Order in respect of the conversion of the application to an action, it was never issued as it was never submitted to the court for issuance. The draft Order (“Draft Conversion Order”) includes the following terms:
THIS COURT ORDERS that the within Application be and is hereby converted to an Action bearing Court File Number ________.
THIS COURT ORDERS that the Applicants’ Notice of Application shall constitute a Statement of Claim.
THIS COURT ORDERS that the Respondents shall serve Statements of Defence on or before July 14, 2023.
10Stephan’s consent to the above draft Order was communicated by Mr. Felker’s email dated July 13, 2023. It is important to note that this draft Order states that Stephan will deliver a Statement of Defence and does not state that he will deliver any further pleading such as a Counterclaim or Crossclaim.
11At a motion heard November 27, 2023, amongst other things, the 8-day trial that was scheduled to commence on April 8, 2024, was adjourned to October 1, 2024.
12The following scheduling appointments and pretrial conferences were held before Sanfilippo J. At a pre-trial conference held on March 4, 2024, there was a “fulsome” discussion of the issues. A further pre-trial conference was held on April 30, 2024. Once again, “the parties conducted fulsome discussions of all issues and came to a settlement framework that requires consultation with third parties for continued development.”
13At scheduling appointments held on May 30, 2024, and July 8, 2024, the parties advised the court that “their settlement dialogue was continuing and that they required more time to discuss the remaining unresolved issues.”
14At a pretrial conference held on August 8, 2024, “the parties reported that their settlement dialogue was continuing, and that they required more time to discuss the remaining unresolved issues.”
15On September 4, 2024, the pretrial conference continued. The parties advised that they “continue to discuss matters on which they have not reached agreement.” The parties’ request to adjourn the trial was dismissed. The pretrial conference was adjourned to permit the parties a further opportunity to reach a settlement.
16On September 20, 2024, the pretrial conference continued. The applicants advised that they had reached a partial settlement and requested that a motion to discontinue this proceeding pursuant to Rule 23.01(b) be scheduled. Stephan opposed this relief. Sanfilippo J. directed that this motion be brought at the commencement of trial subject to the discretion of the trial judge.
17The trial management report of Sanfilippo J., dated September 20, 2024, states:
Motion at the opening of trial wherein the Applicant/Plaintiff will move for leave under Rule 23.01(b) to discontinue this Action. See Schedule “A”. The parties have agreed to steps that they consider necessary to prepare for the argument of a Motion for Leave to Discontinue at the opening of trial and further pleadings that might be necessary. The moving parties, Applicants/Plaintiffs will deliver their Motion Record to the lawyer for Stephan Goutzioulis by September 25, 2024.
18At my request, I directed that the parties appear for a case conference on September 24, 2024. At that time, I directed that the motions be heard on September 27, 2024.
ANALYSIS
19This applicant brings this motion pursuant to Rule 23.01(1)(b) of the Rules of Civil Procedure even though the Draft Conversion Order has not been issued nor have pleadings been exchanged. The failure of the parties to arrange for the Draft Conversion Order to be issued and entered does not diminish the legal effect of Dietrich J.’s Endorsement dated March 14, 2023, which converts this application into an action, given that Rule 59.01 of the Rules of Civil Procedure provides that an order is effective from the date on which it is made, unless it provides otherwise. In my view, Rule 23.01(1)(a) of the Rules of Civil Procedure is applicable given that pleadings have not closed as a defence has not been filed. Accordingly, the applicant has the right under Rule 23.01(1)(a) to discontinue this action by serving a notice of discontinuance on the other parties who, in turn, may seek their costs pursuant to Rule 23.05. Alternatively, if this proceeding remains an application, there is a parallel authority under Rule 38.08(1) of the Rules of Civil Procedure for the applicant to abandon this application. Once again, the respondents have the right to seek their costs from the applicant pursuant to Rule 38.08(3).
20If neither Rule 23.01(1)(a) nor Rule 38.08(1) are available in these circumstances, as submitted by the applicants, then under Rule 23.01(1)(b) an action may be discontinued with leave of the court. The relevant considerations were outlined by Low J. in Simanic v. Ross (2004), 2004 CanLII 66337 (ON SC), 71 O.R. (3d) 161 (Ont. S.C.):
24 A discontinuance, unlike a dismissal, does not result in a res judicata and, in the absence of terms restraining a future action on the same cause, does not shield a defendant from being pursued again on the same claim.
25 It is thus common ground that on a motion for leave to discontinue, the court is to balance and weigh the rights and interests of the parties. It is to consider the prejudice that would befall the plaintiff in not being permitted to discontinue against the prejudice to the defendant if leave were granted, taking into account in each case the court’s ability to neutralize prejudice through the imposition of terms.
21These principles have been repeatedly adopted. See 1623242 Ontario Inc. v. Great Lakes Copper Inc., 2016 ONSC 1002, 55 C.L.R. (4th) 99, at paras. 47-48; Ontario College of Teachers v. Bouragba, 2023 ONSC 367 (Div. Ct.), at para. 22; The Mississauga Fire Fighters Association, IAFF Local 1212 v. McNamara, 2024 ONSC 4508, at paras. 24-27.
22Cathy has been dominis litis of this application. As the person who commenced this application, Cathy has the right to make decisions about how her case is conducted. With a trial scheduled to commence in a few days, Cathy chose to settle her claims. Cathy would be greatly prejudiced if she were forced to proceed to incur the cost of an eight-day trial and an uncertain outcome because Stephan, who has not advanced a claim, is unsatisfied with the settlement agreement. On the other hand, Stephan has been represented throughout this proceeding. He has chosen not to commence an application or action to advance his own claims against Frank. By doing so, he has avoided the risk of being faced with a motion for security for costs and a motion for the dismissal of his claim on the basis it is statute barred as more than two years has passed since the death of the deceased. Most significantly, Mr. Felker candidly acknowledged that Stephan will not be prejudiced if this application is discontinued given that the discontinuance of this proceeding does not prevent him from commencing his own proceeding in respect of the issues raised in this case. I grant leave to Cathy to discontinue this action. If Stephan seeks his costs pursuant to Rule 23.05 or Rule 38.08, then I will hear his motion if I am available.
23Stephan submitted that if Cathy was permitted to discontinue this proceeding, an order should be granted that permits him to be substituted for Cathy as plaintiff in this matter. In my view, Rule 26.01 and 26.02 only permits a party to amend, or seek court approval to amend, their own pleading. Stephan relies on Ingram Estate v. Imperial Life Assurance Co. of Canada (1985), 491, 1985 CanLII 2123 (ON SC), 53 O.R. (2d) 442, aff’d (1986), 1986 CanLII 2741 (ON SC), 54 O.R. (2d) 762 for the submission that his claim should be joined pursuant to Rule 5.04(1) which states:
No proceeding shall be defeated by reason of the misjoinder or non-joinder of any party and the court may, in a proceeding, determine the issues in dispute so far as they affect the rights of the parties to the proceeding and pronounce judgment without prejudice to the rights of all persons who are not parties.
24As noted earlier, Stephan could have long ago brought his own application seeking some or all of the relief claimed by Cathy. He has not provided a sufficient answer to explain why he waited until the eve of trial to advance a claim. As a result, there is no basis for finding that his “status should be adjusted or transmuted so that justice might be done”: Ingram Estate, at para. 10.
25To summarize, the applicants’ motion to discontinue is granted. Stephan’s motion to be substituted for Cathy is dismissed. Stephan is ordered to pay partial indemnity costs of today’s motions in the amount of $8,353.46 to the applicants and to Frank. Given the outcome of these motions, I accept the ETDL’s submission that an order should be granted which removes Mr. de Vries as ETDL. Whether the ETDL should be required to formally pass his accounts, and the Estate required to incur such expense, is a matter for the parties to consider given that he has apparently provided an informal accounting. I may be spoken to regarding this issue if needed.
Mr. Justice M. D. Faieta
Released: October 2, 2024