COURT OF APPEAL FOR ONTARIO

CITATION: Middleton Estate v. Middleton, 2020 ONCA 552

DATE: 20200904

DOCKET: C65585

Feldman, van Rensburg and Thorburn JJ.A.

IN THE MATTER OF THE ESTATE OF EVA ROSEMARY MIDDLETON, deceased

BETWEEN:

Julia Gurr Lacasse,

in her capacity as Estate Trustee of the Estate of Eva Rosemary Middleton

Applicant (Respondent)

and

Linda Middleton

Respondent (Appellant)

Robert J. Reynolds, for the appellant

Charles Hammond and Jennifer Ng, for the respondent

Heard: June 16, 2020 by video conference

On appeal from the judgment of Justice Patrick Hurley of the Superior Court of Justice, dated June 4, 2018, with reasons reported at 2018 ONSC 3461, 38 E.T.R. (4th) 215.

REASONS FOR DECISION

A. INTRODUCTION

[1] The issue on this appeal is whether the trial judge made any reversible error in arriving at his conclusion that the first of two promissory notes reflected the true intention of the deceased, Eva Middleton: the first note provides that a loan to her daughter, the appellant, Linda Middleton, was repayable on her death, while the second provides that the loan be forgiven on death.

[2] The appellant claims the trial judge erred by:

a) rejecting the evidence of Joyce Willard, a friend of the appellant and Eva Middleton who witnessed the signing of the notes; and

b) finding that the December 12, 2014 email purportedly sent by Eva Middleton to the appellant was never in fact sent.

[3] For the reasons that follow, we dismiss the appeal. There was no reversible error in the trial judge’s conclusion that the first promissory note reflected the intention of Eva Middleton with respect to the loan, and that monies advanced to the appellant, Linda Middleton, were repayable to the estate.

B. FACTS

[4] Eva Middleton died on June 5, 2015. The office of her lawyer, Ken Menlove, provided the estate trustee (the respondent, who is her great-niece) with her will and a promissory note dated July 16, 2014 (“the first promissory note”). The promissory note was for the sum of $142,000 and is in relation to a loan that Eva Middleton advanced to her daughter, the appellant, after the note was signed.

[5] The appellant provided the estate trustee with a second promissory note dated July 22, 2014, which she said she found at Eva Middleton’s condominium, and which provided that the loan would be forgiven upon Eva Middleton’s death (“the second promissory note”). The appellant told the estate trustee that this reflected the true agreement between herself and her mother. She later also provided a copy of an email from her mother, dated December 12, 2014, that stated that the loan was “cleared upon [her] death”.

[6] The estate trustee brought an application seeking the opinion of the court as to which of the two promissory notes was valid and enforceable. The application was directed to proceed to trial.

[7] There were six witnesses. The appellant testified about how the two promissory notes came about. It was her evidence that the purpose of the loan from her mother was to assist in her purchase of the interest of her former spouse in their cottage property. She thought the advance would be a gift. However, when Eva Middleton came to visit the appellant in Picton from her home in Georgetown in July 2014, and before the money was advanced, Eva Middleton brought with her a draft promissory note prepared by her Picton lawyer, Jacob Walinga. The note provided for monthly payments of $600, with the first payment due August 20, 2014 and no interest until maturity (the earlier of July 20, 2019 or the date of the sale of the cottage property).

[8] The appellant testified that after she and her mother discussed the terms, she revised the draft promissory note to add “the mortgage will be forgiven upon the death of the Lender, providing it is in good standing at the time of death", and deleting the maturity date of the loan. She sent the revised draft to Mr. Walinga by fax, noting that her mother would call him that afternoon for his approval before signing the note. After Eva Middleton discussed the matter further with Mr. Walinga, the appellant further revised the draft, removing the provision for forgiveness of the loan upon her mother’s death. She faxed this version to Mr. Walinga, as well as another draft that included the words “and shall run for a term of five years”. Ultimately the appellant revised the draft promissory note to add that the note “may be re-negotiated under any Mutually Agreeable Terms”. The appellant said she understood from the conversation between her mother and Mr. Walinga that forgiveness of the note would be included in Eva Middleton’s will. It was on this basis that the appellant signed the first promissory note, with Joyce Willard as witness. Eva Middleton had met Ms. Willard through the appellant and asked her to witness the note. The appellant gave the signed promissory note to her mother before Eva Middleton returned to her home in Georgetown.

[9] The appellant testified that her mother subsequently called and told her she was afraid of her sister’s reaction if the forgiveness of the loan was in her will, and instead she had decided to include it in the promissory note. Accordingly, the appellant prepared the second promissory note (which was the same as the note she had first faxed to Mr. Walinga). Her mother called Ms. Willard, and again asked her to witness the appellant’s signature. The appellant signed the second promissory note on July 22, 2014, witnessed by Ms. Willard, and she testified that she gave it to her mother in Georgetown on September 9, 2014.

[10] In October 2014, Eva Middleton moved to a condominium she had purchased in Picton. The appellant and her daughter provided care and companionship to Eva Middleton. Two months before her death, Eva Middleton signed a codicil to her will leaving her condominium and its contents to the appellant, as well as a document providing that a loan to her granddaughter would be considered paid in full upon her death. Neither of these transactions was challenged by the estate trustee.

[11] The appellant relied on two pieces of evidence as corroborative of her evidence that the second promissory note reflected her mother’s true intention: a paper copy of an email dated December 12, 2014, after Eva Middleton had received her terminal diagnosis, in which Eva Middleton confirmed to the appellant that the loan would be forgiven on her death; and the affidavit evidence of Ms. Willard, that, before she witnessed the first promissory note, Eva Middleton told her that she was trying to figure out how to keep her personal wishes out of her will and that there might be a second note (the inference being that the second note achieved her stated purpose).

[12] Ms. Willard also testified at trial. Ms. Willard did not read the contents of either promissory note. She knew the first signing was of a promissory note but was not privy to the details. She swore that:

Eva told me that she and her lawyer had also prepared another Promissory Note as she was trying to figure out how to leave her personal wishes out of her Will. She said that I may be asked to witness the other version once she had thought it all through.

Eva called me about a week later to ask me to witness the replacement Note that she mentioned and I did so.

[13] Ms. Willard testified that Eva Middleton told her there might be a second note, she wanted to “think everything through” but there was no discussion about gifts to children.

[14] Jacob Walinga testified about the promissory note he had prepared and his advice to Eva Middleton. Referring to notes he made on July 15, 2014, he testified about the fax he had received from the appellant attaching a revised draft, and his conversation with Eva Middleton, where she indicated that she had not agreed to the change and wanted it out. He testified that this was the only time the issue arose, and at no point did Eva Middleton indicate to him that she wished to forgive the loan upon her death. He said that after he had received the revised note from the appellant with the reference to forgiveness of the loan removed, he was concerned that it still did not contain the maturity date of July 20, 2019 and he left a message on Eva Middleton’s telephone suggesting she should use the promissory note he had drafted. He confirmed this advice by letter. Mr. Walinga said there was no discussion with Eva Middleton about wanting to forgive the loan in a promissory note or about including forgiveness of the loan in her will.

[15] Eva Middleton’s lawyer in Picton, Mr. Menlove, testified that he met with Eva Middleton in December 2014 when she needed a local lawyer who could assist with her estate. She brought with her a will prepared by Mr. Walinga in September 2014 and the first promissory note. Mr. Menlove stated that it was his understanding from their discussion that Eva Middleton had loaned her daughter, the appellant, money and that this was a debt to be repaid upon her death. He confirmed that there was no discussion about any other terms or any paperwork other than the note itself.

[16] Eva Middleton’s grandson, Charles Simpson, testified that he had purchased his grandmother's iPad and helped her set up email on that device. He produced copies of a number of emails he had received from his grandmother and noted that her emails to him usually concluded with the words “Sent from my iPad” but that the December 12, 2014 email had no such wording.

[17] The estate trustee testified about the timing of her receipt of the promissory notes and the December 12, 2014 email, and she confirmed that the estate had not challenged the codicil and forgiveness of the mortgage in favour of the appellant’s daughter.

C. the TRIAL Judge’s REASONS

[18] The trial judge concluded that only the first promissory note was valid and enforceable. He relied on the testimony of the two lawyers, which he found to be credible and reliable, to find that Eva Middleton never changed her mind about forgiving the loan, did not receive the second promissory note, and did not send the December 12, 2014 email to the appellant. He reasoned that:

Mr. Walinga's testimony, which I have no hesitation in accepting, is that he did not prepare a second promissory note because Eva was "trying to figure out how to leave her personal wishes out of her Will" as Ms. Willard deposed in her affidavit sworn June 2, 2016. Mr. Walinga struck me as a careful solicitor and he prepared comprehensive notes of his discussion with Eva on July 15, 2014. If there had been a second promissory note prepared by him for the purpose described by Ms. Willard, he would have said so during his testimony and also recorded that in his notes.

There may have been a conversation between Eva and Ms. Willard about a second promissory note because of Mr. Walinga's advice to Eva in his telephone message of July 15 and his reporting letter of July 22, 2014 that he was concerned about the potential confusion with respect to the maturity date and that the original promissory note which he had prepared should be used in order to clear up this issue. This would explain why Eva might have spoken to Ms. Willard about another promissory note.

Given that Mr. Walinga was her long time solicitor, her consultations with him in June and July about the promissory note and her execution of a new Will on September 2, 2014, it is passing strange that Eva withheld from him that she had changed her mind and a new promissory note had been prepared and signed by Linda.

The most compelling evidence that Eva did not change her mind and that Linda did not give her promissory note 2 was the testimony of Mr. Menlove. Eva gave him promissory note 1 with her Will. Any argument that she could have been confused over the promissory notes and forgot that she had received a second note which superseded the first one founders on Mr. Menlove’s evidence that, at their meeting in December 2014, she confirmed that the loan remained payable on her death.

I consider Mr. Menlove's testimony both credible and reliable. Eva was an elderly client he did not know well, who met with him to discuss important legal documents prepared by another lawyer. He did what any competent lawyer would do in the circumstances - talk to his new client about their contents and ask if her wishes remained the same.

There are circumstantial guarantees of trustworthiness; the primary ones are the contemporaneous notes made by Mr. Walinga and the fact that the documents were given to Mr. Menlove for safekeeping [Citations omitted].

[19] The trial judge rejected the appellant’s account of the circumstances surrounding the signing of the promissory notes. He rejected the evidence that she relied on as confirmatory. Although he accepted that Ms. Willard had witnessed the signing of the two promissory notes, he concluded that she had been mistaken about the conversations she claimed she had with Eva Middleton about the notes. He also found that Eva Middleton did not know Ms. Willard well at the time, so it was improbable that she would have discussed such a private matter in detail with Ms. Willard. He also noted that Mr. Walinga testified that there were changes to the promissory note: changes respecting the payment of interest on the loan, that had nothing to do with forgiveness of the loan.

[20] As for the December 12, 2014 email, the trial judge did not accept that Eva Middleton had sent it. He gave a number of reasons for this conclusion, including that the email was unnecessary if both knew about the existence of the second promissory note; the email is dated nine days after Eva Middleton met with Mr. Menlove and told him that the promissory note would form part of her estate; the email was not included with the appellant’s affidavit in response to the application; and that the email would likely have stated that it came from Eva Middleton’s iPad if she had composed it.

D. THE ISSUES ON APPEAL

[21] The appellant claims the trial judge erred in his assessment of the evidence that corroborated her account of Eva Middleton’s intentions and in particular, (1) in rejecting Ms. Willard’s evidence about what Eva Middleton said in respect of the second promissory note, and (2) in his assessment of the evidence about the December 12, 2014 email, leading to his conclusion that Eva Middleton did not send the email. The appellant submits that these errors were central to the trial judge’s reasoning and conclusion that only the first promissory note was valid and enforceable. As such, the judgment must be set aside and a new trial ordered.

[22] In support of her second argument, the appellant seeks to introduce fresh evidence on appeal. The fresh evidence consists of affidavits of the appellant, her trial counsel, and her daughter to contradict certain evidence at trial concerning the December 12, 2014 email. The appellant says that, once the fresh evidence is admitted, her evidence concerning the email ought to be accepted.

E. ANALYSIS

(1) The Trial Judge’s Treatment of Ms. Willard’s Evidence

[23] The appellant asserts that the trial judge erred in his treatment of the evidence of Joyce Willard that would have supported her version of the events, in particular that the second promissory note was signed after her mother had decided that the note would be forgiven upon her death.

[24] To be clear, Ms. Willard witnessed the signing of both promissory notes at Eva Middleton’s request but she did not read either of them. Nor did she have any discussions with Eva Middleton about gifts to her children. The only relevance of Ms. Willard’s evidence is to address the issue of what Eva Middleton believed the second note said and any conversation she may have had with Ms. Willard about why there was a second note.

[25] However, even if the trial judge had accepted Ms. Willard’s evidence, there was nothing Eva Middleton said to Ms. Willard that indicated that Eva Middleton intended to forgive the loan on her death or that the new note contained such a provision. Nor could what she said have overcome the direct evidence of Eva Middleton’s intention. That evidence was Eva Middleton’s subsequent actions in delivering her will and the first note to the lawyer who would handle her estate, and confirming her intentions to him.

[26] We see no reversible error in the trial judge’s conclusions on this issue. The credibility and reliability of the evidence of the witnesses is the province of the trial judge to which this court owes deference.

(2) The December 12, 2014 Email

[27] The appellant proposes to introduce fresh evidence to prove that one of the emails that Charles Simpson produced to compare with the December 12, 2014 email – an email addressed to him and dated December 17, 2014 - could not have been sent by Eva Middleton from her iPad that day and must have been falsified by Charles Simpson. According to the appellant, the proposed fresh evidence confirms that Eva Middleton was in the hospital on the date the email was sent, and suggests that she did not have her iPad with her.

[28] The appellant contends that this evidence is important, because it means that evidence the trial judge relied on to conclude that Eva Middleton did not send the December 12, 2014 email to her was itself falsified. She asserts that it was only when she was going through her mother’s papers that she realized that Eva Middleton had been in the hospital at the time of the December 17, 2014 email. The appellant contends that it had never occurred to her during the trial that Charles Simpson might have been making things up.

[29] This evidence does not meet the requirements for admitting fresh evidence on appeal as set out in Sengmueller v. Sengmueller (1994), 1994 CanLII 8711 (ON CA), 17 O.R. (3d) 208 (C.A.), at pp. 210-11. The appellant knew before the hearing commenced that Charles Simpson would be testifying about Eva Middleton’s emails. Indeed, she was provided with copies of the emails that Charles Simpson had exchanged with his grandmother and advised that the emails would be tendered to demonstrate that the December 12, 2014 email was fabricated by the appellant. The appellant was asked whether she wished to proceed in the face of this new allegation, and she agreed to proceed without an adjournment.

[30] The fact that Eva Middleton was in the hospital on December 17, 2014 is information that was available to the appellant before and at the trial – Eva Middleton was staying at her home, and the appellant testified that her mother was very sick, and went to the hospital the day after the December 12, 2014 email. Indeed, the evidence at trial was that Eva Middleton was in and out of the hospital for the month of December. The appellant and her counsel had the opportunity to question the authenticity of the emails tendered by Charles Simpson at the trial. The fact that they may not have turned their minds to the issue they now raise does not justify the admission of the proposed fresh evidence.

[31] In any event, the admission of the proposed fresh evidence would not have changed the outcome of the trial. Even had the trial judge accepted the December 12, 2014 email as a genuine message from Eva Middleton to the appellant, there could have been many explanations for it in the context of her illness. As with Ms. Willard’s evidence, sentiment expressed vaguely in an email could not displace the only direct evidence of Eva Middleton’s intention with respect to the loan and her estate, which was her delivery, just a couple of weeks earlier, of the first promissory note and her will to Mr. Menlove.

[32] Even if Eva Middleton had told the appellant that her intention was to forgive the loan on her death, based on the evidence that was available, the appellant was not able to prove that intention at trial in the face of her mother’s act of relying on the first note by giving it to her lawyer.

(3) The Trial Judge’s Assessment of Eva Middleton’s Intention

[33] In addition to the errors alleged above, the appellant contends that the trial judge erred in his assessment of the evidence, pointing to his failure to consider the possibility that Eva Middleton may have been confused or mistaken when she met with Mr. Menlove in December 2014, and that she may have given him the wrong instructions.

[34] Contrary to the appellant’s submission, the trial judge specifically addressed the appellant’s suggestion, in argument, that Eva Middleton simply “forgot that she had received a second note which superseded the first one”. Eva Middleton deposited the documents with Mr. Menlove for safekeeping so that her estate plan would be carried out. Mr. Menlove reviewed the contents of those documents with her and confirmed that her wishes remained the same. It was not suggested to Mr. Menlove that Eva Middleton had been confused when she met with him. Nor was there any other evidence at trial that would have supported this inference. The trial judge was entitled to conclude that Eva Middleton had accurately conveyed her wishes to Mr. Menlove when she brought the first promissory note and will to him and they met about her estate.

F. CONCLUSION

[35] For these reasons, the appeal is dismissed.

[36] In accordance with the parties’ agreement on costs, the respondent, as the successful party, is entitled to costs of $15,000 for the appeal and a further $10,000 for the fresh evidence motion. Both amounts are inclusive of disbursements and applicable taxes.

“K. Feldman J.A.”

“K. van Rensburg J.A.”

“J.A. Thorburn J.A.”