ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-10-408744
DATE: 20120411

BETWEEN:

RHONDA KASTNER
Plaintiff

– and –

MILTON DAVIS
Defendant

Daniel F. Chitiz & Tamara Ramsey, for the Plaintiff
Michael R. Kestenberg, for the Defendant/Moving Party

HEARD: March 20, 2012

LEDERER J.:

[ 1 ] This is a motion for summary judgment. The action was begun almost ten years after the events on which it relies occurred. In the normal course, one would anticipate it to be out of time.

Background

[ 2 ] The plaintiff and the defendant met when the plaintiff became involved in managing a business that had been her father’s. The defendant, a lawyer, was representing the company in ongoing litigation. They became romantically involved. The relationship lasted approximately three years, from 1999 to 2002. The defendant believes that they shared “a spousal relationship”, that they were “a family unit”. [1] The plaintiff says she did not consider the defendant to be her spouse and refused to marry him when he asked. [2] Over the three years, money and property passed between them. The plaintiff says that, among these, was a loan that has not been re-paid and, by this action, seeks payment. It is the position of the defendant that the money being sought was in respect of a gift and cannot be the subject of a lawsuit, but that if it was a loan, any applicable limitation period has long since expired. The plaintiff says that, taken from when she “discovered” the claim, the action was commenced in time but that, even if she is found to be wrong in this, her relationship with the defendant was such that he owed her a fiduciary duty which he had breached. This is significant because, at the time, there was no limitation period directly applicable to a claim for breach of fiduciary duty and the plaintiff would, in such circumstances, be free to proceed with the action.

[ 3 ] The question on a motion for summary judgment is whether there is an issue requiring a trial. In assisting this court as to how to arrive at this determination, the Court of Appeal has identified a “full appreciation test”. The judge hearing the motion is required to ask: “can the full appreciation of the evidence and issues that is required to make dispositive findings be achieved by way of summary judgment, or can this full appreciation only be achieved by way of a trial?” It is not enough for the judge to have read and understood the evidence. The judge must fully appreciate the evidence such that it “permits a fair and just adjudication of the dispute.” [3]

The nature of the relationship

[ 4 ] The first question on this motion is whether the presence or absence of a fiduciary relationship between the plaintiff and the defendant is an issue requiring a trial.

[ 5 ] The concept of fiduciary duty focuses on trust and loyalty. The fiduciary relationship is one in which a party is required to act in the best interests of another. Breach of fiduciary duty can be articulated as a separate head of liability. [4] There are common relationships that have been established as being fiduciary in nature or having the potential, in the appropriate circumstances, to include the obligations of a fiduciary (directors to a corporation, trustees to a beneficiary and solicitors to a client). [5] On the other hand: “[t]he categories of relationships giving rise to fiduciary duties are not closed nor do the traditional relationships invariably give rise to fiduciary obligations”. [6] For example, contracts, by their nature, are adversarial. Typically, each party looks after its own interest. Nonetheless, it is possible to have a fiduciary relationship created by contract. [7] It has been posited that a custodial parent could be the fiduciary of a non-custodial parent with respect to visitation rights. [8] It is the nature of the actual relationship that gives rise to a fiduciary duty. [9] The existence of an obligation creating a fiduciary duty is specific to the facts on which such a claim is based. [10]

[ 6 ] The Supreme Court of Canada has provided a framework within which to evaluate this evidence. It is founded on the understanding that relationships in which fiduciary obligations have been imposed may possess three characteristics:

(1) The fiduciary has scope for the exercise of some discretion or power;

(2) The fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary’s legal or practical interests; and,

(3) The beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power. [11]

[ 7 ] These are guidelines. Their application can be demonstrative of a fiduciary relationship, but are not determinative of its presence. They are “… indicia that help recognize a fiduciary relationship rather than ingredients that define it”. [12] “Thus, outside the established categories, what is required is evidence of a mutual understanding that one party has relinquished its own self-interest and agreed to act solely on behalf of the other party.” [13]

[ 8 ] What evidence is there as to the nature of the relationship in this case?

[ 9 ] It is well-established that the solicitor-client relationship is one that can give rise to fiduciary obligations. The defendant says that he was not retained by the plaintiff. His client was the company and, therefore, no duty can arise from this relationship. This is too narrow an examination. The plaintiff indicates that, shortly after she became involved in the business, her father’s health deteriorated. She had been a stay-at-home mother for fifteen years and, after a divorce in 1995, began working in a small garden centre. The plaintiff deposed in an affidavit that she… “was suddenly in the precarious position of having to take over management of the business on [her] own”. The defendant had taken over “several pieces of messy litigation” involving her father, her uncle and the company. She says that, from the outset, she made it clear to the defendant that she did not understand the litigation and that she needed help. He reassured her. [14] It is in this context that the relationship began and continued.

[ 10 ] The plaintiff was more than just the manager of the company. As a result of an estate freeze utilized by her father, she and her two sisters each owned one-third of the company. [15] The plaintiff says she advised the defendant that she would be “completely dependent upon him to provide [her] advice and guidance for dealing with the Kaiser Litigation”. [16] The defendant took instruction solely from the plaintiff, but in circumstances where she says he told her what she needed to do and she “completely counted” on him. [17]

[ 11 ] Even if the plaintiff was not a client of the defendant, there are circumstances where a lawyer has been found to be a fiduciary in the absence of a solicitor-client relationship:

(a) In Piccolo v. DiBenedetto , the court imposed a fiduciary obligation on a lawyer who had acted for a client in previous and subsequent transactions, but disavowed the relationship for the specific transaction at issue in which the lawyer was acting for other parties. The court held that a fiduciary obligation existed, if not on a solicitor-client basis, then on the basis of a relationship of close proximity to a solicitor-client relationship.

( Piccolo v. DiBenedetto, 2002 18053 (ON SC) , 2002 CarswellOnt 3575 , at paras. 113-117 , 125-126 and 155 (S.C.J.), aff’d 2003 CarswellOnt 4032 (C.A.) )

(b) In Shoppers Trust Co. v. Dynamic Home Ltd. , the court imposed a fiduciary obligation on a lawyer to the unrepresented wife in a transaction in which her husband arranged for a business loan to be secured against the matrimonial home. The court found that the lawyer had scope for the exercise of some discretion. The lawyer was in a position to unilaterally exercise that discretion so as to affect her legal or practical interest with respect to the matrimonial home and she was particularly vulnerable to the lawyer by virtue of the fact that she was the sole registered owner of the home and that her interests were unrepresented by counsel.

( Shoppers Trust Co. v. Dynamic Home Ltd. 1992 7685 (ON SC) , 1992 CarswellOnt 303 at paras. 13-20 (Gen. Div.) )

(c) In Cassey v. Morrison , the court found that where a lawyer was involved in a transaction for his own benefit, a fiduciary duty may be found to exist on the basis of a solicitor-client relationship where the solicitor performed only services of a minor nature for people who were otherwise friends. The court held that, in view of the very intimate and friendly relationship between the parties, and the obvious complete trust that existed, the lawyer owed a fiduciary duty to the plaintiffs.

( Cassey v. Morrison (1989), 1989 4075 (ON SC) , 67 O.R. (2d) 65 , 1989 CarswellOnt 739 , at paras. at 6 and 17 (S.C.))

[ 12 ] Any question concerning the nature of the relationship between the parties is exacerbated by the personal interaction between them. The defendant holds the view that they were in a spousal relationship. In his affidavit, sworn on December 22, 2010, he deposes that they “effectively” lived together, staying either at his house or at hers. He swears that he “did virtually all domestic duties, including the shopping, meal preparation and general kitchen duties...and “stood in loco parentis to [the plaintiff’s] children”. The defendant asserts that, by the summer of 1999, he and the plaintiff were “effectively a family unit, spending virtually every evening and every weekend together”. [18]

[ 13 ] The plaintiff denies all of this. In her affidavit, sworn on April 15, 2011, she deposed that the defendant did not do any shopping, meal preparation or general kitchen duties in the context of their relationship. She says the defendant did not undertake these responsibilities at her home and “generally did these tasks for himself and his sons”. The plaintiff swears that the defendant did not act as a parent to her daughters and spent very little time with them. [19]

[ 14 ] Counsel for the plaintiff pointed to the actions of the defendant at the material time. The defendant did not always treat the plaintiff as a spouse. He described her as such when he transferred a 50% interest in a cottage to her. Counsel observed that, in doing this, the defendant avoided the payment of land transfer tax. In filing his personal income taxes, the defendant did not refer to the plaintiff as his spouse. In 1999 and in 2000, he identified himself as separated and, then, in 2001, he identified himself as divorced. [20]

[ 15 ] There is substantial disagreement between the parties as to the nature of the relationship both in its professional aspect and from a personal perspective. I find that it is not possible to fully appreciate the nature of the relationship without the benefit of a trial and the fact-finding processes it would include. In particular, I am not able to determine whether that relationship was such that it obliged the defendant to act as a fiduciary in respect of the plaintiff.

The office renovation

[ 16 ] The series of transactions that took place between the two parties over the course of the relationship involved loans, property and services.

[ 17 ] The plaintiff loaned money to the defendant, as follows:

(a) to satisfy taxes which he owed ($125,000);

(b) to assist him in the purchase of a lot abutting the cottage ($102,700); and,

(c) to allow him to assist a friend in purchasing a cottage. When the friend re-paid the money, the plaintiff agreed that the defendant could keep it as a loan ($30,000).

The defendant:

(d) transferred to the plaintiff the 50% interest in the cottage, to which I have already referred; and,

(e) although no terms were specified, said he would provide the plaintiff with free legal services.

Finally, for the purposes of this motion:

(f) The plaintiff paid $359,866.35 to assist in the renovation of office space for the defendant’s legal practice.

[ 18 ] As matters stand today, the three loans have been re-paid and the interest in the cottage returned, by the plaintiff, to the defendant. The plaintiff seeks the re-payment of the money she contributed to the renovation of the office. This is the money the defendant argues was a gift and, as such, he says cannot be recovered through this action. The plaintiff says that it was a loan.

[ 19 ] An issue in this proceeding is whether the payment of the cost of the office renovation was a loan or a gift. The second question on the motion is whether this is an issue requiring a trial.

[ 20 ] The defendant says that the plaintiff suggested who should act as the designer and the general contractor for the project. In his affidavit, he deposed that the plaintiff: “... said she would like to give the completed office to [him] as a gift”. He went on to observe that he had very little involvement. He said: “[v]irtually all of the finishing, furniture and construction details were discussed between [the plaintiff, the designer and the contractor], with [the defendant] having a relatively minor role”. The defendant credits the plaintiff with having, “... given the office a luxurious touch that [he] never would have contemplated and never could have afforded at that time”. [21]

[ 21 ] The plaintiff takes a completely contrary view. In her affidavit, she says that the only gift she offered to pay for was a Persian rug, as an office-warming gift. She says it was only after he advised her that, as a result of the cost of construction he was overextended and had no money left, that she agreed to “help… by paying the decorating costs”. It was his decision to use the designer. As the plaintiff recollects it, she warned him that the designer “...was too expensive for offices and thought that it would potentially turn off clients if the office was over done”. She deposes that she “... did not have any involvement in the design for the space” and “would not have the slightest idea about how to design a law office”. She says she only visited the office once while it was under construction and “...[b]y that time the walls, doors and some wallpaper was already up” [22] .

[ 22 ] While the defendant recalls that he did pay for filing cabinets, secretarial stations, telephones, computers and the technology set-up, there appears to be no dispute between the parties that the plaintiff paid $359,866.35 in respect of this work.

[ 23 ] Counsel for the defendant pointed out that there was no written agreement evidencing the loan and no re-payment schedule. Counsel suggested that, in the approximately ten years since the “loan” had been made, the plaintiff has never requested that it be re-paid. When she was cross-examined, the plaintiff testified that, at the time the payments were made (in the year 2000), the defendant had “…specifically told me he would repay [her]”. She did not ask for re-payment because, from that point on, he kept asking her for money: “...how do I ask him for money when he's asking me for money?” The plaintiff also said that the first time she asked for re-payment was after they had broken up. She guessed the request was made around July 2002. [23]

[ 24 ] I find that it is not possible to fully appreciate whether this was a loan or a gift without the benefit of a trial.

[ 25 ] Some reference should be made to the transfer of the 50% interest in the defendant’s cottage to the plaintiff. The defendant says that, overwhelmed by the gift of the office renovations, he made the transfer, as a gift, out of gratitude. To him, this was an exchange of gifts. [24] The plaintiff acknowledges that the defendant, out of gratitude, “... announced that he was giving [her] a 50% interest in his cottage”. In her affidavit, she deposed that the defendant “said that it was to thank [her] for paying the decorating costs and to help repay [her] for what [she] had done” [25] [Emphasis added]. Counsel for the defendant submitted that, after the relationship was over, when the parties attempted to determine the value of any debt owed by the defendant to the plaintiff, no reference was made to the cost of the office renovations. This is quite apart from the statement of the plaintiff, on cross-examination, when she said she asked for re-payment, in 2002, after they had broken up (see paragraph [23], above). It also fails to recognize that, at that time, the plaintiff continued to hold the 50% interest in the cottage. Whatever its value, the plaintiff could set-off the interest in the cottage against the office renovations. The defendant asked that the interest in the cottage be returned. He said this was required because a mortgage was coming due and he would be unable to re-finance it if the plaintiff continued as an owner. From the plaintiff’s perspective, he was asking for the return of the interest in the cottage he had given her while failing to return the money she had given him. The plaintiff says that, during a telephone conversation that took place on March 13, 2004, she “caved in to pressure” [26] from the defendant and agreed to give back the interest in the cottage.

[ 26 ] It may be that the defendant did not need to transfer title before he could re-finance the mortgage. Counsel for the plaintiff submitted that the transfer was not registered until 2005, well after the re-financing was complete. [27] Once the interest in the cottage was returned, the plaintiff had nothing to offset the money used to pay for the renovations to the office which, she says, was a loan.

[ 27 ] This is not the only event relied on by the plaintiff as confirming an ongoing obligation owed to her by the defendant. At the time the relationship ended, the defendant “…offered to do [the plaintiff’s] personal legal work for free”. According to the defendant, the reason for this offer was that, notwithstanding the breakup of the relationship, he felt that the plaintiff had done a great deal for him and he wanted to reciprocate as a show of goodwill. There was no relationship between the benefits he had received and this “gratuitous” offer. [28] Counsel for the plaintiff sees this quite differently. It was not an act of generosity that stands apart from the other transactions between the parties. It was part of a settlement which was arranged over several months as the plaintiff and defendant dealt with the end of their relationship. [29] As counsel sees it, the terms of the agreement were:

(a) the defendant would pay the plaintiff $262,000. (This was in re-payment of the money the plaintiff had loaned to the defendant in respect of his taxes, to purchase the abutting cottage lot and to assist in the purchase, by a friend, of a nearby cottage (see: para. [17], above).) [30]

(b) the defendant would provide the plaintiff with free legal services for life;

(c) the plaintiff would release the defendant from any further obligations to re-pay money to her; and,

(d) if the parties thought of something else that the plaintiff could do to re-pay the plaintiff, it would be considered. [31]

[ 28 ] Counsel for the plaintiff went on to submit that the agreement was breached. In March 2010, the plaintiff refused to provide legal services to the plaintiff when she asked him to send a demand letter, on her behalf, to a real estate agent. [32] The defendant says that he examined the circumstances and determined that there was no reasonable cause of action available to the plaintiff. [33] He refused to act. As the defendant sees it, the offer of free legal services, whatever its parameters, did not require him to pursue claims that were without merit.

[ 29 ] All of this confirms the difficulty in determining, at this stage, whether the money used to pay for the renovations of the office was a loan or a gift.

Was there a breach

[ 30 ] The fundamental premise on which the motion is based is that the action was out of time. To come to grips with this proposition, it will be necessary to determine what, if any, limitation applies. The plaintiff claims that the fiduciary duty she says she was owed has been breached. The parties agree that, at the applicable time, there was no limitation period in respect of lawsuits for such a breach. The plaintiff argues that the defendant, at the time of the various transactions, was in a conflict of interest and failed, in respect of each of them, to ensure that she received independent legal advice.

[ 31 ] The conflict of interest, as alleged by the plaintiff, resulted from the different perspectives that would arise from the defendant acting as counsel for the plaintiff or the company she managed and owned at the same time they entered and continued their personal relationship. Counsel for the plaintiff pointed to the Rules of Professional Conduct as demonstrating the concern: “If a lawyer has a sexual or intimate personal relationship with the client this may conflict with the lawyer's duty to provide objective, disinterested professional advice to a client.” [34]

[ 32 ] In his affidavit, the defendant deposed that, as soon as the relationship began, he suggested that he would resign as counsel for the company. It was, he said, the plaintiff who “insisted that [he] remain as counsel in the various proceedings”. [35] As with so much of the evidence, the plaintiff has a contrary view. In her affidavit, she swore that, as soon as their romantic relationship began, she asked the defendant if it was okay for him “...to be going out with me when he was my lawyer”. She recalled him saying that it was not a problem and using words to the effect that they were on the same side. In her affidavit, she quoted the defendant as saying “... we were all on the same side” [36]

[ 33 ] In December 2000, at the request of the brother-in-law of the plaintiff, another lawyer was asked to consider if the defendant had a conflict of interest in acting for the company while maintaining his relationship with plaintiff. The defendant says he offered to resign. The defendant says that, in the end, the lawyer advised that he could not see any conflict of interest. [37] For her part, the plaintiff says that the defendant told her not to worry because he and the lawyer were good friends and later that “… he had taken care of [her brother-in-law] and all was well”. [38]

[ 34 ] The plaintiff said the defendant: “...never offered to resign as counsel for me or my family”. [39]

[ 35 ] In his submissions, counsel for the defendant suggested that none of this matters. If the defendant breached the Rules of Professional Conduct , it is a matter to be dealt with by a complaint to the Law Society and not an action in court. Certainly, where there has been a breach of these Rules , a complaint to the Law Society is available, but this does not foreclose the prospect that such a conflict may be evidence that could support a breach of fiduciary duty [40] . It is argued, on behalf of the plaintiff, that what the defendant learned in the course of his professional responsibilities could have or did effect the transactions between them.

[ 36 ] While it is not for me to decide, it may be that the suggested failure to ensure that the plaintiff obtained independent legal advice, in respect of each of the transactions, will be the larger concern.

[ 37 ] It was said, on behalf of the plaintiff, that the defendant made no effort directed to the plaintiff obtaining independent legal advice prior to any of the individual transactions by which she gave or loaned him money or in respect of the return of the interest in the cottage he had transferred to her. Counsel for the plaintiff suggested that, by identifying the plaintiff as his spouse, the defendant avoided any issue arising through the Rules of Professional Conduct . Counsel pointed out that the Rules permit a lawyer to borrow money from a client if the client is a related person, as defined by the Income Tax Act (Canada) . [41] This was confirmed as a possible motivation by the affidavit of Evelyn Schusheim, a tax and estate planning lawyer retained by the plaintiff’s father. She deposed that, when she learned of the personal relationship between the parties, she asked the defendant whether this was appropriate “...in light of the law society guidelines about dating a client”. The lawyer deposed that the defendant responded by advising her that the Law Society rules were not an issue because he and the plaintiff “...were practically spouses”. [42]

[ 38 ] Counsel for the plaintiff relied particularly on the loan made by the plaintiff to the defendant in order that he might purchase the property adjoining his cottage. The plaintiff understood that she was the one buying the lot. The defendant had asked her to do so because he could not afford to. She was surprised when she learned that it was held by her “in trust”. [43] Counsel suggested that, with legal advice, the plaintiff might have understood what was taking place and chosen to purchase the property herself. Quite apart from the return of the money loaned or given in respect of the office renovations, the plaintiff seeks as damages an amount representing the increased value of that land.

[ 39 ] Counsel for the defendant submitted that it was not as if the plaintiff was unaware of the availability of counsel. The defendant referred to Evelyn Schusheim as providing legal advice to the plaintiff throughout the course of the relationship. [44] It may be that Evelyn Schusheim provided legal advice to the plaintiff, but it appears, from her affidavit, that it was not, in any way, related to the transactions between the parties. [45] The plaintiff says that it was not until April 2010 that she advised Evelyn Schusheim of the money she had provided to the defendant. [46] Counsel for the defendant also pointed out that, in the year 2000, the plaintiff consulted with a family lawyer. [47] Again, this seems not to have been in respect of the money the plaintiff advanced to the defendant. It was out of concern that her assets be protected given the length of time that had passed since her relationship with the defendant began. [48]

[ 40 ] At the end of the relationship, the defendant agreed to pay the plaintiff $262,000 in respect of the money she had loaned him (see: para. [17], above). He advised the plaintiff that she should meet with Evelyn Schusheim. He indicated that this would “...give [the plaintiff] independent legal representation on the transaction”. The plaintiff felt this was unnecessary and would be embarrassing to her. She did not want Evelyn Schusheim to know about their personal business. [49] Counsel for the plaintiff submitted that it was self-serving to have the plaintiff obtain legal advice at this stage of the process. [50] Certainly, it was after all of the loans and/or gifts had been made. It was at the end of the relationship and cannot reflect on whether the defendant was obliged to suggest or ensure that the plaintiff had independent legal advice prior to each of the transaction between the parties.

[ 41 ] I find that it is not possible, without the benefit of a trial, to fully appreciate whether the defendant had a conflict of interest and whether the defendant failed to provide independent legal advice such that the defendant was in breach of any fiduciary duty he owed to the plaintiff.

The applicable limitation

[ 42 ] This leaves the question of how a determination of the issues reviewed in these reasons could affect whether or how any limitation period would be applied. Prior to January 1, 2004, the day on which the Limitation Act, 2002 S.O. 2002, c 24 became effective, there was no limitation period applicable to an action brought for breach of fiduciary duty. Thus, if the claim was discovered before January 1, 2004, there would continue to be no limitation to be applied to the commencement of the action. Accordingly, if the plaintiff knew or ought to have known of the claim before January 1, 2004, the claim could not be struck out based on the passage of time. If, on the other hand, the plaintiff did not know and ought not to have known of the claim until after January 1, 2004, the two-year limitation period prescribed, by the Limitation Act, 2002, supra , [51] would apply. In the event that the plaintiff did not “discover” the claim until after January 1, 2004, the two-year period would begin to run from the date of its discovery.

[ 43 ] Counsel for the defendant said that, in any event, the limitation period should not be determined as a result of the presence of a breach of fiduciary duty. He says the action is “thoroughly grounded in contract” [52] . It is the view of counsel that a concurrent claim for breach of fiduciary duty should not operate to extend the limitation period that applies to the action in contract. In making this submission, counsel relied on the case of Central Trust Co. v. Rafuse [53] . The case was an action for negligence brought against a solicitor for failing to recognize that a mortgage, arranged as part of a transaction involving the purchase of the shares of a corporation, was, as a result of the operation of a particular statute, illegal. The case notes the “[a] concurrent or alternative liability in tort will not be admitted if its effect would be to permit the plaintiff to circumvent or escape a contractual exclusion or limitation of liability for the act or omission that would constitute the tort”. It goes on to observe a qualification that “…where concurrent liability in tort and contract exists the plaintiff has the right to assert the cause of action that appears to be most advantageous to him in respect of any particular legal consequence”. [54] Counsel went on to address the fact that a breach of fiduciary duty is a claim in equity. He submitted that, while a breach of fiduciary duty may attract a separate limitation period from a breach of contract, in the case at hand, the limitation period for breach of contract should be applied by analogy. In this, he relied on the case of Canadian Microtunnelling Ltd. v. Toronto (City) [55] , where the court stated: “Quite often, legal remedies and equitable remedies are sought concurrently or in the alternative (as is the case at bar). A court will not afford a plaintiff ancillary equitable relief after the expiry of the statutory period for pursuing the legal remedy.” [56] This approach assumes that the action is principally founded in contract. This may not be so. This will flow from an understanding of the nature of the relationship between the parties and a proper understanding of the transactions between them. It could be that, as in Central Trust Co. v. Rafuse , supra , the core of the case runs to the professional responsibility of the defendant as a lawyer. These responsibilities may arise where there is a fiduciary duty, even if the contribution to the office renovations was a gift. Counsel for the plaintiff suggested that, even then, there were obligations that arose which should have compelled the defendant to ensure that the plaintiff understood the legal effect of what she proposed to do. Simply put, $359,866.35 is a great deal of money. For such an amount to be given as a gift in any circumstance would be unusual. Where the recipient is a lawyer, who acts for the donor, or for any other reason stands as a fiduciary, it may be that there is a responsibility to be sure that the donor understands the impact of what is being done. If this is the case, it would be inappropriate to treat this as an action founded in contract.

[ 44 ] Finally, if there was no fiduciary duty or if any fiduciary duty that was present was not breached, it does not end the matter. The Statement of Claim was issued on August 13, 2010. If, as the plaintiff suggests, there was an overall settlement agreement (see: para. [27], above) and it was breached in March 2010, when the defendant refused to act for the plaintiff, the two-year limitation period would apply, but would not have expired. Moreover, counsel for the plaintiff submitted that their client did not discover there was a fiduciary duty owed to her until April, 2010. If this is correct, it would mean that, while the breach was discovered after the Limitation Act, 2002 and the two-year limitation period it imposes came into effect, the discovery was made less than two years before the Statement of Claim was issued.

Conclusion

[ 45 ] What follows from all of this is that it is not possible to fully appreciate the evidence and determine this case without the benefit of a trial. Among the issues to be determined are:

• the nature of the relationship between the parties;

• the nature of the transactions concerning payment for the office renovations and the purchase of the cottage lot;

• whether there was a breach of any responsibility the defendant owed the plaintiff; and,

• if necessary, when the cause of action was or should have been discovered.

[ 46 ] The motion is dismissed.

Costs

[ 47 ] No submissions were made as to costs. In the event that the parties are unable to agree, I will consider submissions in writing, on the following terms:

1. Submissions on behalf of the plaintiff are to be no later than fifteen days after the release of these reasons. Such submissions are to be no longer than four pages, double-spaced, not including any Costs Outline, Bill of Costs or case law that may be provided.

2. Submissions on behalf of defendant are to be no later than ten days thereafter. Such submissions are to be no longer than four pages, double-spaced, not including any Costs Outline, Bill of Costs or case law that may be provided.

3. Submissions in reply, on behalf of plaintiff, are to be no later than five days thereafter. Such submissions are to be no longer than two pages, double- spaced.

LEDERER J.

Released: 20120411