Court of Appeal for Ontario

Date: 2022-01-26 Docket: C68974

Before: Pardu, Roberts and Miller JJ.A.

Between:

Alireza Ghasempoor Plaintiff/Defendant by Counterclaim (Appellant)

and

ICapital Financial Services Corp. Defendant/Plaintiff by Counterclaim (Respondent)

and

Atciti Corp. Third Party (Appellant)

Counsel: Alireza Ghasempoor, acting in person and for the appellant, Atciti Corp. Peter Smiley, for the respondent, iCapital Financial Services Corp.

Heard: January 21, 2022 by video conference

On appeal from the order of Justice Susan Vella of the Superior Court of Justice, dated December 21, 2020, with reasons reported at 2020 ONSC 8010.

Reasons for Decision

Facts

[1] The appellant Mr. Ghasempoor is the principal and president of the appellant Atciti, a web development services business. The respondent, iCapital, provides small business financing. In November 2018, Atciti and iCapital entered a Term Loan Agreement (“TLA”) by which iCapital agreed to advance $40,000 to Atciti and in return, Atciti agreed to repay the sum plus a $12,000 fee (i.e., $52,000 in total) by making daily payments in the amount of $216.27. The TLA provides that in the event of default, all of Atciti’s indebtedness would become immediately due and payable at the option of iCapital. Mr. Ghasempoor personally guaranteed the TLA. In relation to the TLA, iCapital obtained a consumer report on Mr. Ghasempoor.

[2] In February 2019, Atciti and iCapital entered into a new term loan agreement which was incorporated by reference into the TLA (the “Renewal”). Pursuant to the Renewal, the loan amount was increased to $70,000 to Atciti in exchange for a fee of $21,000 (i.e., $91,000 in total) to be paid in weekly installments of $1,750. This subsumed the amounts that were outstanding under the prior TLA. The guarantee remained in effect. Prior to entering into the Renewal, iCapital obtained a second consumer report on Mr. Ghasempoor from Equifax.

[3] Atciti (through Mr. Ghasempoor) made the required weekly payments for five weeks. On April 4, 2019, Mr. Ghasempoor commenced the action, alleging that iCapital had damaged his personal credit and made an “unreasonable payment demand”. On the next day, April 5, 2019, Atciti failed to make the required payment. The outstanding sum owing under the TLA became due and payable.

[4] iCapital counterclaimed against Mr. Ghasempoor and commenced a third-party claim against Atciti. It alleged that Atciti defaulted in its weekly payments required under the Renewal, which triggered an acceleration of the balance of the debt. This, in turn, triggered Mr. Ghasempoor’s personal guarantee of the loan.

Decision Below

[5] The motion judge granted the respondent’s motion for summary judgment, dismissing Mr. Ghasempoor’s action against it and granting judgment against Mr. Ghasempoor (defendant by counterclaim) and Atciti Corp. (third party) in the amount of $82,250 on a joint and several liability basis.

[6] The motion judge read Mr. Ghasempoor’s filings generously. She determined that his position was that: (a) by making a “premature” demand for payment, iCapital was deprived of seeking payment of the accelerated outstanding indebtedness under the Renewal and the Guarantee; (b) the outstanding indebtedness was $51,000, not $82,250, as was claimed by iCapital; and (c) iCapital obtained a second consumer report from Equifax which caused damage to Mr. Ghasempoor’s financial credit standing.

[7] The motion judge rejected all three of these arguments. She found that Mr. Ghasempoor consented to iCapital obtaining a second credit report. She also noted that Mr. Ghasempoor did not quantify the damages he was seeking or adduce any evidence in support of his allegation that iCapital’s request for a second consumer report was improper or gave rise to damages. She similarly noted that Mr. Ghasempoor did not adduce any evidence justifying his “bald allegation” that the outstanding indebtedness is only $51,000. Finally, she rejected Mr. Ghasempoor’s argument that a letter from iCapital dated April 1, 2019 amounted to a demand for payment; it was merely a statement of account showing the outstanding indebtedness.

Issues on Appeal

[8] On a liberal reading of the appellants’ factum, notice of appeal and amended notice of appeal, it seems that they have raised four issues:

1. Procedural fairness: The appellants were denied the ability to attend the motion hearing and were not properly served. The respondent and its lawyer acted improperly by making false statements to the court and by scheduling the motion on a date on which the appellants were not available.
2. Summary judgment: This claim is unfit for summary judgment and requires a trial with viva voce evidence.
3. Outstanding loan amount: The trial judge erred in finding that the outstanding balance was $82,250; it was $51,000.
4. Fresh evidence: The appellants have filed an affidavit dated May 7, 2021, which constitutes fresh evidence.

Procedural Fairness

[9] We are not persuaded that the proceeding was procedurally unfair to the appellants. They refused to attend cross examinations, even though they were required to by an agreed-upon timetable set in Civil Practice Court. After the date set for the argument of the respondent’s summary judgment motion was canceled because of the COVID pandemic, the respondent offered seven different dates for the argument of the motion, plus a date for cross examinations. The appellants did not respond and the date was set for August 21, 2020 to argue the motion. The endorsement also warned Mr. Ghasempoor that he was to advise of a date on which he could be cross examined and stipulated that if he failed to do so or to attend for cross examination, his affidavit could be struck.

[10] This endorsement was provided to the appellants by registered mail and email.

[11] On July 30, 2020, the respondent received correspondence from Mr. Ghasempoor, indicating that he would not attend the practice court hearing on July 28, 2020 and that he was unavailable to attend a summary judgment motion during the period of August 19-27 due to medical reasons.

[12] The proposed fresh evidence indicates no more than that Mr. Ghasempoor had a dental appointment and was prescribed antibiotics. It does not establish that he was unable to attend and argue the motion, which was conducted virtually.

[13] The motion judge carefully explained that she was satisfied Mr. Ghasempoor had had notice of the hearing. She waited for him to attend. Counsel for the Respondent called him and left a voice message. Mr. Ghasempoor did not appear or contact the court. There is no basis to interfere with her discretionary decision to hear the motion in his absence. She did not strike his affidavit but weighed it in evaluating the arguments made on the motion.

[14] The appellants have made no attempt to set aside the judgment pursuant to rule 59.06(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

The Merits

[15] The motion judge’s decision on the merits is unassailable and we see no error in her conclusions. The action in debt was well suited for a summary judgment motion. She carefully considered Mr. Ghasempoor’s affidavit filed on the motion, despite his absence.

Fresh Evidence

[16] In so far as the proposed fresh evidence has any relevance to the merits of the summary judgment, that evidence was available with reasonable diligence and could have been provided to the summary judgment motion judge.

[17] In so far as the proposed fresh evidence purports to explain why Mr. Ghasempoor did not attend the hearing, it does nothing to dispel the impression that the decision was tactical on his part, and is not credible in so far as it alleges misconduct in scheduling the motion on the respondent’s part.

[18] The proposed fresh evidence is not admitted.

[19] The appeal is accordingly dismissed. Costs are awarded to the respondent on the appeal in the sum of $3000.00.

“G. Pardu J.A.”

“L.B. Roberts J.A.”

“B.W. Miller J.A.”