COURT FILE NO.: CV-18-1140
DATE: 20220623
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
THOMAS MAXWELL
Plaintiff
– and –
PAULINE ALTBERG
Defendant
J. David Keith for the plaintiff
John S. Contini for the defendant
HEARD: May 30, 2022 by videoconference
RULING ON PLAINTIFF’S summary judgment MOTION
C. boswell j.
OVERVIEW
[1] The defendant loaned $50,000 to the plaintiff and his wife, Karen Maxwell. The loan was advanced in two tranches between December 1995 and January 1996. It was documented by a promissory note dated December 28, 1995 executed by both borrowers. It was secured by way of a collateral mortgage registered on December 22, 1995 against a cottage property in Muskoka registered in the plaintiff’s name.
[2] The plaintiff issued a Statement of Claim on November 5, 2018 seeking an order discharging the collateral mortgage. He asserts that the debt reflected in the promissory note has been repaid in full. He further asserts that, in any event, enforcement of the mortgage is statute barred by virtue of s. 23(1) of the Real Property Limitations Act, R.S.O. 1990, c. L.15. That Act, (the “RPLA”) provides that no action to enforce a mortgage may be brought more than 10 years after the mortgage became due, unless there has been a payment made in the interim, or a written acknowledgment of the indebtedness. The plaintiff contends that he last made a payment on the mortgage in March 2005.
[3] The defendant delivered a Statement of Defence and Counterclaim on or about November 27, 2018. She denies that enforcement of the collateral mortgage is statute barred. She alleges that the plaintiff made a payment against the mortgage on May 28, 2010 in the amount of $4,000. In her position, the 10-year limitation period restarted as of that date. She seeks payment of the sum of $121,440.83, which she alleges was due and owing on the mortgage as of November 30, 2018. Of course she seeks further interest accruing since that date.
[4] The plaintiff moves for summary judgment. He says there is no genuine issue for trial with respect to the application of the 10-year limitation period, because there is no credible and reliable evidence that he made the $4,000 payment relied upon by the defendant. The defendant, unsurprisingly, resists the motion. She says there is a very live issue as to whether the $4,000 payment was made. She urges the court to reject the suggestion that a conclusion can be made about that payment in the absence of an oral hearing.
[5] The plaintiff’s motion succeeds for the reasons that follow.
THE LEGAL FRAMEWORK
Summary Judgment
[6] Summary judgment is a procedure made available to litigants through r. 20 of the Rules of Civil Procedure. It is one of a cluster of rules that litigants may utilize for the purpose of determining cases, or issues, without the need of a trial.
[7] Rule 20.04 (2) and (2.1) provide as follows:
(2) The court shall grant summary judgment if,
(a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or
(b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment.
(2.1) In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:
Weighing the evidence.
Evaluating the credibility of a deponent.
Drawing any reasonable inference from the evidence.
[8] The application of r. 20.04 came before the Supreme Court for consideration in 2014 in Hyrniak v. Mauldin, 2014 SCC 7.
[9] It is no secret that access to civil justice has been a serious and pressing issue for courts across the country for many years. A lack of resources, cumbersome processes and escalating costs have seriously impaired the ability of most Ontarians to access civil justice in a timely and cost-efficient (or even cost-tolerable) way.
[10] In Hryniak, the Supreme Court signalled that if we were to make any significant headway towards improving access to civil justice, a culture change was required - a fundamental shift in the way the court delivers justice. Writing for a unanimous court, Justice Karakatsanis described this culture shift, at para. 2 of the ruling, as follows:
This shift entails simplifying pre-trial procedures and moving the emphasis away from the conventional trial in favour of proportional procedures tailored to the needs of the particular case. The balance between procedure and access struck by our justice system must come to reflect modern reality and recognize that new models of adjudication can be fair and just.
[11] There was a time, prior to Hyrniak, when the utility of r. 20 was limited to weeding out clearly unmeritorious claims or defences. But the addition of r. 20.04(2.1) in 2010 and the Supreme Court’s guidance in Hryniak make those limits a footnote to history. Rule 20 now represents a “significant alternative model of adjudication”. (Hyrniak, para. 45).
[12] Justice Karakatsanis provided the following guidance about the circumstances in which a motions judge might determine that there is no genuine issue requiring a trial:
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. (Hyrniak, para. 49).
[13] Although the rule does not, on its face, appear to require a staged analysis, Hryniak instructs that r. 20.04(2) should, in fact, be applied in two stages.
[14] First, the motions judge must determine if there is a genuine issue requiring a trial based only on the evidence filed on the motion, without resort to the enhanced fact-finding powers described in r. 20.04(2.1). No genuine issue requiring a trial will exist if the evidence permits the motions judge to fairly and justly adjudicate the dispute in a timely, affordable and proportionate manner. If no genuine issue requiring a trial exists, judgment should be rendered accordingly.
[15] If the motions judge concludes at the first stage that a genuine issue for trial exists, then stage two is triggered. At stage two, the motions judge is directed to consider whether the need for a trial may be avoided by resorting to the enhanced fact-finding powers set out in r. 20.04(2.1). The motions judge may utilize those powers, in his or her discretion, unless doing so would be contrary to the interests of justice.
[16] Notwithstanding the fact that the summary judgment process represents a significant means by which access to timely and affordable justice can be enhanced, it is not a panacea for all that ails the civil justice system. It is not appropriate in every single case. The court must not be in such a rush to dispose of cases summarily that the fairness of the process is undermined. See Royal Bank of Canada. v. 16443937 Ontario Inc., 2021 ONCA 98 at para. 25. It is imperative that the analytical framework set out in Hryniak be closely adhered to, in order to ensure that the evidence is properly analyzed. See Trotter v. Trotter, 2014 ONCA 841 at para. 49.
[17] A great deal of jurisprudence has developed in relation to summary judgment motions, both before and after the 2010 amendments. Much of the pre-2010 jurisprudence remains valid. In addition to the principles enunciated in Hryniak, the following others have emerged over the years and continue to apply:
(a) The moving party continues to bear the legal and persuasive burden to establish that there is no genuine issue requiring a trial to resolve;
(b) The responding party continues to bear an evidentiary burden to establish that there is a genuine issue requiring a trial;
(c) Each party must “put their best foot forward”. Neither may rest on the allegations in their pleadings; and,
(d) The court is entitled to assume that the record before it contains the core substance of the evidence that the parties will present at trial.
See Dawson v. Rexcraft Storage & Warehouse Inc., 1998 CanLII 4831 (ON CA), [1998] O.J. No. 3240 (C.A.) at para. 17; Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200 at paras. 26 and 32; and Penretail Management Ltd. v. 2380462 Ontario Inc. (o/a Bolton Health Centre), 2016 ONSC 600, at para. 10.
The Real Property Limitations Act
[18] Central to the determination of this case is the operation of the limitation period applicable to mortgage enforcement actions. That limitation period is found at s. 23(1) of the RPLA, which provides as follows:
23 (1) No action shall be brought to recover out of any land or rent any sum of money secured by any mortgage or lien, or otherwise charged upon or payable out of the land or rent, or to recover any legacy, whether it is or is not charged upon land, but within ten years next after a present right to receive it accrued to some person capable of giving a discharge for, or release of it, unless in the meantime some part of the principal money or some interest thereon has been paid, or some acknowledgment in writing of the right thereto signed by the person by whom it is payable, or the person’s agent, has been given to the person entitled thereto or that person’s agent, and in such case no action shall be brought but within ten years after the payment or acknowledgment, or the last of the payments or acknowledgments if more than one, was made or given.
EVIDENCE SURROUNDING THE $4,000 PAYMENT
[19] The live, factual issues in this action are very narrow. They boil down to two questions. First, did the mortgagors make a $4,000 payment against the mortgage in May 2010? If they did not, then there is no serious dispute that the mortgage action is out of time. The last recorded payment prior to May 2010 appears to have been made on March 14, 2005. If that is so, then the time in which to commence any enforcement action on the mortgage expired in March 2015.
[20] Second, if the mortgagors did make a $4,000 payment against the mortgage in May 2010, then the question becomes how much is currently outstanding on the mortgage?
[21] For the purposes of this motion, only the first question is in play. In other words, is there a genuine issue requiring a trial regarding the $4,000 payment purportedly made in May 2010? Asked another way, is there a genuine issue requiring a trial with respect to the limitations issue?
[22] The evidence submitted on the motion consists of the following:
(a) The Affidavit of Thomas Maxwell sworn August 21, 2020;
(b) The Affidavit of Karen Maxwell sworn August 21, 2020;
(c) The Affidavit of Leo Altberg sworn October 21, 2020;
(d) The Affidavit of Pauline Altberg sworn October 21, 2020;
(e) The Supplementary Affidavit of Leo Altberg sworn December 20, 2020; and,
(f) The following transcripts:
(i) The examination for discovery of Pauline Altberg taken April 12, 2019;
(ii) The examination for discovery of Thomas Maxwell taken April 12, 2019;
(iii) The cross-examination of Karen Maxwell taken December 10, 2020;
(iv) The cross-examination of Thomas Maxwell taken December 10, 2020; and,
(v) The cross-examination of Leo Altberg taken December 10, 2020.
[23] Despite all the affidavits and transcripts filed, the evidence about the $4,000 payment is arrestingly thin. I will take a moment to place the purported payment into context.
[24] It appears to be common ground that the loan from Mrs. Altberg to Mr. Maxwell was money Mr. Maxwell needed to start up a business. The business was called Bowmax Industries Ltd. Mr. Maxwell described it as a manufacturer of insulated units for windows. Bowmax was in operation between 1995 and 2005. It ceased to do business in March 2005. It was formally dissolved as a corporation on January 13, 2007. Just as it was going out of business, Mr. Maxwell directed the available funds left in the company towards repayment of the loan to Mrs. Altberg, making a total of $23,100 in payments on March 14, 2005. He made a personal assignment into bankruptcy a month later, on April 12, 2005. A month after that, he commenced to work for a business owned by Mrs. Altberg’s son, called Pinnacle Millwork Incorporated.
[25] All arrangements for the loan were made between Mr. Maxwell and Mrs. Altberg’s husband, Leo Altberg. Mrs. Altberg was identified as the lender because the funds on loan came from a bank account she held in trust for her children. Mrs. Altberg has consistently said that she was not involved in making the arrangements for the loan or its repayment.
[26] The mortgage is, as I noted, collateral to a promissory note dated December 28, 1995. The note is in the principal amount of $50,000. It provides for interest accruing in two components. First, an amount payable monthly at a rate equal to 10% per year. Second, a further amount, also equal to 10% per year, payable annually on the 28th day of December, 1996. The principal was due in full by December 28, 1998.
[27] According to the terms of the note, the Maxwells should have been paying $416.67 in monthly interest payments commencing January 28, 1996 and an additional $5,000 annually on the 28th of December, commencing in 1996. They should have repaid the principal in full on or before December 28, 1998.
[28] Mr. Altberg deposed that both he and his wife recall that Mr. Maxwell paid the full amount of interest owing throughout 1996, 1997 and 1998. There is no evidence, however, as to when or how any such interest payments were made.
[29] There is no doubt that the Maxwells did not repay the principal by December 28, 1998. Moreover, they did not make all interest payments as they fell due following December 1998. What payments they did make are a little difficult to track with confidence. No one kept a record of any payments made, nor a running account of the balance, with accrued interest.
[30] Mrs. Altberg banked at TD Canada Trust. She identified an account that she deposited the Maxwells’ loan payments into. But that account was not exclusively dedicated to the Maxwell loan. Other funds regularly went into and came out of that account.
[31] According to Mrs. Altberg, whenever the Maxwells made a payment on the loan, she made a notation in her bank book corresponding to the payment. For instance, there is a $1,000 deposit on July 30, 1999 beside which she wrote, “Bomax May-June-July”. She testified that her note meant the deposit reflected a payment against the Maxwell loan for interest over the months of May-July 1999.
[32] Unfortunately, Mrs. Altberg no longer has her bank books for the years 1996, 1997 and 1998. She does have them for years 1999 and later. She has produced those statements, which include her own handwritten notes on certain entries. The entries she and her husband say are relevant to the Maxwell loan are the following:
| Date | Amount | Note |
|---|---|---|
| July 30, 1999 | $1,000 | Bomax May-June-July |
| November 5, 1999 | $2,000 | Bowax Aug–Jan/2000 |
| July 29, 2000 | $2,000 | Bowman Feb-July 6 months |
| October 7, 2000 | $1,000 | Bomax Aug-Oct |
| April 2, 2001 | $2,000 | Bomax Nov-Apr |
| April 29, 2002 | $4,000 | Bomax 1 Yr Int May01-April02 |
| May 16, 2003 | $2,000 | Bomax May 1/02-Oct/02 |
| June 17, 2003 | $2,000 | Bomax Nov/02-Apr03 |
| July 15, 2003 | $1,000 | Bomax May/03-July/03 |
| October 22, 2003 | $1,000 | Bomax Aug-Oct/03 |
| June 4, 2004 | $2,000 | Bomax Aug-Jan/04 |
| July 19, 2004 | $2,000 | Bomax |
| August 10, 2004 | $2,000 | Bomax |
| September 15, 2004 | $2,000 | Bomax *returned NSF Sept 20/04 |
| March 14, 2005 | $15,000 | Tom X |
| March 14, 2005 | $5,000 | Tom X |
| March 14, 2005 | $1,000 | Tom X |
| March 14, 2005 | $2,100 | Tom X |
| May 28, 2010 | $4,000 | Box |
[33] When questioned about these entries during her examination for discovery, Mrs. Altberg was unable to say why she wrote “Bomax”, or variations on that name, beside specific entries in her bank books. She thought perhaps the cheques may have come from Bowmax.
[34] Mrs. Altberg similarly did not know why she wrote “Tom X” beside the four payments made in March 2005. She did not know if the March 2005 payments were payments against principal or outstanding interest.
[35] Mrs. Altberg also did not know why she wrote “Box” in relation to the May 28, 2010 payment. She said “I assume it came from Bowmax”. She does not know where the payment came from or whether it was a cheque or some other form of payment.
[36] In his affidavits filed in response to Mr. Maxwell’s motion – and during cross-examination on those affidavits – Mr. Altberg expressed confidence that Mr. Maxwell made a $4,000 payment against the loan on May 28, 2010. But his confidence, it must be noted, is based entirely on his wife’s entry in her bank book. He has no actual recollection of that payment being made. He could not recall if any of the payments on the loan were made through him or if they all went directly to his wife. He said some of the payments were made by cheque, but he was not sure if all were. Some were made on the Bowmax account, but again, he was not sure if all were. He could not recall giving the May 2010 payment to his wife.
[37] Mr. Altberg was not aware of any mortgage statements, whether annual or otherwise, being provided to Mr. Maxwell.
[38] Mr. Maxwell denies that he made a payment of $4,000 on May 28, 2010. He submits that it is impossible for him to prove a negative. One thing he is able to say, for certain, however, is that the payment in issue did not come from Bowmax, given that Bowmax was out of business and dissolved as a company in early 2007. He said he was doing his personal banking at CIBC after 2005. He managed to obtain a copy of his bank records for the period May to June 2010 from the CIBC. They do not reflect any $4,000 payment being made.
[39] According to Mr. Maxwell, he had repaid $35,000 of the principal amount of the loan by the time he started to work at Pinnacle. He said he had an agreement with Mr. Altberg that he would be paid $50,000 at Pinnacle, but that the $15,000 balance of the loan would be deducted from his wages over time. Mr. Altberg denied that such an arrangement existed. He said Mr. Maxwell was simply paid $35,000 per year for his employment at Pinnacle. That employment was terminated effected July 14, 2006.
[40] Like the Altbergs, Mr. Maxwell did not keep any records of the payments he made against the loan, whether principal or interest. He said, however, during his examination for discovery, that “I’m a numbers guy…I remember numbers.” Notwithstanding his confidence in his ability to remember numbers, he said under cross-examination that:
(a) He mistakenly thought that the interest rate on the promissory note was 8%, when in fact it is 20% per year;
(b) He could not explain why, on the Statement of Affairs he filed in relation to his bankruptcy in April 2005, he listed his brother as a secured creditor for $175,000 and an unsecured creditor for $35,000. His brother has a registered mortgage against his cottage in the amount of $125,000 and he “believes” he borrowed an additional $25,000 from him;
(c) He was not sure why, in that same Statement of Affairs, he said he had only a one-half interest in the cottage;
(d) He was not sure why, in that same Statement of Affairs, he said he had an unsecured indebtedness owing to Mrs. Altberg of $65,000;
(e) He did not know where the $175,000 valuation of his cottage came from for the purposes of his Statement of Affairs; and,
(f) He did not know if the value of his cottage increased between 1995 and 2005.
THE PARTIES’ POSITIONS
[41] Mr. Maxwell takes the position that the onus is on Mrs. Altberg to establish that her action has been brought within the appropriate limitation period. In the circumstances here, that means that it is her onus to establish that in the ten years prior to the commencement of the claim on the mortgage, there was either a payment made or a written acknowledgment of the indebtedness. Mrs. Altberg cannot do so, Mr. Maxwell submits, rendering this case appropriate for summary judgment.
[42] Mrs. Altberg takes the position that there is conflicting evidence on a number of points, but particularly in relation to the $4,000 payment purportedly made in May 2010. Her counsel submits that Mrs. Altberg and her husband have both provided sworn evidence that the $4,000 payment was made by Mr. Maxwell. He contends that their evidence is corroborated by the entry in Mrs. Maxwell’s bank book. He compares that to Mr. Maxwell, who has offered nothing to corroborate his direct evidence that he did not make the payment in issue. In the circumstances, the court should conclude that there is a triable issue with respect to whether the payment was made by, or on behalf of, Mr. Maxwell in 2010.
[43] Should it come to the second prong of the Hryniak framework, Mrs. Altberg argues that the court should not too quickly make an adverse credibility finding against her, given the presence of evidence that corroborates her testimony. At the same time, there are cogent reasons to reject Mr. Maxwell’s evidence as not credible. In particular, she contends that Mr. Maxwell made inconsistent and misleading representations in his Statement of Affairs in relation to his personal bankruptcy.
[44] In Mrs. Altberg’s view, it is impossible to make the necessary factual findings in order to grant summary judgment on the record now before the court.
DISCUSSION
[45] As I alluded to earlier, summary judgment is to be granted when the court is satisfied that there is no genuine issue requiring a trial. There will be no genuine issue requiring a trial where the court is able to reach a fair and just determination on the merits during the summary judgment motion. To repeat, 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. (Hyrniak, para. 49).
[46] The first step in the analysis is therefore to determine whether the process – having regard to the record before the court – allows the court to make the necessary factual findings. In this instance, that means a finding about whether there was a payment made against the loan in May 2010.
[47] The court must generally be satisfied that the necessary facts have been made out to the certainty required by Hryniak. If the court is not so satisfied, a genuine issue for trial may exist. See Nasr Hospitality Services Inc. v. Intact Insurance, 2018 ONCA 725, at para. 39.
[48] To be clear, Hryniak does not set a new standard for fact-finding. Triers of fact do not generally need to be satisfied of individual facts to a particular threshold, such as “beyond a reasonable doubt” or “on a balance of probabilities”. Instead, the standard is defined in terms of confidence. A trier of fact needs to be sufficiently confident in the credibility and reliability of the evidence supporting a particular finding that he or she is prepared to make that finding in the process of adjudication.
[49] In Hryniak, Justice Karakatsanis adopted the confidence standard for fact-finding on summary judgment motions. She explained, at para. 50, that in assessing whether the court is able to reach a fair and just determination on the merits, 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.”
[50] In accordance with Hryniak’s instructions, the evidence must be assessed in two stages.
Hryniak Stage One
[51] At the first stage of the Hryniak analytical framework, the court is directed to determine if there is a genuine issue requiring a trial based only on the evidence filed on the motion, without resort to the enhanced fact-finding powers described in rule 20.04(2.1). In other words, without weighing evidence, evaluating credibility or drawing reasonable inferences from the evidence, am I able to fairly and justly adjudicate this dispute?
[52] In the preceding section of this ruling, I reviewed the evidentiary record relating to the repayment of the loan in issue. To summarize, the evidence available to the court to consider at this first stage of the Hryniak analysis is essentially the following:
(a) A $50,000 loan was advanced by the defendant to the plaintiff in December 1995. The loan is documented by a promissory note and a collateral mortgage on the plaintiff’s cottage. The loan accrued interest at the rate of 20% per year – half payable yearly and the other half payable monthly;
(b) Neither side has any records of the payments made, or not made, on the mortgage, save for some bank book entries between 1999 and 2010;
(c) Mrs. Altberg generally wrote “Bomax” or some variation of that word in her bank books beside payments made against the loan. In relation to four payments made on March 14, 2005, however, she wrote “Tom X”;
(d) It is agreed that Mr. Maxwell made payments on the promissory note. It is clear that those payments did not coincide with the terms of the note. Indeed, it is difficult to discern any particular pattern to the payments;
(e) The principal balance of the loan was due in full by December 28, 1998. It was not paid;
(f) No payments were made on the loan between March 14, 2005 and May 28, 2010. There is no record of any demand for payment being made in that period;
(g) There is no record of any payment, or demand for payment, following May 28, 2010, prior to the commencement of this lawsuit;
(h) There is conflicting evidence about whether Mr. Maxwell paid off the loan by July 2006 through a combination of payments and labour;
(i) On May 28, 2010, Mrs. Altberg deposited $4,000 to her bank account at TD Canada Trust. She wrote the word “Box” beside the entry; and,
(j) Mr. Maxwell says he did not make a payment on the loan in May 2010.
[53] The parties’ positions about what to make of the limited evidence are diametrically opposed. The Altbergs contend that a $4,000 payment was made against the loan in May 2010. The Maxwells deny making any payment in 2010 and contend that their last payment on the loan was made in March 2005.
[54] Each side submits that the court should have confidence in their position because each is purportedly corroborated by banking records. Mrs. Altberg has produced a TD Canada Trust bank book which shows a $4,000 deposit on May 28, 2010. Mr. and Mrs. Maxwell have each produced bank statements for May 2010 from what they say were their only active bank accounts at the time. Those statements do not reflect any debits in the amount of $4,000.
[55] In my view, none of the bank records provide strong corroboration for either position.
[56] First, in relation to the Maxwells’ statements, their probative value is only as strong as the faith I put in their representations that the statements they have produced cover off all of their active bank accounts at the relevant time. In other words, the bank statements they have provided do not meaningfully bolster the credibility of their testimony about not making the $4,000 payment in May 2010. This is because the probative value of the bank statements they have produced is entirely dependent on their credibility – in particular, the credibility of their assertions that they have produced statements from all of their active bank accounts at the relevant time.
[57] Second, in relation to Mrs. Altberg’s bank book, I find that it is not corroborative evidence of the purported loan payment; it is the only evidence.
[58] Neither of the Altbergs has any independent recollection of a $4,000 payment having been made by the Maxwells in May 2010.
[59] Mrs. Altberg testified that she does not know where the $4,000 payment came from. She does not know why she wrote the word, “Box”, beside the entry relating to that payment. She “assumes” it is because the deposit relates to the Maxwell loan.
[60] Mr. Altberg was asked, under cross-examination, on what basis he was making the statement that Mr. Maxwell had made a payment of $4,000 on May 28, 2010. His answer was “The bank book says that he paid $4,000 at that time.” When asked if he had a recollection of a payment being made, he said, “I do because it was deposited.” He had no recollection of receiving the payment or providing the payment to his wife for deposit. According to him, the entry in the bank book “speaks for itself”.
[61] It is clear that each of the Altbergs is entirely reliant on Mrs. Altberg’s bank book to establish the $4,000 deposit and her handwritten note to establish that the deposit was connected to the loan to Mr. Maxwell. In other words, the bank book entry is not corroborative evidence of the Altbergs’ independent recollection of events. It is the only evidence of the relevant events.[^1]
[62] Candidly, on the basis of the limited evidentiary record before the court, I lack the confidence necessary, at this first stage of the Hryniak analysis, to make a finding about whether a payment on the loan in issue was made in 2010.
[63] Without utilizing any of the enhanced fact-finding powers provided for in r. 20.04(2.1), I face a record that is little more than the classic he said/she said account of a single historical event. There is little to choose from between the two accounts.
[64] Arguably, the court’s inability to make a finding about whether the payment in issue was made supports the conclusion that there is a genuine issue requiring a trial regarding the question of whether Mrs. Altberg’s claim is statute barred. Such a conclusion triggers stage two of the Hryniak analytical framework.
[65] At the same time, I am alive to the plaintiff’s argument that the onus is on the defendant to establish that her claim on the mortgage was initiated within the statutory limitation period. It is arguable that the defendant’s claim on the mortgage should be dismissed in light of her failure to adduce evidence capable of satisfying the court that her claim was commenced within that period. In my view, however, the onus issue is best left to stage two of the analysis where it can be considered in light of any change in the factual landscape based on the application of the court’s enhanced fact-finding powers.
Hryniak Stage Two
[66] Having reached the conclusion at stage one that I am unable to determine if a payment was made on the mortgage in May 2010, I must consider whether it is in the interests of justice to employ the enhanced fact-finding powers set out in r. 20.04(2.1). It will be in the interests of justice to utilize these powers where doing so will enable the court to fairly and justly adjudicate the dispute in a proportionate, timely and affordable manner. What is fair and just is a function of the nature of the issues, the nature and cogency of the evidence and proportionality. See Hryniak, paras. 58-59.
[67] I am satisfied that applying the enhanced fact-finding powers would not be contrary to the interests of justice in this instance. The live issue is a very narrow one and it has the potential of determining the proceedings on the whole. The parties’ evidence on the issue has been thoroughly canvassed. Each of the parties and their spouses have filed affidavits and been examined or cross-examined.
[68] The Altbergs’ counsel suggested that the court ought to consider hearing oral evidence on the payment issue. But apart from having the benefit of observing the witnesses’ demeanour, there would be little to be gained from an oral hearing. The evidence is not likely to change. The court has the evidence of any witness likely to know anything about the payment in issue. It is difficult to conceive of any new information being tendered about that payment during the course of an oral hearing. The ability to observe the witnesses’ demeanour is not valueless, but I think little will turn on it.
[69] Having said all of that, the use of the enhanced fact-finding powers does not ultimately assist me in determining whether the May 28, 2010 entry in Mrs. Altberg’s bank account was a loan payment by the Maxwells.
The Assessment of Credibility
[70] A consideration of the credibility of the witnesses who provided evidence on the motion does not significantly affect my views of that evidence. I do not have any compelling reason to reject any particular witness’ evidence about the purported loan payment.
[71] The Altbergs strike me as generally credible witnesses, but that credibility does not take them very far. As I noted, neither of them has an independent recollection of the payment in question being made. Each of them is simply looking at the bank book entry on May 28, 2010 and interpreting it as a payment from the Maxwells.
[72] Mrs. Maxwell testified that she did not make a payment on the loan in 2010 and I have no reason to doubt her.
[73] Mr. Maxwell similarly said he did not make a payment in May 2010. I have at least some concern about the credibility and reliability of his evidence for reasons that include the following:
(a) It was my impression that he overstated the amount that he paid off on the mortgage. There is no evidence that corroborates his position that he had paid off $35,000 in principal on the mortgage by the time he accepted a position with Pinnacle in the spring of 2005. The evidence tends to suggest, in my view, that he had not even kept current with the interest payments as they fell due. Indeed, it would appear that between January 1999 and December 2004, he underpaid interest by, coincidentally, $35,000. At the time of his assignment into bankruptcy in April 2005, he listed the debt owing to Mrs. Altberg at $65,000;
(b) He made what appear to me to be a number of other misleading statements on the Statement of Affairs he prepared in his bankruptcy;
(c) His assertion that Leo Altberg agreed that he could pay off “the final $15,000” owing on the loan by taking a reduced salary at Pinnacle strikes me as unlikely. First, because I do not believe that only $15,000 was owing at that time. Second, because there is not a shred of evidence to corroborate such an agreement. I would have expected to see a written confirmation of such a variation in repayment terms, given the careful way in which the loan was originally documented; and,
(d) His assertion that he remembered all of the payments he had made on the loan because he is a “numbers guy” is nonsense.
[74] My concerns about Mr. Maxwell’s credibility and reliability as a witness are not sufficient, however, to outright reject his evidence, particularly in the face of such tepid evidence that a loan payment was indeed made in May 2010.
Inference Drawing from Circumstantial Evidence
[75] It is remarkable that none of the parties kept any sort of records of what payments were falling due under the promissory note and what payments were made. While there is no serious question that a $4,000 deposit was made into Mrs. Altberg’s bank account on May 28, 2010, the source of those funds is very much a live issue. My review of the witnesses’ testimony and a consideration of the credibility and reliability of that evidence did not assist in resolving that live issue.
[76] My review of the surrounding circumstances – and a consideration of what inferences might arise from those circumstances – has proven to be equally unhelpful.
[77] Earlier I provided a table setting out all of the purported payments made by the Maxwells between 1999 and 2010. There is no particular pattern of payments that is discernable, other than the fact that payments appear generally to have been made in multiples of a thousand dollars, typically either $1,000 or $2,000 at a time. Total payments in 1999 were $3,000. They were $3,000 again in 2000. In 2001 they were $2,000. Then $4,000 in 2002, $5,000 in 2003 and $8,000 in 2004. Then there was the $23,100 paid in 2005 when Bowmax went out of business.
[78] The payments made in the years 1999 to 2005 were not only inconsistent in amounts, but also in terms of timing.
[79] After the significant payments were made in March 2005 there was nothing paid for the balance of that year, or 2006, 2007, 2008 and 2009. Though Mr. Altberg suggested he spoke to Mr. Maxwell about the loan on occasion, there is no evidence that a mortgage statement was ever delivered by the Altbergs to the Maxwells. There is no evidence that a demand for payment was ever made.
[80] The purported payment in 2010 appears to have been entirely random. It is difficult to understand why the Maxwells might pay nothing for over five years, then suddenly and randomly make a $4,000 payment, then return to making no payments for another eight years before this action was commenced. It is not inconceivable that they might conduct their affairs in that way, but it strikes me as improbable.
[81] I accept that Mrs. Altberg had a practice of making a handwritten note in her bank book when payments were made. The notes were not, however, consistent. Most, as I noted, were some variation on “Bowmax”. But the 2004 payments were marked “Tom X” and the deposit in issue was marked “Box”. “Box” is not a term used previously by Mrs. Altberg to reference this loan. I am satisfied that the payment did not come from Bowmax because Bowmax no longer existed at the time the payment was made. Mrs. Altberg did not recall where the payment came from or why she wrote “Box”. Neither the “Box” notation nor the evidence of Mrs. Altberg enhances my level of confidence about the source of the funds deposited on May 28, 2010.
[82] I am unable to say, frankly, whether the $4,000 deposit was a payment on the Maxwell loan, even with the benefit of the enhanced fact-finding powers contained in r. 20.04(2.1). It might have been. Or it might not have been.
[83] In most instances, an inability to make findings on the central facts in dispute on a summary judgment motion would support the conclusion that there is a genuine issue requiring a trial. But I do not consider that to be the case here. I say that because there is not likely to be any further or better evidence about the payment should a trial, or a mini-trial, be held. I accept that a different jurist might, of course, view the evidence differently than I do. But in my view, that prospect is not a sufficient or proper reason to reject the motion and order the issue to proceed to trial.
[84] Instead, my view is that the motion must be decided by answering the following question: what outcome follows where the court cannot be satisfied that a payment was made against the loan in 2010? This question necessarily engages the onus issue.
[85] In Findlay v. Holmes (1998), 1998 CanLII 5488 (ON CA), 111 O.A.C. 319, at para. 25, the Court of Appeal for Ontario held that where a defendant pleads a limitations defence, the onus is on the plaintiff to prove that the cause of action arose within the statutory limitation period. See also Timminco Ltd. v. ABB Industrial Systems Inc., 2010 ONSC 6971 at para. 44 and Noddle v. Ontario (Ministry of Health), 2019 ONSC 7337 at para. 57.
[86] In this case, the Altbergs bear the onus of establishing that their claim is not statute barred. There is no dispute that the cause of action arose on December 28, 1998 when the mortgage balance fell due and was not paid. The limitations clock accordingly began to tick on that date. It restarted with each payment made on the mortgage after that date. The last (non-disputed) payment was made March 14, 2005. In the result, the limitation period expired on March 14, 2015, unless either (a) a payment was made in the intervening period; or (b) the Maxwells signed a written acknowledgment of the indebtedness.
[87] It is common ground that the Maxwells did not sign a written acknowledgment of the indebtedness. The only dispute surrounds the purported payment made in May 2010. I am not satisfied that the $4,000 deposit into Mrs. Altberg’s bank account on May 28, 2010 was a payment made by the Maxwells against the index loan. The best I can say is it might have been. The Altbergs, in the result, have not met their onus to establish that the limitations clock was reset in May 2010.
[88] I am mindful that summary judgment is generally only available where the court is able to make the necessary factual findings on the record before it. This is an unusual case. While I am not able to make a specific factual finding about the $4,000 payment, I am able to say that the evidence is not of sufficient quality that the court can be confident that the deposit in issue reflects a payment on the loan. The quality of the evidence is not going to improve if the motion is dismissed and the matter traversed to trial, or even a mini trial. For that reason, I am of the view that this is an appropriate case for summary judgment. A trial is not required to fairly and justly adjudicate the claim and counterclaim. Indeed, in my view, compelling the parties to proceed to trial on what I expect would be an unchanged evidentiary record would result in only delay and added expense.
[89] The motion is, in the result, granted. Judgment shall issue in accordance with para. 1(a) of the statement of claim. The counterclaim is dismissed.
[90] The parties are encouraged to agree on the issue of costs. If no agreement can be reached, they may make written submissions on a 14-day turnaround. The plaintiff’s submissions are to be served and filed by July 7, 2022. The defendant’s submissions are to be served and filed by July 21, 2022. Submissions should not exceed two pages in length, not including costs outlines.
Boswell J.
Released: June 23, 2022
[^1]: The admissibility of Mrs. Altberg’s bank books – and the notes written in them – was not contested on the motion. Even so, I think it worthwhile to comment on the route by which that evidence – particularly the handwritten notes – gains admission.
Mrs. Altberg’s bank records are undoubtedly admissible for the proof of their contents pursuant to s. 33 of the Evidence Act, R.S.O. 1990, c. E.23. There is no dispute that there was a $4,000 deposit made to Mrs. Altberg’s account on May 28, 2010. The bank book bears that out. The dispute lies in the source of the funds deposited. The only evidence about the source of the funds comes from Mrs. Altberg’s handwritten note, “Box”, and her retrospectant interpretation of that note.
Though the bank books are admissible as a statutory exception to the hearsay rule, Mrs. Altberg’s notes on those records are not. Her notes are hearsay. They are out-of-court statements offered in court for the proof of their contents. There was no opportunity to cross-examine Mrs. Altberg about the statements contemporaneous with their creation. Moreover, the out-of-court statement, “Box”, was not adopted as part of Mrs. Altberg’s discovery testimony. See R. v. Khelawon, 2006 SCC 57.
In my view, Mrs. Altberg’s handwritten notes are presumptively inadmissible in accordance with the rule against hearsay evidence. That said, it appears likely that the handwritten notes meet the past recollection recorded test for admissibility.
The essential elements of the past recollection recorded exception are the following:
(a) The past recollection must have been recorded in a reliable way. The witness must have either prepared the record personally or must have reviewed it for accuracy if someone else prepared it. The original record must be used if it is available;
(b) The record must have been made or reviewed within a reasonable time, while the event was sufficiently fresh in the witness's mind to be vivid and likely accurate;
(c) The witness must have no independent recollection of the recorded events at the time of giving testimony; and,
(d) Despite having no independent recollection of the events in issue, the witness must vouch for the accuracy of the assertions in the record, by confirming that he or she was being truthful at the time the assertions were recorded.
See R. v. Louangrath, 2016 ONCA 550
Mrs. Altberg testified that the notes are hers and that they were made as a “contemporaneous handwritten note to confirm that payment came from Maxwell.” See the Affidavit of Pauline Altberg, sworn October 21, 2020, para. 6. Mrs. Altberg has no independent recollection of the recorded events. Though she was not explicitly asked if she was being truthful at the time she recorded her notes, I think it can be implied from the substance of her evidence.
I have proceeded on the basis that the handwritten notes on Mrs. Altberg’s bank books are admissible evidence.