Citation: Sharpley v. TNT.CA Inc. et al, 2019 ONSC 4202

NEWMARKET COURT FILE NO.: DC-16-128776-00

DATE: 20190809

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Douglas Sharpley

Plaintiff/Appellant

– and –

TNT.CA Inc. and Steve Smith

Defendants/Respondents

F. Oster, for the Plaintiff/Appellant

Steve Smith, Self-Represented

HEARD: June 27, 2019

REASONS FOR DECISION on JUDGMENT ON APPEAL

de sa j.

Overview

[1] The Appellant takes the position that the Deputy Judge erred in concluding that the Respondent’s claim was not statute barred. The Appellant also argues that the Deputy Judge’s reasons are inadequate in the circumstances.

[2] I agree with the Appellant. In my view, given the underlying factual record, the reasons fail to adequately explain how the Deputy Judge came to his conclusion.

[3] As such, I grant the appeal, set aside the judgment of the Deputy Judge and remit the matter back to the Richmond Hill Small Claims Court for a new trial.

[4] My reasons are outlined below.

Evidence at Trial

The Payment

[5] On September 23, 2015, the Plaintiff, Steven Smith (“Smith”) and TNT.CA (“TNT”) issued a claim against his former accountant and friend, Douglas Sharpley (“Sharpley”).

[6] Smith and TNT take the position that Sharpley owes TNT a total of $30,000 which was advanced to Sharpley as a loan (the “Loan”).

[7] Mr. Sharpley maintains that he did not owe the $30,000. The money was repayment for a debt that was owed in relation to overseas investments made by Bobby Rahman and Smith.

Smith’s Version of Events

[8] Smith’s evidence was that, in the Spring of 2011, TNT was engaged in renovating a house in Mississauga (the “Property”). The registered owner of the house, was Razia Munir (“Munir”).

[9] According to Smith, Munir was going through a divorce. She wanted out of the house, and Smith was into the house for close to $300,000 in renovations. In the end, Smith told Munir he would take the house in lieu of the amounts owing.

[10] As Smith was doing work on the house, Sharpley arranged for one of his close clients, Steve Delman (“Delman”), to provide a mortgage to Smith (the “Delman Mortgage”), and the Property was used as collateral.

[11] Of the amount advanced through the Delman Mortgage, $30,000 was provided to Mr. Sharpley on behalf of TNT (the “Loan”).

[12] Smith acknowledged that Sharpley assisted with payment of the Delman Mortgage. According to Smith, it was agreed that Sharpley would cover the payments on the Delman Mortgage as payments towards the Loan.

[13] Smith testified that it was understood the Loan would be repaid to TNT once the house was sold. According to Smith, Sharpley agreed to pay back the Loan once Smith repaid the Delman Mortgage. It is for this reason that Smith delayed demanding back the money.

[14] Shortly after the Delman Mortgage was obtained, Smith had a heart attack.

Sharpley’s Version of Events

[15] Sharpley’s version of events was very different. While Sharpley assisted Smith with his accounting, he was not his “accountant”. According to Sharpley, he and Smith were friends for over 25 years. Sharpley had been Smith’s accountant in the past, but he had not worked for Smith since 2012. On occasion, he would lend Smith money towards his investments.

[16] Smith also had various business endeavors in India and China with another male by the name of Bobby Rahman (“Rahman”). Sharpley assisted them with the books for these investments. Smith would often ask Sharpley for funds to assist with these investments.

[17] Sharpley testified that Smith had been having money problems. Sharpley arranged for a former client, Steve Delman, to give Smith a loan in the amount $200,000 towards these investments which would be secured against the Property. According to Sharpley, Smith also requested $30,000 from Sharpley to assist with some immediate needs.

[18] Sharpley initially refused. According to Sharpley, he had already advanced $50,000 to Rahman for these investments. However, Smith agreed that he would pay back the $30,000 as soon as he received the Delman Mortgage. Given that the Delman Mortgage was in the process of being arranged, Sharpley agreed to advance the funds.

[19] Sharpley provided Smith the $30,000 which was given to Rahman. When the Delman Mortgage was obtained, Sharpley received the money back from TNT.

[20] According to Sharpley, the $30,000 was nothing other than repayment of the amounts owing. It was never understood to be a “Loan”.

[21] After receiving the Delman Mortgage, Smith had a heart attack. Sharpley had been making payments towards the Delman Mortgage. He placed a separate lien on the Property to secure the payments he was making.

[22] At some point, Delman got concerned about the $30,000 payment to Sharpley, so Sharpley had Rahman send an email to Delman to explain the circumstances.

The Email/Correspondence to Delman

[23] During cross-examination, Smith questioned Sharpley regarding the email which was sent by Rahman to Delman. Correspondence between Sharpley and Rahman demonstrated that the email had been drafted by Sharpley himself.

[24] Notably, the correspondence from Sharpley to Rahman indicated that the email was necessary for a meeting he had with Delman, and Sharpley asked that Rahman only send/forward the email to Delman if he agreed with its contents. If he did not agree with the facts, Sharpley asked that Rahman not send it.

[25] On the issue of the Loan, the email provided the following:

Dear Mr. Delman,

Early in 2011 Steve Smith and I were arranging through Razia Munir (now Razia Afrox) to obtain from you a mortgage on the property on Loyalist Dr. The funds were being raised to complete a BOI (Business Overseas Investment) and to cover expenses for a project which Steve Smith and I were working on in Bangladesh.

Because I had to leave for China/Dhaka before the mortgage funds would be released I asked Douglas Sharpley to assist us by advancing me $30,000 to cover travelling and various expenses. This was discussed at a meeting between Steve Smith, Mr. Sharpley, and I prior to my departure.

Mr. Sharpley agreed – as long as it was understood that the $30,000 would be paid back immediately on receipt of the mortgage funds. This was agreed to at the meeting.

I understand that this was, in fact, done and Steve Smith did pay $30,000 back to Douglas Sharpley on receipt of the funds. Steve Smith was able to do this because he had Razia Munir endorse the $150,000 cheque from the Steve Delman mortgage into his personal account or one of his companies.

I have been told that Steve Smith is now claiming that the repayment of $30,000 he made to Douglas Sharpley was from him for debt he owed Mr. Sharpley personally and was not related to the $30,000 Sharpley had advanced us, as outlined above.

I say “us” because Steve Smith and I were partners in a number of projects in China and Bangladesh. This is a fact known by his brother, his son, Razia Afroz and Douglas Sharpley as well as numerous business associates and the lawyers involved, whose names I can produce on request.

The Deputy Judge’s Decision

[26] The Deputy Judge accepted Smith’s version of events. The Deputy Judge concluded that the limitation period did not commence until after the Delman Mortgage had been paid.

[27] The Deputy Judge also rejected Sharpley’s evidence. His rejection of Sharpley’s evidence appeared to be based, at least in part, on the email correspondence Sharpley asked Rahman to send to Delman. The Deputy Judge explained:

In all of this, I find the evidence of Sharpley far from credible. I believe the evidence of Smith. Sharpley’s correspondence to the mortgagee asking the latter to support Sharpley’s recollection of events further persuades me that Smith’s version is, on the balance of probabilities, more likely.

[28] Ultimately, the Deputy Judge also concluded that the limitation period did not commence until after the Delman Mortgage had been paid. As evident from the above passage, the Deputy Judge accepted Smith’s evidence that the Loan was due when the Delman Mortgage had been discharged. On the limitation issue, the judge explained:

The evidence of Smith is that the loan would be repaid upon the discharge of the registered mortgage. There is no written evidence for this position and, indeed Sharpley defends on the basis of the claim being statue barred. The mortgage was paid out on April 15, 2013 and the mortgage was finally discharged on June 23, 2014. The evidence of Smith is that once the mortgage was paid out he asked for the money and was told that the loan was due on discharge. He accepted this position and waited. This Claim was commenced on September 23, 2015.

Analysis

[29] An appeal based on insufficient reasons “will only be allowed where the trial judge’s reasons are so deficient that they foreclose meaningful appellate review”: R. v. Dinardo, 2008 SCC 24, [2008] 1 S.C.R. 788, at para. 25. R.E.M., 2008 SCC 51, [2008] 3 SCR 3 at para. 16; R. v. Sheppard, 2002 SCC 26, [2002] 1 S.C.R. 869, at para. 55.

[30] In assessing the sufficiency of reasons, a court must consider the record as a whole including the issues as framed by the parties, together with any admissions and concessions. The core question in determining whether the trial judge’s reasons are sufficient is the following: Do the reasons, read in context, show why the judge decided as he or she did: R. v. Vuradin, [2013] 2 SCR 639, 2013 SCC 38; R.E.M. at para. 17.

[31] Where a case turns largely on determinations of credibility, the sufficiency of the reasons should be considered in light of the deference afforded to trial judges on credibility findings. In Dinardo, recognizing the various factors that go into a credibility assessment, Charon J. commented at para. 26:

Rarely will the deficiencies in the trial judge’s credibility analysis, as expressed in the reasons for judgment, merit intervention on appeal. [Emphasis added]

[32] The degree of detail required in explaining findings on credibility can also vary with the evidentiary record. The factors supporting or detracting from credibility may be clear from the record itself. In such cases, the trial judge’s reasons will not be found deficient simply because the trial judge failed to recite these factors. As the Supreme Court explained in R.E.M., supra, at paras. 48-49:

…The Court tackled this issue in Gagnon, setting aside an appellate decision that had ruled that the trial judge’s reasons on credibility were deficient. Bastarache and Abella JJ., at para. 20, observed that “[a]ssessing credibility is not a science.” They went on to state that it may be difficult for a trial judge “to articulate with precision the complex intermingling of impressions that emerge after watching and listening to witnesses and attempting to reconcile the various versions of events”, and warned against appellate courts ignoring the trial judge’s unique position to see and hear the witnesses and instead substituting their own assessment of credibility for the trial judge’s.

While it is useful for a judge to attempt to articulate the reasons for believing a witness and disbelieving another in general or on a particular point, the fact remains that the exercise may not be purely intellectual and may involve factors that are difficult to verbalize. Furthermore, embellishing why a particular witness’s evidence is rejected may involve the judge saying unflattering things about the witness; judges may wish to spare the accused who takes the stand to deny the crime, for example, the indignity of not only rejecting his evidence and convicting him, but adding negative comments about his demeanor. In short, assessing credibility is a difficult and delicate matter that does not always lend itself to precise and complete verbalization. [Emphasis added]

[33] The requirement for deference is even more applicable in the context of Small Claims decisions. See Maple Ridge Community Management Ltd. v. Peel Condominium Corporation No. 231, 2015 ONCA 520, at para. 35.

Application to the Facts of this Case

[34] In this case, the trial proceeded in a very confusing manner with discussions back and forth between the Deputy Judge and Smith. The line between submission and evidence is not easy to discern. Indeed, the narrative of events is hardly clear from a review of the record.

[35] Smith appeared to agree that Sharpley made advances on his behalf to Rahman. Smith also agreed that Sharpley was in an arrangement of some sort with Rahman and Smith for the BOI (Business Overseas Investment). There is also no dispute that Sharpley was paying monies towards the Delman Mortgage on behalf of Smith. These facts provide substantial support for Sharpley’s account.

[36] The Deputy Judge’s rejection of Sharpley’s evidence appears to be based, in large part, on the email sent by Sharpley to Rahman. The Deputy Judge disbelieved Sharpley because he essentially outlined the facts for Rahman in an email that was forwarded to Delman.

[37] However, the Deputy Judge’s reasons do not address the fact that Sharpley asked Rahman not to forward the email unless he accepted the facts outlined in the email as accurate. In my view, this fact is significant if the email is to be given any consideration on the issue of Sharpley’s credibility.

[38] The fact that Smith had health issues during the relevant time period also clearly raises concerns. This fact was also not canvassed by the Deputy Judge in his reasons.

[39] I agree with the Respondent that a trial judge’s reasons need not be thorough in every case. Every issue need not be canvassed in a trial judge’s reasons. The sufficiency of the reasons is contextual, and presumes that the judge is aware of the law and has heard and contemplated the evidence.

[40] However, given the complexity of the evidentiary record here, I agree with the Appellant that the Deputy Judge’s reasons are deficient. The reasons, as they stand, in the context of the trial evidence, indicates that the Deputy Judge may have misunderstood or even overlooked certain aspects of the evidence. Given the complex evidentiary record here, further elaboration in the reasons was necessary.

[41] In the context of the evidentiary record, the Deputy Judge’s reasons are inadequate to permit for meaningful appellate review.

[42] Accordingly, I set aside the judgment of the Deputy Judge and remit the matter back to the Richmond Hill Small Claims Court for a new trial.

[43] Concerning legal costs of this appeal, if the parties are unable to agree, they may make submissions to me in writing of no more than two pages within 30 days.

Justice C.F. de Sa

Released: August 9, 2019