Mother lent rather than gifted money to daughter and her husband, court summarily finds
The Ontario Superior Court of Justice has granted summary judgment in favour of a mother upon finding that she loaned funds to her daughter and her husband. The court disagreed with the son-in-law’s characterization of the money as a gift.
The defendants in this case were involved in matrimonial litigation following the breakdown of their marriage in 2020. The wife’s mother, who was the plaintiff in this case, filed a statement of claim seeking the amount of $163,982.50, to be paid from the sale proceeds of the defendants’ matrimonial home. She then moved for summary judgment of her claim.
According to the plaintiff, the funds were a part of a 2017 loan that she made jointly to her daughter and her husband when they were buying their first home. When the couple started having marital problems in 2020, she asked her financial consultant how she could ensure repayment. He told her to use a promissory note and drafted one showing the amount due.
In July 2020, the plaintiff delivered this promissory note to her daughter so that she and her husband could sign it. The next month, it remained unsigned. She messaged her son-in-law to remind him and his wife to sign the note. He responded with “okay.”
In the court proceedings, the son-in-law disagreed with the plaintiff’s position and alleged that the funds were a gift, not a loan. He claimed that he and his wife signed a 2017 gift letter, which stated that the plaintiff was “making a gift of $200,000.”
He also alleged that, after the gift letter’s signing, someone added a handwritten phrase to the effect that the funds reflected a “loan from mother to daughter and son-in-law.” He argued that, if the gift letter did amount to a loan, this loan agreement bound only his wife and her mother, not him.
In Massaar v. Moneck, 2024 ONSC 6889, the Ontario Superior Court of Justice ordered both defendants, jointly and severally, to pay the plaintiff $163,982.50, the amount outstanding as of the date of the statement of claim. The court also directed them to pay prejudgment interest. Payment would come from funds held in trust from the sale of the home.
The court said that it did not need a trial to decide the issue of whether the plaintiff had loaned or gifted the money. Summary judgment would lead to an outcome that would end the litigation of this issue among the parties and would save the time and expenses required for a trial, the court held.
The court found, on a balance of probabilities, that the promissory note contained the son-in-law’s electronic signature. In August 2020, he provided a written acknowledgement that he would sign the document, the court noted. That same month, his wife delivered the executed document to the plaintiff, the court added.
The court concluded that the contemporaneous evidence in this case clearly showed the plaintiff’s intention to make a loan, including her hesitation to sign the gift letter, her email to her daughter to explain that she would only sign the letter if it included the additional phrase, and her crossing out of the words “a genuine gift that does not have to be repaid.”
Moreover, evidence from the plaintiff’s financial consultant showed that he advised her on how to alter the gift letter to reflect the existence of a loan agreement. This evidence corroborated the finding that the plaintiff intended for it to be a loan, the court said.
On the other hand, the court refused to rely on the son-in-law’s evidence seeking to support his position that he did not sign the promissory note. He was unable to offer evidence establishing that the plaintiff’s intention had been to make a gift rather than a loan, the court found.
