Court File and Parties

Citation: Royal Bank of Canada v. Correia, 2016 ONSC 4698 Superior Court File No.: 4386/14 Divisional Court File No.: DC-16-10-ML Date: 2016-07-20 Superior Court of Justice – Ontario

Re: Royal Bank of Canada, Plaintiff And: Joao Carlos Correia aka Joao Carlos Araujo Nunes Correia aka Joao Carlos N. Correia, Defendant

Before: Regional Senior Justice Daley Counsel: James M. Satin, for the Plaintiff Douglas Snider, for the Defendant

Heard: In writing

Endorsement

Introduction

[1] The plaintiff seeks leave to appeal from the order of Gibson J. dated January 8, 2016. In that order, the motion judge dismissed the plaintiff’s motion for summary judgment.

[2] The plaintiff instituted this action seeking judgment against the defendant for an unpaid VISA debt of approximate $16,000 as well as an unpaid credit line debt of approximate $45,000.

[3] The defendant filed a statement of defence denying liability on the plaintiff’s claim and in his pleading he offered, as his primary defence, that he was not qualified for credit at the time when the credit facilities were advanced to him.

[4] The plaintiff bank then brought a motion for summary judgment on the basis that the defences raised in the statement of defence did not give rise to genuine issues requiring a trial and as such the matter should be determined by way of summary judgment.

[5] In the defendant’s responding motion material and affidavits filed, it was raised for the first time that additional defences of non est factum and unconscionability were being relied upon by the defendant. These defences were not asserted in his statement of defence, nor were any material facts, in support of these defences put forward in his pleading.

[6] No evidence was offered by the defendant in response to the plaintiff’s summary judgment motion to establish that he was unable to read or understand English at the time he signed either of the credit applications.

[7] In his reasons for decision the motion judge stated at para [6]: “The Defendant advances a defence of non est factum and unconscionability, and says that he did not understand the document relating to the credit line and VISA at the time he signed them.” He further concluded that the summary judgment motion must be dismissed as he found that, based on the evidence before him, there were genuine issues requiring a trial with respect to the defence of non est factum. In dismissing the plaintiff’s motion, he awarded the defendant costs of the motion on a partial indemnity basis fixed at $10,000.

[8] Although the defendant was served with this motion for leave to appeal, he has not filed any material in reply and as such I am left to consider the plaintiff’s motion record, factum and case authorities as filed.

Test for Leave to Appeal

[9] The test for granting leave to appeal under Rule 62.02(4) is well-settled. It is recognized that leave should not be easily granted and the test to be met is a very strict one. There are two possible branches upon which leave may be granted. Both branches involve a two-part test and, in each case, both aspects of the two-part test must be met before leave may be granted.

[10] Under Rule 62.02(4)(a), the moving party must establish that there is a conflicting decision of another judge or court in Ontario or elsewhere (but not a lower level court) and that it is, in the opinion of the judge hearing the motion, “desirable that leave to appeal be granted.” A “conflicting decision” must be with respect to a matter of principle, not merely a situation in which a different result was reached in respect of particular facts: Comtrade Petroleum Inc. v. 490300 Ontario Ltd. (1992), 7 O.R. (3d) 542 (Div. Ct.).

[11] Under Rule 62.02(4)(b), the moving party must establish that there is reason to doubt the correctness of the order in question and that the proposed appeal involves matters of such importance that leave to appeal should be granted. It is not necessary that the judge granting leave be satisfied that the decision in question was actually wrong – that aspect of the test is satisfied if the judge granting leave finds that the correctness of the order is open to “very serious debate”: Nazari v. OTIP/RAEO Insurance Co., [2003] O.J. No. 3442 (S.C.J.); Ash v. Lloyd’s Corp. (1992), 8 O.R. (3d) 282 (Gen. Div.). In addition, the moving party must demonstrate matters of importance that go beyond the interests of the immediate parties and involve questions of general or public importance relevant to the development of the law and administration of justice: Rankin v. McLeod, Young, Weir Ltd. (1986), 57 O.R. (2d) 569 (H.C.J.); Greslik v. Ontario Legal Aid Plan (1988), 65 O.R. (2d) 110 (Div. Ct.).

Analysis

[12] The plaintiff’s motion is brought pursuant to Rule 62.02(4)(b) and it is urged on behalf of the plaintiff 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 leave to appeal should be granted.

[13] As the two parts of the test under this subrule are conjunctive, consideration will be first given to the question of whether or not the proposed appeal involves matters of such importance that leave to appeal should be granted.

[14] It is urged on behalf of the moving plaintiff that the motion judge fell into error in several aspects of his decision. One of the errors asserted is that the motion judge permitted the responding defendant to raise the defenses of non est factum and unconscionability in response to the motion for summary judgment in spite of the fact that these defences were not pleaded in his statement of claim.

[15] It is also asserted that motion judge failed to provide sufficient reviewable reasons.

[16] In respect of the second branch of Rule 62.02(4)(b) namely whether the proposed appeal involves matters of such importance that leave to appeal should be granted, the plaintiff submits that a question of law must be determined, which has broad importance to all litigants and “particularly to debt collection cases”, namely whether motions judges can rely upon evidence and positions put forward on summary judgment motions which are not contained in that party’s pleadings.

[17] I have concluded that there is good reason to doubt the correctness of the order dismissing the summary judgment motion, given the jurisprudence in place at the time of his decision that established that where defences have not been pleaded they are not open for consideration by a court, nor can counsel make submissions in respect of such defences: see plaintiff counsel’s factum at para 47 – 54 and the cases therein referred to.

[18] The plaintiff also asserts that in addition to falling into error by allowing counsel to rely upon and make submissions in respect of defences not pleaded in the statement of defence, he also errors by failing to provide reasons as to why the defendant was allowed to raise those defences, by making certain findings of fact that may not have been supported by the evidence, by applying the wrong legal test with respect to the defences asserted and by awarding costs in the sum of $10,000, which it was argued are entirely disproportionate.

[19] Having regard to the requirements of the second branch of Rule 62.02(4)(b) in respect of each of the errors that are alleged to have been made, I have concluded that the moving plaintiff has failed to satisfy the requirement of this branch of the rule by demonstrating that the proposed appeal involves matters of such importance that leave to appeal should be granted.

[20] Catzman J. (as he then was) in Rankin v. McLeod, Young, Weir Ltd. et al., [1986] O.J. No. 2380 carefully considered this branch of the rule and he noted: “In such a case, in my view, the “importance” comprehended by the rule transcends the interests of the immediate parties to the litigation and contemplates issues of broad significance or of general application that are felt to warrant resolution by a higher level of judicial authority.”

[21] All of the errors asserted by counsel for the plaintiff relate to matters that have been thoroughly considered by many courts resulting in a substantial body jurisprudence in respect of each of the alleged errors. As such, there is no reasonable basis for concluding that the law and jurisprudence with respect to those alleged errors will be in any way enhanced by further appellate consideration in this case.

[22] I am further of the view that the issues at stake arising from the alleged errors are not issues of broad importance extending beyond the interests of the parties on the facts of this case. The motion judge did not establish or extend any new proposition of law or practice or attempt to modify or overturn any established one.

[23] While I have concluded that there is good reason to doubt the correctness of the order in question, the plaintiff has not established that the proposed appeal involves matters of such importance that leave should be granted, as the errors that are alleged, if determined, do not give rise to matters of such importance that they require more fulsome consideration beyond the existing jurisprudence. Further, I have concluded that the interests at stake arising from the alleged errors do not go beyond the immediate interests of the parties in this action.

[24] In the result the application for leave to appeal is dismissed without costs.

Daley RSJ.

Date: July 20, 2016