Court File and Parties

COURT OF APPEAL FOR ONTARIO DATE: 20200219 DOCKET: C67291

Doherty, Brown and Thorburn JJ.A.

BETWEEN

The Energy Credit Union Limited Plaintiff (Respondent)

and

Pamella Radwan and Gregory Radwan Defendants (Appellants)

Counsel: David Conn, for the appellants Oren Chaimovitch, for the respondent

Heard and released orally: February 13, 2020

On appeal from the judgment of Justice Michael Gibson of the Superior Court of Justice, dated July 15, 2019.

Reasons for Decision

[1] The appellant, Gregory Radwan, is the former CEO of a credit union. He and his wife, the appellant Pamella Radwan, own a home in Oakville (the “Property”).

[2] In December 2015, the Radwans granted the respondent, The Energy Credit Union Limited (“Energy Credit”), a mortgage on their Property in the amount of $664,000. The mortgage stipulated that it was “ON DEMAND” and “[s]ubject to MeritLine Home Equity LOC”. The evidence before the motion judge was that “MeritLine” is a trademarked equity line of credit product offered by the Canadian Credit Union Association.

[3] The Radwans refinanced their mortgage with Energy Credit in January 2017. They increased the amount of their equity line of credit to $736,000. The Meritline – Home Equity Line of Credit Agreement they signed states that all advances “under the MeritLine are repayable upon demand”. The new mortgage on the Property stipulates that it is “On Demand”. An Acknowledgement and Direction signed by the Radwans also states that the loan facility is “ON DEMAND”.

[4] The Radwans failed to meet their payment obligations under the equity line of credit, resulting in Energy Credit making demand for payment in full. The Radwans did not pay the balance due or refinance the mortgage. Energy Credit commenced this action for judgment on the amount due under the mortgage and possession of the Property. The motion judge granted Energy Credit summary judgment.

[5] On appeal, the Radwans advance three main arguments. First, they submit the motion judge’s reasons failed to address (i) the appellants’ evidence that they did not sign a set of standard charge terms and (ii) Pamella Radwan’s level of sophistication as a borrower. Second, the Radwans argue that the motion judge’s reasons were inadequate and did not provide insight into how the legal conclusion was reached. Third, they contend that the motion judge failed to consider important issues of credibility.

[6] We are not persuaded by any of these submissions.

[7] The reasons of the motion judge clearly disclose the basis for his decision. He wrote:

The Defendants signed a valid agreement. They benefited from the advance of funds under the mortgage. They have defaulted on their payment obligations. It was not incumbent upon the lender in these circumstances to insist that the borrowers obtain legal advice. It is not credible that these borrowers did not understand what “on demand” meant.

[8] We see no palpable and overriding error in those findings. They are amply supported by the evidentiary record before the motion judge, specifically:

• The terms of the 2017 credit facility and mortgage were not novel ones for either Gregory or Pamela Radwan. Both had previous experience with an “on demand” mortgage. They had entered into an “on demand” credit facility, secured by a $664,000 on demand mortgage, with Energy Credit in 2015;
• Mr. Radwan acknowledged that at the time they entered into the 2017 credit facility, he was a senior executive at another credit union;
• There was no suggestion of undue influence or fraud that could impose upon the credit union an obligation to ensure a borrower received independent legal advice: Bank of Montreal v. Featherstone (1989), 68 O.R. (2d) 541 (C.A.);
• None of the documents signed by the Radwans support their assertion that they thought they were entering into a one-year, interest-only mortgage;
• There was no dispute that the Radwans signed documents in which they agreed to an “on demand” credit facility: specifically, the Meritline – Home Equity Line of Credit Agreement and the Acknowledgement and Direction, which included their acknowledgement of the receipt of the standard charge terms;
• The Radwans do not dispute the amount of debt they owe Energy Credit;
• The Radwans admit that the mortgage fell into arrears in late 2018; and
• In any event, on the Radwan’s contention that the credit facility was secured by a mortgage with a 12-month term, they were in default of the mortgage at the time Energy Credit demanded payment in full.

[9] The adequacy of the reasons is measured in the context of the evidence adduced. Reading the motion judge’s reasons in the context of the evidence, they adequately explain the basis for his decision.

[10] For these reasons, the appeal is dismissed.

[11] The appellants shall pay Energy Credit its costs of the appeal fixed in the amount of $6,500, inclusive of disbursements and applicable taxes.

“Doherty J.A.”

“David Brown J.A.”

“Thorburn J.A.”