Deputy premier wins property sale dispute at Superior Court

By Sabrina Nanji November 18, 2020

Health Minister Christine Elliott has won $1,014,990.96 in a legal case against a property developer who was a longtime friend and political donor, after a real estate deal fell through.

According to a Superior Court decision filed on November 9, developer Saverio Montemarano had agreed to purchase a property on Garden Street in Whitby from Elliott for $5 million in 2017.

He backed out when he realized it was zoned for a church, per a long-standing Whitby bylaw; Montemarano had planned to build a retirement home.

Elliott sold the property, which had been her personal residence, for $4.3 million about a year later, and the judge ruled Montemarano must pay her $700,000 in damages related to that discrepancy, as well as $242,950 for a real estate commission she had to pay on the property’s eventual sale (her deal with Montemarano didn’t involve realtors or commissions).

Per the ruling, Elliott is also owed $60,672 for interest she incurred on $3,378,727 in loans and mortgages related to the property and to a Toronto residence she purchased ahead of the Whitby sale’s aborted closing date. Elliott had intended to use the funds from the Whitby land sale to purchase the new property and pay off the loans, the judge wrote.

She was also awarded $10,287 in property carrying costs.

The judge didn’t buy Montemarano’s argument that Elliott should have revealed the zoning bylaw because they were pals. Montemarano also friends with her late husband, former Canadian finance minister Jim Flaherty, and supported both of their political careers, the decision said.

Montemarano donated $777 to Elliott’s PC leadership bid in 2018 and thousands to the PC Party over the years, according to Elections Ontario’s disclosures.

“The defendant’s argument that the plaintiff owed him a fiduciary duty to disclose the bylaw is based upon the long-standing friendship which he and the plaintiff had which he describes as one of trust and confidence, which included supporting her and her late husband’s political career in the past, as well as family dinners … This is not sufficient to establish a fiduciary relationship,” wrote Justice Eugenia Papageorgiou.

The judge also noted Montemarano is a “sophisticated land developer” and “knows how to check zoning.”

Elliott’s lawyer, Ken Prehogan, noted the case arose before she was a cabinet minister. 

Before becoming Ontario’s deputy premier and minister of health in 2018, Elliott was a long-time PC MPP who stepped down after losing the leadership contest to Patrick Brown in 2015. In between that time she served as the first patient ombudsman.

Montemarano also had close ties to former PC premier Mike Harris and was at the centre of a 2000 Queen’s Park controversy that also involved a land sale in Whitby.