



COURT OF APPEAL FOR ONTARIO

CITATION: Drakoulakos v. Stirpe, 2017 ONCA 957

DATE: 20171206

DOCKET: C63905

Strathy C.J.O., Juriansz and Huscroft JJ.A.

BETWEEN

Michael Drakoulakos

Plaintiffs (Appellant)

and

Martha Stirpe a.k.a. Martha Drakoulakos and Mark
    Stirpe and 1166054 Ontario Limited

Defendants (Respondents)

Daniel Zacks and Robert Drake, for the appellants

Ronald Bohm, for the respondents

Heard: December 4, 2017

On appeal from the judgment of Justice Paul M. Perell of
    the Superior Court of Justice, dated May 16, 2017.

REASONS FOR
    DECISION


[1]

This is an appeal from the summary judgment dismissing the appellants
    action for a declaration that his daughter holds assets in a numbered company
    in trust for him. The other respondents are the daughters husband and the
    company.

[2]

In 1996, the appellant incorporated the company making his daughter the
    sole shareholder and conveying a taxi license to the company. In 2003 he conveyed
    a second taxi license to the company. The appellant alleges the company was
    intended to hold the taxi licenses for tax purposes and the assets were meant
    to pass to his daughter only upon his death. The respondent daughter alleges
    the first license was a gift upon her graduation from university, and the
    second license was a gift upon the birth of her first child.

[3]

On the motion below, both parties proceeded on the basis that the claim
    related to a bare trust and that the limitation period was governed by the
Limitations
    Act, 2002,
S.O. 2002, c. 24, Sched. B
.
    The respondents took the position the appellant discovered his claim by 2004
    and no later than December 9, 2010. The appellants position on the motion was
    that his claim was discovered on December 9, 2010, and that a mental or
    psychological condition rendered him incapable of commencing an action within
    two years of that date.

[4]

The motion judge decided the case on a different basis than the parties
    had argued. First, he decided that the claim related to a resulting trust.
    Second, he decided that the appellants claim was known or ought to have been
    known in 2002. He observed this was more than 15 years before the action was
    commenced and thereupon dismissed the action as statute barred. He did not
    consider the application of the transition provisions of the
Limitations
    Act, 2002
.

[5]

The appellant argues, and counsel for the respondents properly concedes,
    that on the facts found by the motion judge there is no limitation period for a
    claim against the trustee of a resulting trust for property still in the
    possession of the trustee. The two prerequisites for the application of the
    transitional provision in s. 24 (6) of the present Act are satisfied: there was
    no limitation period for such a claim under the former Act and the claim was
    discovered before January 1, 2004.

[6]

The respondents submit that the appeal should be dismissed for two
    reasons. First, they submit the appellant should be held to his concession
    before the motion judge that his claim would be statute barred but for the
    application of s. 7 of the
Limitations Act, 2002
, which provides the
    limitation period does not run during any time during which the person with the
    claim is incapable of proceeding because of a physical, mental or psychological
    condition. Second, they submit that the appellant should not be permitted to
    advance a new argument on appeal.

[7]

In our view, the appellants concession must be understood in the
    context in which it was made. The concession was made in the context that he was
    claiming a bare trust and that the discoverability date was after the coming
    into force of the
Limitations Act, 2002
.

[8]

Further, it is our view that it is appropriate and in the interests of
    justice that we entertain the appellants argument. The appellant did not have
    the opportunity to advance the argument in the court below, his underlying
    claim is equitable in nature, the argument raises a pure question of law, the
    record provides a complete evidentiary basis for the determination of the
    argument, and there is no prejudice to the respondents.

[9]

Once the motion judge decided to proceed on a framework different from
    the one on which the parties had presented argument, he was obligated to apply
    the correct law to it. As noted, the parties agree that the correct law
    applicable to the facts found by the motion judge is that no limitation period
    applies to the appellants claim for property still in the possession of a
    trustee of a resulting trust.

[10]

We
    do not agree with the respondents argument that they are prejudiced because
    they were unable to raise the equitable defence of laches before the motion
    judge. The only basis on which the respondents brought a motion seeking summary
    judgment was their limitations defence. They may raise the defence of laches at
    trial or on another motion if they so wish. It would not be appropriate for
    this court to deal with the matter on appeal.


[11]

The
    appeal is allowed, the order of the motion judge is set aside, and replaced
    with an order dismissing the respondents motion. In the circumstances, the
    costs of the motion and of the appeal will be in the cause.

G.R. Strathy C.J.O.

R.G. Juriansz J.A.

Grant Huscroft J.A.


