ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-11-01751-00
DATE: 20130620
B E T W E E N:
Richard Ainsley
Carol Struthers, for the Plaintiff
Plaintiff
- and -
Donna Fitzpatrick
Ian Latimer, for the Defendant
Defendant
HEARD: May 22, 2013
ENDORSEMENT
Justice Thomas A. Bielby
Overview
[1] The defendant has before the court a motion for summary judgment, pursuant to Rule 20, of the Rules of Civil Procedure. The defendant seeks a dismissal of the action and relies on the Limitations Act, 2002, S.O. 2002, c. 24, Schedule B (“Limitations Act, 2002”) and its predecessor, the Limitations Act, R.S.O. 1990 c. L.15 (“Limitations Act, 1990”).
[2] The plaintiff commenced this action on April 27, 2011, alleging he loaned the defendant monies on three occasions, and that the loans are unpaid and in default.
[3] The first loan was allegedly made in December, 1998, in the amount of $7,150.00. The terms of this loan were set out in writing, and the loan document is set out as Exhibit 2 (a) to the defendant’s motion record. The loan had an interest rate of 15% and was to be repaid by December 31, 1999. It was signed by the defendant.
[4] The second and third loans were not reduced to writing. There are no known terms. The second loan was apparently made in May, 2000 for $48,000.00 and the third loan was made in June, 2000 for $50,000.00.
[5] It is alleged by the plaintiff that the $50,000.00 was borrowed to assist the defendant in challenging her father’s estate. It is alleged the money was, in fact, used to acquire an interest in real property located in Bolton.
[6] In that regard, the plaintiff seeks a Certificate of Pending Litigation claiming an interest in the property for which the funds were used. The plaintiff claims he is entitled to a trust interest in the said property.
[7] In her pleadings the defendant denies the existence of the loans made in the year of 2000, but for the purposes of this motion, she admits the three loans.
DEFENDANT’S ARGUMENT
[8] The moving party, the defendant submits that a summary judgment in her favour ought to issue because the enforcement of these loans is statute barred under the Limitations Acts, both old and current.
[9] The defendant submits that all three loans were subject to the Limitations Act, 1990, and its six year limitation period. The Limitations Act, 2002, did not come into effect until January 1, 2004.
[10] It is submitted by the defendant that the plaintiff was aware of his claims prior to January 1, 2004.
[11] It is submitted, therefore, that the plaintiff is out of time as the limitation periods on all three loans would have expired, at the latest, sometime in the year, 2006.
[12] It is argued that the first loan became due on December 31, 1999 and that the limitation period expired December 31, 2005.
[13] A payment may restart a limitation period but the plaintiff alleges no payments were made.
[14] According to s. 13 (10) of the Limitations Act, 2002, the defendant notes that an acknowledgement of indebtedness would also restart the limitation period, but submits such acknowledgement must be in writing and signed by the person making it.
[15] The plaintiff has not provided evidence of any such written acknowledgement(s), signed by the defendant.
[16] With respect to loans two and three, the defendant submits they should be treated as demand loans. There are no loan terms in evidence to suggest otherwise. Further, there have been demands by the plaintiff for the payments of these loans, starting in 2006.
[17] The defendant submits that the limitation period with respect to loans two and three runs from the date the loans were made. In that regard, the defendant relies on the Court of Appeal decision in Hare v. Hare, 2006 41650 (ON CA), [2006] O.J. No.4955 (O.C.A.), in which it was confirmed that under the old Limitations Act, 1990, and with respect to demand loans, the cause of action arose when the money was loaned.
[18] It is therefore, argued by counsel for the defendant that the limitation period for the second and third loans expired in 2006.
[19] Alternatively, the defendant submits that if the current Limitations Act, 2002, applies demand for payment was made, for the first time, on May 1, 2006. The current Act states that the limitation period for demand loans run from the date demand for payment was made. Accordingly, the two year limitation period commenced on May 1, 2006 and expired well before the action was commenced.
[20] The plaintiff sent further demands for payment by letter, January 23, 2007, May 1, 2008, and May 1, 2009. In the last demand letter, the following statement is made, “This is the last extension for this loan”.
[21] The defendant submits that this is the only reference to any possible extension of the loan(s), which might be considered acknowledgements of the indebtedness. There is no written evidence that the defendant ever requested an extension of time to repay the loans. As such, there is no written evidence of an acknowledgement.
[22] The plaintiff, in his material and through the submissions of his counsel, argues that for portions of these periods he was incapacitated. Limitation periods are deemed not to run during periods of incapacitation (Limitations Act, 2002, s. 7)
[23] It is alleged that for a long period of time the plaintiff was homeless and lived out of his car. There is some reference to the plaintiff being hospitalized for mental health issues.
[24] The defendant argues that on a summary judgment motion the plaintiff is required to put his best foot forward and that there is no sufficient evidence before the court to establish incapacity and the periods in which he was incapacitated. The plaintiff did not include any medical evidence in his material.
[25] The defendant provided to the court the case of Deck International Inc. v. Manufacturers Life Insurance, [2012] ONCA 309. In this case the motion judge determined the limitation period had expired and that there was insufficient evidence supporting a finding of incapacity. In discussing the incapacity issue, the Court of Appeal stated, at paragraph 6,
We do not accept this submission. There was no medical evidence to the effect that Mr. Donaldson lacked the capacity to commence the action within the meaning of s. 7. There was evidence from family members as to his disability, but that is not the same thing as medical evidence going to the issue of capacity to commence an action.
[26] It is argued by the defendant that the facts of the Deck International case and the court’s conclusions are analogous to the case before me.
PLAINTIFF’S ARGUMENT
[27] The plaintiff, as part of his responding record, brought a cross-motion. He asks for an order that the defendant provide particulars relating to her statement of defence. As noted, he also claims a Certificate of Pending Litigation against the defendant’s Bolton property, which he alleges the defendant used to purchase the property.
[28] The plaintiff submits to the court that the limitation periods claimed by the defendant do not apply. It is argued that once the money was loaned to the defendant and not repaid, the defendant became a trustee for the money. The trustee relationship results from the fact there was no consideration given by the defendant for the advancement of monies and the fact the defendant misled the plaintiff as the purpose for at least one of the loans.
[29] In this regard, I note the first loan bore interest so there was consideration. Further, in his demand letters the plaintiff demands, the full amount, with interest.
[30] The argument of the defendant being a trustee is based on the request that a remedial constructive trust should be imposed. As such, it is argued, there is no limitation period with respect to equitable claims.
[31] The plaintiff argues he was misled by the defendant as to the reason for the largest loan. He submits that in the presence of Mr. Latimer, counsel for the defendant, the loan was requested by the defendant to retain legal counsel to make a claim against her father’s estate. It is alleged the defendant told the plaintiff that she would put the money in a GIC and borrow against it to pay her legal bills.
[32] On a Bank of Montreal form, entitled, Source of Funds Information Form, and executed by the defendant on June 26, 2000, when she presumably deposited the money, it is stated that the source of the $50,000.00 currency was a “Business Loan from a Shareholder”. It is alleged that it was the Bank of Montreal that financed the defendant’s purchase, initially with her sister, of the Bolton property during the same period when the loan was made (attached to the affidavit of the defendant, sworn, October 26, 2012).
[33] The plaintiff submits that he delayed in pursuing collection of the debts because of the loan extensions, and that he believed the estate had not been settled.
[34] One of the affidavits filed on behalf of the plaintiff is that of Felix Brum, which was sworn, November 28, 2012. In that affidavit, Mr. Brum deposes that he was in the presence of the parties in 2006, 2007, and 2008 when the defendant requested an extension of time to repay the loans.
[35] Another deponent, Irene Paquet, on behalf of the plaintiff swore her affidavit on November 28, 2012 deposing that she was present when the plaintiff loaned the defendant $50,000.00 and the defendant had told her that she had borrowed monies from the plaintiff because her telephone lines were about to be disconnected for non-payment.
[36] It is alleged that on more than one occasion, the defendant asked the plaintiff to extend the time for repayment and that the last loan extension was May, 2009. The plaintiff alleges the defendant acknowledged the debts in writing (affidavit of the plaintiff, sworn November 28, 2012, para. 7).
[37] The plaintiff deposes that the request for extensions and the acknowledgement of debts was made in the presence of Shane Miller and Denice Davis.
[38] The plaintiff’s letter of May 1, 2009 demands payment and advises the defendant that if she needs to make arrangements for payment she should contact the plaintiff and that the offer to make arrangements was the last extension for this loan. It is alleged the defendant requested the extensions because the estate had not been settled.
[39] The plaintiff also argues that a case will be made that for parts of the relevant periods he was incapacitated. He argues at times he was homeless and lived in his car. There is some evidence he was hospitalized in regards to mental health issues.
ANALYSIS
[40] In the Royal Bank of Canada v. Tie Domi Enterprises Ltd., 2011 ONSC 7297, [2011] O.J. No. 5828, S.C., the court stated the following, at paragraph 5, in regards to summary judgment motions,
The moving party must satisfy the court there are no issues of fact required to be tried to succeed in the motion. The party resisting the summary judgment has the onus to satisfy the court there are material facts to be tried and must demonstrate there is a real chance of success at trial. The resisting party must adduce evidence of material facts that require a trial to assess credibility, weigh evidence and draw factual inferences. Courts have held the party resisting the motion must lead trump or risk losing [1061590 Ontario Limited v Ontario Jockey Club (1995) 1995 1686 (ON CA), 21 O.R. (3d) 547 at 557 (Ont. C.A.)]. The court is entitled to assume the evidence contained in the record is all the evidence the parties would rely on if the matter proceeded to trial.
[41] With respect to the first loan made in 1999, on its face it was due at the end of that year. I accept that the cause of action existed on January 1, 2000, and that it was subject to the Limitations Act, 1990.
[42] I also find that the two subsequent loans were demand loans. The loans were verbal in nature and without terms.
[43] I accept that the cause of action on these loans existed from the date the monies were advanced and in that regard rely on the decision of the Ontario Court of Appeal in the Hare case referenced earlier.
[44] With respect to the second and third loans, the limitation period for the enforcement of these loans expired in May, 2006 and June, 2006 respectively.
[45] The question is then, are there any circumstances unique to these loans which would negate the impact or application of the limitation periods?
[46] Section 15 (4) of the Limitations Act, 2002, states:
The limitation period established by subsection (2) does not run during any time in which,
(a) the person with the claim,
(i) is incapable of commencing a proceeding in respect of a claim because of his or her physical, mental or psychological condition…
[47] Section 24 (5) states:
If the former limitation period did not expire before January 1, 2004, and if a limitation period under this Act would apply were the claim based on an act or omission that took place on or after that date, the following rules apply:
- If the claim was not discovered before January 1, 2004, this Act applies as if the act or omission had taken place on that date.
- If the claim was discovered before January 1, 2004, the former limitation period applies.
[48] If the latter two loans were not demand loans and it was determined the Limitations Act, 2002, applied, the first written demand was made on May 1, 2006. At the latest, the limitation period expired two years later, years before the commencement of the action.
[49] A request for an extension to pay the loan, signed by the defendant, would likely be an acknowledgement by the defendant, of her liability to pay the liquidated sum, pursuant to section 13(10) of the Limitations Act, 2002. Such an acknowledgement would restart the limitation period.
[50] While the plaintiff alleges a written acknowledgement exists (affidavit of the plaintiff, sworn November 28, 2012, paragraph 7), no such evidence has been produced. While the last demand letter states that “this is the last grant in any form of extension for this loan.” This does not amount to an acknowledgement.
[51] In Fleisher Ridout Partnership Inc. v. Tai Foong International Ltd., 2012 CarswellOnt 11314, Justice Prattas had to determine if emails amounted to an acknowledgement as defined in section 13(10).
[52] The learned judge held that exchanged emails were valid and proper acknowledgements. In his ruling, at paragraph 14 he held that, “The emails constitute a written and signed document or record…”
[53] Justice Prattas concluded that the emails constitute an agreement by the defendant to pay the debt.
[54] The case before me is easily distinguished. There is nothing in writing in which the debt is acknowledged. An agreement to extend the repayment of the loan, had it been in writing and signed by the defendant or at least sent and confirmed by email, may have extended or restarted the limitation period.
[55] In West York International Inc. v. Importanne Marketing Inc., 2012 ONSC 6476, [2012] O.J. No. 5395, Justice DiTomaso stated at paragraph 90,
Even if the Defendants made verbal reference to any alleged debt, which was specifically denied, any such reference was not an acknowledgement of a debt, was not in writing and was not signed by the Defendants as necessitated by the Limitations Act, 2002, S.O. 2002 c. 24 Sch. B, and or its predecessor statute, the Limitations Act, R.S.O. 1990, c. L15.
[56] From paragraph 92 I quote,
It is well established law that in considering whether an acknowledgment satisfies the requirements made under s. 13 of the Limitations Act, the acknowledgement must, at a minimum, confirm and concede the amount that remains owing. Further, the acknowledgment must be in writing and signed by the person making it, or the person’s agent.
There is no such acknowledgement in this matter.
[57] On the issue of capacity, while there is some evidence suggesting a capacity issue, it falls short of establishing that the plaintiff lacked the capacity to commence a proceeding within the limitation period. There is no medical evidence regarding capacity.
[58] Discoveries were held in April, 2013 and the plaintiff undertook to produce medical evidence. The evidence has not been produced nor was the court asked by the plaintiff to adjourn this motion.
[59] Certainly, the plaintiff had the capacity to make written demands for payment commencing in 2006. It is not suggested he lacked capacity when he made the loans.
[60] Further in 2006, as a result of speaking to the defendant’s lawyer, the plaintiff knew that the defendant had not started any type of court application or action against her father’s estate.
[61] On this issue, the plaintiff has not put his best foot forward; notwithstanding, that one of the demands for payment was authored by Sue Norman, a case manager of some sort and was written on Trillium Health Centre letterhead and dated, January 23, 2007.
[62] I also am of the opinion that there was no trust relationship between the parties or an equitable claim on the part of the plaintiff, which would not be negated by a limitation argument. Certainly there is no remedial constructive trust. Otherwise, such a trust could be claimed in all collection proceedings. From all the evidence, it would appear that the loans included a claim for interest, which amounts to consideration.
[63] In any case, where a debt has not been repaid by a debtor, who has had the benefit of the money loaned, it can be said that there is an unjust enrichment.
[64] However, there is juristic reason, being the law of debtor-creditor relationships and the ability to commence legal proceedings if the terms of the loan are not fulfilled. The impact of a statutory limitation period is part of the juristic reason.
[65] The non-payment of loans in the circumstances before me, do not create a trust.
[66] I do not accept the submissions of the plaintiff that the appropriate limitation period is to be found in the Real Property Limitations Act, R.S.O. 1990, c. L.15. This action is not one seeking an interest in land. Rather, it is an action to enforce debts, where it is alleged some of the money lent went into the purchase of land. That, in and of itself, does not create an interest in land.
[67] What the facts herein establish is a claim for liquidated damages, being the amount of money loaned and unpaid together with interest.
[68] I cannot conclude that there are any issues of fact required to be tried.
[69] The plaintiff has failed his onus in that regard and has not demonstrated there is a real change of success at trial.
[70] The plaintiff has not “lead trump.”
DECISION
[71] I find that on the evidence before me, there is no genuine issue for trial. The claim of the plaintiff is defeated by the Limitations Act, 1990.
[72] As such, the action is dismissed. As a result I need not rule on the plaintiff’s claim for particulars and a Certificate of Pending Litigation.
[73] I do note that, with respect to the claim for the Certificate, the plaintiff sought the same relief in 2011 and the claim was dismissed by J. F. McCartney, on December 1, 2011.
[74] With respect to costs, I will accept cost submissions no more than 3 pages in length within 21 days of the release of this ruling.
Justice Thomas A. Bielby
Released: June 20, 2013
COURT FILE NO.: CV-11-01751-00
DATE: 20130620
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Richard Ainsley
Plaintiff
- and –
Donna Fitzpatrick
Defendant
ENDORSEMENT
Bielby J.
Released: June 20, 2013