Court File and Parties

COURT FILE NO.: CV-20-227 DATE: 20210316 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Devi Financial Inc., Plaintiff AND Everwood Place Ltd., Hyde Park Crossing Ltd. and Trevor Bond, Defendants

BEFORE: Justice S. Nicholson

COUNSEL: K. D. Reason, for the Plaintiff W. Chapman, for the Defendants

HEARD: March 8, 2021

REASONS ON summary judgment MOTION

NICHOLSON J.:

[1] The plaintiff, Devi Financial Inc., (“Devi”) brings this motion for summary judgment against the defendants, Everwood Place Ltd. (“Everwood”), Hyde Park Crossings Ltd. (“HP Crossings”) and Trevor Bond (“Mr. Bond”). The proceedings are based on a $2,650,000 mortgage granted in favour of Devi by Everwood and HP Crossings, ostensibly personally guaranteed by Bond.

Background

[2] The following background is taken from the three affidavits of Marcello Devincenzo, an Officer/Director of Devi, and from an affidavit of Mr. Bond, as well as the substantial exhibits to those affidavits. Both individuals were cross-examined on their affidavits.

[3] Everwood and HP Crossings are corporations that own two separate pieces of property in the city of London. Mr. Bond is the principal of both those corporations. Importantly, Mr. Bond provided to the plaintiff a financial disclosure statement indicating that he had a net worth of $16,415,000.00 as of April 28, 2018.

[4] The evidence establishes that in December of 2013 Everwood and HP Crossings granted a mortgage in favour of a company called Litera Investments Inc. with respect to the same properties. The document registering that charge/mortgage, dated December 12, 2013, notes that Mr. Bond was the President of both corporate defendants. He is also noted to be the “Guarantor” of the loan of $1,300,000.00.

[5] Through an independent mortgage broker the defendants sought alternate financing. By way of a Mortgage Commitment Letter dated September 12, 2018, Devi offered mortgage financing in respect of the two pieces of property. Devi agreed to loan the sum of $2,650,000 at an interest rate of 11% over a one-year term running from July 25, 2018 to July 25, 2019. As security for the loan Devi was to receive a first charge/mortgage over each piece of land. They also required that Mr. Bond enter into a Guarantee of Bond. This was executed on September 14, 2018.

[6] Mr. Bond also executed a Guarantor’s Consent to Electronic Registration of Charge on September 14, 2018, wherein he confirmed that he was “the guarantor of the charge described in the attached Acknowledgement and Direction”.

[7] Funds were advanced by Devi to the defendants. In return the Charge/Mortgage was registered on the respective properties on September 17, 2018. Devi was also granted a General Security Agreement (“GSA”) against both corporate defendants, dated September 14, 2018. Devi had the GSA registered pursuant to the Personal Property Security Act, R.S.O. 1990, c. P. 10 (“PPSA”).

[8] It is noteworthy that the parties had earlier, in July 2018, entered into a loan agreement for the sum of $2,200,000.00, which was ultimately replaced by the agreement to loan $2,650,000.00. In the documentation in respect of the $2,200,000 loan, which did not proceed, Mr. Bond is described as “Guarantor” and signed “as authorized officer of the Chargors and as Guarantor”. In other words, Mr. Bond executed all the requisite documentation twice, once for the aborted loan of $2,200,000 and then again in respect of the $2,650,000 loan.

[9] Subsequently, the parties agreed to an extension of the mortgage so that it would mature on January 25, 2020. The interest rate was increased to 12%, calculated and payable monthly in the amount of $26,500.00 per month from and after July 25, 2019. The payments were to be made by 6 post-dated cheques. The taxes on both properties were to be paid in full to August 31, 2019.

[10] Almost immediately after this extension was agreed upon the defendants were in default of the loan. The post-dated cheques that they had provided were returned “NSF”. The first cheque was dated August 25, 2019. A default letter was sent to Mr. Bond dated August 30, 2019. The September 25, 2019 and October 25, 2019 payments were also not made on time. On the evidence, Devi, through its lawyers, gave the defendants substantial opportunities to bring the loan into good standing. On October 31, 2019 the defendants paid $25,000 and then made a further payment of $57,664.80 on November 4, 2019. The next payment was due on November 25, 2019. No further payments were ever made.

[11] By demand letter dated November 28, 2019, Devi sent to the defendants a statement of amounts necessary to bring the mortgage into good standing as of December 10, 2019 and a Notice of Intention to Enforce Security under the Bankruptcy and Insolvency Act dated November 28, 2019.

[12] Furthermore, a Notice of Sale under Charge/Mortgage was delivered to the defendants on December 11, 2019. Under that notice, the defendants were given until January 22, 2020 to bring the mortgage into good standing. A PPSA Notice of Intention to Sell dated January 27, 2020 was sent to the defendants on that date. Finally, a Statement of Claim against the defendants was issued on January 28, 2020.

[13] It should be noted that on January 23, 2020, the plaintiff received letters from the Canada Revenue Agency indicating that HP Crossings was in arrears of debts owing with respect to taxes, including CPP and GST/HST. Devi obtained tax certificates in respect of both properties dated March 20, 2020 indicating unpaid taxes from 2019.

[14] Mr. Devincenzo deposes that as of August 14, 2020, the amount required to discharge the mortgage was $3,017,165.98. As of the date of the hearing, that sum had increased to $3,214,264.15.

Specific Provisions of the Relevant Documentation

[15] The Mortgage Commitment Letter dated September 12, 2018 was sent by Devi’s solicitor, Mr. Paul Siskind. The letter is addressed to Mr. Bond. Importantly, it is prominently noted that one of the terms and conditions for the loan was that Mr. Bond would be a “Guarantor”. Mr. Bond signed back this letter on September 13, 2018 on three separate lines, once as authorized signatory for each corporate defendant and once on behalf of “Trevor Bond (Guarantor)”.

[16] I should note at this juncture that Mr. Bond identified his signature on the various documents during the cross-examination on his affidavit, with one exception, which I will discuss below. Mr. Bond also acknowledged that although he could not necessarily remember reading each document, he would have at least been provided with an opportunity to read each document.

[17] Appended to the Mortgage Commitment Letter was a Schedule of “Additional Provisions”. Mr. Bond initialled the two pages of the Schedule. That Schedule contains the following two clauses, which are in issue on this motion:

PROVIDED further that if collection, or other legal proceedings, are taken in connection with, or to realize upon this security, an administrative fee of One Thousand Five Hundred ($1,500.00) Dollars shall be added to the Charge/Mortgage debt on each occasion such proceedings are so taken and said fees shall form a charge upon the charged property in favour of the Chargee.

PROVIDED that if this Charge/Mortgage is not discharged on its maturity or, with the written agreement of the Chargee renewed or extended, the Chargors agree to pay to the Chargee a bonus equal to three (3) months’ interest when the Charge/Mortgage is paid off.

[18] The defendants were provided with a Cost of Borrowing Disclosure, with each page initialled by Mr. Bond. Mr. Bond executed an acknowledgement with respect to the disclosure on September 13, 2018 on six different lines, two for each corporate defendant and two lines where he is identified as “Guarantor”.

[19] A copy of the Guarantee is an Exhibit to Mr. Devincenzo’s affidavit. Although the date of the Guarantee is not filled in at the top, it is dated on the last page where Mr. Bond signed it on September 14, 2018. “Trevor Bond” is identified at the very top of the document as “Guarantor”. The corporate parties are properly identified as “Lender” and “Borrowers” respectively. The “Debt” is identified as $2,650,000.00 and under “Limit of Liability” it states “Limit as hereinbefore set forth of the Outstanding Balance from time to time”. The Guarantee provides as follows:

NOW THEREFORE THIS AGREEMENT WITNESSES THAT IN CONSIDERATION of the Lender dealing with HYDE PARK CROSSING LTD. & EVERWOOD PLACE LTD., herein referred to as the “Borrower”, the undersigned hereby guarantees payment to the Lender of all present and future debts and liabilities direct or indirect or otherwise, now or at any time and from time to time hereafter due or owing to the Lender from or by the Borrower and whether incurred by the Borrower alone or jointly with any other person or persons or otherwise howsoever. Provided, however, that the liability of each of the undersigned does not exceed the Limited Amount, plus legal expenses, plus interest on the Limited Amount at the rate provided under the Loan Security calculated and compounded monthly from the date the Lender demands payment under this Guarantee.

[20] The Guarantee is specifically described as a “continuing guarantee” such that it covers and secures any ultimate balance owing to the Lender, including all costs, charges and expenses which the Lender may incur in enforcing or obtaining payment of the sums of money due to the Lender from the Borrower. It is signed by Mr. Bond and witnessed by a J. Weston. There is no signature line for either of the corporate defendants.

[21] The registered Charge/Mortgage document dated September 17, 2018 identifies Mr. Bond as “Guarantor”.

[22] I reiterate that Mr. Bond had signed versions of the same documentation in July 2018 as part of the $2,200,000 loan which did not proceed.

[23] By letter dated July 17, 2019 to Mr. Bond from Mr. Siskind on behalf of the plaintiff, Devi offered a 6-month extension of the mortgage. The interest rate was increased to 12% per annum, payable in the monthly amount of $26,500.00. Among the terms, the mortgage, as extended, could be prepaid, without notice, upon paying a bonus of 3 months’ interest. All other terms and conditions in the existing mortgage would remain in effect for the extended term.

[24] Mr. Bond purportedly signed this letter on July 24, 2019, once each for the corporate defendants and once on a line above “Trevor Bond (Guarantor)”. I say “purportedly” because during the cross-examination on his affidavit, Mr. Bond did not recognize the signature or the initials as his own.

[25] The Set of Standard Charge Terms that formed part of the transaction provided as follows:

The Chargee on default of payment for at least fifteen (15) days may, on at least thirty-five (35) days’ notice in writing given to the Chargor, enter on and lease the land or sell the land.

The Defence

[26] The defendants filed a statement of defence dated March 2, 2020. It is very brief. The defendants simply deny all but one of the paragraphs in the statement of claim. They plead that the plaintiff failed to provide proper notice of any alleged default. They also plead that the amount alleged to be owing is not accurate and excessive.

[27] It is noteworthy what is not pleaded. Mr. Bond does not raise any issue specific to his alleged guarantee. He does not claim that he misunderstood any of the terms and conditions associated with the loan, charge/mortgage and/or guarantee. He does not plead non est factum, unconscionability or misrepresentation, for example. He does not plead that he did not sign any of the documents or that his signature was forged, for example.

[28] Although not raised in his statement of defence, Mr. Bond sets out his defence in his responding affidavit to this motion, as follows:

Any actions taken by myself in regards to the above noted mortgage were not taken in my personal capacity, including the guarantee dated September 14, 2018, but were, in fact, taken in my capacity as agent for Hyde Park Crossing Ltd., and/or Everwood Place Ltd. As such, I will be bringing a motion forthwith to have myself removed in my personal capacity as a Defendant.

[29] No such motion has ever been brought.

[30] In his affidavit Mr. Bond also relies upon his assertion that the plaintiff failed to provide proper Notice of Default to the defendants because a payment must have been in default for at least 15 days, and there must be at least 35 days notice in advance of the invocation of the Power of Sale.

[31] Furthermore, Mr. Bond takes issue with the plaintiff including the three months “bonus” and the $1500 collection fee as part of the amount owing.

[32] As referenced earlier Mr. Bond, when cross-examined on his affidavit, identified his signature on the July 2018 documentation, including as authorized officer and as guarantor. He also identified his initials on each page. He agreed that he had the opportunity to read the documents that he signed or initialled. Furthermore, Mr. Bond identified his initials on the September 2018 documentation, as well as his signature. He does not specifically recall reading the documentation but agreed that if he signed it, he would have been given an opportunity to review it.

[33] With respect to the September 14, 2018 guarantee, Mr. Bond was asked if he knew that he was going to be guaranteeing this loan for $2,650,000.00. His response was “I don’t recall”. He then agreed that he had guaranteed the Litera mortgage based on the documents, although he did not specifically recall doing so. The following exchange took place during the cross-examination:

135. Q. Okay. In your Affidavit you say the following, any actions taken by myself in regards to the above noted mortgage were not taken in my personal capacity, including the guarantee dated September 14, 2018 but were in fact taken in my capacity as agent for Hyde Park Crossing Ltd. and/or Everwood Place Ltd. Now I haven’t seen anything to suggest in the numerous documents we’ve looked at that you were simply being agent for corporations. Can you help me out with the basis for that statement, please?

A. Well, my belief obviously was that I was acting on behalf of the corporation.

136. Q. Well, where did you say that in any of these numerous documents that you were not acting as a guarantor but you were simply…

A. I, I don’t, again, I , I don’t recall the documents and signing them, so I can’t answer that.

[34] Mr. Bond gave an undertaking on his cross-examination to review his documentation and to advise if he has any recollection of verbal representations having been made by any parties involved with respect to the negotiations with respect to this mortgage. His response was that this matter was never discussed with the mortgage broker, who was acting for both the borrower and the lender in this transaction.

[35] As earlier mentioned, Mr. Bond did not identify his signature on the July 17, 2019 commitment letter with respect to the extension of the loan. The following exchange occurred:

220. Q. A two page document dated July 17, 2019 and take a look at page one bottom right hand corner and that’s your initials?

A. That does not look like my initials.

221. Q. Okay. Or your signature, why don’t you take a look at the next page?

A. That does not look like my signature either.

222. Q. I beg your pardon?

A. That does not look like my signature.

223. Q. Were you aware that there was going to be an extension of the mortgage, Mr. Bond?

A. I don’t recall.

224. Q. Okay. Did you cause certain cheques and funds to flow to the mortgagor during this extension period?

A. I’d have to check.

225. Q. Did you, did you payout the mortgage when it was, once it had matured?

A. I don’t believe we paid the mortgage out. That’s obviously still on the books, so its’ not paid out.

[36] Despite his failure to recognize his signature, Mr. Bond did acknowledge that he had provided a series of post-dated cheques in the amount of $26,500 to Devi corresponding to the amount agreed to in the extension. He recognized his signature on the cheques. Mr. Bond agreed that they had paid $25,000 on October 31, 2019 and then a further $57,664.80 on November 4, 2019. Ultimately, counsel for Mr. Bond indicated that they agreed that the defendants had entered into the extension.

[37] Later during the cross-examination, the following exchange occurred with respect to Mr. Bond’s signature on the July 2019 extension documentation:

300. Q. So that’s a letter of direction with respect to the renewal dated July 17, 2019 and signed by you in three places at the bottom. And in the middle you’ll see it talks about six monthly payments of $26,500.00. You see all that, Mr. Bond?

A. I do, yeah. Yes.

301. Q. Okay. So this document confirmed that there were, it’s a six month extension payable at $26,500 a month, correct?

A. Right. But that, I’m not being a stickler but that does not look like my signature but …

302. Q. Well, you entered, well, you entered into an arrangement with our client to extend the mortgage by six months, correct?

A. It appears so, yeah. I’m not…All I’m making a statement is that that does not look like my signature but maybe it was.

303. Q. Right. And you…Well, this is a, a mortgage broker document and you’re not suggesting that Mr. Marks, the mortgage broker acted fraudulently in putting a document forward on your behalf, are you?

A. I’m not suggesting anything. I just said it doesn’t look like my signature.

304. Q. All right. Well, you, if it’s not your signature could you have authorized someone to sign it on your behalf?

A. No.

305. Q. Okay.

A. But again, it might be, it might be in my chicken scratch.

[38] During the defendants’ submissions during the motion, the focus of counsel’s submissions was on the defence raised that Mr. Bond had signed the guarantee as agent for the corporations. Counsel also pressed the argument that Mr. Bond was not a lawyer and did not have a lawyer review the documentation with him.

Test for Summary Judgment

[39] Motions for summary judgment are governed by Rule 20 of the Rules of Civil Procedure. Rule 20.01 authorizes a plaintiff to move with supporting affidavit material for summary judgment after the defendant has delivered a statement of defence.

[40] Rule 20.02 reads as follows:

EVIDENCE ON MOTION

20.02

(2) In response to affidavit material or other evidence supporting a motion for summary judgment, a responding party may not rest solely on the allegations or denials in the party’s pleadings, but must set out, in affidavit material or other evidence, specific facts showing that there is a genuine issue requiring a trial.

[41] Rule 20.04 sets out the test for granting summary judgment and the powers of the court in doing so, as follows:

DISPOSITION OF MOTION

General

20.04 (2) The court shall grant summary judgment if,

(a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or

(b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment.

(2.1) In determining under clause 2(a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:

1. Weighing the evidence.

2. Evaluating the credibility of a deponent.

3. Drawing any reasonable inference from the evidence.

(2.2) A judge may, for the purposes of exercising any of the powers set out in subrule (2.1), order that oral evidence be presented by one or more parties, with or without time limits on its presentation.

[42] The leading case on motions for summary judgment is the oft quoted decision of the Supreme Court of Canada, Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87. Karakatsanis J. noted that rule 20 was amended in 2010 to improve access to justice by providing a more expeditious and least expensive manner by which to reach a fair and just determination of a dispute between parties. Summary judgment motions must be granted whenever there is no genuine issue requiring a trial. There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case where the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. There is no question that the Supreme Court encouraged broadening the use of rule 20.04 to resolve disputes, so long as it provides a “fair process that results in a just adjudication of disputes”.

[43] Justice Karakatsanis formulated a two-part test in Hryniak. First, the motion judge should determine if there is a genuine issue requiring a trial based only on the evidence before her, without using the enhanced fact-finding powers under rule 20.04 (2.1) of the Rules. Second, if there appears to be a genuine issue requiring a trial, the motion judge should determine if the need for a trial can be avoided by using the enhanced powers under rule 20.04 (2.1)—which allows her to weigh evidence, evaluate the credibility of a deponent, and draw any reasonable inference from the evidence—or under r.20.04 (2.2) to order that oral evidence be presented by one or more parties.

[44] As recently held in Royal Bank of Canada v. 1643937 Ontario Inc., 2021 ONCA 98, it is incumbent upon the motion judge to follow the analytical approach set out in Hryniak.

[45] The legal burden under rule 20 is on the moving party to satisfy the court that there is no genuine issue requiring a trial. However, the defendant cannot simply rest upon the denials contained in its statement of defence. It is frequently repeated that each party must put its best foot forward with respect to the issues in the proceeding. A party is not entitled to sit back and rely on the possibility that more favourable facts may develop at trial.

Analysis

[46] I start with the statement of defence. The defendants do not raise any of the traditional defences that might relieve a party from adhering to a contract, such as non est factum, unconscionability, unequal bargaining power or misrepresentation. Leave was not sought to amend the statement of defence. In reviewing the affidavit of Mr. Bond, and upon reviewing the transcript from his cross-examination, no such defence could be made out on his evidence.

[47] It is important to note that Mr. Bond appears to be a sophisticated businessman. He disclosed net assets exceeding $16 million as of April 2018. His transcript references other mortgages which he had granted. Indeed, the Litera mortgage contained a personal guarantee that Mr. Bond agreed to as well.

[48] While Mr. Bond did not have a lawyer there is no evidence suggesting any duress. He could have obtained legal advice had he chosen to do so. Nowhere in the material does Mr. Bond indicate that he did not understand what a guarantee meant. If his position is that he does not understand what a guarantee entails, it was obligatory for him to set that out in his affidavit.

[49] Furthermore, the documentary evidence is clear as to what capacity Mr. Bond was executing the documentation. On the face of the documentation, he was executing the documents as an officer of each of the corporate defendants, as well as a “Guarantor”, beside which his name appeared. The word “Guarantor” appears frequently throughout the documentation which he signed. Furthermore, Mr. Bond admittedly signed as a guarantor numerous times including:

• In the Litera mortgage transaction in 2013;
• in the aborted loan of $2,200,000 in July of 2018; and
• in the September 2018 transaction.

[50] In respect of the July 2019 extension, Mr. Bond initially was unable, or unwilling, to identify his signature on the documentation. However, I reiterate that he did not plead that he had not signed the extension and he did not raise that issue within his responding affidavit. Furthermore, when pressed he backtracked considerably, indicating that while it did not look like his signature, it might have been his “chicken scratch”. He indicated that no one else would have been authorized to execute the documentation on his behalf. Most importantly, he provided six post-dated cheques, and made two payments as if the extension had been entered into and made no effort to pay off the principle amount owing. The inescapable conclusion is that Mr. Bond did sign the July 2019 documents extending the loan.

[51] Mr. Bond, although not pleaded, does assert that when he signed as “Guarantor” he was not doing so in his personal capacity but as an agent for the corporations. I reject that defence as being non-sensical, for the following reasons.

[52] First of all, the Guarantee documentation that Mr. Bond signed, both in relation to the aborted transaction and then the September 2018 transaction, make clear that he is the “Guarantor”. HP Crossings and Everwood are clearly described as the “Borrowers”. The terms of the Guarantee, if read by Mr. Bond, make clear what his obligations under the Guarantee are in relation to the loan made to the Borrowers. Mr. Bond testified that even though he could not recall if he had read the document, he was afforded an opportunity to do so. By affixing his signature to the document, he is holding out that he has read the document. Again, Mr. Bond is not an unsophisticated party.

[53] Secondly, when Mr. Bond signed on behalf of each of the corporations as an officer/director, he bound them to the obligations of the borrower. It makes no commercial sense for the borrower to also be the guarantor of the loan, as the borrower is already liable in the event of default. The whole purpose of a guarantor is to provide assurance to the lender that if there is default, there is another party who is also liable for the debt. The interpretation that Mr. Bond is asking for is commercially untenable, and I reject that a businessperson of Mr. Bond’s ilk would have understood that to be the case. There is no explanation provided by Mr. Bond for why he believed that he was signing as agent for the corporate defendants, other than his belief. His belief, if genuine, must be objectively reasonable. That belief would not be objectively reasonable in my view.

[54] Interestingly, throughout his cross-examination Mr. Bond repeatedly indicated that he could not recall signing the documentation, although agreeing that if his signature was affixed to it, he must have signed it. Despite his lack of recall, Mr. Bond asks this court to accept his bald assertion that he recollects that he was signing the documentation as an agent for the corporations.

[55] Mr. Bond provided his net worth statement to Devi in April of 2018. The only purpose in doing so would be to satisfy Devi that he was in financial position to secure such a large loan.

[56] Mr. Bond relies upon Royal Bank of Canada v. 1643937 Ontario Inc., *supra*, a case in which the Ontario Court of Appeal overturned the motion judge’s granting of summary judgment on personal guarantees. However, on a review of that decision, the Court was concerned with the sufficiency of the Hryniak analysis undertaken by the judge. Ultimately, the Court did not disturb the motion judge’s finding that the guarantees were valid and enforceable, and remitted the matter back for a determination as to the scope of the guarantors’ liability, i.e. whether joint or several.

[57] Mr. Bond also refers me to Dynamic Shelters Inc. v. DC Synergy Limited, 2011 ONSC 4160. In that case, the issue on the motion for summary judgment was whether the defendant DC Synergy Limited had entered a contract as agent for the defendant, Greyhound. The plaintiff asserted that it understood that it had made an agreement with Greyhound as principal. Stewart J. felt that the issues of agency raised by the plaintiff required a trial to resolve. Accordingly, she dismissed the motion.

[58] The facts in Dynamic Shelters are distinguishable from the within case. In Dynamic Shelters the plaintiff was trying to substitute one defendant who was a signatory to the contract for another non-signatory defendant. The determination of whether an agency relationship exists required an examination of the relationship between the alleged principal and agent. However, Mr. Bond, as an officer/director, was already acting as an agent for the corporate defendants when he bound them to the terms of the mortgage. Again, it does not make any sense for the corporation to be guarantor for a loan in which it was already the borrower. No agency analysis needs to occur to make that determination.

[59] In Summerhill Prestige Real Estate Ltd. v. Politsky, 2019 ONSC 475, the plaintiff sought summary judgment against the defendant for breach of a Buyer Representation Agreement. Pollak J., in dismissing the motion, found that the parties’ evidence with respect to the creation and signing of the Agreement was contradictory and extremely different. In her view, given the contradictory and inconsistent affidavit evidence, the credibility of the deponents could not be determined based on the written record. In her view, there were genuine issues requiring a trial. Furthermore, she concluded that she could not use the enhanced fact-finding powers to avoid a trial.

[60] In contrast, I do not find that the evidentiary record to be contradictory. To the contrary, I find the evidentiary record to be clear. The plaintiff advanced $2,650,000 to the defendants in return for a first charge/mortgage on two properties, personally guaranteed by Mr. Bond. That is the deal that he agreed to, both on behalf of his corporations and himself personally. His creative defence that he was signing the guarantee as agent for the corporate defendants does not pass muster.

Notice

[61] The defendants take the position that the plaintiff failed to provide adequate notice because their November 28, 2019 demand letter was not sent 15 days in advance of their December 11, 2019 notice of sale. In my view this argument misconstrues the notice period set out in the standard charge terms, and s. 32 of the Mortgages Act, R.S.O. c. M. 40.

[62] I repeat that the clause in issue read as follows:

The Chargee on default of payment for at least fifteen (15) days may, on at least thirty-five (35) days’ notice in writing given to the Chargor, enter on and lease the land or sell the land.

[63] The standard clause does not require 15 days’ notice. It simply requires that if the Chargor is in default of making a payment for at least 15 days, 35 days notice can be given that the chargee will enter on and lease or sell the land.

[64] The defendants’ November 25, 2019 payment was not made. They were in default at that time. The 15-day period would have ended on December 10, 2019. The clause requires that 35 days notice is given prior to the chargee entering on to lease or sell the land. The Notice of Sale was sent December 11, 2019 and set out the amount outstanding and gave to the Chargor until January 22, 2020 to pay said sums. That was more than 35 days.

Conclusion Regarding Genuine Issue Requiring a Trial

[65] For the above reasons, and in accordance with the first stage of the Hryniak test, I find that there is no genuine issue requiring a trial with respect to the liability of the corporate defendants on the mortgage or whether Mr. Bond gave a personal guarantee in respect to the initial loan of $2,650,000 or the subsequent extension of the loan. In doing so, I have considered the evidence before me without resort to any of the enhanced fact-finding powers under rule 20.04 (2.1).

[66] I conclude that the corporate defendants are liable with respect to the Charge/Mortgage and Mr. Bond is liable under the personal guarantee he executed.

Damages

[67] Devi submitted a Statement of Amounts owing on the Mortgage as at March 8, 2021, the date of the hearing. The total owing is described as $3,214,264.15, inclusive of interest. The per diem interest after March 8, 2021 is calculated to be $1,056.74.

[68] The defendants take issue with two items that have been included in the Statement. First, they object to the inclusion of the “bonus” of three months’ interest, shown to be $93,619.34. Secondly, they object to the chargee’s collection/legal proceedings administrative fee of $1,500.00.

[69] These two items are simply a matter of contractual interpretation and do not require a trial to determine. Furthermore, I do not believe that resort needs to be had to Rule 20.04(3) to determine if these items ought to be included. There is no genuine issue requiring a trial to resolve if these items are properly recoverable.

[70] Importantly, the Commitment Letter dated July 17, 2019, by which the mortgage was extended set out eight specific terms and conditions. Paragraph 9 stated:

9. All other terms and conditions in the existing mortgage shall remain in effect for the extended term.

[71] Accordingly, unless any of the first eight terms and conditions altered the provisions dealing with the $1500 administrative fee or three months’ bonus, then those terms remained in effect.

[72] Paragraph 8 of the July 17, 2019 Commitment Letter provided as follows:

8. The mortgage, as extended, may be prepaid, without notice, upon paying a bonus of 3 months’ interest.

[73] With respect to the “bonus”, the original Schedule provided as follows:

PROVIDED that if this Charge/Mortgage is not discharged on its maturity or, with the written agreement of the Chargee renewed or extended, the Chargors agree to pay to the Chargee a bonus equal to three (3) months’ interest when the Charge/Mortgage is paid off.

[74] On comparing paragraph 8 with the clause in the original Schedule, it appears that they are not triggered by the same circumstances. Paragraph 8 occurs if the mortgage has been prepaid. If so, there is a 3 months’ bonus payable. That did not occur in this case and that bonus does not apply.

[75] On the other hand, the bonus set out in the clause in the original Schedule is triggered (1) if the Charge/Mortgage is not discharged on its maturity, or (2) if it is not renewed or extended. The only sensible reading of these clauses, in my opinion, is that in the event that the defendants did not pay out the loan on its maturity date, or agree to extend it to a new maturity date, the bonus would be activated. Reading these two provisions together, to avoid the bonus the defendants had to discharge the mortgage on its maturity date.

[76] Thus, the bonus was not activated when the parties agreed to the extension in July of 2019. It was, however, triggered when the current extension ended and the mortgage was neither discharged, nor extended. In my opinion, the bonus is properly included in the amount owing to the plaintiff. That is what the parties agreed upon.

[77] In respect of the administrative fee, I again set out the clause contained in Schedule A to the Commitment Letter setting out the terms of the loan, as follows:

PROVIDED further that if collection, or other legal proceedings, are taken in connection with, or to realize upon this security, an administrative fee of One Thousand Five Hundred ($1,500.00) Dollars shall be added to the Charge/Mortgage debt on each occasion such proceedings are so taken and said fees shall form a charge upon the charged property in favour of the Chargee.

[78] The defendants take the position that the administrative fee should not be charged in addition to any legal fees charged for these proceedings, as they were intended to represent a minimum charge, and not an additional charge. I disagree. There is no reference to this $1,500.00 charge being on account of legal expenses even though collection and legal proceedings are referenced. This is simply a sum that the parties agreed to pay as an “administrative fee” if such proceedings were to occur. In my view, the wording of the clause is clear and the $1,500.00 is properly recoverable.

Disposition

[79] For the foregoing reasons, summary judgment is granted in favour of the plaintiff against all three defendants for the relief sought in the Statement of Claim. There is no genuine issue requiring a trial as I am able to reach a fair and just determination on the evidence before me.

[80] The plaintiff shall have judgment against all of the defendants for the sum of $3,214,264.15, calculated to March 8, 2021, plus interest at the contractual rate of 12%. The plaintiff shall also have judgment for possession of the mortgaged properties.

[81] The plaintiff is entitled to its costs of this motion and this action. If the parties are unable to agree on costs, written submissions no more than two pages double-spaced may be submitted to my attention. The plaintiff shall serve and file its submissions no later than April 5, 2021 and the defendants’ response shall be provided no later than April 15, 2021. Bills of costs should be included.

Justice Spencer Nicholson Date: March 16, 2021