Court File and Parties

Court File No.: CV-15-131 Date: 2019-04-05 Ontario Superior Court of Justice

Between: Kathleen Anne Cruikshank, on behalf of the Estate of Ross Gerrard Cruikshank, Plaintiff – and – Randy Kennedy and VLC Global Ministries a.k.a. Victorious Living Centre, Defendants

Counsel: Timothy Flannery, for the Plaintiff Randy Kennedy, representing himself and the corporate Defendants

Heard: January 10, 2019

Reasons for Judgment

PETERSEN J.

Overview

Introduction

[1] This case involves a lawsuit over the alleged non-repayment of private loans between former friends and colleagues. The Plaintiff’s claim is for damages in the amount of $123,922.19 arising from the Defendants’ alleged breach of contract and/or unjust enrichment. The Amended Statement of Claim also alleges breach of fiduciary duty, but that claim is no longer being pursued by the Plaintiff.

[2] In this motion, the Plaintiff seeks summary judgement against the Defendants. The Defendants seek dismissal of the Plaintiff’s motion and summary judgment dismissal of the Plaintiff’s action.

Procedural History

[3] The action was commenced by Ross Gerrard Cruikshank, who filed his original Statement of Claim on May 21, 2015. A joint Statement of Defence was filed by Randy Kennedy and Victorious Living Centre (“VLC”) on October 27, 2015.

[4] On August 25, 2017, Mr. Kennedy was granted leave to represent the corporate Defendant VLC.

[5] Mr. Kennedy was examined for discoveries on November 16, 2017.

[6] Various motions were brought. Mr. Cruikshank’s ex-wife, Johanne Bastien, was originally named as a third co-Defendant, but she was removed from the litigation by Order of Snowie, J. on April 26, 2018.

[7] An Amended Statement of Claim was filed by Mr. Cruikshank on May 24, 2018 and a Fresh as Amended Statement of Defence was filed by the two remaining co-Defendants on June 6, 2018.

[8] The action was supposed to be scheduled for trial during the January 2019 sittings, but Mr. Cruikshank died on June 3, 2018. His sister Kathleen Cruikshank was appointed Trustee of his Estate on November 1, 2018. She filed this motion for summary judgement on November 15, 2018.

[9] At the outset of the motion hearing, I granted an Order that the litigation would continue by Ms. Cruikshank as representative of Mr. Cruikshank’s Estate: Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r.11.01.

Issues in Dispute

[10] At the heart of the dispute are three loans that were made by Mr. Cruikshank and Ms. Bastien, or by Mr. Cruikshank’s business (Hall’s Paper Supplies), to the co-Defendants Randy Kennedy and VLC in 2003, 2004 and 2005. The parties agree that Hall’s Paper Supplies and Mr. Cruikshank are effectively one and the same (for the purposes of this litigation). They agree that any money loaned by Hall’s Paper Supplies was to be repaid to Mr. Cruikshank personally.

[11] The Plaintiff Estate claims that the money borrowed was not fully repaid and that a substantial amount of debt remains outstanding. The Defendants acknowledge the existence of the loans but assert that all required payments were made by the spring of 2012. The Defendants maintain that the debts were fully satisfied, both principal amounts and interest.

[12] This relatively straight-forward issue is complicated by the dynamics of the parties’ close relationships. Mr. Cruikshank, Ms. Bastien and Mr. Kennedy were founding members of the board of directors of VLC, a church that provides support and shelter to disadvantaged members of the community. VLC was incorporated federally as a charity in or about June 2007. At that time, Mr. Cruikshank and Ms. Bastien were married. Mr. Kennedy is the Minister for the church. Mr. Cruikshank and Ms. Bastien were both parishioners. Mr. Cruikshank and Mr. Kennedy were also personal friends. Their friendship engendered trust between them. As a result, there is little documentation of the loans or of payments made in respect of the loans. They did not feel it necessary to reduce such things to writing. The lack of a complete documentary record is problematic from an evidentiary point of view, particularly in light of the fact that the primary lender, Mr. Cruikshank, is now deceased.

[13] The case is also complicated by the eventual breakdown of the parties’ relationships and their ensuing inter-personal conflict. Mr. Cruikshank and Ms. Bastien separated in January 2008 after more than 20 years of marriage. They entered into a separation agreement on August 25, 2008, which stipulated (among other things) that Mr. Cruikshank would be solely responsible for collecting payments on their joint loans. They divorced in 2009. A family law proceeding ensued and their separation agreement was eventually set aside by a court Order dated April 20, 2015.

[14] During the course of the matrimonial litigation, Mr. Cruikshank learned that Ms. Bastien allegedly had an affair with Mr. Kennedy. The alleged affair is immaterial in this proceeding, except to the extent that Mr. Cruikshank’s belief in the affair may have given him incentive to pursue Mr. Kennedy and Ms. Bastien in this action. Evidence in the record (including an affidavit sworn by Mr. Cruikshank’s sister Kerry Radlinski) establishes that Mr. Cruikshank was emotionally devastated by what he perceived to be not only a betrayal by his wife but also a profound breach of trust by his pastor and friend. He therefore had a possible motive to fabricate a vindictive claim that Mr. Kennedy and VLC still owed him money.

[15] The resentment that flowed from the alleged affair gives rise to potential ulterior motives and credibility concerns. I note that, after Snowie, J. released Ms. Bastien as a Defendant in this litigation, she commented in her Endorsement dated May 22, 2018 that the action as against Ms. Bastien “was a completely vexation (sic) piece of litigation.” The Defendants’ position in this motion is that the claims against them are equally vexatious and were spurred by Mr. Cruikshank’s ill-founded belief that Mr. Kennedy had an affair with his wife.

[16] Ms. Bastien and Mr. Cruikshank eventually reached a final settlement of their matrimonial disputes, which was endorsed by a consent Order of this Court on March 10, 2016. As part of the settlement, Ms. Bastien waived any claims that she might have to monies still owing on various private loans they had jointly made during their marriage, including loans to Mr. Kennedy and VLC. Thus, if the Defendants are liable for any outstanding balances on the loans, the money would be owed to Mr. Cruikshank’s Estate.

[17] The first issue for me to decide, before I evaluate the merits of the Plaintiff’s claims, is whether this is an appropriate case for summary judgement.

Summary Judgement Motions

[18] Summary judgement motions are governed by the Rules of Civil Procedure, which stipulate (in part) as follows:

20.01 (1) A Plaintiff may, after the Defendant has delivered a statement of defence or served a notice of motion, move with supporting affidavit material or other evidence for summary judgment on all or part of the claim in the statement of claim.

20.02 (1) An affidavit for use on a motion for summary judgment may be made on information and belief as provided in subrule 39.01 (4), but, on the hearing of the motion, the court may, if appropriate, draw an adverse inference from the failure of a party to provide the evidence of any person having personal knowledge of contested facts. (2) In response to affidavit material or other evidence supporting a motion for summary judgment, a responding party may not rest solely on the allegations or denials in the party’s pleadings, but must set out, in affidavit material or other evidence, specific facts showing that there is a genuine issue requiring a trial.

20.04 (2) The court shall grant summary judgment if, (a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or (b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment. (2.1) In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:

1. Weighing the evidence.
2. Evaluating the credibility of a deponent.
3. Drawing any reasonable inference from the evidence. (2.2) A judge may, for the purposes of exercising any of the powers set out in subrule (2.1), order that oral evidence be presented by one or more parties, with or without time limits on its presentation.

[19] The parties agree that the Plaintiff Estate’s claims against the Defendants should be determined by way of summary judgement. I must nevertheless assess, pursuant to Rule 20.04(2)(b), whether or not it is appropriate to do so.

[20] If Mr. Cruikshank were still living, I would likely order this action to proceed to trial because the motion record is deficient in several respects. Most critically, there is no affidavit sworn by Mr. Cruikshank in support of the motion and no transcript of a cross-examination of him, nor even a transcript of an examination for discovery.

[21] The motion record does contain an affidavit by Mr. Cruikshank, but it was sworn in the context of a different Application that was brought by Ms. Bastien against him. That affidavit forms part of the record because Coroza, J. granted leave on August 25, 2017 for the parties to rely on evidence from prior proceedings between some or all them. In the affidavit, Mr. Cruikshank mentions the loans at issue in this case, but does not address them in detail. The affidavit is of limited assistance to the Court in this matter. It merely confirms the existence of the loans, which is not disputed by the Defendants.

[22] The motion record also contains a sworn Form 13.1 Financial Statement dated April 13, 2012 that was filed by Mr. Cruikshank in the matrimonial proceeding. In it, Mr. Cruikshank refers to the Defendants’ loans and sets out the alleged outstanding balances on dates relevant to the calculation of his net family property.

[23] The motion record contains an affidavit sworn by Ms. Bastien on November 9, 2017. It was drafted to support her motion to be removed as a Defendant in this action, but it contains evidence relevant to the summary judgment motion before me.

[24] The motion record also contains an excerpt of questioning of Ms. Bastien that took place in May 2013, in the context of the family law proceeding. The excerpt includes testimony about facts relevant to this motion.

[25] The motion record also contains an affidavit sworn by the Estate Trustee, Kathleen Cruikshank, in support of the Plaintiff Estate’s motion for summary judgement. Ms. Cruikshank deposed that she is familiar with the amounts owing by the Defendants to her deceased brother’s Estate and can speak from personal knowledge about them.

[26] I do not believe that the statements in Ms. Cruikshank’s affidavit are based on her personal knowledge. I accept that she discussed the matter with her brother before his death. She accompanied him to all his court dates during his matrimonial proceeding, during which the loans at issue in this case factored into the calculation of his net family property. She therefore acquired familiarity with her brother’s perspective on the status of the Defendants’ loans at the time of his divorce proceeding, but her affidavit statements are clearly based on information and belief – namely, information provided by her deceased brother and belief in the veracity of his claims. She was not personally involved in any of the loans at issue. She has no first-hand knowledge of the relevant facts.

[27] I cannot fault the Plaintiff Estate for relying on Ms. Cruikshank’s affidavit in the circumstances. It would be absurd and unfair for me to draw an adverse inference from the Plaintiff’s failure to adduce an affidavit from Mr. Cruikshank. However, the weight to be given to Ms. Cruikshank’s evidence is attenuated by her lack of first-hand knowledge of the relevant facts. I note, however, that the Defendants had an opportunity to cross-examine her on her affidavit and elected not to do so, apparently for cost-saving reasons. Her affidavit evidence is therefore unchallenged, except to the extent that the Defendants adduced contradictory evidence.

[28] Mr. Kennedy is an officer and director of the corporate Defendant VLC. There is no dispute about the fact that he has personal knowledge of the financial affairs of VLC and of the loans made by Mr. Cruikshank to himself and to VLC. He was not cross-examined on his affidavit. He was, however, examined for the purpose of discovery. The Plaintiff relies on portions of the transcript of his examination-for-discovery: Rules of Civil Procedure, r.39.04(1).

[29] The record is not as complete as I would like it to be. However, a trial would not generate a more comprehensive record. I have no reason to believe that additional relevant documents would be produced. Mr. Cruikshank is no longer available to testify. I would not have an opportunity to hear his evidence viva voce or assess his credibility on the basis of cross-examination. Mr. Kennedy is available to testify, but I am of the view that his credibility can be fairly assessed based on his affidavit and the transcript of his examination-for-discovery: Rules of Civil Procedure, r. 20.04(2.1). Ms. Bastien is available to testify, but her testimony would be of limited assistance because she made it clear in her affidavit that she has “no further information regarding the loans as it was the responsibility of the Plaintiff, Ross Cruikshank to collect and maintain the loans” pursuant to their original separation agreement dated August 25, 2008.

[30] Although the record is less than ideal, I have concluded that it would not be improved by a trial. It is sufficient to enable me to draw appropriate inferences, make the requisite findings of fact and apply the relevant legal principles in order to resolve the dispute in a fair manner. A summary judgement motion is therefore a proportionate, expeditious and less expensive way to achieve a just result in this case: Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 at para.49-60. For these reasons, I am satisfied that the parties’ request to proceed by way of summary judgement is appropriate.

Agreed Facts

[31] The following facts are not in dispute.

[32] Mr. Cruikshank and Ms. Bastien jointly loaned money to a number of individuals and businesses during their marriage. Some of the loans were made through Mr. Cruikshank’s company, Hall’s Paper Supplies. The borrowers included not only the Defendants, but also individuals named Mr. Brown and Mr. Marritt, as well as Mr. Marritt’s company, ARC Irrigation, and others.

[33] On October 7, 2003, Mr. Cruikshank and Ms. Bastien agreed to loan Mr. Kennedy $25,000, with the understanding that he would repay the money with interest, at a rate of 7.5% calculated semi-annually (the “First Loan”). Repayments in the amount of $500/month began on November 7, 2003. The projected amortization date upon which this First Loan was expected to be fully repaid was October 6, 2008. The purpose of the First Loan was to enable Mr. Kennedy to purchase a vehicle.

[34] In September 2004, Mr. Cruikshank and Ms. Bastien obtained a joint $90,000 Line of Credit from Toronto-Dominion bank, secured against their matrimonial home.

[35] On November 1, 2004, Mr. Kennedy obtained another loan from Mr. Cruikshank and Ms. Bastien in the amount of $90,000 (the “Second Loan”). Repayments in the amount of $649.94/month began on December 1, 2004. There is a dispute between the parties as to whether these were the only payments made by Mr. Kennedy or whether he made additional payments on this Second Loan. This issue will be addressed below.

[36] Mr. Kennedy made regular monthly payments on the First Loan up until July 6, 2005. At that point in time, the outstanding balance on the First Loan was $17,275. VLC assumed liability for that debt because the vehicle purchased by Mr. Kennedy with the borrowed money was primarily used for church business.

[37] In July 2005, VLC borrowed an additional $20,000 from Hall’s Paper Supplies, the company owned and controlled by Mr. Cruikshank. The new $20,000 loan was consolidated with the outstanding balance of $17,275 from the First Loan. The First Loan was thereby discharged. The total amount owing by VLC was then $37,275 (the “Consolidated Loan”). The interest rate for the Consolidated Loan was 8%. Monthly payments in the amount of $753.48 commenced on August 4, 2005. The projected amortization date for the Consolidated Loan to be fully repaid was July 4, 2010.

[38] VLC made regular monthly payments to Mr. Cruikshank to service the debt on the Consolidated Loan up until November 4, 2008. The parties agree that at least some additional payments toward the Consolidated Loan were made in 2009, but they do not agree on the total amount paid.

[39] On the date of their separation in January 2008, Mr. Cruikshank and Ms. Bastien owed $71,149.32 to TD on their joint Line of Credit. After their separation, Mr. Cruikshank withdrew large sums of money from the Line of Credit to pay his expenses. Ms. Bastien discovered in January 2010 that he had almost maxed out their $90,000 credit limit. She had the account suspended so that no further withdrawals could be made and she began to make payments on the account, which reduced the balance incrementally. A bank statement dated December 31, 2013 shows that, as of that date, a balance of $74,266.43 was still outstanding.

[40] At some point in or about 2015, TD bank commenced a legal action against Mr. Cruikshank and Ms. Bastien in connection with overdue payments on their joint Line of Credit. Ms. Bastien was still living in the matrimonial home. The Line of Credit was secured against the home, so her ongoing occupancy (and ownership) of the home was jeopardized. TD discontinued its legal action in January 2016, after VLC made a payment in the amount of $4,127.48 toward the balance owing on the Line of Credit.

[41] The Defendants made other occasional payments to the TD Line of Credit. The total amount of those payments and the reasons for them are in dispute and will be discussed in more detail below.

[42] As part of the resolution of the matrimonial litigation in March 2016, Ms. Bastien assumed sole responsibility for the TD Line of Credit. She subsequently paid the full balance owing on the Line of Credit (a sum of $74,502.13) on April 15, 2016, with money obtained from a $100,000 mortgage loan that she obtained.

[43] I will now turn to my analysis of the evidence presented with respect to the Plaintiff’s claim that the Defendants failed to repay their loans. I will deal with each of the two loans in turn.

The Consolidated Loan

[44] I am persuaded by the following evidence that VLC fully repaid the Consolidated Loan, including both principal and interest:

(a) At the time of his examination, Mr. Kennedy could not recall the exact date when the final payment was made on the Consolidated Loan, but he testified that he was certain that the debt had been fully repaid by VLC. He was confident that the payments would be reflected in VLC’s general ledger. (b) In his affidavit, Mr. Kennedy deposed that the last payment on the Consolidated Loan was made by VLC in February 2011. He stated that all payments toward the loan were made to Mr. Cruikshank personally, either by cash, by cheque or through a “contra agreement”. (c) During his examination, Mr. Kennedy explained that VLC paid for residential housing for Mr. Cruikshank for a couple of years in 2009-2011 after he separated from Ms. Bastien and moved out of their matrimonial home. Mr. Kennedy said Mr. Cruikshank did not pay rent to VLC. Instead, the cost of the housing was applied “in contra fashion” to the money owed to him in connection with the Consolidated Loan. (d) Mr. Kennedy deposed that Mr. Cruikshank commonly entered into such “contra agreements” with various borrowers to whom he had loaned money. Services or goods would be exchanged at an agreed monetary value, which would be deducted from loan payments due to Mr. Cruikshank. Mr. Kennedy recalled that Mr. Cruikshank dealt with various debtors in this fashion, including Grey Fair Furniture, Gardel Pet Supplies, Righteously Clean and ARC Irrigation. (e) The record includes an “Agreement of Service” between Mr. Cruikshank (on behalf of Hall’s Paper Supplies) and Ron Marritt (on behalf of ARC Irrigation), which sets out the details of one such “contra agreement”. The Agreement was executed on February 21, 2007. It establishes that Mr. Cruikshank agreed to deduct $5,000 from Mr. Marritt’s outstanding indebtedness upon Mr. Marritt’s installation of shelving units on Mr. Cruikshank’s property. This letter corroborates Mr. Kennedy’s testimony about the existence of “contra agreements” between Mr. Cruikshank and his debtors. (f) Mr. Kennedy testified that there was no written “contra agreement” between VLC and Mr. Cruikshank, but a verbal agreement was reached to provide rent-free housing to Mr. Cruikshank in exchange for credit towards VLC’s debt repayment. This arrangement is corroborated by VLC’s Financial Statements. (g) The Financial Statement for the year ending December 31, 2008 references an interest-bearing loan to VLC from Halls Paper Supplies. It is clear that the entry refers to the Consolidated Loan. It shows that an amount of $21,028 was owing on the loan at the end of 2007 and that the balance had decreased to $13,373 by the end of 2008. The Financial Statement for the year ending December 31, 2010, shows that the balance was $5,899 at the end of 2009 and had further decreased to $648 by the end of 2010. The Financial Statement for the year ending December 31, 2011 shows that the remaining debt of $648 was fully discharged at some point in 2011. (h) VLC’s general ledger also contains relevant information. It lists transactions relating to the Consolidated Loan. It shows a balance owing by VLC to Hall’s Paper Supplies of $21,028.04 as of January 1, 2008. It lists numerous periodic payments thereafter, with corresponding dates and cheque numbers, for amounts paid by VLC to Hall’s Paper Supplies between January 9, 2008 and November 1, 2009. Each payment is in excess of $600. The amount of each payment increases incrementally from $615.27 to $696.63, with one cheque listed (on October 17, 2009) in the amount of $1,379.69, which appears to be a double payment. The balance owing to Hall’s Paper Supplies is reduced by each payment in the ledger. On December 31, 2009, the ledger shows an “Accounts Rec.” entry marked “contra account” in the name of Ross Cruikshank for $2,700, with a corresponding deduction of $2,700 from the balance owing by VLC to Hall’s Paper Supplies. Thereafter, there are monthly “contra rental” entries, also labelled “Accounts Rec.”, relating to Mr. Cruikshank, in the amount of $450. A final “contra rent” entry is listed on February 1, 2011 in the amount of $198.30, reducing the balance owing by VLC to zero.

[45] The above entries in VLC’s general ledger corroborate Mr. Kennedy’s evidence that housing was provided to Mr. Cruikshank in 2009, 2010 and 2011, and that VLC agreed to waive rent payments in exchange for $450/month being deducted from the balance owing on the Consolidated Loan. The entry for $2,700 on December 31, 2009 most likely represents six months’ rent.

[46] The Plaintiff submits that an adverse inference should be drawn from the fact no records were kept by the Defendants to prove satisfaction of the debt created by the Consolidated Loan. I am not prepared to draw an adverse inference on that basis because the parties shared a bond of friendship and therefore had informal arrangements that were not reduced to writing.

[47] While there is no written record showing that Mr. Cruikshank specifically confirmed the discharge of the Consolidated Loan in February 2011, VLC’s accounting records establish that the loan was repaid. I recognize that the Financial Statements and general ledger were produced by VLC, were not audited and do not bear Mr. Cruikshank’s signature. It is, however, notable that Mr. Cruikshank was an officer and director of VLC. Indeed, he was the Treasurer in 2011. In that position, he almost certainly would have had access to VLC’s accounting records. There is no evidence that he disagreed with the information in the records. Nor is there any basis for me to doubt the accuracy of the records.

[48] The only relevant evidence in the record from Mr. Cruikshank is the sworn Form 13.1 Financial Statement that he filed regarding his personal finances during the course of the matrimonial proceeding. Part 4 of Form 13.1 required him to provide details of all money that other persons owed to him on his date of marriage, on his date of separation and on the date that he executed the form. He claimed that $21,074 was owing on the Consolidated Loan as of January 1, 2008 (i.e., the date that he and Ms. Bastien separated). He did not indicate a balance owing as of the date that he signed the Form 13.1, namely April 13, 2012 – he simply left that column blank. It is reasonable to deduce from this information that Mr. Cruikshank acknowledged the balance of the Consolidated Loan had been fully repaid at some point between January 1, 2008 and April 13, 2012. This is consistent with Mr. Kennedy’s evidence that the final payment was made in February 2011.

[49] In summary, I conclude that the Plaintiff has failed to satisfy its onus of proving that the Defendants were unjustly enriched or breached a contractual obligation to repay the Consolidated Loan. I am persuaded, on a balance of probabilities, that the loan was repaid in full, both the principal and interest, prior to the commencement of this action by Mr. Cruikshank in May 2015.

The Second Loan

Summary of the Plaintiff’s Position

[50] The Plaintiff Estate argues that it has suffered damages in the amount of $88,180.75 as a result of Mr. Kennedy’s failure to repay in full the principal and interest owing on the Second Loan.

[51] The Plaintiff’s calculation of its damages is based on the following three premises:

1. A balance of $77,082.56 was outstanding on the Second Loan as of June 1, 2012;
2. The Defendants made payments totaling $3,352.81 to Mr. Cruikshank and Ms. Bastien’s joint TD Line of Credit between June 1, 2012 and April 15, 2016; and
3. The payments to the TD Line of Credit were made to reduce the balance owing by the Defendants on the Second Loan.

[52] The Plaintiff credits Mr. Kennedy with a deduction of $3,352.81 from the starting balance of $77,082.56, then calculates interest on the remaining balance of $73,729.75 from April 15, 2016 onward, in order to arrive at its claimed damages of $88,180.75.

[53] For the reasons that follow, I have concluded that the evidence does not support any of the three premises upon which the Plaintiff’s case rests.

Analysis of Evidence

[54] The Plaintiff relies primarily on the testimony and affidavit evidence of Ms. Bastien. When she was questioned during the matrimonial proceeding on May 21, 2013, she testified that VLC had borrowed $90,000 from her and Mr. Cruikshank, that VLC still owed them $83,923.82 as of December 2008, and that VLC had been servicing the debt by making deposits to their joint TD Line of Credit. She said Mr. Kennedy was still, at the time of her questioning, making payments to TD on behalf of VLC.

[55] I have no reason to doubt Ms. Bastien’s honesty, but I do have serious concerns about the reliability of her evidence. First, she characterized the Second Loan as a loan to VLC, when it is clear from the totality of the evidence that it was a personal loan to Mr. Kennedy. The accuracy of her recall is therefore in question. Second, she confirmed in her affidavit that Mr. Cruikshank was solely responsible for collecting payments on all of their joint loans in accordance with the terms of their original separation agreement dated August 25, 2008. She admitted that she had no personal involvement with any of the loans after that date. She therefore lacks the requisite first-hand-knowledge to inform the court about facts relating to the status of the loan and any repayments made after August 2008.

[56] Ms. Bastien does have first-hand knowledge of the status of the joint TD Line of Credit from January 2010 onward. She testified that she was making deposits to that account to pay down the balance and was receiving statements from TD. I accept her evidence that payments were being made to the Line of Credit by Mr. Kennedy on behalf of VLC in 2013 and as late as 2016. That fact is not disputed by the Defendants.

[57] The Plaintiff argues that the Defendants’ payments toward the Line of Credit contradict Mr. Kennedy’s assertion that the Second Loan was fully repaid by the spring of 2012. The Plaintiff further argues, based on Ms. Bastien’s affidavit that the Defendants’ deposits to the Line of Credit totalled $3,352.81.

[58] Ms. Bastien deposed that, when she paid off the entire Line of Credit on April 15, 2016, the “amount paid was $74,502.13, a difference of $3,352.81 in Mr. Cruikshank’s favour.” The Plaintiff interprets this statement to mean that the deposits made to the Line of Credit by the Defendants totalled $3,352.81. In my view, that is not a reasonable interpretation of Ms. Bastien’s evidence. I make this finding for the following three reasons.

[59] First, Ms. Bastien testified (during her questioning) that the balance owing on the Line of Credit had “gone down considerably” by May 2013 as a result of the Defendants’ deposits. That statement is inconsistent with the Plaintiff’s assertion that the Defendants had deposited a total of only $3,352.81 by August 2016. Second, there is undisputed documentary evidence that VLC made a payment to the Line of Credit in the amount of $4,127.48 on January 5, 2016, so the total payments made must have amounted to more than that. Finally, the “difference of $3,352.81” mentioned in Ms. Bastien’s affidavit clearly refers to the difference between the amount that was owing on the Line of Credit on the date that Ms. Bastien and Mr. Cruikshank separated in January 2008 ($71,149.32) and the amount that Ms. Bastien was required to pay to discharge the debt eight years later ($74,502.13). She stated that the difference was “in Mr. Cruikshank’s favour” because she paid the additional debt accrued after they separated, even though it was a joint Line of Credit and Mr. Cruikshank was responsible for incurring the debt. She did not state that the amount of $3,352.81 represented an accounting of the Defendants’ deposits.

[60] Moreover, there is no credible evidence in the record to support the Plaintiff’s claim that the Defendants’ deposits to the Line of Credit constituted repayments on the Second Loan. Ms. Bastien candidly admitted during questioning that she merely assumed VLC still owed money on the Second Loan because Mr. Kennedy was depositing money to the Line of Credit. She said she assumed that the Defendants’ deposits were payments on an outstanding loan. She had no personal knowledge about the status of the Second Loan because Mr. Cruikshank had sole responsibility for its collection after August 2008.

[61] Mr. Kennedy deposed that VLC and members of the church community, himself included, made payments on the TD Line of Credit to help relieve the stress and anxiety caused by the bank’s threatened foreclosure on the matrimonial home, where Ms. Bastien was residing. He stated that they did this “in accordance with their faith and mandate to bear each other’s burdens”. He collected the money and made the deposits. I find Mr. Kennedy’s evidence on this point to be plausible. I have no reason to believe that he was misleading the court when he said that the payments on the Line of Credit were not payments toward the Second Loan, but rather philanthropic contributions from him and other members of the church community.

[62] There is simply no credible evidence that contradicts Mr. Kennedy’s statements. Ms. Bastien’s speculative statements and unfounded assumptions are not reliable evidence upon which I can make findings in the Plaintiff’s favour.

[63] The fundamental premise underlying the Plaintiff’s claim for damages is that a balance of $77,082.56 was still owing on the Second Loan as of June 1, 2012. The Plaintiff relies on an amortization schedule that was found among Mr. Cruikshank’s belongings as proof of this premise. The schedule projects that the $90,000 loan would be paid in full, with interest calculated at the rate of 7.35%, by November 1, 2029, if Mr. Kennedy made regular monthly payments in the amount of $649.94 from December 1, 2004 onward. The schedule confirms that a balance of $77,082.56 would be owing as of June 1, 2012 if the parties adhered to the projected payment schedule.

[64] I do not interpret this amortization schedule to be an agreement by the parties to adhere strictly to the specified installments. The document is not signed by either Mr. Kennedy or Mr. Cruikshank. Mr. Kennedy testified (during his examination) that he gave Mr. Cruikshank a software program to produce amortization schedules for his private loans, but that he had never seen this particular schedule previously. His testimony on this point was not contradicted. Furthermore, he said the interest rate applied to calculate the amounts on the amortization schedule was incorrect and did not reflect the variable rate to which he and Mr. Cruikshank had agreed. Moreover, he stated that the $649.94 amount shown on the schedule reflected the minimum monthly payment that he agreed to make to Mr. Cruikshank, but did not reflect the full amount of actual payments made.

[65] Mr. Kennedy deposed that Mr. Cruikshank accepted payments in cash and by both personal cheque and business cheque. He further deposed that he entered into “contra agreements” with Mr. Cruikshank to reduce his indebtedness. He said they did not feel a need to have these agreements in writing. He specifically recalled providing Mr. Cruikshank with “services such as extensive apartment repairs, installation of a basement floor in the matrimonial home, a water pump replacement, [and] vehicle storage of [a] 1967 Mustang” in exchange for reductions of the balance owing on the Second Loan. I find this evidence to be plausible, particularly in light of the other “contra agreements” that existed between Mr. Cruikshank and his debtors (i.e., the February 2007 Agreement of Service with Mr. Marritt and the rent-exchange agreement with VLC.)

[66] Documentary evidence in the record corroborates Mr. Kennedy’s statements about how loan repayments were made. The record includes copies of two cheques drawn on his personal bank account, each in the amount of $649.94. They are dated October 3, 2008 and March 1, 2009 and are made out to Mr. Cruikshank and Ms. Bastien. Mr. Kennedy deposed that these are just two examples of many monthly minimum payments that he made to service the debt. The Plaintiff does not dispute that regular payments in this amount were made by Mr. Kennedy from December 2004 up until the spring of 2012.

[67] Another personal cheque dated June 1, 2009 is made out to Mr. Cruikshank and Ms. Bastien in the amount of $799.88. The memo line on that cheque reads “May + June – (500.cax)”. Ms. Bastien deposed that this cheque “is a double payment from the Kennedy loan which included a $500 cash payment for the balance as indicated on the memo at the bottom of the check” ($649.94 x 2 - $500 = $799.88). The accuracy of her evidence on this point is corroborated by Mr. Kennedy’s affidavit, in which he explained the memo notation on the cheque by stating that $500 was given in cash to Mr. Cruikshank as part of a double payment on June 1, 2009. I therefore accept Mr. Kennedy’s evidence that some loan payments were made in cash.

[68] The record also contains copies of larger personal cheques made out by Mr. Kennedy to himself, with the memo line stipulating “cash for Ross”. One such cheque, dated October 8, 2010, is in the amount of $1,500. Another dated October 29, 2010 is in the amount of $1,000. These cheques not only provide further evidence of cash payments by Mr. Kennedy to Mr. (Ross) Cruikshank, they also corroborate Mr. Kennedy’s evidence that he sometimes paid more than the minimum amount of $694.94.

[69] The record also contains two substantial business cheques from Mr. Kennedy’s numbered company, in the amounts of $10,000 and $11,000, made out to Mr. Cruikshank and to Hall’s Paper Supplies respectively on December 31, 2007. The memo line on the $10,000 cheque states “Repayment”. Both of these cheques were cashed by Mr. Cruikshank. This documentary evidence further corroborates Mr. Kennedy’s assertion that he sometimes made large lump sum payments through his company to reduce his personal debt to Mr. Cruikshank.

[70] Mr. Kennedy insists that the full amount of $90,000, plus interest, was repaid to Mr. Cruikshank by the spring of 2012. He testified that the money was paid “in one way or another”. He explained, “Sometimes it was contra, sometimes it was cash, sometimes it was cheque… Payments of some sort would be made until there was satisfaction on the part of the lender.” He added, “if it weren’t resolved satisfactorily, I’m sure the man I knew would have said something.”

[71] It is clear that Mr. Cruikshank had knowledge of collection practices. The record contains a letter from his solicitor to ARC Irrigation/Ronald Marritt dated October 27, 2011, demanding payment of the full amount outstanding on an overdue loan, with interest accrued. There is no evidence of similar correspondence to Mr. Kennedy from Mr. Cruikshank or his solicitor, demanding payment of an alleged outstanding balance on the Second Loan. Had Mr. Kennedy stopped making payments on a personal loan with an outstanding balance over $77,000 in mid-2012, I would expect to see a demand letter or similar correspondence addressed to him.

[72] The Plaintiff disputes Mr. Kennedy’s assertion that the Second Loan was fully repaid, with interest, by the spring of 2012. The Plaintiff urges me to reject Mr. Kennedy’s evidence and find, instead, that the only payments made by the Defendants prior to June 1, 2012 were monthly installments of $649.94, per the amortization schedule. Such a finding would support an inference that $77,082.56 was still outstanding as of June 1, 2012, when Mr. Kennedy stopped making the regular monthly payments.

[73] The only evidence to support the Plaintiff’s position is Mr. Cruikshank’s Form 13.1 dated April 13, 2012, in which he claimed that Mr. Kennedy owed $85,447.73 on the Second Loan as of the date of his separation from Ms. Bastien (i.e., January 1, 2008) and still owed him $39,084.40 for half of the outstanding balance on the loan (the other half being owed to Ms. Bastien as the joint lender). In other words, Mr. Cruikshank swore, in his Form 13.1, that a total balance of $78,168.80 (2 x $39,084.40) was outstanding on the Second Loan as of April 13, 2012.

[74] The balances listed by Mr. Cruikshank on his Form 13.1 correspond to the projected balances on the amortization schedule, but are inconsistent with the documentary evidence in the record, which shows actual payments made by Mr. Kennedy in excess of $649.94 (as discussed above). I accept Mr. Kennedy’s evidence that the cheques in the record represent only a fraction of the loan payments that he made. Still, it is worthy of note that these payments alone would reduce the balance outstanding on the $90,000 loan by approximately $26,000 (without taking into consideration other regular monthly installment payments). The outstanding balances claimed by Mr. Cruikshank in his Form 13.1 must therefore be inaccurate. The amounts in the form are at best inadvertently inflated, at worst deliberately fabricated.

[75] Mr. Kennedy deposed that Mr. Cruikshank did not give him any indication that there was an outstanding balance owing on the Second Loan until the original Statement of Claim was served on October 1, 2015. Mr. Cruikshank raised the alleged unrepaid debt for the first time in the context of his matrimonial litigation, after learning that Mr. Kennedy ostensibly had an affair with his wife. This timing lends credence to Mr. Kennedy’s suspicion that Mr. Cruikshank commenced this action as retribution for what he perceived to be a personal betrayal committed by Mr. Kennedy and Ms. Bastien, when in fact no money was owed to him by either of them.

[76] The documentary record, albeit incomplete, corroborates key elements of Mr. Kennedy’s evidence. I have no reason to question his credibility as a witness. His evidence remained consistent and he was forthright throughout his questioning. The Plaintiff’s evidence, on the other hand, is not reliable. It consists of an amortization schedule that was not authenticated by any witness, an erroneous Form 13.1 sworn by Mr. Cruikshank, who is now deceased and therefore unavailable for cross-examination, and speculative evidence from Ms. Bastien regarding issues about which she has no first-hand knowledge.

[77] In conclusion, I find that the Plaintiff Estate has not established its claims of unjust enrichment or breach of contract against the Defendants. The Plaintiff has not proved its damages. There is no evidence upon which I can conclude, on a balance of probabilities, that the Second Loan was not repaid and that more than $88,000 is owing to Mr. Cruikshank’s Estate by the Defendants.

Orders

[78] For the reasons set out above, summary judgement is granted to the Defendants. The Plaintiff’s motion is dismissed and the Plaintiff’s action is dismissed.

[79] The Defendants were successful in this motion and are entitled to their costs. The parties are encouraged to attempt to agree on the amount of costs payable by the Plaintiff Estate. If no agreement can be reached, the Defendants may submit written costs submissions of no more than one page, with an attached outline of their costs and any settlement offers that may affect the issue of costs. Those submissions are to be delivered to counsel for the Plaintiff and forwarded to my attention at the Brampton Courthouse of the Superior Court of Justice by no later than April 26, 2019. The Plaintiff may respond with equally brief written costs submissions, to be delivered to the Defendants and to the court within 10 business days of receipt of the Defendants’ submissions and no later than May 10, 2019.

Petersen J. Released: April 5, 2019