Citation and Court Information
CITATION: Easyfinancial Services Inc. v. Ezmoney Tario Inc., 2018 ONSC 1542
DIVISIONAL COURT FILE NO.: DC-17-0000054-00
DATE: 20180306
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
SACHS, WILTON-SIEGEL, MYERS JJ.
BETWEEN:
Easyfinancial Services Inc. Appellant
– and –
EZMoney tario Inc. 7724934 Canada Inc. Respondents
COUNSEL:
B. Woychechyn, W. Bortolin, J. Chang, for the Appellant J. Leclerc, for the Respondent Easy Money Ontario Inc. T. Evangelidis, for the Respondent 7724934 Canada Inc.
HEARD at Brampton: March 5, 2018
Oral Reasons for Judgment
Sachs J.: (Orally)
Introduction
[1] This is an appeal of an interlocutory injunction granted pursuant to an order of André J. dated November the 25th, 2016. The injunction enforced a covenant described below in a lease dated June the 10th, 2011 entered into between 7724934 Canada Inc., the Defendant Landlord, and Ezmoney Tario, Inc., the Respondent.
[2] There are three provisions of the lease that are relevant for this appeal. Section 7.1 provides that the leased premises shall be used “for the sole purpose of the primary use of the brokering, marketing, servicing and making of payday loans and advances, installment advances, cheque cashing, precious metal and stone purchasing.” Section 7.4 provides that the Landlord shall not lease space to any other tenants “whose primary use is any one or more of the uses permitted to be offered by the tenant pursuant to Section 7.1 hereof.” Lastly, Section 7.4 excepts from the foregoing restrictions “banks, trust companies or financing institutions such as Citi Financial or HSBC Financial.”
[3] This proceeding arises because the Landlord entered into a further lease with the Appellant dated September the 16th, 2014 for the use of premises located beside those occupied by the Respondent. It is not disputed that the Respondent offers payday loans and that the Appellant offers short-term, personal and unsecured loans for amounts not exceeding $25,000, as well as prepaid debit and credit cards.
Issues
[4] Leave to appeal the motion judge’s decision was granted with respect to four issues:
- Did the motion judge err in his interpretation of the lease agreement by equating installment advances with installment loans?
- Did the motion judge err in finding that the Appellant did not fall within the financing institution exception to the restrictive covenant?
- Did the motion judge err in his analysis of irreparable harm?
- Did the motion judge err in not considering the impact of the Respondent’s delay in bringing its application for an injunction when dealing with balance of convenience?
The “Installment Advances” Issue
[5] This is an issue of contractual interpretation. As the Court of Appeal recently found in Deslauriers Custom Cabinets Inc. v. 1728106 Ontario Inc., 2017 ONCA 293 at para. 49,
On the authority of both Sattva and Ledcor, there is no doubt that, as a starting point, the interpretation of the Lease involves a question of mixed fact and law subject to deferential appellate review. This characterization of contractual interpretation, Sattva instructs, recognizes that the goal of the contractual interpretation process is to ascertain the objective intentions of the parties, an exercise that is “inherently fact specific”, and that this weighs in favour of deference to first instance decision-makers on points of contractual interpretation: Sattva, at paras. 55 and 52.
[6] Thus, unless there is an extricable question of law that can be identified, the appropriate standard of review for us to apply is palpable and overriding error.
[7] The question of whether the motion judge erred in equating installment advances with installment loans is a question of mixed fact and law. The only parties who can speak to the intention of the parties at the time the contract was formed were the Landlord (who had no evidence to give on this subject) and the Respondent. The Appellant was not a party to the contract. The Respondent led evidence that supported the motion judge’s interpretation of the contract. While there might be an argument that that interpretation could be subject to debate, it cannot be said on the basis of the record before the motion judge, that he made a palpable and overriding error when he found that the phrase “installment advances” was interchangeable with “installment loans”.
The Financing Institution Issue
[8] This is also a question of mixed fact and law subject to review on a palpable and overriding error standard. Again, on the basis of the record before him, it cannot be said that the motion judge made a palpable and overriding error when he found that the Appellant was not a “financing institution” such as Citi Financial or HSBC Financial. The fact that the Appellant’s business is similar in some respects to that of Citi Financial and HSBC Financial does not make it a financing institution in the way that the other two businesses are. The record before the motions judge disclosed that the both Citi Financial and HSBC Financial offer services that the Appellant does not, and that the Appellant is not designed as a “financial institution” under any applicable Canadian statute.
The Irreparable Harm Issue
[9] The standard of review on an appeal from an interlocutory injunction is one founded on deference to the motion judge’s exercise of discretion. It is not the function of an appellate court to exercise its discretion afresh; rather, the appellate court must defer to the motion judge’s discretion, unless the Appellant establishes that the motion judge erred in principle or was clearly wrong. In this case, the motion judge was considering enforcing a negative covenant. There is case law supporting the view that in such cases there is less emphasis placed on the element of irreparable harm than in some other cases. See for example, Canpages Inc. v. Quebecor Media et al. at para 8.
[10] In any event, the relative weight to be applied to each of the three factors in the R.J.R. test is itself a matter for the judge’s discretion in the particular circumstances before the court.
[11] At paragraph 49 of the endorsement under appeal, the motion judge referred to the Respondent’s evidence that its market share, reputation and goodwill were all injured by the Landlord’s breach of the restrictive covenant. The Respondent’s evidence on these points, while somewhat conclusory, was not tested by cross-examination or undermined by evidence to the contrary. The Appellant argues that since the Respondent continues to be profitable it cannot have suffered the irreparable harm. The test, however, is whether the Respondent will suffer harm of a nature that is not readily compensable in damages. The Appellant argues that the motion judge set the bar too low in finding simply that the Respondent may suffer losses that are difficult to quantify. There is ample case law that damage to reputation, market share and goodwill can amount to irreparable harm that is not compensable in monetary damages. There was evidence before the motion judge that supported the decision that he made. Regardless of whether we agree with him, we see no error in principle or any basis to find that he was clearly wrong.
The Delay Issue
[12] The Appellant began operations in the plaza on or about October 31st, 2014. The Respondent did not commence these proceedings until April 27th, 2015 and delivered its Notice of Motion respecting the injunctive proceedings in May of 2015. The Appellant argues that the failure of the motion judge to consider the six-month delay as a factor relevant to the granting of the injunction constituted an error of law. We do not agree.
[13] Delay is a factor whose relevance is subject to the discretion of the motion judge and, as such, is subject to considerable deference. Delay will usually only bar a claim if the Plaintiff has acquiesced in the Defendant’s conduct or if the delay is “otherwise unfairly prejudicial to the Defendant.” See Canpages Inc. v. Quebecor Media Inc. supra at para. 61. Neither of these considerations is applicable in the present circumstances. Accordingly, we see no error in principle in the approach of the motion judge to this matter.
Conclusion
[14] For these reasons the appeal is dismissed.
Costs
[15] For reasons given orally this appeal is dismissed. The Respondent is awarded its costs of this appeal in the agreed upon amount of $20,000. The Respondent is also entitled to the costs of the leave motion fixed by the leave motion judge in the amount of $10,000 and the costs of the withdrawn stay motion, which the parties agreed should be in the amount of $18,000.
Sachs J.
I agree _______________________________ Wilton-Siegel J.
I agree _______________________________ Myers J.
Date of Reasons for Judgment: March 6, 2018
Date of Release:
CITATION: Easyfinancial Services Inc. v. Ezmoney Tario Inc., 2018 ONSC 1542
DIVISIONAL COURT FILE NO.: DC-17-0000054-00
DATE: 20180306
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
SACHS, WILTON-SIEGEL, MYERS JJ.
BETWEEN:
Easyfinancial Services Inc.
– and –
EZMoney tario Inc. 7724934 Canada Inc.
ORAL REASONS FOR JUDGMENT
THE COURT
Date of Reasons for Judgment: March 6, 2018
Date of Release: