Court File and Parties
Court File No.: CV-17-00000163-0000 Date: October 15, 2025 Ontario Superior Court of Justice
Between: TONY LEEDER, Plaintiff – and – BRENT SPENCE, TIM BEALE and TRUDI BEALE, Defendants
Before: Lacelle J.
Counsel:
- David M. Adams, for the Plaintiff
- Michael Swindley, for the Defendant, Beale
Heard: June 6, August 21, 22 and 23, 2023, March 6, 2025, with Plaintiff written submissions filed June 6, 2025, Defendant written submissions filed June 20, 2025, and Plaintiff Reply submissions filed September 12, 2025
Reasons for Judgment
Overview
1This trial involves a dispute between the plaintiff, Tony Leeder, and the defendant Tim Beale, relating to their involvement in a failed "exotic dance bar" and restaurant ["the business"] in Brockville.
2Two other defendants were named in the suit – Brent Spence, the person who ran the business, and Trudi Beale, the former spouse of the defendant Tim Beale. Mr. Spence failed to defend the action and default judgment was awarded to the plaintiff in 2019. Subsequently, Mr. Spence declared bankruptcy, and the plaintiff has been unable to collect the sum awarded to him in the default judgment.
3On the eve of trial, the parties discontinued the action as against Ms. Beale. Accordingly, the trial issues relate only to the dispute between Mr. Leeder and Mr. Beale.
4At its core, the dispute relates to a loan of $100,000 Mr. Leeder made to Brent Spence in June of 2008 as an investment in the business. Mr. Leeder says this was a loan to Mr. Spence that was personally guaranteed by Mr. Beale. Mr. Leeder also says that Mr. Beale was a silent partner in the business. Mr. Leeder says it was necessary that Mr. Beale be a silent partner because Mr. Beale had a criminal record, and this might jeopardize the business's ability to secure a liquor license. Consequently, he could not appear on any paperwork for the business, including loan documents. Mr. Leeder says that Mr. Beale has failed to honour his obligation to repay him the funds he loaned the business both because he personally guaranteed them (at least the initial $100,000 loan) and because he was a partner in the business.
5Mr. Beale, on the other hand, says he was nothing but a co-creditor of the business. He says he also gave money to Mr. Spence as an investment in the business, which he also lost when the business failed. He denies that he guaranteed any loan made by Mr. Leeder to Mr. Spence. He denies that he was a silent partner in the business and maintains that he was only ever an investor.
6As a result of Mr. Beale's alleged breach of contract (and for other reasons), the plaintiff seeks general damages from Mr. Beale in the amount of $250,000. He seeks punitive damages in the amount of $100,000 for breach of fiduciary duty, misrepresentation, fraud and breach of trust. The plaintiff alleges that Mr. Beale is attempting to avoid his obligations to the plaintiff by hiding behind Mr. Spence's bankruptcy, and that Mr. Spence is fully committed to advancing this scheme. The plaintiff says he is the victim of lies and a conspiracy and he is entitled to punitive damages in these circumstances.
7A preliminary, but fundamental, issue in the case relates to the admissibility of communications between Mr. Leeder and Mr. Beale about their dispute. The trial proceeded with a blended voir dire on this issue. Mr. Leeder says the messages are not admissible in the trial because they are protected by settlement privilege. Mr. Beale says the communications are admissible, and relevant, because they show that Mr. Leeder contemplated litigation against Mr. Beale in September of 2014. Given that he did not commence his litigation until April 10, 2017, Mr. Beale argues that the action is statute barred.
8I have concluded that the communications are admissible and that they compel the conclusion that Mr. Leeder's action is barred by the Limitations Act. While this is sufficient to dispose of the matter, I would also find that Mr. Leeder has not met his burden to prove his claim. The evidence is insufficient to conclude on a balance of probabilities that Mr. Beale guaranteed the $100,000 loan advanced to Mr. Spence by Mr. Leeder, or that he was a silent partner in the business and liable on that basis. I am also not persuaded to the requisite degree of proof that a fraud was perpetrated on Mr. Leeder by Mr. Beale and Mr. Spence. While this is possible, the evidence does not persuade me that it is probably true.
Undisputed Facts
9The following facts are undisputed.
10Mr. Leeder and Mr. Beale had known each other for some time before this dispute arose. They lived in the same area and were friends. Mr. Leeder also knew Ms. Beale and her parents.
11Mr. Leeder sold his interest in an insurance brokerage in 2008. At that point, he had funds he could use for investment purposes. How he became involved in investing in the business is the subject of dispute. In any event, the evidence is clear that the business began operations before the involvement of Mr. Leeder.
12For his part, Mr. Beale became involved in 2003. In 2003-2004, he loaned $242,000 to Mr. Spence for investment in the business. Some of the funds were from Mr. Beale's personal funds, his RRSP, and his line of credit. Some of the funds came from Mr. Beale's father and brother. They gave the funds directly to Mr. Beale. Mr. Beale personally guaranteed the loans made by his father and brother to Mr. Beale, and then loaned that money to Mr. Spence. Mr. Beale agrees that he represented to his father that the loan was risk free. Mr. Beale has since repaid his father and sibling.
13None of Mr. Beale's loans to Mr. Spence was documented. Mr. Beale said they had a gentleman's agreement about them.
14Mr. Beale has not been repaid in full by Mr. Spence. He did receive a payment of $25,000 (when he received it is in dispute) which allowed him to partially repay his brother who needed the funds for a house purchase.
15At some point prior to Mr. Leeder's involvement in 2008, and just as the bar had been "ready to go", there was a fire at the business premises. The insurance proceeds relating to the fire went to the property owner, Sonny Clark, and not the business. Further investment in the business was necessary to get it up and running. It appears that Mr. Leeder was the source of much of that funding.
16Between June of 2008 and 2011, the plaintiff provided continuous loans to operate the business. This began in 2008 with the loan of $100,000 at a 24% interest rate. This loan was the subject of documents prepared by a law office, Wilson/Everly. It included a promissory note, general security agreement, indenture, and assignment of interest in a general license. The agreements in these documents were between Mr. Leeder and Mr. Spence. On the same date, a "Declaration of Trust" was executed by the plaintiff, Mr. Beale and Ms. Beale. All documents are dated June 3, 2008. There is no other loan documentation or any promissory note in favour of the plaintiff between Mr. Beale and the plaintiff.
17Around November 2008, the business successfully re-opened and seemed to the plaintiff to be gaining momentum. He received nine payments of $2,000 from November 2008 until July 2009. This convinced the plaintiff that the business could be profitable.
18At various points, the plaintiff advanced further funds to the business. At one point, he made an agreement with Mr. Spence to advance a further $60,000 in return for a 1/3 ownership interest in the business assets. However, for various reasons, it appears this agreement never had any legal effect.
19The business ceased operations in or about 2011, and the Corporation related to it was cancelled in about 2013. These actions were carried out by Mr. Spence. At the time the business ceased operations, the plaintiff believed that the business's wind-up would allow for repayment of the sums he had loaned to the business.
20However, in around 2012, the owner of the property where the business was located (Mr. Sonny Clarke) commenced an action against Mr. Spence. It alleged, among other things, that Mr. Spence was in arrears of rent and that any chattels and leasehold improvements were to revert to the owner of the property. Mr. Beale was not a party in that litigation. This litigation came to include a counterclaim by Mr. Spence against Sonny Clark seeking damages of $1,400,000.
21In September or October 2012, the plaintiff, Mr. Beale and Mr. Spence met at a property on Park Street in Brockville which the plaintiff had purchased in December of 2009 to house the dancers who worked for the business. During the meeting, they discussed the business. What was said is the subject of dispute.
22In November of 2012, the plaintiff loaned a further $800 to Mr. Spence to help cover legal fees for Mr. Spence's litigation with Sonny Clark. Mr. Leeder says he then attempted to follow the lawsuit as a lay person. He would also call Mr. Beale for an update on the status of the lawsuit. In the summer of 2014, he says Mr. Beale stopped returning his calls. It was only in November of 2015 that the plaintiff received confirmation that the action involving Mr. Spence and Mr. Clark had been dismissed. He received this information from Mr. Clark's lawyer.
23Mr. Leeder confronted Mr. Spence at some point after this. Mr. Leeder told Mr. Spence he had no other option but to sue. Mr. Spence told him he was going to sell one of his other properties and if he could wait a bit longer there would be some money for Mr. Leeder. However, no money was ever forthcoming from either Mr. Spence or Mr. Beale.
24The plaintiff says he sought counsel after learning the action had been dismissed, and subsequently commenced this action on April 10, 2017. He says he struggled with the decision to commence this action. He felt ashamed he had placed such trust in Mr. Beale and Mr. Spence, and that he had loaned them so much money. He thought people in the community would think him a fool. Nevertheless, he determined to move forward with this lawsuit to recover the money he advanced.
The Disputed Evidence
25Mr. Leeder says he was approached by Mr. Beale to invest in the business. While he did not know Mr. Spence personally, based on his long friendship with Mr. Beale, Mr. Leader trusted Mr. Beale's endorsement of Mr. Spence and his representations that the business was a promising and lucrative venture. The plaintiff says that Mr. Beale also expressly committed to personally guaranteeing the plaintiff's initial loan to the business of $100,000, which Mr. Beale told him would be enough to jumpstart the business such that the funds would be easily repaid.
26Mr. Beale denies that he introduced Mr. Leeder to Mr. Spence for the purpose of lending. He points to evidence that Mr. Leeder agreed in his evidence that Anthony Fritz was paid a $6,000 "finder's fee" for connecting Mr. Spence and Mr. Leeder in 2008. A note created by the plaintiff (p. 54 of the Joint Trial Document Brief) documents a "fee" of $6,000 paid to Anthony Fritz.
27Mr. Leeder says that Mr. Beale told him that despite Mr. Beale's actual role in the business, his name could not be recorded on business paperwork as his prior criminal conviction would jeopardize the business's eligibility for a liquor licence. Because of this, Mr. Spence would provide signatures and put his name on any official documentation or paperwork for the business, including those related to the loan from Mr. Leeder. Mr. Leeder says he agreed to this. Mr. Beale denies this representation was made. He also denies that he was a silent partner in the business.
28Mr. Leeder says that Mr. Beale presented him with the "Declaration of Trust", the document Mr. Leeder says functioned as Mr. Beale's guarantee of the initial $100,000 loan he made to Mr. Spence. Mr. Beale, for his part, says Mr. Leeder presented this document to him. The plaintiff asserts that this document is identical to another document prepared for another private creditor to the business (the "Hick's loan"), and this shows that all documents were prepared by Wilson/Everly, contrary to the evidence of Mr. Beale. Regardless, the plaintiff asserts that he "believed he had meaningful security based on the aforementioned documentation, and especially, the personal guarantee offered in conjunction with the Declaration of Trust provided by Mr. Beale" (at para. 16 of the plaintiff's written submissions). Mr. Leeder said he understood this document to mean that Mr. and Ms. Beale were providing written guarantees that they would be responsible for the $100,000 he was advancing to Mr. Spence, and this was simply in furtherance of the commitment Mr. Beale had already made to guarantee the loan.
29For his part, Mr. Beale says he understood the Declaration of Trust to give the plaintiff the first right to all leases, chattels, licenses and stock from the business in the event that Mr. Spence defaulted on the loans provided to him by the plaintiff. He believed he was providing to Mr. Leeder priority of the loans with Mr. Spence and nothing more. Mr. Beale says he supported this because an infusion of money from Mr. Leeder would assist in getting the business up and running after the fire, which would have helped the business turn a profit and pay back the money Mr. Beale had loaned as well.
30There is a dispute as well about the agreement in the fall of 2009 between Mr. Leeder and Mr. Spence that a further $60,000 investment by Mr. Leeder would result in Mr. Leeder receiving a 1/3 ownership interest in the business. Mr. Leeder says this discussion involved an agreement with Mr. Spence alone, and it did not nullify Mr. Beale's guarantee of the original $100,000 loan. Mr. Beale maintains that it was his understanding that this agreement included a provision to discharge the earlier loans Mr. Leeder had made to the business, which amounted to about $140,000 by that time. Regardless, Mr. Leeder acknowledges that he did not undertake any "formal" due diligence relating to the business, and he did not know what assets the business owned in the fall of 2009. He did not turn his mind to various issues relating to the business and how it was structured.
31Everyone agrees there was a meeting between Mr. Leeder, Mr. Beale and Mr. Spence at the Park Street house in the fall of 2012. The accounts differ as to what occurred. The plaintiff says he told Mr. Spence and Mr. Beale that he had no choice but to initiate legal proceedings to recover the debt he was owed. The plaintiff says that both Mr. Beale and Mr. Spence begged him not to initiate proceedings to recover the loan money because this would undermine the action involving Mr. Spence and Sonny Clark. The plaintiff says he was told that success against Mr. Clark was certain, and this would mean his loans would be repaid. The plaintiff says the parties thus agreed that the plaintiff would forbear from bringing a claim against Mr. Beale and Mr. Spence until the Clark action was decided.
32Mr. Leeder says that during that meeting, he also told Mr. Beale and Mr. Spence that he felt like they had lied to him and committed a fraud. He told them he had learned that Mr. Beale had received $25,000 from Mr. Spence the same day Mr. Leeder had advanced his $100,000 loan. He says he knew this was a serious allegation, but he had not authorized this payment to Mr. Beale and the money was supposed to have gone into renovating the business premises. Even so, Mr. Leeder says he relied on the pleas of Mr. Spence and Mr. Beale to hold off suing them until the lawsuit played out. He says he did not want to "tip the scales against them" by suing while that action was ongoing.
33For their part, Mr. Beale and Mr. Spence maintain that at this meeting, they took the position that the money loaned by the plaintiff was no longer a debt to be repaid because Mr. Leeder had converted the loan into corporate shares in the fall of 2009.
34Mr. Beale denies asking the plaintiff to forbear enforcing the debt obligation and says this request was only made by Mr. Spence. He agreed that the possibility of the money being recovered from Sonny Clark was discussed at the meeting, and that it made sense for everyone to let that action play out.
The Admissibility of the Communications Between Mr. Leeder and Mr. Beale
The Communications
35The communications at issue were initiated by Mr. Leeder by text message. All the messages were exchanged on September 17, 2014. No lawyers were involved.
36The first message Mr. Leeder sent to Mr. Beale began in this way: "Without Prejudice. I hate it has come to this but I'm putting an end to our financial situation one way or another. Not getting a reply to the phone message I left you, I will make you one offer without sueing [sic] you and Trudy joint and severably". Mr. Leeder told Mr. Beale in that message that "I have and will spend the money for a solicitor and will go for the full $100,000 plus if you do not respond by August 22 with a favourable reply".
37Mr. Beale replied. He also began his message with "without prejudice". Then, he advanced his version of events leading to the dispute. He concluded "Again sorry Tony but if anything you should be putting that energy into getting Sonny Clark to pay for what he has done in the demise of everyone's investment in the Bar". There was no engagement with Mr. Leeder's offer to settle.
38The communications continued in a similar vein, and generally with the preface "without prejudice". Each man set out his version of events. Mr. Leeder also maintained he wanted to settle with Mr. Beale and Ms. Beale. He told Mr. Beale that he had assets and a pension which Mr. Leeder would be "forced to go after" and told Mr. Beale to protect himself. Mr. Leeder again gave Mr. Beale a deadline to respond to his offer. For his part, Mr. Beale continued to deny owing Mr. Leeder any money. He never engaged Mr. Leeder about his offer to settle.
39In his final communication to Mr. Beale, Mr. Leeder concluded by telling Mr. Beale, "The only way I can get a legal opinion and action is to proceed … I've given Brent all the time in the world and it is now up for everyone. … You can decide to go with him or me. I don't like this at all but I need a judgment against him to protect my assets".
40Mr. Beale did not respond after that.
The Legal Principles
41The importance of settlement privilege is well-established. As held in Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37 at para. 13, settlement negotiations have long been protected by the common law rule that "without prejudice" communications are inadmissible". The rule is "based on the understanding that parties will be more likely to settle if they have confidence from the outset that their negotiations will not be disclosed".
42As for the privilege's scope, as held in Union Carbide Canada Inc. v. Bombardier Inc., 2014 SCC 35, the privilege applies "even in the absence of statutory provisions or contract clauses with respect to confidentiality, and parties do not have to use the words "without prejudice" to invoke the privilege: "What matters instead is the intent of the parties to settle the action …. Any negotiations undertaken with this purpose are inadmissible" (Sable Offshore, at para. 14). [emphasis added] This will be so whether settlement is reached, or not, because "[s]uccessful negotiations are entitled to no less protection than ones that yield no settlement": Sable Offshore at paras. 15 and 17.
43Even so, there are exceptions to settlement privilege. Sable Offshore holds that "as with other class privileges, while there is a prima facie presumption of inadmissibility, exceptions will be found "when the justice of the case requires it": at para. 12. For instance, a communication that has led to a settlement will cease to be privileged if disclosing it is necessary in order to prove the existence or scope of the settlement. This makes sense because the exception serves the same purpose as the privilege itself: to promote settlements (see Union Carbide at paras. 34-35). Courts have also found that allegations of misrepresentation, fraud or undue influence, as well as preventing a plaintiff from being overcompensated, are countervailing interests that outweigh the public interest in encouraging settlement: Sable Offshore at para. 19. In any event, a "proper analysis of a claim for an exception to settlement privilege" asks "whether the reason for disclosure outweighs the policy in favour of promoting settlement": Sable Offshore at para. 30 [emphasis in original].
44R. v. Delchev, 2015 ONCA 381, has given further direction about when an exception to the privilege may be justified. In that case, Tulloch J.A. (as he then was) recognized the importance of the privilege because "parties would be reluctant to engage in settlement discussions if those discussions could be admitted at trial as evidence of concessions": para. 31. He also noted that Sable Offshore held that exceptions to settlement privilege will be found when the justice of the case requires it: Delchev at para. 28. Justice Tulloch wrote at para. 31: "The exceptions to this general privilege are justified where evidence of the settlement or negotiations is intended for use other than illustrating the weaknesses of one party's case: [citations omitted] If a party is not seeking to admit the settlement offer or negotiations as evidence of a concession, an exception to settlement privilege would do little to detract from the "public interest in encouraging settlement"." [emphasis added]
45As for what communications will be considered to fall within settlement privilege, this too is the subject of settled law. In order to foster the public policy favouring the settlement of litigation, the law will protect from disclosure communications made where: 1) there is a litigious dispute in existence or within contemplation; 2) the communication has been made "with the express or implied intention it would not be disclosed in a legal proceeding in the event negotiations failed"; and 3) the purpose of the communication is to attempt to effect a settlement: Hollinger Inc. (Re), 2011 ONCA 579 at para. 20; Sopinka, Lederman and Bryant, The Law of Evidence in Canada (Lexis Nexis/Butterworths, Toronto and Vancouver, 1999) at p. 810; Modine Manufacturing Company v. The Rose Corporation at paras. 20-22.
46In this case, it is the third factor that is at issue – whether or not the communications were made in an attempt to effect settlement. On this point, courts have accepted the direction from the Court of Appeal for Alberta in Bellatrix Exploration Ltd. v. Penn West Petroleum Ltd., 2013 ABCA 10, at para. 24, that "communications covered by settlement privilege require at least a hint of potential compromise or negotiation": see for instance Paul Boone v. Dr. Kevin O'Kelly et al., 2020 ONSC 5192 at paras. 20-21; Abdul-Ahad v. Challa, 2021 BCSC 795 at paras. 41-48.
The Positions of the Parties
47The plaintiff submits that the communications are inadmissible on the basis of settlement privilege, and, as they are not subject to any exceptions that might make them admissible, they should not be admitted at trial in support of the defendant's limitation period defence.
48The plaintiff submits in his written argument at para. 45 that "a litigious dispute was well within contemplation of both the Plaintiff and Mr. Beale when 2014 [sic] when the Communications were exchanged". He submits that the parties never intended for the communications to be disclosed, though he accepts that the use of the phrase "without prejudice" is not conclusive of the issue. The plaintiff further argues that he participated in the communications to try to negotiate a settlement with Mr. Beale. While Mr. Beale implicitly rejected the offer, and the communications were unsuccessful even after the plaintiff put forward his offer a second time, they were an attempt at settlement. The plaintiff notes that in his evidence at trial, Mr. Beale said he understood the communications in general to be negotiations between himself and the plaintiff.
49The defendant argues that no settlement privilege attaches to the communications because they were not a genuine attempt at negotiation. Mr. Beale asserts in his written argument that "it is apparent from the correspondence in question that the only reference of what may be argued to be a settlement involved a unilateral offer by the Plaintiff and a subsequent threat of litigation with which the Defendant makes not effort to engage. This is the very definition of a unilateral offer". Further, the defendant asserts that if a litigious dispute was in existence or within contemplation of the plaintiff at the time the communications were sent, then the claim, which was not issued within 2 years of the communications, is barred from proceeding under the Limitations Act. Mr. Beale effectively submits that the plaintiff ought not to be able to use settlement privilege as a shield against his defence under the Limitations Act.
Analysis
50As I have said, I have determined that the communications are admissible. This is for two reasons.
51First, I am not satisfied that the communications were made in an attempt to effect settlement. As I have reviewed, the language of the jurisprudence focuses on the protection of negotiations: see Sable Offshore at paras. 14, 15 and 17. I have difficulty finding that the communication between Mr. Leeder and Mr. Beale can be characterized as a genuine negotiation to settle the matter. While there was an offer made by Mr. Leeder, it was unilaterally made and not the subject of any discussion. There was no hint of a genuine attempt at negotiation of the offer itself. Instead, for the most part, there was posturing by each man about their version of the history of the dispute.
52Second, even if the messages can be characterized as communications attempting to effect settlement, because the messages are being tendered for a use other than illustrating the weakness of the plaintiff's case on its merits, they may be admitted as an exception to the general rule applying to settlement privilege: Delchev at para. 31. Here, the communications are being tendered to show that the plaintiff made a demand for performance of an obligation and that the Limitations Act therefore applies. The communications are not being tendered to illustrate the weakness of the plaintiff's case. In effect, the communications are being tendered for the fact that they were said, and when, so that the application of the Limitations Act may be considered on a fulsome evidentiary record.
53If these communications qualify as settlement negotiations, I find that the reason for disclosure and admissibility of the communications outweighs the policy in favour of promoting settlement: Sable Offshore at para. 30. More specifically, I find that there is a countervailing public interest in ensuring that the application of the Limitations Act is not undermined by a prohibition on adducing settlement communications, and that in the circumstances of this case, this outweighs the public interest in promoting settlement. The communications are admissible as an exception to the general rule applying to settlement privilege.
54In arriving at this conclusion, I have considered the importance of the privilege and the potential that the exception permitted in this case might have a chilling effect. However, I am satisfied that there can be no chilling effect where the use of settlement communications is to establish facts relevant to the application of the Limitations Act. To permit a party to shield communications in these circumstances would be contrary to the interests of justice. This is a narrow exception that flows from a commonsense position. It is difficult to see how it might produce a chilling effect.
The Application of the Limitations Act
The Law
55Sections 4 and 5 of the Limitations Act read as follows:
Basic limitation period
4 Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.
Discovery
5 (1) 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).
Presumption
(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.
Demand obligations
(3) For the purposes of subclause (1) (a) (i), the day on which injury, loss or damage occurs in relation to a demand obligation is the first day on which there is a failure to perform the obligation, once a demand for the performance is made.
56Section 13 of the Act provides:
Acknowledgments
13 (1) If a person acknowledges liability in respect of a claim for payment of a liquidated sum, the recovery of personal property, the enforcement of a charge on personal property or relief from enforcement of a charge on personal property, the act or omission on which the claim is based shall be deemed to have taken place on the day on which the acknowledgment was made.
The Positions of the Parties
57The defendant argues that the plaintiff's action is statute-barred under ss. 4 and 5 of the Limitations Act. He argues that s. 5(3) of the Act was triggered in September of 2014 when Mr. Leeder made a demand for payment from Mr. Beale in writing. Since Mr. Beale failed to perform that obligation immediately, as his position was that the demand was not warranted and he made no further payment, this triggered the commencement of the limitation period. The defendant submits that Mr. Leeder's own evidence establishes that he did not communicate in any substantive manner with Mr. Beale from September 2014 forward and yet he did not commence the litigation until April 2017. The defendant says that on the plaintiff's own evidence, he is out of time on this action.
58The plaintiff, for his part, relies on ss. 5 and 13 of the Limitations Act and argues that the doctrines of promissory estoppel and forbearance apply, such that his action is not statute-barred. Amongst other things, he argues that given the defendant's credibility issues, his self-serving denials that he asked the plaintiff to wait until the action between Mr. Spence and Mr. Clark concluded do not rise to a level sufficient to dislodge the belief by the plaintiff of the need for forbearance. The plaintiff says the limitations clock only started running once he learned that the lawsuit between Mr. Spence and Mr. Clark had been dismissed in November of 2015, and that it was not appropriate for him to commence litigation before then.
Analysis
59The facts relating to this issue are relatively straightforward. Mr. Leeder agreed in his evidence at trial that there was no time other than in the Park Street meeting in 2012 that Mr. Beale asked him not to sue and to wait for the action between Mr. Spence and Mr. Clark to play out. Whether or not Mr. Beale actually made that entreaty need not be resolved, because in any event, there is no suggestion that the request for forbearance was made at any time later than that.
60It is also clear from Mr. Leeder's language in the text communications in September of 2014 with Mr. Beale that Mr. Leeder had determined that he had waited long enough by that point. He was no longer acting on any request made of him to not take Mr. Beale to court. He was expressly telling Mr. Beale that he would sue unless Mr. Beale accepted his offer by a certain date. I agree with the defendant that this communication constituted a demand for payment and that it triggered the limitation period. Mr. Leeder should have brought his lawsuit within two years of that communication, but he did not.
61In the circumstances, I am satisfied that the action is statute barred.
62To be clear, I reject the plaintiff's argument that he did not discover the cause of action until November 2015, when he learned that the lawsuit was dismissed. As I have said, the language in his text communications shows that he was no longer waiting for the lawsuit to be dismissed.
63I also reject the argument that a lawsuit against Mr. Beale any earlier than that was not appropriate pursuant to s. 5(1)(a)(iv) of the Act, as argued by the plaintiff. By the time of the texts in 2014, Mr. Leeder had come to the conclusion (two years earlier) that Mr. Beale and Mr. Spence were defrauding him. He had confronted them with his concerns about being repaid for his loans during the Park Street meeting in 2012, where he also accused them of defrauding him. Whatever the status of the action involving Mr. Spence, it was appropriate by September of 2014 for Mr. Leeder to initiate a proceeding to pursue his claim against Mr. Beale. Mr. Beale was not a party to the litigation between Mr. Spence and Mr. Clark, and as Mr. Leeder said in his text communications, Mr. Beale had assets to satisfy a judgment that Mr. Spence did not have. I see no reason why it would have been inappropriate to launch proceedings against Mr. Beale in 2014, as Mr. Leeder said he intended to do in his text communications.
64As for the applicability of s. 13 of the Act, the plaintiff argues that the debt was acknowledged repeatedly by the defendants in writing and through partial payments, and that Mr. Spence acted as Mr. Beale's agent. For the reasons set out below, I reject the argument that Mr. Spence signed documents as Mr. Beale's agent. In any case, the last loan advanced to the business was in 2012, and Mr. Leeder made clear his intention to sue in 2014. I fail to see how s. 13 of the Act preserves the limitation period for this lawsuit to April of 2017.
65Nor am I satisfied that the doctrine of promissory estoppel is an answer to the defendant's limitation defence in this case. Whatever promises were or were not made, and regardless of who might have made them, Mr. Leeder's text communications make it clear that he had stopped relying on them by September of 2014. There is no basis in the evidence to conclude that Mr. Beale promised repayment through the action with Mr. Clark after that point in time. Mr. Leeder, in his own evidence at trial, does not suggest otherwise. The doctrine of promissory estoppel does not assist the plaintiff.
The Merits of the Plaintiff's Claim
66As for the merits of the claim, the evidence is not sufficiently cogent or compelling to support the findings sought by the plaintiff.
67First, the credibility issues in this case are significant, and they muddy the resulting factual landscape. I will address some of them in turn.
The Evidence of Trudi Beale
68Mr. Leeder called Ms. Beale in support of his case. By the time she testified, Ms. Beale had been discharged from the litigation. She had also been separated from Mr. Beale for some time. She testified that he had been abusive and manipulative towards her, as well as financially controlling.
69While I have no way of assessing whether Ms. Beale's allegations against Mr. Beale are founded, I can say that Ms. Beale had significant and clear animosity for Mr. Beale at the time that she testified. She said (candidly) that she hated him. In contrast, she testified that she and Mr. Leeder were friends and that she would always care about him. When Ms. Beale was asked if she was told that if she would support him in his trial, Mr. Leeder would release her, Ms. Beale said she would have "done it anyway". Given the content of her testimony, and the manner in which she gave it, I find that Ms. Beale is a witness who has reason to favour one party over the other. Considering her evidence as a whole, including the contradictions I outline below, I find she demonstrated bias in favour of Mr. Leeder. This is a reason to be cautious about her credibility.
70More fatal to Ms. Beale's credibility is the fact that she gave completely contradictory accounts of various issues than had been pleaded in her statement of defence or described in her affidavit. She gave no indication in her statement of defence that Mr. Beale was liable for any of the conduct alleged but said at trial that Mr. Beale told her that he owed Mr. Leeder money. This statement was also not contained in her affidavit. Further, in an email in 2017 to Mr. Beale she said she didn't know what deal Mr. Leeder was talking about in his statement of claim, contrary to her evidence at trial. Nor does her affidavit reflect her trial evidence that Mr. Beale told her he was a 50/50 partner with Mr. Spence. I have grave concerns about relying on anything Ms. Beale has to say about her knowledge of these events in the circumstances and give her evidence no weight on these points.
71In any case, Ms. Beale denied having any direct evidence about any discussions between Mr. Beale and Mr. Spence, or between Mr. Beale and Mr. Leeder. And, she said that Mr. Beale did not tell her the Declaration of Trust, which she says she signed under duress, was a guarantee of a loan. Her evidence is of little assistance on any of the critical issues.
The Evidence of Brent Spence
72Mr. Spence was called by Mr. Beale. He testified that Mr. Beale was not a silent partner in the business and gave other evidence that accords with Mr. Beale's account, including that his $25,000 payment to Mr. Beale was made before Mr. Leeder's involvement.
73For the reasons advanced by the plaintiff, I find Mr. Spence is not credible. Quite apart from his disregard for the court process in the litigation of this action (he failed to comply with orders of the court), Mr. Spence's conduct is problematic to his credibility for other reasons. For instance, while he failed to respond to Mr. Leeder's statement of claim, Mr. Spence attended to testify at trial with a folder full of documents that had never been disclosed. One of the documents purported to be notes Mr. Spence took after the meeting at Park Street. Mr. Spence agreed he did not produce these documents at the time he prepared his affidavit for trial with the defendant's counsel, even though he could have produced them at that time. I find this highly suspect. I give Mr. Spence's evidence no weight.
74Given these conclusions, I look to the evidence of Mr. Leeder, Mr. Beale, and the documentary evidence, to decide the issues.
75Unfortunately for Mr. Leeder, there is no cogent body of evidence to support his account. While his theory of the case is possible, it is not supported by the evidence to such a degree that I can conclude that he has proved his case on a balance of probabilities.
76There is no cogent documentation of any guarantee by Mr. Beale of the $100,000 loan. While such documentation does exist for the loans advanced to Mr. Spence (including the $100,000 at issue with Mr. Beale), the only document that purports to document Mr. Beale's guarantee is the Declaration of Trust.
77The Declaration of Trust reads as follows: "This declaration of trust is made by Tim and Trudy Beale (the "Trustee") in favor of Tony Leeder for the sum of $100,000 (the "Beneficiary"). The Trustee solemnly declares that he holds 1185 California Units 6 Threw [sic] 10 Lease, Chattels, Licences, and Stock (the "Property") in trust solely for the benefit of the Beneficiary. The Trustee further promises the Beneficiary: a) not to deal with the Property in any way, except to transfer it to the Beneficiary, without the instructions and consent of the Beneficiary; and, b) to account to the Beneficiary for any money received by the Trustee, other than from Beneficiary, in connection with holding the Property". It was signed by Mr. Leeder, Mr. Beale and Ms. Beale on June 3, 2008.
78This document makes little sense. On its face, it does refer to the amount of the loan Mr. Leeder says Mr. Beale guaranteed. However, its express language offers no guarantee for the $100,000 loan made to Mr. Spence. At the same time, that loan was the subject of a promissory note in favour of Mr. Leeder from Mr. Spence. While it makes little sense that Mr. Beale was holding assets he says he didn't own in trust, and this does suggest Mr. Beale did have some greater involvement with the business than he admits now, the document falls far short of demonstrating an intention to guarantee the $100,000 loan Mr. Leeder made to Mr. Spence. The evidence about the Declaration of Trust, including how it came to be prepared, is convoluted. While it raises suspicions, it does not sufficiently support the finding sought by the plaintiff.
79As for the evidence of the parties about the loan, it is contradictory. After considering their evidence, alongside the documentary evidence, I am unable to conclude on the balance of probabilities that Mr. Beale promised to guarantee the loan. While this could have happened in the way Mr. Leeder says it did, I am not sufficiently sure that it did. It makes little sense that Mr. Leeder would have loaned money at a 24% interest rate and also secured a guarantee from Mr. Beale that effectively insulated him from any risk in making this loan. A guaranteed loan that also had a 24% interest rate was surely too good to be true.
80And, as suggested by counsel in cross-examination of Mr. Leeder, if Mr. Leeder believed the Declaration of Trust functioned as a loan guarantee, and that Mr. Beale was responsible for all loans Mr. Leeder made to the business because Mr. Beale was a silent partner, it would have made sense to update the Declaration of Trust as Mr. Leeder loaned more and more money to the business. Yet, he did not do so.
81In the end, Mr. Leeder acknowledged he did not do his due diligence at various points in his involvement in this failed business. He says he trusted Mr. Beale, and he agreed to arrangements that would see Mr. Beale removed from any formal documentation for the business. The difficulty, now that the case is in a court of law, is that the lack of any documentation tying Mr. Beale to the business, or any loans made by Mr. Leeder, is as consistent with Mr. Beale not being a silent partner as it is with Mr. Leeder's account that he was.
82The evidence is clear that Mr. Beale was not a signatory to any of the purported loan documentation or agreements between Mr. Leeder and Mr. Spence, including the agreement in the fall of 2009 where the original $100k is referred to in the statement that "debts of $140k to be dissolved at later date". It is curious that having ensured that he documented his dealings with Mr. Spence to this extent, Mr. Leeder did not also secure clear documentation of an agreement he says he had with Mr. Beale, notwithstanding the concerns about the impact of Mr. Beale's criminal record.
83I have considered that Mr. Beale was clearly very involved in this enterprise, as is evident by his attendance at the Park Street meeting. And, as does Mr. Leeder, Mr. Beale has an interest in presenting a certain version of events to the court which may or may not be true. While the evidence discloses a basis to be suspicious that Mr. Beale was more involved in the business than he says he was, I find it does not safely permit the conclusion that he was a silent partner, even on a balance of probabilities.
84Further, as regards to the payment by Mr. Spence to Mr. Beale of $25,000, Mr. Beale says this occurred before Mr. Leeder became involved as an investor in the business, and that he received these funds in cash from Mr. Spence. The only documentation of this event in the evidence before me is a note made by Mr. Leeder in an undated ledger he drafted. Quite apart from the lack of detail about the entry in the note, this is not independent or cogent evidence. Mr. Leeder's assertion that the payment was made from the funds he loaned to Mr. Spence is just that – an assertion. While Mr. Beale's evidence is not corroborated in any way, and is arguably convenient, I am nevertheless unable to find that one party's account is more compelling than the other's. I decline to find that Mr. Beale received a payment from the funds loaned by Mr. Leeder to Mr. Spence and that this constituted a fraud on Mr. Leeder.
Conclusion
85For these reasons, I would deny the plaintiff's claim on its merits. Consequently, the action is dismissed.
86In the event the parties are unable to come to an agreement on the issue of costs, I will accept cost submissions – not to exceed 3 pages plus any offers to settle – in accordance with the following schedule: Mr. Beale shall serve and file cost submissions on or before November 7th, 2025; Mr. Leeder shall serve and file responding submissions on or before November 21st, 2025; reply submissions, if any, shall be served and filed on or before November 28th, 2025, after this time, the issue of costs will be determined based on the material filed.
Honourable Madam Justice Laurie Lacelle
Released: October 15, 2025