CITATION: The Toronto-Dominion Bank v. Lumberland Plus Limited, 2013 ONSC 6000

DIVISIONAL COURT FILE NO.: 13/266

DATE: 20130924

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

BETWEEN:

The Toronto- Dominion Bank

PlaintiffApplicant

– and –

Lumberland Plus Limited o/a Irving's Plumbing Supplies and Debra Ellen Erenberg aka Debbie Erenberg aka Debra Ellen Avrams

Defendants/Respondents

Natalie Marconi, for the Plaintiff/Applicant

No one appearing for the Defendants/ Respondents

HEARD at Toronto: September 17, 2013

Nature of the Proceeding

Nature of the Proceeding

1This a motion for leave to appeal the order of Pollak J. dismissing the Plaintiff’s unopposed summary judgment motion for damages in fraud against the Defendant, Debra Ellen Erenberg aka Debbie Erenberg aka Debra Ellen Avrams (“Ms. Erenberg”). Ms. Erenberg was served with the motion materials and her lawyers advised the Plaintiff that no one would be appearing to oppose the motion.

Background

Background

2The Plaintiff and the corporate Defendant, Lumberland, entered into a loan agreement pursuant to which Lumberland obtained a line of credit from the Plaintiff. Ms. Erenberg personally guaranteed the line of credit. The line of credit went into default, the Plaintiff sued and on June 3, 2011, the Plaintiff obtained judgment against both Lumberland and Ms. Erenburg for the amount owing on the line of credit.

3Ms. Erenberg went into bankruptcy, which had the effect of staying the judgment that the Plaintiff had obtained against her. As a result, the Plaintiff commenced another action against Ms. Erenberg in which it alleged that Ms. Erenberg falsely represented Lumberland’s accounts receivable knowing that the Plaintiff was relying on those representations in order to calculate the amount of credit available to Lumberland under its line of credit. As a result of those fraudulent representations by Ms. Erenberg, Lumberland obtained credit from the Plaintiff that it was not entitled to, thereby depriving the Plaintiff of $750,000.00. In the prayer for relief the Plaintiff claimed “damages for fraud for the amount of $750,000.00.”

4On February 27, 2012, Master Short granted an order allowing the Plaintiff’s claim for fraud to proceed. In doing so, he recognized that the Plaintiff already had a judgment for the same debt, but that the new action alleged a fraudulent act. Master Short also noted that Ms. Erenberg did not oppose the order allowing the new action to proceed. Ms. Erenberg filed a Statement of Defence to the new action.

5On November 8, 2012 the Plaintiff examined Ms. Erenberg for discovery. During the course of her examination for discovery Ms. Erenberg made the following admissions:

(a) She had been running Lumberland during the time that the false receivable reports were filed with the Plaintiff.

(b) She was the one who filed those reports.

(c) She was familiar with the terms of Lumberland’s credit facility with the Plaintiff and knew that the Plaintiff was using the receivable reports to calculate Lumberland’s available line of credit.

(d) She had met with the Plaintiff’s receiver on April 21, 2011 and had told him that the false reporting had been going on for one to two years. She also provided him with the genuine monthly reports for the period during which the false reporting had been going on.

6On the basis of the information provided to the Plaintiff’s receiver by Ms. Erenberg, the Plaintiff calculated the amount of credit that it actually advanced to Lumberland because of the false reporting and the amount of credit it should have advanced to Lumberland if it had received accurate reports. The difference between the two amounts was just under $700,000.00. Since the initiation of its claim the Plaintiff had collected some amounts, which reduced the amount owing to just under $570,000.00. On the motion before Pollak J., it sought judgment against Ms. Erenberg for the latter amount. Ms. Erenberg filed no evidence on the motion for summary judgment.

7Pollak J. dismissed the Plaintiff’s motion finding that the Plaintiff had not provided enough evidence to prove its claim in fraud.

Test on Motion for Leave to Appeal

Test on Motion for Leave to Appeal

8Leave to appeal from an interlocutory order will only be granted if one of the following tests is satisfied:

(1) There is a conflicting decision by another judge on a matter involved in the proposed appeal and it is desirable that leave be granted; or

(2) There is good reason to doubt the correctness of the order and the proposed appeal involves matters of importance.

Analysis

Analysis

9I accept that there is good reason to doubt the correctness of Pollak J.’s decision. However, this motion involves a very fact specific situation that does not raise an issue that requires that a conflict in the case law be resolved or a matter that extends beyond the interests of the parties to the litigation. Thus, I do not find that the Plaintiff has met the test for granting leave to appeal.

10I would also note that there is real reason to question what advantage the Plaintiff would derive from pursuing this matter in the Divisional Court as opposed to just setting it down for a short and likely unopposed trial.

Conclusion

Conclusion

11For these reasons the motion for leave to appeal is dismissed.