COURT OF APPEAL FOR ONTARIO

CITATION: Klein v. Dick, 2016 ONCA 8

DATE: 20160106

DOCKET: C60622

Doherty, MacPherson and van Rensburg JJ.A.

BETWEEN

Ester Klein and Willy (Vilmos) Klein

Plaintiffs (Appellants/Respondents to the cross-appeal)

and

Charles Dick, Esther Dick, Joel Dick, 8800383 Canada Inc., ABC Variety Services, ABC Variety and Jamarmy Financial Services

Defendants (Respondents/Appellants by way of cross-appeal)

Counsel:

M. Michael Title and Patricia Virc, for the appellants/respondents by way of cross-appeal

Fred Tayar and Colby Linthwaite, for the respondents Joel Dick and 8800383 Canada Inc.

James Clark, for the respondents/appellants by way of cross-appeal Charles Dick, Esther Dick, ABC Variety Services, ABC Variety and Jamarmy Financial Services

Heard: December 18, 2015

On appeal from the order of Justice Paul M. Perell of the Superior Court of Justice, dated May 19, 2015.

ENDORSEMENT

[1] The appellants, Ester and Willy Klein, lent Charles and Esther Dick money for their ATM business through a series of promissory notes. After the Dicks’ business partners brought an action for misappropriation of funds, the appellants brought an action to enforce the promissory notes. They also brought an action for a declaration that certain mortgages received by the respondents Joel Dick and 8800383 Canada Inc. were fraudulent conveyances under the Fraudulent Conveyances Act (“FCA”).

[2] The motion judge dismissed the appellants’ fraudulent conveyance claim against the respondents for the same reasons as those given in the companion case, 2057552 Ontario Inc. v. Dick. The motion judge also granted summary judgment to the appellants on the promissory notes claims for the full value of the notes, $710,000.

[3] The appellants appeal and the respondents cross-appeal the motion judge’s decision.

The appeal

[4] The appellants contend that the motion judge failed to properly assess the advisability of the summary judgment process in dismissing the appellants’ fraudulent conveyance claim when those defendants had not moved for summary judgment.

[5] We disagree. The appellants brought a summary judgment motion, asserting that there was no genuine issue requiring a trial, among other things, in respect of their fraudulent conveyance claim. The case law is clear that summary judgment may be granted against the moving party in the absence of a motion from the responding party: see, for example, Hunter-Rutland Inc. v. Huntsville (Town), 2015 ONCA 353, at para. 5. Once the motion judge made the essential findings of fact with respect to the fraudulent conveyance claim (that there was no fraud and no intent to defeat creditors), his dismissal of that claim was inevitable.

[6] Second, the appellants contend that the motion judge’s reasons and disposition on the fraudulent conveyance issue were flawed.

[7] For the reasons in 2057552 Ontario Inc. v. Dick, we reject this submission.

The cross-appeal

[8] The respondents contend that the motion judge erred by fixing the quantum of damages and by not staying the remainder of the action to allow for arbitration.

[9] We disagree. There was no reason for the motion judge not to fix the quantum of damages relating to the promissory notes. However, we accept the respondents’ fair concession that the proper amount is $650,000, not $710,000. We also do not see any reason, at this juncture, to send the parties down a different path in this litigation.

Disposition

[10] The appeal is dismissed. The cross-appeal is allowed, but only to the extent of changing the damages to $650,000 from $710,000. The respondents are entitled to their costs of the appeal fixed at $18,000, inclusive of HST and disbursements. The appellants are entitled to their costs of the cross-appeal fixed at $4,000, inclusive of disbursements and HST.

“Doherty J.A.”

“J.C. MacPherson J.A.”

“K. van Rensburg J.A.”