CITATION: Cataraqui Cemetery Company v. Cyr, 2017 ONSC 5819

COURT FILE NO.: CV-10-403-SR

DATE: 2017-10-03

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

THE CATARAQUI CEMETERY COMPANY Plaintiff

– and –

REGINALD CYR and LINDA CYR Defendants

Michael D. Swindley, for The Cataraqui Cemetery Company

Andrew B. Lister, for Reginald Cyr and Linda Cyr

AND BETWEEN:

COURT FILE NO. CV-10-431-SR

REGINALD CYR and LINDA CYR Plaintiffs

– and –

THE CATARAQUI CEMETERY COMPANY Defendant

Andrew B. Lister, for Reginald Cyr and Linda Cyr

Michael D. Swindley, for The Cataraqui Cemetery Company

HEARD: 3, 4, 5, 6, 7, 10 and 12 April 2017, at Kingston.

MEW J.

[1] Established in 1850, the Cataraqui Cemetery in Kingston is one of Canada’s best known, historic and scenic resting places. Its stated vision is “[t]o be a cemetery that is recognized and embraced by the community as a place of tribute and a setting where the living may celebrate life, nature’s beauty and the memory of those who have gone before us”.

[2] Originally developed as a rural cemetery beyond the town limits of Kingston, a history of the cemetery posted on its website compares Cataraqui to Mount Auburn in Boston, Kensal Green in London and Père Lachaise in Paris, and describes the “rural cemetery style” embodied by the Cataraqui Cemetery in these terms:

The specific style embraces the pastoral elements of the local environment, surrounding natural terrain and physical features. All of which are enhanced with natural and artistic forms to create a Picturesque landscape and setting. The design of the cemetery is planned to be organic and flowing as opposed to the rigid geometric block concept that cities were using for their urban planning. Winding roads were laid out using the contours of the hilly terrain. Scenic water courses and ponds were retained. Verdant vistas and Picturesque viewscapes were enhanced with the thinning of large mature trees and the selective placing of ornamental plantings, crafted monuments and allegorical statuary. Cataraqui Cemetery embraced the uniqueness of its chosen setting and life affirming environment.

[3] The Cemetery is also a National Historic Site. Sir John A. Macdonald, Canada’s first Prime Minister, and Sir Alexander Campbell, both Fathers of Confederation, are buried there, as are many other men and women who have served our community and country with distinction.

[4] Since its establishment, the Cataraqui Cemetery Company has held the Cemetery in perpetual trust for individuals who have and will acquire interment rights in the Cemetery. Responsibility for all aspects of the Cemetery Corporation is vested in a five-person Board of Trustees comprised of volunteers who are nominated and elected by interment rights holders.

[5] It is this tranquil, sacred and historical place that is the focal point of a hard-fought and deeply personal civil dispute fought over nearly ten years between the non-profit corporation which runs the Cemetery and two of its former trustees, which culminated in a seven day trial in April 2017.

[6] At the heart of the dispute is whether Reginald Cyr and Linda Cyr breached their obligations and responsibilities as trustees by obtaining personal and unauthorised benefits from the Cemetery.

[7] The Cyrs are alleged to have:

a. obtained an “exchange” of six previously purchased grave plots (one of which had been used already) for six new ones at a discounted price;

b. acquired a substantial “Family Garden”, adjacent to the six new grave plots, again, for an inappropriately low amount;

c. not paid for:

i. the foundation for a 9 foot tall by 4 foot wide monument;

ii. a landscape plan for the “Cyr Family Grave Site”;

iii. construction costs related to the Cyr Family Garden; and

iv. setting fees and care and maintenance fees on six hickey grave markers;

d. obtained improperly a benefit of $8,000 from the sale to the Cemetery of a used desk, television, DVD player and shed; and

e. incurred expenses of $1,864.16 on a trip taken to Boston without approval from the Board of Trustees.

[8] The total amount alleged to be owed by the Cyrs is $43,824.80. In addition, or in the alternative, the Cemetery seeks damages against the Cyrs for their alleged breaches of the fiduciary duties which they owed to the Cemetery Corporation.

[9] For their part, the Cyrs seek declarations that their six grave plots and the Family Garden were validly acquired and that the grave plots, Family Garden, family monument and its foundation should remain undisturbed. By amendments which I permitted at trial (reported at 2017 ONSC 2268), the Cyrs were permitted to add claims for punitive damages and aggravated damages.

Trial Process

[10] These actions were originally scheduled to be tried over three weeks commencing 26 May 2014. Those dates were adjourned because of the unavailability of the lawyer then acting for the Cyrs.

[11] The trial was rescheduled for three weeks commencing 15 June 2015. That trial was adjourned due to a lack of judicial resources.

[12] The trial was then rescheduled to be heard during the span of four weeks commencing on 3 April 2017.

[13] I was assigned to be the trial judge in December 2016. That provided the opportunity for several trial management conferences to be held with counsel (all by telephone) during which the projected length of the trial was reduced to eight days and, with the concurrence of counsel:

a. Opening statements were provided to the court in writing prior to the commencement of trial;

b. A joint book of documents comprising of ten volumes was assembled;

c. Factums and motion materials relating to a limitation issue pleaded by the Cyrs (in action no. CV-10-403-SR) were filed prior to trial; and

d. The evidence in chief of all but one of the witnesses called (that witness having been summoned) was reduced to writing in the form of an affidavit or witness statement (although the parties remained at liberty to conduct a truncated oral examination-in-chief to “warm up” the witnesses and provide an overview of their testimony).

[14] As a result of these measures, a significant amount of court time was saved. In the end, the trial was completed in seven days. Counsel are to be commended for their good-natured and collaborative response to my sometimes not-so-subtle judicial prodding.

[15] The collaborative approach was carried forward in to the trial itself, which was conducted expertly, efficiently and professionally, in the best traditions of the Bar.

Background

[16] A substantial body of evidence was adduced at trial. I have endeavoured in these reasons to limit my recitation of and reference to the evidence that bears most directly on the issues I have been asked to resolve. I start with an overview of the background facts and then expand, issue by issue, upon the evidence relating to the issue and my findings.

[17] On 12 December 1998, Reginald Cyr’s father unexpectedly passed away. As a result, it became necessary for a burial lot to be purchased on an urgent basis.

[18] On 14 December 1998, Mr. Cyr purchased two burial lots in Section “N” of the Cataraqui Cemetery at a cost of $640.00 for each lot. The next day, Mr. Cyr’s father was interred in one of the lots that had been purchased.

[19] In June 1999, Mr. Cyr contacted the Cemetery to discuss the purchase of four additional lots. He learned that there were four lots available directly adjacent to the two lots that he had previously purchased. On 16 June 1999, Mr. Cyr purchased these four additional lots for $640.00 each.

[20] Reginald Cyr’s wife, Linda Cyr, had been a director of the Kingston Historical Society and, in January 2002, accepted an invitation to become an “Advisor” to the Board of the Cemetery Corporation.

[21] Ms. Cyr, who had a professional background in operational restructuring and quality improvement, offered to undertake a current state assessment of the Cemetery’s operations. According to her, at that time, the Cemetery lacked strategic direction and planning which prevented it from reaching its potential as a business and its recognition as an important historic site in Kingston and in Canada.

[22] Ms. Cyr encouraged the Board to establish strategic and operational priorities and objectives and initiated events to attract visitors and members “to celebrate and experience the Cemetery and its significance to the community and the country”.

[23] On 18 November 2003, the Cemetery Corporation’s Treasurer resigned. The Board invited Ms. Cyr to complete the term created by that vacancy and she was thus appointed as a trustee and as Treasurer on that date.

[24] In August 2004, Linda Cyr began to encourage her husband to himself seek election to the Board of Trustees. Mr. Cyr had grown up in Kingston before leaving to pursue post-secondary education and a successful career elsewhere, initially in public health, then in industry and, ultimately, in financial planning. Ms. Cyr felt that the Cemetery could benefit from Mr. Cyr’s business and financial background and with that in mind, he stood for election, and was duly elected as a trustee at the annual general meeting of the Cemetery Corporation in October 2004. He immediately became the Secretary/Treasurer of the Cemetery Corporation and Linda Cyr became the President.

[25] The evidence indicates that both Mr. and Mrs. Cyr were activist trustees. This was notwithstanding the fact that Linda Cyr wintered in Mexico between November and March each year, staying in touch by email and telephone.

[26] Linda Cyr developed a board orientation programme and established guidelines to improve communication among board members and between the Board and management, establishing more formality to the scheduling of board meetings. Her evidence described her efforts to increase sales and professionalism, to improve public perception of the Cemetery (this was particularly important to her given her interest in Canadian history). She sought, also, to improve the operations of the Cemetery Corporation. This involved extensive dealings with the General Manager of the Cemetery Corporation, its most senior employee.

[27] Included in a package of orientation material prepared by Ms. Cyr was an article from “The Journal”, a monthly publication of the Ontario Association of Cemeteries, dated June 2002, on the liabilities of cemeteries. After recording that members of a non-share corporation cannot receive any financial benefit from the corporation, the article continues:

The board members cannot, of course, take any action which would result in the personal advantage of any board member, unless such board member has made complete disclosure to the board, refrained from taking part in any debate of the matter, and has refrained from voting. The most prudent procedure to follow is that no member of the board may – either directly or indirectly – enter into any arrangement or contract with the Corporation or profit from any such arrangement or contract.

[28] In September 2005, Mr. and Mrs. Cyr visited the Beachwood Cemetery in Ottawa looking for ideas and inspiration for how the Cemetery might introduce changes to make itself more financial viable. Mr. Cyr obtained a copy of the entire price book of Beachwood Cemetery. He described this as “a comprehensive document which contained a complete price list of monuments, garden programs, cemetery services as well as interment options”. It included a two-price system per grave – one price was an “At-Need” price, used when a client was purchasing because of a death; the other was a “Pre-Need” price used when a client was purchasing rights as part of long-term planning.

[29] With Linda Cyr’s encouragement, Reginald Cyr, in addition to working on improvement of the Cemetery Corporation’s budgeting and finance, assumed responsibilities for sales and marketing. Working with Dean Oliver, who at that time was a family service representative (with duties including but not limited to selling interment rights, transfer of interment rights, cemetery repurchases of interment rights and handling customer complaints), Mr. Cyr created a new price list which included different prices depending on the section of the Cemetery, adopting the two-price concept used by Beachwood, and introducing a new monument sales programme. The price list was completed at the end of October 2005 and submitted to the Cemeteries Regulation Unit of the Ministry of Government and Consumer Services on 2 November 2005, with an effective date of 5 December 2005. Some corrections to the price list were made in February 2006 that did not require the submission of a revised price list to the Unit.

[30] On 6 October 2005, the long-time Superintendent of the Cemetery left his position. The parties agree that after this departure, the Cyrs (in their positions as President and Treasurer respectively) assumed even more significant roles in the operational management of the Cemetery.

[31] A new general manager, Peter Schell, took up his responsibilities on 3 January 2006.

[32] On 23 April 2006, Mr. Cyr’s mother died suddenly. He needed to arrange her interment.

[33] Mr. Cyr met with Mr. Oliver on 24 April 2006 to discuss funeral and burial arrangements for his mother. At that time, he told Mr. Oliver that he was dissatisfied with the location of the six interment rights that he had previously purchased. The part of the Cemetery where the rights were located had become increasingly busy and developed.

[34] Mr. Cyr asked Mr. Oliver if the lots he had purchased in 1998 and 1999 could be exchanged for new ones, in a different location. He specifically asked for lots in the “Forest Pond” area of Section N of the Cemetery, which he “considered to be more serene”.

[35] Mr. Cyr asserts that Mr. Oliver told him that such an exchange was possible.

[36] Mr. Oliver said that although there was no formal policy for exchanges, owners of interment rights could demand that the Cemetery repurchase those rights for the original purchase price, less the “care and maintenance” component of the price, which was, and remains, 40%.

[37] Mr. Oliver identified six graves located at 12-17, lot 502 of Section N. Mr. Oliver described these graves as being located in the “Pond View” area of Section N. The description “Creekside” has also been used in respect of the location of those graves. According to Mr. Oliver, some “Creekside” graves are in the “Pond View” area which, in his understanding, includes any land around Forest Pond which is located in Section N.

[38] The Cyrs liked the location proposed by Mr. Oliver.

[39] The by-laws of the Cemetery mandate that an “Interment Rights Certificate” must be issued before any interment takes place.

[40] The usual practice of the Cemetery is that the purchasers of interment rights enter into a standard form contract. Consistent with the Cemetery’s by-laws, the terms and conditions on the standard form contract provide that an interment right cannot be exercised until a Certificate of Interment Rights has been issued and, further, that a Certificate of Interment Rights will not be issued until the interment rights have been paid for.

[41] Notwithstanding these provisions, there have been instances where interments were allowed before all fees had been paid and, indeed, in the case of Mr. Cyr’s mother, it would appear that she was buried in one of the graves in lot 502 before any paperwork had been done.

[42] At the time that the Cyrs were looking at lot 502, Linda Cyr inquired about the possibility of acquiring a garden strip area abutting lot 502. As Mr. Cyr explained, “she thought a garden area would beautify our new family plot and the Cemetery”.

[43] Ultimately, the six graves purchased by Mr. Cyr in 1998 and 1999 were returned to the Cemetery. The Cyrs acquired interment rights to six graves in lot 502 of Section N, together with an adjacent area which was referred to at trial as the “Cyr Family Garden”.

[44] The Cyrs paid $10,600 (including G.S.T.) for the purchase of the Cyr Family Garden rights. They paid a further $1,765.50 for the acquisition of rights to graves 12-17 in lot 502 after the application of a credit of $15,150 for the six previously acquired graves that they “exchanged”.

[45] There are very different perspectives on the Cyrs’ acquisition of the graves in lot 502 and the Cyr Family Garden and, in particular, with respect to the financial arrangements and whether the Cyrs acted in ways which were inconsistent with their responsibilities, as trustees, to the Cemetery Corporation.

[46] In the spring of 2006, Mr. Schell had contacted Daina Eliason, a local landscape architect, to discuss a project to beautify part of the Cemetery. She subsequently learned that the proposed project principally involved the area in and around the Cyr Family Garden. She understood that the project was to be a prototype and that the Cemetery was considering further development of family plots.

[47] The Cyrs were at a meeting in June 2006 where concept drawings were discussed. Ms. Eliason subsequently prepared landscape plans for which the Cemetery Corporation was invoiced $1,404.50. The plan covered by the invoice encompassed part of the Forest Pond area including, but not limited to, the Cyr Family Garden.

[48] In June and July 2006, Mr. Cyr worked on a new price book. One of its features was the stipulation that “Section N-Pond View” plots were to be sold as “packages (no exceptions)” with the intention that someone would buy a grave and monument as a package.

[49] In 2007, plants were planted in and around the Cyr Family Garden by the Cemetery horticulturist in accordance with Ms. Eliason’s plan.

[50] Subsequent to the acquisition of the graves in lot 502 and the Cyr Family Garden, lot markers, “hickey” markers and a monument were installed there. These events, including the associated financial arrangements, also form part of the dispute between the parties.

[51] In August 2007, the Cemetery Corporation received an anonymous letter making certain allegations against the Cyrs. The letter was on Cataraqui Cemetery letterhead and was clearly written by someone associated with the Cemetery, although its author has never been definitively established. The alleged improprieties included:

a. The purchase of a tractor for the Cemetery for $22,000;

b. The acquisition of the Cyr Family Garden which, the letter alleged, would have cost anyone else between $60,000 to $110,000, rather than the $10,000 which the Cyrs had paid;

c. The failure of the Cyrs to pay for shrubs and plants at the Cyr Family Garden due to Mr. Cyr having told the staff not to bill him; and

d. The termination of an employee, Gavin Greig, which Mr. Cyr had allegedly plotted.

[52] As a result of this anonymous letter, there was a meeting of the trustees, which the Cyrs attended. The Cyrs say that the issues of the tractor and the Cyr Family Garden were discussed; everyone else claims that there was no discussion, let alone resolution, of the Family Garden purchase issue.

[53] Mr. Schell’s employment with the Cemetery Corporation had terminated in September 2006. From October 2006 until August 2007, the Cemetery Corporation hired a superintendent on contract. Then, in August 2007, Bob Lemmon was hired as the General Manager.

[54] Mr. Lemmon had previously managed a bathroom showroom. The Cyrs were customers and asked him if he would be interested in managing the Cemetery. He met with the Board and was hired. He considered the Cyrs personal friends.

[55] The Cyrs had lent the Cemetery Corporation various items, including an office desk. Subsequently, the Cyrs offered the Cemetery a used television and a used garden shed.

[56] In November 2007, Mr. Lemmon requisitioned a cheque for $8,000 payable to “Reg Cyr” and provided a breakdown of that amount as payment for the shed, desk and television as follows:

Garden shed $ 500

Office desk $ 3,000

Television $ 4,500

[57] On 15 and 16 September 2008, the Cyrs drove to Boston and visited the Mount Auburn Cemetery there. They acquired various Mount Auburn materials including copies of the Master Plan for the development of the cemetery, information about historic cemetery tours and schedules and other information including annual reports, pamphlets, fund raising, newsletters, books, videos, DVDs, price lists, events calendars and notices of events. The Cyrs did not seek prior approval from the Board before making this trip. They claimed and received expenses from the Cemetery Corporation totalling $1,864.16. The Cyrs subsequently reported to the Board on their trip to Boston.

[58] At the 2009 Annual General Meeting of the Cemetery Corporation, her term as a trustee having expired, Ms. Cyr stood for re-election. She was not elected. However, Mr. Cyr, whose position had not been up for re-election, and Rowland Tinline, who had been re-elected, then resigned as trustees, ostensibly because of concerns about the election process, which had involved the use of proxies, for which there was no deemed process. The remaining trustees then asked Mr. Tinline to come back onto the Board. The Board, by then consisting of four trustees, asked Ms. Cyr to fill the second vacancy. Ms. Cyr was then reappointed as President and another trustee, Charles Simonds, was re-appointed as Vice-President. Mr. Tinline was re-appointed as Secretary and Barbara Bonner was appointed as Treasurer.

[59] Shortly after being appointed Treasurer, however, Ms. Bonner offered to resign if Mr. Cyr would replace her. Mr. Cyr agreed and was subsequently appointed to the Board and as Treasurer.

[60] On 25 February 2010, Mr. Lemmon sent Ms. Cyr an email alleging that the Cyrs had received an improper benefit with respect to the exchange of graves and the purchase of a garden in 2006.

[61] In early March 2010, Mr. Simonds, Mr. Tinline, Mr. Lemmon and Hans Blaser (another trustee) met with Graeme Ross, a partner with the Cemetery Corporation’s accountant, Secker, Ross & Perry LLP, to discuss “certain” transactions between the Cyrs and the Cemetery. Mr. Ross was asked to review all of the plot purchase transactions involving the Cyrs between 1998 and 2006.

[62] Mr. Ross concluded that the transactions had resulted in the Cyrs obtaining an improper benefit at the expense of the Cemetery and of the Care Maintenance Fund in an amount of not less than $23,352 exclusive of any additional losses associated with the monument and foundation in the Cyr Family Garden.

[63] On 25 March 2010, Messrs. Tinline, Simonds and Blaser met as a board and voted to remove Linda Cyr as President and Chair of the Board and Reginald Cyr as Treasurer. The Board subsequently purported, in April 2010, to remove the Cyrs as trustees “effectively immediately on the understanding that this action must be confirmed at the next General Meeting”.

[64] At the subsequent Annual General Meeting in June 2010, no resolution was put forward regarding the removal of the Cyrs as trustees. Mr. Cyr’s term was up for renewal. He was not re-elected. Ms. Cyr’s tenure as a trustee technically continued, but she claims she was not allowed to attend nor was she notified of any board meetings after the AGM. She resigned as a trustee on 2 September 2010 once legal proceedings had been commenced.

Issues

[65] The following issues emerge from the pleadings in the two actions and the submissions of counsel:

a. Were the six grave plots in Plot 502 of Section N of the Cemetery and the Cyr Family Gardens validly acquired by the Cyrs?

b. If not, should the Cyrs be required to pay to the Cemetery Corporation a further $25,187.80 for the plot purchase transactions?

c. Are the Cyrs liable to pay the Cemetery Corporation for:

i. the costs of landscaping plans ($1,404.05) and construction of the Cyr Family Garden ($3,816);

ii. the cost of putting in a foundation for a monument ($2,504);

iii. the cost of setting hickey markers in the Cyr Family Garden ($1,050)?

d. Should the Cyrs be required to repay all or part of the $8,000 which they received for the garden shed, the office desk and the television that were acquired by the Cemetery?

e. Should the Cyrs be required to reimburse the Cemetery Corporation the expenses they received for their trip to Boston?

f. Did the Cyrs breach fiduciary duties which they owed to the Cemetery Corporation and, if so, are they liable to pay damages?

g. Are some or all of the remedies sought by the Cemetery Corporation barred by the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B?

h. Is the Cemetery Corporation liable to pay the Cyrs aggravated or punitive damages?

Plot Purchase Transactions

[66] A recurring theme at trial was that the Cemetery’s procedures and policies were honoured more in the breach than in the observance. And, with respect to the exchange of graves, there was not even a consistent practice, let alone a policy. While contractual provisions, which incorporated the Cemetery’s policies by reference, governed the relationship between interment rights holders and the Cemetery, when these provisions were not followed, no-one protested – at least not until a lot of water had flowed under the bridge.

The Exchange

[67] Although there is no formal mechanism for exchanges, the Cemeteries Act (Revised), R.S.O. 1990, c. C.4 (which was in force at material times but was repealed on 1 July 2012) entitled an interment rights holder to repurchase those rights at any time before they were used (section 23(1)). An owner of interment rights exercising the right to repurchase was entitled to receive back the original purchase price, less than the care and maintenance component of the price, which was at all material times, 40%.

[68] There is and was no right to repurchase rights which have been used. Mr. Cyr’s father had been buried in one of the graves that had originally been purchased. When the exchange that Mr. Cyr had arranged through Mr. Oliver took place, Mr. Cyr’s father was disinterred from his original grave and reinterred in lot 502 beside the grave of his wife.

[69] Evidence was adduced by both parties concerning other exchanges that had taken place. These examples are of limited assistance because each appears to have had unique circumstances or considerations. What can be said, however, is that none of the exchanges gave a credit of full market value of plots being returned to the Cemetery Corporation’s inventory.

Pricing

[70] The Cyrs say that they were guided by Mr. Oliver in relation to the pricing of their exchange of graves and the acquisition of rights for the Cyr Family Garden.

[71] Mr. Oliver says that the suggested pricing of the various elements of the exchange originated with Mr. Cyr. Because Mr. Cyr was both the Treasurer of the Cemetery Corporation and the acting Sales Manager (and therefore, his direct supervisor at the time), Mr. Oliver felt he had no choice other than to go along with Mr. Cyr, even though he did not agree with the instructions he was given.

[72] The original six graves were purchased by Mr. Cyr in 1998/99 at $640 each for a total of $3,840 plus G.S.T. Forty percent of the total paid was allocated to the care and maintenance fund.

[73] The contract for the purchase of four graves that Mr. Cyr acquired in 1999 reflects that they cost $2,560 (4 x $640) plus G.S.T., of which $1,024 was allocated to care and maintenance and the “Repurchase Price” stated on the contract was $1,536.

[74] As has already been mentioned, the repurchase rights afforded by the Cemeteries Act do not apply to used graves. Indeed, the Cemetery’s by-laws specify that no refund is owed to an interment rights holder if a used grave is returned to the Cemetery. Notwithstanding this, the Cyrs were, in fact, able to return the lots purchased in 1998/99 to the Cemetery Corporation.

[75] A repurchase of interment rights in accordance with the Cemeteries Act would have resulted in a credit of 60% of the purchase price. On that basis, the credit to Mr. Cyr would have been $2,304 ($3,840 less the care and maintenance portion of $1,536).

[76] Mr. Oliver says that he was directed by Mr. Cyr to calculate the repurchase credit using the guidelines set out in the Funeral, Burial and Cremation Services Act, 2002, S.O. 2002, c. 33, which had not yet come into effect (it did not do so until 1 July 2012). The new legislation provided for repurchase of graves at the fair market (current) value of that grave, less the care and maintenance element.

[77] According to the price list, which Mr. Cyr had played a significant role in creating towards the end of 2005, the “pre-need” price for a grave in Section N was $2,525 plus G.S.T., comprised of $1,515 for the land and $1,010 for care and maintenance.

[78] The credit applied for the return of the graves purchased in 1998/99 was $15,150, or $2,525 per grave. This corresponded with the fair market value, as of 2006, without deduction of the care and maintenance portion.

[79] Mr. Oliver claims that he was instructed by Mr. Cyr to provide a credit for $15,150 for the exchanged graves. Mr. Cyr claims that he left the pricing calculations to Mr. Oliver and that he did not question how the credit of $15,150 was arrived at.

[80] The six “new” graves in lot 502 were priced at $2,800 each. Although, at the time, graves in Section N had a listed price of $2,525, there was a separate price for graves in Section “N-Pond View”. These graves had a listed price of $4,200 each. Mr. Oliver and Charles Simonds (the current President of the Cemetery Corporation, who was on the Board in June 2006) both testified that they believed the graves in lot 502 to be “Pond View” graves.

[81] Despite that, a plan of the Cemetery, marked to show the various sections, does not separately delineate the “Pond View” area. Indeed, lots 502 and 501 are not even shown on the master plan, although a larger scale, colour-coded plan of the area near the Forest Pond, which illustrated the location of the spaces purchased by the Cyrs, was produced.

[82] In contrast to the views of Mr. Oliver and Mr. Simonds, Mr. Cyr says that he and his wife never considered the location of the graves in section 502 to be “Pond View”. Mr. Cyr pointed out that although the price list had a designation for “Pond View” graves, the location of such graves was not defined. As far as Mr. Cyr was concerned, the location of the graves in section 502 was “Creekside”.

[83] Based on the price book rate for “pre-need” “Pond View” graves, it was Mr. Oliver’s evidence that Mr. Cyr should have paid $4,200 per grave for a total of $25,200. After giving a credit of $2,304 (reflecting 60% of the original purchase price of the graves purchased by Mr. Cyr in 1998/99), the net purchase price of the new graves should have been $22,896.

[84] Mr. Oliver says that ultimately the purchase price of the six new plots was reduced, on Mr. Cyr’s suggestion, to $2,800 each. That price was not reflected on any price list that the Cemetery was working from at the time.

[85] As a result of the reduction of the price of the newly acquired graves and the application of a credit of $15,150 for the return of the previously purchased graves, the net final purchase price on the “exchange” was $1,650 plus G.S.T.

[86] With the respect to the Cyr Family Garden, Mr. Oliver says that at the time of the purchase of the interment rights for spaces 12-17 of lot 502, Mr. and Ms. Cyr also spoke with him about a further purchase of the surrounding areas, including the three graves beside the six new graves (i.e. graves 9, 10, 11 and 19, 20 and 23 of lot 502). This is what Mr. Oliver says he understood to be the additional rights purchased for the Cyr Family Garden. He did not understand the rights purchased to also include a garden area to the immediate south of graves 12-17.

[87] The price of $10,000 for the Family Garden was not drawn from any price list but was, according to Mr. Oliver, a “round figure” suggested by Mr. Cyr. Mr. Oliver says that he did question Mr. Cyr about the figure, as he had concerns that it was too low, to which Mr. Cyr allegedly responded that he and Ms. Cyr would be leaving a sum of money to the Cemetery in a form of an endowment for the maintenance of the Family Garden. The contract allocates $5,000 of the $10,000 total price to care and maintenance, and describes the interment rights purchased as “12 positions” (a reference to cremation positions rather than graves) with the notations “Private Cremation gardens as per approved plans” and “Construction costs of Garden are extra upon completion”.

[88] By way of comparison, in November 2005 another garden near to where the Cyrs’ was located, but approximately half the size with only two interment rights, had been purchased for $8,950.

[89] The Cyrs produced a copy of a memorandum from Linda Cyr to Peter Schell dated 20 June 2006. The memorandum reads:

Peter, I have been given [sic] some careful thought to the logistics of managing and purchasing the Forest Pond plot. I do appreciate the concern that we are not in violation of any restrictions or regulations governing Board practice and I think it is appropriate that we confirm the interpretation of the restrictions with [the Cemetery Corporation’s lawyer]. All of our actions as Trustees were rendered willingly without expectation of payment. We need to be clear that the agreed price is reasonable and justifiable and not a “gift” or deemed as payment for Board services. This could be statement incorporated into the purchase agreement for the purposes of documentation. …

Peter, I am not looking for any special arrangements but to establish a reasonable and appropriate purchase agreement that is mutually acceptable to us and to the Cemetery.

[90] Linda Cyr says that she prepared the memorandum after a meeting with Peter Schell earlier the same day. She cannot find a copy of any email that the memorandum was attached to but is positive that she left the document for Mr. Schell in his office.

[91] Mr. Schell has no recollection of having received this memorandum and there is no copy of it in the Cemetery Corporation’s records.

[92] At the very time all of this was going on, Mr. Cyr was working on a new price book.

[93] Evidence was adduced concerning a request by an interment rights holder who wished to return two graves to the Cemetery. She had purchased the graves in 1983 for $780. In August 2006 she contacted the Cemetery and was referred to Mr. Oliver. She explained that she no longer wished to be buried in Kingston. In a letter subsequently sent to Mr. Simonds, she says that Mr. Oliver told her that she could only get what she had paid for the graves, less the care and maintenance portion. After further discussion she claims that Mr. Oliver then “said that because they were double lots, and in section N where not many unsold doubles remained, and the law was about to change, he felt the Board would consider buying them … at fair market value” and suggested that she write to the Board requesting this. She then received a call from Mr. Cyr which culminated in an offer from him to buy back the graves for an amount which, although significantly more than she had paid for the graves, was less than Mr. Oliver had suggested she might receive. She turned the offer down. She then received a short letter from Mr. Cyr which said:

This letter is to confirm that the current policy is to not purchase graves at fair market value. We understand that legislation is proposed which will accommodate your request, and we will be pleased to assist you at that time.

[94] The rights holder complained in a letter to Mr. Simonds, copied to all other board members. She accused Mr. Cyr of being rude and said that, for want of a better expression, she felt like she was being “jerked around”. This yielded a letter from Ms. Cyr in which she defended the actions of Mr. Cyr as “fair and accommodating” and reiterated that the “calculation of the buy back price is clearly defined in legislation and policy”.

The Paperwork

[95] Although the contract for the purchase of the interment rights to spaces 12-17 is dated 12 June 2006, the consensus appears to be that the contract was not signed until August 2006. The contract relating to the purchase of the Cyr Family Garden is dated 14 August 2006.

[96] There is no reference on the contract for spaces 12-17 to “Pond View”. The contract for the cremation garden, in one iteration, makes no reference to its location. However, a version with additional writing, including a “paid in full” stamp, denotes “Section N” and “Creekside”. A Certificate of Interment Rights concurrently prepared in relation to the “Private Cremation Garden” refers to it as being in Section “old N” with the lot described as “Creekside”.

[97] The overall impression of the “paperwork” produced by the Cemetery Corporation with respect to the acquisition and certification of interment rights is that:

a. Contracts were not filled out in a timely way;

b. Pricing and financial considerations were not adequately spelled out or justified; and

c. There is no contemporaneous reliable narrative of what happened or why.

The Anonymous Letter

[98] Roland Tinline circulated the anonymous letter to other Board members on 6 August 2007. Soon afterwards, a meeting was held at the Cemetery’s offices. All of the Trustees attended: the Cyrs, Mr. Simonds, Mr. Tinline and Barbara Bonner. There was no formal agenda. No minutes were taken. Only the Cyrs (or one of them) retained a copy of the letter.

[99] Mr. Simonds, Ms. Bonner and the Cyrs have quite different recollections about what was discussed at the meeting.

[100] Ms. Bonner and one other trustee felt that the letter should be ignored because its author was an unidentified disgruntled employee. Mr. Simonds said that he read the complaint, but did not attach any credit to it. There was no apparent foundation for the allegations it contained. At the time he did not think there was any question about the integrity of the Cyrs.

[101] The Cyrs claim that they brought to that meeting all of the documents relating to their “exchange” of graves and their acquisition of the Cyr Family Garden. Yet it was acknowledged during cross-examination that the contracts relating to the 1998 and 1999 grave purchases were not taken to the meeting and, more significantly, no copy of the 20 June 2006 memorandum from Ms. Cyr to Peter Schell was taken either.

[102] Mr. Simonds and Ms. Bonner do not recall any documents relating to the grave transactions being produced. And whereas the Cyrs claim that the meeting lasted about an hour and that almost all of the discussion was about the graves, Mr. Simonds recalls it as a “very brief” meeting, and he and Ms. Bonner recall a discussion about the tractor, but nothing else.

Analysis and Findings

[103] The transactions relating to the exchange of graves and the acquisition of the Cyr Family Garden are a product of erratic and incomplete record keeping, inconsistent practices and procedures and a lack of oversight. In the case of exchanges in particular, the approach appears to have been one of “make it up as you go along”.

[104] Mr. Oliver was at the centre of the 2006 transactions. He was not duped. At best, from his standpoint, he was pressured by the Cyrs into transactions that he knew to be improvident. At worst, he sought to ingratiate himself to the Cyrs. The true state of affairs is likely closer to the latter of those two scenarios.

[105] Mr. Oliver’s willingness to do deals was not limited to the Cyrs, hence his suggestion to the interment rights holder who contacted him in August 2006 that she should be able to get the Board to pay full market value (less care and maintenance) for them. And it was not just Mr. Oliver who adopted an elastic approach to the application of the Cemetery’s policies: although Mr. Cyr, to whom the member’s request was subsequently directed, turned that request down, he did offer, on behalf of the Cemetery, to repurchase the graves for a lot more than had been paid for them. There is no indication that, up to that point, the request had been referred to the Board as a whole.

[106] Given this environment, it is not surprising that the Cyrs were able to get what they wanted on terms that were most favourable to them.

[107] I do not accept that the Cyrs did not have any concept of how the pricing arrangements for the exchange were arrived at. During the very time period in question, Mr. Cyr had been working on a new pricing book, which he circulated to other board members in early July 2006.

[108] Furthermore, the correspondence adverted to above – concerning another member’s repurchase request just a few months after their own transactions – amply demonstrates how alert the Cyrs were to repurchase policies in particular. It surely does not overstretch logic to conclude that they would have been quite aware of pricing issues.

[109] I do not find that the Cyrs were dishonest or that they actively coerced Mr. Oliver. However, Mr. Oliver was prepared to do what he could to accommodate the Cyrs and the Cyrs benefitted as a result.

[110] The price that was set for the newly acquired graves was more than the list price for “regular” Section N plots, but less than “Pond View” graves. The inference I draw from that is that the Cyrs knew that these plots were not standard plots. Why else would they agree to pay more than the list price?

[111] It is troubling that the only copy of Ms. Cyr’s memorandum of 20 June 2006 is the one produced by Ms. Cyr (Mr. Schell having no recollection of having received it).

[112] It is also unfortunate that no minutes were taken or notes made at the meeting in August 2007 to discuss also the anonymous letter and that the Cyrs have diametrically different recollections of what was discussed at that meeting than the other attendees. Minutes were routinely taken at board meetings and Ms. Cyr was a self-described “fastidious note-taker”.

[113] I find that it is unlikely that, as Mr. Simonds and Ms. Bonner claim, there was no discussion at the August 2007 meeting of the allegations made against the Cyrs: the Cyrs would, after all, have been highly motivated to set the record straight, given the seriousness of the allegations that had been made against them and the scurrilous tone of the anonymous letter.

[114] The Cemetery argues that the conclusions to be drawn are, firstly, that Mr. Cyr breached the terms of the contracts he entered into in 1998 and 1999. Those contracts would have specified the repurchase rights. And, secondly, that the Cyrs abused their positions as trustees in relation to both the “exchange” transactions and the purchase of the Cyr Family Garden.

[115] The contractual analysis is, in my view, straightforward. As I have already found, the provisions of the interment rights contracts were not strictly followed. There was a mutual agreement between the Cyrs and the Cemetery’s authorised representative to do things differently than provided for in the contracts. No-one complained. To the extent it is argued that this occurred because of an abuse of the Cyrs’ status as fiduciaries and directors, this issue becomes one of whether they breached their duties as such. This is discussed below.

[116] Sophisticated individuals like the Cyrs should, however, have recognised the need for them to make full and contemporaneous disclosure to the Board of the transactions which they were entering into in relation to the exchange of graves and the acquisition of the Cyr Family Garden.

[117] Although the Cyrs protested that the purchase of graves was not the sort of financial transaction that needed to be disclosed, the “exchange” and the acquisition of the Cyr Family Garden went beyond the simple acquisition of interment rights at list price.

[118] Everything about the transactions involving the Cyrs was irregular. The return of a lot that had been used was irregular. The credit for the current market value of the returned lots (including the care and maintenance element) was irregular. The pricing of the newly acquired graves was irregular. And the acquisition of the Cyr Family Garden was irregular, both with respect to pricing and the lack of precision in the paperwork as to what had been acquired.

[119] I simply do not accept that the Cyrs left it all to Mr. Oliver and to other employees of the Cemetery Corporation to deal with the pricing, the preparation of the paperwork and ensuring that the regulations and by-laws had been complied with. And if that is what they did in fact do, they should not have. As trustees, fiduciaries, and sophisticated business people, they should have known better.

[120] It is not hard to see why, in 2010, when Mr. Lemmon stirred things up, the Board, looking into the rear view mirror, saw self-dealing and impropriety on the part of the Cyrs. While I do not find the conduct of the Cyrs to have been dishonest, calculated or deliberately abusive of their responsibilities as officers and trustees, I do find that their actions were careless and ill-considered.

Landscaping

[121] Jack Nielissen is a long time employee of the Cemetery. His current role is Grounds Manager. In 2006, he was the Horticultural Manager. His duties included gardening and overseeing new gardens and maintenance of existing gardens.

[122] There had been discussions in early 2006 involving Linda Cyr, Reginald Cyr, Peter Schell and Hans Blaser (an Advisory Board member at the time and a benefactor of the Cemetery, who subsequently became a trustee). There was a discussion about new gardens in the Forest Pond area generally, including what became the Cyr Family Garden.

[123] It was Mr. Nielissen who found and first contacted Ms. Eliason. She then met with Mr. Blaser to discuss what expertise she might bring to the landscaping of the entire Cemetery, including the Forest Pond area.

[124] Ms. Eliason recalled a visit to the Cemetery in which she met with Mr. Schell and, she believes, Mr. Nielissen. She subsequently sent Mr. Schell a letter on 8 May 2006 submitting a proposal to prepare a concept plan, to be followed by a final detailed landscape plan for “Cyr Family Grave Site”. The landscape plan would designate proposed and existing plant and burial areas as part of the overall design. A plant material list specifying botanical name and size and necessary details would also be provided.

[125] Ms. Eliason was given the go-ahead to proceed. In time, she presented her concept plan. Mr. Schell and Mr. Nielissen were present, as were the Cyrs.

[126] Ms. Eliason billed the Cemetery for her work. She subsequently did other work relating to the Forest Pond area which was separately built.

[127] The garden was planted by Mr. Nielissen in 2007 in accordance with the landscape plan. Mr. Nielissen worked directly from the landscape plan without any regard to or instruction from anyone as to the size of the plots or the garden. Mr. Nielissen had no information as to who paid for the planting. He does recall that in the late 2007, he suggested to the Cyrs that a back-drop of blue chip junipers should be planted on the slope to the immediate northwest of the Cyr Family gravesite. By that time, a monument had been erected and it was Mr. Nielissen’s suggestion that planting the junipers would enhance the entire area. The cost of each juniper was approximately $20 and approximately 60 were planted. Mr. Nielissen has no knowledge as to who paid for these plantings.

[128] From the time that the garden was planted in 2007 until the end of 2010, Mr. Nielissen claims that the Cyr Family gravesite was “fastidiously maintained on a regular basis”. He estimates that it would require between five and eight man-hours per week (on average) to properly maintain the Cyr Family gravesite garden.

[129] After 2010, Mr. Nielissen acknowledged that the Cyr Family gravesite has been maintained to a lesser degree. He says that he was instructed to maintain the garden to such a degree as to ensure that the area did not deteriorate to the detriment of the surrounding area. The Cyrs assert, and the photographic evidence confirms, that the Cyr Family Garden has now fallen into a state of disrepair.

[130] Mr. Cyr testified that he fully expected to pay for an allocated share of the landscaping work which included the Cyr Family Garden. However, he was never invoiced and no demand for payment was made until after the current litigation commenced in 2010. Mr. Lemmon subsequently determined that the cost associated with landscaping the Cyr Family Garden would have totalled approximately $3,816 (inclusive of G.S.T.). In cross-examination, Mr. Cyr indicated that if he had been given an invoice for this amount, he would have paid it, although he added that he did not know what a fair price would be now that the garden has been permitted to fall into a state of disrepair.

Findings

[131] Setting to one side any limitation concerns, by the time the Cemetery asked the Cyrs to pay for the landscaping and related work, the garden was no longer being maintained by the Cemetery. Much, if not all, of the money it had spent, which the Cyrs would willingly have reimbursed, had been wasted. And there was no agreement about who would pay for what.

[132] Under those circumstances I find no basis to require the Cyrs to pay for landscaping now.

Hickeys, Monuments and Markers

[133] The Cyrs purchased a nine foot tall by four foot wide monument to be erected as part of the Cyr Family Garden. The Cyrs paid for the monument out of their own personal funds.

[134] According to both Mr. Simonds and Mr. Lemmon, the monument purchased by the Cyrs was of exceptional design and size which exceeded the specifications for upright markers set out in the Cemetery’s by-laws. The Cyrs should, accordingly, have sought approval from the Board prior to erection of the monument. This did not occur.

[135] The Cyrs claim that Mr. Oliver told Linda Cyr that the monument was not oversized for the size of their family plot and that Board approval was therefore not required.

[136] Furthermore, during Mr. Cyr’s six years on the Board, he could not recall any occasion on which the Board had been requested to approve monumental foundation placement, believing this to be an operational task performed by the grounds manager.

[137] The location of the foundation for the monument was marked out by Gavin Greig who was, at the time, the Grounds Foreman of the Cemetery. Typically, when a foundation was to be installed, Mr. Greig would receive a blue monument card from the Cemetery setting out the location of the foundation as well as its size. However, in the case of the Cyr Family Garden, there was no blue monument card. Rather, according to Mr. Greig, Mr. Cyr directed him where he wanted the foundation to be poured. An unsigned “Application and Authorization for Marker Foundations/Marker Installation” form records the location of the foundation as being two feet “into gravesite” and two feet to “backside of gravesite into open area”. The foundation size was 48” x 48” x 6”.

[138] Mr. Greig believed at the time that part of the area he was being asked to mark out was outside of the area for which interment rights had been purchased by the Cyrs. He claims that Mr. Cyr replied, “It doesn’t matter because we are buying the land behind the lot for the Cyr Estate Garden”. Mr. Greig explained that on previous occasions, he had been told by Mr. Cyr that any refusal on his part to follow his directions would result in his immediate termination. Accordingly, he did what he was told.

[139] Mr. Greig says that Mr. Cyr then had “his men” pour the foundation.

[140] Mr. Cyr vehemently denies the allegations of Mr. Greig. In fact, it would appear that the monument was not located outside of the area for which the Cyrs had purchased rights.

[141] And while, ordinarily, the Cemetery Corporation would pour foundations itself, on this occasion, the work was done by an outside contractor at the Cemetery’s request. The Cemetery Corporation paid for the pouring of the foundation.

[142] There is no doubt that the Cyrs should have been responsible for the cost of the foundation. However, they were not billed by the Corporation, nor was any payment demanded until after the litigation commenced.

[143] The Cyrs also purchased six hickey grave markers to be placed in the Cyr Family Garden.

[144] A setting fee of $125 per marker applied. Furthermore, an additional $50 per marker would be paid into the care and maintenance fund.

[145] Mr. Nielissen says that he was instructed to place the first two hickeys that came in at the foot of the graves of Mr. Cyr’s parents. The Cyrs confirm that this is where they wanted two of the hickeys to be placed. The others were to be put wherever the Cemetery deemed appropriate with the thought that they could be repositioned later.

[146] Mr. Cyr claims that it was just an error that the setting fees were not billed for or paid. There is no assertion that the Cyrs gave instructions that they should not be billed.

Findings

[147] Subject to the limitation defence raised by the Cyrs and discussed below, the Cyrs should now pay the setting fees and associated care and maintenance fund contribution for the six hickeys.

The Desk, the Television and the Shed

[148] Mr. Cyr had purchased a second-hand desk for $3,000 in 2005. For a while, it was kept in his basement office at home. However, when Mr. Schell was hired by the Cemetery Corporation and required furniture for his office, the Cyrs decided to loan furniture and accessories to the Cemetery, including the desk.

[149] The Cyrs also loaned a metal garden shed to the Cemetery, which had become surplus to their needs.

[150] In 2007, a television set and VCR that the Cyrs had replaced was also provided to the Cemetery. This occurred after a conversation with Mr. Lemmon which, according to Mr. Cyr, led to Mr. Lemmon offering the Cyrs $8,000 for the television, the VCR and the previously loaned shed and desk.

[151] Mr. Cyr bought his new television from the company which employed Mr. Lemmon’s son. In fact, Mr. Lemmon and his son themselves delivered the new set to the Cyr residence and removed the old one to take it to the Cemetery.

[152] Mr. Lemmon claims that he was instructed by Mr. Cyr to pay Mr. Cyr $8,000 for these three used items on the basis that this payment would then allow Mr. Cyr, in turn, to make a charitable donation back to the Cemetery for $8,000 for which he would receive a tax receipt. Mr. Lemmon claims that the actual value of the used television, desk and garden shed was much less than $8,000, but because of Mr. Cyr’s representation with respect to the donation back, he did not raise any issue at the time.

[153] The Board was not made aware of this transaction at the time.

[154] Mr. Cyr does not deny that he had said that he would be leaving money to the Cemetery, but he denies that there was any promise of a donation back.

[155] If the Cyrs had made a donation of $8,000 to the Cemetery, Mr. Lemmon would have said “no problem”. After sending Mr. Cyr the cheque, he did not follow up with Mr. Cyr to find out when a donation would be forthcoming.

Findings

[156] If one accepts that Mr. Lemmon authorised a payment to Mr. Cyr which he knew to be improvident because he expected Mr. Cyr to make a matching donation, he then let years pass without saying anything and only raised a concern after being asked by Mr. Simonds if he could find other evidence of questionable dealings between the Cyrs and the Cemetery.

[157] Mr. Lemmon’s conduct in respect to this transaction is unsavoury. Furthermore, there is no evidence other than his own bald assertion to back up the claim that the Cyrs were over-compensated.

[158] Accordingly, and also as further discussed in relation to the claim of breach of fiduciary duty, I find that there is no basis for requiring the Cyrs to return the sum of $8,000.

The Trip to Boston

[159] As already noted, the Cyrs did not get prior approval for their trip to visit the Mount Auburn Cemetery in Boston.

[160] Mr. Simonds confirmed that the Cyrs had reported on their trip when they got back. They never told the Board, however, that they would be seeking reimbursement of expenses. Nor was there any budget for such a trip.

[161] There is no allegation that the money was not spent or that the amount claimed by the Cyrs was excessive. The Cyrs drove to Boston and stayed in a hotel. They filed an expenses claim which was processed. Mr. Lemmon does not know if he or a trustee signed the reimbursement cheque: a copy of the cheque, while obtainable, was not produced.

[162] There was nothing clandestine, excessive, abusive or improper about the trip for Boston. It was an entirely legitimate expense which benefitted the Cemetery.

[163] The claim for reimbursement should be denied.

2010 and the Ross Report

[164] By the autumn of 2008, the relationship between Linda Cyr, who was still the President, and Gordon Lemmon began to deteriorate.

[165] Ms. Cyr claims that there were a number of customer complaints, some of which required board involvement, during the course of which Mr. Lemmon “often exhibited a confrontational, unprofessional and non-compassionate approach to dealing with difficult or challenging customers”.

[166] In 2009, according to Ms. Cyr, the situation with Mr. Lemmon had not improved. He was “blatantly ignoring various aspects of his job and was increasingly disrespectful, defiant and confrontational with me and the Board”.

[167] It will be recalled that at the AGM in 2009, Ms. Cyr was not re-elected as a trustee. However, due to the resignation of one of the trustees who was elected, Ms. Cyr came back onto the Board as both a trustee and president.

[168] Mr. Lemmon, by contrast, asserts that in 2009, he still had a good relationship with the Board. He acknowledged that he and Mr. Cyr would clash on certain things, but that they knew each other’s personalities and were both still trying to do their best. His evidence suggested that sources of frustration would occur when the Cyrs interfered with things that were properly within his domain as the person responsible for day-to-day management.

[169] In August or September 2009, Mr. Lemmon became aware that the Cyrs’ last hickey marker had come in – he cannot remember how or by whom or exactly when this was drawn to his attention. But it gave him occasion to check the Cyrs’ file. It was then that he says he became aware of many of the details of the exchange that had occurred in 2006. He quickly realised that the repurchase arrangement for the original six graves purchased by Mr. Cyr was irregular and thought that the prices of the new graves should have been quite a bit higher than that shown on the contract. But he did not do anything further to look into it at that time. He said that he knew that at some point, he would have to address what he had seen in the files. He says that he had in mind that three previous managers had been terminated after short tenures. There had also been a number of occasions on which Mr. Lemmon felt that he was being pushed into a corner by the Cyrs. So he waited.

[170] Mr. Lemmon acknowledges that he sat on the information that he had learned about the Cyrs’ transactions until he felt the need to protect his job. That occurred when, on 24 February 2010, Ms. Cyr sent a three-page memorandum to Mr. Simonds complaining of Mr. Lemmon’s behaviour. This memorandum coincided with Mr. Lemmon informing the Cyrs that he was going to raise with the then vice-president, Mr. Simonds, his concerns about the 2006 exchange and the non-payment of various amounts which he felt were owing by the Cyrs to the Cemetery Corporation.

[171] Mr. Simonds, on behalf of the Trustees (other than the Cyrs), then retained Mr. Ross to investigate. Mr. Ross conceded that he did not conduct a proper forensic examination. Rather, he unquestioningly took information from Mr. Lemmon. He did not interview the Cyrs. He acknowledged that the Board (minus the Cyrs) wanted a report that they could present to the Cyrs and, perhaps, have a resignation.

Findings

[172] I have attached no weight to the Ross report. Not only is it not a proper forensic accounting report – Mr. Ross conceded that he was not qualified as a forensic accountant and his report did not reflect an investigative mindset – it cannot be regarded as objective or unbiased (despite Mr. Ross’s protests to the contrary).

[173] The Cemetery Corporation included in its claim an amount of $1,614.38 for reimbursement of the cost of the report of Secker, Ross & Perry LLP. Given my comments about the value, or lack thereof, of this report, the Cyrs should not be required to reimburse the Cemetery Corporation for this expense, whether characterised as a special damage claim or a litigation disbursement.

[174] The Board evidently got what they wanted. After receipt of the Ross report, the Cyrs were not given an opportunity to respond to the findings or the allegations that had been made against them. They were excluded from further Board meetings and, effectively, removed from the Board, pending ratification by the next General Meeting.

Fiduciary Duties

[175] At trial, the Cemetery asserted a claim against the Cyrs for breach of fiduciary duty, although the Cemetery Corporation’s statement of claim does not expressly allege breach of fiduciary duty. Rather, the allegations include “self-dealing” as Trustees and misappropriation of funds.

[176] The Cyrs acknowledge that, as trustees, they owed fiduciary responsibilities to the Cemetery Corporation. They also had a statutory obligation, under section 71(1) of the Corporations Act, R.S.O. 1990, c. C.38, to declare any interest, direct or indirect, in a proposed contract or a contract with the Cemetery Corporation:

Every director of a company who is in any way directly or indirectly interested in a proposed contract or a contract with the company shall declare his or her interest at a meeting of the directors of the company.

[177] Notwithstanding the lack of precision in the pleadings, the pith and substance of the allegations made against the Cyrs is that they abused their positions as officers, directors and fiduciaries of the Cemetery Corporation.

[178] An oft-referred to overview of the fiduciary relationship was enunciated by the Supreme Court of Canada in Hodgkinson v. Simms, [1994] 3 S.C.R. 377, at p. 461:

At the heart of the fiduciary relationship lie the dual concepts of trust and loyalty. This is first and best illustrated by the fact that the fiduciary duties find their origin in the classic trust where one person, the fiduciary, holds property on behalf of another, the beneficiary. In order to protect the interests of the beneficiary, the express trustee is held to a stringent standard; the trustee is under a duty to act in a completely selfless manner for the sole benefit of the trust and its beneficiaries (Keech v. Sandford (1726), 25 E.R. 223) to whom he owes “the utmost duty of loyalty”. (Waters, Law of Trusts in Canada (2nd ed. 1984), at p. 31). And while the fiduciary relationship is no longer confined to the classic trustee-beneficiary relationship, the underlying requirements of complete trust and utmost loyalty have never varied.

[179] Directors, whether of not-for-profit corporations or of businesses, have always been subject to the duties and obligations imposed by courts of equity upon fiduciaries: Hodgkinson, at p. 461-62.

[180] While not every breach of duty by a fiduciary is a breach of fiduciary duty, allegations of self-dealing and financial impropriety by fiduciaries will almost always, if proven, amount to a breach of fiduciary duty.

[181] As fiduciaries it was the obligation of the Cyrs to act in the interests of the Cemetery. The Cyrs do not dispute this but argue that purchasing of graves was not an activity that could give rise to allegations of self-dealing. They point to other transactions between trustees and the Cemetery Corporation which they say should also have been reported to the Board according the Cemetery Corporation’s theory of directors’ responsibilities. For example, when the wife of a trustee had died and a grave had been acquired for her burial, or, for that matter, any financial transaction with the Cemetery, such as buying flowers at the shop.

[182] Routine and transparent transactions involving trustees and the Cemetery Corporation – which would not, in my view, require disclosure to the Board either pursuant to section 71(1) of the Corporations Act or because of fiduciary responsibilities – can readily be distinguished from the transactions which the Cyrs entered into in 2006.

[183] As I have already observed, almost every aspect of the transactions involving the Cyrs’ disposal and acquisition of rights was irregular in one way or another. It would be enough for a disclosure obligation to exist if the transaction gave rise to the potential for a conflict between the interests of the Cyrs and those of the Cemetery Corporation. In fact, the transactions went well beyond the mere appearance or potential for conflict:

a. the Cyrs were conferred a greater benefit upon repurchase than that which they had contracted for (getting full market value credit for the graves that were returned to inventory);

b. depending on whether the graves they purchased were correctly identified as “Pond View” or not, the new graves were acquired at below market price; and

c. the acquisition of rights for the Cyr Family Garden was on terms that compared very favourably to a similar transaction for another family garden that had occurred just months before.

[184] It is not necessary for the Cyrs to have acted in bad faith or for actual wrongdoing to be established. The fundamental rule of equity that a person in a fiduciary capacity must not make a profit out of her trust is part of the wider rule that a trustee must not place herself in a position where her duty and her interest may conflict: Boardman v. Phipps, [1966] 3 W.L.R. 1009 (H.L.(E)), at p. 1066-67. As Lord Herschell stated in Bray v. Ford, [1896] A.C. 44 (H.L.), at p. 51, a fiduciary duty “might be departed from in many cases, without any breach of morality, without any wrong being inflicted, and without any consciousness of wrong-doing”.

[185] The Cyrs should, both as a matter of prudence (or common sense) and by virtue of their responsibilities as directors and fiduciaries, have made full disclosure to the Board of the transactions they were entering into. Transactions that went to the very core of the Cemetery’s business. Transactions that favoured their personal interests as the holders of interment rights. The terms of the exchange and the acquisition of the Cyr Family Garden were almost certainly more favourable than would have been the case if they did not have a special relationship with the Cemetery.

[186] The optics of the transactions were also poor. They were negotiated with a mid-level employee (Mr. Oliver) and, to some extent, with the General Manager, in whose hiring they had played a major role a few months earlier (and who they caused to be fired a few months later). The power imbalance and the potential for abuse or undue influence (perceived or actual) should have been obvious to the Cyrs.

[187] They should have told the Board.

[188] While it may also have been prudent to tell the Board about the transaction involving the desk, shed and television, given my earlier findings about the role played by the General Manager and the absence of reliable evidence of an irregularity, I find no breach of duty by the Cyrs on that account.

Remedy

[189] When a breach of fiduciary duty entails a failure to avoid a conflict of interest, personal profit-taking or a failure to disclose, the usual remedy is to require disgorgement of the resulting gains: Jeffrey Berryman, The Law of Equitable Remedies, 2^nd ed. (Toronto: Irwin Law, 2013) at p. 484.

[190] According to Graeme Ross, the minimum apparent loss to the Cemetery resulting from the transactions involving the exchange and the acquisition of the Cyr Family Garden was $23,352. This calculation was premised upon the value of the interment rights acquired by the Cyrs being $36,000 plus G.S.T., i.e. 12 interment rights at $3,000 each, comprised of six regular graves and 12 cremation places (12 cremation places being the equivalent of six graves). The $3,000 figure was supplied by Mr. Lemmon. Mr. Ross claims that it was verified by looking at other documents and transactions.

[191] While there is no apparent reason not to accept Mr. Ross’s arithmetic, I am concerned about the lack of verification of the $3,000 figure which forms an important part of his calculation.

[192] I prefer the calculations done by Mr. Oliver. He says that the Cyrs should have received $2,304 for the trade-in of the original six graves that they purchased. That is what the contracts provided for. Instead they received a repurchase credit of $15,150, a difference of $12,846. The price list price of the six new graves which were acquired was either $4,200 per grave (if the graves were located in the “Pond View” area) or $2,525 if they were not. The actual price paid by the Cyrs was $2,800 per grave, which appears to have been a bespoke price either set by Mr. Oliver or dictated by Mr. Cyr, depending on whose version of events is accepted. The fact that the price was more than a regular grave in section N supports the conclusion that the location was more desirable. As the only differential pricing for graves in section N is for those identified as “Pond View”, I conclude that the Cyrs should have paid $4,200 per grave for a total of $25,200. Accordingly, the total purchase price they should have paid for the six new graves, less the credit they should have received for the old graves, was $22,896.

[193] The value of the gain enjoyed by the Cyrs in respect of the purchase of the Cyr Family Garden is harder to determine. A similar, but smaller, neighbouring garden – the “Kelly Family Garden” – was purchased a few months earlier for $8,950, which included interment rights, construction and landscape costs. It was 123.5 square feet, with only two interment rights, compared with up to 279.3 square feet said to be occupied by the Cyr Family Garden (there is some debate about the exact dimensions, which were measured by a land surveyor). Using the Kelly Family Garden as the yardstick, and giving the Cyrs some benefit of the doubt for the dispute over their garden’s dimensions, I find that the value of the Cyr Family Garden at the time of purchase was at least $16,000, with the result that the Cyrs made a gain of $6,000 on the transaction.

[194] Applying the disgorgement principle, and subject to the effect of the Limitations Act on the availability of the remedy, I find that the appropriate amount of damages for breach of fiduciary duty is $28,896 ($22,896 plus $6,000).

Limitation Defence

[195] The Cemetery Corporation’s action against the Cyrs was commenced on 17 August 2010. Accordingly, any claim by the Cemetery Corporation which was discovered prior to 17 August 2008 is statute barred: Limitations Act, 2002, s. 4.

[196] The relevant parts of section 5 of the Limitations Act, 2002 provide:

5 (1) A claim is discovered on the earlier of,

(a) the day on which the person with the claim first knew,

(i) that the injury, loss or damage had occurred,

(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,

(iii) that the act or omission was that of the person against whom the claim is made, and

(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).

(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.

[197] The trip to Boston and the cost of the Secker, Ross & Perry LLP report arose within two years of the issuance of the statement of claim. However, for the reasons given above, those claims fail on the merits.

[198] Mr. Nielissen cannot recall exactly when the Cyrs’ hickey markers were delivered. It was sometime after August 2007. Mr. Lemmon became aware in August or September 2009 that the last two hickey markers had come in. However, despite having checked the file, he was not able to say with exactitude when the hickey markers had come in and been installed.

[199] The Cyrs having pleaded a limitation defence, the onus is on the Cemetery Corporation to show when time began to run or that some other reason exists for overcoming the limitation defence (for example, fraud). In M. (K.) v. M. (H.), [1992] 3 S.C.R. 6, Sopinka J. observed, at p. 84:

The basic criteria for the allocation of the burden of proof apply to justify maintaining the legal burden of proof with respect to reasonable discoverability on the plaintiff. It is the plaintiff who is seeking an exemption from the normal operation of the statute of limitations asserting that she was not aware of her cause of action for many years after the statutory period would otherwise have commenced to run. Moreover the plaintiff is in the best position to adduce evidence of her lack of awareness and the defendant is not.

[200] The Cemetery Corporation has not met this burden with respect to the hickey markers. In the face of the limitation defence pleaded by the Cyrs, it would be expected that the Cemetery Corporation would produce records or less equivocal testimony than Mr. Lemmon’s to show when the hickey markers were delivered, installed or both.

[201] With respect to all of the other claims made by the Cemetery Corporation, the presumptive discovery date is more than two years prior to the commencement of the action:

a. payment of Ms. Eliason’s invoice – 17 July 2006;

b. plantings in the Cyr Family Garden – Summer 2006;

c. plot purchases/exchanges – 14 August 2006;

d. foundation for the monument – 6 November 2006; and

e. purchase of used television, shed and desk – 23 November 2007.

[202] The Cemetery Corporation asserts that these claims, as well as that relating to the hickey markers, were not reasonably discoverable before 2009 or 2010 when the Board became aware of what had happened. Specifically, it was only when Mr. Lemmon started to go through the records and make further inquiries, starting in the late summer of 2009, that knowledge of what had happened could be imputed to the Cemetery Corporation. Mr. Lemmon did not inform the Board itself until February 2010, and the Board then received the Ross report a month later.

[203] The Cemetery Corporation further asserts that the Cyrs concealed their actions from the Board by their failure to inform the Board about their transactions which, as fiduciaries and as required by s. 71(1) of the Corporations Act, they were obliged to. As a result, the equitable doctrine of fraudulent concealment should operate to toll the running of the limitation period until, at the earliest, Mr. Lemmon’s discovery of the Cyr’s activities.

[204] The Cyrs counter that the Cemetery Corporation knew about the plot exchanges because Mr. Oliver acted as the Cemetery’s representative throughout and his knowledge of the transactions is the Cemetery’s knowledge. Mr. Schell was also involved, certainly to the extent of his involvement with Ms. Eliason and the Cyr Family Garden and (according to Ms. Cyr) with the detail of the transactions. And the Board itself became aware of the transactions in August 2007 as a result of the anonymous letters.

[205] They further argue that aside from the exchanges and the purchase of chattels – the television, shed and desk – the Cemetery’s claims result from their failure to request payment within two years of the rendering of the service involved.

Concealment

[206] The existence of fiduciary and statutory obligations to disclose owed by the Cyrs, as trustees, to the Cemetery Corporation, are said to give rise to the application of the doctrine of fraudulent concealment.

[207] In equity and in common law, it is a principle that where fraud or concealment by a party prevents the discovery of a claim, that party should not be able to raise a limitation defence. There does not have to be fraud or deceit of the quality those words ordinarily connote. It is sufficient that the wrongdoer conceals the wrongdoing. As Lord Denning M.R. explained in King v. Victor Parsons & Co., [1973] 1 W.L.R. 29 (C.A.), at p. 33-34, [1973] 1 All E.R. 206, at p. 209-10:

Like the man who turns a blind eye. He is aware that what he is doing may well be a wrong, or a breach of contract, but he takes the risk of it being so. He refrains from further inquiry lest it should prove to be correct: and says nothing about it. The court will not allow him to get away with conduct of that kind. It may be that he has no dishonest motive: but that does not matter. He has kept the plaintiff out of the knowledge of his right of action: and that is enough: see Kitchen v Royal Air Force Association, [1958] 1 WLR 563.

[208] In Kitchen v. Royal Air Force Association, [1958] 1 W.L.R. 563, [1958] 2 All E.R. 241 (C.A.), at p. 249, the England & Wales Court of Appeal explained that:

… no degree of moral turpitude is necessary to establish fraud... What is covered by equitable fraud ... is, I think ... conduct which, having regard to some special relationship between the two parties concerned, is an unconscionable thing for the one to do towards the other.

[209] The discoverability principle established at common law and now given statutory form by s. 5 of the Limitations Act achieves the same result as the application of the doctrine of fraudulent concealment. Under the statute it remains the case that unconscionable behaviour by a director or fiduciary who fails to disclose something when under a duty to do so should not then assist that party’s limitation defence. Unless there is some other basis for the claimant to have discovered the defendant’s conduct, the limitation period will not run from the date of the conduct.

[210] On the facts of this case, the Cyrs, as directors and fiduciaries, should have disclosed the exchange and Cyr Family Garden transactions to the Board. Coupling this finding with the nature of the corporation – a not-for-profit entity with a volunteer and relatively unsophisticated board and weak management – I am satisfied that the ingredients of “special relationship” and unconscionable behaviour are sufficiently present. These factors, which form part of the doctrine of fraudulent concealment, inform the analysis of when the Cemetery’s claims should have been discovered.

[211] Unless there are other facts which result in the conclusion that the grave exchange, Cyr Family Garden and sale of chattels transactions should have been discovered by the Cemetery sooner, I would find that the claims were not discovered, for limitation purposes, until Mr. Lemmon’s investigation began in or about August 2009. These facts – namely who in the Corporation discovered the various claims and whether the anonymous letter started the limitations clock – must be considered to assess whether the Corporation in fact discovered, or should have discovered, the claims sooner.

Who Discovers the Claim

[212] The contracts for the purchase of the exchanged graves and the Cyr Family Garden were dated 14 August 2006 and signed by Mr. Oliver as “Licenced Cemetery Representative”.

[213] The Cyrs argue that Mr. Oliver, as a “Licenced Cemetery Representative”, possessed the “abilities” required by the Limitations Act to discover a claim. They refute any suggestion that Mr. Oliver was placed under duress by them.

[214] The extent of Mr. Schell’s role is less clear. He appears to have had some awareness that the Cyrs were looking to exchange plots. And he had dealings with Ms. Eliason and, hence, the proposed gardens. But he denies any involvement in, or oversight of, the transactions. Whatever his role was, in fact, he testified that the Cyrs were respectful towards him and that he found them to be people of integrity in his dealings with them.

[215] The Cyrs rely on the corporate identification doctrine, which stands for the proposition that a corporation is generally imputed to have the knowledge of its directing minds. Although this doctrine is more commonly associated with corporate criminal liability, the Cyrs argue that it can be used to establish corporate liability in the civil context as well: Doyle Salewski v. Lalonde, 2016 ONSC 5313, at para. 127; Standard Investments Ltd. et al. v. Canadian Imperial Bank of Commerce (1985), 52 O.R. (2d) 473 (C.A.), at p. 493.

[216] I find these authorities inapplicable to the case at hand. In Doyle Salewski, the court rejected the application of the corporate identification doctrine to the liability of a trustee in bankruptcy for the fraudulent acts of a debtor. In Standard Investments, the Court of Appeal held that the identification doctrine was applicable in a civil action where the plaintiff seeks to establish liability on the part of a defendant corporation on the basis of an alleged breach of fiduciary duty by its employees or agents.

[217] There is surprisingly little guidance in the cases as to when the knowledge of an employee of a corporation will be imputed to the corporation itself for the purposes of applying the discoverability rule.

[218] One feature of the corporate identification doctrine would seem apt. If the employee is a directing mind of the company, it would seem logical to impute that employee’s knowledge to the corporation itself.

[219] Employees holding executive positions may also have sufficient knowledge of the activities and operations of a company that it would be appropriate to impute their knowledge to the corporation. And where other employees have a responsibility to report to management, it may be appropriate to impute to the company information that management has, or should have, as a result. The inquiry will be a factual one.

[220] Mr. Oliver’s duties included selling interment rights, transfers of interment rights, Cemetery repurchases of interment rights and handling customer complaints. Mr. Oliver had responsibility for the preparation of documentation relating to these transactions. His job does not appear to have required him to report individual transactions up the line to his superior, Mr. Schell.

[221] Mr. Schell was the General Manager. As such, he was the senior manager at the Cemetery and reported to the trustees. He would have had oversight of employees such as Mr. Oliver.

[222] Mr. Schell does recall Mr. Oliver bringing to his attention concerns which Mr. Oliver says he had regarding the discussions with the Cyrs, and in particular that aspects of the discussions had gone outside of the elements contained in the applicable price lists, by-laws and regulations. Mr. Schell’s evidence was that he advised Mr. Oliver that he had to follow the price lists. He assumes this advice was followed. His recollection is that Mr. Oliver was wanting to maintain his lead on the discussions with the Cyrs. Mr. Schell did not see the subsequent agreements or have any further involvement with the discussions.

[223] Given the nature of his duties and the level of his responsibilities, I would not impute to the Corporation whatever knowledge Mr. Oliver had. And although there would be a sounder basis for imputing Mr. Schell’s knowledge to the company, in fact Mr. Schell had very limited knowledge of the Cyrs’ transactions.

[224] Furthermore, if one considers the nature of the fiduciary responsibilities which the Cyrs had, it can be readily seen that one of the reasons they should have told the Board about the transactions was to avoid the possibility, or the appearance, of Mr. Oliver being placed under duress. If the Cyrs can avoid sanction for their failure to disclose their dealings to the Board by saying that the knowledge of an employee, who says he was pressured to go along with what the Cyrs were directing him to do, is deemed as knowledge of the company, it would undermine one of the reasons to require the Cyrs to tell the Board about their dealings in the first place.

[225] The transaction involving the desk, the shed and the television is different. Mr. Lemmon, the General Manager – the Cemetery Corporation’s senior executive – was front and centre. He agreed the amount to be paid to Mr. Cyr and had the cheque cut. Even if it is accepted that he was waiting for a matching donation from Mr. Cyr which never came, the alleged wrong – failing to report the transaction to the Board – was known by Mr. Lemmon on 27 November 2007. He said nothing and did nothing for over two years, saving up what he knew for a rainy day. That claim was statute-barred by the time the action was commenced.

The Anonymous Letter

[226] In his witness statement, Mr. Simonds said, of the August 2007 Board meeting:

At that meeting, Barbara Bonner advised the Board that she did not feel right dealing with an anonymous letter. I wholeheartedly agreed; I felt that the letter was likely from a current or former disgruntled employee (given it was written on Cemetery letterhead), and given this person refused to identify themselves, the letter was not worth any discussion.

Ultimately, the Board decided to destroy all copies of the anonymous letter at the end of the meeting. No Minutes of the meeting were taken.

[227] By contrast, Mr. Cyr states that he:

… reviewed each document with the Trustees and described the entire transaction in detail. Specifically, I discussed:

a) That we exchanged graves purchased in 1998/1999;

b) The credit received for that exchange;

c) How the price/credit was determined;

d) The ultimate price paid for the exchange, including the amount that went into Care and Maintenance;

e) The purchase of the garden area;

f) The description of the land we acquired;

g) The cost of the garden area;

h) How the price of the garden area was determined; and

i) The fact that landscaping of the garden was in addition to the price paid.

The Trustees were given the opportunity to raise questions or concerns about my and Linda's transactions with the Cemetery in 2006, at any time.

At the end of the meeting, all of the Trustees commented that they felt that there were no issues with any of the transactions and that the anonymous letter was a false accusation.

Someone, Barbara Bonner I believe, said that she felt that we should just destroy the anonymous letter and forget it.

Everyone left the meeting with a copy of the letter and copies of all of the documents that I provided to them.

[228] In her oral testimony, Ms. Bonner acknowledged that she had read the letter in its entirety but she remained steadfast that the only discussion at the meeting had concerned the allegation about Mr. Cyr’s purchase of a tractor.

[229] Mr. Simonds acknowledged in cross-examination that he read the complaint but did not attach any credibility to it. He also remembers Ms. Bonner being adamant about not discussing the anonymous letter.

[230] Whether they attached any credit to it or not, the fact remains that Mr. Simonds and Ms. Bonner, having both read the letter, knew about the allegations concerning the Cyrs. It is understandable that the Board was not prepared to place reliance on the letter, perhaps influenced by the views of Ms. Bonner who, as a former director of human resources, said she would not give consideration to any letter written anonymously. What is less easy to understand is why the Board failed to review the records of the transaction at that time or look for any evidence that would corroborate the allegations they had read. In that regard, it matters not whether the Cyrs brought all of the documentation to the meeting or otherwise.

[231] Ultimately, the fact is that by August 2007 the Board had more than an inkling of the allegations which were to resurface eighteen months later when Mr. Lemmon made his move. A plaintiff does not have to know the full extent of the wrong. Time will start to run from when a claimant had, or ought to have had, prima facie grounds to infer that a wrong had been committed: Kowal v. Shyiak, 2012 ONCA 512, at paras. 18-19. The fact that the Cemetery Corporation chose to avert its eyes and not investigate further or attach any value to the anonymous letter does not change the fact that by August 2007 all of the trustees were aware of the nature, if not the specifics, of the allegations made against the Cyrs.

[232] The Cemetery Corporation’s action was not commenced until three years after the date on which it knew or should have known of the existence of the claims based on the exchange of graves and the acquisition of the Cyr Family Garden. Accordingly, those claims are statute barred.

Other Goods and Services

[233] The remaining claims – for reimbursement of Ms. Eliason’s invoice, the plantings in the Cyr Family Garden, the supply and placement of hickey markers and the foundation for the monument – all relate to goods or services which were supplied more than two years before the action began. In the case of the hickey markers the Cemetery Corporation has failed to establish that the goods and services were supplied within the limitation period.

[234] The reason for non-payment of these items is the same: no-one sent the Cyrs a bill or otherwise requested payment. These are ordinary transactions. In the absence of specific terms of a contract for the supply of goods and services to the contrary, it is an implied term of every contract that an obligation to pay arises at the time the goods are supplied or the services are provided to the recipient. If the price has not been fixed or agreed, then the obligation is to pay a reasonable price: Al-Con Precast Ltd. v. Dean Construction Co., [1985] O.J. No. 1169 (H.C.), at para. 53; Heerkens v. Lindsay Agricultural Society, 2017 ONSC 240, at para. 42.

[235] A supplier of goods and services cannot expect to wait for well over two years before demanding payment or rendering an invoice therefor and not face a limitation defence. The whole purpose of limitation periods is (among other reasons) to deter stale claims.

[236] Each of these claims is statute barred.

Cyrs’ Claims

Declaratory Relief

[237] The Cyrs sought declarations that their six grave plots and the family garden were validly acquired and that the grave plots, family garden, family monument and its foundation should remain undisturbed.

[238] During the trial, the Cemetery confirmed that it did not now seek to challenge the Cyrs’ interment rights. Given that concession, the Cyrs are entitled to the declaratory relief sought.

Damages

[239] The Cyrs’ claims for punitive and aggravated damages make reference to the allegedly reprehensible conduct of the Cemetery; to the Cemetery’s threat to disturb the resting place of the Cyrs’ family members; to the trumping up of additional charges against them; to the advancement of meritless claims against the Cyrs; and, to the arbitrary application of the Cemetery’s by-laws and policies in a manner detrimental to the Cyrs.

[240] As previously indicated, the Cyrs’ damages claims were added by amendment at trial. The trigger for the amendment was said to be the evidence of Mr. Ross and the nature and extent of the instructions given to him by the Board – in essence a request for a report that would secure the Cyrs’ resignations or ejection as trustees.

[241] Unfortunately, the behaviour of most of the key individuals involved in these proceedings does them little credit.

[242] Most of the substantive claims against the Cyrs had merit, and it is only because of the Cemetery’s dilatoriness that it has been barred from obtaining a remedy.

[243] That said, the way in which the Cyrs were ousted was unprofessional and unfair. They were judged on the basis of a horribly flawed “report” from Mr. Ross, which lacked objectivity and rigour and was based to a large degree on information provided by Mr. Lemmon, who had been saving up ammunition to use against the Cyrs if ever his position came under threat. The Cyrs were not given an opportunity to question the allegations made against them or to account for their actions.

[244] Awards of punitive damages are few and far between and are reserved for situations in which a party has acted in a high-handed, malicious, arbitrary or highly reprehensible manner that departs to a marked degree of ordinary standards of decent behaviour: Whiten v. Pilot Insurance Co., 2002 SCC 18, at para. 36, [2002] 1 S.C.R. 595. In the present case, although Mr. Lemmon may not have been motivated by the noblest of sentiments, and some of the Board’s actions and decisions were arbitrary and unfair to the Cyrs, they were not in my view of a sufficient degree to attract punitive damages.

[245] Claims for aggravated damages are compensatory in nature and require some proof of injury. Although it has been recognised, particularly in the context of employment disputes, that such damages can be awarded for intangible harm, there still needs to be some evidence of harm, for example professional embarrassment, humiliation, reputational harm, mental distress or the like: Fidler v. Sun Life Assurance Co. of Canada, 2006 SCC 30, at para. 47, [2006] 2 S.C.R. 3; see also Tim Ludwig Professional Corporation v. BDO Canada LLP, 2017 ONCA 292, at paras. 58-70.

[246] While the Cyrs were undoubtedly on the receiving end of some shabby treatment, and expressed concern about reputational harm, there was no evidence of injury of the type contemplated by the cases which discuss aggravated damages.

[247] Accordingly, the Cyrs’ claims for damages are dismissed.

Judgment

[248] To the extent that I have found that the Cyrs breached their obligations, the Cemetery Corporation’s remedies are statute-barred. The Cemetery Corporation’s action is therefore dismissed in its entirety.

[249] The declaratory relief sought by the Cyrs is no longer opposed and is, accordingly, granted. The balance of the Cyrs’ claims are dismissed.

Costs

[250] The Cyrs advised at the end of the trial that they wished to reserve the opportunity to argue that their costs should be paid by some of the trustees personally. If they wish to pursue that relief, it will be necessary to schedule an attendance in court.

[251] Otherwise, unless either party requests a hearing, or should counsel not be able to agree on costs, I will receive written submissions. Any party seeking costs should, within 21 days of receipt of these reasons, deliver a bill of costs and a written submission of not more than four pages in length to which may be annexed any offers to settlement or relevant correspondence as well as copies of any authorities relied upon. Any responding submissions should be delivered within 14 days thereafter.

[252] Any request for a hearing on costs should be directed to the trial coordinator in Kingston within 14 days of the release of these reasons.

Mew J.

Released: 3 October 2017