



COURT OF APPEAL FOR ONTARIO

CITATION: Kavanagh v. Lajoie, 2014 ONCA 187

DATE: 201403011

DOCKET: C56655

Cronk, Epstein and Benotto JJ.A.

BETWEEN

Laurie Kavanagh

Plaintiff (Respondent)

and

Mark Lajoie

Defendant (Appellant)

Claude-Alain Burdet, for the appellant

J. Alden Christian, for the
    respondent

Heard:  March 4, 2014

On appeal from the decision of Justice Paul B. Kane of
    the Superior Court of Justice, dated January 15, 2013.

By the Court:

[1]

This dispute is over the extent of the appellants ownership interest in
    residential property on Oakdale Avenue in Ottawa (Oakdale). The appellant and
    respondent are brother and sister. Prior to 2005 the parties father, Donald
    Lajoie, owned Oakdale and two other residences.  In that year, Mr. Lajoie gave
    one family-owned residence to the respondent and advised the appellant that he
    intended to give him the Oakdale property.  To this end, Mr. Lajoie arranged,
    through the services of his long-time solicitor Eric Honey, for the title to
    Oakdale to be transferred to him and the appellant as joint tenants.

[2]

Mr. Lajoies health began to deteriorate in 2006. He moved in with the
    respondent and her family, in Ottawa.

[3]

In 2007, the appellant and his wife moved to Saskatchewan.  After the
    move, the appellant attempted to persuade Mr. Lajoie to rent or sell Oakdale so
    that funds would be available to assist him and his wife to purchase a home.

[4]

In July of 2009, the appellant and his family visited Mr. Lajoie. 
    During the visit Mr. Lajoie, the appellant and the respondent discussed various
    ways the appellant could access money from Oakdale. No agreement was reached.

[5]

Within hours of the appellants departure from Ottawa to return home, Mr.
    Lajoie met with Mr. Honey at his office to change the ownership of Oakdale.  In
    accordance with Mr. Lajoies instructions, Mr. Honey prepared and registered
    documents to transfer Oakdale to Mr. Lajoie, thereby severing the joint tenancy
    and creating a tenancy-in-common with the appellant. As Mr. Lajoie had
    instructed, Mr. Honey then transferred Mr. Lajoies half-interest in Oakdale to
    the respondent.

[6]

Mr. Lajoie died on June 4, 2010. It was only then that the appellant learned
    of the 2009 transactions that left him sharing ownership of Oakdale with the
    respondent, as a tenant-in-common.

[7]

In July 2011, the respondent brought an application for partition and
    sale of Oakdale.  That application was dismissed. However, on consent, Oakdale
    was sold and the proceeds were paid into court pending the trial judges
    decision regarding the appellants entitlement to an order setting aside the 2009
    transactions.

[8]

At trial, the appellant advanced two arguments in support of his
    position that the 2009 transactions should be set aside. First, he submitted
    that Mr. Lajoie gifted Oakdale to him in 2005 and the gift was not defeated by
    severing the joint tenancy.  Second, even if severing the joint tenancy could
    have defeated the gift, the transaction should be set aside on the basis that
    it was a result of the respondents undue influence on Mr. Lajoie.

[9]

The trial judge rejected both arguments.  He concluded that Mr. Lajoies
    promise to the appellant in 2005 and the creation of the joint tenancy did not,
    in law, create an
inter vivos
gift.  Second, the trial judge held that
    the appellant had not satisfied the onus of establishing that the 2009
    transactions were the result of undue influence.

[10]

The
    appellant renews both arguments on appeal.

[11]

We
    see no error in the trial judges findings. Therefore, the appeal must be
    dismissed.

ANALYSIS

(1)

Did Mr. Lajoies promise to the appellant and the subsequent creation
    and registration of a joint tenancy create an irrevocable
inter vivos
gift of Oakdale to the appellant?

[12]

We
    disagree with the appellants submission that Mr. Lajoies promise to give him
    Oakdale, followed by the creation of the joint tenancy, established an
    irrevocable
inter vivos
gift.

[13]

For
    a gift to be valid and enforceable it must be perfected. In other words, the
    donor must have done everything necessary and in his power to effect the
    transfer of the property.  An incomplete gift is nothing more than an intention
    to gift. The donor is free to change his mind.  See
Bergen v. Bergen
[2013] B.C.J. No. 2552.

[14]

The
    appellant pointed to no legal authority in support of his proposition that
    creation of the joint tenancy completed Mr. Lajoies promise of Oakdale to the
    appellant.  In fact, by putting title of Oakdale into joint tenancy  with the
    attendant right to deprive the appellant of half of the property through
    severance  Mr. Lajoie defeated any finding that an irrevocable
inter vivos
gift was created.

[15]

In
    any event, the appellants argument cannot succeed as it would be contrary to the
Statute of Frauds,
R.S.O. 1990, c. S. 19, as amended S.O. 1994, c. 27
.

(2)

Did the trial
    judge err in refusing to set aside the 2009 transactions on the basis of undue
    influence?

[16]

The
    appellant argues that the trial judge erred by failing to conclude that Mr.
    Lajoies decision to sever the joint tenancy and transfer his half interest in
    Oakdale to the respondent was the result of undue influence by the respondent
    and must therefore be set aside.  He argues that the trial judge misapprehended
    the evidence and placed improper weight on the respondents testimony.

[17]

We
    see no reason to interfere.

[18]

Equity
    will intervene and set aside arrangements such as the impugned transactions if
    it can be demonstrated that they were obtained through undue influence.

[19]

Geffen
    v. Goodman Estate
, [1991] 2 S.C.R. 353, and
Bank of Montreal v. Duguid
(2000), 47 O.R. (3d) 737 (C.A.) are two of the leading cases on the doctrine of
    undue influence and its evidentiary companion, the presumption of undue
    influence. The concept of undue influence focuses on a persons dominance over another
    persons will by exercising a pervasive influence on him or her, whether
    through manipulation, coercion, or outright abuse of power. The onus is on the
    party claiming undue influence to prove affirmatively that such influence was,
    in fact, exerted by the other party expressly for the purpose of securing some
    advantage.

[20]

The
    trial judge rejected the appellants argument that the respondent obtained her
    one-half interest in Oakdale through the use of undue influence over Mr. Lajoie
    and concluded that the 2009 transactions were the result of Mr. Lajoies free
    mind, through the following analysis.

[21]

The
    trial judge recognized that the potential existed for the respondent to
    dominate or unduly influence Mr. Lajoie given the nature of their relationship
    and Mr. Lajoies dependence on the respondent during the last few years of his
    life.

[22]

Having
    found the potential for domination, the trial judge turned his mind to whether
    the respondent had actually abused her relationship with Mr. Lajoie to secure
    part of Oakdale. The trial judge acknowledged that while the respondent was interested
    in gaining half of Oakdale at the appellants expense, this motivation, even
    given the opportunity the respondent had to unduly influence her father, would
    not give rise to a finding of undue influence.  There was an abundance of
    evidence that demonstrated that Mr. Lajoie was an independent man known to
    freely exercise his own will.

[23]

The
    trial judge focused, then, on the actual circumstances surrounding the
    transactions and made the following findings.  While the respondent drove her
    father to Mr. Honeys office, Mr. Lajoie and Mr. Honey met alone to discuss Mr.
    Lajioes decision to sever the joint tenancy and transfer his interest in
    Oakdale to the respondent.  Mr. Honey was sensitive to the family dynamics and
    accepted Mr. Lajoies explanation that he had lost patience with the
    appellants repeated requests to access the equity in Oakdale. Mr. Honey also understood
    that Mr. Lajoie wanted to show his appreciation for the support the respondent
    and her husband had given him since 2006.

[24]

The
    trial judge also accepted Mr. Honeys testimony that he had no concerns about
    Mr. Lajoies ability to instruct him  either with respect to his mental
    competency or his ability to freely make the decisions reflected in the
    instructions.

[25]

On
    these findings, the trial judge concluded that the appellant had not
    demonstrated that the 2009 transactions had come about as a result of the
    respondents undue influence over Mr. Lajoie.

[26]

The
    trial judges findings of fact are amply supported by the evidence.  We see no
    reason to interfere with the trial judges rejection of the appellants
    argument that the 2009 transactions should be set aside based on undue
    influence.

[27]

While
    the appellant takes issue with Mr. Honeys involvement and the legal services
    he provided, we do not see how any of these concerns assist the appellants
    arguments in this matter.

[28]

Given
    the family history and the timing and lack of communication surrounding the
    2009 transactions, we understand the appellants difficulty accepting the
    consequences of Mr. Lajoies change of heart regarding the ownership of
    Oakdale. However, there is no evidence to support a finding that this change
    came about by the respondents undue influence over Mr. Lajoie. And once Mr.
    Lajoie independently decided to give half of Oakdale to the respondent, nothing
    in law prevented him from severing the joint tenancy and transferring his
    interest.

[29]

As
    a result, as the trial judge held, the appellant is only entitled to one half
    of the proceeds of the sale of the property.

[30]

Finally,
    we see no error in the trial judges decision that the issues raised in the
    appellants counterclaim be dealt with in the reference over the division of
    the proceeds of the sale of Oakdale that are currently held in court.

[31]

We
    note that leave to appeal the trial judges costs award was not sought.  In any
    event, we see no error in principle in the trial judges costs award. Nor, in
    our view, is his costs award plainly wrong.

DISPOSITION

[32]

For
    these reasons, the appeal is dismissed. The respondent is entitled to her costs
    of the appeal fixed in the amount of $15,000, including disbursements and
    applicable taxes.

Released: Mar. 11, 2014                                         E.A.
    Cronk J.A.

EAC                                                                 Gloria
    Epstein J.A.

M.L.
    Benotto J.A.


