CITATION: Goldman v. Devine, 2007 ONCA 301
DATE: 20070423
DOCKET: C45895
COURT OF APPEAL FOR ONTARIO
CRONK, ARMSTRONG and MacFARLAND JJ.A.
BETWEEN:
AARON GOLDMAN and FREEDOM STUDIOS INC.
Plaintiffs/Appellants
and
PATRICK DEVINE, PHYLLIS J. CHIN SANG, CYNTHIA GUALBANCE, JOHN NORONHA, and ROYAL BANK OF CANADA
Defendants/Respondents
Michael E. Girard, for the appellants
Catherine Francis, for the respondents
Heard: April 19, 2007
On appeal from the judgment of Justice K.A. Hoilett of the Superior Court of Justice dated August 4, 2006.
ENDORSEMENT
I. Introduction
[1] This litigation arises from loan arrangements entered into by the appellants, Freedom Studios Inc. (“FSI”) and Aaron Goldman (“Goldman”), with the respondent, the Royal Bank of Canada (the “Bank”), in the summer of 1997 whereby the Bank financed, in part, the appellants’ acquisition of property in the City of Toronto from which Goldman intended to operate a special effects production company. FSI was incorporated by Goldman for that purpose.
[2] After discussions between Goldman and the respondent Patrick Devine (“Devine”), an employee of the Bank, the Bank agreed to provide a one-year term loan in the amount of $504,000 to finance the acquisition of the property in question. The loan was secured by a mortgage on the property, a general security agreement, $65,000 in cash pledged through a guaranteed investment certificate (the “GIC”), and personal guarantees signed by Goldman, his father (David Goldman), his mother (Janice Goldman), and his business partner (Sandra Caryl) (collectively, the “Credit Facility”). The funds were advanced to FSI at the beginning of August 1997.
[3] The appellants claim that when the Credit Facility was negotiated, Devine indicated that within three months of the signing of the mortgage: he would release the GIC if rentals for the purchased building were in hand; he would obtain a $250,000 government guaranteed small business loan for the ongoing operations of the production company; he would provide funds up to the amount of $200,000 for renovations to the building: and, he would provide equipment financing, in an amount up to two million dollars, on certain conditions. The appellants say that, in reliance on these assurances, they rejected available – and more favourable – alternative financing and entered into the Credit Facility arrangements.
[4] The appellants further maintain that Devine’s statements, and subsequent state-ments by the other individual respondents – who are also Bank employees – constituted a binding agreement on behalf of the Bank to provide additional financing to the appellants and to release the funds secured by the GIC on the terms discussed with Devine, which agreements the Bank wrongfully breached when it declined to release the GIC funds in full and to advance further loans. In the alternative, the appellants say that the statements at issue constitute actionable negligent misrepresentations.
[5] When the appellants sued the Bank and the named Bank employees for damages allegedly arising from breach of contract or negligent misrepresentation, the respondents moved for summary judgment. The motion judge concluded that the appellants’ claims did not give rise to a genuine issue for trial. Accordingly, by judgment dated August 4, 2006, he granted summary judgment in favour of the respondents and dismissed the appellants’ action.
[6] FSI and Goldman appeal that decision. They make four main submissions in support of their assertion that the motion judge erred by concluding that their claims against the respondents had no “air of reality” and raised no genuine issue for trial. They submit that the motion judge erred:
in several respects, by dismissing their contract claims;
in his application of the parol evidence rule;
in his assessment of their negligent misrepresentation claims; and
in failing to hold that a trial is necessary in this case to permit findings to be made on contested facts.
II. Discussion
[7] For the following reasons, we reject these submissions.
[8] First, the motion judge’s reasons indicate that, in determining to grant the respondents’ motion, he considered both the documentary record before him and the evidence of those persons cross-examined in respect of the motion, including Goldman’s testimony, the testimony of his father, mother and cousin, and the testimony of Caryl, Goldman’s business partner. We agree with the motion judge that this evidence estab-lished that the appellants failed to meet their onus on the summary judgment motion of “lead[ing] trump or risk[ing] losing”: see Dawson v. Rexcraft Storage & Warehouse Inc. (1998), 1998 4831 (ON CA), 26 C.P.C. (4th) 1 (Ont. C.A.).
[9] In particular, the appellants failed to produce key documentation alleged by them to exist and to be supportive of both their contract and their negligent misrepresentation claims. This “missing” documentation included: (i) the alternate offer of financing that the appellants claimed had been received by them and which they alleged that Devine had improperly induced them to reject; (ii) a critical e-mail from the respondent John Noronha, which the appellants relied upon to establish their claim that Noronha agreed or represented that he would release the GIC monies to them when demanded and, further, that the Bank would renew the mortgage on the property in question when the Credit Facility, including the mortgage, came due in 1999; (iii) notes of Goldman’s father, David Goldman, that Mr. Goldman Sr. claimed he had made regarding the alleged statements of the Bank’s employees; and (iv) an application for renovation financing that Goldman testified was submitted to the Bank.
[10] The appellants failed to produce this documentation notwithstanding a request by the Bank’s solicitors in August 1999 that evidence of Devine’s alleged commitment to further financing be furnished to the Bank and notwithstanding a subsequent demand by the respondents, delivered under the Rules of Civil Procedure, to inspect documents.
[11] Second, the appellants were also unable or unwilling to provide particulars of the additional financing and loan terms that they said had been agreed upon or promised by or on behalf of the Bank. The transcripts from the cross-examinations of the deponents of the affidavits filed on behalf of the appellants demonstrate their lack of knowledge of the alleged additional financing arrangements and, in the case of Goldman, a lack of particularity and precision concerning the terms of the proposed financing said by him to have been agreed upon.
[12] Third, and importantly, the transcripts indicate an awareness by Goldman and Caryl that formal financing applications and loan agreements were necessary for any additional financing by the Bank beyond that advanced under the mortgage granted in 1997. The record clearly indicates that Goldman and Caryl knew that any further loans from the Bank after the summer of 1997 depended on additional formal loan applications and, as Caryl put it, “the approval of the Bank”.
[13] Fourth, it is also significant that when the appellants applied to the Bank in 1998 to increase the amount and term of the original mortgage on the property, there was no suggestion that Bank employees had already committed to, or represented that the Bank would provide, additional financing or that the Bank was wrongfully retaining the funds then remaining on the GIC security. This application was signed by Goldman.
[14] Fifth, we do not agree with the appellants’ submission that the motion judge erred by over-emphasizing the quantum of the damages claimed by the appellants in their amended pleading. The compensatory relief sought by the appellants was one factor, among many, relevant to an assessment of whether the appellants’ claims gave rise to a genuine issue for trial.
[15] Sixth, we also do not accept that the motion judge mischaracterized the nature of the appellants’ breach of contract claims. The motion judge’s reasons indicate that he was alive to the various aspects of the appellants’ contract claims, including their assertions that one or more of the respondents committed to additional financing for renovations, operating expenses and the acquisition of equipment.
[16] Seventh, we also reject the appellants’ argument that the motion judge erred in his application of the parol evidence rule. The motion judge correctly stated the rule, as expressed in accepted authorities, and concluded that:
[16] The plaintiffs in the present case have led no evidence to put themselves or any of them among them within the exceptions to the rule. Simply put, they have simply asserted, if believed, a parallel and competing contract, contradictory of the unambiguous written contract on which the moving parties rely.
[17] We agree. The terms of the Credit Facility documents are clear and unambiguous. As we have said, one of the central components of the collateral agreement alleged by the appellants was a commitment by Devine to release the GIC within three months of the original mortgage financing if certain tenancy requirements were met. But the terms of the Credit Facility documents executed by the appellants, in respect of which they had legal advice, specifically provide that the GIC would not be released until the funds owed to the Bank were repaid. Thus, in at least this important respect, the collateral agreement alleged by the appellants conflicts with and contradicts the terms of the written contracts between the parties.
[18] Eighth, we also reject the appellants’ submission that the motion judge erred in his assessment of their negligent misrepresentation claims.
[19] The motion judge stated, “[A]s a general proposition, an action predicated on negligent representation must be a representation in respect of a past or presently existing fact and not in respect of a future event.” [Citations omitted and emphasis added.] By this statement, the motion judge recognized that there may be circumstances where a statement about future events could arguably ground a negligent misrepresentation claim, where it is based on existing facts.
[20] The decision in Premium Properties Ltd. v. Colonia Life Holdings Ltd., [2004] O.J. No. 1785 (S.C.) does not assist the appellants with respect to this issue. In that case, the motion judge was unable to determine the precise nature of the alleged represen-tations. That is not this case.
[21] We again emphasize that the appellants failed to produce documents vital to their negligent misrepresentation claims. These included the alleged third party financing commitment, which they claimed to have rejected based on Devine’s representations, and the e-mail relied upon by the appellants as establishing a written misrepresentation by Noronha.
[22] Moreover, the appellants’ contention that the respondents Chin Sang, Gualbance and Noronha agreed or represented, at various times, to release the remainder of the GIC funds and/or to renew the appellants’ mortgage, rest solely on bald assertions by the appellants. No particulars or documentary support for these allegations was proffered by the appellants. We agree with the respondents that in the absence of some arguable legal obligation by the Bank to release the GIC prior to the repayment of its loans notwithstanding the clear contrary language of the Credit Facility documents, these allegations do not give rise to a genuine issue for trial.
[23] Finally, we are not satisfied that a trial is required in this case for the purpose of the determination of contested facts. On this record, there is simply no meaningful support for the representations or the additional financing arrangements alleged by the appellants, other than unsubstantiated and bald assertions. These fall far short of any demonstration of real credibility issues, or other genuine issues necessitating a trial. Self-serving evidence that merely asserts a defence or a claim without providing some detail or supporting evidence is not sufficient to create a genuine issue for trial: see Rozin v. Ilitchev (2003), 2003 21313 (ON CA), 66 O.R. (3d) 410 (C.A.) at para. 8.
[24] We conclude with this observation. The appellants advance various claims against the individual respondents. But there is nothing on this record to suggest that any of the individual respondents acted outside the scope of their employment with the Bank or in their personal capacities in their dealings with the appellants. Accordingly, we are not persuaded that there is any genuine issue for trial concerning the claims against these parties.
III. Disposition
[25] We conclude that, on this record, it was open to the motion judge to find that there was no genuine issue for trial. The appeal is dismissed. The respondents are entitled to their costs of the appeal on a partial indemnity basis, fixed in the total amount of $13,000, inclusive of disbursements and GST.
“E.A. Cronk J.A.”
“Robert P. Armstrong J.A.”
“J. MacFarland J.A.”