COURT FILE NO.: 5314-11F
DATE: 20121015
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
GEORGE JACK HILL
Lisa Belcourt, for the Applicant
Applicant
- and -
FREDERICK ROWLAND HUGH HILL personally and as Estate Trustee with a Will of the ESTATE OF MABEL JANE JOHANNA HILL, deceased, THE ESTATE OF GEORGE JOSEPH HILL, deceased, and THE PUBLIC GUARDIAN AND TRUSTEE
On his own behalf
Respondents
HEARD: September 20, 2012
D E C I S I O N
WILCOX, J.
[1] INTRODUCTION
[2] This matter involves the enforcement of an Agreement between the Applicant and the late Mabel Jane Johanna Hill. The Applicant alleged that he had fulfilled his end of the bargain and that, therefore, he is owed what is due to him pursuant to the Agreement. The Respondent Frederick Rowland Hugh Hill, acting for the deceased, disputed that. For the reasons that follow, the court finds in favour of the Applicant.
[3] OVERVIEW
[4] George Joseph Hill (George) and his wife, Mabel Jane Johanna Hill (Mabel) resided on the Hill family farm in Hilliard Township in the District of Temiskaming from 1956. They had four children, Trevor, Jennie Joanne Belkwell (Joanne), Frederick Rowland Hugh Hill (the Respondent, or Frederick Hill or Fred Hill) and George Jack Hill (the Applicant, or Jack, or Jack Hill). The Applicant remained on the farm with the parents. The other three siblings moved away. George died in 1997, apparently intestate. Mabel executed her will and codicil on April 14, 2000. The agreement between Mabel and the Applicant (the Agreement) that is central to this case was executed on May 31, 2001. Following a capacity assessment which indicated cognitive decline, she was moved from the farm in April, 2010 to the Respondent’s home in Cambridge, Ontario and then into a nursing home. She executed a Power of Attorney for Property on May 22, 2010 appointing the Respondent and his sister Joanne as attorneys. Joanne soon resigned, leaving the Respondent as the sole attorney. Mabel was discharged from the nursing home in March, 2011 to live with the Respondent and they moved back to the Temiskaming District. Mabel was admitted to the Temiskaming Hospital where she died on May 10, 2011. The Respondent subsequently obtained a Certificate of Appointment of Estate Trustee with a will for Mabel. In his position first as attorney for property and then as estate trustee for Mabel, the Respondent has raised questions about the Applicant’s dealings with Mabel and has not honoured the agreement. The Applicant has applied to court to enforce it.
[5] THE AGREEMENT
[6] The Agreement purports to be a “written partnership agreement to carry on a farm business as a partnership” under the name “Hill Farm”, commencing June 1, 2001. Of particular interest is paragraph 21 “buyout provisions”. It refers also to paragraph 19 “retained ownership”. These paragraphs read as follows:
- Retained Ownership
Despite any implication to the contrary, the following items are and shall remain the exclusive property of Mabel:
all parts of the Model A
all parts of the Model T
the boat
all antique tools in all sheds
gas
(hand) water pump
furniture and appliances currently in the house
finished lumber currently on the property
industrial drill
skill saw
5” Makita grinder
Huskavarna chain saw
planer-jointer
large yellow bus
antiques in the boxcar
- Buy-out Provisions
To complete the buyout of Mabel’s joint share of Hill Farm including the purchase of Parcel 9844 S.S.T., Parcel 11020 S.S.T., and Parcel 17909 S.S.T., livestock, equipment and everything else whatsoever, not including property described in paragraph 19, and Mabel’s share of this partnership, Jack will pay Mabel the sum of nine thousand dollars ($9,000.00) without interest, annually for ten years with the first such payment due December 21, 2001 and the final payment due December 21, 2010. In the event a payment is not made by January 31st of the following year, interest shall be added to that payment only at the rate of four percent (4%) calculated annually, not in advance, until such time as that payment is made.
Jack shall have the privilege of prepaying any or all such payments.
In the event of Mabel’s death prior to payment in full, fifty percent (50%) of any balance then owing shall be forgiven absolutely. The other fifty percent (50%) shall be payable at the rate of nine thousand dollars ($9,000.00) or such lesser amount as is remaining.
That payment shall be made annually, without interest, until the fifty percent (50%) remaining has been fully paid.
Payments following Mabel’s death shall be paid to Jennie Joanne Belkwell to be divided by her one third to Jennie Joanne Belkwell, one third to Frederick Rowland Hugh Hill, one sixth to Ashley Hill and one sixth to Kassandra Hill.
Upon the completion of the buy-out, Jack shall be entitled to a Transfer of Mabel’s interest in Parcel 9844 S.S.T., Parcel 11020 S.S.T., and Parcel 17909 S.S.T.
The agreement was signed by Mabel Jane Johanna Hill and George Jack Hill and witnessed by Dawn L. Clark. Ms. Clark was acknowledged to be Mabel’s lawyer. The agreement is supported by the Applicant’s affidavit of May 31, 2005 indicating that Ms. Clark had recommended that he obtain independent legal advice, but that he had declined to do so.
[7] PROCEDURE
[8] The Notice of Application named as Respondents Mabel Jane Johanna Hill, Frederick Rowland Hugh Hill, personally and as attorney for Mabel Jane Johanna Hill pursuant to a Power of Attorney, the estate of George Joseph Hill, deceased and the Public Guardian and Trustee. Mabel was alive when the application was brought. The Order of R. Gordon J. of April 11, 2011 entitled the Respondent to represent her interests as litigation guardian in the proceeding. That Order also dismissed the application as against the Public Guardian and Trustee. Subsequent to Mabel’s death, an Order to Continue dated November 22, 2011 identified the Respondent as a respondent personally and as estate trustee with a will of Mabel’s estate. The Applicant was represented throughout by counsel. The Respondent represented himself.
[9] The Respondent takes the position that he represents both estates, Mabel’s and George’s, that Mabel was the representative for George’s estate, and that both estates are the same. In fact, it appears from the documents that no one was appointed to administer George’s estate and that Mabel inherited the entire estate, as its value did not exceed her spousal preferential share, but that the property was never registered in her name. Mabel was only a beneficiary of George’s estate, not an executrix, administrator or estate trustee of it. Fred Hill is Mabel’s estate trustee, but is not, without some other source of authority, the representative of George’s estate.
[10] Of the relief sought in the Application, the order of R. Gordon J. of April 14, 2011 ordered the issue of, and granted leave to register, a certificate of pending litigation against the subject lands, and ordered the delivery to the Applicant by Dawn Clark of any documents in her possession pertaining to the Agreement or to George’s estate, which documents the Applicant was to copy to the Respondent. The balance of the relief sought in the Application was adjourned. Each side then filed numerous and voluminous documents. These were identified as exhibits for ease of reference at the hearing as follows:
Exhibit 1 is the Application Record containing the affidavit of George Jack Hill sworn March 3, 2011 and exhibits.
Exhibit 2 is the Supplementary Application Record of the Applicant dated November 12, 2011, containing the supplementary affidavit of Jack Hill sworn November 14, 2011, with exhibits, and the affidavit of Sharon Ruth West sworn October 20, 2011.
Exhibit 3 is the Further Supplementary Application Record of the Applicant dated February 27, 2012, containing the further supplementary affidavit of George Jack Hill sworn December 29, 2011, with exhibits, and the affidavit of Lucy Belinski sworn February 27, 2012 with exhibits.
Exhibit 4 is the “Respondent’s Factum” dated May 24, 2011. In fact, it was not a factum but the Affidavit of Frederick Hill sworn May 25, 2011. Attached to it are numerous pages of documents which are not identified in the affidavit as exhibits and which are not themselves labeled nor commissioned as exhibits. Consequently, they were not accepted into evidence.
Exhibit 5 is the Supplementary Affidavit of Frederick Hill sworn December 5, 2011 with exhibits.
Exhibit 6 is the Further Supplementary Affidavit of Frederick Hill sworn February 23, 2012. Attached to it are numerous pages of documents which are not identified individually in the affidavit as exhibits and which are not themselves labeled nor commissioned as exhibits. They, too, were not accepted into evidence.
Exhibit 7 is an untitled brief containing the further affidavit of Frederick Hill with various documents attached. The document was “affirmed” on August 9, 2012. The name of the witness is indecipherable from the signature and is not otherwise shown. There is no commissioner’s stamp. Indeed, the words “a commissioner for taking affidavits” are crossed out. The attachments are not identified in the document nor individually as exhibits, nor are they commissioned. Consequently, this document was not accepted into evidence.
Exhibit 8 is the affidavit of Carey Lefaive sworn August 23, 2012 with exhibits.
Exhibit 9 is the transcript of the cross-examination of Frederick Rowland Hugh Hill on January 4, 2012.
[11] There was no cross application.
[12] There is mention in the Applicant’s documents of the further affidavit of Frederick Hill purportedly sworn in July, 2011. The parties clarified that this document was never filed with the court and was not being used by either party.
[13] SUBMISSIONS
[14] At Exhibit 2 Tab A is a letter dated May 24, 2011 from Dawn Clark, a lawyer who had acted for Mabel, to the Applicant’s counsel. It seems to have been provided in response to R. Gordon J.’s order. In it, she explains that Mabel was the sole beneficiary by preferred share of George’s estate. Mabel did not have or had not wanted to spend the money to probate or administer the estate. Instead, she chose to wait three years so that she could apply as the beneficiary when the property had vested pursuant to the Estates Administration Act. She signed a covenant to indemnify the Land Titles Assurance Fund, a transmission application and an affidavit in support of the transmission application, but preferred that no money be spent to complete the transmission. Later, after the Agreement was entered into, her instructions were to wait and register the transmission when the transfer to the Applicant was registered. Copies of the covenant to indemnify the Land Titles Assurance Fund, the transmission application and the affidavit in support were appended to the letter. Ms. Clark indicated that the documents respecting the business agreement would be forwarded under separate cover.
[15] At Exhibit 2 Tab B is a second letter from Ms. Clark to the Applicant’s counsel, also dated May 24, 2011, which refers to various enclosures, including the Agreement, supporting documentation and land transfers. Ms. Clark said that her instructions from Mabel were, upon the first of Mabel’s death or the Applicant’s payment of the $90,000, to register the transmission to Mabel and immediately thereafter to register or make available for registration the transfer to the Applicant as sole owner. However, she had subsequently received written directions to turn over the contents of the file and original documents to Mabel’s attorney (ie. the Respondent). In court, the Applicant’s counsel said without contradiction that the Respondent has the originals and has agreed to safeguard them.
[16] It would have been preferable if Ms. Clark’s letters had been in the form of an affidavit. However, the Respondent did not dispute the existence or validity of the Agreement itself. The original Agreement was not filed in court. The Respondent said that he had it in a safety deposit box. Ms. Clark’s letter, therefore, is not required to prove the agreement, but provides a useful background narrative.
[17] The Applicant claimed that he had paid Mabel $81,000 pursuant to the Agreement, and produced receipts for $80,000 which were entered as Composite Exhibit 10. A further receipt for $1,000 was missing, he said.
[18] The Applicant submitted that there is one outstanding payment, the last one in the Agreement. Exhibit 1 contains the affidavit of the Applicant sworn March 3, 2011 which addresses this. Exhibit F of that affidavit is a copy of a letter from his then lawyer Bill Ramsay, dated October 18, 2010 and directed to the Respondent’s then lawyer and to Dawn Clark, indicating that the $9,000 for the final payment was in Mr. Ramsay’s trust account and that he wanted to complete the transaction. Neither recipient lawyer remained retained at that time, and the transaction was not completed.
[19] The Respondent’s position can be summed up as the Agreement should not be enforced for two reasons:
The Applicant did not make the payments. The receipts are fraudulent.
The Applicant breached the Agreement in a number of ways involving how the farm operation was run, how the expenses were paid, and how the income was shared.
[20] The Respondent maintained that the receipts were fraudulent even in the face of handwriting analysis by the Centre of Forensic Sciences (CFS). Exhibit 8, the affidavit of Carey Lefaive contains copies of the OPP reports, the report of the CFS, and the notes of OPP Constable M. W. Loach. These indicate that the Respondent had made a complaint to the police and provided the receipts to them. The CFS compared them to other documents bearing the known signatures and initials of Mabel (“the writer”). Of the nine receipts, the CFS concluded that the writer probably wrote the questioned signatures on seven of them. It was unable to conclude whether or not the writer signed the other two, noting the copy quality precluded elimination of the writer. The police advised that there was no evidence to support charges, but the Respondent still requested that charges be filed!
[21] The Respondent submitted that he interpreted the CFS report as concluding that it could not verify that Mabel wrote out the receipts. In addition, he pointed out that Constable Loach’s notes have the following entry:
CFS called
Peter Pajor advised some were signed by Mabel all at ones (sic).
(Note: Peeter Pajos is the CFS report’s author).
[22] The Respondent pointed out that each receipt has a different date as support for his suspicion that the receipts are fraudulent.
[23] It is open to question what the officer’s entry means. It does not explicitly refer to the receipts. Indeed, some of the documents bearing the known signatures and initials of Mabel and used for comparison with the receipts had the same date. The Respondent had the opportunity to look into this and present further evidence to the court on point, but did not do so. Given the evidence before the court, it is too great a leap to conclude on this basis that the receipts are fraudulent.
[24] The Respondent also argued against the validity of the receipts on the basis that he had obtained and reviewed Mabel’s banking records and not found deposits of the amounts of the receipts. That assumes that the payments were made in lump sums contemporaneously with the receipts and would have been deposited. The evidence for the Applicant was that the money was paid in smaller amounts adding up to the amounts of the receipts, and that Mabel cashed some cheques rather than depositing them. That is believable in view of the evidence of her concern not to show income other than her government pension cheques which were deposited. In any event, the Respondent did not provide sufficient evidence of a forensic accounting nature to establish that she had not received the money from the Applicant. Conversely, the Applicant was able to show evidence of some payments being directed to Mabel.
[25] Furthermore, the Respondent submitted that Mabel’s practice was to use a dedicated receipt book, with consecutive numbers, and clearly written. He pointed to four receipts which are found at Exhibit 2 Tab 1C and said that he believed that Mabel would have done similarly if she had received $9,000 from the Applicant each year. I can put no stock in this argument. The four receipts that he uses as examples are dated March 20, 1999 (two receipts), April 3, 1999 and April, 1999. They are written out to Fred Hill and signed “Mabel Hill” and are consecutively numbered, apparently from the same stationer’s receipt book. Given the short span of time within which they were issued, this is neither surprising nor enlightening. Looking at the receipts purportedly being from Mabel to the Applicant in Exhibit 10, one can see that the ones for 2001 and 2003 are apparently from the same book as the four examples above, with identity numbers consistent with being issued later, as would be expected. The others also come from stationer’s receipt books, albeit of different styles. Given the period of years over which they were dated, the change in style might be expected, as different books were used and perhaps used up. The receipts in Exhibit 10 are clearly written. Overall, they are what could reasonably be expected, including by what the Respondent said Mabel’s standards were.
[26] The Respondent said that he had shown the receipts to Mabel who had not remembered them. It was clearly near the end of her life, when her mental competence was failing, and proves nothing.
[27] Exhibit 2 contains the affidavit of Sharon West. In it, she states that she was the next door neighbour of Mabel, had known the Hill family since West was a child and, in the years before Mabel moved from the farm, saw her daily. She was aware of the Agreement and had seen Mabel sign receipts for $9,000. She had also seen Mabel receive cheques from others that the Applicant had done work for, and money from the Applicant himself. She had accompanied Mabel to the bank on occasion, when Mabel had cashed the cheques rather than depositing them. Also, she observed that the Applicant did most of the work on the farm for at least the last 10 years. The Plaintiff’s siblings had visited only occasionally. At no time had Mabel expressed concern or unhappiness about the arrangements with the Applicant regarding the farm. The affidavit supports the Applicant’s position. The Respondent in his submissions tried to cast doubt on it to no effect. If he had some questions about the matters that Ms. West attested to, he could have cross-examined her to explore those, which he did not do.
[28] The Respondent’s second argument, that the Agreement should not be enforced because the Applicant breached it in a number of ways, can be dealt with quickly. The Respondent’s position was that the intention behind the Agreement was to continue to run the farm as George had run it, and to preserve it as a place for the family to gather. The Respondent objected to the farming operation being done differently from the way George had done it. Also, he alleged that Mabel had had to pay the expenses of the farm from her pension income, while the Applicant kept the farm income for himself, and that this was after Mabel had supplied all of the assets when the Agreement was entered into, at no cost to the Applicant.
[29] The Respondent left the farm at age 15, last living there around 1999 or 2000, and visited about two weeks each year after that. He lived in Southern Ontario. He spoke to Mabel on the telephone every week or so, but discussed personal matters, not the farm operation nor finances. He had no involvement in the farm operation prior to May 22, 2010 when he received Power of Attorney for Mabel. It is apparent that, for most of the life of the Agreement, the Respondent had little or no knowledge of the arrangements between the Applicant and Mabel.
[30] George died in 1997. The idea that the farm should continue to be run as he ran it, without even updating the farm machinery, is without merit.
[31] The Agreement, in its recitals, clearly indicates the Applicant’s contributions to the farm and that there was consideration, in a legal sense, for the contract from him as well as from Mabel. Subsequently, it was the Applicant who provided most of the labour for the farm.
[32] The Respondent said that he based his concern regarding the financial arrangements between the Applicant and Mabel on a review of her financial records that he obtained after receiving Power of Attorney. Even if the records were properly in evidence and were complete, they are insufficient to prove anything. There are questions regarding how Mabel handled her finances which they do not answer. It is important to note that Mabel was described by the Respondent as a meticulous record keeper. He also noted that she took night courses relevant to running the farm. There was no suggestion that she had been mentally incompetent until the last year or so of her life. For most if not all of the life of the Agreement, she can be assumed to have been mentally competent. There is no evidence that she complained during that time regarding the situation. Whatever the financial arrangements were from day to day between Mabel and the Applicant, the existence of the receipts suggests that they were satisfactory to Mabel within the Agreement. She was entitled to carry on as she wished to, whether or not the Respondent, in hindsight, approved.
[33] It is, of course, important that people such as the Respondent, acting under Powers of Attorney or as Estate Trustees, look out for the interests of those whom they are acting for. However, the materials filed by the Respondent and his submissions contain irrelevancies, opinions, allegations and suspicions without proof. He has gone to considerable efforts to collect records, but has not been able to show that there has been any wrongdoing by the Applicant in the context of the Agreement.
[34] LAW
[35] S. 13 of the Ontario Evidence Act states:
- In an action by or against the heirs, next of kin, executors, administrators or assigns of a deceased person, an opposite or interested party shall not obtain a verdict, judgment or decision on his or her own evidence in respect of any matter occurring before the death of the deceased person, unless such evidence is corroborated by some other material evidence.
[36] The standard of proof in such matters is the balance of probabilities, within which the degree of proof may vary depending on what is at stake. (Burns Estate v. Mellon 2000 5739 (ON CA), 48 OR (3d) 641 Ontario Court of Appeal).
[37] The existence of the Agreement itself is not an issue. The receipts, the report of the CFS, the affidavit of Sharon West and the lack of evidence to the contrary, in addition to the evidence of the Applicant, are satisfactory proof that the Applicant paid $81,000 under the Agreement’s buyout provision, and would have made the final $9,000 payment had the Respondent accepted it.
[38] Regarding the Respondent’s allegations that the receipts are fraudulent, the onus is on him to prove that, clearly and distinctly. (Wilson v. Suburban Estates Co. 1913 Carswell ONT 400, 24 O.W.R. 825, 40 W.N. at 1488 Ontario Supreme Court (High Court of Justice). In civil cases, where there is an allegation of conduct that is morally blameworthy or that could have a criminal or penal aspect, the court will require a high degree of probability. (Continental Insurance Co. v. Dalton Cartage Co. 1982 13 (SCC), [1982] 1 S.C.R. 164.) As indicated, the court finds that the Respondent has failed to meet this standard.
[39] WHAT REMAINS OWING
[40] Paragraph 21 of the Agreement provided that, in the event of Mabel’s death prior to payment in full, 50 percent of any balance owing shall be forgiven. One payment, the $9,000 due December 31, 2010, remains outstanding. As indicated above, the Applicant offered through his lawyer on October 18, 2010 to make that payment, but was refused. Mabel subsequently died, in 2011. Had the payment been accepted when offered before Mabel’s death, it would have been $9,000. The delay in payment is due to the refusal by the Respondent to accept it. Now that the refusal has been found to be unfounded, the Respondent shall not be allowed the benefit of the full amount. Therefore, I find that there remains owing by the Applicant $4,500.
[41] ORDERS
[42] An order shall go in the following terms:
The Applicant shall pay $4,500, without interest, to Jennie Joanne Belkwell, in trust, to be divided by her one third to Jennie Joanne Belkwell, one third to Frederick Rowland Hugh Hill, one sixth to Ashley Hill and one sixth to Kassandra Hill.
The payment by the Applicant of the $4,500 shall discharge the Applicant’s obligations pursuant to the buyout provisions of the Agreement in full.
Upon the payment by the Applicant of the $4,500, the Respondents shall transfer forthwith to the Applicant at the expense of the estate of Mabel Jane Johanna Hill free and clear of any encumbrances not incurred by the Applicant:
a) the lands that are the subject of the Agreement, more particularly described as:
PIN 61308-0153 (LT) PCL 9844 SEC SST; PT S PT BROKEN LT 9 CON 3 HILLIARD AS IN LT95597; HILLIARD; DISTRICT OF TIMISKAMING
PIN 61308-0205(LT) PCL 17909 SEC SST; PT LT 8 CON 2 HILLIARD BEING LOCATION CL1506 AS IN TP13440 FOR AGRICULTURAL PURPOSES ONLY EXCEPT PT 1 54R2148; HILLIARD; DISTRICT OF TIMISKAMING
PIN 61308-0161 (LT) PCL 11020 SEC SST; S PT LT 8 CON 3 HILLIARD AS IN TP11834, EXEPT LT106076, PT 2 TER376, PT 5, 6 54R1806; HILLIARD; DISTRICT OF TIMISKAMING
and
b) The livestock, equipment and other chattels that form part of the Hill farm, (as referred to in the Agreement at paragraph 21) but not including the following:
all parts of the Model A
all parts of the Model T
the boat
all antique tools in all sheds
gas
(hand) water pump
furniture and appliances currently in the house
finished lumber currently on the property
industrial drill
skill saw
5” Makita grinder
Huskavarna chain saw
planer-jointer
large yellow bus
antiques in the boxcar
- The parties may serve and file their respective submissions regarding costs within 20 days of the date of this order.
Justice J. A. S. Wilcox
Released: October 15, 2012