Court File and Parties

Court File No.: CV-20-015-00 Date: 2025-08-11

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Laura Marshalok Plaintiff

- and -

Joanne Nigro Defendant

HEARD: January 8, 2025, at Thunder Bay, Ontario

Before: Madam Justice T. J. Nieckarz

Counsel:

• Nicola-Antonio Melchiorre, for the Plaintiff
• Conor Carr, for the Defendant

Reasons for Judgment

Introduction

[1] The Plaintiff, Laura Marshalok, claims the sum of $57,000 from her mother, the Defendant, Joanne Nigro. The Plaintiff is the Defendant's only child.

[2] The Plaintiff alleges that between April 2005 and December 2009 she made monthly payments of $1,000 to the Defendant as an investment in the property located at 306 Balsam Street, Thunder Bay (the "Property"), in exchange for a promise that the Property would be transferred to the Plaintiff at some point in the future and the parties would share the net rent proceeds. In 2018 the relationship between mother and her only child broke down, and the Plaintiff seeks the return of her money.

[3] The Defendant says that the Plaintiff is statute barred from claiming a return of the money by virtue of the expiry of the two-year limitation period. In the alternative, the Defendant says that the Plaintiff has not proven the amount of her contributions to the Property as she has only tendered proof of cheques totalling $6,000. Furthermore, if the claim is proceeding in equity, the Defendant argues that the $15,000 she gave to the Plaintiff for a new roof on her home must be taken into consideration, as well as the unpaid rent on the unit occupied by the Plaintiff and her spouse between August 2012 and December 2017. Rent was requested in December 2014 and November 2015, but never paid. In the further alternative, the Defendant argues that the claim is premature as there is no indication that the property will not be transferred to the Plaintiff at some point, which was the verbal agreement.

Legal Issues

[4] The legal issues raised by this case for determination are:

a. What was the amount paid by the Plaintiff to the Defendant?

b. Was there unjust enrichment?

c. What may be set-off against the amount claimed in considering unjust enrichment?

d. Is the claim barred in equity by a lack of clean hands on the part of the Plaintiff?

e. Is the claim premature?

f. Is the claim otherwise statute barred by virtue of expiry of the two-year limitation period?

[5] For the following reasons I find that the Defendant was unjustly enriched by the contributions of the Plaintiff in the amount of $46,200.

Factual Background

[6] In 1998, the Defendant and her former spouse purchased the Property for $500,000. In or about March 2005, following the separation of the Defendant and her spouse, the Defendant approached the Plaintiff with respect to the property.

[7] The Property is a twelve-unit building registered solely in the name of the Defendant.

[8] The Defendant approached the Plaintiff to discuss ways for her to invest and proposed that she make investment payments towards the Property. The plan involved the Plaintiff paying the Defendant $1,000 per month, with the understanding that in the future the rent proceeds from the Property would be shared with her and the Property would be transferred to her.

[9] As is often the case with family, the terms of the investment were never put on paper and the parties disagree as to what was, and was not, said.

[10] The Plaintiff's evidence is that she began making the investment payments in April 2005 by way of a personal cheque payable to the Defendant. She says she made 57 payments in total.

[11] At the time the Plaintiff began making the payments to the Defendant she was still living with her mother. She says that in addition to the investment, she paid a small amount each month as rent to her mother. She says she also assisted in the operation of the Property by collecting rent, showing apartments to interested renters, dealing with tenant grievances, assisting with basic maintenance such as changing lightbulbs, and cleaning common areas on a regular basis. The Plaintiff says that she never requested, nor was she ever compensated for the work she did. In addition to this, she assisted the Defendant with some of her personal chores and made contributions towards the Defendant's home.

[12] The Plaintiff met her husband, David Marshalok in 2008. Mr. Marshalok began spending a fair bit of time at the home that the Plaintiff and the Defendant shared. The Defendant and Mr. Marshalok did not get along. In December 2009, they had a significant disagreement. This caused tension in the relationship between mother and daughter, and the Plaintiff moved out.

[13] The parties agree that the Plaintiff made her last $1,000 payment in December 2009. In January 2010, the Defendant inquired about further payments. The Plaintiff advised her that she was not making any further "investment" or rent payments. There were no other conversations about the $1,000 payments. The Defendant did not demand additional payments and the Plaintiff did not pursue recovery of her investment. The relationship between the parties was distant and continued to deteriorate.

[14] The Plaintiff has produced evidence of only six, $1,000 payments, with cheques dated:

• July 7, 2009
• August 4, 2009
• September 17, 2009
• October 1, 2009
• November 1, 2009
• December 3, 2009

[15] In the meantime, in June 2012, the Plaintiff inquired of the Defendant as to availability at the Property of an apartment for them to live at. The Defendant offered them a one-bedroom basement apartment commencing July 2012. The Plaintiff's evidence is that the Defendant said she did not have to pay rent, but instead, the Plaintiff and Mr. Marshalok would be expected to help with the maintenance of the building for a few hours each month. The Plaintiff says that she agreed to this arrangement, but the work associated with the Property turned out to be significant.

[16] The Plaintiff's evidence is that between July and August 2012, her and Mr. Marshalok renovated and updated the apartment before moving in. They moved in at the end of August. At the time, they intended this to be a temporary living arrangement while they built a home. The Plaintiff further attests that in August 2012, the Defendant offered to pay the balance owing on her credit card for the construction of the roof on the new home, in the amount of $15,000. The Defendant says it was for windows for the new home. Both parties agree that the amount was $15,000. Both parties agree it was a loan, with no set date for repayment. No amount was ever paid towards the loan.

[17] The Plaintiff and Mr. Marshalok's evidence is that once they moved into the Property, they assumed the role of building superintendents. They collected rent, dealt with tenants, did maintenance and repairs, painted and prepared apartments for new renters, did the grass cutting and snow removal of walkways and some in the parking lot, as well as taking care of the garbage. Mr. Marshalok's affidavit in this proceeding sets out a long list of work he alleges he completed at, or for, the Property.

[18] The Plaintiff further attests that in June 2013, the Defendant offered to allow the Plaintiff to move into a bigger two-bedroom unit. She says there was to be no rent payable if she and Mr. Marshalok continued with their superintendent duties and performed the necessary renovations on the apartment.

[19] Tensions between the Defendant and Mr. Marshalok continued. A "family meeting", which included some extended family members, was held in August 2013 to address the situation. The Plaintiff says that the Defendant minimized and dismissed all the maintenance and upkeep work that Mr. Marshalok was doing at the Property, as well as the administrative work they were both performing on a regular basis.

[20] Between 2013 and December 2014, the Defendant says that the relationship remained turbulent, with multiple arguments between her and the Plaintiff, as well as her and Mr. Marshalok.

[21] On December 1, 2014, the Defendant sent an email to the Plaintiff discussing their relationship and requesting that she begin paying rent in the amount of $700 per month to continue occupying the apartment at the Property. She also requested repayment of the $15,000 advanced for the roof.

[22] On December 5, 2014, the Plaintiff advised that they would not be paying rent, and that the value of the superintendent services provided by them exceeded the value of the monthly rent. Mr. Marshalok testified that for the five years he lived at the Property, he did not work outside the home. He further testified that he was performing so much work at the Property he was unable to complete building the home he and the Plaintiff were building throughout the approximately five years they lived at the Property.

[23] In September 2015, there was a significant issue between Mr. Marshalok and the Defendant at the hospital following the birth of the Plaintiff's second child. Additional words were exchanged in October 2015. In November 2015, the Plaintiff received a letter from a lawyer for the Defendant demanding that she vacate the apartment at the Property by November 30, and repay the $15,000 for the roof. Legal action was threatened if the demands were not met. The Plaintiff did not respond to the letter and nothing further was done.

[24] From late 2015 onwards, the parties were not on speaking terms. The Defendant says that in December 2016 she attempted to contact the Plaintiff to arrange a Christmas gathering, but between December 24 – 30, 2016, the Plaintiff made it clear in a series of text messages that she did not wish to be contacted by the Defendant, and she was clear that any communication was to be limited to writing.

[25] Again, on March 31, 2017, the Plaintiff sent a text message making it clear that she had "…no interest in seeing or speaking with you…"

[26] On October 5, 2017, the Defendant wrote to the Plaintiff asking if they could start over. There was no response.

[27] On or about December 22, 2017, the Plaintiff and her family moved out of their unit at the Property. On December 30, 2017, the Plaintiff sent email correspondence to the Defendant suggesting she did not want a relationship with the Defendant.

[28] On January 28, 2018, the Defendant sent a text message letting the Plaintiff know that she should pick up any belongings of hers that are stored at the Defendant's home. The message further stated that "[T]his would put a finish to anything we have to do with each other which is what you want." The Plaintiff says that even though it was not specifically mentioned, it was at this point that she realized that her $1,000 investment payments may be in jeopardy.

[29] In April 2018, the Plaintiff finally responded to the Defendant's message with a letter seeking to address three issues:

a. Arrangements to pick up any remaining personal property of the Plaintiff that the Defendant had in her possession;

b. Cancellation of a life insurance police the Defendant has on the Plaintiff's child; and

c. Repayment of the $57,000 invested with her between April 2005 and December 2009.

The Plaintiff sought a resolution of these issues by April 23, 2018, failing which legal action was threatened.

[30] Nothing further occurred until August 2019, when counsel for the Plaintiff sent correspondence to the Defendant seeking the repayment of the $57,000, failing which a legal proceeding would be commenced. This proceeding was commenced January 10, 2020.

[31] The Defendant's evidence was that despite the ongoing litigation and lack of relationship between the parties, she is honouring the agreement by leaving the Property to the Plaintiff, as her only child. She says she cannot afford to reimburse the Plaintiff for her contributions otherwise.

[32] Despite having moved out of the Property in 2017, Mr. Marshalok still had not completed the build of his home with the Plaintiff as of the time of trial.

Analysis

What did the Plaintiff pay as an "investment" in the Property?

[33] I find that the Plaintiff has satisfied me on a balance of probabilities that she paid $57,000 to the Defendant on account of her investment in the Property. While the Defendant acknowledged in her affidavit only having received a "handful of payments", and she took the position at trial that only $6,000 worth of payments have been proved by the Plaintiff, the evidence supports a different conclusion.

[34] The evidence of the Defendant at trial and the admission of the Defendant in the Statement of Defence, supports the Plaintiff's claim that between April 2005 and December 2009 she paid to the Defendant the sum of $1,000 per month. While the Defendant did not keep track of the payments, in her Statement of Defence she acknowledges that payments started in or around April 2005 and ceased in December 2009. In cross-examination at trial she testified that she cannot say for certain that these are the dates, but she has no evidence to suggest otherwise. She further testified that no payments were missed from the time they started, shortly after the Defendant's separation, until the time they ceased when the Plaintiff moved out in December 2009. I have no reason to doubt the Plaintiff's evidence that she first had a discussion about investing with her mother in March 2005, and started the payments in April.

[35] At the conclusion of trial, the Plaintiff's counsel indicated that the claim was no longer being pursued on the basis of contract, acknowledging that there may not yet be a breach and that the agreement may be void for uncertainty in any event. This is because:

a. The evidence of both parties is that the Plaintiff agreed to pay $1,000 per month as an investment in the Property, in exchange for which she would share in rent or profits from rent at some point, and the Property would be hers at some point in time.

b. The Plaintiff says that the date for the sharing of the rent was never discussed, and neither was whether it was gross rent or profits. The date for transfer was also not discussed. Nor was it specified how much the Plaintiff was expected to invest in order to receive these benefits. No one addressed the consequences of not continuing the payments.

c. The Defendant says that the agreement was:

i. The Plaintiff was to pay $1,000 each month;

ii. The Plaintiff's payments were to go towards the mortgage and other expenses of the Property;

iii. Once the mortgage was paid, the profits from the rent payments would be shared equally;

iv. The Plaintiff would be responsible for administrative tasks involving the Property, such as evicting tenants; and

v. As the Defendant's only child, the Property would be gifted to the Plaintiff upon the Defendant's death.

d. The Defendant testified that the purpose of the $1,000 monthly payments was to assist in paying off the debt associated with the Property sooner. Originally the debt for the Property was in the form of a mortgage against the Defendant's home. She further testified that she has since re-financed and there remains mortgage debt associated with the Property that is not expected to be paid until 2050. There was no discussion about what would happen with respect to the sharing of rent in the event of re-financing and an increase in the mortgage. There is considerable uncertainty surrounding the agreement with respect to rent sharing.

e. There was no discussion that the Plaintiff would receive the Property in the Defendant's lifetime.

f. Despite the cessation of the $1,000 payments, the Defendant has still left the Plaintiff as the beneficiary of the Property in her Will. Even if it could be concluded that there was an enforceable agreement, the Plaintiff accepts the Defendant's position that there may not be a breach unless the Plaintiff does not have the Property transferred to her on the death of the Defendant. The claim based on breach of contract may not have crystallized.

g. The Defendant raises ss. 4 and 9 of the Statute of Frauds, R.S.O. 1990, c. S. 19, and the lack of any written agreement as a barrier to a claim in contract.

Is the Plaintiff entitled to recover her investment based on unjust enrichment?

Was there an unjust enrichment?

[36] The Plaintiff now pursues her claim solely based on unjust enrichment. She does not claim an interest in the Property, but rather monetary damages.

[37] The test with respect to unjust enrichment is well-established and not in dispute. The Plaintiff must prove the following three elements:

a. that the Defendant has been enriched by a contribution made by the Plaintiff, which the Defendant has retained;

b. that the Plaintiff has suffered a corresponding detriment; and

c. there is no "juristic reason" for the enrichment, meaning there is no reason in law or justice for the retention by the Defendant of the benefit in issue.

Kerr v. Baranow, 2011 SCC 10, [2011] 1 SCR 269, at para. 3, and at paras. 36-41.

[38] The Plaintiff argues that an unjust enrichment has resulted from her payment of investment funds to the Defendant. She has been deprived of the $57,000 paid, while the Defendant has been enriched by the payment of these monies. The Plaintiff further argues that there is no reason in law or justice as to why the Defendant should retain the benefit of her money.

[39] The Defendant argues that there is no unjust enrichment. She states that the Plaintiff has received at least $60,500 in benefit from the Defendant, which exceeds the $57,000 claimed. The benefit received by the Plaintiff comprises:

a. $15,000 loaned in 2012 that was never repaid; and

b. Sixty-five (65) months of rent-free living in a unit that rents for $700 per month, for a total of $45,500.

The Defendant also states that the Plaintiff received the benefit of free utilities for the sixty-five months of occupancy of the Property, although this amount is not quantified.

[40] The Defendant claims set-off for amounts outlined above and judgment for the difference, being $3,500. The Plaintiff argues that set-off is not permitted for a variety of reasons, not the least of which is that the limitation period expired on the Defendant's claims prior to them being brought. A demand was made for the $15,000 in November 2015 and went unpaid. The limitation period would have commenced from that point forward. The Plaintiff moved out of the Property in December 2017, and the limitation period with respect to unpaid rent would have expired in December 2019 at the latest (there may been an earlier date with respect to the rent demanded in November 2015 for the period prior to that).

[41] I agree with the Plaintiff with respect to any claim for legal set-off. Having said this, the limitation period does not prevent me from considering the benefits the Defendant says she conferred on the Plaintiff from the perspective of whether the Defendant has been unjustly enriched. Equitable set-off does, however, require the Defendant to show that the damages arose out of the same contract or a series of events that gave rise to the amount claimed, or that is closely connected with the contract or series of events in issue: Mujtaba v. Yasin, 2020 ONSC 2554, at para. 43.

[42] At para. 44 of Mujtaba, Emery J., citing Weiler J.A. in Canaccord Genuity corp. v. Pilot, 2015 ONCA 716, at para. 57, outlined the following five principles relevant to equitable set-off:

a. The party claiming set-off must show some equitable ground for being protected from his adversary's demands;

b. That ground must go to the very root of the plaintiff's claim;

c. The counterclaim must be so clearly connected with the plaintiff's demand that it would be manifestly unjust to allow the plaintiff to enforce payment without taking into consideration the counterclaim;

d. The claim and counterclaim need not arise out of the same contract; and

e. Unliquidated claims are on the same footing as liquidated claims.

[43] At para. 45 of Mujtaba, Emery J., concluded that the defendant must lead evidence that two obligations are so closely connected that it would be unconscionable if the court did not permit set-off to apply against amounts at issue.

[44] I find that the $15,000 loan is not so closely connected to the Plaintiff's demand that it would be unjust to enforce the Plaintiff's demand without consideration of the amount advanced by the Defendant in the unjust enrichment analysis. The only connection is the two parties. The $15,000 had nothing to do with the Property or the issues pertaining to the Plaintiff's investment in the Property. While I am very sympathetic to the Defendant, who has been deprived of these funds, while now finding herself faced with the potential of repayment of the Plaintiff's funds, I cannot find sufficient a connection on the facts of this case.

[45] With respect to unpaid rent, I find that some set-off is warranted for the following reasons:

a. The Defendant testified that when she agreed to forgo payment of rent in 2012, the occupancy of a unit by the Plaintiff was intended to be for a short duration. It was not intended to be for five years.

b. The Defendant made a demand for rent in December 2014, which the Plaintiff refused to pay. The Plaintiff did receive value from the Defendant in the form of free rent that is subject to set-off from January 2015 to December 2017. As the amount regularly charged was in the $600-700 range, I will give the Plaintiff the benefit of the lower value of $600 per month for 3 years. This totals $21,600.

c. The question then becomes by what amount was the Plaintiff enriched by the free rent, taking into consideration the superintendent and maintenance duties performed by her and her husband. The evidence in this regard is unsatisfactory.

d. I accept that the Plaintiff and Mr. Marshalok did deal with many maintenance and repair issues, tenant issues, collecting rent and laundry coins, upkeep of the Property, and made improvements to the units they lived in. This does not mean I accept all of Mr. Marshalok's evidence. I found him to be a hostile and uncooperative witness, even with the Plaintiff's counsel. I accept the Defendant's evidence with respect to some of Mr. Marshalok's actions and difficulty they created with tenants. I accept that she encountered difficulties with him with respect to issues such as plumbing and maintenance of the Property, and often paid people to perform necessary work. I do not accept the evidence of the Plaintiff and Mr. Marshalok that the demands associated with the Property were so significant that it prevented him from completing work on his own home. That home remained unfinished as of the date of trial, which was seven years after he moved out of the Property. None of the work performed was quantified in terms of value of an estimate of hours expended. I do not know when a lot of the repair work was performed, and whether it was prior to December 2014 or after.

e. I do, however, find that there was still a benefit to the Defendant of having the Marshaloks manage many of the on-site requirements of the Property. While this benefit has not been properly quantified, I cannot say that it had no value. Given the lack of evidence from both parties on this issue, I assess the value at one-half the amount of the monthly rent.

f. Therefore, I find that the amount of $10,800 is an appropriate set-off against the $57,000 to account for the actual enrichment and deprivation. I find that the Defendant was enriched by the Plaintiff's contributions in the amount of $46,200.

Is there a juristic reason for the enrichment and corresponding deprivation in the form of the verbal agreement between the parties, making the claim premature?

[46] The question then becomes whether there is any juristic reason for the enrichment and corresponding deprivation.

[47] The Defendant argues that the juristic reason is that the verbal agreement did not contemplate repayment, but rather transfer of the Property upon her death. As this has not yet happened, the claim is premature.

[48] The Defendant relies on Servello v. Servello, 2014 ONSC 5035. In Servello, Koke J., found that the Plaintiff's contribution to a property had unjustly enriched the owners, but that his claim failed because he lacked clean hands, and his claim was premature. Koke J., also found that there was an understanding between the Plaintiff and the Defendants that he would derive a benefit in return for his investment in the property in the form of the continued use of the property and the eventual transfer of an interest in it. Like the present case, there was no date set as to when the transfer should occur, only that the transfer would take place at some time in the future, as circumstances permitted. It was found that his claim had not crystallized.

[49] While there are many similar facts in Servello, there are also distinguishing ones. For example, in Servello, there were issues with severing the property to allow for a transfer. There was also a finding by the trial judge that the mother had done nothing in the interim to breach the agreement and had done what she could to honour it by providing for the transfer of the relevant portion of the property at issue to the Plaintiff (her son) in a codicil to her Will.

[50] In this case, the Defendant's evidence was that the Property will be gifted to the Plaintiff through her Will. In that regard, the case is similar to Servello. The main distinguishing factor in this case is that the parties seem to have stopped honouring the terms of the spirit of the agreement (as there was no clear specification of terms) many years ago. The Plaintiff stopped making the payments. The Defendant's refinancing of the Property extended the time necessary for repayment of the mortgage and frustrated the sharing of rent receipts. The only thing that has been honoured is the Defendant's testamentary gift of the Property to the Plaintiff.

[51] As such, I find that whatever the verbal agreement was, it was frustrated by both parties and can no longer form the basis for a juristic reason for the enrichment. The claim is not premature.

[52] I agree with the Plaintiff that in these circumstances, it is best to simply determine the Plaintiff's damages and provide for payment. Otherwise, there are far too many circumstances that could result in further litigation, at further financial expense to the parties and to their already broken relationship. Mother and daughter should not have to be in litigation with each other once, let alone multiple times, if it can be avoided. While this may cause the Defendant to have to further refinance the building, the clean break is preferable. By commencing this litigation, the Plaintiff may have guaranteed herself some repayment, but she may also have jeopardized the possibility of inheriting the whole building someday. With repayment of the investment, the Defendant's obligation to the Plaintiff with respect to the Property will be at an end.

Does the Plaintiff's claim in equity fail because she comes to court with unclean hands?

[53] The Defendant argues that the Plaintiff's cessation of the $1,000 monthly payments, contrary to the verbal agreement between the parties, is evidence of unclean hands that prevents her from recovering her money in equity. It was the Plaintiff who breached the verbal agreement between the parties. She then failed to repay the $15,000 owing to her mother, despite acknowledging that it was a loan. She also continued to live in the Property rent free after a demand had been made for rent.

[54] The clean hands doctrine provides that a plaintiff cannot obtain equitable relief if they come to court with "unclean hands". In such cases, the court can exercise its discretion to refuse an award for an equitable remedy. The law of equity should not intervene on behalf of individuals who have acted in bad faith: Taylor v. Guindon, at para. 48.

[55] I disagree that unclean hands prevent recovery on the circumstances of this case.

[56] The Defendant took no action with respect to the cessation of payments and made no request for continued payment. She was content to further acquiesce by permitting the Plaintiff and her family to live in the Property without payment of rent and without ever raising an issue over the stopped payments, even once threats of litigation started. The Defendant proceeded to advance the $15,000 to the Plaintiff, and even when repayment of this amount was demanded, there was no demand to continue the $1,000 payments. In short, the stopped payments did not seem to be a concern to the Defendant, nor did it seem to impact her willingness to continue to involve the Plaintiff with the Property. She cannot now claim that the Plaintiff's claim should not be allowed because of them.

[57] With respect to the $15,000 loan and rent, I do not see this as a clean hands doctrine issue. The Plaintiff's position with respect to rent was that none was owing given the value of services that she and her husband were providing to the Property, and continued to provide until they moved out. There was a disagreement that rent remained owing given the contributions made by the Plaintiff and Mr. Marshalok to the asset of the Defendant. I have now resolved that issue with the findings made, and the Defendant has been compensated. She did not choose to pursue the issue at the time it was raised, and the legal limitation period lapsed, although the Plaintiff's counsel acknowledges this does not prevent consideration of the equitable set-off issue. With respect to the $15,000, this was not related to the claim in question such that unclean hands will prevent the equitable claim.

Is the claim for unjust enrichment statute barred?

[58] The parties agree that the Plaintiff's claim for damages for unjust enrichment is subject to the two-year limitation period set out in s. 4 of the Limitations Act, S.O. 2002 c.24 Sched. B, as amended.

[59] They disagree as to when the limitation period commenced and expired.

[60] Section 5(1) of the Limitations Act states that a claim is discovered on the earlier of:

a. the day on which the person with the claim first knew,

i. that the injury, loss or damage had occurred,

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

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

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

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

[61] The discoverability analysis under s. 5(1) of the Limitations Act, involves, in part, determining when a claimant first knew that an injury, loss or damage had occurred and was caused by an act or omission of the Defendant: Zeppa v. Woodbridge Heating & Air-Conditioning Ltd., 2019 ONCA 47, at para. 40.

[62] In other words, the question to be asked is when the material facts on which the cause of action is based were discovered or ought to have been discovered by the Plaintiff, had she been exercising reasonable diligence: Lawless v. Anderson, 2011 ONCA 102, at paras. 22 & 23.

[63] For the limitation period to begin to run, it is not necessary that the Plaintiff know the full extent of her damages. It will begin to run with her subjective or objective appreciation of being damaged (i.e. of being worse off than before the Defendant's conduct): Mundell v. White, 2022 ONSC 5994, at para. 79.

Plaintiff's position

[64] The Plaintiff argues that it is difficult to pinpoint the period at which the limitation period commenced because of the parties' continued relationship and continued involvement with the Property after December 2009. Because of the ongoing interactions and relationship with the parties, the Plaintiff says that the earliest time at which a legal proceeding became the appropriate means to remedy the dispute, as provided in s. 5(1) (iv) of the Limitations Act was in or around January 28, 2018. The Plaintiff argues that it was only when the Defendant sent her message on January 28, 2018, indicating that the relationship was at an end, that it became evident that her investment was in jeopardy and that legal action may be warranted to protect it. Up until December 2017 the Defendant allowed the Plaintiff to live at the Property without payment of rent. During this time, there was no reason to believe that the relationship was such that legal action was required to protect her investment. Once it became evident on January 28, 2018, the Plaintiff attempted to address the outstanding debt three times on April 17, 2018, July 16, 2018, and July 18, 2018.

[65] As an alternative, the Plaintiff further argues that the limitation period did not begin to run until April 17, 2018, when the Plaintiff demanded the repayment of her investment, and the Defendant did not pay. The Plaintiff relies on 1346134 Ontario Limited v. Wright, 2023 ONCA 307, at paras. 47-51.

[66] The Plaintiff further argues that the several demands for repayment that were unopposed by the Defendant can be inferred as an acknowledgment of debt to restart any limitation period that is applicable. The Plaintiff relies on Michel v. Spirit Financial Inc., 2020 ONCA 398, at para. 19. In Michel, the Court of Appeal for Ontario found that a payment by a debtor, to his creditor, has the effect of starting afresh the running of a period of limitation. I find that this is not the case here. The Defendant's lack of response is a situation in which the Plaintiff should have been alerted that there may be a problem recovering her investment.

[67] In the further alternative the Plaintiff argues that the period during which the parties were attempting to repair their relationship and resolve their differences extends the time for the limitation period. The Defendant did seek to resolve the relationship issue by involving another family member to see if the Plaintiff would mediate, but the Plaintiff did not engage.

Defendant's position

[68] The Defendant's position is the earliest the claim began to run is December 2009 when the Plaintiff made her last payment and failed to make any inquiries as to the status of her investment given the cessation of the monthly payments. At the very latest, the Plaintiff's claim was discoverable by the end of December 2017 when the Plaintiff made it clear she wanted no further relationship with her mother.

[69] The Defendant argues that the Plaintiff made no inquiry of her mother as to whether she still intended to honour the verbal agreement between them given the cessation of payments in December 2009. The Plaintiff made no inquiry until almost nine years after the final payment was made. A reasonable person acting with diligence in the Plaintiff's circumstances ought to have discovered the material facts giving rise to her claim upon her unilateral breach of the agreement. Instead, the Plaintiff sat idly and did not take any steps to determine whether her investment was in jeopardy by virtue of her actions.

[70] Alternatively, it was evident at various points prior to January 2018 that the relationship was irreparably damaged such that the Plaintiff's investment may be in jeopardy. For example:

a. In November 2015 the parties were no longer on speaking terms. The situation was such that the Defendant caused her lawyer to send the Plaintiff a letter asking her to vacate her unit at the Property and demanded repayment of the loan.

b. Sometime in January 2016 when the Plaintiff began accumulating proof of the payments she made suggests she knew that there was a problem and was concerned about whether her investment was in jeopardy. If not, there would have been no purpose for her to request proof of the payments. The Plaintiff has acknowledged that she requested proof of payments in response to the letter received from the Defendant's lawyer on November 15, 2015, because she understood there may be legal action related to the Property.

c. December 24, 27, or 30, 2016, when the Plaintiff sent the Defendant a string of text messages to the effect that she did not want to see or speak with her.

d. March 31, 2017, when the Plaintiff reiterated, she had no interest in speaking with the Defendant; or

e. In December 2017 when the Plaintiff and her family moved out of the Property.

[71] Additionally, the Defendant argues that it is not plausible for the Plaintiff to claim that a material breakdown in the relationship between the parties occurred as a result of the Defendant's January 28, 2018, text message, as the parties had not spoken since November 2015. The Plaintiff's own written correspondence between December 2016 and December 2017 made it clear she had no interest in a relationship. This culminated in the Plaintiff leaving the Property by the end of 2017 without advising the Defendant. It is clear that the relationship between the parties was irreconcilable by the end of December 2017 at the latest, yet the Plaintiff waited until January 10, 2020, to commence her claim.

Findings

[72] I agree with the parties that the limitations issue is complicated by what happened in their fractured relationship over the years.

[73] I find that even though the parties were not speaking, and litigation had been threatened by the Defendant at times prior to December 2017, the Defendant did still permit the Plaintiff to live in the Property until December 2017 and did not pursue her rights or give the Plaintiff any indication she needed to protect hers. Despite the fact the parties were not speaking, the Defendant made various overtures to try to repair the relationship. Despite threatening litigation, nothing was done to evict the Plaintiff from the Property. She was still permitted to live there until she left in December 2017, and continued to perform some administrative tasks with respect to the Property with the knowledge and consent of the Defendant. These actions would not have alerted the Plaintiff to the fact that her investment was in jeopardy and that she needed to take steps to protect it.

[74] The question becomes whether the limitation period began to run December 2017, or January 28, 2018. I find it was January 28, 2018. Despite the Plaintiff's harsh rebuke of her mother at the end of December 2017, it was not until January 28, 2018, that the Defendant seemed to accept that the relationship was at an end and alerted the Plaintiff to the fact that from that point onwards they were to be separate in all regards. Up until this point, despite the Plaintiff's repudiation of the relationship with her mother, her mother continued to reach out to try to repair the relationship. Neither party said anything that would have given the Plaintiff cause for concern for her investment until the January 28th email from the Defendant. Therefore, I find that the limitation period did not expire until January 28, 2020 (two years after the email). As the action was commenced January 10, 2020, it was within the limitation period.

Order

[75] For the foregoing reasons, I find that the Plaintiff is entitled to judgment in the amount of $46,200, in addition to pre-judgment interest calculated from February 1, 2018, to the date of this order in accordance with s. 128 of the Courts of Justice Act.

[76] If the parties are unable to agree on costs, written submissions shall be provided as follows:

a. From the Plaintiff, within 30 days of release of this decision, limited to 5 pages, double-spaced (not including Bill of Costs, Caselaw and Offers);

b. From the Defendant, within 30 days of receipt of the Plaintiff's written submissions, also limited to 5 pages, double-spaced (not including necessary attachments); and

c. Any Reply, within 15 days of receipt of the Defendant's submissions, limited to 2 pages, double-spaced.

The Hon. Madam Justice T. J. Nieckarz

Released: August 11, 2025