Batten-Carew v. Batten, 2016 ONSC 6937
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
MARK BATTEN-CAREW and ELIZABETH BATTEN-CAREW
Plaintiffs/Applicants
– and –
JOHN BATTEN and JENIFER NESBITT
Defendants/Respondents
COUNSEL:
Marcus Boire, for the Plaintiffs/Applicants
Denis Cadieux, for the Defendants/Respondents
HEARD: November 8, 2016
BEFORE: T.D.RAY, J
REASONS FOR JUDGEMENT
1This summary judgement motion is brought by the plaintiffs for judgment for the balance owing on a loan agreement. The defendants contend that the agreement is unenforceable. The plaintiff Mark Batten- Carew (“Mark”) is the brother of the defendant John Batten (“John”). The plaintiffs are husband and wife. The defendants are also husband and wife.
2The plaintiffs and defendants entered into an agreement August 7, 2005 to permit the defendants to purchase a property in Prince Edward County. While the parties are in agreement that was the purpose, there is nothing in the agreement to that effect. All parties signed the agreement. The thrust of the agreement on its face is that the plaintiffs lent the defendants $270,000. The plaintiffs were sourcing the loan amount from their line of credit. The defendants were to pay the bank directly the monthly payments toward the interest and principal amount of the loan advance. The agreement recited that no costs were to be incurred by the plaintiffs. The agreement also provided that “in partial compensation”, the defendants would pay an additional amount of 1% of the loan amount at the end of each year directly to the plaintiffs. They agreement provided that the advanced funds “are to be used at the discretion of the borrower”.
3Sometime in 2012, the plaintiffs discovered that the line of credit was in default and the defendant had not been making the payments. The defendants admit they ceased making payments. The reason was that the payments had become a hardship. The parties agree that the amount owing is $308,522.80.
4The defendants deny liability for the loan. Firstly they contend that they were never afforded the opportunity to get legal advice before signing the agreement. Secondly they contend that the agreement actually contemplated a partnership such that if the property was sold at a profit, it would be shared with the plaintiffs; and if it sold at a loss, the losses would also be shared amongst all the parties.
5In fact the property sold at a loss.
6The loan agreement clearly contemplates a possible future partnership agreement. It explicitly provides that the loan agreement will terminate when a partnership agreement is entered into; but will continue as an enforceable agreement if a partnership agreement is not entered into.
7The only evidence of a partnership agreement is an undated, unsigned and unacknowledged document that was prepared by Mark and forwarded to John October 13, 2006. It is entitled ‘Memorandum of Understanding (“MOU”). It recites that it is not intended to be legally binding, but simply an outline of ‘possible terms of the agreement’. The MOU was clearly intended to deal with a Prince Edward County property. It was never signed, nor even acknowledged by the defendants. No partnership agreement was ever entered into.
8Email exchanges after that were consistent with the loan advance having gone into the purchase of the Prince Edward County property, the possible value for sale, and when the defendants would sell the property so as to repay the loan.
9The defendants affirm that they borrowed the money for the purchase of the property with the intention of reselling it at a profit. But say that “given the nature of the business partnership, we expected that all profits would be divided equally, as should the risk of loss”. However the defendants have offered no evidence to support their position beyond that bald allegation. In fact that position is not even reflected in their Statement of Defence.
10There is not a scintilla of evidence to support the defendants’ position that a partnership existed. A partnership relationship was never formed. And the loan agreement recited that if no partnership agreement was entered into, then the loan agreement was to continue in force. There was nothing unfair about the loan agreement. The terms were not demanding at all. The defendants treated the agreement as subsisting for some 7 years, without any complaint.
11I find in favour of the plaintiffs. Judgement shall go in favour of the plaintiffs for $308,522.80. If the parties cannot agree on costs, they may make written submissions within 10 days of two pages or less with a further 5 days for reply.
Honourable Justice Timothy Ray
Released: November 8, 2016
CITATION: Batten-Carew v. Batten, 2016 ONSC 6937
COURT FILE NO.: 14-60176
DATE: 2016-11-08
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
MARK BATTEN-CAREW and ELIZABETH BATTEN-CAREW
Plaintiffs/Applicants
– and –
JOHN BATTEN and JENIFER NESBITT
Defendants/Respondents
REASONS FOR JUDGeMENT
Honourable Justice Timothy Ray
Released: November 8, 2016