An Ontario court has ordered Elizabeth Leonard’s legal interest in a disputed camp property transferred to Clare Fluke after finding that a decades-old separation settlement had already resolved the ownership issue. Mortgage payments, the parties’ long-term conduct and substantial investment in the property persuaded the court that Leonard could not now reclaim the interest she had relinquished.
In Fluke v. Leonard, 2026 ONSC 5817, released October 14, Justice Pritchard of the Ontario Superior Court of Justice granted Fluke’s request for a vesting order and dismissed Leonard’s application for partition and sale. The Thessalon property was registered in their names as tenants in common when the applications were heard.
Leonard and Gary Fluke bought the vacant lot for $3,000 in 1975 and built a seasonal family camp. They separated in 1980 and divorced in 1984. Gary married Clare in 1985 and died in 2019. Clare became registered on title in 2020 through her rights under the Family Law Act.
Reconstructing the settlement
The central question was what Leonard and Gary had agreed to when settling the property issues from their marriage. Leonard maintained that no settlement had disposed of her camp interest. Clare argued that Leonard should have been removed from title following the separation and that the court should now give effect to that arrangement.
More than 40 years later, no final minutes of settlement remained in the record. The surviving settlement correspondence consisted of three letters sent by Leonard’s lawyer between 1980 and 1982. The judge considered them despite their apparent settlement privilege because they were needed to determine whether a settlement existed and what it covered.
The letters reflected changing proposals. The first sought Gary’s position on buying out Leonard’s camp interest. A later proposal contemplated relinquishing it for the children’s benefit. The July 1982 letter proposed exchanging the camp interest for the entire benefit of a mortgage arising from the sale of the former family home. The judge emphasized that these were offers, not agreements, and that the incomplete correspondence could not establish the settlement on its own.
Nor could the court simply choose one party’s recollection over the other’s. Clare had not personally participated in the original settlement, and the judge found inconsistencies in her accounts of what she understood had happened. Her evidence about the agreement was hearsay of questionable reliability.
The judge also identified significant contradictions in Leonard’s evidence. Among them, her affidavits described discussions about retaining title for the children’s benefit, while her cross-examination denied that those discussions had occurred. The court gave little weight to her account where it lacked supporting evidence and turned instead to the mortgage records and the parties’ conduct.
Mortgage benefits and decades of conduct
The former family home had been sold in 1980 with a $20,000 vendor-take-back mortgage payable to Leonard and Gary. Under that arrangement, part of the purchase price remained owing to the sellers. The full monthly payment was $224.27. Despite inconsistencies in Leonard’s testimony about the amount, her counsel ultimately admitted that she had received the entire monthly payments.
Leonard argued that receiving all the payments did not necessarily prove acceptance of the 1982 proposal: it could have resulted from an error. The judge rejected that explanation. Gary had arranged the mortgage, and the court considered it unlikely that he would go for two years or more without receiving payments he expected while property-settlement discussions were ongoing.
The discharge of the mortgage provided further support. Leonard received $7,500 when it was called in and discharged in 1985. The court accepted Clare’s evidence that Gary received no corresponding benefit and found that the payment accounted for the remaining principal. The mortgage benefits were evidence of the historical settlement, rather than damages awarded in the present case.
The judge also considered the properties’ historical values and the outstanding mortgage on the camp, which Gary took over. Those figures made the exchange a viable settlement option. Leonard’s confirmation that she received no support payments was also consistent with the 1982 proposal, which contemplated giving up support and the camp interest in return for the mortgage benefit.
The ensuing decades reinforced that conclusion. Leonard made no financial contributions to the camp and no demands for possession, compensation or sale. She did not seek occupation rent or object to Gary and Clare’s exclusive use. The court did not accept that this long-running allocation of use and expenses had simply arisen without an agreement.
Gary and Clare, meanwhile, treated the camp as their family home from 1992. They paid the taxes, utilities, mortgage and maintenance costs, and converted a seasonal property without running water into a year-round home with a well and septic system. The judge found that this substantial investment reflected their belief that the property belonged solely to Gary.
Reliance supported the transfer
The court applied proprietary estoppel, which addresses circumstances in which it would be inequitable to let someone withdraw a representation or assurance about property rights. As the judge described the test, there must be a representation intended to affect legal relations, reasonable reliance and a resulting detriment. Conduct, as well as express statements, can induce that reliance.
On the combined evidence, the judge found it more likely than not that Leonard had relinquished her camp interest around 1982 as part of the marriage-related property settlement. Gary and Clare reasonably relied on that relinquishment and made significant investments. Allowing Leonard to reverse her position now would be inequitable.
Leonard relied on tax bills and assessment notices that continued to name her, as well as an email Clare sent after Gary’s death acknowledging Leonard’s name on title. The judge accepted that Clare had not understood the title significance of the notices. The email reflected legal advice received at the time and Leonard’s asserted position, rather than Clare’s acceptance that Leonard remained the true beneficial owner.
The court also rejected the argument that Clare had waited too long to seek a vesting order. She believed Gary was the sole owner and did not learn the state of legal title until his death in 2019. Her own registration followed in 2020 under the Family Law Act.
Title vested; sale application dismissed
Section 100 of the Courts of Justice Act provided the remedy. The judge found that Clare had a legal entitlement through her Family Law Act interest, that Leonard was obliged to transfer the title interest she had previously relinquished, and that court intervention was necessary to complete the transfer. Leonard’s legal title was therefore vested in Clare, and the partition-and-sale application was dismissed.
The result depended on the court’s reconstruction of a particular settlement and the reliance that followed. The reasons do not establish that failing to pay property expenses, leaving a property unused or remaining silent for a set number of years automatically extinguishes a co-owner’s interest.
Costs remained unresolved. The judge encouraged an agreement; failing that, Clare had 15 days from release of the decision to submit her costs position, and Leonard had 15 days from receiving those submissions to respond. If no submissions were received within the prescribed timeframe, costs would be deemed settled between them.
