Litherland v. McKenzie, 2016 ONSC 6597

CITATION: Litherland v. McKenzie, 2016 ONSC 6597

OSHAWA COURT FILE NO.: CV-15-91549-SR

DATE: 20161116

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Barrington Litherland Plaintiff/Defendant by Counterclaim

– and –

Jennifer Eunice McKenzie Defendant/Plaintiff by Counterclaim

COUNSEL:

Barrington Litherland, In Person

Evan Clemence, for the Defendant/Plaintiff by Counterclaim

HEARD: October 6, 2016

REASONS FOR DECISION

GILMORE J.:

Overview

[1] This is the defendant’s motion for summary judgment, seeking to wholly or partially dismiss the plaintiff’s claim pursuant to r. 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The defendant also seeks to amend her statement of defence to add a paragraph stating that “The defendant relies on section 4 of the Limitations Act, S.O. 2002, c. 24, as an absolute defence to any and all claims which predates the plaintiff’s statement of claim by over two years”.

[2] The plaintiff resists the motion and requests that the court permit registration of a certificate of pending litigation on the subject property in accordance with his statement of claim.

Background

[3] The defendant purchased the property at 119 Beer Crescent in Ajax in 2006. There is no dispute that she has always been the sole owner of the subject property.

[4] The parties met in 2007 and began an intimate relationship. The defendant’s evidence was that they began to live together immediately. While the plaintiff did not disagree that the parties were involved sexually, he does not agree that he began to immediately live with the defendant. The plaintiff was employed as a long-haul truck driver and deposed that the requirements of his job meant that he did not always sleep at the defendant’s home. In fact, the plaintiff maintains that he lived independently and maintained a separate residence throughout 2007 and 2008. The plaintiff’s motion material did not contain any evidence of where he was living in 2007 and 2008.

[5] It is undisputed that between 2007 and 2009 the plaintiff did not contribute to any household expenses. The defendant claims that she paid the plaintiff’s car insurance from November 2007 to August 2009 and his cell phone bill between November 2008 and February 2011. She also claims that he used her credit card for various purchases, including satellite radio subscriptions, roadside assistance, gasoline and meals. These expenses totalled $4,556.41.

[6] The defendant prepared a spreadsheet which was attached as Exhibit 27 to her affidavit sworn June 14, 2016. The spreadsheet outlines the defendant’s calculations, showing that the plaintiff owes her $56,437.80 for various amounts paid out on his behalf, including cash loans, food, shelter and the above-mentioned amounts.

[7] The plaintiff advises that between 2007 and 2009 he was never asked to contribute to household expenses. He agrees that he borrowed $12,000 from the defendant in 2008 and 2009, but repaid her $15,000 on July 23, 2009. The surplus of $3,000 was meant to offset payments made on the defendant’s credit card for the plaintiff’s behalf.

[8] In 2009, the defendant began to insist that the plaintiff start contributing to household expenses. She had been laid off work and the plaintiff’s trucking business was earning more income than it had in the previous years. There is no dispute that commencing April 1, 2010, the plaintiff began to give money to the defendant as a contribution towards the mortgage and household expenses. Copies of those cheques were produced by both parties in their respective motion records. The defendant’s calculations are that the plaintiff paid her $37,770 in contributions to household expenses. The plaintiff’s claim is for $33,180, “for money spent toward mortgage payments on the property belonging to the defendant”.

[9] The defendant issued a counterclaim for $16,715.70. She pleads that she advanced a total of $31,715.70 to the plaintiff between 2007 and 2012, and that she was only repaid $15,000. She counterclaims for the balance of $16,715.70.

[10] The plaintiff deposed that he was entitled to partial ownership of the property because of his contributions toward household expenses. He became upset when he discovered that the defendant had renewed the mortgage without adding him to the title.

[11] The defendant’s evidence was that the plaintiff pressured her into signing an agreement which provided that he would receive $13,000 from the sale of the home. The agreement was signed on February 4, 2012. At that time, the parties were still living on the subject property, but sleeping in separate bedrooms.

[12] The plaintiff has a different view of the alleged agreement. In his reply affidavit, sworn October 4, 2016, he deposed that the defendant drafted the agreement without any duress. He said that she made the agreement to ensure that the plaintiff would continue making his contributions to household expenses because the defendant only had a part-time job. The plaintiff’s evidence was that he continued contributing to household expenses, totaling $33,180 as per his claim.

[13] The parties physically separated on November 9, 2013, when the defendant called the police and the plaintiff was asked to leave.

[14] In his supplementary affidavit sworn October 6, 2016, the plaintiff deposed that there is a question as to who actually drafted or worded the agreement and what the motive of the defendant was when he was coerced into its execution. The defendant’s evidence is that she was coerced into signing the agreement by the plaintiff.

Issue Number 1: Is this matter appropriate for a motion for summary judgment?

[15] In this court’s view, a motion for summary judgment is entirely appropriate. The parties do not disagree that the plaintiff made certain contributions toward household expenses. The defendant claims a set-off based on monies which she says were advanced to the plaintiff for other reasons. The affidavits filed are comprehensive and set out the entire history. As exhibits to their affidavits, the parties have also attached receipts, statements and vouchers verifying the amounts that they respectively claim. The issues are concise, discrete and appropriate for a motion of this nature.

Issue Number 2: Is this matter properly before the Court?

[16] The defendant questioned whether the plaintiff’s claim should have been issued in Family Court, given that the parties were in an intimate relationship and the agreement could be construed as a domestic contract.

[17] In Pilon v. Lavigne, 2016 ONSC 1965, 2016 CarswellOnt 4362, Linhares de Sousa J., sitting as a single judge of the Divisional Court, heard an appeal from the Small Claims Court. The respondent on appeal, Ms. Lavigne, loaned Mr. Pilon $12,000 while the two were cohabiting. They later signed a separation agreement that cleared Mr. Pilon of all debts owed to Ms. Lavigne. Ms. Lavigne claimed that the $12,000 loan was not covered by the separation agreement and brought an action to recover the funds in the Small Claims Court. The Small Claims Court agreed with her and ordered Mr. Pilon repay her for the loan. On appeal, Mr. Pilon argued that the Small Claims Court judge erred by making an order when the claim should have been heard in the Family Court.

[18] After surveying the case law, Linhares de Sousa J. held that the key question in determining jurisdiction was the “pith and substance” of the claim (at para. 41). If the claim arose from a “family law relationship”, then it would be within the Family Court’s jurisdiction (at para. 42). However, the Family Court would not have jurisdiction if (i) the “family law relationship” was only part of the narrative of the claim in issue and (ii) the claim is a common law action (at para. 43).

[19] In my view Pilon is applicable here notwithstanding that it dealt with a Small Claims Court matter. The “family law relationship” in this case is only part of the narrative of the claim which in “pith and substance” deals with a debt between the parties.

[20] While the parties were in an intimate relationship, no claim is being made for support. The plaintiff makes a claim for a certificate of pending litigation, but makes no claim for an interest in land. In fact, the claim and counterclaim are more about an accounting than any family law related issue. While the subject agreement could be construed as a domestic contract, it may also be construed as a regular contract to which the usual contract rules would apply.

[21] In my view, the matter can be dealt with in this court. The matter involves both property and contract issues. There are perhaps some family law issues, but they are not predominant.

Issue Number 3: The request by the defendant to amend their pleadings

[22] The defendant requests leave to amend her pleadings and add a claim under the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B. During the course of this motion, the plaintiff was asked if he had any submission to make on the requested amendment. He had none.

[23] The amendment is requested pursuant to r. 26.01, which allows the court to grant leave to amend a pleading on such terms “as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.” The wording of the proposed amendment was contained in the defendant’s motion record, which was properly served on the plaintiff and has been in his possession since on or about June 20, 2016. No objection to the proposed amendment has been raised by the plaintiff.

[24] In Godoy v. 475920 Ontario Ltd., 2007 CanLII 38394 (ON SC); affirmed 2008 ONCA 801, 59 R.F.L. (6th) 246, the Court of Appeal upheld a decision in a case where a similar amendment was requested on the eve of trial. It is important to note that the amendment was upheld even where the plaintiffs argued that such an amendment effectively resulted in a dismissal of their case.

[25] Similarly in this case, a large portion of the plaintiff’s claim is clearly out of time under the Limitations Act. This fact is verified by the cheques relating to the plaintiff’s contribution to household expenses that both parties provided.

[26] Given the uncontroverted evidence of the subject payments and the case law, it is reasonable to grant the amendment sought by the defendant. As such, the defendant’s counterclaim shall be amended by adding a new paragraph after paragraph 27 which states that “The defendant relies on section 4 of the Limitations Act, S.O. 2002, c. 24, as an absolute defence to any and all claims which predates the plaintiff’s statement of claim by over two years.”

[27] The contributions made to the defendant by the plaintiff by way of cheques between April 1, 2010 and October 25, 2013 are not in dispute. It is also undisputed that the plaintiff’s claim was issued on May 5, 2015. Therefore, any and all contributions made by the plaintiff which pre-date May 5, 2013 cannot form part of the plaintiff’s claim, in accordance with s. 4 of the Limitations Act. In these circumstances, the plaintiff’s only remaining claim is for the contributions made on May 30, July 1, August 6, September 27 and October 25, 2013. Those contributions total $5,000.

[28] It is of interest to note that in the plaintiff’s supplementary affidavit, sworn October 6, 2016, he makes reference to an additional loan of $5,000. More specifically, in his affidavit of October 4, 2016, he deposed that on meeting the defendant in August 2014 by chance at a grocery store, she advised him that she had forgotten to include in her account a further $5,000 which she leant to him. At that point the plaintiff suggested that she correct their agreement and make the amendment. Based on the plaintiff’s admission that he was loaned a further $5,000, and given the outstanding counterclaim, the plaintiff’s claim would be reduced to nil.

Issue Number 4: The Agreement

[29] If I am wrong in granting the amendment to the counterclaim or in my calculations with respect to the plaintiff’s claim, I turn to the issue of the agreement between the parties. The agreement between the parties was executed on February 24, 2012. Neither party disputes that the agreement was signed by them. A copy of the agreement is produced below:

119 Beer Crescent, Ajax, Ontario. L1S0B9 February 7, 2012.

On Tuesday February 7, 2012, Barrington Litherland and I, Jennifer McKenzie had come to an agreement concerning property located at 119 Beer Crescent, Ajax, Ontario. L1S0B9.

I, Jennifer McKenzie of sound mind has agreed to make Barrington Litherland a part owner of my property located at the above address.

It should be shared as follows,

Assuming sale price $350,000 Less mortgage $238,000 Less commission $20,000 Less legal fees $1,000 Equity $91,000 Jennifer $65,000 Balance $26,000

The balance should be shared equally,

Barrington $13000 Jennifer $13000

Jennifer McKenzie Barrington Litherland Date 24/2/12 Date 24/02/12

[30] I find that the agreement signed between the parties is unenforceable for the following reasons:

1. Unusually, both parties claim that they signed the agreement under duress. The plaintiff claims he was forced to sign the agreement by the plaintiff so that she could be assured of his continuing contributions to household expenses. The defendant claims that she signed the agreement under duress from the plaintiff because of his insistence that he was entitled to an ownership interest in her home. Given that both parties have deposed that they signed the agreement under duress, the agreement cannot be enforceable.

2. There is no consideration for the agreement flowing from the plaintiff. Nothing in the agreement sets out what consideration the defendant is to receive for making the plaintiff a part owner of her property. Further, the factual matrix or the intention of the parties cannot lead this court to impute consideration into a contract where no reference to consideration is made (see Creston Moly Corp v. Sattva Capital Corp., 2014 SCC 53 at para 50. As such, the agreement would fail on the grounds that it lacks proper consideration and is therefore not legally binding as a contract.

3. If the contract is considered a domestic contract under the Family Law Act, R.S.O. 1990, c. F.3, it lacks the required witnessing and financial disclosure elements.

Issue Number 5: Discharge of the CPL

[31] The plaintiff seeks an interest in land by way of a CPL, but that interest appears to arise from his contributions to the mortgage. There is no other evidence that he made contributions to the improvement of the subject property that would entitle him to an interest in the land.

[32] Section 103(6) of the CJA grants a court with broad discretion to discharge a CPL: see G.P.I. Greenfield Pioneer Inc. v. Moore, 2002 CanLII 6832 (ON CA), at para. 16. Section 103(6) reads as follows:

Order discharging certificate

(6) The court may make an order discharging a certificate,

(a) where the party at whose instance it was issued,

(i) claims a sum of money in place of or as an alternative to the interest in the land claimed,

(ii) does not have a reasonable claim to the interest in the land claimed, or

(iii) does not prosecute the proceeding with reasonable diligence;

(b) where the interests of the party at whose instance it was issued can be adequately protected by another form of security; or

(c) on any other ground that is considered just,

and the court may, in making the order, impose such terms as to the giving of security or otherwise as the court considers just.

[33] The plaintiff’s CPL claim could be dismissed on many of the above grounds; one of which being that the substance of his claim is for a repayment of contributions and not for an interest in the land.

Issue Number 6: Can the plaintiff claim a constructive trust interest in the subject property?

[34] Although the plaintiff’s payments helped to maintain the property, his contributions were not significant enough to warrant a constructive trust. The following cases support this conclusion.

[35] In Davis v. Vriend, 1999 CarswellOnt 809, (Ont. Ct. J. Gen. Div), the parties cohabited for eight years in a home purchased by the defendant. Prior to cohabitation, the plaintiff paid $600 in rent per month. The defendant’s monthly mortgage payments were $1,100, and the plaintiff paid him $600 monthly with cheques marked as “rent”. Justice Matheson did not find a constructive trust in the property because (i) the plaintiff’s living expenses did not substantially increase over the time the parties lived together and (ii) the property had depreciated (at para. 44).

[36] In Chartier v. Ens, 1991 CarswellOnt 329, (Ont. Ct. J. Gen. Div.), the parties cohabited for three years on the defendant’s farm. Each month, the plaintiff paid $350 to the carrying costs of the property and $300 in living expenses. The defendant’s mortgage payments exceeded $1,200 per month. The parties performed their fair share of the household chores. In finding that the plaintiff had no constructive trust interest in the farm, Carazan J. wrote, at para. 38:

I accept the characterization of defendant's counsel that what [the plaintiff] did was no more than what might be expected between two friends sharing accommodation while pursuing their individual careers. It was no more than she would have had to do for herself were she residing, at the time, by herself.

[37] Similarly, in the case at bar, I find the plaintiff did no more than what might be expected between two friends sharing accommodation. In that regard, I prefer the defendant’s evidence that the parties were living together for the period of February 2007 to November 2013 (some 81 months). That means that the plaintiff’s monthly contribution to household expenses would be approximately $410 a month, based on his claim of $33,180. I accept the uncontradicted evidence of the defendant that the monthly expenses for operating her household, including mortgage, taxes, insurance, utilities and food, were approximately $2,700 a month. The plaintiff’s contribution, therefore, comes nowhere near half of that. I should add that had the plaintiff been living elsewhere his living expenses for rent, utilities and other basic necessities would have no doubt far exceeded this amount.

Final Order

[38] Based on all of the above, the defendant’s motion is granted and the plaintiff’s claim is dismissed.

Counterclaim

[39] The defendant’s counterclaim has not been dealt with in this motion, other than granting the amendment to include the claim under the Limitations Act. During the hearing, the defendant’s counsel advised that the balance of the counterclaim would likely be withdrawn if the motion for summary judgment was successful.

Costs

[40] The defendant has spent a total of $13,000 in legal fees, while the plaintiff paid $3000 to his former counsel. The defendant has had clear success. The plaintiff’s claim was improperly framed and statute-barred. In the circumstances, the plaintiff should pay a proportionately reasonable sum of costs given the amount at stake and the complexity of the matter.

[41] The motion was argued in under an hour and was brought under the Simplified Rules. A motion for summary judgment was entirely appropriate for this matter which did not require a trial. Considering all of the circumstances, the plaintiff shall pay costs to the defendant in the sum of $4,000, payable within 90 days of the release of this judgment. In the event the defendant does not withdraw the balance of her counterclaim (that is, all claims except the claim to dismiss under the Limitations Act) within the 90 day period, the payment of costs shall be suspended until such time as there is a disposition of the counterclaim.

Justice C.A. Gilmore

Released: November 16, 2016