COURT FILE NO.: CV-17-2149-00

DATE: 20221128

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Nanaksar Thath Ishar Darbar

Plaintiff

-and-

George Graff, Irene Graff, the Estate of Lili Glaser, Inderjeet Sidhu,

Gurdeep Grewal and Baba Amar Singh

Defendants

Paul Mand, for the Plaintiff / Defendant by Counterclaim

James MacDonald, for the Defendant Inderjeet Sidhu / Plaintiff by Counterclaim

Heard: June 23, 2022

JUSTICE C. PETERSEN

REASONS FOR DECISION

OVERVIEW

Introduction

[1] Nanaksar Thath Ishar Darbar (“Nanaksar”) is a not-for-profit Ontario Corporation whose primary objective is to operate a gurdwara, a place of worship for members of the Sikh faith. Inderjeet Sidhu was a member of Nanaksar’s sangat (i.e., religious congregation) for approximately 10 years, from 2005 to 2015.

[2] Nanaksar commenced this proceeding against multiple defendants in May 2017 but has since abandoned its claims. The action against Ms. Sidhu was dismissed on consent. However, a counterclaim Ms. Sidhu filed remains to be adjudicated.

[3] The parties have filed summary judgment motions. They agree that Ms. Sidhu’s counterclaim should be determined by summary judgment, pursuant to r. 20.04(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 under the Courts of Justice Act, R.S.O. 1990, c.C.43. I am satisfied that it is appropriate to do so. Credibility is a peripheral issue in this case and any credibility disputes can be adjudicated based on the motion record. Neither party’s motion gives rise to a genuine issue requiring a trial.

Evidentiary rulings

[4] I should note at the outset that I have not taken into account any answers Ms. Sidhu gave to questions during her examination-for-discovery. During oral submissions, Nanaksar tried to rely on statements she made in discoveries to support its position on a number of issues. Ms. Sidhu’s counsel objected. The objection was well-founded.

[5] The discovery transcript was not read into the record as part of Nanaksar’s case pursuant to r. 31.11 of the Rules of Civil Procedure. No other steps were taken by Nanaksar to try to introduce the discovery transcript as evidence at any stage of the motion proceeding. Nanaksar elected not to cross-examine Ms. Sidhu on her affidavit when it had the opportunity to do so. It cannot now seek to substitute her discovery evidence for cross-examination evidence. The transcript of her testimony during discoveries is not evidence properly before me on these motions.

[6] Moreover, during oral submissions, Nanaksar challenged the authenticity of two documents attached as exhibits to Ms. Sidhu’s affidavit. The challenges were based in part on the timing of the documents’ disclosure, after the parties’ affidavits of documents were exchanged and examinations for discovery were completed. They were also based in part on statements made by Ms. Sidhu during her examination-for-discovery. If Nanaksar intended to impeach Ms. Sidhu’s credibility regarding the documents’ authenticity, it ought to have cross-examined her and followed the procedure set out in s. 20 of the Evidence Act, R.S.O. 1990, c. E.23. It did not do so. Proper impeachment steps were not taken. As a matter of fairness, Nanaksar cannot now seek to impugn Ms. Sidhu’s credibility without having given her an opportunity to address the concerns about the documents’ authenticity during cross-examination: R v. Lyttle, 2004 SCC 5, at para. 64, citing the rule in Browne v. Dunne (1893), 1893 65 (FOREP), 6 R. 67 (H.L.) at pp.70-71.

[7] Nanaksar relies on the evidence of its President, Navtej Kang. In adjudicating the issues raised by the parties’ summary judgment motions, I have considered his discovery evidence only to the extent of using portions of it that were put to him and acknowledged by him during his cross-examination.

Overview of the dispute and parties’ positions

[8] Ms. Sidhu’s claims arise from money that she advanced to Nanaksar in four payments between March 2009 and May 2012, in the total amount of $465,000. She asserts that the funds were provided to assist Nanaksar with the construction of its gurdwara at 9954 The Gore Road in Brampton, Ontario (hereafter, “the Gore Road Property”). She further asserts that the former spiritual leader of the gurdwara, Amar Singh, requested the money for that purpose and told her that it would be returned to her after the temple structure was built. None of the money was ever returned.

[9] In her Statement of Counterclaim, Ms. Sidhu pleads unjust enrichment or, in the alternative, breach of contract. She also pleads the doctrine of resulting trust, but she did not pursue the latter claim in her motion for summary judgment. In her motion, she seeks a declaration that she holds a beneficial ownership interest in the Gore Road Property, title to which is registered in Nanaksar’s name. Specifically, she seeks a remedial constructive trust for unjust enrichment. Alternatively, she pleads that she should be paid $465,000 as restitution for unjust enrichment or, in the further alternative, for breach of contract.

[10] In its original Statement of Defence to the Counterclaim, Nanaksar denied receiving any funds from Ms. Sidhu. In a subsequent Amended Statement of Defence, it acknowledges receiving the four payments totalling $465,000, but pleads that the payments were donations made without any promise of reimbursement. In the alternative, Nanaksar pleads that Ms. Sidhu’s counterclaim for repayment of the money (whether based on unjust enrichment or breach of contract) is statute-barred by the expiry of the two-year limitation period in s.4 of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B. Ms. Sidhu commenced her counterclaim against Nanaksar on January 2, 2018.

[11] In its factum and at the hearing of the summary judgment motions, Nanaksar abandoned its principal position that the payments were donations and relied only on its alternative pleading. It argued that all four payments were loans and submitted that the two-year limitation period for an action to recover the loaned money expired prior to the commencement of Ms. Sidhu’s counterclaim. In its counter-motion for summary judgment, Nanaksar seeks an Order dismissing Ms. Sidhu’s claim on the basis that it is statute-barred by the Limitations Act, 2002.

[12] In her motion for summary judgment, Ms. Sidhu seeks a proprietary remedy for unjust enrichment and argues that the applicable limitation period for that claim is 10 years, as set out in s.4 of the Real Property Limitations Act, R.S.O. 1990, c. L.15. She asks the Court to declare that she has a beneficial ownership interest in the Gore Road Property. She takes the position that she did not enter into loan agreements with Nanaksar. However, if her claim for unjust enrichment fails on the basis that the payments are found to be loans, then she argues that her alternate claim for damages for breach of contract is not statute-barred because the two-year limitation period was extended by Nanaksar’s acknowledgement of liability for the debt.

[13] If the court determines that the payments were not loans and that Nanaksar was unjustly enriched at Ms. Sidhu’s expense, then Nanaksar argues that a constructive trust remedy is not appropriate. It submits that none of the money was used for the gurdwara construction project. It further argues that any personal monetary remedy (whether for breach of contract or unjust enrichment) is statute-barred. Nanaksar denies that it made any acknowledgement of liability prior to the expiry of the limitation period.

ISSUES

[14] I am not required to address all the myriad issues raised by the parties’ pleadings and submissions. My ruling on the first threshold issue will determine the subsequent issues that need to be adjudicated. I have therefore set out the questions to be answered in a flow chart fashion below:

[15] Evidently, if Ms. Sidhu has not made out a claim of unjust enrichment or has not established her entitlement to a proprietary remedy by way of constructive trust, and if I conclude that her claims for monetary relief are statute-barred, then her counterclaim must be dismissed and summary judgment will be rendered in Nanaksar’s favour.

UNJUST ENRICHMENT

Analytical Framework

[16] The analytical framework for deciding claims of unjust enrichment is set out in Supreme Court of Canada jurisprudence. To succeed, the plaintiff must show three things, namely: (i) that the defendant was enriched by receiving a benefit, (ii) that the plaintiff suffered a corresponding deprivation, and (iii) that there is no juristic reason for the enrichment and corresponding deprivation: Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, at para. 32; Moore v. Sweet, 2018 SCC 52, [2018] 3 S.C.R. 303, at para. 37. (In this case, Ms. Sidhu is the Plaintiff by counterclaim; Nanaksar is the Defendant by counterclaim.)

[17] A two-stage analysis applies to detemine the issue of juristic reason. At the first stage, the plaintiff must demonstrate that the defendant’s retention of the benefit at the plaintiff’s expense cannot be justified based on any of the established categories of juristic reason: a contract, a disposition of law, a donative intent, or another valid common law, equitable or statutory obligation: Kerr, at para. 43. If any of these categories applies, the analysis ends and the plaintiff’s claim of unjust enrichment fails: Kerr, at para. 41; Moore at para. 57.

[18] If the plaintiff successfully demonstrates that none of the established categories of jurisdic reasons applies, then a prima facie case of unjust enrichment is made out and the analysis proceeds to the next stage. The defendant then has an opportunity to rebut the plaintiff’s prima facie case by showing that there is some residual reason to deny recovery by the plaintiff. A de facto burden of proof is placed on the defendant to show a reason why it would be just for them to retain the enrichment at the plaintiff’s expense: Kerr, at paras. 41-43; Moore, at para. 58. This second stage of the analysis includes consideration of the reasonable expectations of the parties and of moral and policy-based arguments. The relevant factors to consider will depend on the specific facts and circumstances before the Court.

[19] Before analyzing the elements of unjust enrichment in this case, I will briefly summarize the evidence pertaining to Amar Singh’s role in the gurdwara. Amar Singh was Nanaksar’s religious leader. An overview of his role in the gurdwara is necessary because he plays a significant part in the narrative of events that gave rise to the litigation.

Baba Amar Singh’s role

[20] The parties refer to Amar Singh as “Baba” or “Baba Ji,” which are honorific titles given to religious leaders in the Sikh faith. I will hereafer refer to Amar Singh as “Baba Amar Singh.”

[21] Baba Amar Singh founded Nanaksar as part of an international network of Sikh gurdwaras and schools located in India, Canada, the United States, the United Kingdom, Australia, New Zealand and Hong Kong. He lives in India but is the spiritual leader of all the affiliated gurdwaras dispersed around the globe. He visits the gurdwaras to attend special events, lead prayers, and deliver sermons and blessings. He has many followers both within and beyond India’s borders. He is regarded by some as a Sant, namely a person of exceptional holiness, worthy of emulation. His most devout followers observe and promote his religious teachings and defer to his decisions with unqualified compliance. In its factum, Nanaksar states that members of the sangat “followed Baba Amar Singh’s directions and instructions blindly, in a cult like fashion” (emphasis in original). This statement is not challenged by Ms. Sidhu.

[22] Baba Amar Singh is listed as “religious leader” in Nanaksar’s application for incorporation dated July 22, 1981. The application states that he will be an ex officio director of the corporation, and that the corporation’s directors shall be elected by the members from candidates approved by him. The corporation’s Profile Report dated June 3, 2021 lists him as a director since September 2, 1981. He held the office of Chairman for a period of time; the exact dates of his tenure as Chairman are unclear from the record.

[23] From 1981 until approximately 2015, Baba Amar Singh was the religious leader of Nanaksar’s sangat. He had many devout followers within the sangat, including Ms. Sidhu. Ms. Sidhu’s uncontested evidence is that, in addition to providing spiritual guidance to sangat members, he was recognized as the de facto head of the gurdwara and was shown deference by the corporations’ other directors, officers and employees. Ms. Sidhu deposed that attendance at the gurdwara increased when Baba Amar Singh visited. After prayers, members of the sangat, including Ms. Sidhu and her family, would meet with him to receive blessings and ask him for life advice.

[24] Baba Amar Singh is no longer the religious leader at Nanaksar. He was eventually expelled by Nanaksar’s board of directors for alleged breaches of fiduciary duties. It appears that he was not immediately formally removed as a director from the corporation’s records, but in or about 2015, the board voted to ban him from entering the gurdwara during a visit to Canada. His expulsion caused controversy within the sangat and was opposed by some directors and members, including Ms. Sidhu, who ultimately departed from Nanaksar’s gurdwara that same year.

[25] Nanaksar’s specific allegations of misconduct against Baba Singh are not in evidence. It is unclear whether they pertain to the local gurdwara or to conduct affecting other gurdwaras within Nanaksar’s network. Nanaksar drew the court’s attention to the decision of the Supreme Court of British Columbia in Gill et al v. Amar Singh et al, 2002 BCSC 969, in which the trial judge set aside a conveyance of property valued at more than $1,000,000 on the basis that it was procured by Baba Amar Singh through undue influence over an elderly woman with terminal cancer, who thought he would intervene with God on her behalf and cure her cancer if she transferred the land to him. Nanaksar also filed a media article from The Sikh Times, describing numerous legal proceedings commenced against Baba Amar Singh in California and other jurisdictions, alleging fraud and breach of fiduciary duties. The statements in the article are hearsay and are not admissible for the truth of their content. The article is, however, admissible as proof of the sequence of events that ultimately led to Nanaksar’s decision to divorce itself from its founding religious leader.

[26] Nanaksar’s President, Mr. Kang, stated his belief that “Baba Amar Singh has violated his office and pilfered the coffers of various local Gurdwaras for his own unfettered benefit as his sangat follows him blindly.” Mr. Kang further deposed that Baba Amar Singh “has been removed from office from several Gurdwaras, including but not limited to Brampton, the United Kingdom and California for breaches of fiduciary duties.”

[27] Most notably, Mr. Kang deposed that Baba Amar Singh “absconded with all [the gurdwara’s] financial records when he was removed from office.” Although Ms. Sidhu did not challenge this statement, I find it to be an exaggeration because Nanaksar produced some financial records in its motion materials, including a bank statement, an affidavit pertaining to a receivership proceeding, and copies of the bank drafts for the four payments from Ms. Sidhu. Clearly, Baba Amar Singh did not take all the financial records with him. I accept, however, that he did remove some records relevant to the issue of whether there is a juristic reason for Nanaksar to retain the benefit of the payments it received from Ms. Sidhu.

[28] I have not relied on the missing records to draw adverse factual inferences against Nanaksar because its failure to produce the records is outside of its control. For example, Mr. Kang acknowledged during his cross-examination that Nanaksar has a statutory duty, as a charitable corporation, to maintain records of donations. Nanaksar produced no record of Ms. Sidhu’s payments being recorded as donations. In different circumstances, I could draw an inference that the payments were not donations based on Nanaksar’s failure to produce such a record. However, in the circumstances before me, where Baba Amar Singh removed the relevant records of loans and donations made by sangat members, such an inference would not be reasonable.

[29] I will now turn to my analysis of the evidence pertaining to Ms. Sidhu’s claim of unjust enrichment.

Analysis

[30] Nanaksar conceded the first two elements of unjust enrichment during the motions hearing. It is nevertheless useful to review the evidence relevant to these elements because it provides helpful context for adjudicating the issues in dispute.

Was there an enrichment?

[31] Ms. Sidhu deposed that she made four advances to Nanaksar in the following amounts on the following dates:

1. $100,000 on March 5, 2009

2. $80,000 on September 3, 2010

3. $50,000 on January 5, 2011

4. $235,000 on May 14, 2012

[32] Ms. Sidhu adduced bank drafts and bank account statements proving that these payments were drawn from her personal bank account and were payable to Nanaksar.

[33] In his affidavit, Mr. Kang conceded that these payments were received by Nanaksar. He later tried to resile from that concession during his cross-examination by suggesting that some of the payments were made to Baba Amar Singh personally, but he ultimately confirmed the truth of what he had stated earlier in his affidavit.

[34] Mr. Kang suggested, during his cross-examination, that some of the money was repaid to Ms. Sidhu. She denies that suggestion. This testimony is inconsistent with Mr. Kang’s unequivocal statement in his affidavit that “Nanaksar has never made any repayment.” Despite Mr. Kang’s evidence during his cross-examination, Nanaksar does not take the position that any part of the money was repaid. It acknowledges that none of the money was returned to Ms. Sidhu.

[35] Ms. Sidhu has therefore established the first element of unjust enrichment, namely that Nanaksar was enriched by receiving four payments totalling $465,000.

Was there a corresponding deprivation?

[36] Ms. Sidhu’s uncontested evidence is that she made the first three payments with money she withdrew from a line of credit. The fourth payment was made from a different line of credit secured by a mortgage against her residential property. That mortgage loan is still outstanding and is registered as a charge on title to her home.

[37] Based on these facts, I find that Ms. Sidhu suffered a financial deprivation corresponding to Nanaksar’s enrichment. She was not only deprived of the use of the $465,000 that she advanced to Nanaksar, but she also incurred interest charges because she borrowed money in order to make the payments.

[38] The first two elements of unjust enrichment have been established. The central issue in dispute is whether there is a juristic reason (i.e., a reason in law or equity) that justifies Nanaksar’s enrichment at Ms. Sidhu’s expense: Kerr, at para. 40; Moore, at para. 54.

Is there a juristic reason?

[39] To establish a prima facie case for the absence of a juristic reason, Ms. Sidhu must show that none of the established categories of juristic reason applies. Nanaksar’s pleadings, affidavit evidence, and submissions raise two possible recognized categories: (1) that the payments were gifts made with donative intent, or alternatively, (2) that they were demand loans, recovery of which is barred by the expiry of the applicable limitation period. None of the other established categories of juristic reasons could be invoked in the circumstances of this case.

[40] If the payments were loans and if Ms. Sidhu’s ability to collect the loans has been extinguished by the Limitations Act, 2002, this would fall under the established category of “disposition of law,” which arises “where the enrichment of the defendant at the plaintiff’s expense is required by law, such as where a valid statute denies recovery”: Kerr, at para. 41; Moore, at para. 63. Where a loan has not been repaid by a debtor who has the benefit of the money loaned, there is an enrichment of the debtor and a corresponding deprivation of the creditor, but the impact of a statutory limitation period on the creditor’s ability to commence legal proceedings against the debtor for fulfillment of the terms of the loan provides a juristic reason for retaining the enrichment if the limitation period has expired: Ainsley v. Fitzpatrick, 2013 ONSC 3338, at paras. 63-64, aff’d 2014 ONCA 93. Non-fulfillment of the terms of repayment of a loan does not, in these circumstances, give rise to unjust enrichment.

[41] With respect to the element of juristic reason in this case, I will deal first with the issue of donative intent, and then I will address the more hotly contested issue of whether the payments made by Ms. Sidhu to Nanaksar were loans.

Were Ms. Sidhu’s payments donations?

[42] Despite having made pleadings and having adduced evidence to the contrary, in its factum and in its oral submissions at the motions hearing, Nanaksar expressly admitted that Ms. Sidhu’s payments were not donations. Given this admission, I no longer need to adjudicate the issue of her donative intent. I will nevertheless review the relevant evidence because it is material to the contested issue of whether the payments constituted loans.

[43] Nanaksar’s witness, Navtej Kang, has been a sangat member since 2005, a director on Nanaksar’s board since July 28, 2010, and President of the board since December 13, 2017. He was the board’s Chairman prior to his election as President.

[44] Mr. Kang deposed in a sworn affidavit that the payments made by Ms. Sidhu were donations. He said she first demanded repayment during a phone call with him in 2015, shortly after the board decided to ban Baba Amar Singh from the gurdwara, a decision that troubled her. He recalled telling her that Nanaksar would not repay the money and that she ought to seek recovery from Baba Amar Singh. In his affidavit, Mr. Kang expressed his belief that Ms. Sidhu’s claim of unjust enrichment was brought as retribution for Baba Amar Singh’s expulsion. His theory is that she donated the money to the temple because she was a devout follower of Baba Amar Singh, and she later tried to retract the donations because she was upset that Nanaksar expelled the leader whom she worshipped.

[45] Ms. Sidhu insists that she never intended any of the payments to be donations. She deposed that Babar Amar Singh repeatedly assured her the money would be returned to her. She recalls the phone conversation with Mr. Kang in 2015, when she demanded repayment and he told her to ask Baba Amar Singh for the money instead. However, she deposed that she made multiple requests for repayment to other directors at the temple, including Baba Amar Singh, prior to his expulsion. She denies that her disagreement with the board’s decision to sever ties with Babar Amar Singh has anything to do with her claim.

[46] It is undisputed that Baba Amar Singh frequently asked sangat members to give money to Nanaksar to support the construction of a new gurdwara at the Gore Road Property location. Nanaksar purchased that property in December 2004, prior to both Mr. Kang and Ms. Sidhu joining the sangat. Nanaksar’s gurdwara had been located in Mississauga, but the sangat moved to Brampton after the purchase of the Gore Road Property. A house located on the property was initially used as the gurdwara. It was later demolished, some time between 2006 and 2008, to prepare the site for constructing a new temple building. Around that time, Nanaksar rented an adjacent property and used it as a temporary gurdwara for the next few years.

[47] The construction project was expensive. It ended up costing Nanaksar in excess of $10 million. It was partially financed through a construction mortgage from Royal Bank of Canada (“RBC”). The bank financing was supplemented by donations and loans from sangat members.

[48] Mr. Kang deposed that Babar Amar Singh made regular pleas for donations from the sangat whenever he visited the gurdwara. Mr. Kang recalled that, after offering blessings, Babar Amar Singh would seize the opportunity to request donations from congregants. Ms. Sidhu deposed that she was present on several occasions when Baba Amar Singh mentioned Nanaksar’s need for funds to other members of the sangat while he was preaching.

[49] Ms. Sidhu recalled that Baba Amar Singh started making requests for money in early 2009. She said that, in addition to asking congregants for money during his sermons, he made several verbal requests to her and her family privately on occasions when they met with him for blessings and advice. She said he told her money was needed for construction of the new temple and he verbally assured her that Nanaksar would reimburse her for any advances. She said he told her “to rely on her faith” when he asked for money. She felt a sense of obligation to provide financial assistance due to her family’s membership in the sangat. According to Ms. Sidhu, each of the four payments she made to Nanaksar were preceded by verbal requests for funds from Baba Amar Singh, and verbal assurances from him that Nanaksar would return the funds. No terms of repayment were ever discussed.

[50] Nanaksar did not cross-examine Ms. Sidhu on her affidavit and Mr. Kang did not contradict her evidence about these conversations with Baba Amar Singh. Mr. Kang confirmed, during his cross-examination, that he has no knowledge of what, if any, representations were made to Ms. Sidhu by Baba Amar Singh about repayment of the funds by Nanaksar.

[51] I find Ms. Sidhu’s uncontested evidence to be credible. I accept her testimony that each of the four payments she made were advanced to Nanaksar at the behest of Baba Amar Singh, with verbal assurances from him that the money would be repaid by Nanaksar after the new temple was constructed. Her account that the payments were all made without donative intent is corroborated by circumstantial evidence. First, no donation receipts were issued to her by Nanaksar for any of the payments. There is evidence that official charitable donation receipts were issued to her on other occasions when she gave smaller sums of money to Nanaksar (in amounts ranging from $51 to $226). Second, she did not claim any of the four payments as charitable donations on her income tax returns. Had she donated the money to Nanaksar, a registered charitable organization, surely she would have claimed the available tax credits to reduce her tax liability and offset her borrowing costs.

[52] On the totality of the evidence, it is clear that the payments were not donations. Had Nanaksar not made a last-minute admission of this fact, I would have found in Ms. Sidhu’s favour on this issue. Nanaksar’s enrichment and Ms. Sidhu’s corresponding deprivation therefore cannot be justified on the basis that the money was gifted to the corporation.

Were Ms. Sidhu’s payments loans?

[53] The only other possible recognized category of juristic reason for Nanaksar to retain its enrichment at Ms. Sidhu’s expense would be if Ms. Sidhu’s payments were loans and her enforcement of the debt were barred by the expiry of the two year limitation period in s.4 of the Limitations Act, 2002. The parties made submissions during the motions hearing about when the tolling of the limitation period for breach of contract commenced and whether it was reset by any written acknowlegment of liability for the debt pursuant to s.13(8) of the Limitations Act, 2002. It is unnecessary for me to decide those issues because I have concluded, for the reasons set out below, that the payments were not loans.

[54] Ms. Sidhu deposed that Baba Amar Singh referred to her payments as “loans” when he discussed them with her. She said she relied on his assurances that Nanaksar would eventually repay her the money because he was Nanaksar’s religious leader and a member of the board of directors. She is correct in her submission that this evidence alone does not establish the existence of loan agreements between her and Nanaksar.

[55] The absence of a written agreement is not fatal to Nanaksar’s argument that the payments constituted loans. Verbal loan agreements are legally enforceable provided that they constitute valid contracts. In this case, however, there is no evidence to support a finding that the corporation, Nanaksar, entered into a loan contact with Ms. Sidhu.

[56] In determining whether there was a loan agreement between Ms. Sidhu and Nanaksar, the court must be guided by the common law’s long adherence to the objective theory of contract formation: Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corp., 2020 SCC 29, at para. 30; Ethiopian Orthodox Tewahedo Church of Canada St. Mary Cathedral v. Aga, 2021 SCC 22, at paras. 21-22 (“Ethiopian Orthodox Church”). This approach requires examining how each party’s conduct would appear to a reasonable person in the other party’s position: Strata Plan, at para. 33; Ethiopian Orthodox Church, at para. 35. The court must construe the parties’ course of conduct according to the traditional contract requirements of offer and acceptance, with the intention of creating a legal relationship, supported by consideration: Jedfro Investments (U.S.A.) Ltd. v. Jacyk, 2007 SCC 55, [2007] 3 S.C.R. 679, at para. 16; Ethiopian Orthodox Church, at para. 35.

[57] In this case, there is no evidence upon which a reasonable person could conclude that Nanaksar conducted itself in a manner that shows acceptance of any loan offers from Ms. Sidhu. Ms. Sidhu may have had a subjective expectation that she would be repaid because of representations made to her privately by Baba Amar Singh, but there was no conduct by Nanaksar consistent with a promise to repay her.

[58] There is no evidence that any officer or director of the board, other than Baba Amar Singh, acknowledged Nanaksar’s obligation to repay the amounts advanced by Ms. Sidhu at the time that the payments were made. In its Statement of Defence to Ms. Sidhu’s counterclaim, Nanaksar pleads that it is governed by a board of directors, that the corporation’s actions are authorized by resolutions adopted by the board, and that no resolution was ever passed by the board to take a loan from Ms. Sidhu. I highlight these pleadings because, in the motions before me, Nanaksar has not adduced any evidence of a board resolution to approve loans from Ms. Sidhu. Even if it is impossible for Nanaksar to produce relevant board records because Baba Amar Singh took them with him, Mr. Kang was a director from July 2010 onward and therefore could have given evidence, from his personal knowledge and recollection, about any board resolutions to accept loans from Ms. Sidhu. Instead, he swore an affidavit stating that her payments were donations, not loans. He steadfastly maintained that position throughout his cross-examination.

[59] Moreover, Mr. Kang deposed that he made inquiries of all existing board members to detemine which sangat members made loans and which ones made donations to Nanaksar during Baba Amar Singh’s tenure. I accept his statement that no financial records could be located, but individual directors could have testified based on their own knowledge and memory. There is no evidence that a single officer or director recalled the board approving any loans, let alone loans amounting to almost half a million dollars, from Ms. Sidhu.

[60] Ms. Sidhu tendered a two-paragraph affidavit sworn by a former director, Jaswant Singh, on February 5, 2018. She describes Jaswant Singh as Baba Amar Singh’s “right-hand man” and as the “manager of the temple” during the period when her payments were made. She deposed that he “controlled most of the money that was donated by the sangat every day and the donation box, referred to as a ‘golak’, that was used to hold donations.”

[61] In his February 2018 affidavit, Jaswant Singh states that that Ms. Sidhu and her husband “loaned the said temple an amount of $465,000.” He does not set out the source of his knowledge of this purported fact. There is no foundation for his bald statement. Moreover, his understanding of what constitutes a “loan” is not apparent from the brief affidavit. He may have used the word “loan” simply to support Ms. Sidhu’s contention that she did not intend to donate the money.

[62] There is no evidence that Jaswant Singh acknowledged Nanaksar’s obligation to repay Ms. Sidhu’s advances at the time when they were made in 2009, 2010, 2011 and 2012. In fact, he swore an affidavit on October 22, 2013, in the context of a receivership proceeding, in which he gave evidence that appears to contradict his later (2018) deposition that Ms. Sidhu loaned money to the temple. He was one of three directors (along with Baba Amar Singh and Gurdeep Grewal) who were overseeing the construction project. The project became mired in delays and cost overruns. Various contractors registered substantial construction liens against title to the property. There were allegations of mismanagement and fraud against the managing directors, which are immaterial to the case before me. What is relevant is that RBC withdrew its construction financing and demanded repayment of its mortgage loan in July 2012. A Receiver was subsequently appointed to take control of the corporation’s assets and manage its operations.

[63] The Receivership ended in November 2013. Jaswant Singh swore the above-mentioned October 22, 2013 affidavit in support of Nanaksar’s motion to discharge the receivership. He listed Nanaksar’s creditors and attested to the fact that none would be prejudiced by the discharge. Notably, Ms. Sidhu was not among the enumerated creditors.

[64] Jaswant Singh’s October 22, 2013 affidavit is lengthy and detailed. It appears to have been drafted based on a careful review of the corporation’s financial records at that time (i.e. prior to Baba Amar Singh removing the records in 2015). I infer from this that the corporation likely had no record of any loans from Ms. Sidhu in October 2013, and I further infer that there were no loan agreements between the corporation and Ms. Sidhu.

[65] Mr. Kang drew a similar inference in his affidavit. He expressed his belief that Ms. Sidhu’s payments were not loans because she was not listed among Nanaksar’s creditors at the time the receivership was discharged. Furthermore, he deposed that, to the best of his knowledge, “there were no creditors of Nanaksar other than those reflected in Nanaksar’s Receivership.” This statement and other evidence given by Mr. Kang directly contradict Nanaksar’s position that Ms. Sidhu’s payments were loans.

[66] Based on the totality of the evidence, I find that there was no privity of contract between Ms. Sidhu and the corporation. There is no evidence upon which a reasonable person could conclude that Nanaksar conducted itself in a manner that showed acceptance of loans with intent to create legal relations. Even if Baba Amar Singh had authority to bind the corporation in his capacity as a director of the board – which Nanaksar expressly denies – there is no evidence that he entered into a loan agreement with Ms. Sidhu on Nanaksar’s behalf.

[67] Formation of contract requires objective evidence of a meeting of the minds on the essential terms: Jedfro, at para. 16. The evidence before me shows that the amounts were neither negotiated nor agreed upon. On each occasion, Ms. Sidhu independently determined how much she was going to advance to the corporation. No terms were negotiatied with respect to repayment. Ms. Sidhu deposed that she understood she would be repayed the interest that she incurred borrowing the money, but she acknowledged that Baba Amar Singh did not agree to that. She gave uncontested evidence that no interest rates were discussed. No interest payments were ever agreed upon. There was therefore no consideration for the advancement of the money. Without consideration, there can be no contract: Strata Plan, at para. 37; Ethiopian Orthodox Church, at para. 35; Scotsburn Co-Op. Services v. W.T.Goodwin Ltd., 1985 57 (SCC), [1985] 1 S.C.R. 54, at para. 19.

[68] Ms. Sidhu was induced to advance the funds, not by any contractual consideration, but rather by Baba Amar Singh’s pleas and appeals to her faith. His repeated assurances that the money would be returned to her by Nanaksar created an expectation of repayment on her part. However, that expectation, unsupported by any consideration, is not itself sufficient to create an enforceable loan agreement.

[69] I reject Nanaksar’s submission that the facts of this case are indistinguishable from those in Ainsley, where Bielby J. found (para. 64) a juristic reason for the defendant’s enrichment based on “the law of debtor-creditor relationships,” including the applicable limitation period for the commencement of legal proceedings if the terms of a loan are not fulfilled. In this case, there was no loan agreement between the parties, so the expiry of the limitation period for an action in breach of contract is immaterial. It does not constitute a juristic reason in this case.

[70] Ms. Sidhu has therefore proven a prima facie case of unjust enrichment. None of the established categories of juristic reason applies.

What were the parties’ reasonable expectations?

[71] The onus falls upon Nanaksar to rebut the prima facie case of unjust enrichment by demonstrating a reason why it would be just for its enrichment to be retained. The question at this stage of the analysis is whether, looking at all the circumstances of the transactions, it would be equitable to deny Ms. Sidhu’s recovery: Garland v. Consumers’ Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629, at paras. 43-45. The parties’ reasonable expectations and policy considerations factor into this assessment.

[72] With respect to the parties’ expectations, I accept that Ms. Sidhu believed that she would be repaid because she trusted Baba Amar Singh, who assured her that Nanaksar would return the money. Nanaksar, on the other hand, never agreed to borrow the money, so it did not expect to be required to repay Ms. Sidhu.

[73] In this regard, the facts of this case resemble the facts in Moore, where the Supreme Court of Canada was required to consider the elements of unjust enrichment in the context of a claim between two “innocent” parties, in circumstances that involved a third party (para. 39). In that case, Ms. Moore entered into a verbal agreement with her ex-husband Lawrence to pay the premiums of his life insurance policy in exchange for the right to remain named as beneficiary of the policy. Without her knowledge, and while she continued to pay the premiums, Lawrence designated his new spouse, Ms. Sweet, as irrevocable beneficiary. When Lawrence died, Ms. Sweet was legally entitled to receive the $250,000 proceeds from the insurer, but the Supreme Court held that retention of that benefit would constitute unjust enrichment at Ms. Moore’s expense.

[74] There are facts that distinguish this case from Moore, most notably that: (i) Ms. Sidhu did not enter into a contract with Baba Amar Singh, whereas Ms. Moore had entered into a separation agreement with Lawrence, and (ii) Ms. Moore was only out-of-pocket $7,000 (the cost of the insurance premiums over a period of 13 years), whereas Ms. Sidhu is out-of-pocket $465,000, plus interest accrued on the loans she took to make the payments. But there is an important parallel between the two cases insofar as Nanaksar is an innocent party that reasonably expected to be able to retain the money because it was unaware of the assurances that Baba Amar Singh gave to Ms. Sidhu to induce her to make the payments – just as Ms. Sweet was an innocent party who reasonably expected to retain the insurance proceeds because she was unaware that Lawrence had promised Ms. Moore that he would maintain her as his beneficiary to induce her to pay the premiums. Similarly, Ms. Sidhu, like Ms. Moore, is also an innocent party, who reasonably expects to be made whole.

[75] In Moore, at para. 84, the Supreme Court addressed the fact that both parties reasonably expected to receive the insurance proceeds upon Lawrence’s death. Ms. Sweet had a statutory right to the proceeds pursuant to insurance legislation, but the Supreme Court held that her expectation to retain the $250,000 could not take precedence over Ms. Moore’s prior contractual right to remain named as beneficiary of the policy. In the case before me, neither party can assert a preceding statutory or contractual right to the disputed funds, so neither party’s expectation takes precedence over the other. In short, the parties’ reasonable expectations do not give rise to an equitable reason to preserve Nanaksar’s enrichment at Ms. Sidhu’s expense.

Are there relevant policy considerations?

[76] I turn then to whether there are policy reasons to justify retention of Nanaksar’s enrichment and Ms. Sidhu’s corresponding deprivation. Nanaksar made several policy arguments in its factum and during the motions hearing. It submitted that the court should generally limit the imposition of a constructive trust in commercial contexts or in situations between debtors and creditors. It also submitted that an equitable ownership interest in its Gore Road Property ought not to be awarded to Ms. Sidhu because the gurdwara and the land on which it is situated essentially belong to the entire sangat. These arguments pertain to the issue of whether a proprietary remedy is appropriate in the event that I find Nanaksar has been unjustly enriched. They are not relevant to the issue of whether it would be equitable to preserve Nanaksar’s enrichment at Ms. Sidhu’s expense.

[77] Nanaksar has advanced no compelling policy arguments to persuade me that it would be equitable to allow the corporation to retain its enrichment at Ms. Sidhu’s expense. Consequently, Ms. Sidhu’s prima facie case of unjust enrichment has not been rebutted.

Conclusion on Unjust Enrichment

[78] For the reasons articulated above, I find that Ms. Sidhu has established all three elements of unjust enrichment. The next issue for me to determine is whether she has demonstrated entitlement to a proprietary remedy.

REMEDY

Analytical Framework

[79] A remedy for unjust enrichment must be restitutionary in nature. It can take one of two forms: personal or proprietary. A personal remedy is essentially a debt or a monetary obligation that may be enforced against the defendant. The Supreme Court of Canada has repeatedly held that, in most cases, this remedy will be sufficient to achieve restitution. It is therefore the default remedy for unjust enrichment: Kerr, at para. 46; Moore, at para. 89.

[80] If the plaintiff can demonstrate that a personal remedy would be inadequate, then they may be entitled to a proprietary remedy. The most pervasive proprietary remedy for unjust enrichment is the constructive trust, which is imposed without reference to intention to create a trust: Moore, at para. 90. The court will only order a remedial constructive trust if the plaintiff establishes that the contributions that founded their claim of unjust enrichment are linked to the property over which the constructive trust is claimed: Kerr, at paras. 50-51; Moore, at para. 91.

Analysis

Is there a nexus with the property in dispute?

[81] Nanaksar argues that there is no link between the payments made by Ms. Sidhu and the Gore Road Property over which she claims a beneficial ownership interest. Mr. Kang deposed that the first three payments (totalling $230,000) were “co-mingled into Nanaksar’s bank account and used for various purposes.” However, during his cross-examination, he could not explain the source of his knowledge for that statement. He admitted that he had no proof of where the money went or how it was spent. Although he was unable to trace the funds, he refused to admit that any part of the money was used to finance construction of the new gurdwara on the Gore Road Property.

[82] There is circumstantial evidence to support a finding, on a balance of probabilities, that Ms. Sidhu’s first three payments were expended on the construction project. Specifically, there is evidence of major construction-related expenses that were incurred by Nanaksar around the time of each of Ms. Sidhu’s payments. For example, the record shows that, in a letter dated February 13, 2009, the City of Brampton advised Nanaksar that a building permit for the Gore Road Property would not be issued until the corporation paid the amount of $305,569. Ms. Sidhu’s first payment (in the amount of $100,000) was made on March 5, 2009.

[83] Similarly, the record shows that Nanaksar secured construction financing from RBC in August 2010, on condition that it post a $500,000 bond as a guarantee for potential cost over-runs. Ms. Sidhu’s second payment to Nanaksar (in the amount of $80,000) was made on September 3, 2010.

[84] Finally, the record shows that, on April 8, 2011, Nanaksar paid its general contractor $4,219,969 for work completed to date. Ms. Sidhu’s third payment to Nanaksar (in the amount of $50,000) was made on January 5, 2011.

[85] Mr. Kang acknowledged during his cross-examination that construction of the gurdwara was ongoing when the first three payments were made. Moreover, he confirmed that Nanaksar was not incurring any other major expenses during that time. I infer from the totality of the circumstantial evidence that Ms. Sidhu’s payments were likely used by Nanaksar to help finance the gurdwara construction project on the Gore Road Property. There is no evidence to contradict this inference.

[86] Ms. Sidhu has therefore established a direct link between her first three payments and improvements to the disputed Gore Road Property. She has not, however, established a direct link to the disputed property in respect of her fourth payment in the amount of $235,000. I accept as credible her testimony that she sincerely believed the final payment was used to finance the gurdwara construction project, which was near completion when she advanced the money on May 14, 2012. This was a reasonable assumption on her part, given the representations made by Baba Amar Singh and the fact that some aspects of the construction project were still incomplete. However, Nanaksar adduced evidence that proves, on a balance of probabilities, that Ms. Sidhu’s fourth payment was used to finance the purchase of an adjacent property at 9946 The Gore Road (hereafter, the “9946 Adjacent Property”). The 9946 Adjacent Property was subsequently conveyed to a third party under power of sale. Nanaksar did not receive any share of the proceeds of sale.

[87] Nanaksar submits that Ms. Sidhu’s claim to a constructive trust based on unjust enrichment arising from her fourth payment must fail because she has not established a direct link to the specific Gore Road Property that is the subject of the trust. Ms. Sidhu argues that proof of a direct link to the Gore Road Property is not required.

[88] The Supreme Court of Canada has frequently commented on the nature of the link that must be established to ground a remedial constructive trust. In Pettkus v. Becker, 1980 22 (SCC), at para. 49, it held that “some connection must be shown between the acquisition of property and the corresponding deprivation.” Ms. Becker had made an indirect contribution of money and direct contribution of labour that facilitated an accelerated rate of saving by Mr. Pettkus, which enabled him to purchase the disputed property. This was held to be “a sufficiently substantial and direct link.”

[89] In Sorochan v. Sorochan, 1986 23 (SCC), para. 31, the Supreme Court ruled that a remedial constructive trust is not confined to cases involving property acquisition. It held that “some nexus” must exist between the claimant’s deprivation and the property that is the subject matter of the trust, but specified that a contribution relating to the preservation, maintenance or improvement of the property is sufficient. The Supreme Court found that Ms. Sorochan’s labour had “directly and substantially” contributed to the maintenance and preservation of the property owned by Mr. Sorochan.

[90] In Peter v. Beblow, 1993 126 (SCC), 1993 CarswellBC 44, [1993] 1 S.C.R. 980, at para. 101, the Supreme Court stated unequivocally that that “indirect financial contributions to the maintenance of property will be sufficient to establish the requisite property connection for the imposition of a constructive trust.” In Kerr, however, at para. 51, the Supreme Court cited its earlier decision in Peter for the principle that “[a] minor or indirect contribution will not suffice.” It added that “[i]ndirect contributions of money and direct contributions of labour may suffice, provided that a connection is established between the plaintiff’s deprivation and the acquisition, preservation, maintenance or improvement of the property.” Finally, in Moore at para. 91, the Supreme Court held that “the plaintiff’s contribution that founds the action [must be] linked or causally connected to the property over which a constructive trust is claimed.”

[91] Although there is inconsistency in the Supreme Court’s description of the requisite “nexus” that must be established, it is clear from the outcomes of the various cases that proof of a substantial but indirect contribution to the acqusition, preservation, maintenance or improvement of a property will suffice. There must, however, be a clear link between the contribution that resulted in the plaintiff’s deprivation and the disputed property.

[92] Ms. Sidhu submits that there is a nexus between her 2012 payment of $235,000 and the Gore Road Property because the 9946 Adjacent Property (which was acquired with her money) was purchased by Nanaksar for the purpose of expanding its gurdwara complex. Mr. Kang would not admit this fact on cross-examination, but he gave no explanation or alternate reason for the purchase of the 9946 Adjacent Property. Moreover, he conceded that Nanaksar bought another neighbouring lot on Castlemore for the purpose of extending the temple complex. Furthermore, Ms. Sidhu gave uncontested evidence that Nanaksar attempted unsuccessfully to purchase yet another adjacent property (where the temporary gurdwara had been situated during the construction period) for the purposes of expansion.

[93] Based on the totality of the evidence, I find that the 9946 Adjacent Property was likely purchased for the purpose of expanding the gurdwara complex. That fact does not, however, established a clear link between Ms. Sidhu’s $235,000 payment and the improvement of the disputed Gore Road Property upon which she seeks to impose a constructive trust. The requisite link is absent because the planned expansion of the gurdwara complex did not materialize. There is therefore no evidence that the purchase of the 9946 Adjacent Property improved the Gore Road Property in any way. Consequently, Ms. Sidhu has not established that her fourth payment had a sufficient nexus to the disputed Property.

[94] In summary, I have found that there is a direct link between Ms. Sidhu’s first three payments (totalling $230,000) and the improvement of the Gore Road Property, but a sufficient nexus to the property has not been established with respect to her fourth payment in the amount of $235,000. She may, therefore, be entitled to restitution that is partially personal and partially proprietary. However, in order to determine whether she is entitled to a remedial constructive trust in proportion to her $230,000 contribution to the improvement of the disputed property, I must consider whether she has proven that a purely monetary award would be insufficient in the circumstances: Kerr, at para. 52.

Is a personal remedy sufficient?

[95] In deciding the sufficiency of a personal remedy, the court may take into account the probability of recovery of a monetary award, as well as whether there is a reason to grant the plaintiff the additional rights that flow from recognition of a proprietary interest: Peter, at para. 3; Kerr, at para. 52.

[96] In this case, there is no evidence that Nanaksar is unable or unlikely to repay the monies advanced by Ms. Sidhu if ordered to do so. On the contrary, the record shows that the parties entered into an agreement according to which $500,000 was paid by Nanaksar to Ms. Sidhu’s counsel’s law firm in trust, as security for her claim, in exchange for her consent to remove a Certificate of Pending Litigation that was registered on the Gore Road Property.

[97] Ms. Sidhu did not make any of the four payments to Nanaksar as an investment with an expectation that she would acquire an interest in the equity of the property. There is no reason why she should benefit from the increase in value of the property over the years, which would flow from awarding her a proprietary ownership interest.

[98] Ms. Sidhu has no particular attachment to the property. The gurdwara is a communal place of worship. Although it is legally owned by the corporation, it essentially belongs to the sangat. In the circumstances, it would not be appropriate to grant Ms. Sidhu an equitable ownership interest in the property.

[99] Ms. Sidhu would be adequately compensated for her deprivation if she received an award of damages in the amount of the money she advanced (i.e., $465,000). Restitution does not require that she be paid any interest on the money (apart from pre-judgment interest commencing the day she initiated her counterclaim) because there was no loan agreement between the parties. There is no contractual obligation for Nanaksar to pay interest. Neither law nor equity requires that interest be paid in order for Ms. Sidhu to be adequately compensated.

Is Ms. Sidhu’s claim for monetary restitution statute-barred?

[100] The final issue for me to determine is whether Ms. Sidhu’s claim for monetary restitution for unjust enrichment is statute-barred.

[101] In accordance with the decision of the Court of Appeal for Ontario in McConnell v. Huxtable, 2014 ONCA 86, at paras. 39 and 50, the parties agreed to the following at the motions hearing: (a) If Ms. Sidhu demonstrated her entitlement to a remedial constructive trust, then the ten-year limitation period in s.4 of the Real Property Limitations Act would apply to her claim, and (b) if Ms. Sidhu had claimed only monetary restitution for unjust enrichment, that claim would have been subject to the two-year limitation period in s.4 of the Limitations Act, 2002. I was left to decide which limitations statute applies to Ms. Sidhu’s claim for monetary compensation in circumstances where it was pleaded in the alternative to a claim for a constructive trust.

[102] Nanaksar submits that Ms. Sidhu is statute-barred from obtaining an award of damages because she commenced her counterclaim after the shorter two-year limitation period expired. Ms. Sidhu argues that the longer ten-year limitation period applies and has not expired. She also argues, in the alternative, that, if s.4 of the Limitations Act, 2002 bars her ability to recover a monetary award, that is a sufficient basis upon which to grant her a remedial constructive trust instead. I am not required to decide the latter issue because, as set out below, I have concluded that Ms. Sidhu’s claim for a personal monetary remedy is not statute-barred.

[103] I am bound to make that ruling based on the decision in McConnell, where the Court of Appeal for Ontario held that: (a) the ten-year limitation period under s.4 of the Real Property Limitations Act applies in circumstances where a constructive trust is claimed based on unjust enrichment, and (b) an alternative claim in damages in respect of the same unjust enrichment is also protected under s.4 of the Real Property Limitations Act. Writing for the Court, Rosenberg J.A. (at para. 40) upheld the motion judge’s conclusion that the applicant’s alternative claim for damages in the event that a constructive trust was not awarded could shelter under s.4 of the Real Property Limitations Act. He adopted the following reasons expressed by the motion judge:

My analysis of the question begins with the words of [s.4 of the Real Property Limitations Act]: "... bring an action to recover any land ...". In contrast to the Limitations Act, 2002, which deals with individual "claims", this provision deals with an "action" (extended by section 1 of the Real Property Limitations Act to include "any civil proceeding"). An action or application can and frequently does include a principal claim with an alternative claim, as in this case. Here the damages claim is an alternative or fallback position to the first claim advanced by the applicant, which is for an ownership interest. The statute does not say "action to recover only land". Further, it would not make sense to interpret section 4 of the Real Property Limitations Act as a sort of all or nothing proposition, forcing the court either to award a proprietary interest on what it finds to be a meritorious claim, when a monetary award would otherwise be an adequate and appropriate remedy, or to award nothing at all, because a shorter limitation period for a damage award bars that kind of remedy. To interpret the section as not protecting an alternative damage award would mean that a claimant would never be able to rely on the section in determining when to launch a court case involving land and would always have to meet the limitation period for a damages claim, for fear of being locked out at the end of the case.

(emphasis added, citations omitted)

[104] The following is therefore a settled and binding principle of law: where a claim for a remedial constructive trust is made based on unjust enrichment, and the claimant seeks monetary restitution as alternative relief for the same unjust enrichment, both claims are subject to the ten-year limitation period in the Real Property Limitations Act.[^1] However, if no proprietary relief is sought, then a claim for monetary restitution for unjust enrichment will be subject to the two-year limitation period in the Limitations Act, 2002.

Is there an abuse of process?

[105] I recognize that the principle in McConnell creates opportunity for abuse of process. It is foreseeable that a plaintiff who has no viable claim to a proprietary remedy may plead a remedial constructive trust simply for the purpose of sheltering an otherwise statute-barred claim for monetary relief under the ten-year limitation period. The court must not countenance such misconduct.

[106] Unjust enrichment is an equitable claim. The claimant must therefore come to the court with clean hands or risk being denied relief. With this in mind, I do not interpret the principle in McConnell to apply in circumstances where the court has reason to believe that the plaintiff’s proprietary claim is frivolous and has been advanced strategically to circumvent the limitation period that would otherwise extinguish their monetary claim.

[107] I find support for this restricted application of McConnell in the recent decision of the Court of Appeal for Ontario in Bakhsh v. Merdad, 2022 ONCA 130, a family law case in which Ms. Bakhsh sought to impose a constructive trust on a property registered in Mr. Merdad’s name. Mr. Merdad brought a motion for summary judgment, arguing that the claim was barred by the two-year limitation period that applies to equalization claims under the Family Law Act, R.S.O. 1990, c. F.3, s.7(3)(a). His motion was dismissed and he appealed. In dismissing his argument, the Court of Appeal in Bakhsh commented (at para. 13),

It is clear in our view that Ms. Bakhsh’s claim is not a thinly veiled attempt to dress up an equalization claim as an equitable trust claim. Rather, Ms. Bakhsh seeks to impose a resulting or constructive trust over the condominium property that she financially maintained and in respect of which she seeks a declaration of sole beneficial ownership. Indeed, Mr. Merdad does not suggest that the claim represents an abuse of process …

[108] In the case before me, Nanaksar has not accused Ms. Sidhu of engaging in an abuse of process. It is, however, arguing that she has framed her unjust enrichment claim as a proprietary claim simply to avoid the two-year limitation period that would otherwise apply to a claim for monetary relief. If this were true, I would find that Ms. Sidhu’s alternate claim for damages cannot shelter under the longer ten-year limitation period. However, I reject the suggestion that Ms. Sidhu tried to revive a statute-barred claim for monetary compensation by sheltering it under a frivolous claim for proprietary relief.

[109] Although I have concluded that a proprietary remedy is not appropriate because a monetary remedy suffices to compensate Ms. Sidhu for the unjust enrichment that she suffered, I find that she had a viable claim for a constructive trust. Her proprietary claim was not advanced merely as a litigation tactic to circumvent the two-year limitation period that would have otherwise barred her claim for monetary relief.

[110] Ms. Sidhu demonstrated a nexus between her first three payments and the construction of the gurdwara that improved the Gore Road Property. Although the fourth payment had no nexus to the disputed property, she was unaware of that until after she commenced her counterclaim and discoveries were undertaken. She reasonably believed that her fourth payment was also linked to the improvement of the Gore Road Property.

[111] Ms. Sidhu acted in good faith within the applicable ten-year limitation period for her proprietary claim. It is just and equitable in the circumstances for her alternative claim for monetary restitution to shelter under the protection of s.4 of the Real Property Limitations Act.

CONCLUSION

[112] For the above reasons, I make the following orders:

a. Nanaksar’s motion for summary judgment is dismissed.

b. Ms. Sidhu’s motion for summary judgment is granted in part. She is entitled to damages for unjust enrichment.

c. Nanaksar must pay Ms. Sidhu the amount of $465,000, with pre-judgment interest calculated at the rate prescribed under the Courts of Justice Act, R.S.O. 1990, c. C. 43, from the date that she served her Statement of Counterclaim. This payment shall be made forthwith from the funds held in trust by Ms. Sidhu’s counsel. Any remaining funds shall continue to be held in trust as security for costs.

COSTS

[113] The parties are encouraged to resolve the issue of costs by way of settlement negotiations. If they are unable to reach a resolution, they may make written submissions on costs and I will decide the issue. Each party’s submissions shall not exceed 3 double-spaced pages, excluding any Offers to Settle, Bills of Costs, and authorities relied upon.

[114] Ms. Sidhu’s costs submissions shall be served and filed by no later than December 22, 2022. Nanaksar’s responding costs submissions shall be served and filed by no later than January 12, 2023. There shall be no reply submissions unless requested by me.

Petersen J.

Released: November 28, 2022

COURT FILE NO.: CV-17-2149-00

DATE: 2022 11 28

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Nanaksar Thath Ishar Darbar

Plaintiff

– and –

George Graff, Irene Graff, the Estate of Lili Glaser, Inderjeet Sidhu, Gurdeep Grewal and Baba Amar Singh

Defendants

REASONS FOR DECISION

Petersen J.

Released: November 28, 2022

[^1]: See also Caroti v. Vuletic, 2022 ONSC 4695, at para. 456 and Studley v. Studley, 2022 ONCA 810, at para. 29. These cases were decided after the motions hearing before me was concluded. It was unnecessary for me to invite the parties to make further submissions based on these decisions because the courts in these cases simply applied the already-settled principle enunciated in McConnell. The McConnell case was canvassed in detail in both the parties’ factums and oral submissions. I am relying on McConnell, not on the more recent decisions, to arrive at my conclusion.