



COURT OF APPEAL FOR ONTARIO

CITATION: Latner Estate v. Latner, 2017 ONCA 859

DATE: 20171108

DOCKET: C61923

Sharpe, Rouleau and Fairburn JJ.A.

BETWEEN

The Estate of Albert J. Latner (Deceased) by its
    Estate Trustees Steven David Latner and Michael Elliot Latner

Plaintiffs (Respondents)

and

Joshua I. Latner and JILCO Realty Group Ltd.

Defendants (Appellants)

AND BETWEEN

The Estate of Albert J. Latner (Deceased) by its
    Estate Trustees Steven David Latner and Michael Elliot Latner

Plaintiffs (Appellants
by way of cross-appeal)

and

Joshua I. Latner
and Clariden Leu AG

Defendants (
Respondent
by way of cross-appeal
)

David Chernos and Andrew Finkelstein, for the appellants/respondent
    by way of cross-appeal

Ronald B. Moldaver, Q.C., for the respondents/appellants
    by way of cross-appeal

Heard: October 30, 2017

On appeal from the judgment of Justice Thomas J. McEwen
    of the Superior Court of Justice, dated March 1, 2016, with reasons reported at
    2016 ONSC 364, 129 O.R. (3d) 283.

REASONS FOR DECISION

[1]

On February 22, 2007, the late Albert Latner, his four children, Steven,
    Elise, Michael and Joshua and various related corporations entered into an
    agreement by which Albert relinquished control over his companies. In exchange,
    the children and their respective corporations agreed to make certain payments
    to Albert (the Latner Family Agreement).

[2]

Albert brought claims against Joshua seeking payment of the sums owed to
    him pursuant to the Latner Family Agreement. The claims also sought repayment
    of a $13 million payment Albert made to Joshua in April 2007.

[3]

Prior to trial, Albert passed away and the claims were continued by his
    estate.

[4]

Joshua maintains that nothing was owed by him pursuant to the Latner Family
    Agreement because he had reached an oral agreement with Albert. Pursuant to
    that oral agreement, Albert would not require the payments stipulated in the Latner
    Family Agreement to be made. Albert also gave Joshua a one million dollar
    promissory note as part of the oral agreement. As for the claim for the return
    of the $13 million payment, Joshua maintains that it was a gift that was
    properly documented. There is simply no basis for requiring it to be returned.

[5]

At trial, the judge agreed with Joshua that the $13 million was a gift
    and he rejected the claim for its return. There was nothing in the Latner Family
    Agreement that would limit Alberts ability to gift money, even in such a large
    amount, to any of his children.

[6]

However, the trial judge determined that the alleged oral agreement to
    the effect that Joshua would not be required to make the payments provided for
    in the Latner Family Agreement was unenforceable. He also found that the one
    million dollar promissory note could not be set off against the sums found to be
    owing under the Latner Family Agreement because it was part of the
    unenforceable oral agreement.

[7]

According to the trial judge, the oral agreement was entered into before
    the Latner Family Agreement was concluded and ran afoul of ss. 1.2 and 9.6 of
    that agreement. Section 1.2 provides that :

(a) This Agreement shall, without further act or formality on
    the date of execution and delivery of the Agreement by all parties hereto, (i)
    constitute the entire agreement among the parties hereto with respect to the
    subject matter hereof as the Effective Date and (ii) supersede the 2003 Family
    Agreement and all other prior agreements, understandings, negotiations and
    representations, whether written or oral, among the parties hereto with respect
    to the subject matter hereof. For greater certainty, the 2003 Family Agreement
    shall, without further act or formality on the date of execution and delivery
    of this Agreement by all of the parties hereto, be of no further force and
    effect as of and from such date.

(b) For further certainty, in the
    event of any conflict between the provisions of this Agreement and the
    provisions of any agreement entered into with any person, firm or corporation
    who are not members of a Group, the provisions of this Agreement shall, as
    amongst the parties hereto, prevail.

Section 9.6 states that:

No supplement, modification, waiver or termination of this
    Agreement shall be binding unless executed in writing by all the parties bound
    thereby.

[8]

As a result, the trial judge found Joshua liable under the Latner Family
    Agreement and gave judgment in the amount of $2,776,895.00.

[9]

Joshua has appealed the finding of liability against him. Alberts
    Estate has cross-appealed the dismissal of its claim for the return of the $13
    million payment.

[10]

In
    our view, both the appeal and the cross-appeal must be dismissed. With respect
    to Joshuas appeal, he argues that the trial judge erred in finding that the
    oral agreement was made before the Latner Family Agreement was signed. He
    argues that a legally binding agreement was not reached until April 2007, some
    two months after the Latner Family Agreement was entered into. That is  when
    Albert undertook not to enforce the Latner Family Agreement in exchange for
    Joshua cancelling the promissory note. Based on this courts decision in
Shelanu
    Inc. v. Print Three Franchising Corp.
, [2003] O.J. No. 1919 (C.A.) the
    trial judge ought to have found the oral agreement to be enforceable despite
    the exclusionary clauses in the Latner Family Agreement.

[11]

We
    disagree. We see no basis to interfere with the trial judges conclusion that
    the oral agreement between Albert and Joshua was entered into before the
    parties concluded the Latner Family Agreement. Contrary to Joshuas submission,
    the record fully supports the trial judges factual conclusion in this regard.

[12]

As
    Joshua himself testified, the oral agreement was that, in exchange for Joshua
    agreeing to sign the Latner Family Agreement, Albert would not seek payments
    from him. He would also give Joshua a one million dollar promissory note in the
    event that Albert, because of pressure from his other children, may call upon
    Joshua to make some payments. In our view the further steps taken in April
    2007, do not alter the fact that the agreement Joshua seeks to enforce was
    reached before the Latner Family Agreement was entered into.

[13]

By
    its terms, the Latner Family Agreement terminated any prior written or oral
    agreement. In fact, it was designed to achieve finality with respect to the
    financial arrangements among Albert and his children. As the oral agreement
    preceded the Latner Family Agreement, it was superseded. Enforcing the oral
    agreement and the promissory note would undermine the purpose and intent of the
    Latner Family Agreement, and do so unbeknown to the other signatories.

[14]

On
    the cross-appeal, Alberts estate argues that because the $13 million was a
    gift to one of Alberts children, there is a presumption of a resulting trust
    in favour of Albert. In its view, the record is insufficient to rebut the
    presumption. Further, the record does not support the suggestion that the gift
    was somehow intended to compensate Joshua for having received less than his
    share of Alberts assets when those were allocated pursuant to the Latner Family
    Agreement and prior agreements.

[15]

We
    disagree. There was ample support for the trial judges finding that the $13
    million was a gift and that any presumption to the contrary had been rebutted.
    The gift was fully documented and Alberts intention that it be a gift was
    confirmed by testimony of witnesses independent of Joshua.

[16]

Proof
    of Alberts reason for making the gift is not required. In any event, wills
    prepared by Albert show that he believed the distribution of his assets was
    less than fair to Joshua. This was his belief even though he had not calculated
    a precise amount.

[17]

For
    these reasons, the appeal and cross-appeal are dismissed. As agreed by the
    parties, in the event of such an outcome, there should be no award of costs.

Robert
    J. Sharpe J.A.

Paul Rouleau J.A.

Fairburn J.A.


