Superior Court of Justice
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
MARIAN BERNICE HERTENDY
Plaintiff
– and –
BEVERLEY ANN GAULT
Defendant
Sean Taylor, for the Plaintiff
Jonathan Collings, for the Defendant
HEARD: July 9, 2020 BY TELEPHONE
the honourable mr. justice j. m. johnston
REASONS FOR decision
1The Plaintiff, Ms. Hertendy, seeks Summary Judgment against her daughter, the Defendant, Beverly Gault, asking to recover legal ownership of land legally described as PT LT 8 Con 5 North Elmsley PT1, 27R5024; Drummond-North Elmsley, and municipally known as 837 Poonamalie Road, Smiths Falls. This property was owned by the Plaintiff and transferred by her to the Defendant in 2012. The issue raised in this motion is did the Plaintiff intend to transfer the property? Was it transferred as a gift, or did she intend to transfer the property for consideration, or was it a transfer subject to a resulting trust.
2For the Reasons that follow, I dismiss the Plaintiff’s motion. I grant Summary Judgement in favour of the Defendant.
3The Plaintiff agreed to transfer and did transfer her property known as 837 Poonamalie Road, Smiths Falls to her daughter Beverly Gault in April 2012, when she signed Transfer documents prepared by and signed in the presence of a lawyer, Mr. Jack Kirkland, on April 4, 2012. I find, on the balance of probabilities, the land was transferred as a gift with the stipulation that she would retain a life interest in the property and Ms. Gault and her husband would help pay on-going household expenses, specifically property taxes. I reject Ms. Hertendy’s evidence that she did not understand she was transferring the land to her daughter and reject her claim that she first learned of the transfer in 2015 when she went to another lawyer and attempted to obtain a reverse mortgage on the property on Poonamalie Road. Accordingly, the court declines to declare Ms. Gault has no equitable or legal interest in the Land and declines to declare that Gault’s registered ownership interest in the Land is subject to a resulting trust in favour of her mother, the Plaintiff.
Moving Party\Plaintiff Position:
4The Plaintiff argues that she did not know or appreciate the legal effect of the legal documents she signed. She argues that the documents were prepared by Mr. Kirkland, who was Ms. Gault’s long-time lawyer. Mr. Kirkland was not acting for her, rather was acting solely for Ms. Gault. The instructions to prepare the Transfer documents were given to the lawyer by the Defendant and the Defendant made the appointment to meet with the lawyer for the Plaintiff to sign the papers.
5Accordingly, Ms. Hertendy argues she received no Independent Legal Advice on the Transfer, the Transfer occurred while Ms. Gault was her Attorney for Property and occurred at a time when Ms. Gault had complete control over her affairs and during a time when she did exactly as Ms. Gault requested. Ms. Hertendy states she placed complete trust in the Defendant and was duped by her to sign over her home.
6Further, Ms. Hertendy argues the transfer occurred in a time period generally, where she was depressed and still in mourning for the loss of her husband. She claims she was also taking heavy pain medication as a result of recent left knee replacement surgery and was still dealing with injuries to her right knee and clavicle suffered in a December 2011 fall. Most importantly, she argues there was no payment or consideration at all in exchange for the Transfer. Ms. Hertendy claims she never intended at any time to transfer the Land to Ms. Gault during her lifetime.
7Plaintiff’s counsel argues that the only evidence provided by Ms. Gault regarding her mother’s intentions at the time of the Transfer was that it was done to prevent the Land from being subject to a family law claim by the man Ms. Hertendy was dating.
8The Plaintiff argues that a ‘resulting trust’ arose on these facts and, as a general rule, the presumption of resulting trust will apply to gratuitous transfers. Where a transfer is made for no consideration, the onus is on the transferee to demonstrate that a gift was intended. The majority in the decision of Pecore v Pecore (2007) SCC 17 held that the presumption of advancement should not apply to gratuitous transfers from parents to dependent adult children. In order to rebut a presumption of resulting trust, the transferee must demonstrate at the time of the gratuitous conveyance that the transferor intended to gift the property at issue.
9The Plaintiff relies on the decision in Bannister v McGraw (2016) 23 ETR (4th) 124 (Ont. SCJ). According to the Plaintiff, the facts in Bannister are similar to the case at bar. In Bannister the parents transferred their home to their adult child, the deal was suggested by their daughter. It is clear in the decision that the purpose for the transfer was to protect the home from potential legal claims against the parents, as a result of the father’s motor vehicle accident. The land transaction occurred quickly, there was no independent legal advice and no life interest was reserved to the parents and there was no consideration. The Court in Bannister found a ‘resulting trust, on the basis the parties all intended to shield the parent’s property. There was no intention to transfer ownership.
10The Plaintiff argues the same principles apply in the case at bar and the result ought to be the same.
Responding Party / Defendant position:
11The Defendant argues that her mother’s motion for summary judgement ought to be dismissed and the court ought to grant summary judgement in her favour. In the alternative, there ought to be a focused mini trial under the expanded summary judgment powers.
12The Defendant argues the transfer of the home from her mother to herself was done for consideration, namely, a promise to help pay carrying expenses for the home, when her mother requests. Further, the transfer was intended as a gift at the time it was made. Her Mother may have changed her mind years later, but the gift had been completed. The Defendant argues the Plaintiff at the outset of this litigation confirmed to Ms. Lorna Greenall that she ‘changed her mind’ about the land transfer.
13The Defendant argues whether the Land Transfer is classified as a gift or otherwise, it was properly completed and cannot be undone because the Plaintiff later changed her mind. There is no resulting trust, the Plaintiff intended to gift the House to the Defendant at the time and she did so. “Hindsight cannot be used to unravel that gift”, according to the Defendant.
14The Transfer was not done by the Defendant in her capacity as Attorney for Property. The Plaintiff signed all the documentation herself. There was no undue influence, nor was the Plaintiff under medical or other disability.
Background:
15On or about October 28, 2011, Marian Hertendy appointed her daughter Beverly Ann Gault Attorney for Property and Personal Care. She also executed a Will in 2011, although provided evidence she does not recall doing so.
16In her Will dated 2011, the Home, was to be transferred by the Plaintiff to the Defendant upon her death. Carl Hertendy (husband of the Plaintiff, father of the Defendant) executed a will in 2006 leaving the Poonamalie Road to the Defendant, in the event his wife did not survive him.
17Carl Hertendy died March 5, 2011. Pursuant to the Will, the home transferred to the Plaintiff.
18By sometime late 2011 Ms. Hertendy became involved with a male friend, Mr. Bruce Roberts. She initially described him a just a friend. Mr. Roberts spends weekends with the Plaintiff and appears to have a close relationship.
19Mr. Kirkland prepared the Transfer documents. It is not clear who instructed the preparation of the documents. The Plaintiff attended with her daughter and signed the documents. The Transfer was signed by the Plaintiff in the presence of Mr. Kirkland on April 12, 2012. The signing occurred outside the lawyer’s office, with the Plaintiff a passenger in a vehicle driven by the Defendant. As a result of her knee surgery three weeks before, in March 2012 the Plaintiff was not mobile. Mr. Kirkland is now deceased. His file is evidence on the motion.
20Mr. Kirkland acted in the past for the Defendant and her spouse but had also acted in 2011 for the Plaintiff to prepare a Will.
21The Plaintiff received a reporting letter from Mr. Kirkland’s office in June 2012 about the transfer of the Home. She made no issue about the transfer at that time, although now claims she did not see this letter.
22In 2017 the Plaintiff removed the Defendant from her Will. It is alleged that also in 2017, the Plaintiff stated to her daughter Lorna Greenall that she ‘changed her mind about transferring the home.’
23After transfer of the Home, the Defendant paid some of the property taxes and insurance.
The Law:
24Both parties argue that this is an appropriate case for the court to exercise its powers under Rule 20.04 (2) (a) of the Rules of Civil Procedure and grant Summary Judgement. Obviously, the parties disagree which of them should be granted Judgment. Counsel agree, given the discoveries and materials filed that no better evidence would be provided in a viva voce hearing.
25Counsel for the Plaintiff states in his factum paragraph 31: “dealing with the issue of ownership of the Land at this point is in the interests of all parties as it is the most expeditious and least expensive means to achieve a just result. If the outcome is in Marian’s favour (Plaintiff) then the parties can move to calculating the amounts owed by each party to the other, and if the outcome is in Gault’s (Defendant’s) favour then the litigation would essentially be brought to a conclusion.”
26Rule 20.04 (2) (a) provides that summary judgment shall be granted if “the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence”.
27The landmark decision regarding summary judgment is the Supreme Court of Canada in Hryniak v Mauldin (2014) SCC7 the Court stated at para 66:
On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her…There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04 (20 (a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rule 20.04 (2.1) and (2.2). She may, at her discretion, use those powers… if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in the light of the litigation as a whole.
Issues:
28The issue is who is the legal owner of 837 Poonamalie Road, Smiths Falls. To answer that question the court is required to examine the transaction of Land Transfer from the Plaintiff to the Defendant, signed by the Plaintiff April 12, 2012 and registered on Title in June 2012 by lawyer, Jack Kirkland. The question raises the following issues:
(1) Did Marian Hertendy intend to transfer legal ownership to her daughter Bev Gault, reserving for herself a life Interest?
(2) Does the Doctrine of Resulting Trust apply?
(3) Was the Land Transfer a gift or was there consideration?
Analysis:
29As a rule, the presumption of resulting trust will apply to gratuitous transfers. Where a transfer is made for no consideration, the onus is on the transferee to demonstrate that the gift was intended. A majority of the Supreme Court of Canada confirmed that a competing presumption of advancement should not apply in respect of independent adult children. Further, the majority in Pecore supra, held that the presumption of advancement should not apply to gratuitous transfers from parents to dependent adult children. The evidentiary standard to rebut the presumption of resulting trust is a balance of probabilities. (Pecore supra. Para. 43)
30In Saylor v Madsen Estate (2007) SCC 18 at para. 17 the SCC held that “an adult child who received a gratuitous transfer of assets from her parent bore the burden of rebutting the presumption of a resulting trust by showing on a balance of probabilities that a gift was intended.”
31The Supreme Court in Pecore supra. set out that:
The focus in any dispute over a gratuitous transfer is the actual intention of the transferor at the time of the transfer…The presumption will only determine the result where there is insufficient evidence to rebut it on a balance of probabilities. (Pecore paras 5 and 44)
Credibility:
32Ms. Hertendy stated in her affidavit sworn November 27, 2019 that she never intended at any time to transfer the property to her daughter Beverly, or to anyone else. She re-iterated this notion in cross examination; a review of the transcript of the Discovery May 25, 2020 at Tab 3 of the Transcript Book page 7 reveals the following exchange between counsel for the Defendant and the Plaintiff:
- Q. Yes, that’s correct? You never intended for her to get ownership of the house?
A. No, I never intended for her to get ownership of the house.
- Q. You just wanted help with the expenses of the house?
A. I just wanted help with the expenses.
- Q. That would have included the property tax?
A. That’s all I was thinking of at the time, yes, the property tax.
- Q. But then she ended up paying insurance and Rogers as well for the house?
A. Well, I don't think it has anything to do with Rogers.
- Q. At the very least, she paid property tax and insurance for the house?
A. Yes.
33In her Discovery examination the Defendant provided evidence as to her explanation for her mother transferring the house, in the following exchange:
78 . Q. When did the taxes first come up? Was it in April 2013, as you have previously stated, or do you wish to change that answer as well?
A. I'll stay with the 2013.
- Q. If that was the first time that the taxes were discussed, then that could not have been a reason for a transfer that happened in 2012? Do you agree?
A. That's when she insisted that she was having trouble and she needed help. We had talked about the taxes before but she didn’t say, “I need help with this.” It was the taxes are high, Hydro is high, heating is high. Sometimes you can talk about things and it doesn’t mean that I had to jump in and pay for it.
- Q. There is a reason why this transfer happened.
A. She decided to give me the house. That's why the transfer happened.
- Q. And that’s it? There was nothing else other than she was going to give you the house?
A. She wanted to give me the house and so did Dad. It was what they had wanted. It wasn’t until she got mad and decided to take the house back.
- Q. For this gift of the house that you were given of the house, did you pay anything?
A. No.
34In re-examination Ms. Hertendy said she thought the papers she signed with Mr. Kirkland were not for the purpose of transferring property, but to provide the Defendant with the right to pay her property taxes. The exchange with her counsel is as follows:
- Q. Marian, my first question to is what did you think you signed in April of 2012?
A. To give Bev permission to pay my taxes.
- Q. When did you first discover that Bev actually had acquired ownership of your house?
A. When I went to see Cliffen to get the money from the reverse mortgage.
35I reject the Plaintiff’s evidence on this issue. It makes no sense and it is contrary to other evidence that I do accept, that confirms she was aware she was transferring ownership to the Defendant.
36Lorna Greenall’s evidence was uncontradicted. I accept her evidence. Ms. Greenall is also a daughter of the Plaintiff. She had no discussions with the Plaintiff as to her reasons for transfer of the property before it happened. However, she had two conversations with her mother after the fact about the house transfer. I find these conversations contradict the Plaintiff’s evidence now, that she did not know she was transferring ownership. Ms. Greenall testified her mother at one point said she and the Defendant were interested in purchasing property in Florida, but they would have to sell the Lands in question. In this exchange it is clear the Plaintiff understood that the Defendant was at the very least a part owner of the property. The statement is consistent with the fact that the home was transferred to the Defendant, reserving to her a life interest in the property. It is inconsistent with her evidence that she never intended to transfer ownership to anyone, least of all the Defendant.
37In 2017 after this court case had begun, Ms. Greenall confronted her mother and said: “But you gave her the house” meaning the Plaintiff transferred the Poonamalie Road home to the Defendant. The Plaintiff’s response was: “I’ve changed my mind.” I accept Ms. Greenall’s evidence that these words were spoken by the Plaintiff. The Plaintiff’s denial of understanding the fact she agreed to transfer of the property is undermined by the evidence of both of her daughters.
38The Plaintiff has a convenient memory, or lack of memory, on essential issues that if true cast doubt on her evidence. For example, the Plaintiff claims a lack of memory of attending to Mr. Kirkland in 2011 to execute a new Will. She does not recall receiving an invoice for the Will prepared and sent to her by Kirkland. Yet, the invoice was produced by her and found in her personal papers. Obviously she must have received the invoice.
39The Will prepared by Kirkland is similar to a previous Will prepared by a lawyer, Ms. Lemay in Arnprior for Carl Hertendy. In his Will, Carl provided that the Poonamalie Road home was to be gifted to the Defendant, if Ms. Hertendy did not survive him. Ms. Hertendy did not recall the contents of the Wills. The denial is not believable.
40Finally, Ms. Hertendy claims she did not recall receiving an invoice from Mr. Kirkland, addressed to her for transfer of the home. I find the invoice was sent to her by Kirkland in June 2012 and was paid. It is clear on the face of the documents that it was a land transfer she signed, not an authorization for the Defendant to pay the Plaintiff’s property taxes. The acknowledgement of the receipt of this invoice would undermine her argument that she knew nothing of the transfer until 2015. Therefore she testified she had no knowledge.
41I reject the Plaintiff’s evidence that she only learned that she transferred the property to the Defendant in 2015, when she visited another lawyer in Smiths Falls, Mr. Cliffen, to obtain a ‘reverse mortgage’. I accept she did attend Cliffen’s office, to try and obtain a mortgage. I do not find this is proof that Ms. Hertendy did not intend to transfer her property in 2012. One cannot speculate what was in the Plaintiff’s mind when she sought the mortgage three years later. It is conceivable that Ms. Hertendy felt that her life interest in the property gave her the right to obtain a mortgage.
42Finally, I reject the Plaintiff’s evidence that she thought the legal papers she signed with Mr. Kirkland on April 12, 2012 was to give the Defendant permission to pay her taxes. The evidence of the Defendant and her sister, Ms. Greenall, confirm that the Plaintiff was worried after the death of her husband in 2011 about being able to afford to pay the bills related to the home, specifically the property taxes. The Plaintiff in her own words stated the purpose of signing the papers was so the Defendant ‘would help pay the taxes.’ The Plaintiff did not expand on how or why she thought a lawyer was required to prepare legal documents in order for the Defendant to help pay the house taxes. The court is simply left with her statement that she thought the papers allowed the Defendant to pay the taxes.
43A court may accept some, all or none of a witness’s evidence. I accept the Plaintiff’s evidence that she was worried about her capability to pay the bills after her husband’s death. I accept her evidence that her concern about being able to finance her continued residence at the house lead to her signing the papers prepared by Kirkland. I reject her evidence she did not understand the legal consequence of the papers she signed.
44In her Discovery on May 25, 2020 the Plaintiff testified she recalls attending to Kirkland’s’ office and being in the car and signing documents. She stated she did not realize what she was signing and testified: “yes in hindsight I should have asked more questions.” This is not believable.
45Turning to the Defendant’s evidence. At times she was vague in her cross examination as to the reason for the land transfer. Second, she testified she did not recall making the appointment for her mother to meet with Kirkland or to prepare the transfer. The real estate file from Kirkland strongly suggests the arrangements were made by the Defendant. She did however, allow for the possibility that she was asked by her mother to speak to Mr. Kirkland and make the arangements. Both her memory and the Plaintiff’s memory seem questionable. However, I find that on several material points, the evidence of the Defendant is corroborated by Ms. Greenall. As previously stated, the evidence of Ms. Greenall contradicts the Plaintiff.
46Upon review of all of the evidence I find the Plaintiff intended to gift the property to the Defendant when she signed papers with Mr. Kirkland April 2012. The 2011 Will is alone not evidence of intention to gift the property inter vivos. However, it can be considered as one factor and a piece of evidence to consider among all the evidence. The evidence is clear that, leading up to the Land transfer in April 2012, the Plaintiff worried about paying the bills, she wanted to remain in her home, she knew and acknowledged she required financial help.
47She intended the Defendant to eventually become the homeowner after her death. The transfer of the land to the Defendant, reserving a life interest to the Plaintiff is consistent with the evidence of the two daughters. It is consistent with the Plaintiff’s desire to stay in the home she had previously shared with her husband, by way of a life interest. Also consistent with her concern that she needed someone to help her pay some of the bills. The notion of transferring the ownership, at some point to the Defendant, did not come out of the blue.
48The issue is whether at the material time the Plaintiff intended the transfer. In deciding this case, I pause to consider whether a person would gift their home to someone, even a family member, in return for a vague pledge of assistance for payment of expenses. In this case the payments would likely have been far less than fair market value. For the reasons discussed, I find the Plaintiff did just that when she signed the Transfer in April 2012. She signed the Transfer document, she intended to sign the document, she received a benefit from signing the document (albeit modest compared to the value of the property), she paid the lawyer for the transfer and made no complaint until at least three years later. Ms. Hertendy’s explanation is ‘in hindsight I should have asked more questions.’
49The fact that Mr. Kirkland’s file indicates that the Defendant initiated the legal process for transfer is not inconsistent with a finding that the Plaintiff wanted to transfer ownership and did so. Ms. Gault could have, but did not use her Power of Attorney over Property to execute the documents on her mother’s behalf. I am satisfied Ms. Hertendy used Mr. Kirkland as her own lawyer previously, notwithstanding her attempt to distance herself from this fact. I am satisfied that the intention between the mother and daughter was for ownership to transfer, on an understanding mother would have the right to remain in the home and daughter would assist with some of the bills.
50There is insufficient evidence to conclude and I do not conclude that Ms. Hertendy was unduly influenced by the Defendant, or that she suffered depression or other medical issues rendering her mentally incapable. Undoubtedly the Plaintiff was sad in 2011 when her husband died. However, she subsequently entered into a relationship with another man and went on a cruise. Ms. Hertendy continued living her life. She had physical limitations on April 12, 2012 following her knee surgery. She was unable to climb stairs and attend at Kirkland’s office. I do not find that any of these issues impaired her abilities to know and comprehend what documents she was signing.
51This case is distinguishable from the case of Bannister supra. In Bannister the parents were clearly vulnerable, I do not find Ms. Hertendy was vulnerable. In Bannister there was no life estate reserved for the parents, as was done in the case at bar. The transfer was consistent on some level, with the previous Will made by the Plaintiff. In Bannister the transfer was precipitated by the accident and the need to take action immediately. In the case at bar I accept there had been discussions in 2011 leading up to the 2012 transfer, about concerns of money. This is verified by Lorna Greenall. I conclude on all of the evidence that the Plaintiff’s utterance to Lorna Greenall in 2017 “I changed my mind”, means just that. In 2012 the Plaintiff agreed to transfer her property to the Defendant. She executed the documents with this purpose. In later years she changed her mind. I conclude that it is too late.
52I agree with the submission of both counsel that there is sufficient evidence to make a fair determination of the issue. The court is able to use its expanded powers to make findings of credibility. There would be little to gain from requiring a mini-trial. This is an appropriate case to exercise enhanced powers now permitted, to grant Summary Judgment.
53Judgment is granted in favour of the Defendant.
The Honourable Mr. Justice J. M. Johnston
Released: December 7, 2020