SUPERIOR COURT OF JUSTICE – ONTARIO
RE: ZITIA DEVELOPMENTS INC., and ZITIA DEVELOPMENTS (2010) INC. Plaintiffs
AND:
PAUL HALYK, 2156083 ONTARIO INC., IOANNIS ANTONOPOLOUS, also known as JOHN ANTONOPOULOS, SPEROS KANELLOS, JOHN ALEXANDER EVANS, ROSS & MCBRIDE LLP and WILLIAM DUNLOP. Defendants
BEFORE: Justice Chalmers
COUNSEL: D. Rosenbluth and A. Iggers for the Plaintiffs
R. Campbell for the Defendants
HEARD: May 2, 2025 by videoconference
ENDORSEMENT
Overview and Factual Background
1The Plaintiff, Zitia Developments (2010) Inc. (Zitia 2010) brings this motion for an order directing the Registrar to issue a Certificate of Pending Litigation (CPL) on the property known municipally as 64 Dundas Street East, Paris, Ontario (the Property).
2Peter Labiris (Labiris) is an officer and director of Zitia 2010 and a number of affiliated companies which are part of a larger group of companies known as the Zitia Group. The Zitia Group were operated by Labiris and his former brother-in-law and business partner, Paul Halyk (Halyk). There was a breakdown in their relationship in early 2021. Although they no longer work together, they continue to own certain assets through the Zitia Group.
3Zitia 2010 was incorporated in 2010 to undertake a commercial development project at Dundas Street East in Paris, Ontario. Halyk was the president and director of Zitia 2010 from the date it was formed until the breakdown of the relationship. Currently, the directors of Zitia 2010 are Labiris and his mother, Voula Labiris. Labiris is the sole officer of Zitia 2010.
4Between 2007 and 2014, Labiris and Halyk acquired the following five lots of adjacent land to form a land assembly for use as a commercial development; the Property (64 Dundas Street East), 70 Dundas Street East, 72 Dundas Street East, 74-80 Dundas Street East and 8 Fair Lane (collectively the Assembled Lands).
5When the properties were acquired, title to each property was registered either in the name of Halyk and his wife Dimitra Halyk (Dimitra), or jointly to Labiris and Dimitra. The property at 74-80 Dundas Street East was registered in the name of Zitia Developments Inc. Labiris states that the parties understood that the properties were acquired on behalf of Zitia 2010 regardless of who took title. Halyk disagrees that properties were acquired on behalf of Zitia 2010, or that Zitia 2010 is the beneficial owner of the Property.
6In August 2013, Labiris entered into an Agreement of Purchase and Sale (“APS”) with respect to the Property. In the APS, the purchaser was listed as Peter Labiris, in trust. Labiris states that it was his understanding that he was purchasing the Property in trust for Zitia 2010. When the transaction closed on October 7, 2014, title to the Property was registered in the name of Halyk and Dimitra. Dimitra Halyk died in 2016. After her death, Halyk became the sole registered owner of the Property.
7Labiris believes that the downpayment for the purchase of the Property was funded by Zitia 2010 or another Zitia Group entity. However, he has been unable to locate the documentary evidence, in part because Halyk had primary control over the companies’ bank accounts at the relevant time. Labiris produced documentation confirming that Zitia 2010 and other Zitia Group entities contributed to the property taxes for the Property.
8The Plaintiffs filed the affidavit of Catherine Cooper, affirmed on April 4, 2025. She worked for Zitia 2010 and the Zitia Group as a land use planner for approximately 18 years. She states that it was always her understanding that although the properties that make up the Assembled Lands were initially registered to either Halyk or Labiris personally, all the Assembled Lands were meant to be corporate assets belonging to Zitia 2010. Ms. Cooper deposes that to the best of her recollection, the downpayment for the Property was funded by the Zitia Group and not Halyk personally. She states that the same is true for most or all of the carrying costs of the Property. Halyk did not cross-examine Ms. Cooper, and her evidence with respect to the payment of the downpayment and carrying costs is unchallenged.
9In 2016, the Zitia Group pursued the commercial rezoning of the Assembled Lands to ready them for redevelopment. There was a rezoning application in 2016. The application was successful, and the County passed a zoning bylaw applicable to the Assembled Lands. After the zoning bylaw was passed, the Assembled Lands, except for the Property, were developed. Starbucks, Harvey’s, and Swiss Chalet franchises are on the Assembled Lands. There is a house on the Property that is currently tenanted. According to Ms. Cooper, Zitia 2010 and/or the Zitia Group have overseen the administration of the lease and managed and paid for the maintenance of the Property.
10Before the breakdown in their relationship, the parties treated the Assembled Lands (which included the Property) as a corporate asset of Zitia 2010. In 2018, Halyk signed a letter of intent on behalf of Zitia with Starbucks which included a map of the Assembled Lands. In 2018, Halyk received an e-mail from the County’s planning staff in which the staff referred to the Assembled Lands as the Zitia Group Land Holdings. For several years, the tenant on the Property paid rent to the bank account controlled by Labiris, without objection from Halyk.
11In 2020, the ownership of the developed properties was transferred from the individual owners to Zitia 2010 for no consideration. According to Ms. Cooper, the Zitia Group was not prepared to commercially develop the Property by 2020. They did not have a confirmed commercial tenant for the Property and therefore it was not necessary to transfer title to Zitia 2010. Ownership of the Property continues to be registered in the name of Halyk.
12Zitia 2010 states that although the Property has not yet been developed, it is highly integrated with the other portions of the Assembled Lands. The Property is adjacent to the parcel at 74-80 Dundas Street East that is occupied by the Starbucks franchise. The fence at the Starbuck’s franchise extends over the boundary line and onto the Property. In addition, there is an easement registered on title to the Property for “turnaround purposes of vehicular traffic”. The easement was a condition of the site plan approval for the development of the Assembled Lands to support ongoing municipal and servicing work to the Assembled Lands.
13The unchallenged evidence of Ms. Cooper is that most or all of the servicing connections required to develop the Property including water, sanitary, storm water outlet, utilities and the transformer for Hydro power are physically located at 72 or 74-80 Dundas Street East. The Property is dependent on access to those sites for development.
14Labiris alleges that in March 2025, Halyk began taking steps to sell the Property without any advance notice to Zitia 2010. He attempted to evict the tenant at the Property. He also invited multiple real estate agents to view the Property. When asked to cease the sale efforts, Halyk refused and asserted that the Property was his personal asset.
15Zitia 2010 states that the Property is integrated with the Assembled Lands and that the value of the Property is maximized if the Assembled Lands are sold as a whole. Ms. Cooper, in her affidavit, states that selling the Property in isolation instead of together with the Assembled Lands would likely impair any ability to develop the Property commercially.
16Halyk notes in his affidavit that there is no support for Ms. Cooper’s statement that the value of the Property would be maximized if sold together with the other properties. He states that Labiris wanted to sell 72-80 Dundas Street East in 2023. The sale was separate from the other properties that formed the Assembled Lands. Halyk notes that Labiris had no issue separating the properties back then.
17Halyk deposes that the real estate agents were asked by Labiris to proceed with a valuation of 72-80 Dundas Street East alone. Following the valuation, Halyk received an offer to purchase 72-80 Dundas Street East for $9,000,000. Halyk has since received an opinion from a local realtor that the Property is worth between $955,000 and $1,055,000. Halyk states that it is in the interest of both parties to sell the properties at this time and to work toward severing their relationship.
18On March 31, 2025, Zitia 2010 commenced this action seeking, inter alia, a declaration that Zitia 2010 is the beneficial owner of the Property and an order requiring Halyk to transfer title to the Property to Zitia 2010. In the action, Zitia 2010 seeks an order for the registration of a CPL on the Property. Zitia 2010 does not seek damages as alternative relief to the declaration that it is the beneficial owner of the Property.
The Issue
19The sole issue on this motion is whether to grant leave to register a CPL on title to the Property.
Analysis and Discussion
General Principles
20The test for a CPL is well established and not seriously in dispute.
21There are two steps to the test for granting a CPL. First, the moving party must establish the threshold issue that there is a triable interest in the land in question. If the threshold issue is satisfied, the court will then consider whether it is just and equitable to grant a CPL having regard to all the relevant matters between the parties: Global West Development Ltd. v. 16380 Jane Street Inc. et al, 2021 ONSC 4284, at paras. 25-26, and Perruzza v. Spatone, 2010 ONSC 841, (Perruzza) at para. 20.
22The non-exhaustive factors the court may consider at the second stage of the test in assessing the equities as between the parties include the following:
a) Whether the plaintiff is a shell corporation;
b) Whether the land is unique;
c) The intent of the parties in acquiring the land;
d) Whether there is an alternative claim for damages;
e) The ease of difficulty of calculating damages;
f) Whether damages would be a satisfactory remedy;
g) The presence of absence of a willing purchaser; and
h) The harm to each party if the CPL is or is not removed with or without security: 572383 Ontario Inc. v. Dhunna, 1987 CarswellOnt 551 (Ont S.C. - Master); Bains v. Khatri, 2019 ONSC 1401, at para. 35; and Perruzza, at para. 20.
Has the Moving Party Established A Triable Interest in the Property?
23The moving party must establish the threshold issue that there is a triable interest in the land in question. The evidentiary bar for the threshold issue is low. Zitia 2010 states that the registered owner, Halyk holds the Property in trust for Zitia 2010. Halyk denies that Zitia 2010 has any equitable interest in the Property but concedes for the purposes of this motion that the threshold issue is met.
24Although the issue is conceded, it is necessary to consider Zitia 2010’s claim of an interest in the Property for the purpose of balancing the equities.
25Labiris states that he believes that Zitia 2010 funded the downpayment for the purchase of the Property and that some or all subsequent mortgage payments were funded by Zitia 2010 or another Zitia Group entity. Ms. Cooper also deposes that to the best of her recollection, the downpayment was made by Zitia 2010. He did not provide any evidence that he funded the downpayment. In his affidavit, Halyk states that he seeks to be reimbursed for mortgage payments, tax, and insurance. He did not seek reimbursement of the downpayment.
26Labiris and Ms. Cooper also depose that in addition to funding the downpayment, Zitia 2010 has been funding the carrying costs of the Property. Halyk has not put forward any documentation to prove that he paid for the carrying costs of the Property. Halyk did not cross-examine Labiris or Ms. Cooper.
27I also note that the parties treated Zitia as the owner of the Property. In the letter dated October 12, 2016, the County of Brant wrote to the Zitia Group to state that the Assembled Lands including the Property, were zoned highway commercial. In the development agreement between owner and contractor dated December 4, 2019, the owner of the Property is identified as Zitia Developments. Halyk signed the development agreement on behalf of Zitia Developments.
28A resulting trust may be established when a person advances funds to contribute to the purchase price of the property but does not take title to the property. Here, there is evidence that Labiris paid the downpayment and that Zitia 2010 paid the carrying costs. The role of the motions judge is not to determine whether a resulting trust is in fact established; it is to determine whether there is a reasonable claim to an interest in land: Halliday v. Bromley, 2019 ONSC 1670, at para. 19.
29I am satisfied that Zitia 2010 has established a reasonable claim to an interest in the Property.
Is it Just and Equitable to Grant a CPL?
30Once it has been established that the moving party has an interest in land, the court is to consider the Dhunna factors to determine whether it is just and equitable to grant a CPL. I am satisfied that the factors support the granting of the CPL.
a. Uniqueness of the Property
31Halyk argues that the Property is not unique and for that reason, the CPL should not be granted. He states that the Property was acquired for speculation and profit and it does not have a character or quality which cannot be replicated.
32Zitia 2010’s claim is based in trust and fiduciary law. It asserts that it is the true beneficial owner of the Property. It argues that as the true owner it wishes to keep the Property within the Assembled Lands rather than sell it in isolation. Zitia 2010 does not claim damages in the alternative to its claim that it is the owner of the Property.
33In Perruzza, the moving party did not seek damages as a primary or alternative claim. The moving party alleged an ownership intertest in the property. The court held that although the property was not unique, this factor was outweighed by the fact that the moving party was claiming an ownership interest in the property. The court stated as follows:
Perruzza does not seek damages, neither as a primary or alternative claim. To the contrary, Perruzza seeks some control over the marketing and sale of the Property based on his alleged ownership interest. He alleges that Spatone is ignoring Perruzza’s alleged 50% interest by intentionally taking no steps to market the Property or list it for sale. Consequently, while damages can be calculated, damages are not a satisfactory remedy This is not a claim for damages, but rather for ownership of a property that is to be sold pursuant to the Alleged Trust arising for the alleged Joint Venture Agreement: Perruzza, at para. 40(1).
34Where the moving party seeks an ownership interest over the Property rather than damages, the uniqueness of the property is not a factor in whether to grant a CPL: 1861067 Ontario Inc. v. Sang, 2021 ONSC 7226, at para. 65. see also Suntower Developments Limited v. Studios of America Corporation, 2023 ONSC 2703, at para. 51. The registration of the CPL is not to secure damages but to secure its ownership interest in the Property. If the CPL is not granted and Halyk was permitted to sell the Property, Zitia 2010 would lose the ownership right it seeks in the action: Perruzza, at para 40(ii).
35I am satisfied that the fact the moving party claims a beneficial ownership in the Property favours granting the CPL.
b. Intent in Acquiring the Property
36The intent of the parties in acquiring the Property was to commercially develop the Property as part of the Assembled Lands. The Assembled Lands (which include the Property) have been rezoned as a single integrated unit. The Assembled Land are interconnected. The Starbucks at 72-80 Dundas Steet East has a fence that extends onto the Property. Most or all of the servicing connections for the Property are located on 72 or 74-80 Dundas Street East. There is an easement registered on title to the Property to support municipal services work and municipal vehicle use for, and on, the Assembled Lands.
37Zitia 2010 argues that it is not appropriate or just to allow the sale of the Property in isolation. It states that to allow such a sale would permit the “senseless destruction of a valuable land assembly for no good reason”. Zitia 2010 also argues that the Property should be sold as part of the Assembled Lands to preserve their unique interconnectedness and zoning advantages. Halyk argues that the Property can be sold separately with the proceeds paid into court pending the determination of the ownership interests of Labiris and Halyk.
38I am satisfied that the parties purchased the Property for the purpose of incorporating it into the Assembled Lands which would then be commercially developed. This factor favours granting the CPL to preserve the value of the Assembled Lands pending the determination of the ownership of the Property.
c. Relative Harm to the Parties
39Halyk concedes that Zitia 2010 has an interest in the Property. Although Halyk is the registered owner of the Property, Zitia 2010 states that Halyk holds ownership in the Property as trustee. As trustee, Halyk would not be prejudiced if he continues to hold the Property in trust for the beneficial owner. On the other hand, if the CPL is not granted, the Property could be sold thereby rendering Zitia 2010 claim of ownership in the underlying action, moot.
40There is no evidence that Halyk wishes to sell the Property because he is in need of funds. In fact, the evidence is to the contrary. Halyk states that any suggestion he needs cash is “laughable speculation”. He states that cash flow is not an issue.
41Halyk states that if the Property is not sold, he will suffer harm by prolonging the ongoing dispute with Labiris. The “dispute” includes the ownership interest in the Property. In my view, this alleged harm is not a basis to refuse the CPL. It assumes that Halyk has the right to sell the Property when the dispute between them is to determine which party can sell the Property.
42Halyk also argues that if the Property is not sold, he will be harmed by being forced to pay the mortgage, insurance, and taxes while Labiris has diverted the rental payments from the tenants to himself. Halyk has not produced any documentary evidence that he is currently paying the carrying costs. The Plaintiffs’ evidence is that Zitia 2010 is currently funding the carrying costs.
43If the CPL is not granted, Zitia 2010 will be harmed because its action to determine ownership of the Property will be rendered moot. I am satisfied that if the CPL is granted, Halyk will not suffer any harm. He does not require the proceeds of the sale of the Property. He will continue to be a shareholder in Zitia 2010 and will be entitled to his share of the value of Property once the ownership issue is determined.
44This factor favours the granting of the CPL.
Disposition
45I am satisfied that Zitia 2010 has established an interest in the Property. I am also satisfied it is just and equitable in the circumstances to grant the order for the issuance of the CPL. I find that Zitia 2010 is entitled to the relief sought. I order that the Registrar is directed to issue a CPL to be registered on title to the Property.
46The Plaintiffs are successful on the motion and are presumptively entitled to their costs. The Plaintiffs filed a cost outline in which they seek their partial indemnity costs in the all-inclusive amount of $34,414.92. The Defendant filed a cost outline which provides that if successful, the Defendant would have sought partial indemnity costs in the all-inclusive amount of $16,221.16.
47If the parties are unable to agree on costs, the Plaintiffs may deliver its written cost submissions of no more than 3 pages, excluding offers to settle and caselaw, within 15 days of the date of this endorsement. The Defendants shall deliver their written cost submissions in response, and on the same basis, within 15 days of receiving the Plaintiffs’ cost submissions.
DATE: May 28, 2025
Chalmers J.