Court of Appeal for Ontario

Citation: Business Development Bank of Canada v. Nap Corp., 2013 ONCA 608

Date: 2013-10-03

Docket: C56560

Before: Gillese, Juriansz and Strathy JJ.A.

Between

Business Development Bank of Canada

Plaintiff (Respondent)

and

Nap Corporation and Arie Tall

Defendants (Appellants)

Counsel:

Adam Jarvis, for the appellants

Rosemary A. Fisher, for the respondent

Heard: September 25, 2013

On appeal from the order of Justice K.A. Carpenter-Gunn of the Superior Court of Justice, dated January 2, 2013.

ENDORSEMENT

[1] The appellants appeal summary judgment in favour of Business Development Bank of Canada (BDC) on its loan to NAP, guaranteed by Tall. The loan and guarantee are not in dispute. The outstanding balance is $130,091.63.

[2] The initial hearing of the summary judgment motion, on October 4, 2012, was adjourned to permit BCD to obtain evidence from RBC, with whom it had entered into a subordination agreement, to show that NAP was in default to RBC, thereby triggering default on the BDC loan to NAP.

[3] The appellants did not consent to RBC disclosing its records. BDC was therefore forced to bring a motion, which was successful, to compel RBC to produce the documentation pertaining to its loan to NAP and NAP’s default thereunder. These documents, including notices and emails confirming NAP’s default to RBC, were appended to an affidavit of a solicitor in the office of counsel for BDC (the “impugned affidavit”).

[4] On the continuation of the motion on January 2, 2013, the motion judge noted that default was the central issue. She found that the RBC documentation confirmed default by the appellant to RBC. There was also evidence from Tall’s cross-examination that appeared to acknowledge this default. She also found that Tall’s affidavit was self-serving and did not establish an issue for trial. The appellants had recently cross-examined a representative of RBC, but failed to adduce any evidence from that cross-examination on the continuation of the summary judgment motion.

[5] The motion judge therefore found that NAP was in default to RBC and that this put NAP in default to BDC. There was no genuine issue for trial and BDC was entitled to summary judgment.

[6] These conclusions were fully warranted on the record before the motion judge.

[7] We reject the appellants’ submission that they did not have notice of the case they were required to meet on January 2, 2013, and that, having dismissed their motions to stay the summary judgment motion and to strike the impugned affidavit, the motion judge should have granted an adjournment to permit them to file additional materials.

[8] The issue of whether NAP was in default to RBC was the very reason for the adjournment on October 4, 2012, and the reason for BDC’s motion for the production of the RBC records. The information necessary to respond to this issue was entirely within the control of the appellants. They were required to put their best foot forward, not litigate step-by-step.

[9] The motion judge was entitled to discount their evidence as self-serving and to draw an adverse inference from their failure to adduce available evidence from the cross-examination of RBC. The appellants failed to refute BDC’s evidence that there was no genuine issue for trial.

[10] The motion judge was also entitled to receive the impugned affidavit. The impugned affidavit attached the business records obtained from RBC, which spoke for themselves and appeared uncontroversial. It was open to the appellants to cross-examine the affiant, to file their own affidavit evidence or to file any relevant evidence they had obtained on cross-examination of RBC.

[11] We also find that the motion judge made no error in dismissing the appellants’ cross-motion to stay the summary judgment motion. That cross-motion was filed after the initial hearing on October 4, 2012, and before the continued hearing on January 2, 2013. As this court noted in Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, at para. 58, it may be appropriate for a responding party to move to stay a premature summary judgment motion to ensure that an appropriate evidentiary record is available after discovery. In this case, however, the appellants had filed evidence in response to the summary judgment motion and were prepared to contest it on the merits at the first hearing. The motion judge found that the appellants were aware of the case they were required to meet before the continued hearing. At the continued hearing, they chose not to file further evidence and the motion judge made no error in the exercise of her discretion in refusing a stay.

[12] For these reasons, the appeal is dismissed, with costs in the agreed amount of $15,044.28, all inclusive.

“E.E. Gillese J.A.”

"R.G. Juriansz J.A."

"G.R. Strathy J.A."