Estate's Claim To Recover $700,000 Gift From Elderly Man To Fiancée Dismissed

• Published date: 16 March 2021
• Subject Matter: Litigation, Mediation & Arbitration, Family and Matrimonial, Trials & Appeals & Compensation, Wills/ Intestacy/ Estate Planning
• Law Firm: Gardiner Roberts LLP
• Author: Mr James Cook

We have previously written about gratuitous transfers of real estate between family members, and the requirement on the recipient's part to prove that the transfer was intended to be a gift if the purpose of the transaction is subsequently challenged. A recent decision of the Ontario Court of Appeal affirmed similar principles in the context of a transfer of $700,000 from an elderly man to a woman who was alleged to have taken advantage of him: Zachariadis Estate v. Giannopoulos Estate, 2021 ONCA 158.

The appeal involved the estate of Dr. George Zachariadis who in 1996 began a romantic relationship with Despina Giannopoulos. At the time, Dr. Zachariadis was divorced from his former spouse and was estranged from his two daughters. He was not invited to their weddings and never met his grandchildren. Their estrangement continued until his death.

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

In November 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.

Dr. Zachariadis passed away in February 2015, after being diagnosed with cancer a few months earlier. Dr. Zachariadis died without a will. As a result, his estate passed on intestacy to his two daughters, who were appointed co-estate trustees in December 2015.

On December 29, 2017, the daughters commenced an action on behalf of their father's estate to recover the $700,000 payment for the estate. They alleged breach of trust, fraud, conversion, and unjust enrichment.

In November 2019, the Honourable Markus Koehnen of the Ontario Superior Court of Justice dismissed the estate's action in its entirety.

Koehnen J. determined, firstly, that the estate's action was commenced outside the strict two-year limitation period set out at s. 38 (3) of the Trustee Act. In that regard, the applicable limitation period commenced at the time of Dr. Zachariadis's death and not, as argued by the estate, when the claim was discovered by the estate trustees. Koehnen noted that while the rule may seem harsh, it was a specific policy choice in the legislation since, at common law, any claim by the deceased would have been extinguished entirely on death. As a compromise, the legislature provided a...