



COURT OF APPEAL FOR ONTARIO

CITATION: McMurtry v. McMurtry, 2017 ONCA 296

DATE: 20170412

DOCKET: C62204

LaForme, Pepall and Pardu JJ.A.

BETWEEN

Mildred McMurtry

Plaintiff (Respondent)

and

John
    McMurtry
and
Mic Mac Realty
    (Ottawa) Ltd.

Defendants (
Appellant
)

AND BETWEEN

John McMurtry

Plaintiff

and

Jim
    McMurtry

Defendant

AND BETWEEN

Jim McMurtry

Plaintiff by Counterclaim

and

John
    McMurtry
, Brenda McMurtry, Barry Coons, Bouris Wilson
    LLP and Mic Mac Realty (Ottawa)

Defendants by Counterclaim

Jeff G. Saikaley, for the appellant

Mark W. Smith, for the respondent

Heard: February 21, 2017

On appeal from the judgment of Justice Sylvia Corthorn of
    the Superior Court of Justice, dated April 29, 2016, with reasons reported at
    2016 ONSC 2853.

ENDORSEMENT

[1]

This case involves a dispute concerning the control of a family company,
    Mic Mac Realty (Ottawa) Ltd. (MMR).

[2]

Mildred McMurtry and Keith McMurtry were married and had six children.
    After buying out his co-founder, Keith McMurtry was the sole owner of MMR. Out
    of a total of 22 shares, he gave four shares to each of his three sons, John
    (the appellant), Jim and Michael. Keith retained the remaining ten shares.

[3]

After Michael died in 1983, Jim and John each received half of Michaels
    shares; each then had six shares as of August 1984.

[4]

Keith died in 1998. Under his will, Mildred was the residuary
    beneficiary of Keiths estate. The will made no mention of Keiths ten shares
    (the Disputed Shares).

[5]

Mildred and John each claim ownership of the Disputed Shares. Mildred
    claims they are hers as the residuary beneficiary of her husbands estate. John
    claims that his father gifted the shares to him before he died.

[6]

The dispute over the shares has given rise to two actions. In 2011, John
    brought an action against Jim, seeking a declaration of ownership of the
    Disputed Shares and various oppression remedies. In response, Jim filed a
    defence and a counterclaim against various parties including John and his wife
    Brenda. His pleading asserts that he and John each own six shares and Mildred
    owns ten shares of MMR. In 2012, Mildred sued John, seeking a declaration of
    ownership of the Disputed Shares. She is also seeking an oppression remedy and
    related relief. The trial judge is presiding over both Johns and Mildreds
    actions.

[7]

A case management master ordered that Mildreds action be tried first. Before
    her trial began, the parties agreed that the only aspect of the claims made on
    behalf of Mildred to be decided at this stage was the request for declaratory
    relief with respect to ownership of the Disputed Shares. That determination was
    to be binding on the parties to the companion action. In essence, the matter
    proceeded as a trial of the issue of share ownership.

[8]

This issue was tried over eight days. John argued that Keith had given
    him the Disputed Shares
inter vivos
, or had an intention to give the
    Disputed Shares to John that persisted until Keiths death, and his executors
    had subsequently completed the gift. He also submitted that Mildreds claim for
    a declaration was statute barred.

[9]

The trial judge ruled that there had been no gift to John. In addition,
    Mildreds claim to the declaration of ownership was not statute barred. 
    Accordingly, Mildred was the beneficial owner of the Disputed Shares as the
    residuary beneficiary of Keiths estate. The trial judge went on to hold that
    because of certain statements made by Mildred, she held the shares in a
    constructive trust for John.
[1]


[10]

John appeals from the April 29, 2016 judgment declaring that Mildred is
    the beneficial owner of the shares. He does not raise the constructive trust
    issue that is also the subject matter of that judgment and Mildred does not
    advance any cross-appeal of that portion of the judgment.

[11]

In light of the unusual procedure agreed to by the parties and their
    positions, we are addressing the appeal of the April 29, 2016 judgment in the
    absence of any additional judgment.

Analysis

[12]

We see no reason for this court to interfere with the trial judges conclusion
    that the Disputed Shares were not gifted to John.

[13]

On our review of the record, including the trial transcripts, the trial
    judges finding that there was insufficient evidence of a gift is entirely
    reasonable. For instance, the Declaration of Transmission that John executed
    on December 15, 1999 stated that the Disputed Shares remained vested in Keiths
    estate as of that date and that John was the beneficiar[y] properly entitled
    by law to receive the shares. The trial judge found that the declaration was
    intended to identify John as the beneficiary of the Disputed Shares pursuant to
    the will and not the owner by virtue of an
inter vivos
gift.  Since
    John knew the contents of the will, he swore a document he knew to be untrue,
    which hurt his credibility.

[14]

It follows from the finding that the Disputed Shares were not gifted to
    John that Mildred became the beneficial owner of the shares as the residuary
    beneficiary under the terms of the will.

[15]

John also submits the trial judge erred in finding that Mildreds claim
    was not statute barred. In our view, for the purposes of the trial of the issue
    of share ownership, it was unnecessary for Mildred to seek a formal declaration
    of ownership and as such, the limitation period was not relevant.

[16]

In the circumstances, what was necessary was a factual determination as
    to whether the Disputed Shares had been gifted to John. A factual determination
    that the shares were not gifted (and the legal conclusion flowing from that
    determination that the shares thus fell into the residue of the estate making
    Mildred the beneficial owner under the terms of the will) would have been
    sufficient to establish Mildreds status as a shareholder for the purposes of
    any action against John.

[17]

In essence, a declaration was not required. Declaration or no
    declaration the finding of no gift is now
res judicata
and binding in
    any further proceedings.

[18]

That said, it has yet to be decided whether Mildreds other claims are
    statue barred. As noted, the parties agreed that the only issue to be decided
    at this stage was the claim for declaratory relief. Whether Mildreds other
    claims are statute barred remains to be decided.

Disposition

[19]

The appeal is dismissed. Mildred is awarded her costs of the appeal in
    the amount of $12,000 inclusive of disbursements and HST as agreed to by the
    parties.

H.S.
    LaForme J.A.

"S.E. Pepall
    J.A."

G. Pardu J.A.





[1]
On its face, the trial judges formal judgment appears contradictory. She
    declares that Mildred is the beneficial owner of the Disputed Shares and she
    declares that Mildred has held them in a constructive trust for John since
    January 1999. However, the parties say that the trial judge will subsequently
    determine whether all, or only part of, the shares are held in constructive
    trust.


