Court File and Parties
Court File No.: CV-18-00000089 Date: 2020-04-08 Ontario Superior Court of Justice
Between: Hilda Rosseel, Plaintiff – and – Scott Robert Molson, Defendant
Counsel: Donald Elliott, for the Plaintiff Aaron Drury, for the Defendant
Heard: October 21, 22 2019
Before: Tranquilli J.
Reasons for Judgment
[1] The plaintiff Hilda Rosseel sues to enforce a verbal agreement. Ms. Rosseel claims she loaned the sum of $115,000 to her former son-in-law, the defendant Scott Molson. The plaintiff also claims the defendant undertook to repay her the sum of $844.90, representing the cost of his airfare for a family trip to Germany he refused to take after he “deserted” the plaintiff’s daughter in May 2016.
[2] The defendant denies the plaintiff loaned him money or that he agreed to compensate her for the airfare.
[3] The issue is whether there is an oral agreement between the plaintiff and defendant and if so, the terms of that agreement.
[4] The crux of the dispute centres on an affidavit sworn by the defendant on April 16, 2016 in connection with contentious matrimonial litigation with his former spouse. The defendant attested he and the plaintiff’s daughter borrowed $115,000 from the plaintiff in order to pay for legal fees incurred in the course of that litigation.
[5] The plaintiff pleads and relies on the defendant’s sworn statement to support her claim that she loaned him $115,000. The defendant acknowledges this sworn statement; however, contends it was a misstatement concocted in concert with the plaintiff’s daughter for the purpose of opposing his former spouse’s motion to adjourn the trial. The defendant pleads in his statement of defence that the plaintiff offered to loan him money prior to him signing the affidavit but that no money was, in fact, ever loaned. However, at trial, he maintained he never had any discussion with the plaintiff about loaning him money.
[6] For the reasons that follow, this court finds that no legally enforceable agreement exists between the plaintiff and defendant. The defendant’s position that he swore a false statement causes grave concern and raised an evidentiary issue in the course of trial relating to the rule in Browne v. Dunn. The defendant’s evidence in contradiction to his pleading that a loan was offered is also problematic. However, the court concludes the evidence as a whole nevertheless fails to establish there was a bargain struck between the plaintiff and her former son-in-law regarding a loan of $115,000 or the refund of the airfare.
[7] Where an oral contract is alleged, the Court must examine everything occurring between the parties that is relevant to the alleged agreement in order to decide whether a contract exists. The Court cannot make a contract for the parties if they have not agreed upon its material terms: Picavet v. Clute, 2012 ONSC 2221, paras. 9 to 13. There are facts that are difficult to reconcile and issues which were not addressed by the parties. Against that backdrop, the court finds there is insufficient evidence to establish a contract between the plaintiff and defendant.
[8] The lack of pretrial disclosure undoubtedly led to procedural and evidentiary issues at trial. The parties did not exchange affidavits of documents, although required and did not undertake examinations for discovery. Documentary discovery is mandatory under the Rules of Civil Procedure. While it may be that the discovery process was truncated due to financial expediency, the lack of any discovery led to unfocused and vague evidence at trial as well as positions that were at times inconsistent with the pleadings of both parties.
[9] The court heard evidence from the plaintiff and her daughter, Bettina Allen, in support of the plaintiff’s claim. The defendant testified and called evidence from his family lawyer, Monique Rae Bennett.
[10] There was very little common ground among the material witnesses on the events in issue, apart from the fact that the relationship between the defendant and the plaintiff’s daughter, Ms. Allen, ended in May 2016 in a very bitter and acrimonious manner. Those ongoing sentiments were clearly expressed in the testimony of the plaintiff, defendant and Ms. Allen. However, the evidence was vague at best as to the amounts of money allegedly advanced by the plaintiff to the defendant, when, on what terms and by what means. It fell far short of establishing the essential terms of a contract. Unfortunately, I found the evidence of all three material witnesses, the plaintiff, her daughter and the defendant to be vague, inconsistent and unreliable. The evidence of the defendant’s matrimonial counsel, Monique Rae Bennett, was independent, clear, credible and of some assistance in assessing the reliability of the affidavit evidence in issue.
[11] The plaintiff testified she advanced varying amounts of money to the defendant over the course of approximately eight years while the defendant was in a relationship with her youngest daughter, Bettina Allen (who was known as Bettina Bross-Molson when married to the defendant). Ms. Allen told the plaintiff that she and the defendant were having financial troubles due to the defendant’s ongoing litigation with his former spouse and they needed money to support their lifestyle and pay bills. The plaintiff stated she offered to help them. Ms. Allen’s testimony supported this account. Ms. Allen stated that the purpose of the loans was for the defendant’s legal fees and also to support their lifestyle.
[12] The plaintiff did not testify to any specific discussion she had with the defendant about providing him with a loan or the terms of repayment. At its highest, her evidence is that when his relationship with her daughter ended, he said he would pay her back, or that he said if he ever got the money back, he would repay her. The daughter testified “it was just assumed” that they would pay her mother back when the defendant was in a position to do so. The daughter claimed the defendant acknowledged the debts in a text exchange between them after their marital separation. However, she deleted the text history with the defendant from her phone when they divorced. She testified she never thought she would need them and believed he would honour his word.
[13] The defendant denied having any discussions with the plaintiff regarding a loan or loans. Although this evidence arguably contradicts his pleading regarding an offer by the plaintiff, the evidence among the three witnesses appears to be in accord on at least this point: there was no communication between the plaintiff and defendant about a loan or loans. I find that there was no meeting of the minds between the plaintiff and defendant as to an agreement to loan him money and the terms of repayment.
[14] The evidence was vague and contradictory as to when the loan was ostensibly made. It was not a single lump sum, as suggested by the plaintiff in her statement of claim, but an unknown number of unspecified cash advances over a number of years. It was unclear whether the loans occurred over a course of approximately seven or eight years or a shorter duration of three years. The plaintiff stated she provided the first advance shortly after the defendant first moved in with her daughter in 2009 and recalled that she made the last advance in connection with the final stages of the defendant’s litigation with his former spouse in or about 2016. However, her daughter first stated that she recalled receiving the cash from her mother over a shorter period of three and one half to four years, between 2012 and 2016. She later conceded she could not recall when the first loan was made, and thought it was perhaps in 2013 when she and the defendant reconciled after a two-year separation between 2011 and 2013.
[15] The plaintiff testified she kept a substantial sum of cash on hand in a firebox, which she used to advance the cash loans. She provided the cash sums to her daughter mainly in hundreds of dollars at a time but had no recollection or record of the specific amounts. Occasionally she would go to the bank to withdraw the cash. Ms. Allen supported this evidence, testifying she would ask her mother for money when the defendant said they needed it. She would ask for amounts suggested by the defendant and would turn the cash over to the defendant after she received it from the plaintiff. She offered no evidence on the amounts of cash provided to her by her mother and testified she did not know what the defendant did with the cash after she gave it to him.
[16] The plaintiff did not maintain any transaction records of these cash advances ostensibly made to the defendant through her daughter over the course of seven years. She also did not know the specific amount of the debt. When asked how she was able to arrive at the claim for a debt of $115,000, the plaintiff testified it came from the “legal memos.” There was no other documentary evidence entered at trial to support the plaintiff’s claim about the $115,000 loan except for the defendant’s affidavit. I conclude the “legal memos” the plaintiff referred to is the affidavit sworn by the defendant to oppose his former spouse’s motion to adjourn a trial regarding the property equalization.
[17] In that affidavit sworn April 18, 2016, the defendant stated:
I oppose the last minute request for the adjournment of the trial which is scheduled for April 25, 2016, peremptory on both parties. This is a case that has been ongoing since the spring of 2009. The parties separated December 3, 2008. Both myself, my children and my wife, Bettina Bross-Molson need this to be over. I do not have the funds to be able to continue to pay lawyers. We have used up my wife’s proceeds from an accident settlement and we have borrowed money from my mother-in-law in the amount of $115,000 to be able to pay for legal fees. I am out of funds and struggling financially. The litigation has been an extreme financial strain and burden on me and my family.
[18] Ms. Allen has training and experience as a legal secretary and testified she assisted the defendant in drafting several affidavits throughout the contentious proceeding with his former spouse. The defendant acknowledged Ms. Allen assisted him. Ms. Allen testified that the defendant’s family lawyer, Monique Rae Bennett, said she needed “a number” for use in an affidavit. Ms. Allen stated the amount of the loan was discussed amongst her, the plaintiff and defendant and the sum of $115,000 “seemed a fair amount.” The plaintiff did not offer any testimony of such a conversation amongst the three witnesses that led to an agreement on the total loan amount to include in the affidavit.
[19] The defendant testified that Ms. Allen “cajoled” him into making a false statement about the $115,000 loan and that she said the plaintiff would support that statement if it came to court. He denied that his lawyer Ms. Bennett had been asking him for a “number”. He stated he was motivated to lie as the matrimonial litigation, which also named his business, Molson Tire Ltd., as a respondent, had taken years to get to trial. His former spouse was seeking to adjourn it yet again and continued to dispute the valuation of his business. There was financial strain, but he was paying for his legal fees through his business. He wanted to bring the litigation to an end. The motion to adjourn did not proceed and the case ultimately settled on the second day of trial in April 2016.
[20] This evidence about fabricating the affidavit engaged the “rule” in Browne v. Dunn, as neither the plaintiff nor Ms. Allen were cross-examined on the defendant’s contrary evidence. However, the failure to put the witness on notice of the intended later impeachment does not necessarily bar the impeaching evidence or require the court to draw an adverse inference. Where a witness is not cross-examined on matters which are of significance to the facts in issue, and the opposing party then leads evidence which contradicts that witness on those issues, the trier of fact may take the failure to cross-examine into consideration in assessing the credibility of that witness and the contradictory evidence offered by the opposing party. The effect of the failure to challenge a witness’s version of events on significant matters that are later contradicted in evidence offered by the opposing party is not controlled by a hard and fast legal rule, but depends on the circumstances of each case: R. v. Paris.
[21] Although the plaintiff witnesses were not expressly confronted with the contention that the sworn statement was false, the defendant’s position in his pleading and at trial was clearly that a loan was never made, notwithstanding the affidavit. He testified that he paid all of his legal fees through his business, Molson Tire Ltd., which was supported by the documentary evidence filed at trial. These payments were also set out in his statement of defence. The plaintiff raised the rule in Browne v. Dunn and had the opportunity to call evidence in reply; however, chose not to do so. Much of the defendant’s evidence about the circumstances of the swearing of the false statement was also elicited by the plaintiff on cross-examination.
[22] The credibility of the witnesses is undoubtedly a significant factor in the determination of whether there was an oral contract and the failure to cross-examine the plaintiff witnesses on the defendant’s contention is improper. I also have significant misgivings in placing weight on the defendant’s evidence when he has admitted to having previously lied under oath; however, there is other evidence that leads me to question the reliability of the affidavit and I find that it does not establish the existence of a $115,000 loan by the plaintiff to the defendant on a balance of probabilities.
[23] The defendant’s lawyer Ms. Bennett did not support Ms. Allen’s version of events surrounding the drafting of the affidavit. The statement regarding the loan is one paragraph of an extensive 91 paragraph affidavit. Ms. Bennett acknowledged the defendant and Ms. Allen would review and edit the draft affidavits prepared throughout the course of the litigation; however, she testified that neither the loan nor the amount of the loan was material to the issues in dispute. Ms. Bennett also advised that such a loan or loans were also never disclosed as a debt in the defendant’s financial statements filed during the course of the litigation. Ms. Bennett was a disinterested witness who gave careful and responsive answers. The court prefers her evidence to that of the other trial witnesses. It is important to note that there was no suggestion that Ms. Bennett was a knowing party to the alleged false statement. It was clear that the first time Ms. Bennett became aware of the defendant’s position is when he told her after he was served with the statement of claim in this action.
[24] The affidavit states the loan of $115,000 was all for legal fees. However, the plaintiff’s own evidence is that she advanced the sums to her daughter over the course of several years to assist in maintaining their lifestyle. Ms. Allen supported this evidence in her testimony. Only the last unspecified amount was apparently for legal fees, contrary to what was stated in the affidavit.
[25] But for this number appearing in the affidavit, I find the evidence failed to establish a reliable basis for concluding that a total of $115,000 was, in fact, advanced by the plaintiff to the defendant. As previously reviewed, the plaintiff does not, in fact, know how much she ostensibly loaned the defendant and kept no transaction records. She could only say that the amount quoted in the affidavit seemed “accurate”. The only evidentiary basis for this number is Ms. Allen’s testimony that it was arrived at as a “fair amount.” While such evidence could potentially support a claim for a debt in this amount, in the context of all of the other vague and inconsistent evidence, it is inappropriate to rely on the affidavit to establish the debt.
[26] The affidavit also expressly states “we have borrowed” the funds to pay legal fees. Reading the impugned paragraph as a whole, the “we” can only refer to the plaintiff’s daughter Ms. Allen as well as the defendant, as if she were also a party to the loan. Certainly, both the plaintiff and her daughter testified that an unspecified portion of the alleged loans went to supporting the couple’s lifestyle. However, both the plaintiff also maintained the loans were made to the defendant. There was no evidence offered at trial as to why or what terms of the loan or loans render the defendant solely responsible for such a debt. In closing argument, the plaintiff urged that the court could alternatively find the defendant liable for one-half of the alleged debt, being $57,500. However, this requires the court to enter into a further speculative exercise on the essential terms of the alleged oral contract. Given the extent of the vague and inconsistent evidence, I find it improper to do so.
[27] There was also no evidence to explain why such a debt was not addressed in the context of the defendant’s divorce from Ms. Allen. Ms. Allen testified she accepted $20,000 from the defendant to bring matters to a close. The court would expect such a significant debt to be an important issue to address. It is also noteworthy that the plaintiff did not previously call for the debt to be repaid. The initial demand occurred only with this proceeding. In all of the circumstances there is too much uncertainty as to a bargain between the plaintiff and defendant and the essential terms in order for the court to conclude that there was a loan to the defendant for either $115,000 or $57,500.
[28] In her statement of claim the plaintiff anticipated a limitation defence and pleaded that her daughter’s marriage to the defendant at the time of the loan amounted to a tolling agreement such that the debt did not become due until the defendant deserted Ms. Allen in May 2016. However, the defendant did not plead a limitation defence, his sole contention being that the loan never occurred. The circumstances of any tolling agreement or limitation defence was also not explored in the evidence. I accordingly make no findings on this issue, although I question how a marriage in and of itself creates a tolling agreement.
[29] I also conclude there is insufficient evidence to find that the defendant is obligated to pay the plaintiff $844.90 for the cost of his airfare. The plaintiff witnesses contended this was either a loan or undertaking, whereas the defendant argued it was a gift and that he did not offer to compensate her for the unused non-refundable ticket.
[30] It was uncontested that the plaintiff planned a trip for herself, Ms. Allen and the defendant to travel to Germany in the summer 2016 to visit the plaintiff’s extended family and that the plaintiff purchased the airfare for all three of them. The plaintiff did not testify that the purchase of the airfare was a loan to the defendant.
[31] The plaintiff testified that the defendant then changed his mind and refused to go on the trip a few weeks before the departure date. A disagreement ensued between the defendant and Ms. Allen, and the plaintiff came to the couple’s home. The plaintiff said the encounter ended with the defendant kicking her daughter out of the house and that he promised the plaintiff he would pay her back for the airfare.
[32] In contrast to the plaintiff’s evidence, Ms. Allen testified her mother offered to loan them the money for the airfare. However, there was no clear evidence that the tickets were purchased on terms as a loan beyond Ms. Allen’s testimony that “it was just a given.” The alleged understanding was the defendant was to pay her mother back for the cost of the defendant’s and her airfares as well as for one-half of the car rental. She went with her mother on the trip to Germany in the summer 2016 as planned. Both she and her mother acknowledged at trial that she has not paid her mother back for her airfare, which I find is inconsistent with the daughter’s evidence that the airfare was a loan.
[33] The defendant’s uncontradicted evidence is that the plaintiff and Ms. Allen accidentally booked the travel for when he would have summer access with his children from his previous marriage. The matrimonial litigation was high conflict (as confirmed by his lawyer Ms. Bennett) and his former spouse was not going to agree to vary the vacation schedule. He did not want to miss time with his children as she had previously withheld access. He therefore told Ms. Allen and the plaintiff that he would not go to Germany. His relationship with Ms. Allen broke down shortly thereafter. He acknowledged he had agreed to share in the cost of the car rental in Germany (which was not claimed in this action); however, as he did not go, he did not contribute to that expense.
[34] Ms. Allen testified the plaintiff previously paid for a trip to Cuba for herself, the defendant and Ms. Allen and two other family members in 2015. Again, Ms. Allen claimed the cost of that trip for herself and the plaintiff was to be repaid by the defendant, on the basis that “it was just a given”. The court heard no evidence from the plaintiff as to whether this Cuba expense formed part of the $115,000 in debts claimed or whether it was, in fact, a honeymoon gift from the plaintiff to the couple, as testified by the defendant. In any event, I find this prior family trip was not probative of whether the purchase of the trip to Germany was on the terms of a loan.
[35] The defendant was not cross-examined on his contention that he did not promise or undertake to refund the cost of the ticket after his relationship with the plaintiff’s daughter ended. Leaving aside whether the defendant has a moral obligation to his former mother-in-law, the evidence is insufficient to find that a moral obligation was transformed into legal obligation to refund the cost of the airfare.
[36] The claim is therefore dismissed. Given the non-compliance with the discovery rules and the defendant’s position that he swore a false statement to the court, there shall be no order as to costs.
Released: April 8, 2020 Justice K. Tranquilli