DIVISIONAL COURT FILE NO.: 223/12

DATE: 20120627

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT - TORONTO

RE: TRI-NOVO GROUP INC. v. LARRY RADZIO and others

BEFORE: NORDHEIMER J.

COUNSEL: M. Swan, for plaintiff and third parties/applicants

S. Sheikh, for the defendants

HEARD: June 27, 2012

ENDORSEMENT

[1] The applicants seek leave to appeal to the Divisional Court from the order of Chapnik J. dated April 23, 2012 that dismissed the applicants’ motion for summary judgment.

[2] The action arises out of a lease agreement between the plaintiff/landlord and certain of the defendants as tenants. The defendant, Rene Radzio, was starting up a restaurant business and the leased space was to be used for this purpose. The restaurant turned out, in relatively short order, to be a losing enterprise. The tenants ultimately abandoned the premises about fifteen months after the lease began. As a consequence of that action, the defendants do not dispute that certain sums are owing to the plaintiff but claim that there are amounts to be set-off against the sums owing that result in monies actually being owed to the defendants. There is a counterclaim for this amount.

[3] Central to the dispute between the parties is the payment of $210,000 by the tenants that occurred at the outset of the relationship between the parties. The tenants contend that this amount was paid as an additional security deposit for the lease and thus it should be credited against the tenants’ obligations. The plaintiff contends that this payment was a commission due to an unrelated party for the obtaining of the lease and is unconnected to the obligations under the lease agreement. The payment of this amount in two parts to two numbered companies that appear to be related to the plaintiff forms the subject of the third party claim.

[4] The motion judge dismissed the motion for summary judgment on the basis that there were genuine issues that required a trial for their proper determination. The motion judge made specific reference to the issue over the $210,000 payment and also the conflict on the facts regarding how the whole relationship between the parties came into being. The motion judge concluded that these matters were not ones that were amenable to being resolved in a summary fashion and on a paper record. In this regard, the motion judge also pointed to the overlay of unequal bargaining and undue influence that may have been involved in the negotiation of the lease agreement.

[5] The applicants rely on rule 62.02(b) as the basis for their application for leave to appeal. In order to obtain leave to appeal under that subrule, the applicants must establish that there is good reason to doubt the correctness of the order in question and that the proposed appeal involves matters of such importance that in the opinion of the application judge leave should be granted.

[6] In my view, the applicants have not satisfied either prong of the test under the subrule. I do not doubt the correctness of the decision reached to dismiss the motion for summary judgment. In this regard, it is important to observe that it is the decision about which there must be doubt as to the correctness, not the reasons given. While I do not agree with some of the reasons that the motion judge gave for dismissing the motion for summary judgment, I do agree with the result. There are clearly conflicting views on what transpired leading up to the signing of the lease agreement and there are also conflicting views on what the $210,000 was paid for. A trial is necessary to resolve those conflicts. I note in that regard that there were no cross-examinations on the plaintiff’s material because of an earlier order made by Perell J. While I have some concerns regarding the advisability of such an order being made in a summary judgement matter, it remains the fact that the motion judge was not bound by that order to make a determination if she thought that cross-examination was nonetheless necessary to a proper and fair adjudication of the issues.

[7] In addition, the disposition of the summary judgment motion does not involve matters of such importance that a panel of the Divisional Court should be called upon to review the matter. The decision of the motion judge does not give rise to any matters of public importance nor does it establish new legal principles regarding the appropriate disposition of summary judgment motions under the new summary judgment rules. While the issues may be important to the parties, that reality is not sufficient to satisfy the second prong of the test. In that regard, I would add that any issue regarding the quantum of costs awarded on the motion does not itself rise to a level of importance that would justify leave being granted.

[8] The application is therefore dismissed.

NORDHEIMER J.

DATE: June 27, 2012