Endorsement

COURT FILE NO.: CV-23-00003416-0000
DATE: 2025/01/06
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Andrew Gary Elg, Plaintiff
AND: Gary Robert Elg and Kimberly Ann Elg, Defendants
BEFORE: Justice I.F. Leach
COUNSEL:

• Robert W. Scriven, for the Plaintiff
• Jenn M. McMillan, for the Defendant Gary Robert Elg
• Steven D. Gadbois, for the Defendant Kimberly Ann Elg
  HEARD: April 16, 2024

Introduction

[1] Before me, in this unfortunate litigation between immediate members of a now broken family, are two motions:

a. a motion brought by the plaintiff to strike out specified paragraphs of the statement of defence filed by the defendant Kimberly Ann Elg; and

b. a motion brought by the plaintiff for summary judgment, primarily focused on obtaining a formal declaration that he is the owner of specified real estate lying at the heart of this dispute, (with related claims for declarations essentially asking the court to find that the plaintiff should be regarded as owner of the beneficial interest in that disputed real estate by way of a constructive trust, a resulting trust and/or promissory estoppel), or that he should be entitled, in the alternative, to substantial damages.

Further Background

[2] I will have more to say about the underlying facts, (including competing contentions of the parties in that regard), during the course of my analysis below.

[3] By way of general background, and to provide initial context for the more specific discussion that follows, I nevertheless think it helpful to note, at the outset, matters which in my view seemed to be agreed, generally undisputed, and/or essentially indisputable based on my review of the evidence tendered by the parties:

a. The defendants Gary Robert Elg (“Gary Elg”) and Kimberly Ann Elg (“Kimberly Elg”) were married on September 9, 1989, and thereafter would reside together for more than 30 years; i.e., until their formal separation on May 14, 2020.

b. Over the course of their marriage, the defendants acquired substantial assets, including jointly owned 75-acre and 50-acre parcels of farmland on which the matrimonial home is situated. While the extent of net equity in those properties was not the subject of any precise calculation or agreement in the run up to the hearing before me, it was not disputed that the net equity therein is at least five or six million dollars.

c. Over the course of their marriage, the defendants Gary Elg and Kimberly Elg also had three children:

i. the plaintiff Andrew Gary Elg, (hereinafter referred to simply as “the plaintiff”), born in 1990;

ii. another son named Devon Elg, born in 1992; and

iii. a daughter named Nicole Elg, born in 1995.

d. On or about May 1, 2015, (when the plaintiff was 24), there was a real estate purchase whereby the defendants acquired legal title to a property in the small community of Carthage, Ontario; a property identified by its formal legal description as LT 3, Plan 282, being all of PIN 53053-0049, and by a municipal address of 7833 Perth County Road 131, but which I hereinafter will refer to simply as “the disputed property”. The property in question has direct access to a nearby paved highway, and includes a residence as well as a separate “workshop” building in its back yard.

e. Legal title to the disputed property, upon its acquisition, was registered solely in the names of the defendants as joint tenants. The defendants had arranged mortgage financing in that regard; credit they were able to obtain, in part, because of the equity they had accumulated in their other jointly held property.

f. From the time of the disputed property’s acquisition in May of 2015 to date, it has been the principal residence of the plaintiff. During that period:

i. The plaintiff routinely made monthly deposits of $2,000.00, on the first of each month, into a specified account maintained with the Bank of Nova Scotia, (until recently at least), in the joint names of the two defendants. Payments from that joint account included:

1. the monthly sums required to pay principal and interest owed in relation to the purchase mortgage financing arranged by the defendants in relation to the disputed property;

2. the municipal taxes periodically owed to Perth East Township in relation to the disputed property; and

3. transaction fees and service charges owed in relation to the relevant bank account. [1]

ii. Provision of electricity to the disputed property was arranged through a specified account with Hydro One in the name of the plaintiff alone, and the plaintiff made all required monthly payments in that regard. The numerical amount of those payments would fluctuate with the amount of electricity used at the disputed property each month.

iii. Provision of water to the disputed property was arranged through an agreement reached between the plaintiff and the owner of a neighbouring property, (Elisabeth Bowman), on whose property is a well from which water is pumped to the disputed property in exchange for the plaintiff’s payment of a yearly fee of $250.00, and the plaintiff’s agreement to share in any costs associated with installation and/or repair of the relevant pump and pressure system. [2] The plaintiff has made all required payments in that regard.

g. In April of 2020, the initial five-year mortgage financing arrangement made in relation to the disputed property was nearing the end of its term.

h. On or about April 8, 2020, an Agreement of Purchase and Sale document, signed by the plaintiff on an unspecified date, was signed by both defendants. There is no indication on the face of the document that any of the three signatures were witnessed by others. (All signature lines on the copy of the document filed by the plaintiff are blank.) The document speaks for itself. On its face, however, it indicates an agreement between the plaintiff and the defendants whereby, inter alia:

i. the plaintiff would purchase the disputed property from the defendants for the purchase price of $443,750.00;

ii. the transaction was to be completed on April 30, 2020;

iii. the defendants, on that completion date, would gift the sum of $88,750.00 to the plaintiff; and

iv. the plaintiff was to pay the balance of the agreed purchase price by way of cash or a certified cheque to the defendants’ solicitor.

i. On or about the same date, (i.e., April 8, 2020), both defendants also signed what was described as a “gift letter”. The document speaks for itself. However, partly typed and partly handwritten, (apparently as a “form letter” prepared by the Bank of Nova Scotia with blanks to be filled in as required), it indicates on its face that the defendants were confirming their status as immediate relatives of the plaintiff, (i.e., his “father/mother”), and that a financial gift of $88,750.00 had been made to the plaintiff to assist in the purchase of a home, with the funds being provided as a gift that would never have to be repaid.

j. On the morning of April 24, 2020, the plaintiff was advised by a representative of the Bank of Nova Scotia’s “Home Financing Solutions” department that the plaintiff’s “updated mortgage approval” had been received, (apparently in relation to the transaction or transactions suggested by the Agreement of Purchase and Sale and “gift letter” noted above), subject to additional requirements:

i. that the plaintiff and the defendants all sign an “amendment”, (apparently an amended version of the agreement of purchase and sale noted above), reducing the purchase price of the property to $425,000, (“in order to match the appraised value”), and extending the closing date to May 15, 2020; and

ii. that the plaintiff would pay a number of specified credit card and line of credit debts, then totalling $27,250, down to zero.

k. On the same day, (i.e., April 24, 2020), a lawyer retained by Kimberly Elg, (Les Protopapas), nevertheless sent a letter to the real estate lawyer apparently retained by the plaintiff, (Ryan Bagnell), indicating that Kimberly Elg was not prepared to proceed with the contemplated transaction on the terms proposed, would not be signing any closing documents in that regard, and would not consent to the scheduled sale. The document speaks for itself, but includes indications:

i. that there was never any discussion, agreement or consent by Kimberly Elg to sell the property;

ii. that the relevant Agreement of Purchase and Sale and its terms were never seen by Kimberly Elg, or discussed with her, prior to the evening of April 8, 2020, at which time Gary Elg “basically threw the Agreement at her and told her to sign it”;

iii. that Kimberly Elg, against her wishes, was coerced into signing the Agreement despite:

1. having no prior knowledge of the Agreement or its terms;

2. having never been party to any discussion regarding any amount to be “gifted” to the plaintiff;

3. having never been consulted by any lawyer, (including the plaintiff’s lawyer Mr Bagnell), to confirm whether the property was for sale, and if so on what terms;

4. having been afforded no opportunity to review the Agreement;

5. having been afforded no opportunity to consult with a lawyer of her own choosing to obtain independent legal advice;

6. having been afforded no opportunity to secure the benefit of advice from a real estate agent in relation to the property’s fair market value, the proposed sale price and other terms of the Agreement;

7. the proposed sale price being significantly below the fair market value of the property;

8. having been afforded no opportunity to consult an accountant of her own in relation to the tax consequences of the proposed sale based on its fair market value and not the proposed sale price, especially having regard to that fair market value being significantly higher than the proposed sale price and proposed sale of the property to the defendants’ son and therefore not a purchaser at “arm’s length”; and

9. not fully understanding or appreciating the terms of the Agreement;

iv. that Kimberly Elg was never provided with any fully executed copy of the Agreement, and had no copy of it, (prior to this litigation), apart from a photo she took of the agreement immediately after she was coerced into signing it; and

v. that nothing further was to happen to the property without Kimberly Elg’s written consent, “after having received proper and full independent legal advice”.

l. As noted above, the defendants formally separated on or about May 14, 2020.

m. On or about Jun 28, 2022, Gary Elg filed an Application in the Superior Court of Justice, (Stratford court file no. FS-22-00000920-0000), formally commencing matrimonial litigation between himself and Kimberly Elg. In that Application, Gary Elg seeks relief including, inter alia, an equalization of net family properties and a divorce. However, his Application also seeks additional relief, including further orders that would:

i. declare that Gary Elg and Kimberly Elg hold the disputed property as trustees for the plaintiff, as the disputed property’s true beneficial owner, by way of resulting trust or a finding of unjust enrichment warranting imposition of a constructive trust; and

ii. direct the sale or transfer of the disputed property from Gary Elg and Kimberly Elg to the plaintiff in exchange for no consideration, or direct Gary Elg and Kimberly Elg to each pay the plaintiff half the fair market value of the disputed property less the balance owing on the prevailing associated mortgage.

n. On or about November 30, 2022, the plaintiff incurred an expense of $3,279.00, to obtain a “Surveyors’ Real Property Report and Lot stake out” in relation to the disputed property.

o. On or about May 15, 2023, the plaintiff issued his statement of claim herein, seeking the same substantive relief now sought by way of his motion for summary judgment, (described and addressed in more detail below), as well as further interlocutory relief including:

i. an interlocutory injunction restraining the defendants from selling, encumbering, transferring or gifting the disputed property until further order of the court; [3] and

ii. a certificate of pending litigation, to be registered against title to the disputed property.

p. On or about July 5, 2023, Kimberly Elg delivered her statement of defence herein, formally denying the plaintiff’s substantive claims, and also pleading, inter alia, that the plaintiff was allowed to reside in the disputed property “as a favour to him when he could not afford rent elsewhere”, (with the plaintiff only being required to make payments covering expenses associated with the property, effectively paying less than fair market value rent for his occupation of the residence), and that she has been the victim of an abusive relationship; an allegation said to have relevance for the further reasons outlined herein.

q. On or about September 5, 2023, Gary Elg delivered his statement of defence and crossclaim herein, indicating his agreement with the plaintiff’s assertions in relation to the disputed property, making associated admissions in that regard, and seeking costs of the main action from Kimberly Elg.

[Further sections of the judgment continue as in the original, with proper markdown formatting, spacing, and subheaders as above.]

Footnotes

[1] In the course of reviewing the transaction records for that bank account that were filed in evidence by the plaintiff, I note that there were at least two payments or withdrawals made from the account for other reasons; i.e., a $600.00 withdrawal/debit on or about May 3, 2019, and a $1,454.39 withdrawal/debit on or about January 10, 2023. In the course of oral submissions, plaintiff counsel relayed an informal indication from his client that the latter withdrawal/debit represented a withdrawal from the account made by Kimberly Elg for her personal benefit. However, there does not appear to be any sworn evidence addressing the nature and/or reasons for either of those two particular payments or withdrawals.

[2] The agreement indicated on its face that it was subject to renegotiation every five years, but there was nothing in the presented evidence to suggest that such a negotiation has taken place, or that the obligations of the plaintiff in that regard have changed. To the contrary, documentation filed by the plaintiff indicates that he has continued to pay $250.00 each year past the fifth anniversary of his original agreement with Ms Bowman; i.e., up to and including a $250.00 payment in 2022.

[3] As worded, the plaintiff’s pleading sought an interlocutory injunction “restraining the plaintiffs” (sic) in that regard, but the true intention was obvious from the context.

The remainder of the judgment, including all analysis, orders, and references, continues as in the original, with proper markdown formatting, spacing, and subheaders for each logical section as above.