Court of Appeal for Ontario

Date: 2022-01-24 Docket: C69210

Judges: Strathy C.J.O., Harvison Young and Zarnett JJ.A.

Parties

BETWEEN

Hedia Bouji also known as Linda Bouji Plaintiff (Respondent)

and

Karrunawatti Poonai also known as Kay Poonai also known as Kay Persaud Defendant (Appellant)

Counsel

Eugene J. Bhattacharya and Mary Rodriguez, for the appellant Madeleine Dusseault, for the respondent

Heard

January 17, 2022 by video conference

On Appeal From

On appeal from the judgment of Justice Frederick L. Myers of the Superior Court of Justice, dated February 1, 2021, with reasons reported at 2021 ONSC 771.

Reasons for Decision

[1] The appellant appeals from a summary judgment that ordered her to pay the respondent $200,000, together with interest, under a promissory note dated August 31, 2016 and a related oral agreement that provided for interest on that note.

[2] In 2016, the appellant introduced the respondent to an opportunity to invest $400,000 and acquire shares in Metrozen (Canada) Inc. (“Metrozen”) which had a real estate project located in Scarborough, Ontario. The appellant was told by the principal of Metrozen that the funds were required to bring a mortgage on the project back into good standing and to help keep it current.

[3] The respondent was prepared to invest $200,000, but only if the appellant invested the same amount. The appellant agreed to do so, but as she did not have that amount on hand, the respondent agreed to advance it on her behalf. The motion judge found that the agreement between the appellant and respondent was that the appellant would receive three percent of the shares of Metrozen, and the respondent seven percent; the respondent’s larger percentage of shares was because she was putting up funds for the appellant.

[4] On May 31, 2016, the parties went together to the respondent’s bank to arrange for the $400,000, and then to Metrozen’s lawyer, who deposited the funds into his trust account. In return, two documents were provided: (i) a note dated May 31, 2016 (the “Metrozen Note”) by which Metrozen and its principal promised to pay the respondent’s corporation $400,000 by December 1, 2016; and (ii) a Share Agreement whereby Metrozen and its principal agreed that seven percent of the shares of Metrozen would be transferred to the respondent’s corporation and the balance of the shares would be pledged as security for repayment under the Metrozen Note. Although the appellant is not mentioned in the Metrozen Note or Share Agreement, she witnessed the execution of both. No document mentioning the appellant’s three percent was provided by Metrozen.

[5] On August 31, 2016, the parties executed, before a notary, the promissory note which is the subject of this action (the “August Note”). Under it, the appellant promised to pay to the respondent the sum of $200,000. The August Note recited that this amount had been loaned to the appellant by the respondent to purchase three percent of the shares of “metro ZEN [ sic ] for the project located at 189-195 Milner Avenue, Scarborough, Ontario.”

[6] The parties later discovered that the funds that had been advanced on May 31, 2016 were misappropriated by Metrozen or its principal. The funds did not go into the Metrozen project, and neither of the parties received any shares in Metrozen or any payments from it in return for the advance.

[7] The appellant paid interest to the respondent on the August Note at an orally agreed-upon rate until September 2018. From 2016 to the time she stopped making payments, the appellant sent numerous texts and emails to the respondent that acknowledged her indebtedness under the August Note.

[8] In 2019, the respondent commenced an action against the appellant to recover on the August Note and the oral agreement for interest. The respondent then successfully moved for summary judgment.

[9] The motion judge rejected the appellant’s argument that there were genuine issues that required a trial. He specifically considered, and rejected, that genuine issues were raised by the three defences advanced by the appellant: (a) that the failure of the respondent to ensure both that the funds advanced went into the Metrozen project and that the appellant received shares in Metrozen meant there was no consideration for the August Note; (b) that repayment of the August Note was conditional upon the funds being used for Metrozen’s project and the appellant’s receipt of shares in Metrozen; and (c) that the August Note should be rescinded on the basis of misrepresentations made by the respondent that the appellant would receive an equal number of shares in Metrozen to those received by the respondent.

[10] The motion judge found that the consideration for the August Note was the advance of funds, which had undoubtedly taken place. He found that since the appellant had attended with the respondent at Metrozen’s lawyer’s office to make the advance, participated in all steps, and had witnessed the documents Metrozen provided in return, she could not contend that her obligations to the respondent under the August Note, signed three months later, were somehow conditional on the way the funds would be handled by Metrozen or its lawyer, or on Metrozen fulfilling its obligations to deliver shares. He noted that neither party had control over Metrozen performing its obligations and that neither the appellant nor the respondent received the shares to which they were entitled. And he found that the appellant’s contention that there had been a misrepresentation by the respondent that the shares she was to receive would be equal to the percentage to be received by the appellant was foreclosed by the terms of the August Note that set out the appellant’s percentage and by the appellant’s knowledge of what had been provided by Metrozen on May 31, 2016.

[11] On appeal, the appellant advances three arguments:

(a) the motion judge failed to consider all of the evidence, specifically the transcripts of the cross-examinations of the parties, and thereby committed an error of law;

(b) the motion judge failed to give adequate reasons as to why he declined to make credibility findings; and

(c) the motion judge made palpable and overriding errors of fact.

[12] With respect to the first two arguments, the appellant primarily relies on the statements of the motion judge that the respondent had met her burden through the documents and that he could interpret the August Note based simply on the timeline without making an express credibility finding. The appellant urges us to find that the motion judge did not consider the cross-examinations of the parties that had been conducted, and that his reasons are inadequate to explain why he was declining to make a credibility finding.

[13] We reject these arguments.

[14] The motion judge was not required to mention each item of evidence; we do not conclude from the absence of an express reference to the cross-examinations that he did not consider them. For example, the appellant places reliance on a statement in the respondent’s cross-examination to the effect that the parties were to be equal partners in the transaction. However, the reference is clear that the respondent meant that both would be equally responsible for the sum advanced to Metrozen. The respondent went on to explain that she was to receive a greater percentage of shares because she was advancing the appellant’s portion for her. There is nothing in this exchange inconsistent with the trial judge’s findings or that would suggest he lost sight of, or did not consider, this evidence.

[15] Nor are the reasons inadequate, as they permit meaningful appellate review: R. v. R.E.M., 2008 SCC 51, [2008] 3 S.C.R. 3, at paras. 30, 57. The motion judge explained why he could determine the issues without a credibility finding, namely that the documentary record was clear. Moreover, in addition to making the statements the appellant points to about why the case could be decided without an express credibility determination, the motion judge also indicated that the outcome would be no different if he decided the matter on the basis of credibility. He stated that, “if I viewed it otherwise, the contemporaneous texts and emails from the [appellant] make the outcome clear and deprives her defences and evidence of credibility” and “[i]f I was not able to decide the case on the written record, I would have no hesitation rejecting the [appellant’s] evidence and arguments in face of her own documents, documented knowledge, and participation throughout.” The motion judge gave detailed reasons for his conclusions.

[16] Nor are we persuaded that the motion judge made any palpable and overriding errors of fact.

[17] The divergence complained of by the appellant between the motion judge’s finding that she was “promised” a commission by Metrozen that was never paid, and the appellant’s evidence that she was “offered” a commission but never received it, is more superficial than real and could have no impact on the outcome.

[18] We see no merit to the appellant’s complaint that the motion judge erred in finding there was a “deal” that the appellant was to receive three percent of the shares of Metrozen and the respondent seven percent. There was evidence to support that finding, including evidence of the respondent, documents that referenced the respondent’s seven percent that were witnessed by the appellant, and the reference to the appellant’s three percent in the August Note. The motion judge was alive, in making this finding, to the fact that Metrozen’s documents did not refer to the appellant’s three percent. But he appropriately considered that since the appellant participated in all the arrangements with Metrozen and witnessed documents, and since she signed the August Note, this did not detract from the appellant’s liability to the respondent, especially given that Metrozen misappropriated the advance and never delivered any shares to anyone.

[19] Nor is there merit to the appellant’s complaint about the motion judge’s observation that by August 2019, the appellant was formulating her defence to payment of the amount due under the August Note. We see no error in that observation that could have affected the outcome. By that date, the appellant had ceased making payments under the August Note after having repeatedly acknowledged her liability to do so.

[20] Accordingly, the appeal is dismissed.

[21] If the parties are unable to agree on costs, they may make written submissions not exceeding three pages. The respondent’s submission should be delivered within ten days of the release of these reasons; the appellant’s submission should be delivered within ten days of those of the respondent.

“G.R. Strathy C.J.O.” “A. Harvison Young J.A.” “B. Zarnett J.A.”