



COURT OF APPEAL
    FOR ONTARIO

CITATION: Middleton Estate v. Middleton, 2020 ONCA 552

DATE: 20200904

DOCKET: C65585

Feldman, van Rensburg and Thorburn JJ.A.

IN THE MATTER OF
    THE ESTATE OF EVA ROSEMARY MIDDLETON, deceased

BETWEEN:

Julia Gurr
    Lacasse,

in her capacity as Estate
    Trustee of the Estate of Eva Rosemary Middleton

Applicant (Respondent)

and

Linda Middleton

Respondent (Appellant)

Robert J. Reynolds, for the appellant

Charles Hammond and Jennifer Ng, for the respondent

Heard: June 16, 2020 by video conference

On appeal from the judgment of Justice Patrick Hurley of
    the Superior Court of Justice, dated June 4, 2018, with reasons reported at 2018
    ONSC 3461, 38 E.T.R. (4th) 215.

REASONS
    FOR DECISION

A.

INTRODUCTION

[1]

The issue on this appeal is whether the trial judge made any reversible
    error in arriving at his conclusion that the first of two promissory notes
    reflected the true intention of the deceased, Eva Middleton: the first note provides
    that a loan to her daughter, the appellant, Linda Middleton, was repayable on her
    death, while the second provides that the loan be forgiven on death.

[2]

The appellant claims the trial judge erred by:

a)

rejecting the evidence of Joyce Willard, a friend of the appellant and
    Eva Middleton who witnessed the signing of the notes; and

b)

finding that the December 12, 2014 email purportedly sent by Eva
    Middleton to the appellant was never in fact sent.

[3]

For the reasons that follow, we dismiss the appeal. There was no
    reversible error in the trial judges conclusion that the first promissory note
    reflected the intention of Eva Middleton with respect to the loan, and that
    monies advanced to the appellant, Linda Middleton, were repayable to the
    estate.

B.

FACTS


[4]

Eva Middleton died on June 5, 2015. The office of her lawyer, Ken
    Menlove, provided the estate trustee (the respondent, who is her great-niece)
    with her will and a promissory note dated July 16, 2014 (the first promissory
    note). The promissory note was for the sum of $142,000 and is in relation to a
    loan that Eva Middleton advanced to her daughter, the appellant, after the note
    was signed.

[5]

The appellant provided the estate trustee with a second promissory note dated
    July 22, 2014, which she said she found at Eva Middletons condominium, and which
    provided that the loan would be forgiven upon Eva Middletons death (the
    second promissory note). The appellant told the estate trustee that this reflected
    the true agreement between herself and her mother. She later also provided a
    copy of an email from her mother, dated December 12, 2014, that stated that the
    loan was cleared upon [her] death.

[6]

The estate trustee brought an application seeking the opinion of the
    court as to which of the two promissory notes was valid and enforceable. The
    application was directed to proceed to trial.

[7]

There were six witnesses. The appellant testified about how the two
    promissory notes came about. It was her evidence that the purpose of the loan from
    her mother was to assist in her purchase of the interest of her former spouse
    in their cottage property. She thought the advance would be a gift. However,
    when Eva Middleton came to visit the appellant in Picton from her home in
    Georgetown in July 2014, and before the money was advanced, Eva Middleton brought
    with her a draft promissory note prepared by her Picton lawyer, Jacob Walinga. The
    note provided for monthly payments of $600, with the first payment due August
    20, 2014 and no interest until maturity (the earlier of July 20, 2019 or the
    date of the sale of the cottage property).

[8]

The appellant testified that after she and her mother discussed the
    terms, she revised the draft promissory note to add the mortgage will be
    forgiven upon the death of the Lender, providing it is in good standing at the
    time of death", and deleting the maturity date of the loan. She sent the
    revised draft to Mr. Walinga by fax, noting that her mother would call him that
    afternoon for his approval before signing the note. After Eva Middleton
    discussed the matter further with Mr. Walinga, the appellant further revised
    the draft, removing the provision for forgiveness of the loan upon her mothers
    death. She faxed this version to Mr. Walinga, as well as another draft that included
    the words and shall run for a term of five years. Ultimately the appellant revised
    the draft promissory note to add that the note may be re-negotiated under any
    Mutually Agreeable Terms. The appellant said she understood from the
    conversation between her mother and Mr. Walinga that forgiveness of the note
    would be included in Eva Middletons will. It was on this basis that the
    appellant signed the first promissory note, with Joyce Willard as witness. Eva Middleton
    had met Ms. Willard through the appellant and asked her to witness the note. The
    appellant gave the signed promissory note to her mother before Eva Middleton returned
    to her home in Georgetown.

[9]

The appellant testified that her mother subsequently called and told her
    she was afraid of her sisters reaction if the forgiveness of the loan was in her
    will, and instead she had decided to include it in the promissory note. Accordingly,
    the appellant prepared the second promissory note (which was the same as the
    note she had first faxed to Mr. Walinga). Her mother called Ms. Willard, and again
    asked her to witness the appellants signature. The appellant signed the second
    promissory note on July 22, 2014, witnessed by Ms. Willard, and she testified
    that she gave it to her mother in Georgetown on September 9, 2014.

[10]

In
    October 2014, Eva Middleton moved to a condominium she had purchased in Picton.
    The appellant and her daughter provided care and companionship to Eva Middleton.
    Two months before her death, Eva Middleton signed a codicil to her will leaving
    her condominium and its contents to the appellant, as well as a document
    providing that a loan to her granddaughter would be considered paid in full
    upon her death. Neither of these transactions was challenged by the estate
    trustee.

[11]

The
    appellant relied on two pieces of evidence as corroborative of her evidence
    that the second promissory note reflected her mothers true intention: a paper
    copy of an email dated December 12, 2014, after Eva Middleton had received her
    terminal diagnosis, in which Eva Middleton confirmed to the appellant that the
    loan would be forgiven on her death; and the affidavit evidence of Ms. Willard,
    that, before she witnessed the first promissory note, Eva Middleton told her
    that she was trying to figure out how to keep her personal wishes out of her
    will and that there might be a second note (the inference being that the second
    note achieved her stated purpose).

[12]

Ms.
    Willard also testified at trial. Ms. Willard did not read the contents of either
    promissory note.  She knew the first signing was of a promissory note but was
    not privy to the details.  She swore that:

Eva told me that she and her lawyer had also prepared another
    Promissory Note as she was trying to figure out how to leave her personal
    wishes out of her Will. She said that I may be asked to witness the other
    version once she had thought it all through.

Eva called me about a week later to ask me to witness the
    replacement Note that she mentioned and I did so.

[13]

Ms.
    Willard testified that Eva Middleton told her there might be a second note, she
    wanted to think everything through but there was no discussion about gifts to
    children.

[14]

Jacob
    Walinga testified about the promissory note he had prepared and his advice to
    Eva Middleton. Referring to notes he made on July 15, 2014, he testified about
    the fax he had received from the appellant attaching a revised draft, and his
    conversation with Eva Middleton, where she indicated that she had not agreed to
    the change and wanted it out. He testified that this was the only time the
    issue arose, and at no point did Eva Middleton indicate to him that she wished
    to forgive the loan upon her death. He said that after he had received the
    revised note from the appellant with the reference to forgiveness of the loan
    removed, he was concerned that it still did not contain the maturity date of
    July 20, 2019 and he left a message on Eva Middletons telephone suggesting she
    should use the promissory note he had drafted. He confirmed this advice by
    letter. Mr. Walinga said there was no discussion with Eva Middleton about wanting
    to forgive the loan in a promissory note or about including forgiveness of the
    loan in her will.

[15]

Eva
    Middletons lawyer in Picton, Mr. Menlove, testified that he met with Eva Middleton
    in December 2014 when she needed a local lawyer who could assist with her
    estate. She brought with her a will prepared by Mr. Walinga in September 2014 and
    the first promissory note. Mr. Menlove stated that it was his understanding
    from their discussion that Eva Middleton had loaned her daughter, the
    appellant, money and that this was a debt to be repaid upon her death. He
    confirmed that there was no discussion about any other terms or any paperwork
    other than the note itself.

[16]

Eva
    Middletons grandson, Charles Simpson, testified that he had purchased his
    grandmother's iPad and helped her set up email on that device. He produced
    copies of a number of emails he had received from his grandmother and noted
    that her emails to him usually concluded with the words Sent from my iPad but
    that the December 12, 2014 email had no such wording.

[17]

The
    estate trustee testified about the timing of her receipt of the promissory
    notes and the December 12, 2014 email, and she confirmed that the estate had
    not challenged the codicil and forgiveness of the mortgage in favour of the
    appellants daughter.

C.

the TRIAL Judges REASONS

[18]

The
    trial judge concluded that only the first promissory note was valid and
    enforceable. He relied on the testimony of the two lawyers, which he found to
    be credible and reliable, to find that Eva Middleton never changed her mind
    about forgiving the loan, did not receive the second promissory note, and did
    not send the December 12, 2014 email to the appellant. He reasoned that:

Mr. Walinga's testimony, which I have no hesitation in
    accepting, is that he did not prepare a second promissory note because Eva was
    "trying to figure out how to leave her personal wishes out of her
    Will" as Ms. Willard deposed in her affidavit sworn June 2, 2016. Mr.
    Walinga struck me as a careful solicitor and he prepared comprehensive notes of
    his discussion with Eva on July 15, 2014. If there had been a second promissory
    note prepared by him for the purpose described by Ms. Willard, he would have
    said so during his testimony and also recorded that in his notes.



There may have been a conversation between Eva and Ms. Willard
    about a second promissory note because of Mr. Walinga's advice to Eva in his
    telephone message of July 15 and his reporting letter of July 22, 2014 that he
    was concerned about the potential confusion with respect to the maturity date
    and that the original promissory note which he had prepared should be used in
    order to clear up this issue. This would explain why Eva might have spoken to
    Ms. Willard about another promissory note.

Given that Mr. Walinga was her long time solicitor, her
    consultations with him in June and July about the promissory note and her
    execution of a new Will on September 2, 2014, it is passing strange that Eva
    withheld from him that she had changed her mind and a new promissory note had
    been prepared and signed by Linda.



The most compelling evidence that Eva did not change her mind
    and that Linda did not give her promissory note 2 was the testimony of Mr.
    Menlove. Eva gave him promissory note 1 with her Will. Any argument that she
    could have been confused over the promissory notes and forgot that she had
    received a second note which superseded the first one founders on Mr. Menloves
    evidence that, at their meeting in December 2014, she confirmed that the loan
    remained payable on her death.

I consider Mr. Menlove's testimony both credible and reliable.
    Eva was an elderly client he did not know well, who met with him to discuss important
    legal documents prepared by another lawyer. He did what any competent lawyer
    would do in the circumstances - talk to his new client about their contents and
    ask if her wishes remained the same.



There are circumstantial
    guarantees of trustworthiness; the primary ones are the contemporaneous notes
    made by Mr. Walinga and the fact that the documents were given to Mr. Menlove
    for safekeeping [Citations omitted].

[19]

The
    trial judge rejected the appellants account of the circumstances surrounding
    the signing of the promissory notes. He rejected the evidence that she relied
    on as confirmatory. Although he accepted that Ms. Willard had witnessed the
    signing of the two promissory notes, he concluded that she had been mistaken
    about the conversations she claimed she had with Eva Middleton about the
    notes.  He also found that Eva Middleton did not know Ms. Willard well at the
    time, so it was improbable that she would have discussed such a private matter
    in detail with Ms. Willard. He also noted that Mr. Walinga testified that there
    were changes to the promissory note: changes respecting the payment of interest
    on the loan, that had nothing to do with forgiveness of the loan.

[20]

As
    for the December 12, 2014 email, the trial judge did not accept that Eva Middleton
    had sent it. He gave a number of reasons for this conclusion, including that
    the email was unnecessary if both knew about the existence of the second
    promissory note; the email is dated nine days after Eva Middleton met with Mr.
    Menlove and told him that the promissory note would form part of her estate;
    the email was not included with the appellants affidavit in response to the
    application; and that the email would likely have stated that it came from Eva Middletons
    iPad if she had composed it.

D.

THE ISSUES ON APPEAL

[21]

The
    appellant claims the trial judge erred in his assessment of the evidence that
    corroborated her account of Eva Middletons intentions and in particular, (1) in
    rejecting Ms. Willards evidence about what Eva Middleton said in respect of
    the second promissory note, and (2) in his assessment of the evidence about the
    December 12, 2014 email, leading to his conclusion that Eva Middleton did not
    send the email. The appellant submits that these errors were central to the
    trial judges reasoning and conclusion that only the first promissory note was
    valid and enforceable. As such, the judgment must be set aside and a new trial
    ordered.

[22]

In
    support of her second argument, the appellant seeks to introduce fresh evidence
    on appeal. The fresh evidence consists of affidavits of the appellant, her
    trial counsel, and her daughter to contradict certain evidence at trial
    concerning the December 12, 2014 email. The appellant says that, once the fresh
    evidence is admitted, her evidence concerning the email ought to be accepted.

E.

ANALYSIS

(1)

The Trial Judges Treatment of Ms. Willards Evidence

[23]

The
    appellant asserts that the trial judge erred in his treatment of the evidence
    of Joyce Willard that would have supported her version of the events, in
    particular that the second promissory note was signed after her mother had
    decided that the note would be forgiven upon her death.

[24]

To
    be clear, Ms. Willard witnessed the signing of both promissory notes at Eva Middletons
    request but she did not read either of them. Nor did she have any discussions
    with Eva Middleton about gifts to her children.  The only relevance of Ms.
    Willards evidence is to address the issue of what Eva Middleton believed the second
    note said and any conversation she may have had with Ms. Willard about why there
    was a second note.

[25]

However,
    even if the trial judge had accepted Ms. Willards evidence, there was nothing
    Eva Middleton said to Ms. Willard that indicated that Eva Middleton intended to
    forgive the loan on her death or that the new note contained such a provision.
    Nor could what she said have overcome the direct evidence of Eva Middletons
    intention. That evidence was Eva Middletons subsequent actions in delivering
    her will and the first note to the lawyer who would handle her estate, and
    confirming her intentions to him.

[26]

We
    see no reversible error in the trial judges conclusions on this issue. The
    credibility and reliability of the evidence of the witnesses is the province of
    the trial judge to which this court owes deference.

(2)

The December 12, 2014 Email

[27]

The
    appellant proposes to introduce fresh evidence to prove that one of the emails
    that Charles Simpson produced to compare with the December 12, 2014 email  an
    email addressed to him and dated December 17, 2014 - could not have been sent
    by Eva Middleton from her iPad that day and must have been falsified by Charles
    Simpson. According to the appellant, the proposed fresh evidence confirms that
    Eva Middleton was in the hospital on the date the email was sent, and suggests
    that she did not have her iPad with her.

[28]

The
    appellant contends that this evidence is important, because it means that
    evidence the trial judge relied on to conclude that Eva Middleton did not send
    the December 12, 2014 email to her was itself falsified. She asserts that it
    was only when she was going through her mothers papers that she realized that
    Eva Middleton had been in the hospital at the time of the December 17, 2014
    email. The appellant contends that it had never occurred to her during the
    trial that Charles Simpson might have been making things up.

[29]

This
    evidence does not meet the requirements for admitting fresh evidence on appeal
    as set out in
Sengmueller v. Sengmueller
(1994), 17 O.R. (3d) 208
    (C.A.), at pp. 210-11. The appellant knew before the hearing commenced that Charles
    Simpson would be testifying about Eva Middletons emails. Indeed, she was
    provided with copies of the emails that Charles Simpson had exchanged with his
    grandmother and advised that the emails would be tendered to demonstrate that
    the December 12, 2014 email was fabricated by the appellant. The appellant was
    asked whether she wished to proceed in the face of this new allegation, and she
    agreed to proceed without an adjournment.

[30]

The
    fact that Eva Middleton was in the hospital on December 17, 2014 is information
    that was available to the appellant before and at the trial  Eva Middleton was
    staying at her home, and the appellant testified that her mother was very sick,
    and went to the hospital the day after the December 12, 2014 email. Indeed, the
    evidence at trial was that Eva Middleton was in and out of the hospital for the
    month of December. The appellant and her counsel had the opportunity to
    question the authenticity of the emails tendered by Charles Simpson at the
    trial. The fact that they may not have turned their minds to the issue they now
    raise does not justify the admission of the proposed fresh evidence.

[31]

In
    any event, the admission of the proposed fresh evidence would not have changed
    the outcome of the trial. Even had the trial judge accepted the December 12,
    2014 email as a genuine message from Eva Middleton to the appellant, there
    could have been many explanations for it in the context of her illness.  As
    with Ms. Willards evidence, sentiment expressed vaguely in an email could not displace
    the only direct evidence of Eva Middletons intention with respect to the loan
    and her estate, which was her delivery, just a couple of weeks earlier, of the
    first promissory note and her will to Mr. Menlove.

[32]

Even
    if Eva Middleton had told the appellant that her intention was to forgive the
    loan on her death, based on the evidence that was available, the appellant was
    not able to prove that intention at trial in the face of her mothers act of
    relying on the first note by giving it to her lawyer.

(3)

The Trial Judges Assessment of Eva Middletons Intention

[33]

In
    addition to the errors alleged above, the appellant contends that the trial
    judge erred in his assessment of the evidence, pointing to his failure to
    consider the possibility that Eva Middleton may have been confused or mistaken
    when she met with Mr. Menlove in December 2014, and that she may have given him
    the wrong instructions.

[34]

Contrary
    to the appellants submission, the trial judge specifically addressed the
    appellants suggestion, in argument, that Eva Middleton simply forgot that she
    had received a second note which superseded the first one. Eva Middleton
    deposited the documents with Mr. Menlove for safekeeping so that her estate
    plan would be carried out. Mr. Menlove reviewed the contents of those documents
    with her and confirmed that her wishes remained the same. It was not suggested
    to Mr. Menlove that Eva Middleton had been confused when she met with him. Nor
    was there any other evidence at trial that would have supported this inference.
    The trial judge was entitled to conclude that Eva Middleton had accurately
    conveyed her wishes to Mr. Menlove when she brought the first promissory note
    and will to him and they met about her estate.

F.

CONCLUSION

[35]

For
    these reasons, the appeal is dismissed.

[36]

In
    accordance with the parties' agreement on costs, the respondent, as the successful party, is entitled to costs of $15,000 for the appeal and a further $10,000 for the fresh evidence motion plus disbursements and applicable taxes on both amounts.

K.
    Feldman J.A.

K. van
    Rensburg J.A.

J.A. Thorburn
    J.A.


