Court File and Parties

Court File No.: FS-21-013-00 Date: 2025-09-02

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Charmaine Marie Langlais Applicant

- and -

Paul Richard Stanley Dolyny Respondent

Counsel:

• M. Cupello, for the Applicant
• P. Howie, for the Respondent

Heard: August 27-29, 2025, at Thunder Bay, Ontario

Before: Mr. Justice F. Bruce Fitzpatrick

Decision Following Trial

[1] The parties were in a common law relationship of over 22 years. The parties have three children. They separated March 8, 2019.

[2] The matter has taken some time to get to trial. After a day and a half of trial, the parties were able to resolve all but one of the outstanding issues between them. I commend both counsel and the parties for their efforts to finally resolve difficult and highly contested matters such as retroactive child and spousal support, the imputation of income and retroactive section 7 expenses for the last 5 years or so.

[3] The sole remaining issue for trial was an allegation by the Applicant that she loaned the Respondent $14,000.00 in September 2018 (the "Paul Loan"). She seeks an order that the Respondent pay her $14,000.00 plus prejudgment interest in satisfaction of the Paul Loan. The Respondent denies the monies were a loan. He defends the allegation by also claiming he provided valuable construction supplies and service to the Respondent's sole proprietorship sign-making business that were in excess of $14,000.00.

[4] I heard evidence from both parties. In my view, the Applicant has not led evidence to satisfy her burden to prove on a balance of probabilities that the transaction involving a $14,000.00 cheque dated in September 2018 was a loan for which repayment can be enforced by a judgement in this proceeding.

[5] I say so for the following reasons.

Evidentiary Observations

[6] I begin by observing that the evidence of both parties, in the main, lacked specificity and offered vague and unfocused answers when asked what I viewed as straightforward questions. I suspect the issue of the loan in this litigation drew the least attention of the parties in the course of their preparations for trial.

[7] In the course of the trial, before the issue of section 7 expenses was resolved on consent, I had the benefit of hearing the evidence of the annual incomes for both parties in 2019. This is important only because it demonstrated to me that the Applicant was not earning a great deal of income at that time. She had a line 15000 income of 10,651.00 in 2019. I suspect her income was approximately that or less in 2018.

The Metis Voyageur Development Fund Loan

[8] The Applicant testified the source of the funds which allowed her to advance the Paul Loan, (which was more money than she earned in the next year), was a business loan she obtained in her own name. The loan was advanced by an entity called the Metis Voyageur Development Fund (MVDF) based in Ottawa (the Metis Loan). The principal advanced was $81,000.00. The advance was obtained August 21, 2018. The Applicant testified it was to be used to complete renovations and construction of a new building, (the Garage) to be used for her sign business on a property owned by her alone.

[9] The Applicant testified that the Respondent was required to give a personal guarantee for the Metis Loan. She also testified that the Respondent was ultimately released from the guarantee but could not provide any particulars of when or why that occurred. The Applicant did not provide any documentary evidence of the Metis Loan other than a payment schedule which was current only to March 24, 2022.

The Paul Loan

[10] The Applicant testified that the Paul Loan was to be repaid from the proceeds of an annual bonus that the Respondent regularly received in December of each year from his employer, a hardware store in Emo Ontario. However, according to the Applicant, the Paul Loan was to be repaid from the 2019 bonus.

[11] The Applicant testified that she made the Paul Loan because 'we were a family'. She testified that she sought and received the permission of the MVDF to use a portion of the advance to make the Paul Loan. The Applicant testified that the Respondent used the full amount of the Paul Loan to pay off a debt he had with homeowners from whom he had purchased a rental property on Third Street East in Fort Frances.

[12] The Applicant acknowledged that the Respondent assisted in providing labour for the construction of the Garage but minimized his involvement. She also testified she paid for all the materials used in the construction of the Garage.

Respondent's Evidence

[13] The Respondent admitted he received the $14,000.00. However, he testified only $12,000.00 was used in respect of the Fort Frances rental property. The payment extinguished his obligation to the former homeowner in respect of the purchase of that property. It also freed up $2,000.00 per month to be used by the family, which the Respondent had been previously paying in regard to his outstanding debt. The Respondent claimed $2,000.00 of the Paul Loan advance was used specifically to replace materials he had bought for the rental property but were instead provided to build the Garage. The Respondent admitted the couple acted in aid of each other's enterprises, and he supported her in obtaining the Metis Loan by providing an estimate of the project cost.

Legal Framework

[14] Neither counsel provided the court with any authorities to assist the court in assessing the legal basis for their respective submissions.

[15] Based on the evidence of the parties I find the following.

[16] The Respondent did not defend the advance to funds to him as being a gift.

[17] I prefer the evidence of the Respondent that the Applicant transferred the $14,000.00 in consideration of materials and services provided by him for the Garage project and in support of her sign business. I come to that conclusion for a number of reasons.

[18] While the law concerning gratuitous transfers as articulated in the leading case from the Supreme Court of Canada in Pecore v. Pecore 2007 SCC 17 is not on point, I did find some assistance in a gratuitous transfer case decided by the Ontario Court of Appeal in Barber v Magee 139 OR (3d) 78, 2017 ONCA 558. In discussing a case of a gratuitous transfer between family members, in Barber at para 4 the Ontario Court of Appeal discussed the difference between gifts and loans stating:

[4] Generally, there are objective indicators that can assist in determining whether an advancement is a gift or a loan (citations omitted) A gift is a transfer in which the absence of an expectation of repayment tends to be reflected in the absence of security, recording, payments or efforts to collect payments. A loan often involves a formal, recorded transfer in which terms are set out and in which repayment is made or sought. In evaluating whether the presumption of resulting trust has been rebutted, a trial judge will naturally look at such indicia.

[19] This decision is useful as it outlines indica of a loan in a family law context. Those indicia of a loan noted in Barber, such as formal records setting out terms and demand for payment are lacking in the present matter.

Credibility and Evidentiary Concerns

[20] Also, I was not convinced of the veracity of the answers of the Applicant concerning efforts she made to seek the permission of the MVDF to make the Paul Loan. Her initial answer to a direct question in cross examination about seeking such permission was vague; she stated "I spoke to the contact person". It was only in response to a question from me following conclusion of the cross examination and re examination that the Applicant stated she had the permission to use the funds in this way. I am skeptical of her answer.

[21] In my experience, funding agreements for specific projects from business development agencies such as the MVDF are very particular about the use that can be made of the funds by the recipient. This is because the funds are generally provided by a government type agency with very stringent lending, use and reporting requirements as contrasted to those required by the banks or other commercial lenders. According to the Applicant, the loan was for the express purpose of building the Garage. It was not a "do with it as you like" line of credit type arrangement.

[22] I was also skeptical about the Applicant's evidence that the cheque was to be treated as a loan and not simply a transfer of an asset that was available to one family member to another. I accept the Respondent's evidence that there was no expectation of specific repayment to the Applicant when she gave him the cheque. At the time he was a guarantor on the loan. He was as much at personal risk for repayment as was the Applicant. He was also known to the MVDF in that capacity when the advance was made. His use of the funds did not change either of their liability to MVDF.

[23] In my view, the use of the funds in September 2019, a month after the advance was made is consistent with a couple "acting like a family". I agree with the submission of the Respondent that a formal loan agreement between a couple that had been together for some 18 years and had three children would be out of the ordinary. Also, the advance had just been made and no repayment other than a monthly payment appeared to be required in the short or medium term.

Economic Analysis

[24] Also, I find the Applicant's evidence that the loan was to be repaid in 2019 as opposed to 2018 to make no economic sense. The Respondent was expecting an annual bonus in 2018. If the $14,000.00 was going to be repaid from the bonus it would have made most sense for the couple to put that money back in the account as soon as possible rather than continue to incur the interest charges if indeed the transaction was to be considered some kind of loan. The interest rate shown on the loan document from the MVDF which was exhibited was 6%. This rate seems to me to be commercially reasonable from what I recall the interest conditions were in Canada in 2018 when the prime rate was in the 4.5 to 5% range. As interest was accumulating, if those funds were not immediately necessary for the Garage, and it was the Applicant's intent to use them to pay down the debt to the MVDF, it would have made most sense to replace the funds as soon as possible if indeed the Applicant thought the monies were needed in the near term. In my view, this wasn't done because the Applicant had no such intention of paying the money back to the MVDF in the near term and was not treating the monies as an obligation that the Respondent was directly responsible for. It was a family debt that eventually had to be repaid. However, the fact that the Applicant continues now to be responsible for the Metis Loan, does not convince me that the $14,000.00 was an advance that she expected would ever be specifically replaced by the Respondent.

Context of High Conflict Proceedings

[25] I find that the Applicant has concocted the notion that the transaction at issue was a loan in the heat of what was a high conflict family law case. This matter has occurred in the shadow of criminal charges, alleged parental alienation and accusations of conduct that did not put the best interests of the children first. The high degree of personal animosity between the parties was evident in the pleadings and the testimony of the parties I heard in this matter. Prior to the commencement of this trial, the Respondent was not making regular ongoing child support payments as had been ordered. Arrears of support and ongoing child support was ultimately resolved by a consent order reached on the first day of trial. Nevertheless, it seemed to me from the evidence, that the economic uncertainty created by such behaviour created an occasion where perceptions of past behaviour were clouded by the Applicant's view that the Respondent had shirked his responsibilities to his children. However this difficult circumstance was no basis for a finding that an inter-spousal loan was in existence at the time the parties separated.

Conclusion on the Loan Issue

[26] I prefer the evidence of the Respondent that the Paul Loan was used to compensate the Respondent for funds he had expended or labour he had provided for the Garage or in support of the Applicant's business prior to the Metis Loan being advanced. This seems to me to be more in accordance with what would be an acceptable use of the funds advanced from an agency like the MVDF.

[27] While the advance of the Paul Loan could also be indicia of a joint family venture in respect of the rental property, there were other corresponding benefits to the Applicant's business from the services provided by the Respondent. The action of paying off the loans for the rental property improved the family cash flow situation by $2,000.00 per month. This was not an insubstantial amount. The Respondent did not seek a set off of that benefit obtained from the use of the funds for the Paul Loan. However, in my view it was a corresponding equitable benefit which was shared by the Applicant from October 2018 until at least until the date of separation. It also serves to overcome any inequity that arises from the fact that the Applicant still remains personally liable for the full amount of the Metis Loan.

[28] How it was that the personal guarantee of the Respondent was extinguished was not addressed in the evidence. However it appears from the evidence the Respondent was a guarantor of the Metis Loan at the time the Paul Loan was advanced, so he was as personally exposed to liability to the MVDF as was the Applicant at that time. In my view this appropriately distributes any equitable loss or benefit to this couple from the transaction that the Applicant seeks to characterize as a loan. It also militates in favour of a finding that the advance was a transfer for consideration and not a loan.

[29] For all these reasons the Applicant's claim for a judgment against the Respondent for $14,000.00 plus prejudgment interest in respect of the Paul Loan is dismissed.

Final Order and Costs

[30] The parties filed a draft order as a lettered exhibit on the first day of trial. I leave it to counsel to forward to my judicial assistant a draft final order that now reflects the result in this endorsement and the settlement of the retroactive section 7 expenses claim. Paragraph 6 requires amendment and a new paragraph 11 concerning costs, (left blank) could be added to the draft.

[31] It seems to me in this matter, success has been divided. Ultimately the Applicant was successful in obtaining a lump sum payment of retroactive child support. The Applicant settled her claim for section 7 expenses for a greatly reduced amount. The Applicant's claim for repayment of a loan was dismissed. Absent any Rule 18 compliant offers to settle exchanged between the parties and outstanding as of August 26, 2025, I would expect any costs claim asserted by either party would be nominal.

[32] If counsel wish to make a claim for costs, the Applicant can first send no more than a two page submission, plus any documents concerning Rule 18 compliant offers to my judicial assistant on or before September 19, 2025. Any responding submission of no more than two pages, plus offer documentation can be similarly submitted on or before September 26, 2025. The Applicant will not have a right of reply in this scenario.

[33] If no submissions are received from the Applicant by the deadline set above, counsel for the Respondent shall advise both the Applicant and the Court in writing if costs will be sought. In that case the September 26, 2025, deadline remains for those submissions and the Applicant can reply by October 3, 2025.

[34] My judicial assistant can be reached at leah.vanderpark@ontario.ca

The Hon. Mr. Justice F. Bruce Fitzpatrick

Released: September 2, 2025