COURT FILE NO.: C-919-11

DATE: 2014-03-11

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Geoffrey Bellew

J. Krotz, Counsel for the Plaintiff

Plaintiff

• and -

Matthew Bellew and

Christina Kelemen-Bellew

Defendants

M. Milczarczyk, Counsel for the Defendant,

Matthew Bellew

Dennis Tousenard, Counsel for the Defendant,

Christina Kelemen-Bellew

HEARD: February 10, 11, 13 and 26, 2014

GLITHERO J.

REASONS FOR JUDGMENT

[1] The plaintiff father brings this action against his son, Matthew, and his former daughter-in-law, Christina Kelemen-Bellew. The action is to recover the sum of $98,497.29 owing as of October 30, 2009, together with interest at 5.2% thereafter.

[2] It is clear that the plaintiff advanced the sum of $34,000 on July 10, 2007. It is referred to in the pleadings and at trial as the second mortgage loan. He advanced the sum of $65,000 between May 28, 2008 and August 4, 2009, at the rate of $4,000 a month, referred to throughout as the income support loan. Lastly, he advanced the sum of $33,896 on August 12, 2009, known throughout as the debt consolidation loan.

[3] It is admitted that these amounts were advanced. The issue is whether or not the advances were in the form of loans, as alleged by the plaintiff and the first defendant, or whether they were in the form of gifts, as alleged by the second defendant. Also at issue, if the advances were loans, is the terms of the loans and who is responsible to pay them, and in what proportions.

[4] The plaintiff’s position is that the monies were loaned jointly to the two defendants. His son Matthew’s position is that the advances were loans and that he and his former wife are responsible for 50% each. The second defendant, Christina, claims the advances were in the form of gifts and that regardless, she is not responsible for repayment of any of these monies, and she disputes the balance claimed. Matthew and Christina each have crossclaims for contribution and indemnity, as between them, for any amounts either is found to owe to the plaintiff.

[5] The terms of the money advances were not formally documented. The case falls to be determined on the basis of the testimony of the parties and of witnesses, and upon a large number of emails exchanged between them.

[6] Exhibit 1 is an agreed statement of facts in which the cheques advancing the various amounts are admitted. The second mortgage loan cheque is noted in the memo line to be “re home purchase loan”. Of the 17 cheques making up the $65,000 living support loan, one was made out to both defendants, and the other 16 were made out in Matthew’s name. Two of the cheques were indicated in the memo line to be loans, and in the other 15 cheques the memo line was blank.

[7] It is further agreed in Ex. 1 that the living support loan cheques, and the debt consolidation loan cheque, were deposited in a personal line of credit account held in the names of Christina and her mother. Shortly after the deposit of the last cheque payments were made from this same account towards a credit card debt in Matthew’s name, another student line of credit in his name as well as that of his father (as guarantor), and another towards payment of debt owing on a credit card in Christina’s name. While there is no formal admission in Ex. 1 as to the authenticity of the many emails, neither is it challenged in the testimony given by those involved.

[8] It is further agreed that there is nothing owing on the second mortgage loan. It is dealt with in the evidence only because it demonstrates the nature of the early financial dealings between the parties, including the fact that there was no mortgage or other documentation for this loan, and because the funds received in repayment of this loan, out of the proceeds of the eventual sale of the defendants’ house, formed the basis of the last loan, the debt consolidation loan.

[9] The first amount advanced, referred to by the plaintiff as the second mortgage loan, was not in fact a mortgage at all. Rather it was an amount of money advanced to the defendants at the time they were purchasing their first house. Were it not for this amount advanced to them, the defendants would not have had sufficient down payment monies and would have incurred much higher expenses if required to finance a higher amount through CMHC.

[10] Geoffrey Bellew, the plaintiff, is a 64 year old mostly retired former participant in the financial service industry. His expertise lay in the field of marketing financial services. He has a masters degree in business. He now does only consulting work for charities and non-profit organizations.

[11] He and his wife each earn between $40,000 - $50,000 a year. He has five children ranging in age from 37 down to 24, and a stepson by his wife Marina, age 31. Matthew, the defendant, is his middle child, age 34.

[12] The two defendants met in 2003, while attending university, and began living together shortly thereafter. Prior to their marriage in September of 2007, the plaintiff made gifts to each of them only in the form of Christmas gifts or birthday gifts, often financial, but in modest amounts. He treated the two of them equally.

[13] The plaintiff’s evidence is that he had an arrangement with each of his children whereby he would advance them the monies for tuition and living expenses for post high school education, on the basis that if they completed their school program the tuition portion would be forgiven, and they would thereafter determine an appropriate repayment program in respect of the loan for living expenses.

[14] When Matthew completed his schooling and obtained employment in December of 2005, he and the plaintiff agreed that he would start making payments, together with interest at 5%, with the school loan to be paid off in 5-7 years. Most of that loan remains outstanding and there has been no demand for payment. It is not an issue in this case other than as evidence of the plaintiff’s willingness to financially assist his children.

[15] In July of 2007, Matthew was employed with a local company and Christina was a full-time teacher. They decided they wanted to buy a home so as to build equity rather than continuing to pay out money for rent. The plaintiff and his wife Marina and the two defendants went and looked at several properties. The defendants asked the plaintiff if he would assist them financially by lending them an amount for the down payment. Together the defendants had an income of $120,000 a year and the plaintiff thought their proposal to be reasonable. Without the plaintiff providing the down payment, in the amount of 10% of the purchase price of the house, the defendants would not have a sufficient down payment and CMHC insurance fees would have been expensive, namely some $7,000.

[16] On July 10, 2007, the plaintiff advanced the sum of $34,000, which included the advance of the down payment , together with additional amounts requested by the defendants for furniture and some replacement of flooring. The plaintiff claims the amount of interest was agreed upon at 5.2%, being the rate the defendants could have obtained on a fixed rate basis. The plaintiff obtained the monies advanced from a line of credit he had at the bank which had a 6.75% interest rate at the time. He gave them the choice of accepting that floating interest rate as applicable to the monies advanced, or he would agree to a fixed interest rate of 5.2%, which then was agreed by all. It was further agreed that this loan would be repaid at the amount of $300 a month for two years, and then would go up to $1,000 a month. Nothing was written down.

[17] The parties have filed a large number of e-mails exchanged as between all of them on some occasions, or as between some of them on others. As I read them, they support the plaintiff’s contention, which is not seriously challenged, that until the financial troubles arose, this was a very closely knit family. Both defendants frequently sought the plaintiff’s advice on financial and marital issues, and he gave it. They were thankful for that advice and said so. The plaintiff testified that he looked upon the defendant Christina as being his own child, and the e-mail exchanges, in my view, prove that to be so. They reveal that often he would communicate with her, without involving his son Matthew, out of concern for her situation. I accept his undisputed evidence that he, his wife and the two defendants did a lot of things together, frequently got together for meals and visits, and that the plaintiff, and often his wife, participated in many of the decisions made by the defendants. I accept that he gave them financial advice, as evidenced in the numerous e-mails exchanged over the relevant time period in respect of these loans and other financial matters. In my assessment, the plaintiff, with the support of his wife Marina, acted as a very loving and supportive father, and was very generous financially to his son Matthew and to Christina, as he was with his other children. In my opinion his evidence, together with the supporting e-mails, demonstrate that his desire was that his children would succeed and that he would do what he could financially to assist them in getting a good start of their adult lives.

[18] His evidence is that with respect to this “second mortgage loan” both Matthew and Christina were very appreciative, both participated fully in the discussion of the terms of the loan, and both thanked him for his generosity and financial support. It was agreed, naturally, that if the house was sold the loan would be repaid out of the sale proceeds. This is not disputed by anyone.

[19] This was a second marriage for the plaintiff, and took place in 2007, the same year that the defendants were married, and the plaintiff’s evidence, supported by that of Marina, his wife, which I accept, is that this somewhat unusual circumstance of both father and son being married in the same year brought the two women closer together than might often be the case, and promoted a very close relationship amongst all four of them.

[20] The first dark cloud in the relationship between the defendants came about in November of 2007 when Matthew learned of some romantic activities on the part of Christina with others. At Matthew’s request the plaintiff met with each of them, individually, and offered advice, including a recommendation that they obtain counselling, which they did. That seems to have smoothed things out, as it turns out temporarily, in that the defendants then went on a honeymoon to the Bahamas in December of 2007.

[21] Then by e-mail dated February 13, 2008 from Christina to the plaintiff, she asked if he could help her with respect to a disagreement she had had with Matthew. After the e-mail the plaintiff and Christina spoke and she explained to the plaintiff that she and Matthew had had another blow up, and that things were not going well between them and she asked that the plaintiff look at a written account of her feelings about the whole matter, which he agreed to do. That written account of her feelings was then forwarded by her to him. This was followed with a number of meetings and discussions about her inappropriate behavior, to which she had by now confessed in writing. This “up and down” relationship between the defendants continued for some time. I am satisfied, from the plaintiff’s evidence and the supporting e-mails, that whenever asked to assist, the plaintiff did so, and did so without particularly taking sides as between the defendants.

[22] It is in the spring of 2008 that the accounts of the relationships and dealings between the parties begin to differ, and credibility issues arise.

[23] The evidence of the plaintiff is that on or about March 19, 2008 the defendants attended at the plaintiff’s home and explained to he and his wife that they had patched things up, and explained that neither of them was enamored with their employment and they were interested in starting up a dog grooming, boarding and dog food business. Accordingly, the shift was from the marital problems that had been the subject of much discussion in the foregoing months, to a happier topic of new careers and more positive outlooks. The plan was that Christina would continue to teach so as to supply some income, but Matthew would quit his employment so as to start up the dog business. The plaintiff and his wife had the type of concern that would be natural for parents to have when children contemplate giving up steady jobs to enter into a new venture. There were many meetings and discussions. I accept the plaintiff’s evidence that he deliberately met privately with Christina to make sure she agreed with what she and Matthew were about to do, and that she was doing so for the right reasons, and not just out of some form of guilt for having acted inappropriately.

[24] Finally, on March 30, 2008, there was another meeting at the plaintiff’s house. The defendants asked for 6-8 months’ worth of income at $4,000 a month, being approximately the net amount that Matthew was giving up per month by resigning from his employment. That amount, together with Christina’s earnings, would enable them to survive financially while Matthew got the dog business going.

[25] The plaintiff has testified this financial advance was to be in the form of $4,000 a month, starting in May 2008, and that it was initially expected that it would continue until the end of the year as by then Matthew ought to have had the dog business up and running to the point that it was financially viable. On May 2, 2008, the four of them had dinner together, confirmed all the details, and the next day Matthew quit his job. It was agreed that for the balance of 2008, there would be no repayment on the loan but it would be fully repaid after two years after the 2008 year end. There was nothing in writing. They agreed on the same interest rate. Once again it is the plaintiff’s evidence that both Matthew and Christina were both present and both participated in the discussion of the loan arrangements, both understood the terms, both appreciated the plaintiff’s support, and both thanked him for it. The plaintiff testified that the loan was to both defendants and was needed to support both of them while their joint venture, the dog business, was getting off the ground.

[26] From the plaintiff’s perspective the next few months appeared happy as between the defendants, and as between they and the plaintiff and his wife, with many dinners and other happy gatherings. On one occasion, the four of them went to look at a dog kennel property for sale in Bayfield, Ontario, but the defendants, although excited about it, accepted the concerns expressed by the plaintiff about the viability of that property as a location for their business given their unfamiliarity with Bayfield and its smaller market compared to the Waterloo area.

[27] By e-mail dated September 23, 2008, Matthew told his father that he wanted to discuss an exit strategy from his relationship with Christina, which came as a total shock to the plaintiff. He spoke to both of them. Neither were comfortable either with the other, or with the dog business. By now the plaintiff was emotionally drained from all the ups and downs as between the two defendants, and by reason of his own health problems.

[28] At Tab 18 of the plaintiff’s productions there are three pages of spreadsheets created by Matthew but forwarded to both the plaintiff and to Christina in which he details their financial situation, as the defendants were now in the process of wanting to work out terms of a separation. Within those spreadsheets are detailed the second mortgage loan and the amount owing on it including interest, as well as the then current balance owing on the living expense loan, in terms of the monthly advances. Introduced into evidence is the plaintiff’s copy of those spreadsheets bearing his notes made at the meeting on September 24, 2008 in which he recorded which debt was that of Christina and which was that of Matthew in respect of other items they owed, which markings he placed as a result of what he says the two of them agreed to during the meeting. The defendants agreed that the school debt of Matthew was separate, and was his alone, which is common ground throughout these proceedings. Taking that school loan out, the result was that each of them owed $54,000 to the plaintiff.

[29] Matthew prepared updated spreadsheets and sent them to both the plaintiff and Christina on September 28, 2008. It showed the same mortgage debt owing to the plaintiff.

[30] After that, things seemed to settle down as between the defendants and the plaintiff continued to make the $4,000 a month loan advances.

[31] The next significant event in the defendants’ rollercoaster relationship came about on October 22, 2008 when they advised the plaintiff that Christina was pregnant with twins, and was three months along and that they had not told the plaintiff earlier until the first trimester was successfully completed. They also advised the plaintiff that Matthew was having some psychological problems. By now Matthew had no income and Christina would now be losing hers, at least temporarily, with the upcoming birth. It was a difficult time for all. There was the happiness of expecting grandchildren, but accompanying concerns about financial instability and marital instability.

[32] In late November 2008, Christina called the plaintiff to advise that Matthew had attempted suicide and was in the hospital. The plaintiff testified that he provided her directly with the November and December monthly loan cheques and that she asked the plaintiff if he could continue to make more advances to assist them while Matthew was not well and she was pregnant. The plaintiff and his wife agreed. They encouraged the defendants to each get regular jobs once their current problems were resolved.

[33] The plaintiff continued to provide monthly cheques. The dog business produced some but little income. Matthew was still looking for regular employment. The twins were born prematurely in April. The plaintiff concluded that he could not simply keep paying these monthly amounts out and he offered that the defendants come and live with him to save money.

[34] By e-mails in mid-July 2009, Matthew produced calculations that the monthly support loans totaled $65,229.33, including interest, and that the second mortgage loan was in the amount of $30,988.26, for a total of $96,217.59 as between the two of them.

[35] According to the plaintiff, after a series of meetings between he and the defendants, they defendants finally realized that they had to sell their house in order to create some financial stability. There were discussions about the amount they thought they could sell it for and thereby provide funds to pay off some of the plaintiff’s loans. The defendants advised the plaintiff that even if they moved into his house they could not make it financially given the amount of debt they had, a lot of which was at high interest rates. The defendants together asked to borrow more money for August of 2009.

[36] The plaintiff testified that given the dire financial straits of the defendants, the plaintiff agreed to consider one more loan to help them consolidate their debts. The idea was conceived on the basis that when the house was sold and the $32,000 approximate amount owing on the second mortgage loan was repaid, then that money could be used to provide another loan to the defendants to assist them in consolidating their debt. His evidence is that he and his wife went to the defendants’ house and the four had a meeting in which the plaintiff explained his offer. The defendants were appreciative and thankful. They produced figures showing their debts to the plaintiff. The plaintiff offered to lend them $33,896, but only if the house was sold and the net proceeds of the house was used to retire debts. Another meeting took place on July 29 or 30, 2009, again at the defendants’ home, and everything was agreed to. In return for the loan, once Matthew got a job, they were to start repaying at the rate of $500 a month, and once Christina got back to work, the repayment was to be increased to $1,000 a month. That was thought to be manageable as they were already paying out more than that monthly on the debts which now would be consolidated. But at the time of this meeting, neither was yet working. The plaintiff says that again an interest rate of 5.2% was agreed upon. The first debt, the second mortgage loan, was to be paid off out of the sale of the house and it was uncertain how much money would be left over to pay towards the second loan balance, the living support loan. Again, both Matthew and Christina were very appreciative of this financial support and both participated in the discussion of the loan. Again there was nothing in writing. The plaintiff provided the money. He asked Matthew to keep a spreadsheet with respect to these loans. This $33,896 advance was referred to throughout the pleadings and evidence as the living support loan or the consolidation loan.

[37] Tab 29 of the plaintiff’s book of documents is an e-mail dated August 13, 2009, the day after the third loan advance. It was an e-mail between Matthew and the plaintiff, and was copied to Christina. Included in the e-mail is Matthew’s summary of the amounts owing as of then. He shows the first loan to have a balance of $30,816.37, all inclusive. He shows the second loan as being in the amount of $69,788.33, all inclusive. And he shows the third loan to be in the amount of $33,896, as just advanced, for a total amount currently owing of $134,500.70. Tab 32 in the plaintiff’s productions is an e-mail in which Christina thanks the plaintiff for all he has done for them.

[38] Tab 35 in the plaintiff’s productions is an e-mail dated September 27, 2009 from Matthew to Christina and the plaintiff enclosing spreadsheets showing these loans. There was never any communication from Christina asking what these loans were all about, or why they were listed as debts owing to the plaintiff if, as she claims, she had understood they were gifts.

[39] Matthew provided more spreadsheets by e-mail dated October 1, 2009, sent to Christina, again showing the debts in the form of loans owing.

[40] Tab 41 in the plaintiff’s productions is an e-mail to him sent October 15, 2009 in which Christina refers to “our financial obligations to you” and indicates they would like to pay off their joint debts. The plaintiff points to this as strange wording for someone who thought they had been gifted all these funds.

[41] Tab 43 in the plaintiff’s productions is an e-mail dated October 21, 2009 from Christina to Matthew and to the plaintiff in which Christina indicates that she has seen the numbers and “I know that half the debt is mine”.

[42] More spreadsheets were sent by Matthew to the plaintiff, with copies to Christina on November 6, 2009 and November 11, 2009, again without complaint or indication of surprise or disagreement on the part of Christina.

[43] When the defendants’ house eventually sold, the plaintiff was paid the balance owing on the “second mortgage” loan and an additional balance available from the sale in the amount of $4,623.71, for a total cheque of $35,831.86.

[44] Shortly thereafter, the plaintiff became concerned that at the interest rate of 5.2%, the rate of interest on the amount still owed to him was equating to $500 a month. Deciding he would rather have some money sooner rather than later, he offered to waive all interest if they paid off as much capital as they could. The plaintiff testified that he and Christina discussed it and she assured him that they would start making capital payments, although neither was yet working.

[45] After that, Matthew got a job, borrowed money for a car loan, but repaid it, and started to make some interest payments on the other amounts owing.

[46] The plaintiff’s evidence is that at Christmas, 2009, Christina came and stayed with the plaintiff and his family, including the defendant Matthew, and that during this holiday visit the debts were again discussed and during the discussion Christina again remarked on how generous and kind the plaintiff and his wife had been towards them financially. The defendants told the plaintiff and his wife that as soon as they got employment, they would live frugally, and would begin repaying the loans.

[47] On the occasion of the twins’ birthday in April of 2010, the plaintiff swears that Christina and Matthew were both at the plaintiff’s home. He spoke with her and discussed some e-mails he had exchanged with her father and that during that discussion Christina had indicated her father had no knowledge of what he was talking about in the e-mails he sent to the plaintiff and she assured the plaintiff that she was responsible for the debt and was not trying to get out of paying it.

[48] Thereafter, both Matthew and Christina got employment and were earning approximately $60,000 each. The plaintiff says that again they were promising to start payments in September, but couldn’t earlier as they needed furniture.

[49] By Thanksgiving, 2010, during the holiday gathering at the plaintiff’s home, the plaintiff says that Christina indicated that she had saved money but wanted to buy a townhouse so she wouldn’t pay the plaintiff right now but assured him he would get his money. Strains developed between the two defendants because of Christina’s wish to use her money to buy a townhouse rather than repaying the plaintiff. The defendants split at the end of November 2010.

[50] The plaintiff sent e-mails asking for advice on their plan to repay him the loan money owing and got no reply. These proceedings then ensued.

[51] Neither Matthew nor Christina had made any payments since October of 2010. The amount owing as of then was $98,497.98, together with interest between then and now.

[52] Exhibit 3 is the plaintiff’s calculation as of January 31, 2014 of the amount owing at an interest rate of 5.2%, if calculated on the basis that he waived interest for two years. The amount thereby calculated is $109,741.58. Given that the defendants did not start making payments on capital, which was the quid pro quo of his offer, Exhibit 4 is his calculation of the amount of interest owing if charged for the entire period from October of 2010 through to January 31, 2014 and it amounts to $122,799.33.

[53] It is the plaintiff’s evidence he has made loans to each of his other children and has always done so without anything in writing. It is his belief that family matters of a financial nature ought to be honoured without the necessity of writing, and it is his further evidence that with respect to all children other than this one, financial commitments have been met. It is further evidence that he never gifted monies to other children, other than the normal arrangement he had with all of them that loans for tuition fees would be forgiven if they successfully completed their post-secondary education program, but living expenses would remain a repayable loan.

[54] The plaintiff was cross-examined at some length on the basis of it being unusual to advance such sums of money with nothing in writing. The plaintiff agreed, other than as between family members, and namely in respect of his own children. While on Christina’s behalf it was suggested that it is incredulous that the plaintiff would advance money without written documentation if the advances were in the form of loans, he notes that all agree that this was the case in respect of the first loan. He also answers that it is equally incredulous that all these e-mails with enclosed spreadsheets would detail amounts owing, interest owing, show payments made, and go uncontested if indeed there was any genuine belief that all these amounts had been gifts rather than loans. For Christina to be copied or directly sent all the documentation which refers to amounts owing and list them as debts of the two of them, and then to say nothing by way of objection on her part, or expression of disbelief that the plaintiff and Matthew were mutually of the view that the advances were loans, is ridiculous in the estimation of the plaintiff.

[55] Marina Bellew is the wife of the plaintiff and is 58 years of age. She has worked for the same employer for the last nine years. She met the plaintiff in 2005 and they were married in 2007. She met Matthew and Christina in September of 2005, by which point in time they were living together, but not yet married.

[56] Mrs. Bellew testified that in the Summer of 2007 Christina and Matthew had decided that they wanted to buy a house and approached the plaintiff and she asking for a loan of a down payment amout. This request was made at a meeting with all four present. Her evidence is that she and the plaintiff thought it was a good idea to put the money into a house rather than paying rent and that it was feasible as both Matthew and Christina at the time had good jobs and were well educated. She testified further that the plaintiff recommended that they borrow then entire down payment amount so as to avoid the higher costs of additional financing through CMHC. Her evidence continues that Christina and Matthew found a house they liked. Ten % of the purchase price of that house was approximately $25,000, which was agreed to, but Christina and Matthew needed additional money for some renovations and for furniture and after discussion amongst all four of them, the result was that the loan was for $34,000. She is definite that it was always discussed to be a loan and never a gift. She testified that repayment terms were discussed amongst all four of them. It was decided that Christina and Matthew would pay $300 per month for two years and then would increase the monthly payment to $1,000 and that the entire amount was to be paid off after five years. According to her, Christina and Matthew were both involved in all discussions and were both very happy with the arrangement and both thanked the plaintiff and Mrs. Bellew. She indicated it was also discussed and understood that if the house was sold then the plaintiff was to be repaid out of the proceeds of the sale, and that if the relationship ended, then the loan was to be repaid. She testifies to the same effect as had the plaintiff that the four of them were very close and frequently together and that a good relationship existed between all.

[57] She too confirms that the marital situation between Christina and Matthew had many ups and downs. She testified to an occasion when Christina and Matthew came to the Bellew house and were happy and excited, explaining that they had decided they wanted to open a dog business. Initially they were both going to give up their jobs, but that Marina and the plaintiff advised them to think about that, reminded them that they had good jobs and urged them to do it on a step by step basis. The idea matured to the point where Christina was going to keep her job, they would not plan for any children and Matthew would then start the dog business. As Matthew would be giving up his employment he and Christina, according to Marina, asked to borrow money on a monthly basis for six months to replace what Matthew would be losing as a result of giving up his job. As it was initially only to be a monthly advance for six months, Marina’s evidence is that she and the plaintiff thought it was a good idea as it seemed to make both of them happy and that they felt it was not a great deal of money if the dog business did not work out. Marina testified that this living expense loan money was agreed to be interest bearing at the rate of 5.2%, the same amount as had been agreed to for the second mortgage loan and payments were agreed to start by January 2010. Matthew quit his job at the beginning of April 2009. Her evidence is that both Matthew and Christina agreed to all these terms, both were very happy and grateful for this financial support and both thanked the plaintiff and Marina for supporting them.

[58] Marina confirmed that Matthew was hospitalized with an attempted suicide in November 2009. She testified that she took Christina to a restaurant and the two of them talked. She testified that Christina begged her not to stop providing the monthly cheques and Christina told her that the dog business was not going anywhere and that she had been urging Matthew to go out and get a job. Marina testified that it was clear that Christina was asking that the cheques continue on a loan basis and she testified that it was Christina who picked up the December 2009 and January 2010 cheques.

[59] Marina confirmed that she was present when the plaintiff finally told Christina and Matthew that Matthew had to start getting employment, that he and Marina could not keep furnishing these monthly cheques and that they would not make monthly cheques beyond April 2010. As it turns out, that’s when twins were born to Matthew and Christina and as of then, Matthew still did not have employment. With the birth of the twins now, Christina was out of work as well. Her evidence is that the four of them talked about the necessity to sell the house and that Christina and Matthew agreed.

[60] She further testified that she and the plaintiff came to understand that Matthew and Christina had a lot of other debts and so they decided to offer another loan, once the house was sold and they were repaid the money owing to them from the sale proceeds of the house. This additional loan was to be used to consolidate other debts owing by Christina and Matthew at higher interest rates.

[61] She testified that both Christina and Matthew were there when this was discussed, that it was clearly discussed to be a loan and that both Christina and Matthew were very happy and very grateful for this additional offer of financial support. Her evidence is that Christina and Matthew agreed they would look at their debts and provide the plaintiff and Marina with a total amount. Her evidence is that Matthew and Christina then came back and did review with the plaintiff and Marina the extent of their debt situation. She testified that the agreement was that this new loan was to be repaid at the rate of $500 a month once Matthew got a job and at the rate of $1,000 a month once Christina also returned to work. Her evidence is both were very happy and thankful for the support.

[62] Marina testified that once the house was sold, the plaintiff was repaid the amount of the second mortgage loan plus some additional funds, although at the time Matthew still was not working.

[63] Marina testified that although separated by then, Christina stayed at the Bellew house for a few days over Christmas 2009 and that during that visit the four of them talked about the loan and how Christina and Matthew had to start making payments. She confirmed that the plaintiff offered to waive interest for two years if Christina and Matthew started repaying the capital of the loan. That offer was made while both Matthew and Christina were there.

[64] Her evidence continues that Christina returned to work in April of 2010, after taking her year’s maternity leave and that although she and the plaintiff looked forward to starting to receive payments on the loan, Christina and Matthew were always coming up with excuses. She testified as to all four of them attending a party thrown by her employer in June of 2010 where again she and the plaintiff, as well as Christina and Matthew talked about the necessity of loan repayments starting and there was a promise that Matthew and Christina would start paying soon. By September of 2010, still no payments had been made. At Thanksgiving of 2010, both Matthew and Christina were at the Bellew house and again they talked about the loan. Her evidence is that Christina and Matthew assured she and the plaintiff that they would start repaying the loan, but that they did not do so.

[65] In cross-examination when it was suggested to her that it was strange that nothing would be put in writing if these financial advances were in fact loans, and Marina answered that in her native country, Russia, it was not at all strange that financial matters as between family members would not be reduced to writing. She denied that these advances were ever to be a gift and added that she and the plaintiff did not have that kind of money to be able to gift these amounts to Matthew and Christina. Her evidence is that the plaintiff continued to make the monthly living expense advances after the anticipated deadline because by then, Christina was pregnant and Matthew had his health problems. They kept the payments going but not as a gift. She advises that she and the plaintiff are not rich and cannot afford to gift away amounts of this nature.

[66] In my assessment, Marina Bellew was not shaken during cross-examination on the essentials of her evidence. In my assessment she testified in a straightforward and consistent manner and was steadfast throughout that the monies advanced were always loans, arranged with all four present and discussed as to terms with all four present and she remained firm throughout that both Matthew and Christina in respect of both the living expense loan and the mortgage consolidation loan were very appreciative and thankful for the loans and fully participated in the discussion of the repayment terms.

[67] Richard Bellew is the son of the plaintiff and brother of the defendant Matthew Bellew. He testified that the plaintiff had lent him money on different occasions. Once was to pay off a high interest credit card debt. Another time was to finance the purchase of a car. Later the plaintiff loaned him money for the down payment on a house. His evidence is that all of these were clearly loans and that they have been repaid. These monies were advanced without any written agreement between he and the plaintiff. He testified that the plaintiff never gave him gifts of a financial nature other than the normal small amount gifts at Christmas or birthdays.

[68] Kim Davis is the daughter of the plaintiff and sister of Matthew and she too testified as to loans she had received from the plaintiff for school tuition with the agreement being that if she completed her program the tuition would be forgiven but she would have to pay the living expense portion of the loan. She was charged interest by the plaintiff. There was nothing in writing. She has paid it all back. The plaintiff lent her money for a car, which was a loan and has been repaid. The plaintiff also loaned her money to help finance the purchase of a home, whereby this loan took the place of a second mortgage which would have entailed much higher CMHC loan rates. Kim testified that the loan had an interest rate and that she paid her father on that loan. There was nothing in writing. The understanding was that if she sold the house then he would be paid out of the proceeds immediately. Her evidence is that later her father came and asked her to sign a promissory note, as a result of the problems he was having with respect to Matthew. She signed the note, even though the money had been advanced, and repayments had commenced previously on the strength of an oral agreement. She then testified as to an additional loan at the end of 2011 to finance the purchase of a house and that that too was a loan and is being repaid. She too testified that the only financial gifts she ever received were for

[69] Matthew Bellew is the son of the plaintiff. He has a Masters Degree in Science and Management, which was completed in 2005. While in university he met his co-defendant, and now former wife, Christina, in 2003. They began to cohabit shortly after they met and almost right away began to operate financially on a shared basis, pooling their funds. Both of them graduated in the Spring of 2005. Matthew went to the Yukon to work initially, in order to make money. While he was gone, Christina managed their finances. Matthew’s pay cheques went into the account that Christina also had access to and managed while he was working in the Yukon. After approximately six months, both moved to Brockville where they continued to pool their expenses and their income and were totally integrated financially.

[70] In the Fall of 2005, both of them moved to Waterloo with Matthew obtaining employment here that produced an income of approximately $60,000 a year. Christina transferred her teacher’s qualifications to Waterloo and obtained employment here as a teacher and also earned approximately $60,000 a year. Matthew’s evidence is that before they were married, Christina did most of the financial transactions but that the two of them would discuss major decisions. They decided to purchase a house instead of paying rent for an apartment. His evidence is that he and Christina both approached his father and Marina to ask that his father loan them the money they needed for a down payment and that they did so because there was a big difference in the cost of borrowing between having a 5% down payment and a 10% down payment. Accordingly, they asked the plaintiff to loan them 10% of the house price, which was approximately $25,000, as well as some extra for additional items they needed for the new house. His evidence is that he vividly remembers the discussion between he, Christina, the plaintiff and Marina about the appropriate interest rate and the option given to them by the plaintiff of a fixed rate of interest, or the alternative of a floating rate of interest tied to the interest the plaintiff would have had to pay on monies taken on his line of credit for purposes of this loan to the defendants. He and Christina agreed to a 5.2% rate. On his evidence they both discussed and agreed to the repayment terms, which called for $300 a month to be paid for the first two years and that the entire loan was to be paid off in 5-7 years. He insists that he and Christina did this together, as indeed they did all financial discussions together. His evidence is that it was a closely connected family and that these discussions about the “second mortgage loan” always involved he and Christina, together with the plaintiff and often Marina. The end result was that the plaintiff provided a cheque for $34,000 to the defendants, made out to Matthew and that it was deposited in their joint account, an account with Libro Financial Group. His evidence is that the monthly loan repayment amounts were paid out of a CIBC account which was in the name of Christina and her mother. Although the account was not in his name, the evidence is that Matthew knew the password required and accordingly could do online banking through that account, as of course could Christina.

[71] His evidence is that while he and Christina were on a honeymoon in December of 2007 the idea came up of opening a dog related business that would manufacture dog food and board and groom dogs. His evidence is that this had been a long time interest of his and that when the two of them discussed it, they both found the idea exciting and agreed that they should do it and thought that perhaps this would help them get their relationship back on track.

[72] Being mindful of the financial impact of that decision, because it would entail Matthew leaving his employment, they went to see the plaintiff and asked for a temporary loan to offset the loss of income Matthew would incur when he lost his employment. His evidence is that this project was discussed and jointly agreed to by he and Christina and that it was a joint idea of the two of them that he would leave his employment and that they would ask the plaintiff for a loan to offset the income loss. He testified that when it was discussed with the plaintiff and Marina, they were apprehensive about the wisdom of the move and challenged he and Marina to think about it before they did it. The four of them met and discussed the idea and then the plaintiff sent Christina and Matthew away to discuss it further between the two of them and to make a decision.

[73] Matthew gave evidence consistent with that of the plaintiff and Marina to the effect that he and Christina decided that they were in pretty good shape financially, that a fresh start like this is what their relationship needed and they decided to go ahead with it. As part of a chain of e-mails, Matthew e-mailed to both the plaintiff and Christina on March 30, 2008. In the e-mail, he expressed their excitement in the new business venture and Matthew expresses that he and Christina appreciate it’s a lot of money to borrow, and that they are grateful and it confirms the interest rate will be at the same 5.2% rate attached to the second mortgage loan. The e-mail expresses their confidence that they can make it go and will make money to build their future together and to pay the plaintiff back.

[74] Filed at trial were a number of e-mails in which Christina dealt with realtors or others in the Bayfield, Ontario area, with respect to properties potentially available for the dog business and shared those e-mails with Matthew. The idea of a property for the dog business in that area came to a halt when, by e-mail dated September 23, 2008, Matthew advised his father and Christina that he wanted a meeting that night to discuss an exit strategy from his relationship with Christina. His evidence that this development was the result of him being advised that Christina was pregnant even though they had discussed and agreed that there would be no children at this juncture in their lives and that she was to be on birth control. He felt blindsided. Christina’s response was to e-mail Matthew, and the plaintiff, to indicate that she was willing to sit down and work out the terms of their separation or divorce and she asked Matt to send her a list of the assets and liabilities so she would have it before they met.

[75] That same day, Matthew e-mailed Christina and the plaintiff and attached a list of assets, liabilities and contents, as she had requested. Importantly, included in the list under the title “Debt” was listed the down payment loan as well as the employment subsidies loan, which was listed in the amount of $21,000. Another e-mail dated September 24, 2008 from Matthew to Christina and his father contained a revised list of assets and liabilities and showed the down payment loan to be in the amount of $32,856.21 and the “employment subsidies” payback to be in the amount of $21,000. On this copy of the list of assets and debts there is handwriting which all parties agree to be that of the plaintiff, with the plaintiff and Matthew testifying that the handwritten numbers reflect what was agreed to at the meeting. Some items were agreed as being owing by both of them equally. The handwritten notes agree that each of them would owe approximately $54,000. Matthew’s evidence is that Christina did not object in any way to the amounts listed in respect of the second mortgage loan or the “employment subsidy”, either by indicating that they weren’t debts, but had been gifts, or by indicating that they were the responsibility of Matthew and not her.

[76] Matthew’s evidence is that the third loan, the consolidation loan, came about as a result of the fact that he and Christina were having cash flow problems because other debts were eating up so much of their income. They discussed and agreed they could no longer afford the house. His evidence is that he and Christina commenced discussions with the plaintiff about a possible consolidation loan so that they could stay afloat by using the money to retire some of their other debts that had high interest rates. They proposed that the house be sold, the mortgage loan be paid off out of the proceeds of the house, and that there essentially be a “swap” of what had been the mortgage loan money, but would now become a consolidation loan. His evidence is that he, Christina, Marina and the plaintiff discussed this proposal and that it was agreed upon by all four with terms that there would be no repayment until either he or Christina had full-time employment, which would trigger a $500 a month payment, and that the monthly payment would then go to $1,000 once both of them had employment and that the loan would be totally repaid in 5-7 years and that it would bear an interest rate of 5.2%.

[77] His evidence is that he agreed to those terms, and so did Christina and that both of them were very grateful that the plaintiff agreed to provide the money.

[78] By e-mail dated October 6, 2008, Christina asked the plaintiff to drop off the living expense cheque at her house, and by return e-mail, Christina thanked the plaintiff for dropping the cheque off.

[79] By e-mail dated July 15, 2009, the plaintiff advised Matthew (without copy to Christina) that as he had explained to Christina, he and Marina were prepared to continue to loan the living expense money for a little while longer because they appreciated the cash flow problems Matthew and Christina were having. He points out that neither he nor Marina have a pension and they need the money back over a reasonable time frame and accordingly will need to put together a fair, but aggressive repayment schedule once the two of them are on their feet.

[80] By e-mail dated September 11, 2009, Christina sent to Matthew material which she indicates he had asked for, including money received from the plaintiff and their monthly income and expenses. She prepared a list of amounts received from the plaintiff, although it does not start until September 8, 2008, and shows that without the plaintiff’s cheques their monthly income is about $1,890 and their monthly expenses total approximately $3,500 in terms of debt servicing.

[81] Matthew sent an e-mail to Christina dated September 27, 2009 advising her of their current financial information regarding the house and debts, which was prepared with respect to the sale of the house. It lists the payments received from the plaintiff by way of subsidizing their income as totaling $33,896, as of August 13, 2009, without interest. It also shows the original second mortgage loan debt in the principal amount of $34,000 less the payments that had been made on it and indicates that the amount owing as of July 15, 2009 is $30,988.26. It appears to have been calculated using an interest rate of 5% which the plaintiff testified he advised Matthew should be corrected to be 5.2%.

[82] By e-mail dated October 1, 2009, Matthew e-mailed to Christina, with a copy to his father, and attached revised financial information. The attachments reflect the anticipated results of the sale of the house. The calculations include $98,896 as being the amount owing to the plaintiff. After repaying the second mortgage loan, the calculations indicate that the expected proceeds from the sale of the house to Christina and Matthew was the amount of $13,788.74. This amount reflected repayment of the second mortgage loan to the plaintiff, but not repayment of anything else.

[83] Matthew testified that he received an e-mail dated October 15, 2009 addressed to he and the plaintiff in which Christina advised the plaintiff that she and Matthew had discussed their finances and the options of what to do with the $13,000 amount left from the proceeds of the sale of the house. She indicates she wanted to run “our idea through you because of our financial obligations to you. With the $13,000 we would like to pay off our joint debts. Please let me know your thoughts about this. Thanks a lot! Love, Christina”. The plaintiff responded to this e-mail 3 ½ hours later, with a copy to Matthew, indicating he isn’t sure what debts they owe him anymore or what other joint debts they are wishing to pay off and whether other joint debts mean that he is “getting screwed” or whether some alternative repayment plan is being proposed. He goes on to say that given that he has just lent them a further sum in excess of $30,000 to help them pay off joint debts that it isn’t fair now to put the debts owing to him to the end of the line. Christina answers four days later that she’s been busy and will try to get back to him. On October 20, 2009, Christina then e-mails Matthew with what is intended to be a draft e-mail from her to the plaintiff, and she asks Matthew to read it first and tell her whether he thinks it is okay to send to the plaintiff. The proposed e-mail concludes that they will owe the plaintiff for the mortgage loan and that they will be left with $10,380.59 and that she and Matt are wondering if they could keep this amount and pay off other joint debt.

[84] By e-mail dated October 21, 2009 sent from Christina to the plaintiff and Matthew, with the subject of “Debt and Finances”, Christina tells the plaintiff that she doesn’t have the exact numbers in front of her but “I know that half of that debt is mine” and that once “the dust settles from the sale of the house – the three of us should talk about repayment options”.

[85] By e-mail dated November 6, 2009, Matthew advised both Christina and the plaintiff of updated figures from the sale of the house indicating, amongst other things, that a debt was owed to the plaintiff for $65,000 in living expenses for 15 months at $4,000 a month, with 5% interest estimated as of October 31 to be $3,250, for a total debt of $68,250. In addition, it shows another debt to the plaintiff for the consolidation loan in the amount of $33,896, plus interest estimated to be $450 to October 31, 2009, for a total of $34,346. It also shows that the payouts from the proceeds show a payout to the plaintiff of the amount owing on the mortgage loan of $27,580.21, plus the balance left from the sale of the proceeds of the house in the amount of $8,251.65 for a combined cheque to the plaintiff in the amount of $35,831.86. By e-mail dated the same date, Christina thanked Matthew for these updated finance figures. On November 11, 2009, Matthew advised his father that he had made mistakes in the earlier spreadsheet and had overestimated the net proceeds from the house with the result being that the amount paid to the plaintiff was $35,831.86, based on the amount owing to retire the second mortgage loan of $31,208.15 and the remaining proceeds of the sale paid to the plaintiff in the amount of $4,623.71, for a total payment to the plaintiff of $35,831.86. These figures also show the corrected interest rate on the loan to the plaintiff at being 5.2% and shows the living expense loan, as of October 31, 2009, to include 15 months at $4,000 per month loan amounts reduced by the payment from the proceeds of the sale of the home in the amount of $4,623.71 to reduce the principal amount of the loan to $60,376.29, with interest owing of $3,951.59, for a total owing of $64,327.88, plus the consolidation loan with a principal amount of $33,896, plus interest to October 31, 2009, estimated at $450, for a total of $34,346, for a total owing to the plaintiff of $98,673.88, after retirement of the second mortgage loan.

[86] Matthew’s evidence is that Christina is liable for one-half of the debt owing to the plaintiff as she and he were jointly enriched by the loans throughout.

[87] In cross-examination, Matthew confirmed that he takes no issue with the plaintiff’s claim as to the amounts owing and his only dispute is with Christina in that he takes the position that she and he owe that money to the plaintiff equally as she and he had agreed that the loans were made to both of them and that they were each responsible for a half.

[88] Matthew testified that with respect to all of the spreadsheets he prepared, often they were done in conjunction with Christina, but regardless, she never disagreed with his characterization of the monies received from the plaintiff as being loans.

[89] In cross-examination by Christina’s counsel, Matthew agrees that he got a job at Manulife in June of 2010 at a starting salary of about $55,000, but that he did not start repaying the plaintiff for the loans.

[90] By August 2012, his income had increased to approximately $60,000, but he still has not paid anything to the plaintiff in respect of the living expense loan or the debt consolidation loan, but claims he has made some payments to the plaintiff towards what he owes him on student loans.

[91] Christina Kelemen-Bellew testified that she is a teacher and has been since 2005. She agreed that initially she handled the expenses after she and Matthew finished school and he was working in the Yukon. Thereafter, they did their financial transactions together. Her evidence is that once Matthew left his employment he then took over their financial affairs and paid their expenses.

[92] She agrees that she was aware the $34,000 first loan for the second mortgage was in fact a loan, that it bore 5.2% interest and that it called for payments initially at the rate of $300 a month.

[93] She denies that the topic of commencing a dog business was ever raised while they were on honeymoon and instead claims that one day Matthew just came home from work and said he had had enough of this job so accordingly the two of them went to see the plaintiff about commencing the dog business. Her evidence is that it was the plaintiff and Matthew who agreed that Matthew should quit his job, whereas she testifies that it was her who insisted that Matthew should keep his job and just do the dog business as a hobby.

[94] In terms of the $4,000 a month payments, the living expense loan, her evidence is that one day Matthew just came home and had a cheque with him from the plaintiff. She asked what it was for and Matthew said it was payment for having helped his dad. That account of things was never put to either the plaintiff or Matthew when they testified.

[95] She continued on that he later came home with a $4,000 cheque, but again said it was payment for having helped his dad. That too was never put to the plaintiff or Matthew. She testified that while she and Matthew were at university at one point, Matthew had a cheque book with blank cheques signed by the plaintiff for his own use and accordingly she thought these living expense payments would be of the same ilk, namely money that the plaintiff never expected to be repaid. The suggestion that the plaintiff had a blank cheque book with signed cheques from the plaintiff at university was never put to either the plaintiff or Matthew.

[96] Her evidence continues that when Matthew was in the hospital, that the plaintiff took her out for lunch one day. According to her, they never discussed the $4,000 cheques. She claims that she never asked the plaintiff for them. She assumed that they were gifts and would be continuing. Her evidence is that throughout the period during which the living expense payments were made monthly, she never understood them to be anything but a gift. In terms of the consolidation loan, her evidence is that one day Matthew was all dressed up and left saying he was going to his father’s to talk to his father about getting him a job, but instead came home with the cheque for approximately $33,000. Her evidence is that she was upset by this cheque and told him he should go out and get a job instead. That was never put to Matthew. Christina denies that there were ever any meetings where the four of them talked about loans or the terms of any loans, other than of course the first loan referred to by the parties as the second mortgage loan. Her evidence continues that Matthew never told her that these monies were a loan. She agrees that Matthew never told her they were a gift either. Her evidence is that she was mad that Matthew had accepted the cheque for the loan consolidation and that she wanted him to return the cheque to his father, but Matthew would not hear of that. That was never put to Matthew.

[97] When it was suggested to her, in general terms, there were many e-mails between she and the plaintiff about money matters, her initial answer was that she did not read any of them. Specifically, she denies having read the e-mail of March 30, 2008 from Matthew to the plaintiff and to her in which Matthew talks about borrowing the money and paying it back and his assumption that it would be at the same 5.2% interest rate. She denies reading the chain of e-mails, including the one sent to her on April 3, 2008 by the plaintiff in answer to the one from Matt to the plaintiff in which he speaks of the loan of the money, being in debt and the plaintiff having spoken to Christina separately to make sure she was really in agreement with the dog business plan. She denies seeing the e-mail and attachments from Matthew to she and the plaintiff listing the assets and liabilities, which included the debts to the plaintiff. She claims she never looked at them because Matthew was always doing spreadsheets.

[98] In terms of the handwritten notes made at the September 24, 2008 meeting, she admits she saw the notes when the plaintiff was writing them, but she claims that she did not agree with the suggestion that these were loans and were owing to the plaintiff, at least by her. Her evidence is that they couldn’t agree whose debt they were, as between she and Matthew. Of course her initial evidence had been that they were gifts so it wouldn’t be the debt of either.

[99] Her evidence is that in fact they did not break up immediately following that September 24, 2008 meeting, but rather stayed together for another year and during that year they didn’t talk about the $4,000 a month payments, she says because she never agreed to them and it wasn’t her debt.

[100] She agrees that she wrote the e-mail to the plaintiff dated October 6, 2008 in which she asked him to bring the cheque over to her house. She testified before me that she did so feeling that it was a gift. This of course is less than two weeks after she had been at the September 24, 2008 meeting where she claims she was advised for the first time that these monies were loans, that the plaintiff and Matthew expected her to be liable for, together with Matthew.

[101] Christina testified that she disregarded the e-mail of August 13, 2009 from Matthew to she and the plaintiff, which listed the debts owed by them to the plaintiff, at the time totaling $134,500.70 and expressing their gratitude. One would wonder why, if she believed the living expense monthly advances and the consolidation loan were in fact gifts, why she would not be expressing gratitude to the plaintiff, rather than as she testifies, essentially stonewalling him. She agrees to having written the e-mail on September 11, 2009 to Matthew providing the information that he asked for which included some of the payments received from the plaintiff by way of the monthly advances, together with the other monies received each month and the other monies paid out each month. She claims she was asked to provide that information by Matthew, but she didn’t know why. It would make no sense that anyone would be worried about assembling information about gifts, rather than loans, as it is debts that would matter at that stage in their relationship. She does not deny receiving the e-mail of September 27, 2009 found at Tab 35 of Exhibit 5 in which Matthew sets forth details of the income replacement loan and the second mortgage loan, but claims that she never read it. She agrees she must have received the e-mail to her from Matthew enclosing the revised financial information continuing to show the loan liabilities to the plaintiff as debts. She claims she never reviewed it because she was too busy.

[102] She agrees she wrote the e-mail of October 2, 2009 to Matthew in which she expressed the opinion that she would like to have the excess money left from the sale of the house as a cushion. She ignored Matthew’s reply that they had obligations.

[103] She admits receiving the October 15, 2009 e-mail from the plaintiff which speaks of the debts they owe to him, questions what other joint debts they are wishing to pay off and expresses concern as to whether or not he is getting “screwed”. It also refers to the debt consolidation loan that he has just made to them to pay off debts and contains his concern about what other debts now remain unpaid. Her answer four days later is that she’s been too busy to respond. This would presumably be the first time that she would hear about the “consolidation loan” money advance being a loan and a debt owed to the plaintiff. She ignores this news. It was she who had written the earlier e-mail of October 15, 2009 to the plaintiff in which she refers to “our financial obligations to you” and asks for his thoughts as to what they should do with the $13,000 they made from the sale of the house. It seems strange she would ask for the plaintiff’s thoughts on what should be done with the money left over from the sale of the house if she honestly believed that that money was free and clear of any further indebtedness to the plaintiff. By then, according to her, at least as a result of the September 24, 2008 meeting, she was aware that on her account the plaintiff and Matthew were trying to cheat her by making up a story that the monies previously gifted were in fact loans and that she was partially responsible for them. She then writes the e-mail of October 20, 2009 to Matthew asking him to read over her draft of a proposed e-mail to the plaintiff in which she proposes to ask the plaintiff if she and Matthew could keep the $10,380.59 believed at the time to be the proceeds of the sale of the home, and use that money to pay other joint debt. This wording would be inaccurate if she believed there was no debt owing to the plaintiff as she would not need his permission to keep money that was not owed to him, nor would she refer to the wish to use the money to pay “other” debt. Finally, she testified that she wrote that e-mail because Matt told her to. The end result then seems to be that she doesn’t read what Matt or the plaintiff sends her, but she writes whatever he tells her to.

[104] Similarly, she claims to have not read the e-mail of November 6, 2009 in which Matthew sets out all the financial obligations, including the debts to the plaintiff. In terms of an exchange of e-mails between the plaintiff and Christina’s father, which become increasingly harsh between each other, she claims that her father mentioned those e-mails to her, but she didn’t read them. If of course her father had mentioned those e-mails to her, it could only have been in the context of asking her about the plaintiff’s assertion to her father that the monies advanced to she and Matthew were loans and hence debts owing to the plaintiff.

[105] She admits receiving the e-mail from the plaintiff dated December 16, 2010 asking for repayment and explains that she never replied because they were not her debts. She didn’t even reply to tell the plaintiff that. In a same vein, she denies reading the e-mails of April 5, 2010 to her from Matthew containing spreadsheets setting out the situation of the debts to the plaintiff.

[106] In cross-examination, she admitted that she normally checks e-mails regularly but then added that if she receives an e-mail from the plaintiff she often ignores it. That does not appear to be the history of the e-mails until the plaintiff started requesting repayment. She agrees she was very open with the plaintiff about personal matters and explains she only did so as she hoped that would prompt Matthew to talk to her more frequently, presumably because she felt the plaintiff would tell him to do so.

[107] In cross-examination, she reiterated that the plan with respect to the dog business did not include Matthew leaving his work, and instead he quit his work just because he was unhappy with it. That is inconsistent with the many e-mails exchanged. It is also inconsistent when subsequently in cross-examination she admitted that she and Matthew went and discussed with the plaintiff and Marina the concept of opening up a dog business and as part of that she said it included Matthew leaving his job and the fact that they couldn’t survive without his income. Her evidence is, however, that at the meeting they didn’t discuss the idea of borrowing any money from the plaintiff.

[108] Her evidence is that she never corrected the impression that the plaintiff expressed in his e-mail of March 31, 2008 that the monies were a loan and constituted a debt. Similarly, she testified that she and the plaintiff never discussed the $4,000 a month payments and that she never corrected the plaintiff’s understanding that these monies were a loan and constituted a debt as she felt it was between father and son. Aside from the issue of who owed the money, this seems inconsistent with her position that all these monies advanced were gifts other than the second mortgage loan.

[109] She denies reading the e-mail forming part of a chain in which she was included dated April 3, 2008, which speaks of the loans for living expenses, although she admits it was part of the chain sent to her.

[110] She testified in cross-examination that she never thanked the plaintiff for the loan monies as the plaintiff, Matthew, and Marina had testified. It seems strange if the financial advances were gifts that she wouldn’t have thanked the plaintiff for that. She agrees that sometimes she and Matthew were together when the living expense money was received and agrees that she and Matthew used the CIBC account into which the $4,000 a month cheques were deposited and used it to pay all the household expenses except the mortgage.

[111] When asked if she had asked Matthew about the $4,000 a month, her answer was that he said that it was just his father supporting him. Her evidence is that at that point she trusted Matthew to look after their finances, although she also indicated that she wanted him to go out and get a job, that she was upset that he purchased an expensive vehicle. On one hand she seems to be expressing displeasure at his lack of financial responsibility and yet on the other hand claims to have trusted him with their finances. She agrees that she received the e-mail of September 24, 2008, which contains a list of assets and liabilities and concludes with a statement of the loan monies owing to the plaintiff, but says she doesn’t know whether she read it or not. It seems strange that if she read it, she would not have questioned why the “employment subsidies” were shown as debts owing to the plaintiff, instead of being gifts received from him, particularly as these documents were sent as a prelude to the meeting she and Matthew had with the plaintiff to discuss the resolution of their financial affairs as part of the marital dissolution. Although she claims she didn’t know whether she read them or not, her evidence is that nevertheless she objected to them at the September 24th meeting. In cross-examination, she agreed that by the time of the September 24, 2008 meeting she knew that the plaintiff and Matthew took the position that these financial advances were loans and debts owing to the plaintiff, and yet a few days later she’s asking the plaintiff to deliver the cheque to her house, and then e-mails back to thank him for it. She agrees she wrote the e-mail of January 29, 2009 found at Tab 25 in which she asked the plaintiff for his advice as to what they should do with their financial state. This seems curious given that four months earlier, on her evidence, she had learned for the first time that the monies advanced were not gifts as she had understood, but rather were claimed to be loans and constituted unpaid debts owing to the plaintiff.

[112] In cross-examination, she agreed that by April of 2009 when their twin daughters were born and she went on maternity leave, that she and Matthew could not have existed without the $4,000 a month financial advance from the plaintiff. It is curious that she testifies that she was angry when Matthew came home with the cheque representing the debt consolidation loan of over $30,000 and that she wanted him to return it. Why would she be angry if, as she says, she thought it was a gift. Without it, on her evidence, they could not have survived. She agrees it went into the joint bank account and was spent by the two of them for household expenses.

[113] She agrees that she was copied with and received the e-mail of August 13, 2009 from the plaintiff to she and Matthew located at Tab 29 of Exhibit 5. In that, Matthew lists the debts owing by them to the plaintiff totaling some $134,500, comprised of all three of the loans as of that date. That was one day after the date of the cheque given by the plaintiff for the consolidation loan. She claims that she doesn’t know if she read that e-mail or not, which seems strange given that she claims the day before she had been angry with Matthew for bringing the cheque home and to have told him he should return it to his father. You would think that an e-mail from his father one day later would attract sufficient attention on Christina’s part to at least cause her to read it, particularly as she says Matthew wouldn’t discuss it.

[114] Similarly, she indicated she “probably” didn’t read the e-mail to her from Matthew on October 1, 2009, which lists the various debts and liabilities.

[115] She agrees writing the e-mail to the plaintiff dated October 21, 2009 where she admits half the debt is hers and suggests the three of them should talk about repayment options “once the dust settles from the sale of the house”. She claims not to know what she meant when she indicated half the debt was hers. She testified that her reference to “repayment options” was a reference to asking or planning to ask the plaintiff for his advice on how they should pay off credit card loans. This of course would put her in the position of asking for financial advice from a man she claims to have tried to cheat her by indicating that monies previously supplied, believed by her to be gifts, were in fact loans.

[116] She agreed that she remembered the plaintiff telephoning her when she had moved back to Kemptville, where her family lives, but she could not remember if he had offered to waive interest payments on the loan if payments were made on the principal. It seems strange she wouldn’t remember such an offer being made because surely the appropriate response from her, on her account of things, would have been to indicate that it was of no concern to her because she owed him nothing. Similarly, she agrees she stayed a few days at the plaintiff’s home over Christmas of 2009, but she can’t recall if the issue of the loans and monies owing were raised and doesn’t remember discussing or looking at spreadsheets detailing the debts.

[117] She did agree on cross-examination that the bank statements show that essentially all the money received from the plaintiff went into the joint bank account and those monies were spent by the two of them on living expenses. On discovery at questions 171to 186 she admitted that she and Matthew both paid everything out of the CIBC account----both their car leases, hydro, all of their living expenses, and that their pay cheques went into that account as well. She agreed at questions 236-7 on her discovery that her student loan account was paid out of that same account into which the monthly living support loan advances were deposited.

[118] She agreed that there was no paperwork to substantiate the second mortgage loan, but she agreed that she understood it to be that and that the terms were negotiated. While she testified she thought both the living expense advances and the debt consolidation advance were gifts, no one ever told her that. She also testified that if not gifts, she believed they were loans as between father and son, and yet she agrees that she benefited from the money as much as Matthew, and that the two of them could not have survived without it. She also agreed that of the debt consolidation advance, the money was used to reduce their joint line of credit and two credit cards on which they were jointly liable. She agreed she never witnessed any discussion in which the plaintiff indicated that he was gifting monies to Matthew. No one told her these advances were gifts. She admitted near the end of her cross-examination that she assumed that the advances were gifts. She never denied in writing that the monies were loans or debts owing to the plaintiff. In answer to a question by me, she really had no answer as to why she would trust Matthew with finances and ignore what he was saying about them if he had joined with his father at the September 24, 2008 meeting indicating the monies were loans rather than gifts, and really no explanation as to why she would trust the plaintiff in respect of requesting his financial advice if he too was trying to in effect cheat her by insisting, after the fact, that she was responsible together with Matthew for the monies he had loaned them.

[119] In my assessment the plaintiff and his wife Marina were credible witnesses. Their evidence was consistent as between them, and the evidence of each was consistent within itself and with common sense. The e-mails exchanged between the parties is in my view consistent with the plaintiff’s position and demonstrates an admirable willingness on his part, shared in by his wife, to try and assist the defendants as they began adult life. The evidence before me suggests that they are not wealthy and it makes no sense that they would gift these amounts to 2 young people who were for much of the relevant period making sufficient incomes that they ought to have been able to support themselves. Some may be surprised by loans being made without the usual documentation. I am not, as amongst family members. The first loan here, agreed by all to be a loan, was also without documentation. The plaintiff benefited his other children with needed loans, without documentation, and they were repaid with interest.

[120] I reject the evidence of the defendant Christina. Her early emails to and from the plaintiff show the close relationship they shared, and her trust in his advice. Her evidence is at odds with that of all other witnesses. It makes no sense within itself. She was adamant that she did not express gratitude to the plaintiff for these advances, because they weren’t loans—they were gifts. All the more reason to express gratitude. Her testimony that she ignored or didn’t read the many emails and attached spread sheets is ridiculous. Some of it was compiled and sent at her request. It makes no sense that she would ignore emails and financial records received from Matthew during a period where they were dissolving their marital affairs. It makes no sense that she would trust him, or the plaintiff, when on her account at the September 24,2008 meeting she allegedly learned that they were both trying to cheat her by for the first time alleging the advances were loans for which she was equally responsible. Commons sense indicates that from that time onwards she would have been vigilant to guard her position.

[121] In short, she has nothing in writing denying her liability, her emails belie her viva voce evidence, and her testimony is inconsistent with evidence of the other witnesses, and inconsistent with common sense. She shared equally in the benefits.

[122] As the defendants were of the age of majority at the time the monies were advanced, the presumption of advancement does not apply. The onus if on the defendants to show an intention to gift the money. See Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795 at paragraphs 34 to 41, and the analysis by Lawers J (as he then was) in Church v. Church, 2010 CarswellOnt 8698. The male defendant agrees the advances were loans. The female defendant led no evidence that she was told by anyone that the advances were gifts, but rather that she assumed so. I find that the advances were loans to both defendants.

[123] Judgment shall issue in favour of the plaintiff in the amount of $98,497.29 plus interest at the rate of 5.2%. As the plaintiff’s offer to waive interest if payments on principal were made went unanswered, he shall have interest at 5.2% rate from October 30, 2009 which it was agreed totaled $24,302.04 as of January 31, 2014, for a total of $122,799.33 as of that date, and interest thereafter at 5.2% until payment.

[124] This judgment shall be against both defendant’s jointly and severally such that each shall be entitled to recover from the other one half of any amount paid to the plaintiff.

[125] If the parties are unable to agree on costs, written submissions on behalf of the plaintiff may be submitted within 21 days of the release of this decision and those of the defendant, Matthew Bellew, within 21 days thereafter, and with those of the defendant, Christina Kelemen-Bellew, within 21 days of those of the plaintiff. Written submissions should be restricted to five typewritten pages exclusive of bills of costs, offers to settle and any relevant authorities. If submissions are not received within the time frames indicated, the issue of costs will be deemed to have been settled, as between the parties.

C.S. Glithero J.

Released: March 11, 2014

COURT FILE NO.: C-919-11

DATE: 2014-03-11

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Geoffrey Bellew

Plaintiffs

– and –

Matthew Bellew and

Christina Kelemen-Bellew

Defendants

REASONS FOR judgment

C.S. Glithero J.

Released: March 11, 2014

/lr