BARRIE COURT FILE NO.: CV-23-518-00 DATE: 20241210 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN: Marian Massaar Plaintiff – and – Anthony Moneck and Lauren Moneck Defendants
Counsel: Anisha Bhardwaj, for the Plaintiff Megan D’Mello, for the Defendant, Anthony Moneck Mervyn White and Andrew White, for the Defendant, Lauren Moneck
Heard: November 29, 2024
Reasons for Decision
Nature of the Motion
1This is a motion for summary judgment brought by the plaintiff, Marian Massaar, for repayment of what she alleges was a loan made jointly in 2017 to her daughter, the defendant Lauren Moneck, and son-in-law, the defendant Anthony Moneck, when the defendants were purchasing their first home.
2Lauren and Anthony’s marriage broke down in 2020 and they are now engaged in matrimonial litigation.
3Everyone acknowledges that the funds were delivered by Marian. However, Anthony denies, and Lauren affirms, that the money provided to them by Marian was a loan. Anthony takes the position that it was a gift.
Issues
4This court must determine:
(a) whether there is a genuine issue as to whether the funds provided by Marian were a gift or a loan, and whether those issues require a trial or are appropriately decided on a motion for summary judgment; and
(b) whether there is a genuine issue requiring a trial for Lauren’s crossclaim, and whether summary judgment is the appropriate resolution.
Pleadings
Statement of Claim
5The statement of claim claims the sum of $163,982.50, and a declaration that it be paid from the sale proceeds of the matrimonial home owned by Lauren and Anthony.
6The material facts pled by Marian are that in July 2017 she entered into an agreement with Anthony and Lauren whereby she provided a non-interest-bearing loan to them in the amount of $199,982.50 to assist with their purchase of a property in Orangeville.
7The terms of the agreement were that Anthony and Lauren would start repaying the loan after three months and repayments would be provided in monthly installments until the loan was repaid in full. Consistent with their assurances that they would honour the loan agreement, Anthony and Lauren began to pay monthly payments of $900 toward the principal amount of the loan. Marian pleads that in May 2019, the defendants provided her with a payment schedule in respect of the monthly instalments.
8In 2020 the defendants began having marital problems. In an effort to improve their marriage and start “fresh”, the defendants sold the Orangeville property and used the proceeds of sale to purchase another property in Collingwood in July 2020, which is their matrimonial home.
9Marian pleads that because of these marital problems, she requested that the defendants sign a promissory note to ensure that she would be repaid regardless of what occurred in their marriage. She alleges that the defendants signed a demand promissory note in August 2020, whereby they agreed that the remaining indebtedness was $170,300 and that their liability to repay the indebtedness would arise immediately upon receiving a demand from Marian.
10The defendants continued to pay the monthly instalments after moving into their matrimonial home and did so until February 27, 2021. As of that date, the principal amount owed to Marian was $163,982.50.
11Marian made several demands for repayment. The defendants have not repaid the debt, despite listing and selling the matrimonial home.
Statement of Defence and Crossclaim of Anthony
12Anthony denies that he is liable to pay monies to Marian as alleged in the statement of claim.
13He crossclaims for contribution and indemnity over as against Lauren for any promises that she may have made to Marian without his knowledge or consent.
14The material facts pled by Anthony are that a “Gift Letter” on the letterhead of TD Canada Trust was signed by the defendants on July 26, 2017. The Gift Letter states in part “[t]his is to confirm that the undersigned is making a gift of $200,000.”
15Anthony alleges that after he signed the Gift Letter, and without his knowledge or consent, someone hand wrote the phrase “reflects a non-interest-bearing and unsecured loan from mother to daughter and son-in-law”.
16Anthony pleads that Marian is wealthy and her family has set up a trust for Lauren. He alleges that the $200,000 was a gift given to the defendants during the month immediately following their marriage.
17Anthony alleges that Lauren expressed a wish to begin making monthly payments to Marian to “help pay back part of this gift over time”. He pleads that he was surprised by Lauren’s position, as he had always been advised that the monies were a gift. He simply agreed that Lauren could make payments to her mother if she wished, but he did not agree to be personally responsible or consent to the gift being turned into a loan. He pleads that if the Gift Letter indicates a loan, it is strictly between Lauren and Marian and does not involve or bind him.
18Anthony further pleads that the monies paid by Lauren to Marian were placed into a trust fund that was created and held, in part, for the benefit of Lauren. Accordingly, he pleads that even if it is found that Marian is owed money, her claim should be dismissed on the basis that Marian was actually collecting the monthly payments for the benefit of Lauren in order to reduce her net family property in the event of her separation from Anthony. He seeks a tracing of the monies that Lauren provided to Marian.
19Anthony denies signing the promissory note. He alleges that the signature placed on the document is a forgery and that he will be seeking a handwriting expert to confirm the forgery. He denies agreeing to a demand promissory note in favour of Marian.
Reply to Defence and Crossclaim
20In reply to Anthony’s allegations, Marian admits the existence of the Gift Letter. She pleads that it was provided to the defendants by a TD representative in July 2017 when the defendants met with that representative regarding financing of their first property.
21Marian also pleads that following that meeting with the TD representative, the defendants returned to her home where they were temporarily residing until the closing date for the Orangeville property. They provided the Gift Letter to her and informed her that it was to be completed as part of the financing approval process. She reviewed the Gift Letter, which included the defendants’ signatures, as well as the additional handwritten phrase, and signed it.
22She denies that the additional handwriting was placed on the Gift Letter without Anthony’s consent and pleads that the defendants understood and consented to the additional phrase being added to the Gift Letter.
23Marian also denies the existence of a trust fund for Lauren and pleads that it would have no bearing on the defendants’ liability in any event.
24Marian states that she has provided home financing assistance to her other children and their partners in the past, none of which was by way of a gift. These loans are being paid back monthly.
25Marian denies that the promissory note was forged and understands that it was signed by both defendants using Lauren’s mobile device.
26The pleading states that the defendants acknowledged their debt obligation to Marian in accordance with the loan agreement and the promissory note. Consistent with that, Anthony paid monthly instalments from his joint bank account with Lauren and at no time objected to the repayments.
Statement of Defence and Crossclaim of Lauren
27Lauren admits and pleads the allegations contained in the statement of claim.
28She defends against Anthony’s crossclaim and makes a crossclaim for contribution and indemnity for any amounts for which she is found responsible to pay Marian in the main action.
29Additional material facts provided in this pleading are that in July 2017, she and Anthony arranged financing for the purchase of their first property. Financing for this purchase was partly by way of a loan from Marian, on the terms set out in the statement of claim. The balance of the financing was provided by way of a TD line of credit. To facilitate the approval of the line of credit, a TD representative provided Lauren with the Gift Letter for Marian’s signature.
30After reviewing the Gift Letter with Marian, Lauren discussed with the TD representative whether the Gift Letter could be amended to confirm that the funds referenced therein were a loan from Marian to the defendants. The TD representative confirmed that the additional term could be added to the Gift Letter.
31She and Anthony attended together at the bank to finalize financing of their property. A TD representative observed Lauren hand-write the additional term on the Gift Letter. Both defendants signed the TD form.
The Evidentiary Record
32It is undisputed that Anthony and Lauren married on June 9, 2017, separated on November 22, 2020, and that they have an ongoing Family Court proceeding that was started in April 2021. The issues in that proceeding include equalization claims, which will be impacted by whether the advance by Marian is characterized as a gift or a loan.
Signing the Gift Letter
33Mirroring her pleading, Marian’s evidence is that in July 2017 she agreed to provide Lauren and Anthony with a non-interest-bearing loan in the amount of $200,000 to assist with their purchase of a property in Orangeville. The defendants agreed that they would start repaying the loan in October 2017 and that payments would be made by monthly instalments of $900 until the loan was paid in full (the “Loan Agreement” or the “Loan”).
34The defendants also obtained financing for the Orangeville property by way of a line of credit from TD Canada Trust (“TD”). On July 18, 2017, Mark Rattray, Manager of Residential Mortgages at TD, provided Lauren with a document titled ‘Gift Letter’. The following day, Lauren sent an email to Mr. Rattray asking whether it mattered to TD if the Loan was a non-interest-bearing loan and not a gift. Mr. Rattray responded: “In your case it’s fine the term and repayment is being agreed to after the deal closes”.
35Lauren showed the Gift Letter to Marian and explained what Mr. Rattray had told her. Lauren told her that to facilitate the line of credit approval for the property, she needed to sign the Gift Letter to indicate that she was providing $200,000 to the defendants.
36Marian’s evidence is that she was hesitant to sign the Gift Letter since she did not intend to make a gift. She contacted her financial advisor of 15 years, Douglas Brown at Newport Private Wealth Inc., to ask his advice about whether to sign the Gift Letter. Mr. Brown advised her that she should only sign the Gift Letter if she added the wording “reflects a non-interest-bearing and unsecured loan from mother to daughter and son-in-law” to the document.
37In accordance with this advice, on July 22, 2017 Marian sent Lauren a copy of the Gift Letter with revisions. She crossed out the wording “a genuine gift and does not have to be repaid”, and included the wording suggested by Mr. Brown, but with the words “and son-in-law” omitted. She emailed the Gift Letter to Lauren and told her that she would not sign the document unless it included that additional wording. In turn Lauren forwarded her mother’s email to Mr. Rattray, who advised her that the additional wording was acceptable.
38The Gift Letter included in Marian’s July 22, 2017 email appears to have initially been signed by Marian, and then her signature stroked out.
39Marian was advised by Lauren that she then obtained a new copy of a Gift Letter from a representative at TD. Lauren handwrote the amendment, adding the wording exactly as suggested by Mr. Brown and including the words “and son-in-law”. A copy of the final Gift Letter, signed by herself, the defendants and Mr. Brown, is attached to her affidavit. Marian’s signature appears similar to that on the original copy of the Gift Letter, but without the squiggle or line through it.
40Marian’s evidence is that by signing the Gift Letter, she did not intend to gift $200,000 to the defendants and believes that they understood that intention. She signed it strictly to assist the defendants with their financing approval process and to assure TD that she had no legal priority to proceeds from the eventual sale of the Orangeville property.
41Lauren agrees with Marian’s evidence. She adds that she and Anthony were both actively involved in signing all necessary documents to secure the financing for the purchase of their first property. Her evidence is that on or around July 22, 2017, she showed Anthony the email from Marian dated July 22, 2017, with Marian’s requested changes to the Gift Letter. Anthony agreed to change the Gift Letter to note that the funds were a loan.
42Lauren says that it was at the bank, when provided with another Gift Letter by Mr. Rattray, that she wrote “reflects a non-interest-bearing and unsecured loan from mother to daughter & son-in-law” in Anthony’s presence, and they signed the Gift Letter together.
43In his affidavit sworn October 31, 2023, Anthony denies any knowledge of these dealings related to the Gift Letter. Reflecting his pleading, he alleges that the phrase stating that the funds were given as a non-interest-bearing loan was added after the signatures were already on the document, and without his knowledge or consent.
44Anthony notes that he has not received an unsigned copy of the Gift Letter with the same wording as that found on the fully executed document. He believes this is significant, given his position that the wording was added after the signatures and without his knowledge. On cross-examination, Marian stated that although she did not think that she would sign the Gift Letter unless the handwritten phrase had already been placed on it, she admitted that she does not remember whether she signed the document before or after the handwritten phrase had been added.
45Anthony relies on evidence given by Lauren at her discovery, in which she admits that there was no witness to the defendants’ signatures on the Gift Letter, nor evidence to prove that the handwritten portion was added prior to the signatures. She also could not recall whether her mother had signed the document before she and Anthony went to TD on July 26, 2017. She also confirmed that she wrote the additional phrase on the Gift Letter at the bank before she and Anthony signed it.
46Douglas Brown is the President Chief Executive Officer & Co-Founder at Newport, who has provided wealth management services to Marian for over 15 years.
47His evidence is that in July 2017, Marian told him that she had agreed to provide a non-interest-bearing loan to the defendants to purchase their new home. He stated that she told him that TD required her signature on the Gift Letter for the defendants to receive financing approval.
48His affidavit confirms that he provided the advice described by Marian, being the addition of the phrase “reflects a non-interest-bearing and unsecured loan from mother to daughter and son-in-law”, to reflect her intent to provide a non-interest-bearing loan.
Loan Payments
49Marian’s evidence is that the defendants began to pay monthly instalments of $900 toward the principal amount of the Loan, beginning in October 2017. She has provided redacted copies of her bank statements to show the monthly instalments deposited into her account. These payments were sent by e-transfer. Some of the e-transfer transactions did not indicate the name of the sender; others show that the name of the sender was either Lauren or Anthony.
50The defendants missed a payment of the monthly Loan instalment in May 2018. On June 1, 2018 Marian sent the defendants a text message stating that it was not acceptable that they miss payments. Anthony responded by text message: “I’m going to let Lauren explain this one, I apologize though, I wasn’t aware of the message she sent to you” and confirming that he had sent the money, which was e-transferred on June 1, 2018. A screenshot of the text messages confirming this exchange is included in Marian’s evidence.
51Another monthly instalment was missed in December 2018, and Anthony sent that instalment simultaneously with the January 2019 instalment.
52On May 31, 2019, Lauren sent her mother the payment schedule for the Loan for the rest of the year. This was sent in an email from Lauren’s email account, on which Anthony was copied. In the text of the email, following the payment dates, Lauren signed it “Lauren & Tony”.
53Lauren’s evidence is that she and Anthony often discussed the Loan, and those discussions were premised on both having to pay the loan. She and Anthony maintained a joint bank account to cover their joint expenses. She and Anthony often discussed which one of them was going to deposit funds into the account, and which of them would be sending the monthly payment to Marian to ensure that they did not accidentally double the payment.
54Lauren has attached various text exchanges between herself and Anthony as exhibits to her affidavit. In a text exchange on July 26, 2017, Anthony acknowledged that one of his monthly paychecks “is going to your mom once a month”. In another dated July 27, 2020, Anthony sent Lauren a text message stating: “okay so do you want to pay 500 to me for the appliances/ and I’m going to do the same/ and we can pay your mom”, to which Lauren responded “transfer $450 to the savings for my Mom’s mortgage”, and then later in the exchange, which is focused on money, Lauren wrote “900 goes to my mom, my money is already in chequing”.
55After their separation, Lauren and Anthony continued to communicate regarding the Loan. On January 23, 2021, a text message from Anthony states “and it’s also the 22 nd of the month we owe your mother once a month so it can wait”. On February 22, 2021, Lauren emailed Anthony regarding the joint expenses listed on their calendar, with the Loan included in the list. There is no evidence that Anthony disputed the inclusion of this expense, despite responding and adding another expense to the list.
56The exchanges between the defendants became increasingly acrimonious following their separation in November 2020. On March 8, 2021, Lauren sent an email regarding payment of the utilities on the matrimonial home. Anthony responded: “pay your half of all bills associated to the house or your mother will not see another dime from me from this day forward”.
57Anthony stopped contributing payments under the Loan Agreement when his counsel sent a letter in the matrimonial proceeding in March 2021 indicating his position on the Loan, which indicated counsel’s view that the “document” is “clearly framed as a gift”. The letter goes on to say:
It specifically notes that it is a non-interest bearing and unsecured loan from your client’s mother. Your client is welcome to make monthly payments with respect to this loan as she may choose, but this is most certainly not a registered mortgage.
58The letter does not mention anything about Anthony’s allegation that the phrase had been added after he signed the Gift Letter, or his understanding that Marian had gifted the money to the couple.
59About the text messages and screenshots attached to Marian’s affidavit, Anthony says that they have no context and do not prove any of Marian’s claims. He relies on the discovery evidence provided by Marian, in which he says that she admitted that there are no documents to support that Anthony agreed to any type of loan from her. Marian also confirmed that she has no evidence that Anthony prepared the payment schedule, but rather that it was prepared and provided by Lauren.
60Despite executing supplementary affidavits on December 18, 2023 and September 23, 2024, Anthony has not responded to any of the text message or email evidence provided by Lauren in her affidavit sworn October 30, 2023.
The Promissory Note
61Marian’s evidence is that Lauren and Anthony began to have marital problems in the spring of 2020. She asked Mr. Brown for advice on how to ensure that the Loan was repaid and he suggested that a promissory note be signed. He drafted a promissory note showing the outstanding amount of $170,300, as it was at that time.
62Marian delivered the promissory note to the defendants for signing by forwarding a copy to Lauren on July 28, 2020. By August 13, 2020 it remained unsigned, so Marian sent Anthony a text message on that date reminding him and Lauren to sign the Promissory note. Anthony’s response was: “oh yes okay”.
63On August 18, 2020, Lauren sent an email to her mother attaching the promissory note, which had been electronically signed.
64The defendants continued to pay the monthly instalments until February 2021, at which time the principal amount owing under the Loan Agreement was $163,982.50.
65Marian made several demands for payment thereafter, until eventually a demand letter was delivered by her lawyers in January 2022.
66Lauren’s evidence is that she and Anthony had a temporary separation between February and May 2020. After they reconciled, they decided to sell their first home and move to a new property located at 54 Plewes Drive, Collingwood (the “matrimonial home”) which was purchased in July 2020.
67Marian advised Lauren and Anthony at that time that she had concerns about payment of the Loan given their marital problems and decision to purchase a new home. In July 2020, Marian provided her with a promissory note by email.
68Lauren’s evidence is that she immediately forwarded the promissory note to Anthony and asked him to print it. A copy of her email to Anthony, dated July 28, 2020, has been provided. Anthony never printed the promissory note although Lauren asked him to do so several times.
69On August 18, 2020, she sent the document to Anthony from her iPhone at 11:51 a.m. with an all-caps subject line that read “PLEASE SIGN AND SEND BACK”. When Anthony came home from work, she had him sign the Promissory Note on her iPhone. Another email was sent on the same date to Marian, at 7:09 p.m., attaching the promissory note with both defendants’ signatures, with the subject line stating: “promissory note signed”.
70On her cross-examination, Lauren stated that she did not have any evidence aside from her recollection to prove that Anthony signed the promissory note. They were together in their home in Collingwood when he digitally signed on her phone. She admitted that she delivered the note to Marian without copying Anthony on the email, and that she did not provide him with a copy of the signed note afterward.
71Anthony’s evidence is that he did not sign the promissory note and the signature that Marian is relying upon is not his, being placed there fraudulently and without his knowledge or consent. Presumably, he asks this court to draw the inference that Lauren signed it on his behalf.
72Anthony relies on Marian’s evidence from her discovery, in which she admitted that there is no documentation to prove that Anthony acknowledged signing the promissory note. After it was signed, she had no specific conversations with him about it.
73Anthony relies on a report from Docufraud Canada dated September 20, 2024, attached to his affidavit sworn September 23, 2024. The author, whose qualifications and educational experiences in his area of supposed expertise are not outlined, purports to express the opinion that the signatures on the promissory note dated August 18, 2020 “exhibit common characteristics of being written with a stylus as you would at the passport office or when signing for a driver’s licence”. This report does not comply with r. 53(2.1) in almost any respect, including that no signed Form 53 has been provided. The content of the report has been given no weight.
Loan Agreements with Other Daughters
74Marian’s evidence is that it was always her intention, and known to the defendants, that the money provided to them for purchasing their property was a loan and not a gift. Lauren was not treated differently than her other daughters.
75Marian’s evidence is that she has provided non-interest-bearing loans in the amount of $200,000 to each of her three other daughters, Nicole Coyle, Rebekah Manley and Danielle Keenan and their respective partners, for their first property purchases.
76The loan provided to Nicole and her husband, made in September 2007, has been only partly repaid. In April 2016, Marian learned that Nicole and her husband were experiencing some financial difficulties. By then they had made monthly payments for approximately nine years, totalling $70,386.08. Marian suggested to them that they stop making monthly loan payments and proposed that the outstanding amount of $129,613.92 would eventually be subtracted from Nicole’s inheritance from Marian’s estate. Nicole and her husband agreed to this arrangement. Marian’s evidence is that she has attempted to make efforts to obtain her bank statements showing the payments into her bank account but was unable to obtain them before June 2016.
77With respect to the loan provided to Danielle and her husband in August 2012, that couple has made monthly e-transfers in respect of their loan repayment. As of the date of Marian’s affidavit, they had repaid the amount of $105,125.17. Marian has provided redacted copies of her bank statements from June 2016 to July 2023 showing those monthly installment payments.
78The loan provided to Rebekah and her husband was made in April 2020. Rebekah signed a promissory note on April 15, 2020. It is Marian’s evidence that even though Rebekah’s husband has not signed the promissory note, they are aware that both are responsible for repayment of their loan. Rebekah and her husband have paid monthly instalments totalling $21,500 as of the date of Marian’s affidavit. Marian has provided redacted copies of her bank statements from June 2016 to July 2023 showing those monthly loan payments.
79Marian did not ask Mr. Brown to prepare promissory notes for her loans to Danielle and Nicole and their respective husbands because it did not cross her mind to do so.
80Each of these daughters has provided evidence about the status of these loans.
81Rebekah’s affidavit acknowledges an initial loan of $200,000 from Marian, and states that both she and her husband are responsible for repayment of the loan. The affidavit states that she and her husband always knew that her mother was providing them with a loan, not a gift. They were initially paying the monthly amount of $800, which was lowered to $500 in April 2022 with Marian’s agreement. Rebekah has provided redacted copies of her Interac e-transfer history indicating e-transfers into Marian’s bank account up to the month in which her affidavit was sworn.
82Danielle has provided an affidavit acknowledging an initial loan of $200,000 from Marian, which she and her husband know is not a gift. In in accordance with their loan agreement, she and her husband have paid monthly instalments in the amount of $800 and will continue to do so until the loan is paid in full. Between August 2012 and December 2020, she made the monthly payments by cash or e- transfer. Danielle deposes that she has made efforts to locate bank statements that show all the e-transfers and cash withdrawals in respect of the loan but was only able to obtain a list of the e-transfers from January 2021 onward. She has provided redacted screenshots from the TD Canada Trust phone app that show the monthly installments paid to her mother between January 2021 and January 2022, and in November 2022. For all other months, her evidence is that she has paid in cash.
83Nicole has also provided an affidavit acknowledging the loan of $200,000 in August 2007, stating that she and her husband know that Marian was providing the money as a loan and not a gift. She confirmed that they paid the loan in monthly amount of $683.36 until April 2016, when $129,613.92 remained owing.
84Nicole’s evidence was that her husband found it difficult to secure employment after being medically released from the army in 2008, after which they experienced financial difficulties. She confirmed her mother’s offer to subtract the balance of the loan from her inheritance from Marian’s estate. She also has made efforts to obtain bank statements and evidence of e-transfers to show the payments made on the loan, but given the passage of time was unable to retrieve them.
85Anthony maintains that Marian has provided no evidence that any of her sons-in-law have signed any promissory notes, and submits that the evidence establishes that the other loans were only provided to her daughters, and not their husbands.
Additional Matters
86Anthony has raised various other matters which he believes to be germane to the proceeding, arising from the discovery of Marian. These are:
(a) she has refused to provide a copy of her Will, despite her evidence about the status of Nicole’s loan;
(b) she provided evidence that she gave the defendants a $20,000 gift to purchase a car during their marriage, but has not provided documentation of this gift;
(c) she refused to prepare a financial statement outlining her assets and debts;
(d) she has not provided documentation confirming that Anthony acknowledged the debt and agreed that it would be paid, beyond the evidence in her affidavit; and
(e) she refuses to answer questions about the Massaar family trust.
The Law
Summary Judgment
87The applicable principles that guide a summary judgment motion derive from Hryniak v. Mauldin, 2014 SCC 7.
88With respect to when summary judgment may be granted, Karakatsanis J. stated, at para. 49:
There will be no genuine issue requiring 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.
89At para. 50, the Court defined the overarching issue to be “whether summary judgment will provide a fair and just adjudication.” Karakatsanis J. went on to say that “the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute.”
90In terms of the approach to a motion for summary judgment, Hryniak directs at para. 66 that the judge should first determine if there is a genuine issue requiring a trial based only on the evidence before her, without using the new fact-finding powers. If there appears to be a genuine issue requiring a trial, she should then decide if the need for a trial can be avoided by using the new powers under rules 20.04(2.1) and (2.2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. These powers may be used by the motion judge in her discretion provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability, and proportionality in light of the litigation as a whole.
91The court must take a hard look at the evidence on a motion for summary judgment to determine whether there is a genuine issue requiring a trial and may freely canvas the facts and law in doing so. No party is entitled to rely on the prospect of additional evidence that may be tendered at trial; all parties have an obligation to put their best foot forward on a summary judgment motion: Mazza v. Ornge Corporate Services Inc., 2016 ONCA 753, at para. 9; Chernet v. RBC General Insurance Co., 2017 ONCA 337, [2017] O.J. No. 2094, at para. 12; Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200, [2014] O.J. No. 851, at para. 26, aff’d 2014 ONCA 878, [2014] O.J. No. 5815, leave to appeal to SCC refused, [2015] SCCA No. 97. As stated in Dawson v. Rexcraft Storage and Warehouse Inc., [1998] O.J. No. 3240 (Ont. C.A.), at para. 17, “[t]he motions judge is entitled to assume that the record contains all the evidence which the parties will present if there is a trial.”
92The requirement to put one’s best foot forward means that although the onus is on the moving party to establish the absence of a genuine issue requiring a trial, there is an evidentiary burden on the responding party, who may not rest on the allegations or denials in the party’s pleadings, but must present specific facts showing that there is a genuine issue for trial: Cuthbert v. TD Canada Trust, 2010 ONSC 830, [2010] O.J. No. 630, at para. 12; Sanzone v. Schechter, 2016 ONCA 566, [2016] O.J. No. 3760, at para. 30. These principles were affirmed once again in Broadgrain Commodities Inc. v. Continental Casualty Company (CNA Canada), 2018 ONCA 438, at para. 7.
93The evidence adduced on a summary judgment motion need not be equivalent to that at trial. A documentary record may be enough, if it allows the motion judge to have confidence that she can fairly resolve the issues: Hryniak, at para. 57.
94Rule 20.09 mandates that rules 20.01 to 20.08 apply, with necessary modifications, to counterclaims, crossclaims and third-party claims.
Gifts Versus Loans
95For the purpose of determining whether an advance from a parent is a loan or a gift, the intention of the parent is the determining factor. The legal test is the intent of the parent at the time of the transfer. The intention of the transferee is not relevant to the inquiry: Crepeau v. Crepeau et al., 2012 ONSC 418, at para 44; Prtenjaca et al. v. Well-Prtenjaca et al., 2022 ONSC 438, at paragraph 46, Chao v. Chao, 2017 ONCA 701, at para. 54, citing Pecore v Pecore, 2007 SCC 17 at paras. 5 and 44.
96Evidence of intention that arises after a transfer may be relevant to the intention of the transferor at the time of the transfer. However, the court must be alive to evidence that is self-serving or that tends to reflect a change in intention when assessing the reliability of evidence of subsequent intention, and the weight to be given to it: Chao, at para. 56.
97In asserting that the funds were advanced as a gift, Anthony bears the onus of disproving the presumption of resulting trust. He must rebut the presumption on a balance of probabilities: Crepeau, at paras. 39-40; Pecore, at paras. 24-25.
98To prove the existence of a gift, Anthony must establish three elements: 1) the clear and unmistakable intention of Marian to make a gift; 2) acceptance of the gift; and 3) delivery of the gift: Crepeau, at para. 42. Only the first element would be at issue in this case.
99The following factors may be relevant in the context of analyzing whether funds were given as a loan or a gift:
- Whether there are any contemporaneous documents evidencing a loan;
- Whether the manner for repayment is specified;
- Whether there is security held for the loan;
- Whether there are advances to one child and not others, or advances of unequal amounts to various children;
- Whether there has been any demand for payment before the separation of the parties;
- Whether there has been any partial repayment; and
- Whether there was any expectation, or likelihood, of repayment: Chao, at para. 54; citing Locke v. Locke, 2000 BCSC 1300, [2000] B.C.J. No. 1850, at para 21, and Kuo v. Chu, 2008 BCSC 504, at para 78, aff’d 2009 BCCA 9, 2009 BCCA, at para 9.
100In Barber v. Magee, 2017 ONCA 558, at para 4, the court discussed the indicia of gifts versus loans as follows:
…A gift is a transfer in which the absence of an expectation of repayment tends to be reflected in the absence of security, recording, payments or efforts to collect payments. A loan often involves a formal, recorded transfer in which terms are set out in which repayment is made or sought. In evaluating whether the presumption of resulting trust has been rebutted, a trial judge will naturally look at such indicia.
101In Prtenjaca, the court was faced with the issue of whether the funds provided by parents to purchase their son and daughter-in-law’s matrimonial home were intended to be a gift or loan. A gift letter was signed by the parents as a condition of financing imposed by the mortgage lender. Aside from the gift letter, there was no evidence establishing that the funds were intended as a gift. In holding that the funds were transferred as a loan, the court held that the evidence clearly established that the parents executed the gift letter for the sole purpose of permitting the children to obtain mortgage financing to satisfy the balance of the purchase price.
102There are additional cases in which courts have rejected a gift letter given to facilitate mortgage financing as evidence of a gratuitous gift: Bostrom v. Bigford, 2019 BCSC 79, at para. 115; Sheppard v. Carvalho, 2015 ONSC 3266, at para. 14; Dhaliwall v. Ollek, 2012 BCCA 86, at paras. 24 and 37; Crepeau, at paras. 68-69; and Bemrose v. Fetter, at para. 69.
103Anthony relies on Aguanno v. Aguanno. Like the situation before the court, Aguanno involved monies advanced by parents, with separating spouses disputing the characterization of the funds as a gift versus loan. However, that is where the similarity ends. In arriving at the conclusion that the money was a gift, the court took into account that there was no documentary evidence confirming that the funds were advanced as a loan. At paragraph 28, the court advanced the following principle: “where a parent gives money to a child, the advance is presumed to be a gift. Thus the onus is on the parent or child who alleges a different intention to prove that the transactions surrounding the advance was in fact a loan”.
104The foregoing statement of law from Aguanno is no longer correct following the Supreme Court of Canada’s decision in Pecore, in which the presumption of advancement was held to no longer apply in respect of a transferor’s adult children.
105Anthony also relies on Locke, which involved a matrimonial breakdown and a dispute over whether funds provided by grandparents for the purchase of a house were a gift or loan. A note had been signed acknowledging receipt of the funds, which stated that the funds must be fully repaid or else the grandfather’s estate would have a claim to the equity in the matrimonial home. The court found that the funds advanced to the husband by his grandparents were intended as an advance on inheritance, rather than a loan repayable on demand, noting “there is a substantial amount of evidence which supports that conclusion”.
106The court found that the preponderance of evidence led to the conclusion that a failure to repay would lead to the husband relinquishing his right to inheritance. This was found to be consistent with the wording of the note, which indicated that the advance was “from the estate of [the grandfather] and his heirs”. There was no provision for repayment at a specific time, on the happening of any event, or upon demand. In this context, the court also examined the wills of the grandfather and the husband’s parents to assist in determining whether the money could properly be characterized as an advance on the husband’s inheritance.
107Another case relied on by Anthony is Klimm v. Klimm, 2010 ONSC 1479, a decision of Mulligan J. of this court. One of the issues at trial is whether advances of money totalling $150,000 from the husband’s father constituted gifts or loans, with the wife maintaining that they were gifts. The wife admitted that she made a series of payments to the husband’s father but stated that she was directed to do so by the husband when he took over her vehicle payments. In reaching the decision that the advances were not at loan, the court took into account “the unique feature of this case”, including that $40,000 had been forgiven by the parents with respect to loans made to all four of their children, and no payments were made after 2003, the year the parties’ separated, nor were demands for payments issued.
108At paragraph 29 of Klimm the court referred to Heeney, J.’s discussion of the implications of allegations of debt on net family property statements in Poole v. Poole, [2001] O.J. No. 2154 (Ont. S.C.J.), at paragraph 36:
There is a compelling reason for taking this good hard look at the reality of the situation. A debt constitutes a credit in the equalization calculation, and reduces the net family property of the spouse claiming the debt. This has a direct impact on the equalization payment due, by either reducing the amount that the party has to pay to the other (if he has the higher net family property), or increasing the amount that he will receive (if his net family property is lower). Fairness dictates that he should not receive a credit for debt, with the financial benefits that flow from that credit, if he will never be called upon to pay the debt.
Analysis
109There is ultimately only one discrete issue in this litigation – were the funds advanced by Marian a loan or a gift?
110It is important to emphasize that this is an action to recover payment under the Loan Agreement, and not an action to enforce the provisions of a promissory note. Accordingly, it is not critical to the analysis to determine whether the promissory note was signed by Anthony. However, for the reasons that follow, I find that the evidence of Lauren is significantly more credible and reliable than that of Anthony and accept that he did sign the promissory note.
111The record filed by the parties on this motion is thorough. The parties have exchanged all documentary evidence, examinations for discovery have been held, and undertakings answered. The record for this motion includes the transcripts from the examinations for discovery of the parties and relevant portions thereof being relied on. The court may assume that no other relevant evidence exists.
112The record gave this court ample opportunity to consider the totality of the evidence provided by the parties. From this evidence I have been able to conclude that I can make credibility findings, assign weight to the evidence, find the necessary facts and apply the relevant legal principles to enable me to resolve the single issue in dispute in the action.
113In this case, where the central issue is the characterization of the transfer of the funds from Marian, the credibility of the parties is critically important to the court’s determination of the issue.
114In Cook v Joyce, 2017 ONCA 49, at para. 92, the court stated:
The more important credibility disputes are to determining key issues, the harder it will be to fairly adjudicate those issues solely on a paper record. As Benotto J.A. wrote in Trotter v. Trotter 2014 ONCA 841, 122 O.R. (3d) 625 (Ont. C.A.), at para. 55, “[i]t is not always a simple task to assess credibility on a written record. If it cannot be done, that should be a sign that oral evidence or a trial is required.”
115Nonetheless, subrule 20.04 (2.1) permits the motions judge to evaluate the credibility of a deponent unless it is in the interests of justice for such powers only to be exercised at trial. Even disputed factual issues that are central to the issues between the parties may be resolved by making credibility findings on a motion for summary judgment, where the record fairly allows the judge to do so. Credibility determinations can be aided by reference to contemporaneous documents exchanged by the parties: 2212886 Ontario Inc. v. Obsidian Group Inc., 2018 ONCA 670, at para. 39. Such is the case here.
116I have reached the conclusion that the need to make credibility assessments does not require that this motion be dismissed, as Anthony has argued. Credibility issues have been easy to resolve, without requiring oral evidence. The documentary record provides little support for Anthony’s version of events.
117The evidence of Marian and Lauren, where it conflicts with that of Anthony, is preferred. Their evidence is logical and supported by contemporaneous documentary evidence, as reviewed. In contrast, Anthony’s evidence lacks credibility as it is frequently illogical, internally inconsistent, and inconsistent with the contemporaneous documentary evidence.
118The record supports the allegations made by Marian in her statement of claim.
119First, Anthony has failed to produce evidence that Marian intended to make a gift. The only evidence that he has elicited is that of his own understanding that the money was meant as a gift, which the law considers irrelevant to the inquiry. He has produced no evidence that would establish Marian’s intention to provide a gift when she advanced the funds in 2017.
120The factors set out by the court in Chao must also be considered.
121The first is whether there are any contemporaneous documents evidencing a loan. In this regard, the best evidence are the communications from Anthony himself, the authenticity of which are not in dispute, which clearly establish that he is aware that he and Lauren were paying back a loan from Marian. In those messages he repeatedly, explicitly, and implicitly, acknowledged that he and Lauren have a debt to repay. One example of many is his text message of January 23, 2021, in which he notes “we owe your mother once a month”. Supporting this characterization is the wording of his counsel’s letter of March 2020, which acknowledges a loan and does not assert a gift. The only quarrel that Anthony has made in respect of his own words is that they have been taken out of context. He does not suggest how or what the proper context might be.
122Anthony’s evidence that he was agreeing to repay the “gift” in monthly instalments to appease his new wife is neither believable nor logical, particularly when there is no evidence that he ever questioned Lauren or Marian about the logic or necessity of repaying a gift. His evidence is that he simply acquiesced. The unlikelihood of this is underscored by the content of the text messages between the spouses, which reveal the struggle that they were having making ends meet at that time in their marriage.
123Accordingly, Anthony’s own correspondence leads this court to be able to soundly reject his evidence that he knew nothing about this money being a loan, and to reject his allegation that the impugned phrase was added to the Gift Letter after he had signed it and without his knowledge.
124Anthony’s related arguments with respect to Marian’s failure to remember when she signed the Gift Letter, her refusal to produce her Will or a financial statement to show where the repayments were deposited, or Lauren’s evidence that there were no witnesses to the signing of the Gift Letter, are not relevant in the face of this overwhelmingly cogent evidence of Anthony’s acknowledgment of the debt.
125The contemporaneous evidence clearly establishes Marian’s intention to make a loan: her hesitation to sign the Gift Letter because she did not intend to make a gift; her request for advice from Mr. Brown, her crossing out the words “a genuine gift that does not have to be repaid”, her email to Lauren to express her position that she would not sign the Gift Letter without the additional phrase, her crossing out of her signature when she returned the document to Lauren; Lauren’s sharing of that email with Anthony, and his verbal agreement to the change; the email from Lauren to Mr. Rattray attaching the revisions to the Gift Letter, which he confirmed would be acceptable, and that the purpose of the Gift Letter was so that TD would approve the mortgage financing for Lauren and Anthony. The following year, when the defendants missed a payment in May, Marian’s chastisement and Anthony’s apology, followed by his confirmation that he had sent the money, is further confirmation of Marian’s intention and the parties’ mutual understanding that a loan had been advanced, with regularly repayment terms.
126All of this is corroborated by the evidence of Marian’s financial consultant, Mr. Brown, who provided advice on how to ensure that the Gift Letter be altered to accurately reflect the Loan Agreement.
127Another factor to be considered is whether the manner for repayment is specified. Marian’s allegation that the repayment terms were $900 per month commencing in October 2017 is corroborated by her bank statement deposits, some of which show the money being e-transferred by either Lauren or Anthony from their joint account. The spouses’ text messages further support a finding that the monthly repayment amount was $900. There is also the repayment schedule, on which Anthony was copied. The evidence easily leads to the conclusion that not only was there an understanding between the parties about the quantum and frequency of the repayment, but repayment was being made regularly even after the parties separated. The defendants’ conduct is entirely consistent with repayment of a loan. Payments from the defendants ceased following Anthony’s threat that Marian would not see another dime from him.
128Another factor is whether there is security held for the loan. In this case, the evidence establishes that the loan was unsecured. I find, however, that it was advanced one month after the defendants’ marriage, and as part of the commercial financing transaction undertaken in July 2017 for the purpose of buying their Orangeville property. As was the case in Prtenjaca, I find that the Gift Letter was signed by Marian to satisfy TD’s financing requirements, and not to document the existence of a gift. Any other conclusion would be inconsistent with the overwhelming evidence of Marian’s intention and the parties’ understanding of the Loan Agreement.
129Another factor that may be relevant is whether there are advances to one child and not others, or advances of unequal amounts to various children. In this case there is evidence of loans made to Lauren’s three sisters and their husbands, also to help them purchase their first homes. Anthony argues that there is no direct evidence from the spouses of Marian’s other daughters to confirm that those spouses are jointly indebted, so the court is left only with the daughters’ evidence of their husbands’ understanding that the loans were made jointly to each couple.
130I have no reason to reject the evidence of Marian and her other daughters with respect to the nature of those other loans and who is indebted by them in the face of the overwhelming evidence, which I have accepted, showing that Anthony understood that he was jointly indebted to Marian. And while Marian may have changed her mind about how to treat the money given to Nicole and her husband after the fact, and because of their special circumstances, that does not change the fact that her initial intention was to have them repay the full amount of a loan.
131Whether there has been any demand for payment before the separation of the parties is another factor to consider. As previously mentioned, the exchange that ensued between Marian and Anthony in June 2018 following the missed payment leaves no doubt that Marian expected repayment in regular monthly installments, and that Anthony understood that obligation. Marian’s expectation of repayment is fully supported by the evidence.
132The expectation of repayment is also established by the evidence surrounding the promissory note. The importance of this document is only to corroborate Marian’s evidence that she expected the money to be repaid to her, and to show that the defendants were likewise operating under that same understanding. Marian’s actions in sending it to the parties when she did is logical given the defendants’ recent reconciliation following a period of separation. Marian’s concern that full repayment may be in jeopardy makes sense in the circumstances.
133I find on balance of probabilities that it is Anthony’s electronic signature on the promissory note. There is his own written acknowledgement on August 13, 2020 that he would sign it. Five days later, the executed document was delivered to Marian by Lauren. It was delivered to Marian in the evening, in accordance with Lauren’s evidence that she waited for Anthony to come home from work to sign it on her phone. There is no evidence that Anthony denied that it was his signature until this litigation began, although it is clear that he knew of the existence of the document since August 13, 2020 at the latest. Because of the adverse credibility findings I have made against Anthony, arising from him taking unsupportable positions in this case despite cogent evidence to the contrary, I place no reliance on his evidence that he did not sign the promissory note.
134In summary, the issue of whether the money is a loan or gift does not require a trial to decide. Accordingly, summary judgment provides an outcome that ends all issues that would otherwise continue to be litigated between the parties to this action, and thus will result in a savings of time and expense associated with a trial, meeting the objectives of proportionality, efficiency and cost-effectiveness.
135Neither of the defendants has disputed the calculation of the amount left unpaid at the time that payments ceased. The evidence is that $163,982.50 remained outstanding as of the date of the statement of claim. Prejudgment interest will now be owed on that amount.
136Accordingly, this court orders that judgment be granted on the claim jointly and severally against both defendants in the amount of $163,982.50 plus prejudgment interest, and further order that this amount be paid from the funds held in trust from the matrimonial home.
137There is no issue requiring a trial on the crossclaim, which is simply for contribution and indemnity. Based on the results of the motion, summary judgment on Lauren’s crossclaim follows as a natural result.
Costs
138The court was not advised of the amount that remains in trust from the sale of the matrimonial home. However, barring offers that the court should take into consideration, the plaintiff is presumptively entitled to costs not only of this motion but also for her action, because this motion was dispositive of the entire claim: Persaud v. Bratanov and Unifund Assurance Co., 2012 ONSC 6870. If a sufficient amount exists, the costs order will also be paid from the trust funds.
139Lauren’s cross-motion against Anthony has also been successful and she has asked for costs associated with defending the action and Marian’s motion, and for bringing her own motion.
140The court urges the defendants to now come to a swift resolution of the matrimonial proceeding, before any further costs are incurred, and particularly urges Anthony to start taking more reasonable positions.
141If the parties are unable to agree upon the issue of costs within 20 working days from the date of these Reasons, they may make submissions in writing. The Plaintiff’s and Lauren’s are due on January 15, 2025, Anthony’s on January 24, 2025 and any reply, if necessary on January 28, 2025. Written submissions are limited to 5 double-spaced pages, plus a Bill of Costs or Costs Outline.
142All authorities relied on are to be hyperlinked in the document or uploaded to Case Center with a tabbed (i.e., hyperlinked) index.
143The submissions are to be filed with the court, with a copy emailed to my judicial assistant at BarrieSCJJudAssistants@ontario.ca, in addition to being uploaded to Case Center.
The Honourable Madam Justice S.E. Healey
Released: December 10, 2024