Court of Appeal for Ontario

Date: 2025-05-22
Docket: COA-24-CV-1181
Panel: van Rensburg, Sossin and Gomery JJ.A.

Between:
MarshallZehr Group Inc.
Plaintiff (Respondent)

and

Jordan Rudiger Zukowski and Rudi Heinz Edwin Zukowski
Defendants (Appellants)

Appearances:
Irwin A. Duncan and David M. Steele, for the appellants
Stephen Schwartz, for the respondent

Heard: 2025-05-15

On appeal from the order of Justice Marvin Kurz of the Superior Court of Justice, dated October 7, 2024.

Reasons for Decision

Background

[1] The appellants appeal the motion judge’s order granting the respondent’s motion for summary judgment. The motion judge held that a personal guarantee signed by the appellants to secure a project financing loan from the respondent was valid and enforceable. He ordered a trial to determine the amount it secured.

[2] The appellants advance two grounds of appeal. They contend that the motion judge erred (1) in dismissing their motion to cross-examine the respondent’s representative, Cecil Hayes; and (2) in failing to find evidence that the respondent acted in bad faith during the project.

[3] We are not persuaded that either of these grounds has merit.

Jurisdiction Over Interlocutory Orders

[4] The respondent points out that the order dismissing the appellants’ motion to cross-examine Mr. Hayes is interlocutory and says that the appellants should have sought leave from the Divisional Court to appeal it. We disagree. The motion judge’s rationale for dismissing the appellants’ motion forms part of his reasons for granting the summary judgment motion. This court can take jurisdiction over the appeal of the interlocutory aspects of an order if they are so interrelated with the final order that there is a good reason to hear the appeals together: Halton Standard Condominium Corporation No. 550 v. Del Ridge (Appleby) Inc., 2023 ONCA 753, para. 16; Lax v. Lax, para. 9.

Refusal to Permit Cross-Examination

[5] We see no error in the motion judge’s refusal to permit cross-examination of Mr. Hayes as a witness on the pending motion, which would have resulted in an adjournment of the summary judgment motion. He found that the appellants had failed to exercise their right to cross-examine with reasonable diligence, as required by r. 39.03(3) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, and the applicable local practice direction. This finding was open to him to make on the record. The parties conducted cross-examinations based on a court-ordered timetable in March 2024. Five weeks later, the appellants sought to cross-examine Mr. Hayes. When the respondent refused to produce him, they waited a further two and a half months before bringing a motion under r. 39.03. By that time, the summary judgment motion hearing date, which was peremptory on the appellants, was only 15 days away.

[6] According to the appellants, the motion judge failed to consider how the denial of their motion to cross-examine would prejudice their ability to prove bad faith. He did not. The motion judge stated that he was not persuaded that the cross-examination of Mr. Hayes would elicit any relevant evidence that could not have been elicited through the respondent’s affiant, either directly or through undertakings.

Allegations of Bad Faith

[7] With respect to the second ground, we see no reviewable error in the motion judge’s reasons. The appellants conceded that the personal guarantee foreclosed any defence short of bad faith. The motion judge found that the appellants’ allegations that the respondent acted in bad faith were bald and self-serving in that they were unsupported by any credible evidence, while the respondent’s evidence about the parties’ dealings was particularized and supported by the contemporaneous record. He reviewed the record before him in detail and found that the respondent’s control over elements of the project was consistent with the parties’ contractual arrangements and its role as a lender; that the respondent did not, as the appellants alleged, contract with a third party to the appellants’ detriment or receive rents collected by that party; and that the respondent did not improperly cause the appellants’ company to breach its contractual obligations or refuse to provide project draws to the company when required.

[8] Based on the motion judge’s findings, it was open to him to conclude that the validity and enforceability of the personal guarantee could be resolved in the respondent’s favour without a full trial. He did not refer to C.M. Callow Inc. v. Zollinger, 2020 SCC 45, because the appellants did not refer to it or rely on it. The appellants have not identified any palpable and overriding error by the motion judge in his finding that their allegations of bad faith were unsupported. It is not this court’s role to reassess the evidence and make its own findings of fact and inferences.

Disposition

[9] The appeal is therefore dismissed, with all-inclusive costs of $15,000 to the respondent.

K. van Rensburg J.A.
L. Sossin J.A.
S. Gomery J.A.