BARRIE COURT FILE NO.: CV-17-1359 DATE: 20181211 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Ronald Kenneth Beattie, Plaintiff AND: John MacKenzie Beattie and John Beattie Farms Limited, Defendants
BEFORE: THE HON. MADAM JUSTICE A.A. CASULLO
COUNSEL: W.J. Leslie, Q.C. and M.K. Goodman, Counsel for the Plaintiff C.C. Chang, Counsel for the Defendants
HEARD: November 29, 2018
ENDORSEMENT ON SUMMARY JUDGMENT MOTION
OVERVIEW
[1] This action arises out of a transfer of property from the plaintiff, Ronald Beattie (“Ronald”), to the defendants, John Beattie (“John”) and John Beattie Farms Limited (“JBFL”), by way of a Declaration and Deed of Gift. Ronald claims that the Declaration and Deed of Gift was only one part of the agreement. To wit, it is Ronald’s contention that before the Declaration and Deed of Gift was drafted, he and John had an oral agreement whereby Ronald would sell the property, Grossi Farms, to John for $700,000. Pursuant to this oral agreement, John would pay Ronald $100,000 per annum, with 5% interest to be charged each year on the outstanding balance.
[2] In his action, Ronald seeks:
(a) An order setting aside as void both the Declaration and Deed of Gift, and the May 22, 2016 transfer of the property; and (b) A declaration that he sold the property to the defendants by way of an oral agreement.
[3] John and JBFL deny there was an agreement to purchase the property, as evidenced by the very clear terms set out in the Declaration and Deed of Gift. Accordingly, John and JBFL bring this motion for summary judgment, seeking to dismiss the plaintiff’s action against them.
THE FACTUAL BACKGROUND
[4] Ronald is John’s father. Ronald comes from a long line of potato farmers who have farmed in the New Tecumseth community for over 100 years. It is the court’s understanding that Ronald owns a significant amount of property, which at one point included Grossi Farms, a 45-acre parcel of land at 6980 13th Line in Alliston, Ontario.
[5] John is a potato farmer in New Tecumseth, Ontario, and is the owner of JBFL. Together John and JBFL own approximately 500 acres of land in New Tecumseth, and rent an additional 4,500 acres used primarily to process potatoes.
[6] The parties agree that in or about April 2015, father and son discussed John’s prospective plan to build storage units to house potatoes. There is a dispute as to who came up with the proposal to build the storage sheds on Grossi Farms. John states it was his father’s idea, Ronald states it was John’s. John is unequivocal, however, that there was no discussion regarding the value of Grossi Farms, or that Ronald was going to sell it to him. Ronald’s evidence is they discussed the market value of Grossi Farms, agreeing it was worth $1,400,000. Because John was family, Ronald would sell him Grossi Farms for half the market value, or $700,000.
[7] As a result of the April discussion, the Declaration and Deed of Gift was drafted by the lawyer for both parties, Jay Feehely, along with advice from Ronald’s accountant, Dave Legault. The terms of the Declaration and Deed of Gift are far from ambiguous. The following recitals are salient for the purposes of this motion:
- AND WHEREAS the Donor is desirous of gifting the Property to the Donee;
- AND WHEREAS the Donee is agreeable to accepting the gift from the Donor;
[8] Paragraph 2 of the Declaration and Deed of Gift states:
- The Donor confirms that he is the sole owner of the Property and is desirous of transferring the Property to the Donee as a gift and for no consideration other than natural love and affection but on the basis that the Donee will assume the adjusted cost base of the Property in the amount of Sixty-Seven Thousand Five Hundred ($67,500.00) Dollars as of valuation day. The parties acknowledge that the Property is being gifted pursuant to the provision of subsection 73 (3) of the Income Tax Act.
[9] The Donor is defined as Ronald Beattie, and the Donee as John Beattie. The Declaration and Deed of Gift was executed on April 10, 2015, with Jay Feehely as witness. Pursuant to the terms set out in paragraph 2, John paid Ronald $67,500.
[10] If I were to rely solely on John’s motion material, I would grant his motion for summary judgment. The terms of the Declaration and Deed of Gift are clear – Ronald wanted to gift Grossi Farms to John, and for that consideration, John was to pay his father Grossi Farms’ adjusted cost base.
[11] However, there are two invoices from Ronald to John, and a $35,000 payment from John to Ronald, which could support Ronald’s contention that John agreed to purchase Grossi Farms. This documentation was produced in Ronald’s motion record.
[12] The first invoice, dated May 22, 2016, is from Ronald Beattie to John Beattie Farms Limited. Four columns contain the following information:
| Quantity | Description | Unit Price | Amount |
|---|---|---|---|
| 700,000 | Interest on Grossi Sale – 45 Acres | 0.05 | $35,000.00 |
[13] On May 24, 2016, JBFL provided Ronald with a cheque for $35,000. Ronald’s position is that the cheque was made in satisfaction of the invoice. If one does the math, five per cent of $700,000 is $35,000, so logically this makes sense. However, John’s testimony is that he gave his father $35,000, not in satisfaction of the invoice, but because Ronald asked him for money. He states similar requests had been made in the past. John also states he received the 2016 invoice after he gave his father the cheque.
[14] The second invoice is identical but for the date of May 22, 2017, and the notation “From May 22, 2016 to May 22, 2017” under Description. There is no evidence Ronald received a cheque for $35,000 in 2017. This action was commenced September 18, 2017.
TEST FOR SUMMARY JUDGMENT
[15] Rule 20.01(3) of the Rules of Civil Procedure provides that a defendant may move for summary judgment dismissing all or part of a plaintiff’s claim.
[16] Rule 20.04 mandates that a court shall grant summary judgment if satisfied that there is no genuine issue for trial.
[17] The Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7, provides guidance with respect to summary judgment motions (paras. 49 and 50):
There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.
These principles are interconnected and all speak to whether summary judgment will provide a fair and just adjudication. When a summary judgment motion allows the judge to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. Similarly, a process that does not give a judge confidence in her conclusions can never be the proportionate way to resolve a dispute. It bears reiterating that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute.
[18] The Court continued, at para. 68:
While summary judgment must be granted if there is no genuine issue requiring a trial, the decision to use either the expanded fact-finding powers or to call oral evidence is discretionary. The discretionary nature of this power gives the judge some flexibility in deciding the appropriate course of action. This discretion can act as a safety valve in cases where the use of such powers would clearly be inappropriate. There is always the risk that clearly unmeritorious claims for summary judgment could be abused and used tactically to add time and expense. In such cases, the motion judge may choose to decline to exercise her discretion to use those powers and dismiss the motion for summary judgment, without engaging in the full inquiry delineated above.
[19] In Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, the Court of Appeal cautions about the use of affidavit evidence on summary judgment motions where credibility is an issue (para. 44):
What happened here illustrates one of the problems that can arise with a staged summary judgment process in an action where credibility is important. Evidence by affidavit, prepared by a party’s legal counsel, which may include voluminous exhibits, can obscure the affiant’s authentic voice. This makes the motion judge’s task of assessing credibility and reliability especially difficult in a summary judgment and mini-trial context. Great care must be taken by the motion judge to ensure that decontextualized affidavit and transcript evidence does not become the means by which substantive unfairness enters, in a way that would likely not occur in a full trial where the trial judge sees and hears it all.
CONCLUSION
[20] In my view, this is not a case where the defendant should be granted summary judgment on the record before the court. Was there an oral agreement superseding the Declaration and Deed of Gift? Did the $35,000 cheque represent a payment to Ronald of one year’s interest? What date did John receive the 2016 invoice? Had John loaned his father money in the past? These issues require the fullness of a trial to be resolved. This is the sort of case envisioned in Baywood, where the court anticipated problems with the summary judgment process in actions where credibility is important.
[21] Having determined there is a genuine issue requiring a trial, I now turn to step two of the summary judgment process as set out in Hryniak at para. 66: whether the need for trial can be avoided utilizing the new powers under Rules 20.04(2.1) and (2.2). I decline to use these powers, as I would not be confident I was fairly deciding this dispute. As Justice Nakatsuru held in Barberio Estate (Re) v. Da Costa, 2018 ONSC 6144 at para. 54:
In addition, the fact-finding in this case is best done by hearing a narrative told by the witnesses in person, rather than going through the transcripts. Resolution of credibility and appropriate weighing of the evidence cannot be done on a written record or by mini-trial, hearing from a small number of witnesses.
[22] There are witnesses who may be able to provide evidence as to the intentions of the parties, including Ronald’s accountant, Dave Legault, and John’s wife, Jane Steiner, who signed the $35,000 cheque on behalf of JBFL.
COSTS
[23] The defendants have been unsuccessful in their motion for summary judgment. If the parties are unable to reach agreement as to costs, I will entertain brief written submissions not exceeding three pages exclusive of attachments (Bill of Costs, Costs Outline, and authorities if any). The plaintiff shall file within twenty days of the release of this decision. The defendants will then have a further ten days to file. There will be no reply submissions absent leave of the court.
CASULLO J. Date: December 11, 2018