Court File and Parties

Court File No.: CV-24-3248 Date: August 8, 2025 Ontario Superior Court of Justice

Between: Marcel John Klemensiewicz – Applicant and Lorraine Klemens and Marc Klemens – Respondents

Counsel: Melvin Rotman, counsel for the Applicant Richard Swan, agent for the Self-Represented Respondents

Heard: May 14, 2025

Reasons for Judgment

D.E. Harris J.

Introduction

[1] The applicant, Marcel John Klemensiewicz, says that the money he gave to his son and daughter-in-law in 2011—the respondents Marc and Lorraine Klemens—to buy a house was not a gift but rather a loan. He asks in this application that the money, $525,000, be declared to be held in a constructive or resulting trust for his benefit. The respondents disagree and claim that the money was a gift. Aside from the merits, they also assert that this application is time-barred.

[2] There have been affidavits filed by the parties and cross-examination on them. Mr. Klemensiewicz (Marcel) previously failed in his effort to convert this matter into an action. In my view, that was the correct decision. I see no difficulty in proceeding by way of application, as Marcel chose originally. There are no serious disputes with respect to the primary facts. I am confident that the documents and facts admitted by Marcel in the context of the full record leave no significant credibility issues to be resolved. There is no reason to convert this application to an action as the determinations to be made can be based on "objective criteria: consistency with documents, consistency with other evidence": Leavens v. Schwartz, 2023 ONSC 3381, at para. 68.

Was the Money a Gift or a Loan?

[3] This litigation takes place in the context of a bitter family dispute. There are two warring factions. After the applicant, Marcel, now 83 years old, was in the process of getting divorced from his wife and the mother of his children in 2010, Marc and Lorraine took Marcel's side while Marcel's other two children, Michael and Michele, sided with their mother. Marcel came to live with Marc and Lorraine in their small home on Mannington Court in Mississauga. Soon after, Marcel learned from Lorraine that there was a larger home in the neighbourhood on the market with a fully outfitted basement suite that would accommodate him well. It was on a street called Lovingston Crescent. But Marc and Lorraine could not afford this house. They had moved into the Mannington address only four years before and were still in the midst of paying off the mortgage. Both state in their affidavits that they could never have afforded Lovingston. Marcel offered to help them buy the new home.

[4] He eventually gave them $525,000 and, with these funds, Marc and Lorraine purchased the Lovingston home. Originally, Lorraine had found an agreement on the internet to memorialize the transaction between them and Marcel. But it was never signed. Marcel has said it did not represent anyone's intentions. It was a loan agreement.

[5] A general form obtained from a bank to document the transaction was eventually signed by the applicant and the respondents on July 21, 2011. The authenticity of this document and that he signed it were not contested by Marcel. Its intention cannot be and was not gainsaid in this application. It was entitled a "gift letter." In its essential parts, it reads, "The undersigned [Marcel] hereby confirms that a financial gift in the amount of $525,000 is being provided to" Marc and Lorraine. "The Person(s) receiving the gift (Recipient) and the Person(s) giving the gift (Donor) certify the following: The funds are a genuine gift from the donor(s) and are non-repayable." (All emphasis has been added.) The plain language of the document leaves no room for doubt. Nor, as Marcel has admitted, were there ever any requests made by him for repayment of the amount.

[6] The money was clearly a gift, not a loan. That was the evidence of Marc and Lorraine. Marc, the primary affiant, was not cross-examined on his affidavit at all and Lorraine was not challenged in cross-examination on her affidavit asserting that the money was a gift. It is difficult to see how the applicant can take the position he does in light of this: Hurd v. Hewitt (1994), 20 O.R. (3d) 639 (C.A.), at p. 652. At the time, Marcel could easily afford this gift as shown by his Net Family Property filing in the family law proceedings. In the entire record, there is no documentary evidence supporting that the money was a loan.

[7] Marcel also admitted in his evidence that he knew within a few months that he was not on the title of the house. Yet he never did anything to alter the situation. This too supports the legal characterization of the money as a gift with no expectation of any consideration flowing back to Marcel. To the contrary, Marcel admitted to paying rent and admitted to writing rent cheques which the respondents produced. Monies went back to the respondents, not from the respondents to Marcel.

[8] The attempt to now reconfigure the $525,000 as a loan as opposed to a gift is a result of family tectonics shifting in the last number of years. Changed family allegiances have led to Marcel's change of heart. Marcel and the respondents were originally on one side; the other two children, Michael and Michele were on the other, the mother Roberta's side. Roberta died in 2021. Marcel, after years of alcohol abuse is now beset with Alzheimer's disease and, living in a senior residence, has become alienated from the respondents. He is now in Michael and Michele's camp. This application is borne out of this changed dynamic.

[9] There are conspicuous indications that this application is a last-ditch attempt to alter the legal nature of the $525,000. Marcel's notice of application and supporting affidavit initially advanced the position that the $525,000 was his contribution to the purchase of the home. The relief sought was that he be registered as a title holder. Only after it became clear on his cross-examination that Marcel knew from the beginning that he was not on title, was the original claim abandoned and the current position adopted that the money was a loan.

[10] Marcel's evidence was at times in flat contradiction to the objective facts, including the gift letter. Marcel's evidence was riddled with inconsistencies. His evidence with respect to whether he knew he was on the Lovingston title was constantly changing between his first affidavit, his second affidavit and in his cross-examination. Much of this is explainable by Marcel's alcoholism and, more recently, his Alzheimer's diagnosis.

[11] I conclude that the $525,000 was a gift. The presumption of resulting trust is rebutted: Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, at para. 41. Nor can the claim for a constructive trust succeed. This is sufficient to dismiss the application. However, it is also argued that this application is statute-barred. For the sake of completeness, I will consider this argument briefly.

Is This Application Statute-Barred?

[12] Quite apart from the merits, in my view, this action is statute-barred. The Real Property Limitations Act, R.S.O. 1990, c. L.15 in s. 4 imposes a 10-year limitation on any action to recover land or rent from the time the action first accrued. These words have been held to include constructive and resulting trusts in respect of land: Waterstone Properties Corporation v. Caledon (Town), 2017 ONCA 623, 64 M.P.L.R. (5th) 179, at para. 32, citing Hartman Estate v. Hartfam Holdings Ltd. (2006), 263 D.L.R. (4th) 640 at para. 56; McConnell v. Huxtable, 2014 ONCA 86, 118 O.R. (3d) 561, at paras. 38-39. The remedy requested by the applicant is a resulting or constructive trust with respect to the Lovingston address.

[13] An action accrues when the material facts forming the claim are "discovered or ought to have been discovered by the [applicant] by the exercise of reasonable diligence": Browne v. Meunier, 2023 ONCA 223, 167 O.R. (3d) 349, at paras. 9, 14 citing Pioneer Corp. v. Godfrey, 2019 SCC 42, [2019] 3 S.C.R. 295, at para. 31. A resulting trust arises when the funds are transferred: Sinclair v. Harris, 2018 ONSC 5718, 41 E.T.R. (4th) 295, at para. 28. Here everything took place in 2011. That includes conveying the money to the respondents, the gift letter, and Marcel's realization that he was not on title.

[14] This application, launched in 2024, runs afoul of s. 4. It is statute-barred.

Conclusion

[15] For these reasons, the application is dismissed. If costs cannot be agreed upon, the respondents will have 30 days from the release of this judgment to make their 2-page submissions together with a bill of costs, and the applicant must file their 2-page response and bill of costs within 20 days of the respondents' filing.

D.E. Harris J.

Released: August 8, 2025