





CITATION:
Ranger v. Penterman, 2011
          ONCA 412



DATE:  20110531



DOCKET: C49077



COURT OF APPEAL FOR ONTARIO



Weiler, Rouleau and Karakatsanis JJ.A.



BETWEEN



Claude
          Ranger and Claudette Ranger



Plaintiffs (Appellants on Appeal)



and



Louis Penterman and Patricia Penterman (also known as
          Patricia Leigh McGowan)



Defendants (Respondents on Appeal)



Justin Bertrand, for the appellants



Guy R
é
gimbald,
          for the respondents



Heard:
May 2, 2011



On appeal from the judgment of Justice Michel Charbonneau of
          the Superior Court of Justice dated June 4, 2008.



By the Court:



[1]

The appellants appeal the trial judges decision dated
    June 4, 2008, dismissing their claim for breach of contract or, in the
    alternative, for unjust enrichment in the amount of $89,500 plus costs and
    interest.

[2]

The appellants, Claude and Claudette Ranger, advanced
    monies to the respondents
[1]
, Louis and Patricia Penterman, both directly and
    indirectly, through their son Pierre Ranger, the respondents lawyer. The
    respondents admitted receipt of the money, but denied it was a loan. They claimed
    they had no contact or relationship with the appellants and were not aware that
    the funds were coming from the appellants.

[3]

In dismissing the claim, the trial judge found that
    there were no dealings and no loan agreement between the parties. He found that
    while the respondents received the benefit of the funds, their only
    responsibility was to account to Pierre Ranger.

[4]

The appellants submit that the trial judge erred: in
    refusing to admit documents that were relevant to the advancement of monies to
    the respondents; in failing to consider whether the cheques payable directly to
    the respondents and marked loan evidenced a loan contract; and in failing to
    consider whether the appellants were entitled to their claim based upon unjust
    enrichment.

[5]

For the reasons that follow, we would allow the appeal.

Background

[6]

The appellants provided their son, Pierre Ranger, with cheques
    dated between November 2001 and December 2003, believing the funds to be loans
    to the respondents. Pierre Ranger is a lawyer and was acting for the
    respondents in litigation in Quebec at the time. He testified that the
    respondents had requested a loan to assist with trial and personal expenses
    pending the conclusion of their Quebec litigation and that he contacted his
    parents to provide the funds, as they had loaned the respondents money in the
    past. The respondents claimed their agreement was with their lawyer, for an
    investment in a company that has since gone bankrupt.

[7]

There were three series of cheques. The trial judge found
    that the cheques comprising the first and third series, totalling all but
    $11,000 claimed, were forwarded by the appellants to their son Pierre Ranger,
    intending them to be a loan to the respondents; and that the respondents had
    received the funds or the benefit of those funds. However, the trial judge
    accepted the respondents position that their agreement was with Pierre Ranger
    and not with the appellants.

[8]

The trial judge did not address the issue of unjust
    enrichment and declined to make a finding with respect to the respondents
    testimony that the money was advanced to them by Pierre Ranger as an investment
    in a company that had since gone bankrupt.

[9]

In addition to rejecting the evidence of Pierre Ranger,
    concerning the respondents knowledge that the money being advanced was a loan to
    them from his parents, the trial judge refused to admit documents sent by the
    respondents to Pierre Ranger disclosing the nature of the requests for the
    funds and an acknowledgment of the debt, on the basis that they were protected
    by solicitor-client privilege.

[10]

We will first address the issue of whether the trial
    judge erred in excluding this evidence and then deal with the substantive
    issues.

Exclusion of evidence

[11]

The appellants sought to admit into evidence a series
    of documents in which any reference to the Quebec litigation had been redacted
    by Pierre Ranger. They also placed before the court an unredacted version so
    that the trial judge could have the benefit of assuring himself this is what
    had been done.

[12]

We agree with the appellants that the trial judge erred
    in refusing to admit the redacted version of the documents that make clear that
    the respondents were requesting the funds to pay for their personal needs and
    not as an investment in their company. They confirm the nature of their
    requests for money and the purposes of the loans. As well, in May 2004, the
    respondents advised Pierre Ranger that they acknowledged a debt to the
    appellants  Your Dad will be repaid.

[13]

The trial judge excluded the evidence on the basis that
    they were subject to solicitor-client privilege. While it is not clear that the
    trial judge reviewed the unredacted documents, we were provided with the sealed
    unredacted documents and have reviewed them.

[14]

The fact that the documents were contemporaneous with a
    solicitor-client relationship does not necessarily make the communications in
    the documents privileged. Although there are several references to the ongoing
    litigation and privileged communications in the documents, the specific
    communications in issue were not related to the solicitor-client relationship.
    The respondents were requesting funds to pay for various ongoing living
    expenses pending the final resolution of the lawsuit. The documents include
    specific requests for funds to support living expenses such as groceries, gas,
    utilities, truck payments, property taxes for their home and farm lands, home
    insurance, and other living expenses.

[15]

In our view, the trial judge erred in excluding the
    redacted documents. The requests for funds did not fall within the usual and
    ordinary scope of the professional relationship or within the continuum of
    communications in which the solicitor tendered advice.

[16]

Furthermore, the respondents had already selectively
    introduced some of the documents. Obviously they are entitled to waive
    privilege but they cannot do so on a selective basis that results in an
    incomplete and misleading picture being presented to the court. Having put into
    issue the nature and purpose of the advancement of funds, it would be unfair to
    permit them to introduce some of the communications, but exclude other
    documents relating to the same issue. The redacted versions do not in any way
    disclose communications related to the Quebec lawsuit or solicitor-client
    advice and we hold they are admissible.

[17]

The statements in the documents are inconsistent with
    the respondents testimony and position that the advances were an investment in
    their new company. (It is worth noting that the respondents were unrepresented at
    trial.)

[18]

Statements in the documents make clear that the bulk of
    the monies advanced related to specific requests for personal living expenses.
    They support the appellants position that the monies were advanced as personal
    loans. They do not support the respondents evidence that the monies
    represented an investment by their lawyer in a new company.

[19]

The admission of the documents would very likely have
    resulted in very different credibility findings. As a result, the decision of
    the trial judge must be set aside.

[20]

In our view, however, a new trial is not required,
    except as it relates to the claim for $11,000. The appropriate outcome is
    otherwise clear on the respondents admissions and the documentary record
    before us.

The first series of cheques

[21]

The first series of five cheques, dated between
    November 2001 and January 2002, were made payable to Pierre Ranger, or Pierre
    Ranger in trust, with the notation Penterman. They totalled $21,500 and
    were deposited to Pierre Rangers trust account. The respondents Quebec
    counsel in the litigation was in turn paid $20,000 from the trust account. A
    further $3000 was paid out to Pierre Ranger for disbursements.

[22]

The money was paid to the respondents Quebec lawyer
    for professional services rendered to them during their Quebec trial and for
    disbursements for the direct benefit of the respondents. The respondents were
    ultimately successful in the Quebec litigation. They would clearly have
    understood that the funds were paid on their behalf and the source of those funds
    expected to be repaid.

[23]

Pierre Ranger had previously arranged to have his
    father lend money to the respondents in 1992. In a 1994 letter to the
    respondents, Pierre Ranger advised that his father had loaned the respondents
    the funds and requested that the repayment cheques be made payable to his
    father. In 1999, the respondents repaid the loan with a bank draft payable to
    C. Ranger. The appellants thus had a previous lending relationship with the
    respondents and this evidence, coupled with the evidence of the respondents
    requests for money for living expenses pending the outcome of the Quebec litigation,
    as well as the evidence concerning the third series of cheques clearly
    evidencing subsequent loans discussed below, leads us to conclude that the
    respondents financial relationship in regard to this first series of cheques
    was with the appellants.

[24]

Furthermore, there is no question that the respondents
    subsequently became aware that the appellants were the lenders. One of the
    documents excluded by the trial judge is an admission by the respondents that
    they would repay the appellants.

[25]

The appellants are therefore entitled to judgment for the
    amount of $21,500.

The second payment

[26]

The $11,000 claim for the second category of funds
    relates to a cheque dated August 9, 2002 from a third party, Pierre Seguin,
    made payable to the respondents. The trial judge did not accept the evidence of
    Pierre Ranger that this was money owed to the appellants that was made payable
    to the respondents to make things easier and quicker. He believed the
    respondents that they had been told that the deposit of $10,672 represented
    interest on the GIC that was being held as security in the legal proceedings.

[27]

It is not clear to us based upon the record available
    to us, whether this amount, funded by a third party, was in fact monies
    advanced by the appellants. Nor do we accept the factual characterization of
    the trial judge as it was based on his adverse findings of credibility, which
    we have determined must be set aside. This issue must be retried.

[28]

The claim for $11,000 cannot be determined on this
    record and should be remitted for the trial of an issue.

The third series of cheques

[29]

These 17 cheques were paid between October 2002 and
    December 2003, in amounts ranging from $1000 to $5000, and totalled $57,000.

[30]

The final group of cheques were drawn on the
    appellants account, were payable directly to the respondents, were clearly
    marked loan, and were deposited to the respondents personal account. The
    trial judge failed to note these important facts.

[31]

The respondents admitted in their Statement of Defence
    that they were aware as early as December 2002 that funds were being sent to
    them by one of the appellants. In fact, numerous copies of cheques were
    contemporaneously faxed to the respondents. Furthermore, in many instances, the
    amounts advanced relate to the various requests for money for specific living
    expenses as set out in the excluded documents and the responding cheques.

[32]

While the respondents also testified that the advances
    were based upon an agreement with Pierre Ranger that he would invest in their
    new company, this is inconsistent with the documentary evidence.

[33]

In our view, this record clearly establishes a loan
    contract between the parties for the amount of those cheques totalling $57,000.

Interest

[34]

There is insufficient evidence supporting the
    appellants claim for 8% interest. In the absence of any documentary evidence
    regarding interest, the appellants shall have 5% interest per year pursuant to s.
    3 of the
Interest Act
, R.S.C., 1985,
    c. I-15.

Conclusion

[35]

Accordingly, the appeal is allowed. The appellants
    shall have judgment in the amount of $78,500 plus costs and interest at 5% per
    year. The issue regarding the third party cheque for $11,000 is remitted back
    for the trial of an issue.

[36]

The appellants are entitled to their costs of the
    appeal and at trial. We do not have submissions with respect to costs. Subject
    to receiving further submissions from the parties within 10 days of the release
    of these reasons, we would fix the costs of the appeal at $15,000 and the trial
    costs at $20,000 both payable to the appellants.

RELEASED:  May 31,
    2011 KMW


K.M. Weiler J.A.

Paul
    Rouleau J.A.


Karakatsanis J.A.





[1]
Reference to the appellants is a reference to either one of or both of the
    appellants, Claude and Claudette Ranger. Similarly, reference to the
    respondents is a reference to either one of or both of the respondents, Louis
    and Patricia Penterman.


