DATE: 20060301

DOCKET: C42698

COURT OF APPEAL FOR ONTARIO

RE:

RICHARD ISRAEL SNIDERMAN, IN TRUST (Plaintiff (Respondent)) – and – LEE-ANNE GIBBS AND ANDREW PAJEK (Defendants (Appellants))

BEFORE:

CATZMAN, MOLDAVER and ARMSTRONG JJ.A.

COUNSEL:

Maurice J. Neirinck

for the appellants

J. David Sloan

for the respondent

HEARD:

FEBRUARY 24, 2006

On appeal from the judgment of Justice Wailan Low of the Superior Court of Justice dated October 21, 2004.

E N D O R S E M E N T

Liability Appeal

[1] We have not been persuaded that the trial judge erred, either in her findings of fact or in her application of the law to those findings.

[2] In particular, contrary to the submission of the appellant, we are satisfied that it was open to the trial judge to find that “the last loan of $25,000 was made on condition that Ms. Gibbs give a promissory note and a mortgage on her property to secure repayment of the aggregate of the last loan together with all of her previous indebtedness including interest thereon and outstanding accounting fees for her companies.” That finding was central to the trial judge’s analysis and there was a basis for it in the evidence.

[3] As for the trial judge’s legal analysis, we agree with her that, even though the promissory note was not a bill of exchange, it nonetheless evidenced a debt owing from Ms. Gibbs to the respondent. That debt was secured by the mortgage which the appellant assumed from Ms. Gibbs and upon which the trial judge granted judgment.

[4] In the result, the trial judge properly found that the appellant was liable on the mortgage.

[5] The appellant submitted that the respondent failed to provide adequate proof of two alleged advances for accounting fees, one in the amount of $10,000 and the other in the amount of $7,922.50, and that the proof offered was unsubstantiated hearsay. This submission overlooks the fact that, in acknowledging the quantum of her indebtedness as evidenced by the promissory note, Ms. Gibbs must be taken (in the absence of evidence to the contrary) to have acknowledged her liability for the several components that made up that quantum, including the advances for accounting fees referred to.

[6] The appellant further submitted that, as against him, the trial judge erred in rectifying the mortgage by increasing the principal amount from $131,628.39 to $139,550.89. He based this submission on the fact that he was not privy to the making of either the promissory note or the mortgage, nor to the alterations made to those documents by Mr. Samuel, a lawyer retained to provide independent legal advice to Ms. Gibbs. We reject this submission. In our view, the trial judge was entitled to order rectification as she did. It is clear that Ms. Gibbs was aware of the correct amount owing by her. In the particular circumstances of this case, having regard to the close personal relationship between the appellant and Ms. Gibbs, we are satisfied that the appellant had actual knowledge of the correct amount owing or that such knowledge should be imputed to him.

[7] In the result, the appeal from liability is dismissed and the judgment below is affirmed.

Cross-Appeal on Costs

[8] The respondent cross-appeals from the order of costs made at trial. We are not persuaded that the trial judge erred in her costs award. The reductions which she made to the respondent’s bill of costs were well within her discretion and in the end, she arrived at a figure which was fair and equitable in the circumstances. Accordingly, we would deny leave to appeal the costs award.

Costs of the Appeal

[9] The respondent was successful on the appeal from liability, but unsuccessful on his cross-appeal. In the circumstances, we would award the respondent his costs of the appeal in the amount of $15,000 inclusive of G.S.T. and disbursements.

Signed: “M.A. Catzman J.A.”

“M.J. Moldaver J.A.”

“Robert P. Armstrong J.A.”