



COURT OF APPEAL FOR ONTARIO

CITATION: Kraemer v. Kraemer, 2020 ONCA 91

DATE: 20200205

DOCKET: C67284

MacPherson, Sharpe and Jamal JJ.A.

BETWEEN

Stacey
    Kraemer

Applicant (Respondent)

and

Lawrence Kraemer

Respondent (Appellant)

and

Gus Stahlmann

Respondent (Respondent)

Patrick J. Kraemer, for the appellant

Terrah Smith, for the respondent Gus
    Stahlmann

Stacey Kraemer, acting in person

Heard: February 4, 2020

On
    appeal from the judgment of Justice Nancy M. Mossip of the Superior Court of
    Justice, dated July 8, 2019.

REASONS FOR DECISION

[1]

Larry and Stacey Kraemer were married in 2001.
    They separated in 2015 and are involved in matrimonial proceedings.

[2]

Larry and Stacey jointly own a home in Elora. In
    2007, Staceys parents, Gus and Jan Stahlmann, paid just over $216,000 for
    improvements to the property, including the construction of a granny suite
    where they came to live. Jan died in 2013 and Gus continued to live in the
    granny suite.

[3]

After Gus and Jan moved into the home, the parties
    entered into a Licence Agreement with the assistance of legal counsel (the
    Agreement). The Agreement provides:

WHEREAS:

1.
Lawrence and Stacey (hereinafter
    collectively referred to as the Licensors) are the registered owners of the
    premises municipally known as 7577 Sixth Line, RR #2, Elora  and are spouses
    of one another;

2.
Gus and Janice (hereinafter collectively
    referred to as the Licensees) are the biological parents of Stacey and are
    spouses of one another;

3.
In consideration of the sum of ONE
    HUNDRED SIXTY-FIVE THOUSAND DOLLARS ($165,000.00), which sum is secured by a
    demand mortgage agreement attached hereto as Schedule B  the Licensors wish
    to grant to the Licensees a licence to occupy a portion of the Primary
    Residence  together with two (2) outdoor parking spaces.

.

9.
Licensee Covenants

The Licensees covenant



(e) not to register the Mortgage Agreement on title to the Primary
    Residence unless the Licensee has provided 14 business days notice of demand
    for payment thereunder and the Licensor has failed to pay the amount so
    demanded on or before the expiration of such 14 business days.

[4]

After Larrys and Staceys marriage collapsed,
    Gus sought, unsuccessfully, to register the mortgage. Both Gus and Stacey
    commenced legal proceedings. Gus withdrew his and joined Staceys proceedings. The
    matter came before Mossip J., with all three parties agreeing that a summary
    judgment motion was the appropriate route for resolution. The effect of the
    potential resolution was, as explained by the motion judge:

If Gus is entitled to the mortgage, or other
    relief which recognizes that the parties owe Gus the amount set out in the
    Agreement and the mortgage, that amount will be included in the Net Family
    Property calculation of the parties as a debt owed equally by them to Gus.

[5]

At the motion hearing, the core of Larrys
    submission was that the $165,000 secured by the Agreement was a gift. The
    motion judge rejected this submission:

I am satisfied based on the jurisprudence
    applied to the evidence in this case, that there was a clear demonstration that
    the money advanced to complete the granny flat, secured by a demand mortgage,
    was a loan and not a gift. There was no evidence that the money advanced was a
    gift, except Larrys personal belief that it was.

[6]

The motion judge concluded that there is a
    valid and enforceable Agreement and demand mortgage and Gus is legally
    entitled to register the demand mortgage for $165,000. He can make demand on
    this mortgage for the principal amount owing, pursuant to the Agreement.

[7]

Larry raises three issues on this appeal.

[8]

First, Larry submits that the motion judge erred
    in determining that the Agreement is a valid licence. According to Larry, the
    Agreement is a lease of property, not a licence.

[9]

We do not accept this submission. The parties
    were represented by lawyers as they worked together to draw up the Agreement.
    The entire Agreement, starting with the title and continuing through its
    provisions, is a licence, not a lease. Accordingly, it is not surprising that
    the motion judges conclusion on this issue, with which we agree, was expressed
    in relatively blunt language:

The submission that the Agreement is really a
    lease, is simply put forward as a proposition by Larry without any legal basis
    to do so.



Accordingly, I am satisfied that the Agreement
    was in fact exactly what it said it was, and what the parties intended it to
    be. It was an agreement for Larry and Stacey to license a certain part of their
    home to Gus, in consideration of the sum of $165,000, which was secured by a
    demand mortgage agreement.

[10]

In light of this conclusion, it is not necessary
    to consider the second component of Larrys argument on this issue, namely,
    that if the Agreement is a lease, it is invalid because it does not contain
    some of the key features of a lease (e.g. a rent provision).

[11]

Second, Larry contends that the motion judge
    erred by determining that the money paid for the construction of the granny
    suite was not a gift.

[12]

We disagree. We start with an obvious point. If
    Gus and Jan, Staceys parents, intended to give $165,000 to Stacey and Larry,
    they hardly needed to engage separate lawyers to negotiate and ultimately
    finalize a 12-page, 12 section formal document with the title Licence
    Agreement and a Schedule titled Mortgage Agreement. There is nothing in
    these documents to even remotely suggest that Gus and Jan were making a
    $165,000 gift to Stacey and Larry. We agree with the motion judge: If the
    advance was a gift, the drafting and execution of the Agreement makes no
    sense.

[13]

Third, and in the alternative, if the Agreement
    is a licence/demand mortgage, Larry asserts that the face value of the
    mortgage, $165,000, should be discounted by the portion of time that Gus has
    lived in the granny suite. The discount Larry proposes is that portion of the 21-year
    duration of the licence in which Gus has lived there (i.e., $165,000 
    ($165,000 x 12 ½/21 years) = $66,785.70).

[14]

We are not persuaded by this submission. It
    ignores s. 4 of the Agreement whereby Gus waives any interest on the $165,000
    while he lives in the granny suite. We agree with the motion judge:

Given  the clear language in the Agreement,
    there is no legal basis to make this submission. There is no basis to discount
    the principal amount secured by the mortgage.

Such an assertion creates a term in the
    Agreement that is simply not there. There is no evidence that the parties
    intended such a discount to be applied.

[15]

The appeal is dismissed. Gus and Stacey are entitled
    to their costs of the appeal fixed at $15,000 and $6,000 respectively,
    inclusive of disbursements and HST.

J.C. MacPherson
    J.A.

Robert
    J. Sharpe J.A.

M.
    Jamal J.A.


