Barberio Estate (Re) v. Da Costa
This case[1] involves a dispute over the transfer of an elderly man’s Toronto home to his neighbours for $100,000.00 and negligence allegations against the lawyer who assisted with the transfer. The defendant neighbours and lawyer brought a summary judgment motion seeking to have the claim dismissed.
Justice Nakatsuru dismissed the motion finding that the complex matter required a trial of the issues. The case provides helpful guidance on when a summary judgment is, and is not, appropriate in estate litigation.
Background:
The deceased had lived next door to the defendants (a husband and wife), from 1994 to 2008. The defendants testified that they were like family to the elderly gentleman and looked after him regularly. In April of 2008, the deceased approached the defendants with the idea of transferring his house to them for $100,000.00 in exchange for them looking after him and allowing him to live in his home for the rest of his life. The defendants agreed.
In late April, the deceased prepared a Will and powers of attorney for property and personal care with the assistance of a lawyer. He named the lawyer as his attorney for property and the defendant wife as his attorney for personal care. He named his sister as his beneficiary.
He approached the same lawyer later that month with a signed agreement of purchase and sale to transfer his home to the defendants. The lawyer refused to approve of the agreement as she found the elderly gentleman to be vulnerable. She put the defendant neighbours on notice of her decision noting that the terms of the transfer were “unconscionable”.
The deceased then met with a second lawyer (the defendant lawyer in this case). The neighbours also retained counsel and a new agreement for the transfer was signed. The lawyer completed the transfer of the deceased’s property to the husband only. In exchange, both husband and wife provided an undertaking to allow the deceased to live in his home and to look after him. According to the plaintiff estate trustee, the deceased had only signed a direction for the transfer of the property to the husband and wife jointly.
With the assistance of the second lawyer, the deceased also granted power of attorney for property to the defendant wife and signed a new Will naming his sister as his beneficiary.
There was a dispute over how much care the husband and wife provided to the deceased after the transfer. The neighbours also submitted that there was medical evidence suggesting that the deceased was becoming confused and declining cognitively by April of 2009.
In August of 2009, the deceased met with his cousin and nephew. He showed them his Will and the transfer documents and indicated that he never signed the transfer.
The deceased then retained a third lawyer who wrote to the neighbours revoking the previous power of attorney and advising them that they were going to be taking steps to set aside the transfer.
This lawyer also informed the defendant lawyer who assisted with the transfer that it was the deceased’s understanding that he had not sold his home. The new lawyer also requested the transferring lawyer’s file with the deceased’s authorization. The lawyer did not produce the file promptly.
The deceased then signed a new power of attorney for property in favour of his new counsel and his cousin and a new Will naming his cousin and nephew as beneficiaries.
The deceased died in February of 2010. In September 2011, the estate trustee brought a claim in unjust enrichment and solicitor’s negligence seeking among other things, an order transferring the property back to the estate (subject to the return of $100,000) or in the alternative, general and punitive damages and damages against the lawyer for solicitor’s negligence.
ANALYSIS
Unjust enrichment and genuine issue for trial:
The neighbours submitted that there was no genuine issue requiring a trial as the plaintiff’s claim for unjust enrichment failed. Referencing Petkus v. Becker[2], they argued that they had not been enriched by the transaction because they had provided care to the deceased in exchange, the deceased did not suffer a corresponding loss, and the agreement for purchase and sale provided a juristic reason for the transfer.
Justice Nakatsuru found that the nature of the relationship between the deceased and the defendants was material to the issue requiring a trial. Examining that relationship and what took place at the time of the agreement required credibility assessments and viva voce evidence that could not be obtained through a summary motion despite the expanded powers of the Court.
Is the plaintiff’s claim for punitive or general damages, against the neighbours, statute barred?
The defendants argued that the plaintiff’s claim for damages was brought outside the two- year limitation period and was statute barred.
Justice Nakatsuru stated that even if he considered this issue at this stage, it would only provide the defendants with partial summary judgement. After reviewing the principles set out by the Court of Appeal in Butera v. Chown[3], the Court concluded that there was no utility in granting summary judgment on this issue since it would not dispose of the action entirely. Furthermore, the claim for damages was essentially an alternative claim to the return of the property.
Referencing Cook v. Joyce[4], Justice Nakatsuru, noted that the determination of the limitation period defence required credibility assessment and factual findings that would need to be made at trial.
Did the lawyer’s negligence, if any, cause the plaintiff’s damages?
The plaintiff must show that the transferring lawyer’s actions were causally connected to the damages to establish liability against the lawyer. The test for causation is whether the injury would have occurred ‘but for’ the negligence of the lawyer, as per Pilotte v. Gilbert.[5]
The lawyer argued that there was no genuine issue requiring a trial since the deceased chose to ignore a previous lawyer’s advice and proceed with the transfer. Accordingly, the plaintiff estate trustee cannot prove that, ‘but for’ the lawyer’s negligence, the estate would not have suffered the alleged injury.
The plaintiff estate trustee relied on an expert opinion which concluded that in completing this transfer, the lawyer fell below the standard of care of a reasonably competent solicitor.
Justice Nakatsuru found that the issue of causation requires a trial for a number of reasons including: the lack of direct evidence available from the deceased; the unfairness of relying on a sole piece of evidence about the deceased ignoring another lawyer’s advice; and, the need to consider the complex matrix of the factual circumstances in assessing the degree of the solicitor’s negligence as well as causation.
Is the claim against the solicitor statute barred?
The Court noted that the viability of the claim against the solicitor rested on the principle of discoverability. Determining whether the discoverability principle applies, is a fact-based analysis.
The lawyer argued that the plaintiff discovered the claim shortly after the transaction closed on June 3, 2008, but certainly no later than September 1, 2009, when his counsel put the neighbours on notice of this claim.
The plaintiff alleged that the limitation period did not apply because the lawyer committed fraud during the course of the closing of the agreement. Alternatively, the plaintiff submitted that the claim was only discovered when the lawyer’s complete file was obtained. Counsel delayed the production of the complete file, which was required to discover the claim.
Ultimately, the issue of discoverability of the claim against counsel was a genuine issue requiring a trial and could not be determined on a summary judgment motion despite the expanded powers of the Court.
Takeaways:
Where the issues require in-depth credibility assessment and factual findings, the courts will be less inclined to grant summary judgment despite the expanded powers stipulated in the Rules and set out by the Supreme Court in Hryniak v. Mauldin, 2014 SCC 7 (CanLII), [2014] 1 S.C.R. 87.
This case is also a reminder that partial summary judgement creates the risk of inconsistent or duplicate judgments and may not be appropriate in cases involving an assessment of credibility.
This will be an interesting case to follow should it proceed to trial.
—
[1] Barberio Estate (Re) v Da Costa 2018 ONSC 6144 (CanLII).
[2] Petkus v. Becker, 1980 CanLII 22 (SCC)
[3] Butera v. Chown, 2017 ONCA 783 (CanLII) paras. 29 to 35
[4] Cook v. Joyce, 2017 ONCA 49 (CanLII) at para. 96
[5] Pilotte v. Gilbert, 2016 ONSC 494 (CanLII)
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Written by: Kimberly A. Whaley
Posted on: December 20, 2018
Categories: Commentary, WEL Newsletter
Barberio Estate (Re) v. Da Costa
This case[1] involves a dispute over the transfer of an elderly man’s Toronto home to his neighbours for $100,000.00 and negligence allegations against the lawyer who assisted with the transfer. The defendant neighbours and lawyer brought a summary judgment motion seeking to have the claim dismissed.
Justice Nakatsuru dismissed the motion finding that the complex matter required a trial of the issues. The case provides helpful guidance on when a summary judgment is, and is not, appropriate in estate litigation.
Background:
The deceased had lived next door to the defendants (a husband and wife), from 1994 to 2008. The defendants testified that they were like family to the elderly gentleman and looked after him regularly. In April of 2008, the deceased approached the defendants with the idea of transferring his house to them for $100,000.00 in exchange for them looking after him and allowing him to live in his home for the rest of his life. The defendants agreed.
In late April, the deceased prepared a Will and powers of attorney for property and personal care with the assistance of a lawyer. He named the lawyer as his attorney for property and the defendant wife as his attorney for personal care. He named his sister as his beneficiary.
He approached the same lawyer later that month with a signed agreement of purchase and sale to transfer his home to the defendants. The lawyer refused to approve of the agreement as she found the elderly gentleman to be vulnerable. She put the defendant neighbours on notice of her decision noting that the terms of the transfer were “unconscionable”.
The deceased then met with a second lawyer (the defendant lawyer in this case). The neighbours also retained counsel and a new agreement for the transfer was signed. The lawyer completed the transfer of the deceased’s property to the husband only. In exchange, both husband and wife provided an undertaking to allow the deceased to live in his home and to look after him. According to the plaintiff estate trustee, the deceased had only signed a direction for the transfer of the property to the husband and wife jointly.
With the assistance of the second lawyer, the deceased also granted power of attorney for property to the defendant wife and signed a new Will naming his sister as his beneficiary.
There was a dispute over how much care the husband and wife provided to the deceased after the transfer. The neighbours also submitted that there was medical evidence suggesting that the deceased was becoming confused and declining cognitively by April of 2009.
In August of 2009, the deceased met with his cousin and nephew. He showed them his Will and the transfer documents and indicated that he never signed the transfer.
The deceased then retained a third lawyer who wrote to the neighbours revoking the previous power of attorney and advising them that they were going to be taking steps to set aside the transfer.
This lawyer also informed the defendant lawyer who assisted with the transfer that it was the deceased’s understanding that he had not sold his home. The new lawyer also requested the transferring lawyer’s file with the deceased’s authorization. The lawyer did not produce the file promptly.
The deceased then signed a new power of attorney for property in favour of his new counsel and his cousin and a new Will naming his cousin and nephew as beneficiaries.
The deceased died in February of 2010. In September 2011, the estate trustee brought a claim in unjust enrichment and solicitor’s negligence seeking among other things, an order transferring the property back to the estate (subject to the return of $100,000) or in the alternative, general and punitive damages and damages against the lawyer for solicitor’s negligence.
ANALYSIS
Unjust enrichment and genuine issue for trial:
The neighbours submitted that there was no genuine issue requiring a trial as the plaintiff’s claim for unjust enrichment failed. Referencing Petkus v. Becker[2], they argued that they had not been enriched by the transaction because they had provided care to the deceased in exchange, the deceased did not suffer a corresponding loss, and the agreement for purchase and sale provided a juristic reason for the transfer.
Justice Nakatsuru found that the nature of the relationship between the deceased and the defendants was material to the issue requiring a trial. Examining that relationship and what took place at the time of the agreement required credibility assessments and viva voce evidence that could not be obtained through a summary motion despite the expanded powers of the Court.
Is the plaintiff’s claim for punitive or general damages, against the neighbours, statute barred?
The defendants argued that the plaintiff’s claim for damages was brought outside the two- year limitation period and was statute barred.
Justice Nakatsuru stated that even if he considered this issue at this stage, it would only provide the defendants with partial summary judgement. After reviewing the principles set out by the Court of Appeal in Butera v. Chown[3], the Court concluded that there was no utility in granting summary judgment on this issue since it would not dispose of the action entirely. Furthermore, the claim for damages was essentially an alternative claim to the return of the property.
Referencing Cook v. Joyce[4], Justice Nakatsuru, noted that the determination of the limitation period defence required credibility assessment and factual findings that would need to be made at trial.
Did the lawyer’s negligence, if any, cause the plaintiff’s damages?
The plaintiff must show that the transferring lawyer’s actions were causally connected to the damages to establish liability against the lawyer. The test for causation is whether the injury would have occurred ‘but for’ the negligence of the lawyer, as per Pilotte v. Gilbert.[5]
The lawyer argued that there was no genuine issue requiring a trial since the deceased chose to ignore a previous lawyer’s advice and proceed with the transfer. Accordingly, the plaintiff estate trustee cannot prove that, ‘but for’ the lawyer’s negligence, the estate would not have suffered the alleged injury.
The plaintiff estate trustee relied on an expert opinion which concluded that in completing this transfer, the lawyer fell below the standard of care of a reasonably competent solicitor.
Justice Nakatsuru found that the issue of causation requires a trial for a number of reasons including: the lack of direct evidence available from the deceased; the unfairness of relying on a sole piece of evidence about the deceased ignoring another lawyer’s advice; and, the need to consider the complex matrix of the factual circumstances in assessing the degree of the solicitor’s negligence as well as causation.
Is the claim against the solicitor statute barred?
The Court noted that the viability of the claim against the solicitor rested on the principle of discoverability. Determining whether the discoverability principle applies, is a fact-based analysis.
The lawyer argued that the plaintiff discovered the claim shortly after the transaction closed on June 3, 2008, but certainly no later than September 1, 2009, when his counsel put the neighbours on notice of this claim.
The plaintiff alleged that the limitation period did not apply because the lawyer committed fraud during the course of the closing of the agreement. Alternatively, the plaintiff submitted that the claim was only discovered when the lawyer’s complete file was obtained. Counsel delayed the production of the complete file, which was required to discover the claim.
Ultimately, the issue of discoverability of the claim against counsel was a genuine issue requiring a trial and could not be determined on a summary judgment motion despite the expanded powers of the Court.
Takeaways:
Where the issues require in-depth credibility assessment and factual findings, the courts will be less inclined to grant summary judgment despite the expanded powers stipulated in the Rules and set out by the Supreme Court in Hryniak v. Mauldin, 2014 SCC 7 (CanLII), [2014] 1 S.C.R. 87.
This case is also a reminder that partial summary judgement creates the risk of inconsistent or duplicate judgments and may not be appropriate in cases involving an assessment of credibility.
This will be an interesting case to follow should it proceed to trial.
—
[1] Barberio Estate (Re) v Da Costa 2018 ONSC 6144 (CanLII).
[2] Petkus v. Becker, 1980 CanLII 22 (SCC)
[3] Butera v. Chown, 2017 ONCA 783 (CanLII) paras. 29 to 35
[4] Cook v. Joyce, 2017 ONCA 49 (CanLII) at para. 96
[5] Pilotte v. Gilbert, 2016 ONSC 494 (CanLII)
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