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Posted on October 1, 2020 | Posted in Collections

Litigants sometimes forget that facts must be proven by evidence and that, more importantly, the introduction of evidence is subject to rules, both under the common law and pursuant to the Evidence Act of Ontario. This is not a new problem (see June 2008 newsletter). Litigants also sometimes forget that (i) a summary judgment motion is merely another means, rather than a formal trial, by which a decision is to be made, based on the facts and the law; and (ii) facts are still subject to the rules of evidence. It seems that the bank’s lawyer in Toronto-Dominion Bank v. PMJ Holdings Limited, a 2019 Ontario Superior Court of Justice decision, did not fully consider the rules of evidence and, at the same time, ran up against a rather formalistic judge. It did not lead to a good result for the bank.

A stack of folders filled with papers.


It was a run-of-the-mill collection action on a guarantee. Husband’s corporation defaulted on a loan and the bank looked to wife, as the guarantor, for payment of $37,000. Wife claimed that she did not recall signing the guarantee and merely stated that the signature on it “does not appear to be my signature.” She claimed that, if it were her signature, then she signed it only at her husband’s request and that only he would have benefited from that signature. Wife, who did not have independent legal advice relating to the guarantee, claimed undue influence.

Given these rather meagre defences, the bank brought a motion for summary judgment under the simplified procedure Rules of Civil Procedure, arguing that wife’s proposed defences did not raise any triable issues.

Unlike a summary judgment motion under the ordinary Rules, parties are not allowed to cross-examine on affidavits filed on the motion.


The bank’s motion most pressing problem was that the transaction took place in 2002. The odds are very slight that anyone at the bank would still remember, or indeed even have been involved in, a transaction that took place 17 years previously. Accordingly, all of the evidence had to be tendered based on written documents and notes.

The bank’s lawyer put forward most, if not all, of the documents relevant to the transaction, but had to put them forward through someone, an account manager or a collector, who had no first-hand knowledge of the transaction. Unfortunately, the lawyer did not adduce this evidence strictly in accordance with the Rules of Civil Procedure and the rules of evidence and the judge took her to task for not doing so.

On a motion, Rule 39.01(4) allows the deponent of an affidavit to make statements on information and belief if the source of the information and the fact of the belief are specified in the affidavit. In essence, in motions, hearsay evidence is allowed. However, just because it is allowed to be adduced, does not mean that the judge will attach any weight to it. If hearsay evidence is being relied upon for fundamental issues in dispute, that hearsay evidence will be of little use in a summary judgment motion. The bank’s representative seems to have stated only that he believed the documents to be true, but, in many cases, did not indicate how he obtained the information and why he believed it was true. It may be that it was impossible for him to do so; this, we do not know.


When reading the judge’s reasons, the bank’s lawyer would not have enjoyed reading the following – found as early as the second paragraph of the analysis:

“However, it is even more inefficient and wasteful for the parties on a summary judgment motion to present the court with haphazardly-prepared materials that do not permit the motions judge to fairly adjudicate a dispute that might very well have been amenable to summary judgment on a proper evidential record.”

and the judge’s later statement that:

“affidavits do not make even a perfunctory effort either to comply with the requirements of Rule 39.01(4) for “information and belief” affidavits, or to establish a proper foundation for the substantive admissibility of the documents he appends as exhibits.”

The judge raised the following criticisms of the affidavits tendered in support of the bank’s motion:

  • The affidavits did not identify from where the documents came.
  • The authors of some of the notes on which the bank relied were not identified.
  • The affiant did not state from where the notes came, who wrote them, or why the affiant believed the notes to be accurate for the truth of their contents.
  • No information was given about the circumstances in which the notes were made.
  • No information was given as to the authenticity or integrity of the digital records.

Based on these criticisms, the judge held that none of the written documents was admissible into evidence, including the guarantee.


The judge was not enamoured with wife’s assertion that she did not recall signing the guarantee or that it did not seem to be her signature. If the bank had submitted the signed guarantee with a proper evidentiary basis, then this wishy-washy assertion would not hold sway. A guarantor who contests a properly executed guarantee has to provide much more evidence to show that the guarantee is not authentic, usually in the form of a handwriting analysis. However, since the judge held that the guarantee did not have a proper foundation, on that basis alone he was satisfied that there was a genuine issue for trial.

Wife had also claimed a lack of independent legal advice. The courts have stated that, without independent legal advice, there is a presumption of undue influence based on the relationship of the parties, together with the disadvantageous nature of the transaction for the guarantor. Of course, this is only a presumption that the financial institution can rebut with appropriate evidence.

In this case, because the bank had no certificate of independent legal advice, the mere claim of undue influence was enough to bring the defence into issue and shift the onus to the bank to demonstrate that there was no undue influence. Had the notes been admitted into evidence, this would have been accomplished; however, no notes meant no evidence to rebut the presumption. From the bank’s point of view, this was a pity; wife had put forward almost no evidence of actual undue influence. Stating merely that she would have signed the guarantee, if requested, is hardly evidence of undue influence.


The judge dismissed the motion after concluding that there were genuine issues requiring a trial. He commented on this as follows:

“This is unfortunate, insofar as I think there is at least a reasonable prospect that I might have been able to decide the case on a summary basis, one way or the other, if I had been provided with a proper evidential record.”

The action will now either be settled or progress to trial.


We feel that the judge might have been a tad harsh about the evidence produced. However, when faced with difficulties in providing evidence, counsel must do more than simply attach documents. The judge made no mention of the business records provisions of the Evidence Act and, accordingly, we assume that there had been no attempt to fit the evidence within the business records exception to hearsay evidence. Had this been done, along with a proper request to admit, we expect that the decision in this case may well have been very different.


Image courtesy of JerzyGorecki.

Jonathan Speigel


Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.


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