COURT FILE NO.: CV-17-0322-00 DATE: 2024-07-17

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

Lori Carole Marie Van Santvoort-Jansekovich, Plaintiff M. Cranton, for the Plaintiff

- and -

The Estate of John Edward Lundstrom, Respondent J. Lester, for the Respondent

HEARD: May 14, 15, 16, 17, and 30, 2024 at Thunder Bay, Ontario

Before: W.D. Newton

Decision on Trial

Overview

[1] 23 years after her mother’s death, the plaintiff, Lori, sues her mother’s former husband, John (“Jack”) Lundstrom, claiming $469,164.05 as restitution for unjust enrichment.

[2] The plaintiff’s mother, Helen, was married to Jack from 1991 until her death in 1994. This was a second marriage for both. Both had two children from their prior marriages. Helen’s children are Debra Halverson, and her sister Lori, the plaintiff. Jack’s children are Bert Lundstrom and Deborah Fong.

[3] In 1991, Helen made a will that named Jack as her sole beneficiary and the four children as equal beneficiaries should John predecease Helen. The plaintiff alleges that John made a “mirror” will with the same terms.

[4] When she died in June 1994, Helen owned three rental properties in Thunder Bay, and an interest in a cottage at White Birch on Lake Superior. Helen and John jointly owned a home in Florida which had previously been owned by Helen alone. The application for probate lists the value of her estate at about $414,000 comprised of $355,000 in real estate and the balance in personal property.

[5] Lori alleges that she was going to sue her mother’s estate because she did not receive anything upon her mother’s death but did not sue once Jack promised her that she would inherit one quarter of his estate.

[6] Jack married his third wife, Evelyn, in 1998.

[7] This action was commenced on July 4, 2017 because Lori thought that Jack was breaching his agreement to leave her one quarter of his estate. Jack died within 36 hours of being served with the statement of claim. He was 87. Jack’s will left everything to Evelyn and his children.

[8] Originally, the plaintiff sued Jack for $1 million alleging a breach of contract. That claim was amended to sue for $482,000 for unpaid services rendered to Jack over 14 years, from 1991 to 2004, based on Lori working for Jack 40 to 60 hours per week for 14 years.

[9] For the reasons that follow, the action is dismissed.

[10] The plaintiff has failed in discharging her onus of proving that Jack made an agreement with her which provided that she would inherit one quarter of his estate. Further, I conclude that the plaintiff has exaggerated the amount of work she claims to have provided to Jack and his businesses and that she has been adequately compensated for the work she did perform through the provision of rent-free housing for Lori for 22 years, the gifting to her of that house, and free accommodation and meals at the property owned by Jack in Armstrong, Ontario. The claim for unjust enrichment is dismissed.

[11] I also conclude that this claim is statute barred and barred by the operation of Laches.

Evidence at Trial

[12] The parties provided a 77-paragraph agreed Statement of Facts and a Joint Document Book containing 92 documents and collections of documents.

[13] The witnesses for the plaintiff were: the plaintiff, Lori; her husband, Gary Jansekovich; Paul Cherwonick, an ex-boyfriend of Lori’s niece; and Sandra Hay, Jack’s former employee.

[14] The witnesses for the defendant were: Deborah Fong, Jack’s daughter; Evelyn Lundstrom, Jack’s surviving spouse; Richard Burges, Jack’s former employee; Diane Laybourne, Jack’s former employee and bookkeeper; Celina Stuckless, another of Jack’s former employees; Alexander Stewart, Jack’s former lawyer; and Bert Lundstrom, Jack’s son.

[15] To put the evidence in context, the claim is based on services allegedly provided to Jack and his businesses between 1991 to 2004.

[16] It is not disputed that Lori acted as a “property manager” for three rental properties in Thunder Bay, first for her mother, and then for Jack, after Jack inherited the properties. What is in dispute are the hours worked and whether Lori has already been compensated by being allowed to live in a house owned by Jack rent-free.

[17] The balance of the claim relates to services allegedly performed by Lori for Jack’s businesses in Armstrong. Armstrong is a small community of about 250 residents. Armstrong is a three-hour drive north of Thunder Bay. Lori says that she worked between 40 to 60 hours per week in those businesses. The defendant’s witnesses emphatically state that Lori did not.

[18] Since the evidence covered events occurring over 26 years, the following chronology is of assistance to understand the evidence.

Chronology

[19] The chronology is created from the admissions, the joint document book, and testimony when facts are not uncontested.

1991

June 24 – John (Jack) Lundstrom and Helen Ruth (Helen) Lundstrom are married. They lived in Armstrong, Ontario between July 1991 until January 1993. Jack owned and operated J & J General Store in Armstrong and several businesses at D & L Estates in Armstrong including a bar, restaurant, motel, and apartment rentals.

August 28 – Helen prepares Will naming Jack as sole beneficiary, but if Jack predeceased, then beneficiaries are Jack’s 2 children (Bert & Deborah) and Helen’s 2 children (Debra and Lori).

1992

May 28 – Jack’s parent’s home, 448 Pineview Bay, transferred to Jack and Helen $65,000.

Lori given “company” car.

1993

May – Jack purchases a gas station, convenience store, and Chateau North – a hotel with bar and restaurant – in Armstrong.

July 1 – Lori separates from her first husband.

1994

June 26 – Helen dies

December 20 – application for probate of Helen’s Estate – Personalty $58,809 + Real Estate $355,000 = $413,809 (total)

Jack lives in Armstrong primarily between 1994 and 2004.

Lori lives in 449 Pineview Bay, Thunder Bay, from 1994 to 2015 (21 years) rent-free. Jack paid the insurance for Pineview Bay during that period until the property was gifted to Lori in 2015.

1995

August 18 – reporting letter on Helen’s Estate:

Rental properties – 234 Bay, Thunder Bay, and 125 and 127 S. Court Street, Thunder Bay (transferred to Jack on April 27)

Florida home – owned jointly – transferred to Jack

White Birch camp – transferred to Jack

Arvelin Mortgage – $65,350.24 – paid to Jack

1996

Jack built a motel across the street from the Chateau North (hotel) called the Chateau North Motel.

1998

January – Jack marries Evelyn

1999 – 2000 – 2001

During this period, faxes and other correspondences were sent from Lori to Jack regarding apartments and asking about repairs etc.

2000

November 14 – Lori faxing Bert asking for insurance slip and sticker for “company” car.

2001

December 4 – Lori sends a fax to Jack stating that she would really like to use the car again, and wondered if he would sign it over to her.

2004

Jack sells rental property at 234 Bay Street, Thunder Bay.

2005

January – Jack sells rental property at 125 and 127 S. Court Street, Thunder Bay.

January 25 – Jack (owner of property) receives a tax bill for 449 Pineview Bay, Thunder Bay.

2006

February 6 – McKenzie Lake property transferred to Evelyn.

April 12 – McKenzie Lake property transferred to Bert.

May 5 – McKenzie Lake property transferred to Deborah.

October 2 – J & J store property transferred to Bert.

2009

October 2 – Jack prepares Will with lawyer Stewart:

• transfers 449 Pineview Bay to Lori and Debra jointly;
• shares in business to Bert;
• residue to Evelyn, if predeceased to Bert and Deborah

2013

August 4 – Lori faxing Jack – 449 Pineview Bay roof leaking – sends 4 quotes

Unknown date –Jack sends a fax back to Lori stating:

“Since you and Gary have had the use of the house for keeping it up, the roof etc. will be your responsibility. It has been cheap rent. The house will eventually go to you when I kick the bucket. Jack.”

August 30 – Lori and Gary prepare log of hours worked and material cost for roof repair.

September 25 – Lori paying property taxes.

2015

December 1 – Letter from Mr. Stewart to Lori:

“[Jack] is interested in transferring [449 Pineview Bay] to you as gift.”

2016

January 7 – Belluz Realty Inc. Brokerage opinion of value of 449 Pineview Bay – $159,000.

January 8 – direction signed by Debra to transfer 449 Pineview Bay in whole to Lori:

Whereas Jack intended to gift 449 equally to Lori and Debra and gift each $50,000 and Lori not content, Debra will accept $100,000 and no interest in Property.

January 14 – 449 transferred to Lori.

January 15 – Mr. Stewart’s reporting letter regarding the transfer of 449 Pineview Bay to Lori – there were no adjustments as it had been Lori’s responsibility to pay taxes and utilities.

May 2 – updated MPAC assessment for the value of 449 Pineview Bay was $203,000.

May 16 – Lori asks Thunder Bay Law Association to search for Will for Helen made after August 1991.

November 22 – Evelyn transfers McKenzie Lake property to Bert and Deborah.

November 26 – Jack prepares new Will with Mr. Stewart:

Businesses sold – disposition of sale proceeds to Evelyn, Bert and Deborah. Residue to Evelyn, if predeceased then to Bert and Deborah.

2017

March 31 – Lori writing lawyers looking for Will made by her mother between 1991 and June 1994.

July 4 – action commenced.

August 25 – Jack dies at age 87 (within 36 hours of being served). No evidence as to the value of Jack’s Estate.

Evidence for the Plaintiff

Lori Van Santvoort-Jansekovich

[20] Lori testified that she holds volunteer positions with the United Church of Canada including pulpit supply when needed.

[21] Her income tax returns from 1991 to 2004 were contained in the joint exhibit book. The return shows that she worked sporadically and at times earned little to no income. WSIB records state that she had a claim as a result of a back injury in November 1990 while working with Zellers as a salesclerk. In 1991 her T4 income was recorded as $605. In 1992 it was recorded as $2,702. In 1993 her income was from alimony, employment income and self-employed income. During this period, she was teaching country line dancing. In 1994 she also collected over $18,000 from WSIB, $14,000 in alimony and $5000 in employment income. Her 1995 return describes her as separated with income coming from alimony and self-employment. In 1996, in addition to alimony, she received about $28,000 from WSIB.

[22] She attended Confederation College from 1994 to 1996, taking business courses.

[23] Except for her 1998 income tax return which described her status as “common-law” and no income was reported, no returns were filed from 1997 to 2004. She testified that when she got together with Gary, then, “of course, Gary supported me.”

[24] She testified that she met Jack Lindstrom just before he married her mother in June 1991.

[25] She described her mother as a “very wealthy woman” who had apartment buildings. She said that prior to her marriage to Jack, her mother had opened up a chip stand on Bay Street in Thunder Bay and she was teaching country line dancing.

[26] She testified that after her mother married Jack, her mother “took over running the restaurant and bar” that Jack owned.

[27] Prior to marrying Jack, Lori’s mother owned three rental properties in Thunder Bay. The property at 234 Bay Street was a house containing three apartments, and 125 and 127 South Court Street were also houses. In total, there were five rental units. Lori described herself as the “property manager” for these rental properties. Her mother did not pay Lori for any work performed. Lori said that she “was always told that I was part owner”. Her mother had lived in another City previously and she left Lori to take care of the local business:

“… basically, I was told that I was taking care of, you know, my family inheritance so that I was an owner and that I would inherit those businesses with my sister.”

[28] Her work with the rental properties included screening tenants, doing reference checks, showing the property, preparing leases, collecting rent, dealing with the tenants, cleaning when tenants moved out, insurance checks when required, and painting and repairing as required.

[29] Lori’s mother and Jack had purchased Jack’s parent’s house, 449 Pineview Bay.

[30] After her mother married Jack, Lori attended Armstrong and would help her mother cook in the kitchen, serve in the restaurant, and helped in the store that Jack owned. She said that both her mother, but mostly Jack, asked her to do the work in Armstrong.

[31] Jack sold the rental properties in Thunder Bay in 2004 and 2005.

[32] Lori testified that her mother and Jack made “mirrored wills”, meaning that their wills were the same – upon one of their deaths, the surviving spouse would be the sole beneficiary, but if that surviving spouse died, the estate would be divided equally between the four children of the blended family. Lori said that she had both wills in her possession, and that when her mother died, Jack came to her to retrieve both wills.

[33] Lori described the formation of her agreement with Jack as follows:

But, when my mom passed, I was going to bring a claim against the estate at that time. I went and I had a conversation with Jack. I said, “You know, Jack, you’ve only been married to my mom for three years.” My mom ended up – she had brain cancer and I says, “You know, and I’ve been working with my mom since I was 17 years old, when she moved to the Soo.” And I said, “I really, you know, I’m – I’m thinking I’m going to bring a claim against the estate.” And he said to me, “Lori, you know what will says. You don’t have to do that. You – when I pass, you’re gonna get part of my estate. So, just continue on what you’re doing, and, you know, just cooperate and whatever.” And you know, just – I was just feeling that I was actually helping build family wealth for the family. And so, I said, “Okay, Jack, if – if that’s what you’re gonna do, you’re gonna keep me in your will.” Then, I continued on doing the rentals, and I moved into Pineview Bay, there was no problem, because that’s where my room was, and when I was selling my farm, that’s where I went. And there was no – no issue.

[34] The agreement was never reduced to writing because she “just trusted Jack”. She described that she “continue on”, referred to her looking after the rental properties in Thunder Bay and going up to Armstrong and helping.

[35] During this time, she lived in the house at 449 Pineview Bay, Thunder Bay, that had been owned by Jack and her mother, and then Jack through right of survivorship.

[36] She confirmed that, in 1992, she had also been given a company car, a 1989 Dodge Spirit which was registered to and insured by Jack’s store, J. & J. Lori testified that she was given this car because she was doing so many “runs” up to Armstrong and that her mother wanted to make sure that she had a newer, more reliable, vehicle. She also used the car for work related to the rentals in Thunder Bay. She continued to use that car until around 2000. Lori said that when she drove to Armstrong, she would fill up with gas for the return trip to Thunder Bay. She did not pay for gas, just signed for it. That continued after her mother died and she “signed” for gas all the time.

[37] After her mother married Jack, Lori attended Armstrong and would help her mother cook in the kitchen, serve in the restaurant, and help in the store that Jack owned. She said that both her mother, but mostly Jack, asked her to do the work in Armstrong. She also would clean in the restaurant as required, fill the coffee pot, prepare tableware for service, and help in the office as required. She would help out “wherever it was needed”. She said she worked in the store, cleaning shelves, rotating stock and checking in stock. She would also work in the office at the Chateau North, inputting the day’s sales.

[38] When asked by her counsel whether Jack ever specifically asked her to do these works, she replied:

He was doing them. So, what ended up happening - it was, like, he would – the things that he would normally be doing, I kind of took over for what he was doing.

[39] Lori testified that Jack told her: “You know, you’re the owner, you’re gonna inherit this, this is yours.” And so, “I would just go in and do whatever needed to be done.” She said that she “never had a day off in Armstrong.” Often, she said that she would work 10 to 16 hours days in Armstrong.

[40] Lori stated that she would also pick up things from Thunder Bay that Jack needed for his business and would transport those items to Armstrong. She said that this happened “probably more than once a week”, and it included bringing appliances, and, at times produce and food for the restaurant, including liquor and beer.

[41] She said that both she and her sister were promised camps up in Armstrong and that she was promised Pineview Bay. She testified that Jack purchased two camps at McKenzie Bay for Lori and her sister after their mother died and that they did renovations on those camps. She said that she and her partner, Gary, and her sister and her husband all worked on the property. She said that they cut down trees to allow the camp to be moved. There are photographs of Lori and her sister beside brush fires on the property. Lori said that the renovations occurred over two years from 1995 to 1996.

[42] She also testified that she and Gary worked New Year’s Eve parties in Armstrong up to 1997 but was never informed by Jack of any parties after that.

[43] Jack sold the rental properties in Thunder Bay in 2004.

[44] Lori testified that the last conversation she had regarding her inheritance was in 2004 when the rental properties were sold, and she no longer had any property management duties. She said that Jack told her that “nothing would change” that she was “still going to receive an inheritance from him.”

[45] After her mother died, Lori started full time at Confederation College.

[46] Jack married Evelyn in 1998.

[47] Lori said that she had lived at Pineview Bay from 1994, although her income tax returns from 1991 onward have her address listed as Pineview Bay. She said that there was no agreement with Jack about who would pay the expenses and she said that once she started living there, she started paying the bills, including the property taxes. She acknowledged that the house insurance was paid by the store in Armstrong. She said that she just moved in and treated the house as hers.

[48] Lori said that she looked after the maintenance but, in 2013, she asked Jack about getting the roof replaced and sent him four quotes for the roof repair. Jack replied by fax:

“Since you and Gary have had the use of the house for keeping it up, the roof etc. will be your responsibility. It has been cheap rent. The house will eventually go to you when I kick the bucket. Jack.”

[49] Thereafter, she, Gary and a helper replaced the roof. Gary kept detailed notes of the hours expended and the material costs to replace the roof.

[50] Lori testified that she decided to bring a claim against Jack when she found out from her sister, in July 2015, that Jack was intending to transfer title to 449 Pineview Bay to Lori and Lori’s sister. She felt that that was “not right” because she had been promised the house.

[51] She testified that she was not able to speak to Jack about this at that time because she was told by Jack’s lawyer, Sandy Stewart, that Jack was “on his deathbed.” Lori said that she would not go and confront him when he was sick. She said that between 2015 and 2017 she was trying to contact Jack but was not able to reach him, and so retained counsel.

[52] In cross-examination, Lori was asked whether she knew the witnesses that would be called by the defendants including Richard Burgess and Celina Stuckless. She testified that she had contacted both of them to be witnesses for her, but they declined to do so. When confronted with their anticipated evidence – that she did not do the work which she claimed to have done in Armstrong – she said that she was surprised and shocked.

[53] When confronted with the position of the estate – that she was allowed to live rent-free in Pineview Bay in exchange for assisting with their rental properties – she denied that position and asserted that she had to upkeep that house. She stated that she paid the taxes and expenses for that property since 1994. When cross-examined about why she has no receipts for taxes and expenses until 2004, after Jack had sold the rental properties, she said her receipts were lost in a flood at her house.

[54] The property at 593 White Birch Road was a camp on Lake Superior that had been leased from a campers Association by Lori’s mother. After her mother’s death, Lori purchased that property from Jack but could not remember how much she paid for it. She denied that it was sold to her at “well below value” and asserts that she paid the “full price that he asked for it” despite having made a counteroffer.

[55] It was suggested to her that the lawyer, Sandy Stewart, never told her that Jack was on his deathbed. She said that she would be shocked to hear that this was his testimony.

[56] One of the productions was a letter written by Lori on March 31, 2017 to various Thunder Bay lawyers looking for a will that was allegedly made by her mother between 1991 and 1994. A similar production was an email from the secretary of the Thunder Bay Law Association on May 16, 2016 sent on behalf of Lori looking for a will made by her mother after August 1991. In cross-examination, she said that she knew that her mother had made another will, while she was still married to Jack, which disinherited Jack. She said that she had discussed this other will with Jack but allowed Jack to probate the 1991 will in which everything was left to him because of the agreement that she had made with Jack that she would inherit his estate. She said that the lawyer who made the “mirror will” had told Jack that her mother had made another will. According to Lori, that lawyer, David Young, did not make the new will because it would be a conflict.

Gary Jansekovich

[57] Gary is 73 years old and is Lori’s spouse. He retired from his position as a millwright at the Thunder Bay water treatment plant ten years ago.

[58] He first met Lori in the early 1990s at line dancing. She was married when they met. Gary and Lori married in April 2008.

[59] Gary testified that he travelled to Armstrong with Lori, that he would help out with repairs and renovations, and said that there was always something to do. Gary said that he did not want to hang around and do nothing. He said that Lori was usually working at the store or restaurant. He said that the Lori would give him a hand with renovations sometimes and that her sister, Debra, and her husband, Randy, also helped sometimes. He said that he just worked on the inside when he was at McKenzie Lake, which he described as “finishing work”.

[60] When they went to and from Armstrong, they usually took the “company car”.

[61] He also did work on the rental properties in Thunder Bay and acted as a handyman. He would fix heaters, hot water rads, plumbing, and change lightbulbs.

[62] Surprisingly, he testified that he was still doing maintenance of the property even after Jack sold them. He also said that he was doing work at the McKenzie Lake properties up until Jack died.

Paul Cherwonick

[63] Paul lived with Lori’s niece in one of the rental properties from 1996 to 1997. They broke up while he was living there.

[64] He testified that they received $500 a month in rent reduction in exchange for him assisting with property maintenance. That included cleaning out a basement and doing “dump runs”. He said that the work was usually done by him and Gary and he did not recall Lori doing any work, except perhaps cleaning.

[65] In cross-examination, he testified that he ended up resenting the agreement because he felt that he was taken advantage of.

Sandra Hay

[66] Sandra was Jack’s employee from 1993 to 1996. She worked at Chateau North as a bartender, server, and cleaner.

[67] She testified she saw Gary and Lori in Armstrong and in the restaurant for lunch and supper. She said that they served themselves and ate for free. She said that Lori was always on the go and doing different things in the store, and helping Jack move things around.

Evidence for the Defendant

Deborah Fong

[68] Deborah is Jack’s daughter. She moved to Calgary in 1983 but returned every summer to Armstrong for two weeks to visit her family, at first by herself, and later with her husband and children.

[69] She described Jack as a loving father who looked after everybody. She testified that she grew up in the business while in Armstrong.

[70] She met Lori when her mother married Jack. She was not aware of any oral agreement or promise by Jack to make Lori a beneficiary of his estate.

[71] With respect to the assertion that Lori worked 40 or 60 hours per week between 1991 and 1997, Deborah testified that she never saw Lori doing work in any of Jack’s businesses or do any work at the camps on McKenzie Lake. The only time she saw Lori at McKenzie Lake was at meal times.

[72] She last saw Lori in 1998.

Evelyn Lundstrom

[73] Evelyn met Jack in Florida in 1992 when he was married to Lori’s mother. Evelyn is originally from Northern Ontario and had a restaurant in Florida.

[74] Lori’s mother died in 1994. Evelyn and Jack started dating in September 1997 and were married in January 1998. They were together for 19 and half years until his death. Evelyn is the executor of Jack’s estate.

[75] She described Jack as a very honest and hard-working man into his 80s. She was very active in Jack’s business from the spring of 1998 onwards, working in the restaurant and store as required and functioning as a bookkeeper. Jack also involved her in his legal affairs. She had no knowledge of Jack ever using a lawyer other than Sandy Stewart. Jack never discussed an arrangement or promise to Lori to make her a beneficiary of his estate.

[76] Evelyn rarely saw Lori and Gary in Armstrong and did not remember Lori or Gary working in any of the businesses. She saw them rarely at McKenzie Lake and was not aware of any promises by Jack to give property at McKenzie Lake to Lori.

[77] With respect to Pineview Bay, it was her understanding that Lori lived rent-free in exchange for looking after the rental properties in Thunder Bay and that, after the rental properties were sold, Lori was then responsible for paying the expenses of Pineview Bay. Jack transferred the Pineview Bay property to Lori because he felt that she should get something. Evelyn confirmed that Jack paid the capital gains on the transfer of that property.

[78] In 2015, after the businesses in Armstrong were sold, Jack and Evelyn moved to Thunder Bay.

Richard Burgess

[79] Richard worked for Jack from May 1995 until June 2015. His salary was paid for through J. & J. General Store, but he worked for all the businesses as required. Most of the time he would work at the minimart and gas station but would also cut grass, wash dishes, do repairs and bartend at Chateau North.

[80] His grandparents owned the cottage next door to Jack’s at McKenzie Lake.

[81] When Lori came to Armstrong, he would usually see her on a Saturday. He testified that she would come into the restaurant for lunch and then in the evening for a buffet dinner. He said that the staff in Armstrong called Lori the “freeloader”. He said that it seemed odd that Lori was still coming around after her mother died. Lori and Gary would come up on weekends, eat at the restaurant for free, charge their gas for free, and then leave.

[82] In response to the assertion that Lori worked for Jack’s businesses in Armstrong over a number of years, he said that was not the case for the 20 years that he was there. With respect to the assertion that she worked 60 hours a week from 1991 to 1997, he disagreed. Richard said that even when he was not working for Jack, he was around, and Armstrong was a small town. All businesses were located close to each other. The old Air Force Base was a “hang out” so he was around there quite a bit. He testified that he never saw Lori putting in full days for any of the businesses.

[83] Similarly, he did not ever recall seeing Lori or Gary working at any of the McKenzie Lake camps.

[84] Richard said that Evelyn became pivotal to the business after she married Jack. Business was “tough” in those years and, according to Richard, he did not know whether the business would have survived if Evelyn had not been around.

Diane Laybourne

[85] Diane was Jack’s bookkeeper from 1993 to 2015 when the businesses were sold. She would work mornings in the Chateau, and afternoons in the store. She did not know Lori and never had any interactions with her. She testified that if Lori would have been working 60 hours a week for the Armstrong businesses, she would have known.

Celina Stuckless

[86] Celina worked for Jack for 20 to 25 years starting in the 1990s. She was a waitress and a chambermaid at D & L and at Chateau North. She knew Lori as someone who would come to Armstrong. Lori and her partner ate at the restaurant for brunch and dinner and did not pay. She said that Lori did not clean up after herself as compared to Deborah and her family who would cook for themselves, serve themselves, and then wash their own dishes. She never saw Lori do that and never saw Lori perform any work at the restaurant or motel. She also testified that she never saw Lori do any work at the store.

[87] In cross-examination, she admitted that she could not really work with Lori’s mother and stopped working at some point, but came back after Evelyn became involved. Celina’s hours at the Chateau were from 2 p.m. to 10 p.m. or 8 a.m. to 4 p.m.. She said that Lori called her to be a witness, but she declined to be a witness for Lori.

Alexander (Sandy) Stewart

[88] Mr. Stewart is a solicitor in Thunder Bay. He, and his father before him, were Jack’s lawyers from 1991, and before, until Jack’s death in 2017.

[89] He was not aware of any agreement between Jack and Lori that she would receive an entitlement to Jack’s estate in exchange for providing services to Jack and his businesses.

[90] With respect to the transfer of 449 Pineview Bay to Lori, Mr. Stewart said the following:

It goes back to the – the death of (Helen). She had prepared a will and then the will would’ve named Mr. Lundstrom to be her executor and sole beneficiary. So, on that basis, Mr. Lundstrom would’ve received the entire estate. He had thought that he would like to either make some amends or whatever to the two children who didn’t receive anything from – from the estate.

[91] Mr. Stewart stated that it was difficult for Jack to make a will because of his complicated business ventures, and he was facing pressure from pending environmental litigation. By 2015, his businesses were sold, and he was in a position to “tidy up some loose ends”, and so Mr. Stewart dealt with the property. He said:

So, essentially what happened there was that he had come up with a number and I wasn’t privy to how he came up with the number. So, he was going to try to give the property to the – the two girls, and $100,000, but in – part of the difficulty there, Lori had - basically had access to the property from the time – this will go back probably from close to the time it was acquired from his mother, that would be, I think – let’s see. Anyways, it’s a couple years, I think, before her death. And the - Deborah indicated that she didn’t think that her sister would share the – the property with her at all, so we came up with the idea that Deborah would then receive the $100,000 and Lori would receive the property. This was totally by way of gift. This wasn’t a legal obligation. There wasn’t anything else along with that, and so it was – we proceeded on that basis.

[92] The capital gains on the transfer of the property were paid by Jack.

[93] He does not remember telling Lori that Jack was on his “deathbed” then, as that would not have been an accurate description of Jack’s health at that time.

[94] In cross-examination, he confirmed that Jack did not tell him of any prior will when he made his first will with him in 2009.

[95] He was cross-examined about Lori’s assertion that Lori told him of the agreement about inheriting a part of Jack’s estate. Mr. Stewart replied:

A: No. I mean, there would – if there was a call, it would have – any communication that I would have had would have just related to the Pineview Bay property. There certainly wasn’t anything outside of that. That would have certainly been a red flag at that time.

Q: Okay. And you don’t recall having a red flag there?

A: No.

Bert Lundstrom

[96] Bert is Jack’s son. He worked “side by side” with his father for 50 years until Jack sold the businesses.

[97] He now works as a meat cutter at Metro.

[98] Bert and Jack both had desks in the same office.

[99] He met Lori when his father married Lori’s mother. Jack never told him anything about any agreement with Lori.

[100] Jack had four businesses: J. & J. General Store, D. & L. Estates, Chateau North and Northern Lights Bait and Tackle which was part of J. & J.

[101] He described Lori’s assertion that she worked 40 hours a week in the Armstrong business as a cashier, server, and in the office, as “false”. He said that she might have helped her mother but very little. Lori never replaced an employee.

[102] After her mother died, Bert described Lori as a demanding customer, and he said that he almost lost a cook because of Lori’s behavior.

[103] With respect to Lori bringing supplies to Armstrong, he testified that Lori would call to say that she was coming up and would ask whether they needed anything. He said that she came to Armstrong to visit, not to work. He never referred to Lori as an owner. He testified that she never helped him. He said that she “might have tagged along with Jack.”

[104] Bert said that Jack never promised Lori a cottage. He said that Lori came up every two to three weeks in the summertime. He described the assertion that Gary worked three weekends a month on the cottages as “false”. He said that Gary and Lori may have helped a little, but that Jack had two carpenters that he relied on to do the renovations.

[105] With respect to 449 Pineview Bay, he said that Lori never paid rent or expenses and that she was allowed to live there because she had nowhere else to go. In 2004, Lori started to pay the taxes. He said that she had to “start paying her own way” because there is no rent to collect.

[106] The car that was given to Lori was her mother’s and was given to Lori for her use because Lori needed a vehicle.

[107] He said that Lori’s mother was involved with the bar, but not the other businesses. She had previously owned a bar and enjoyed arranging for entertainment and sometimes sang herself. He said that Lori’s mother did not want Lori to have anything else.

[108] He said that Jack had also made a will in 1991 which was similar to Lori’s mother’s will that provided that should the spouse predecease, the four children would inherit equally. That will was kept in the company safe which was cleaned out when the businesses were sold in 2015.

Positions of the Parties

The Plaintiff

[109] The amended statement of claim asserts a claim for compensation and restitution for unjust enrichment in the amount of $482,000 on the basis of quantum meruit for unpaid services rendered by the plaintiff to the defendant.

[110] It is alleged that Jack promised to bequeath one quarter of his estate to Lori in consideration for her work in furtherance of the “Family Enterprise”.

[111] Further, it is estimated that between 1991 in 1997, Lori worked on average 60 hours per week for the Family Enterprise without remuneration and that from 1998 to 2004, Lori worked on average 40 hours per week for the Family Enterprise, without remuneration.

[112] Further, it is alleged that Lori and her partner, Gary, completed significant improvements to two camp properties at McKenzie Lake and that Jack promised Lori ownership of camp properties for completing the improvements.

[113] Relying on the unjust enrichment assessment protocol set out in Granger v. Granger, 2016 ONCA 945, the plaintiff argues that:

a. she conferred a benefit to the estate by her unpaid work;

b. she suffered a deprivation by working without remuneration; and

c. there is no “juristic” reason for the enrichment to the estate.

Then, the plaintiff argues that the estate has the onus to establish a valid reason or defence to limit the remedy requested.

[114] The plaintiff submits that the appropriate remedy is compensation based on the estimated hourly wage for the years worked based on Statistics Canada data, as agreed, at paras. 60 and 61 of the Agreed Statement of Facts, with overtime and vacation pay also calculated. The plaintiff has provided a spreadsheet calculating the compensation to be $469,119.28.

[115] The plaintiff states that a legally enforceable contact is not required for a claim for unjust enrichment.

[116] She submits that her claim was commenced within the two-year limitation period because it was commenced within two years of her discovering that Jack may not have been honouring his commitment to her.

[117] The plaintiff argues that no corroboration is required in order to conform with section 13 of the Evidence Act, R.S.O. 1990, c. E.23 because she is claiming as a creditor of the estate and not as an heir, etc. Alternatively, the plaintiff submits that the totality of the evidence provides corroboration.

The Defendant

[118] The defendant begins by arguing that the plaintiff’s claim is statute barred and barred by the equitable doctrine of Laches.

[119] As the last work alleged to have been performed by Lori occurred in 2004, the defendant submits that the action for the value of services should have been commenced by 2006, and not in 2017, thirteen years later.

[120] Similarly, with respect to Laches, the defendant argues that the circumstances of this case make the prosecution of the action unreasonable. The defendant points to the delay in commencing this action in 2017 based on circumstances from 1991 to 2004, the failure to prosecute the action diligently from 2017 to present causing a further delay of seven years, and the fact that the action was commenced so late that the evidence of the crucial witness, Jack, was likely to be, and was, lost.

[121] The defendant submits that section 13 of the Evidence Act applies and that, therefore, before the plaintiff can recover against the estate, the plaintiff’s evidence must be corroborated by “some other material evidence.”

[122] The defendant does not dispute the legal test to be applied in cases of unjust enrichment as set out by the plaintiff, but argues that this is not a case where it would be “against all conscience” for the defendant to retain the benefit as the plaintiff lived at 449 Pineview Bay rent-free for 21 years (a value of over $200,000, at para. 77 of the Agreed Statement of Facts the parties agreed to average monthly rental rates in Thunder Bay for the relevant years based on CMHC statistics), expense-free for 11 years, and was gifted the house in 2016 (value $159,000 to $203,000).

[123] The defendant disagrees with the plaintiff’s assertion that s. 13 of the Evidence Act does not apply as the plaintiff is claiming as a creditor. The defendant relies upon Fodazi v. Koukia, 2023 ONSC 6260 at para. 99.

[124] Finally, the defendant asks the court to draw an adverse inference against the plaintiff for her failure to produce her entire WSIB file and for the failure to call her sister, Debra, who allegedly was also promised property at Mackenzie Lake by Jack.

Analysis and Disposition

Reliability and Credibility

[125] Much of the evidence of this trial focused on what Jack said or did not say and what Lori’s mother said or did not say. As all that evidence is hearsay and, therefore, untested, that evidence is disregarded.

[126] As the events testified about took place between 20 to 30 years ago, the reliability of all testimony concerning events that long ago is suspect.

[127] Credibility is also in play in this case based on the contradictory testimony about how much Lori worked in Armstrong and at McKenzie Lake. Where Lori’s testimony is contradicted by other witnesses who made observations in the relevant period, I prefer the testimony of the other witnesses. I accept that the testimony of Richard Burgess is of limited assistance with respect to events prior to 1995 and that the testimony of Celina Stuckless is limited with regard to events during the period when Lori’s mother was involved with the businesses.

[128] I find that Lori’s assertions about how much she worked are exaggerated and untruthful. I accept that she did work with her mother during the years her mother helped run the bar. I do not accept at all that she worked to the extent that she said she did after 1994.

[129] Gary’s evidence also contradicted Lori’s evidence. He testified that he worked inside at McKenzie Lake. Lori said that they did everything. Gary’s evidence and recollection is suspect because Gary testified that he did work on the rental after Jack sold them, and that he continued to do work at McKenzie Lake until Jack died.

[130] I draw no adverse inference from Lori’s failure to produce the entire WSIB file. If relevant, the defendant could have brought a motion for production of that file but did not do so.

[131] Similarly, I draw no adverse inference from the failure to call Lori’s sister as a witness with respect to the promise to gift property at McKenzie Lake. There is no evidence before me as to her availability as a witness.

No Agreement by Jack to make Lori a Beneficiary or to Gift Lori Property at McKenzie Lake

[132] I conclude that Lori has failed to establish, on a balance of probabilities, that there was an agreement to leave Lori one quarter of Jack’s estate or to gift her properties at McKenzie Lake.

[133] Section 13 of the Evidence Act provides:

13 In an action by or against the heirs, next of kin, executors, administrators or assigns of a deceased person, an opposite or interested party shall not obtain a verdict, judgment or decision on his or her own evidence in respect of any matter occurring before the death of the deceased person, unless such evidence is corroborated by some other material evidence.

[134] In Fodazi, the plaintiff attempted to argue that section 13 of the Evidence Act did not apply because its application is limited to circumstances where the interested party claims as an heir, next of kin, executor, etc., and since the plaintiff was claiming as a creditor of the Estate and not in their capacity as an heir or other, section 13 did not apply. The court rejected this argument and found that the wording of section 13 was clear, and applies to both an action by or against heirs, next of kin, etc., and applied in this case where the plaintiff was suing as a creditor of the Estate.

[135] In discussing the element of corroboration under section 13, the court in Fodazi commented that:

98 The corroboration required under section 13 should be such as to enhance the probability of truth of the witness' evidence upon a substantive part of the case raised by the pleadings. The corroboration must be evidence independent of the evidence of the opposite or interested party, which shows that the opposite or interested party's evidence on a material issue is true. The corroborating evidence can be either direct or circumstantial. It can consist of a single piece of evidence or several pieces considered cumulatively. [Citations omitted.]

[136] I find that in this case, section 13 of the Evidence Act applies. Furthermore, I find that there is no “other material evidence” to corroborate these assertions by Lori.

[137] I find that Jack did intend to gift Lori and her sister something. In 2004, Lori said that Jack was going to leave an inheritance for her. And, in 2009, he prepared a will leaving Lori and her sister 449 Pineview Bay. Once his property and businesses were in order, he made a gift to Lori and her sister in 2015.

[138] In conclusion, I do not find that there was an agreement that Lori suspected was breached when this claim was commenced.

Unjust Enrichment

[139] As the Supreme Court stated in Moore v. Sweet, [2018] 3 SCR 303, 2018 SCC 52, at para. 35:

Broadly speaking, the doctrine of unjust enrichment applies when a defendant receives a benefit from a plaintiff in circumstances where it would be "against all conscience" for him or her to retain that benefit. Where this is found to be the case, the defendant will be obliged to restore that benefit to the plaintiff…. At the heart of the doctrine of unjust enrichment ... lies the notion of restoration of a benefit which justice does not permit one to retain. [Citation omitted.]

[140] At its heart, this is a case of mutual benefit conferral and, following Granger, at para. 50, any alleged offsetting benefits are to be considered at the defence/remedy stage of the analysis where the defendant bears the onus.

Property Management in Thunder Bay

[141] It is not contested, and I find on a balance of probabilities, that Lori performed property management services for the rental properties in Thunder Bay (three buildings – five rental units) for 14 years from 1991 to 2004. That work included interviewing tenants, collecting rent, and occasional cleaning and maintenance. Lori did not testify as to the hours involved on a weekly or monthly basis. During submissions, her counsel suggested 15 hours per week. I am not persuaded that the tasks required 15 hours per week on average. While Lori testified that there were more short-term rentals in the later years there is no evidence to justify 60 hours per month for the property management. The evidence was that heavy maintenance or “dump runs” were done by Paul Cherwonick and Gary.

[142] Based on the evidence, attributing an average of 15 hours per month for the property management work is generous in Lori’s favour. Using a wage rate as per the Agreed Statement of Facts of $14 per hour in 1991, to $19 an hour in 2005, yields annual compensation between $2,500 in 1991 to approximately $3,500 in 2004.

[143] From 1994 to 2004, Lori lived “rent-free” at 449 Pinewood Bay. I reject her evidence that she paid the expenses once she moved in. Instead, I prefer the Estate’s evidence that Lori became responsible for the expenses in 2004 after there were no property management duties after the sale of the rental properties. I note that Lori only has receipts from 2004. I do not accept her explanation that any prior receipts were lost in the flood. I note that the property insurance was paid by the store. Using the rental values from the Agreed Statement of Facts, the rent would be between $8000-$9000 per year. Free-rent, together with the other expenses for 449 Pineview, far exceeds the value of the property management services provided by Lori.

Work in Armstrong

[144] I accept that Lori would have assisted her mother in the few years that her mother helped with the bar in Armstrong. I am not satisfied, however, on a balance of probabilities, that she worked in the Armstrong businesses after 1994.

[145] I find that while in Armstrong, she ate for free, had free accommodations, and was given a free car and free gas.

[146] Although it is a crass term, I find that she was, as described by some in Armstrong, a “freeloader” after her mother died. I reject her evidence that she worked in the businesses and provided services to Jack.

Limitation Period and Laches

[147] Under the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, “claim” is defined as “a claim to remedy and injury, loss or damage that occurred as a result of an act or omission.”

[148] Lori submits that her unjust enrichment claim was discovered when she suspected that Jack would not honour his agreement with her at the time when she learned that Jack was going to transfer 449 Pineview Bay to her and her sister.

[149] As I have determined that there was no agreement, there is no claim to be discovered. As the last work was done between 20 to 30 years ago, the claim for unjust enrichment is statute-barred.

[150] Similarly, in this case I would apply the doctrine of laches. Mere delay, in itself, is not a basis for applying the doctrine. The following circumstances make the prosecution of this action unreasonable:

a) the events occurred 20-30 years ago which is a substantial and significant delay;

b) recollections are inherently unreliable because of the passage of time;

c) because of the delay in prosecuting the claim, Jack was not served until “on his death bed”, a circumstance that was likely giving his age;

d) consequently, Jack’s crucial evidence was lost.

[151] I conclude that it is unjust for the plaintiff to seek a remedy against Jack’s estate in these circumstances.

Conclusion

[152] For the foregoing reasons, the action is dismissed.

[153] If the parties are unable to resolve costs, the party seeking costs must submit cost submissions, limited to five pages plus costs outline, within 30 days of the release of this decision. Responding submissions, subject to the same limits, are to be submitted within ten days thereafter. If no cost submissions are received within 30 days, costs are deemed settled.

“originally signed by”

W.D. Newton

Released: July 17, 2024