



COURT OF APPEAL FOR ONTARIO

CITATION: Zachariadis Estate v. Giannopoulos Estate, 2021
    ONCA 158

DATE: 20210312

DOCKET: C68520

Rouleau, Benotto and Thorburn JJ.A.

The Estate of George
    Paul Zachariadis, deceased, by his Estate Trustees 
    Alessandra Saccal and Romina Saccal

Plaintiffs (Appellants)

and

The Estate of Despina Giannopoulos, deceased, by her  
    Estate Trustees Aris Giannopoulos and Parthena Giannopoulos
,  
    Dr. Aris Giannopoulos, John Doe and Doe Corporation

Defendants
(
Respondents
)

Norman Groot and Geoff Keeble, for the appellants

Justin de Vries and Diane Vieira, for the
    respondents

Heard: February 4, 2021 by video conference

On appeal from the judgment of Justice Markus Koehnen of
    the Superior Court of Justice, dated November 13, 2019, with reasons reported
    at 2019 ONSC 6505, and from the costs order, dated January 28, 2020, with
    reasons reported at 2020 ONSC 588.

Rouleau J.A.:

OVERVIEW

[1]

Dr. George Zachariadis began a romantic relationship with Despina
    Giannopoulos in 1996. Dr. Zachariadis had divorced his former spouse and was estranged
    from his two daughters, Alessandra and Romina Saccal, the appellants in this
    action. Dr. Zachariadis was not invited to their weddings and never met his grandchildren.
    Their estrangement continued until his death.

[2]

In July 2014 Dr. Zachariadis moved into Ms. Giannopouloss apartment.
    They had plans to get married. Dr. Zachariadis also acted as a father figure to
    Ms. Giannopouloss son Aris and transferred his medical practice to him.

[3]

On or about November 12, 2014 Dr. Zachariadis gave Ms. Giannopoulos a
    bank draft for $700,000, which she deposited into her bank account. The only notations
    on the bank draft were the words Payment to Despina inscribed on the Re
    line.

[4]

In December 2014 Dr. Zachariadis was diagnosed with cancer. He was
    hospitalized on February 2, 2015 and died two weeks later on February 19, 2015.
    Shortly before his death, Ms. Giannopoulos contacted the appellants to inform
    them of Dr. Zachariadiss imminent passing. The appellants attended at the
    hospital but Dr. Zachariadis was unconscious by the time they arrived.

[5]

Dr. Zachariadis died without a will. As a result, his estate passed on
    intestacy to the appellants, his two adult daughters. The appellants applied
    and were appointed co-estate trustees on December 4, 2015.

[6]

On December 29, 2017 the appellants commenced this action to recover the
    $700,000 payment for the estate. They alleged breach of trust, fraud at equity,
    conversion and unjust enrichment. The respondents moved for summary judgment
    dismissing the appellants claim.

[7]

The motion for summary judgment was heard on August 20, 2019. On a
    motion returnable the same day, the appellants sought to adjourn the hearing in
    order to examine eight non-party witnesses under r. 39.03 of the
Rules of
    Civil Procedure
, R.R.O., Reg. 194. The motion judge refused the
    adjournment for three reasons: the appellants had failed to act with reasonable
    diligence in seeking the examinations; the examinations were contrary to r.
    39.02; and the examinations were unlikely to add anything of substance to the motion.

[8]

The motion judge then granted summary judgment dismissing the claim. He
    did so on two bases. First, he found that the appellants action was commenced
    outside the strict two-year limitation period set out at s. 38(3) of the
Trustee
    Act
, R.S.O. 1990, c. T.23
.
    Second, on the merits, he found that the respondents had established that the $700,000
    payment was a valid gift and that, as a result, the claim could not succeed.

[9]

In a costs endorsement dated January 28, 2020 the motion judge awarded
    the respondents substantial indemnity costs fixed in the amount of $199,602.46.
    The motion judge determined that the fraud claims made by the estate were
    unsupported and that the appellants had adopted an unnecessarily aggressive
    approach that tended to lengthen the litigation. The motion judge therefore exercised
    his discretion to award costs on a substantial indemnity basis and made the
    order against the estate as well as against the appellants as estate trustees.

NATURE OF THE APPEAL

[10]

The
    appellants seek to set aside both the motion judges order granting summary
    judgment and the costs order.

[11]

The
    appellants argue that the motion judge erred in finding that their action was
    statute-barred. They renew their argument that Ms. Giannopouloss conduct
    constituted fraudulent concealment, tolling the two-year limitation period. The
    appellants also argue that the motion judge ought to have granted the requested
    adjournment in order to allow them to present additional affidavit evidence at
    the hearing of the motion.

[12]

On
    the merits, the appellants maintain that they presented sufficient evidence of suspicious
    circumstances surrounding the alleged gift to warrant a trial. They emphasize
    the motion judges failure to grapple with the notation on the bank draft
    indicating that the $700,000 was intended as a payment. The appellants argue
    that the motion judge should not have accepted Ms. Giannopouloss videotaped
    testimony and rejected their affidavit evidence without also hearing
viva
    voce
evidence from them.

[13]

Finally,
    the appellants propose to file fresh evidence consisting of documents and
    correspondence exchanged between Ms. Giannopoulos or her representatives and
    the Canada Revenue Agency (CRA). The fresh evidence, if admitted, would indicate
    that Ms. Giannopoulous referred to Dr. Zachariadis as an arms-length party
    for tax purposes, undermining the purportedly romantic nature of their
    relationship.

[14]

For
    the reasons that follow, I would dismiss the appeal.

ANALYSIS

(1)

Adjournment request

[15]

The
    appellants submit that the motion judge ought to have granted the adjournment
    request. They argue that, in order to properly rule on the motion for summary
    judgment, it was necessary that the court hear additional evidence from a list
    of non-party witnesses, including bank employees and Dr. Zachariadiss physician.
    The appellants argue that the bank employees might have knowledge of the issuance
    of the bank draft, and that the physician might be able to say whether Dr.
    Zachariadis would have been physically capable of visiting the bank.

[16]

I
    would reject this ground of appeal. The decision to grant or refuse an
    adjournment is discretionary:
Khimji v. Dhanani
(2004), 128 A.C.W.S.
    (3d) 904 (Ont. C.A.), at para. 14. The motion judges application of r. 39 of
    the
Rules of Civil Procedure
is entitled to deference. The motion
    judge determined that the appellants should not be granted additional time to
    examine the non-party witnesses. He explained that the appellants could and
    should have scheduled the examination of the non-party witnesses before the
    cross-examination of Ms. Giannopoulos. The appellants knew the identities of
    the witnesses long before the summary judgment motion was scheduled. The
    appellants had attended at Civil Practice Court on July 31, 2019 to seek a
    prior adjournment without raising the issue. They provided no satisfactory
    explanation for the delay in arranging the examinations.

[17]

In
    any event, the motion judge found that the proposed non-party examinations would
    have added little to the evidentiary record. The motion judge had before him a
    statement from RBC indicating that the preparation of the $700,000 bank draft
    was, by all appearances, a normal banking transaction of which its employees
    had no memory. The motion judge also had Dr. Zachariadiss medical records,
    accompanied by a letter from his physician, Dr. Yee, stating that she had no
    independent recollection beyond the clinical notes which had already been put
    before the court.

[18]

The
    motion judge took into account all of the relevant factors before deciding to
    deny the adjournment request. Nothing suggests that he exercised his discretion
    unreasonably.

(2)

Was the $700,000 payment a valid gift?

[19]

The
    appellants argue that the motion judge erred in finding that the $700,000
    payment was a valid gift. They submit that in reaching this conclusion the
    motion judge failed to consider and give adequate weight to the presence of numerous
    suspicious circumstances. Had he properly considered and weighed the suspicious
    circumstances, he would have concluded, at a minimum, that a trial was required
    to fully appreciate the circumstances surrounding the issuance and delivery of
    the bank draft, and to assess Ms. Giannopouloss credibility. The appellants argue
    that the gift is in the nature of a deathbed donation and, given the absence of
    any corroborative evidence, demands the strictest scrutiny.

[20]

The
    suspicious circumstances that the appellants suggest were present include:

1.

The $700,000 bank d
raft was issued when there was only $708,531.15 in
    Dr. Zachariadiss account;

2.

No one was present when Dr. Zachariadis gave Ms. Giannopoulos the bank
    draft and he did not explain how he arrived at the $700,000 figure;

3.

Ms. Giannopoulos did not speak to anyone about having received the
    money;

4.

Despite Dr. Zachariadis telling Ms. Giannopoulos that it was a gift, the
    word gift does not appear on the bank draft, which instead reads payment;

5.

Medical records indicate that two days after the bank draft was
    prepared, Dr. Zachariadis was only able to walk five to ten minutes on level
    ground due to muscle weakness and lack of energy, raising questions as to whether
    Dr. Zachariadis was physically able to attend the bank to have the draft
    issued;

6.

Ms. Giannopoulos testified that Dr. Zachariadis removed his property
    from her apartment before he died, yet she says she did not anticipate he was
    going to die;

7.

Despite Dr. Zachariadis having lived with Ms. Giannopoulos prior to his
    death, she did not have any of his personal belongings, such as his wallet or
    passport;

8.

Although Ms. Giannopoulos testified that, while in hospital, Dr.
    Zachariadis gave her a power of attorney for property, she was unable to locate
    it; and

9.

Ms. Giannopoulos testified that she wanted to obtain medical treatment
    in the United States for Dr. Zac
hariadis and that she wanted to use her own
    money for this, not the $700,000 gift.

[21]

I
    see no basis to interfere with the motion judges finding that the $700,000 payment
    was a gift. The motion judge had the benefit of viewing Ms. Giannopouloss videotaped
    testimony, including her cross-examination. He also had voluminous evidence
    filed by the appellants, including affidavits from each of them. The motion
    judge properly identified the applicable law, including that the onus rested on
    the respondents to prove that the payment was a gift. He noted however that:

While healthy skepticism may be
    appropriate and while the court should carefully scrutinize the cogency of the
    supporting evidence, the standard of proof remains the civil standard of proof
    on a balance of probabilities and not some higher standard:
Burns Estate v.
    Mellon
[2000] O.J. No. 2130 at para. 9 (C.A.).

[22]

The
    motion judge then set out the evidence in support of his conclusion that the
    payment was a gift. He noted, for example, that the couple had been in a
    relationship for 19 years and planned to marry; that Dr. Zachariadis had given
    Ms. Giannopoulos a cheque for $500,000 in July of 2014 that she had never
    cashed; that he told her the $700,000 bank draft was a gift; and that there
    were no restrictions on the use of the money. Much of this evidence came from
    the videotaped examination and cross-examination of Ms. Giannopoulos, whom the
    motion judge found to be a credible witness.

[23]

The
    motion judge also noted that there was no active concealment on Ms. Giannopouloss
    part, and that the respondents pointed to no conduct that made it more
    difficult for them to discover their alleged cause
of
action apart
    from
the
fact
    that Ms. Giannopoulos did not volunteer
the
receipt
of
a
    payment, which she was under no obligation to do.

[24]

The
    appellants argue that the motion judge should not have considered Ms.
    Giannopouloss videotaped evidence without hearing
viva voce
evidence
    from the Saccal sisters, especially if he knew or anticipated that he might
    reject some part of their affidavit evidence. The appellants point out that
    Romina Saccal was present in the courtroom to answer questions on her
    affidavit, and they argue that the motion judge should have asked her to give
    oral evidence before favouring Ms. Giannopouloss testimony. I disagree.

[25]

The
    appellants made no request and gave no indication that either sister would give
viva voce
evidence at the hearing of the motion. The motion judge had their
    affidavit evidence, and there was little that they could have added by their
    testimony.

[26]

The
    motion judge was entitled to rely on Ms. Giannopouloss videotaped evidence. He
    was well placed to assess Ms. Giannopouloss credibility, and his reasons on
    this point are comprehensive and cogent. His findings are owed deference. The
    appellants have not pointed to any palpable or overriding error.

[27]

The
    appellants rely principally on the fact that the motion judge did not
    specifically address each of the alleged suspicious circumstances that they
    identify. They argue that the presence of these many suspicious circumstances
    warranted a trial. As noted earlier, the appellants place particular emphasis
    on the motion judges failure to address the fact that the word payment was
    noted on the bank draft.

[28]

I
    see no merit in this ground of appeal. The motion judge had the benefit of
    extensive submissions and was clearly aware of the various alleged suspicious
    circumstances. The fact that he chose to address only a sampling of the alleged
    suspicious circumstances in his reasons does not constitute error. As this
    court acknowledged in
Canadian Broadcasting Corporation Pension Plan v. BF
    Realty Holdings Ltd.
, 214 DLR (4th) 121, at para. 64, citing
R. v.
    Burns
, [1994] 1 S.C.R. 656, [a] trial judge is not required in his or her
    reasons to demonstrate that all aspects of the evidence have been considered,
    nor is it necessary that reasons be given for every point raised in the case.
    As for the presence of the word payment on the bank draft, nothing suggests
    that the motion judge was unaware of that fact or failed to consider it. In any
    event, the word payment is neutral and does not necessarily imply that the
    payment was not a gift.

[29]

The
    motion judges conclusion that a trial was not warranted was similarly without
    error. A motion judges determination of what questions are appropriately decided
    on a motion for summary judgment is a question of mixed fact and law and is
    entitled to deference:
Hryniak v. Mauldin
, 2014 SCC 7, [2014] 1 S.C.R.
    87, at para. 81. The motion judge found Ms. Giannopoulos to be credible, and he
    was aware that, given her health, she would not be available to testify at a
    trial should one be ordered. In fact, she died approximately one week after the
    motion was argued.

[30]

As
    for the evidence filed by the appellants, the motion judge said:

The [appellants] have introduced
    no evidence, let alone evidence that is corroborated, to support their theory
    that Despina either withdrew the money herself or that she received it subject
    to a trust. Instead, the [appellants] have raised a number of factors they say
    are suspicious. Suspicion does not, however, amount to evidence. The
    [appellants] have had ample time to convert their suspicions into evidence but
    have failed to do so.

[31]

Nothing
    in the record before us, including the proposed fresh evidence, suggests that
    the motion judge erred in so concluding.

(3)

Is the action statute-barred?

[32]

At
    the hearing of the motion, the parties agreed that the applicable limitation
    period was the limitation set out at s. 38 of the
Trustee Act
. The
    relevant portion of that section is as follows:

38 (1) Except in cases of libel and slander, the
    executor or administrator of any deceased person may maintain an action for all
    torts or injuries to the person or to the property of the deceased in the same
    manner and with the same rights and remedies as the deceased would, if living,
    have been entitled to do, and the damages when recovered shall form part of the
    personal estate of the deceased

(3)
An action under
    this section shall not be brought after the expiration of two years from the
    death of the deceased
.

[33]

Unlike
    the general two-year limitation period set out at s. 4 of the
Limitations
    Act, 2002
, S.O. 2002, c. 24, Sched. B, which begins to run when the claim
    is discovered, the two-year limitation period at s. 38(3) of the
Trustee
    Act
begins to run strictly upon the death of the deceased:
Levesque v.
    Crampton Estate
, 2017 ONCA 455, at para. 51. In this case, the appellants
    brought the action roughly two years and ten months after the death of Dr.
    Zachariadis.

[34]

The
    appellants argued before the motion judge, and again on appeal, that the
    equitable doctrine of fraudulent concealment ought to extend the limitation
    period at least to the moment the appellants became aware of the payment having
    been made.

[35]

As
    La Forest J. explained in
M.(K.) v. M.(H.)
, [1992] 3 S.C.R. 6, at pp.
    58-59, the doctrine of fraudulent concealment exists to ensure that a
    limitation period does not operate as an instrument of injustice. In order to
    invoke the doctrine, plaintiffs have traditionally been required to establish:
    (1) that the plaintiff and defendant had a special relationship; (2) that the
    defendants conduct was unconscionable in light of the special relationship;
    and (3) that the defendant concealed the plaintiffs right of action either
    actively or by wrongdoing.

[36]

After
    the hearing of this appeal, counsel for the appellants drew the panels
    attention to this courts recent decision in
Beaudoin Estate v.
    Campbellford Memorial Hospital
, 2021 ONCA 57, which draws upon Brown J.s reasons
    in
Pioneer Corp. v. Godfrey
, 2019 SCC 42, 437 D.L.R. (4th) 383. In
Pioneer
    Corp.
, the Supreme Court relaxed the requirement to establish the
    existence of a special relationship, stating at para. 54 that fraudulent
    concealment could apply if it would be, for
any
reason,
unconscionable
for the defendant to rely on the advantage gained by having concealed the
    existence of a cause of action (emphasis in original).

[37]

While
    these developments may ease the necessity of establishing a special
    relationship, neither
Beaudoin Estate
nor
Pioneer Corp.
materially
    affects the analysis in this case. The motion judge found that none of the conditions
    for fraudulent concealment had been made out on the facts. Nevertheless, the
    appellants argue that the motion judge erred.

[38]

As
    explained above, I see no basis upon which to interfere with the motion judges
    finding that the $700,000 payment was a valid gift. Consequently, even if it
    could be shown that Ms. Giannopoulos tolled the limitation period by her
    conduct, the outcome of the appeal would remain the same. In any event, I agree
    with the motion judges finding that Ms. Giannopoulos did not actively conceal
    the existence of the payment and that her failure to volunteer information
    about the gift was not unconscionable. Ms. Giannopoulos received what she
    understood to be a valid gift. She had no reason or duty to disclose the
    existence of the gift to the Saccals, whom she had never met. The doctrine of
    fraudulent concealment does not apply.

(4)

The fresh evidence

[39]

The
    appellants sought to file fresh evidence on appeal. The evidence consists of correspondence
    between the CRA and Ms. Giannopouloss solicitor and accountant. The
    correspondence all predates the hearing of the motion. In it, the CRA raises
    the possibility of requiring Ms. Giannopoulos, as the recipient of a gift from
    Dr. Zachariadis to pay taxes assessed on Dr. Zachariadis that remain unpaid.

[40]

The
    appellants submit that the respondents ought to have produced the documents in
    the course of the litigation, and that it was only by accident that they became
    aware of their existence after the motion judge rendered his decision. The
    appellants argue that one of the documents, a Notice of Objection filed by Ms.
    Giannopouloss accountant, is of particular importance because it represents her
    as being at arms length from Dr. Zachariadis and characterizes their
    relationship as one of friendship. The appellants argue that the Notice of
    Objection calls into question the romantic nature of the relationship and
    undermines Ms. Giannopouloss credibility.

[41]

I
    would not admit the fresh evidence. As the respondents explained, the payment
    of taxes was not raised as an issue in the claim. The exchanges with the CRA over
    Ms. Giannopouloss potential obligation to pay Dr. Zachariadiss taxes were at
    best of marginal relevance to the appellants claim to the $700,000 payment. It
    is understandable that the respondents did not see fit to produce these
    documents in the course of the litigation.

[42]

As
    for the relevance of the fresh evidence in assessing Ms. Giannopouloss
    credibility, the respondents filed affidavit evidence from her accountant. In
    it, the accountant explains that he drafted the Notice of Objection without
    approval or review by Ms. Giannopoulos, who was by then very ill. In other
    words, the Notice of Objection was no more than the accountants
    characterization of the relationship between Ms. Giannopoulos and Dr.
    Zachariadis for income tax purposes. Even if Ms. Giannopoulos had herself
    employed the words arms length, those terms take a particular meaning in the
    context of taxation. In our view, it is highly unlikely that the fresh evidence
    could have had any impact on the motion judges decision.

[43]

In
    any event, the documents ought to be excluded on the basis that they could have
    been obtained by the exercise of due diligence. When the respondents brought their
    motion for summary judgment, the appellants had a pending motion to obtain the
    respondents tax documentation from the CRA and were content to have that
    motion adjourned until after the summary judgment motion was heard.

(5)

Appeal as to costs

[44]

The
    appellants seek leave to appeal the order as to costs. They maintain that the
    motion judge gave disproportionate weight to the respondents settlement offers
    while failing to consider the settlement offers made by the appellants. They
    also argue that the motion judge gave undue weight to the appellants
    allegations of fraud. In their view, equitable fraud is not the same as common
    law fraud and does not carry the same stigma; similarly, the claim of
    fraudulent concealment is not the same as a pure claim of fraud and should not
    meet the same cost consequences. Finally, the appellants argue that the estate
    trustees ought not to have been held personally liable for costs. They argue
    that the litigation only arose as a result of the trustees seeking to ensure
    the proper administration of the estate by recovering the funds needed to cover
    the estates tax liabilities.

[45]

There
    is no basis to interfere with the motion judges award of costs. In concluding
    that substantial indemnity costs were appropriate, the motion judge considered
    the correct factors, including the allegations of fraud, the settlement offers,
    the need to discourage and sanction inappropriate behaviour by litigants and
    the factors listed under r. 57.01 of the
Rules of Civil Procedure
.

[46]

Similarly,
    I see no basis to interfere with the motion judges decision to award costs
    against the trustees personally. He rejected the suggestion that the appellants
    were simply trying to ensure that the estate had enough funds to pay the taxes
    owing to the CRA. His conclusion was well supported by the record.

CONCLUSION

[47]

For
    these reasons, I would dismiss the appeal and deny leave to appeal the costs
    order. I would award the respondents costs of the appeal against the estate
    fixed in the amount of $40,000 inclusive of disbursements and applicable taxes.

Released: March 12, 2021        P.R.

Paul Rouleau J.A.

I agree M.L. Benotto
    J.A.

I agree J.A. Thorburn
    J.A.


