Court File and Parties

Court of Appeal for Ontario Date: 2024-01-12 Docket: COA-23-CV-0362

Before: Hourigan, Trotter and Copeland JJ.A.

Between: Sheela Duraisami Plaintiff (Respondent)

And: Stephan Yaworski and 9327959 Canada Inc. Defendants (Appellants)

Counsel: Michael A. Jaeger, for the appellants Tom Macintosh Zheng, for the respondent

Heard: January 11, 2024

On appeal from the judgment of Justice Michael J. Valente of the Superior Court of Justice, dated February 24, 2023.

Reasons for Decision

[1] The appellants appeal the summary judgment granted in favour of the respondent in the amount of $120,000 plus prejudgment interest. Although the appeal was filed on behalf of both appellants, in oral submissions, counsel made clear that the focus of the appeal was the personal liability of Mr. Yaworski.

[2] Yaworski and the respondent entered into a joint venture agreement for the purpose of purchasing, redeveloping, and selling a property in Cambridge (the “JVA”). The JVA provided that the respondent would invest $100,000 in the joint venture. In return, when the property was sold, she would receive a return of her original investment of $100,000, plus an additional $20,000.

[3] Before the respondent would sign the JVA and advance the $100,000, she required a personal guarantee from Yaworski in the amount of $120,000. Yaworski signed the personal guarantee on July 23, 2019 (the “Guarantee”). Under the Guarantee, Yaworski personally guaranteed the performance of the JVA; agreed to pay the respondent $120,000 by May 31, 2020 in the event that she did not receive the same amount following the sale of the property on or by February 28, 2020; and consented to judgment in favour of the respondent in the amount of $120,000 plus interest and costs.

[4] The respondent signed the JVA on July 24, 2019 (Yaworski had signed on July 22, 2019). On July 29, 2019, she advanced $100,000 to the corporate respondent (“932”), the owner of the property subject to the JVA. Yaworski is an officer and director of 932.

[5] The property subject to the JVA was sold by 932 on or about May 19, 2020. Yaworski executed the transfer on behalf of 932 in his capacity as president. The sale price was $900,800. Yaworski did not advise the respondent of the sale; rather, on July 9, 2020, he advised her by email that the sale had been delayed due to the pandemic.

[6] When the respondent and her husband pressed Yaworski for repayment of the $120,000, which was due no later than May 31, 2020 under the Guarantee, Yaworski replied by text and email on two occasions saying he would pay her the $120,000. But he never did so. In October 2021, the respondent issued the claim for $120,000 in damages for breach of the Guarantee and the JVA.

[7] The motion judge granted summary judgment. He found that Yaworski was liable to pay the respondent $120,000 pursuant to the terms of the Guarantee. He further found that, interpreting the JVA, the parties intended by its terms that the respondent would be paid the agreed $120,000 from the proceeds of the sale of the subject lands without deduction for any losses the project might sustain. With respect to 932, the motion judge found that it had been unjustly enriched, the respondent had been deprived, and there was no juristic reason for the enrichment. On this basis the motion judge found the appellants jointly and severally liable to the respondent for $120,000 plus prejudgment interest.

[8] The appellants argue that the motion judge erred in finding that the claims of the respondent were appropriate for summary judgment. This argument focuses on the fact that the respondent’s claim was brought under the simplified procedure in rule 76 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The appellants argue that because of the restricted ability to cross-examine on a motion and minimal efficiency gains in a summary judgment motion in a rule 76 action, summary judgment was not appropriate, citing this court’s decisions in Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, 108 O.R. (3d) 1, at paras. 254-57; Manthandi v. ASCO Manufacturing, 2020 ONCA 485, 63 C.C.E.L. (4th) 163, at paras. 33-37; Singh v. Concept Plastics Limited, 2016 ONCA 815, at para. 23. The appellants further argue that there were credibility issues in this matter that were not appropriately determined on summary judgment.

[9] We disagree. The motion judge was alive to the issue of whether it was appropriate to decide this action by summary judgment, given that it was a rule 76 proceeding. His reasons are clear that he considered the appropriate legal analysis, referring to this court’s decisions in Combined Air and Manthadi. We see no palpable and overriding error in his finding that the action was document driven and that the relevant facts were undisputed. This summary judgment motion did not turn on findings of credibility. There was no prejudice to the appellants from the matter being determined by summary judgment.

[10] The appellants also argue that the motion judge erred in finding that the JVA did not invalidate the Guarantee, or in failing to find that this issue was at least open to question at trial. The appellants argue that because the Guarantee was executed before the JVA, the entire agreement clause of the JVA invalidated the Guarantee. They also argue that the Guarantee was inconsistent with the JVA.

[11] This ground alleges error in the motion judge’s interpretation of the contracts at issue and his finding that there was no genuine issue requiring a trial. As such, the standard of review is palpable and overriding error: Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 81; Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, at paras. 50, 52.

[12] We see no palpable and overriding error in the motion judge’s interpretation of the Guarantee and the JVA, and in particular, no error in his finding that the Guarantee was valid and subsisting and that it did what it was clearly intended to do – impose personal liability on Yaworski.

[13] The appeal is dismissed. The appellants are jointly and severally liable to the respondent for costs of the appeal in the agreed amount of $8,203.

“C.W. Hourigan J.A.”

“Gary Trotter J.A.”

“J. Copeland J.A.”