Hanson Hardscape Products Inc. v. Elements Stone & Paving Inc., 2012 ONSC 2347
COURT FILE NO.: 9288/09
DATE: 2012-05-08
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
HANSON HARDSCAPE PRODUCTS INC.
Francesca Maio, for the Plaintiff
Plaintiff
- and -
ELEMENTS STONE & PAVING INC. and SEBASTIAN DANNY CAPUTO
Megan Sanford, for the Defendant, Sebastian Danny Caputo (on May 11, 2011)
Defendants
HEARD: May 11, 2011, and April 16, 2012 at Brampton, Ontario
Price J.
Reasons For Order
NATURE OF MOTION
[ 1 ] In 2009, the plaintiff Hanson Hardscape Products Inc. (“Hanson”), a supplier of construction material, granted credit to the corporate defendant, Elements Stone & Paving Inc., a paving company. Elements’ principal, the defendant Sebastian Caputo, claims that this occurred without his knowledge. Hanson obtained default judgment against Elements for the outstanding balance owing for material supplied and now applies for summary judgment against Mr. Caputo on a personal guarantee it says it received from Elements, but which Mr. Caputo denies having signed.
[ 2 ] In order to grant summary judgment to Hanson, the Court must find that there is no genuine issue requiring trial. For the reasons that follow, I find that Hanson has not met its onus of demonstrating that there is no genuine issue requiring trial. I find that a trial is required to determine whether Mr. Caputo applied for credit on behalf of Elements, whether he knew that such an application had been sent to Hanson, and whether he provided a personal guarantee in support of the application.
BACKGROUND FACTS
[ 3 ] Before Mr. Caputo launched Elements as his own business, he was employed as a salesman and estimator by two other paving companies, Pinnacle Paving Co. Ltd. (“Pinnacle”), and Bedrock Stone & Paving Inc. (“Bedrock”), which were headed by Carmen Girimonte (“Mr. Girimonte”) and Calogero Gulizia (“Mr. Gulizia”).
[ 4 ] In 2002, Carol Deganis (“Ms. Deganis”), the credit manager for Hanson’s predecessor, Perma Paving Stone Co. (“Perma”), accepted an application for credit from Mr. Girimonte and Mr. Gulizia on behalf of Pinnacle. Frank Corrado (“Mr. Corrado”), then the sales manager of Perma, later supplied construction materials on behalf of Perma to Pinnacle.
[ 5 ] In 2006, Ms. Deganis, on behalf of Perma, accepted a further application for credit from Mr. Girimonte, this time on behalf of Bedrock. She agreed to Mr. Girimonte’s request that it transfer Pinnacle’s credit account to Bedrock.
[ 6 ] In January 2008, Hanson acquired Perma. Ms. Deganis became Hanson’s credit manager and Mr. Corrado became its sales manager.
[ 7 ] When Mr. Caputo began operating Elements, he employed Mr. Gulizia as a sub-contractor. Mr. Gulizia was also in charge of Elements’ accounts payable. Mr. Caputo testified that, in performing his own role as salesman and estimator for Elements, he would receive an order for a job, for which he would be paid the customer’s ten percent down-payment as his commission, and that he would then hire someone else, such as Mr. Gulizia, as sub-contractor to do the work. The balance of the contract price would be paid to the sub-contractor.
[ 8 ] It is unclear from the evidence whether Mr. Gulizia’s co-principal from Pinnacle and Bedrock, Mr. Girimonte, continued to be associated with Mr. Gulizia when Mr. Gulizia worked as a sub-contractor for Elements.
[ 9 ] In early June 2009, Mr. Corrado, in his capacity as Hanson’s sales manager, met with Mr. Girimonte, whom he had previously known as a principal of Bedrock, and another person, whom Mr. Girimonte introduced to him as Mr. Caputo, at Hanson’s offices in Mississauga. The defendant Mr. Caputo, who was a director of Elements since its incorporation on March 2, 2009, denies that he ever attended a meeting with Mr. Corrado or anyone else from Hanson.
[ 10 ] At the meeting, Mr. Girimonte asked Mr. Corrado to transfer Bedrock’s credit account to Elements. Hanson sometimes “grandfathered” a customer that applied for credit by transferring an earlier credit account to it, when at least one of the owners of the new customer was also an owner of the previous customer. Mr. Corrado states that he knew that Mr. Caputo had not been an officer or director of Bedrock, and advised Mr. Girimonte that Hanson would require a credit application from Elements and a personal guarantee from one of its principals before it would transfer Bedrock’s credit account to Elements.
[ 11 ] On July 24, 2009, Hanson received a facsimile of the following:
a) A credit application from Elements, purporting to be signed by Mr. Caputo, as President of Elements; and
b) A personal guarantee, also purporting to be signed by Mr. Caputo, whereby Mr. Caputo agreed to be personally liable to Hanson for the payment of all purchases made by Elements as they became due.
[ 12 ] The facsimiles of Elements’ Application for Credit and the Personal Guarantee were sent from a facsimile machine of John’s Unique Auto Body Ltd., a business operated from 100 Union Street in Toronto, where Elements and other businesses also operated. Mr. Caputo denies having signed either the Application for Credit, or the Personal Guarantee, or having sent either document to Hanson.
[ 13 ] From time to time, Hanson received orders for materials to be used on Elements’ projects and supplied such materials. Hanson sent invoices for these materials to “Ann”, a person whom Elements employed as a part-time receptionist at its offices on Union Street. According to Hanson’s credit manager, Ann said that she would pass the invoices along to Mr. Caputo. However, the invoices remained unpaid and, after Hanson deducted the amounts of three cheques that it received from Elements, one, in the amount of $10,000.00, signed by Mr. Caputo, a balance of $74,615.73 remained owing.
[ 14 ] When Ms. Deganis, Hanson’s credit manager, finally demanded payment of the amount owing from Elements in mid-November 2009, Mr. Caputo denied having signed Elements’ Application for Credit or the Personal Guarantee, and denied any knowledge of Hanson’s invoices.
[ 15 ] Hanson now moves for summary judgment against Mr. Caputo in the amount of $76,613.76, plus interest and costs, pursuant to the Personal Guarantee dated July 24, 2009. Hanson obtained default judgment against Elements on April 9, 2010, in the amount of $85,063.19 plus $1,145.90 for its costs, and now seeks judgment against Mr. Caputo based on the Personal Guarantee.
[ 16 ] Mr. Caputo opposes Hanson’s motion. He submits that there is a genuine issue requiring trial in that he denies having signed the Application for Credit or Personal Guarantee or having had any knowledge that either document had been sent to Hanson.
ISSUES
[ 17 ] The issues to be determined in this motion are:
Is there a genuine issue for trial?
Are there issues of credibility upon which findings as to material facts depend, which the trial judge will be better equipped to decide, upon hearing the examination and cross-examination of witnesses?
PARTIES’ POSITIONS
a) Hanson’s Position
[ 18 ] Hanson submits that there is no genuine issue for trial, in that:
i) The only evidence that Mr. Caputo did not sign the Elements’ Application for Credit and the Personal Guarantee is Mr. Caputo’s denial. Hanson submits that Mr. Caputo’s onus to “put his best foot forward” required him to produce corroborating evidence supporting his denial.
ii) Mr. Caputo’s actions in accepting supplies from Hanson which he knew, if they were not pre-paid, required credit arrangements to be made, including a personal guarantee, and in signing a cheque for $10,000.00 in payment of one of the invoices, were consistent with his knowing that a personal guarantee in his name had been provided to Hanson, and inconsistent with any other explanation, and are therefore circumstantial evidence that conclusively proves that he either signed the Personal Guarantee himself or knew that it had been provided to Hanson.
b) Mr. Caputo’s Position
[ 19 ] Mr. Caputo submits that:
i) His denial that he signed the Personal Guarantee or had any knowledge of it raises a genuine issue for trial.
ii) The cheque that he signed on behalf of Elements to Hanson is not inconsistent with any explanation other than that he was aware that a personal guarantee in his name had been given to Hanson, or that Hanson had extended credit to Elements on the strength of such a guarantee.
[ 20 ] The evidence discloses that suppliers, such as Hanson, of construction material typically supply such materials to paving companies on credit, supported by personal guarantees from the paving companies’ principals. Principals of one paving company routinely wind up their company at the end of one paving season and open another company at the beginning of the next season. The suppliers of construction material are therefore often dealing with the same individuals, acting on behalf of different companies, from season to season. In this environment, such suppliers must ensure that, at any given time, they have secured personal guarantees from the individuals operating the companies to which they are currently supplying material on credit.
ANALYSIS AND EVIDENCE
a) The test on a motion for summary judgment
[ 21 ] A Court should grant summary judgment if there is no genuine issue requiring trial, [1] but only when it is clear that a trial is unnecessary. [2]
b) The Evidentiary Burdens on the Motion
[ 22 ] It is Hanson, as the moving party, who has the ultimate burden of proving that there is no genuine issue for trial. [3] Mr. Caputo, as the responding party, has a burden of adducing evidence to avoid the court drawing an adverse inference under Rule 20.02. [4] He must show a “real chance of success,” and a self-serving affidavit is not sufficient to create a triable issue, in the absence of detailed facts and supporting evidence. [5] However, if Hanson has not clearly established that there is no genuine issue for trial, the motion should be dismissed, and Mr. Caputo should be permitted to proceed to trial.
c) The approach to be taken by a motion judge
[ 23 ] Rule 20.04, as recently amended, states, in part:
(2) The court shall grant summary judgment if,
(a) The court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or
(b) The parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment.
(2.1) In determining under clause (2)(a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:
Weighing the evidence.
Evaluating the credibility of a deponent.
Drawing any reasonable inference from the evidence.
(2.2) A judge may, for the purposes of exercising any of the powers set out in sub-rule (2.1), order that oral evidence be presented by one or more parties, with or without time limits on its presentation.
[ 24 ] In making the threshold determination required by Rule 20.04(2), above, I asked the parties whether they agreed to have all or part of the claim determined by a summary judgment. Mr. Caputo did not agree. He asked the Court to permit the action to proceed to trial.
[ 25 ] I therefore proceed to the second determination required by the Rule, namely, whether there is any genuine issue requiring trial. For the limited purpose of making this determination, I weighed the evidence, evaluated the credibility of the deponents, and drew reasonable inferences from their evidence, unless it was in the interests of justice that such powers be exercised only at a trial.
[ 26 ] The powers given to a motion judge under Rule 20.04(2.1) ought not to be exercised where the interests of justice require them to be exercised only at trial. [6] As a motion judge, I have borne in mind that the resolution of credibility issues is enhanced by observing the witnesses. [7]
[ 27 ] Neither of the parties to the present motion requested, pursuant to Rule 20.04 (2.2), that I order that oral evidence be presented by one or both of them. I have not ordered that such evidence be presented, having regard to the fact that, in an adversarial system, the parties should generally make their own decisions as to what evidence is presented.
d) Applying the principles to the present case
i) The meeting at Hanson’s offices in June 2009
[ 28 ] Mr. Caputo did not have any apparent reason to apply to Hanson for credit and Mr. Girimonte did not have any apparent reason to act on behalf of Elements in making such an application. Mr. Caputo incorporated Elements in order to market and sell landscaping jobs under that name. It benefitted him to get business for Elements, from which he derived the ten percent deposit paid by customers as his commission. He did not derive any apparent benefit from personally guaranteeing the credit given to his sub-contractors, since the sub-contractors themselves retained the balance of the customers’ payment for the work they performed.
[ 29 ] Hanson’s evidence that Mr. Caputo met with Mr. Corrado in June 2009 and requested credit for Elements is unconvincing for the following reasons:
a) The meeting Mr. Girimonte and the person accompanying him had with Mr. Corrado was with Hanson’s sales manager, not its credit manager. One would expect that if Elements had requested credit from Hanson, its representative would have met with Hanson’s credit manager, Ms. Deganis, not with Mr. Corrado.
b) Mr. Corrado has no record of the meeting he says he had with Mr. Girimonte and the person accompanying him. He testified that he kept notebooks of his appointments for only a year and therefore was unable to produce the one for the period when the meeting in June 2009 had taken place. In any event, he says, the meeting was not important enough for him to have recorded it in his notebook.
c) Mr. Corrado states that at the meeting, he discussed with Mr. Girimonte and the person accompanying him what Hanson required in order to transfer Bedrock’s credit account to Elements. Yet, he later stated that he would not have had anything to do with Hanson’s decision to grant credit to Elements. This decision, he said, would be made by someone in Hanson’s credit department.
d) While stating that Mr. Girimonte introduced the person who attended the meeting as Mr. Caputo, Mr. Corrado admitted that he did not know the person to whom he was introduced. He stated that he may have met the person on one prior occasion but had not seen him since. He was unable to describe him and could not remember what he looked like. Hanson’s solicitor never asked him to identify Mr. Caputo, or a photograph of him, as the person who had attended the meeting.
[ 30 ] Hanson’s evidence about what followed the meeting between Mr. Corrado and Mr. Girimonte and the person accompanying him is also, on the whole, unconvincing, for the following reasons.
a) Because Mr. Caputo, the principal of Elements, had not been an owner, officer, or director of Bedrock, the transfer appears not to have met Hanson’s normal requirements for “grandfathering” a new application for credit by transferring an existing credit account to the new customer.
b) Mr. Corrado stated that he told Hanson’s credit manager, Ms. Deganis, that the parties from Bedrock were reliable, but he also stated that he had never had dealings with Mr. Caputo, did not know him, and could not speak to his reputation in the industry.
c) Hanson’s credit manager, Ms. Deganis, stated that she transferred Bedrock’s credit account to Elements based on Mr. Corrado’s advice to her to do so. Yet Ms. Deganis did not know Mr. Caputo, or anyone who knew him, other than Mr. Corrado, who had met him only once.
d) Ms. Deganis also did not follow the protocol that Hanson would normally follow when considering a new customer’s application for credit. There was no evidence that the trade references referred to on the Credit Application were contacted, or that a Lumberman’s credit search of Elements was conducted, or that Hanson followed up with Mr. Caputo, or, indeed, anyone else at Elements, to confirm that it was extending credit to Elements, or to advise them as to the terms or the limit of that credit.
[ 31 ] Hanson submits that the onus was on Mr. Caputo to submit an affidavit from Mr. Girimonte or call him as a witness at the hearing to corroborate Mr. Caputo’s testimony that he was not the person Mr. Girimonte introduced to Mr. Corrado. I do not agree. Mr. Caputo has given an explanation for not calling Mr. Girimonte as a witness. He testified in his cross-examination that he was Mr. Girimonte’s employee at Bedrock but was not an officer or director of Bedrock, and had parted ways with Mr. Girimonte when Bedrock had ceased to operate.
[ 32 ] Mr. Caputo stated at the hearing that he does not trust Mr. Girimonte to give truthful evidence. Mr. Girimonte, after all, would be implicating himself in a criminal offence if he admitted that he falsely introduced another person to Hanson as Mr. Caputo. Mr. Caputo was asked at his cross-examination whether he had asked Mr. Girimonte whom he had introduced to Mr. Corrado as Mr. Caputo. He later deposed that, after having being asked this question, he tried to contact Mr. Girimonte, but that Mr. Girimonte never returned his calls.
[ 33 ] Hanson submits that an adverse inference should be drawn from Mr. Caputo’s failure to tender an affidavit from Mr. Girimonte or call him as a witness on the motion. Again, I disagree. I am satisfied with Mr. Caputo’s explanation for not calling Mr. Girimonte as a witness. Moreover, Mr. Girimonte’s evidence was as readily available to Hanson as it was to Mr. Caputo. Hanson could have obtained an affidavit from Mr. Girimonte, or sought leave to examine him as a non-party, or could have sought leave to call him as a witness at the hearing. Hanson made no request to do so.
ii) The signature on the personal guarantee
[ 34 ] Mr. Caputo denies that the signature on the Personal Guarantee is his. Hanson submits that the onus was on him to tender evidence of an expert corroborating his denial. I disagree. The onus was, rather, on Hanson, as plaintiff and moving party, to tender this evidence.
[ 35 ] Hanson relies on an Application for Credit that Mr. Caputo admits having submitted to another supplier, Unilock. Hanson’s credit manager, Ms. Deganis, when asked to compare the signature of Mr. Caputo on this Application and on Elements’ application to work at the property of Sue Thompson, agreed that they were similar. When asked to compare those signatures with the signature purporting to be Mr. Caputo’s on the Application and Personal Guarantee that Hanson received, Ms. Deganis agreed that they were dissimilar. I also have compared Mr. Caputo’s signature on the Credit Application to Unilock and the signatures on the Credit Application and Personal Guarantee that Hanson received, and I also find them to be dissimilar.
[ 36 ] Mr. Caputo submitted at the hearing that his actual signature always includes his first name written in full. The Personal Guarantee that Hanson received from Unique Auto Body is signed “S Caputo”. The Personal Guarantee that Mr. Caputo gave to Unilock is signed “Sebastian Caputo”. So also are the affidavits that Mr. Caputo has sworn in the present action.
[ 37 ] I find that there is an issue requiring trial as to whether the Application for Credit and Personal Guarantee that Hanson received from Elements were in fact signed by Mr. Caputo.
[ 38 ] In Tarion Warranty Corporation v. Heritage Homes By Invidiata (Phase 3) Inc., [8] in 2010, Whitaker J. stated:
- There is certainly an issue that requires trial with respect to the validity of the signature of the defendant Bucciarelli on the indemnification executed February 13, 2003. This signature is considerably different from the purported signatures of the same defendant in the two guarantees. In view of the position taken by Bucciarelli that she did not sign this indemnification, this is clearly a factual question that can only be resolved at trial. [Emphasis added]
[ 39 ] The obligation on the responding party to a motion of this kind to “put his best foot forward” does not require the party to present all of the evidence that he may rely on at trial in his defence. If this were the onus on the parties, a motion for summary judgment would be no different from a trial and would not avoid the time and expense associated with a trial. As Shaw J. stated in 1526183 Ontario Ltd. v. Grant Equipment Corp. [9]
- Where, as in this case, the summary judgment motion is brought by a plaintiff, it must be clear to a motions judge that it is proper to deprive the defendant of its right to a trial. The purpose of the summary judgment rules is to avoid the expense of unnecessary litigation where the moving party has satisfied the court, on a review of the evidence and in the light of the provisions of Rule 20.04(2.1), that a trial is not required of a genuine issue in respect of material facts. The threshold issue before me is not how the issues raised by the plaintiff and the defendant should be resolved, but rather it is to determine whether there is a genuine issue requiring trial. [Emphasis added]
iii) The faxing of the application for credit and personal guarantee to Hanson
[ 40 ] Mr. Caputo testified at his cross-examination that Elements occupied one small room in a building owned by a friend. Unique Auto Body Ltd. occupied the bottom floor, and the top floor was occupied by four or five different offices of different companies. There was a shared fax line in the front entranceway, to which everyone had access.
[ 41 ] There were persons other than Mr. Caputo who stood to benefit from Hanson extending credit to Elements. Mr. Gulizia, who had been associated with Bedrock, was a sub-contractor of Elements, and in charge of Elements’ accounts payable. Mr. Caputo testified that, in the discharge of his own responsibility for sales at Elements, he would receive an order for a job and would hire someone, such as Mr. Gulizia, to do the work. He would receive the ten percent down-payment for the job, and the balance would be paid to the sub-contractor. Therefore, it was in the interest of Mr. Gulizia, who had formerly, with Mr. Girimonte, been a principal of Bedrock, to secure credit from Hanson for the construction material he received on the projects that Elements hired him to perform.
[ 42 ] In these circumstances, I find that there is an issue requiring trial as to whether Mr. Caputo faxed the application for credit and personal guarantee to Hanson or had knowledge that they were being sent.
iv) Mr. Caputo’s signing of a cheque to Hanson
[ 43 ] Mr. Caputo testified that he never placed orders with Hanson for construction materials, either when he was employed at Bedrock or when he operated Elements. He stated that he did not know who placed the orders at Bedrock and that, to his knowledge, Elements never placed any orders on credit to Hanson.
[ 44 ] Mr. Caputo admitted at his cross-examination that he had applied on behalf of Elements for credit from three suppliers, namely, Unilock, to whom he had applied in writing, and Lane Landscaping and Stone Academy, to whom he had applied orally. He stated that he never applied for over $10,000.00 credit and always insisted on communicating with those companies himself about orders for supplies.
[ 45 ] Mr. Caputo admitted having used Hanson as a “credit reference” when he applied to Unilock for credit, but denied that this was based on Elements having received credit from Hanson. His intention, he says, was to use Hanson as a “trade reference” only; that is, as someone Elements had done business with, not as someone from whom it had received credit.
[ 46 ] Mr. Caputo testified that when he signed a $10,000.00 cheque to Hanson, a sub-contractor had given the cheque to him to sign and he thought that it was for materials that the sub-contractor needed for his work and for which Hanson required pre-payment. He stated that he never received an invoice from Hanson and denies that the notation “past invoices” was on the cheque when he signed it. He notes that the notation appears in a different handwriting than the other writing on the cheque.
[ 47 ] The events giving rise to this action occurred during Mr. Caputo’s first year in business. I find that he was inexperienced and became caught in a web spun by the colleagues he had been associated with in the paving companies where he had been employed previously.
v) The likelihood of fraud by a third party
[ 48 ] The most likely explanation for the events that led to Hanson granting credit to Elements is that a third party committed a fraud against Hanson. It was Elements’ sub-contractor, Mr. Gulizia, who stood to benefit most from Elements receiving credit from Hanson. Mr. Gulizia had been a colleague of Mr. Girimonte when the two men had received supplies from Mr. Corrado on credit Bedrock had received from Hanson’s predecessor, Perma. The evidence would support an inference that the same two men met with Mr. Corrado at Hanson’s offices, where Mr. Girimonte introduced Mr. Gulizia to Mr. Corrado as Mr. Caputo, his former salesman at Bedrock, and now the officer and director of Elements, in order to procure Mr. Corrado’s support for his application to Hanson for credit. This would have enabled Mr. Gulizia to obtain credit for materials that he, and, perhaps, Mr. Girimonte, needed for the work Mr. Gulizia received as Elements’ sub-contractor.
[ 49 ] Where two innocent people, in this case Hanson and Mr. Caputo, must suffer because of a fraud committed by third parties, in this case Mr. Girimonte and Mr. Gulizia, it is the one whose conduct most enabled the third party who should bear the consequences of it. The issue before the court in the present motion is the liability of Mr. Caputo personally and not that of Elements, which has not defended the action and against whom default judgment has been signed.
[ 50 ] The issue of Mr. Caputo’s liability depends on whether he signed the application for credit or the guarantee, which he denies, or whether he knew and approved of their having being sent to Hanson. It does not depend on whether he was careless in signing documents. The proposition that the party, among two innocent parties to a commercial transaction which has given rise to a loss caused by fraud, who is most guilty of carelessness should bear the loss, based on a recognition of the need for certainty and security in commerce, [10] does not arise in the present case.
[ 51 ] In the present case, the evidence discloses that Hanson failed to follow its own protocols, either for grandfathering an application for credit from a customer with principals in common with an existing customer, or for processing a new customer’s application for credit. Even if Mr. Caputo had been careless in failing to realize that his sub-contractor, with the help of his former colleague, Mr. Girimonte, had impersonated him at a meeting with Hanson, and then forged Mr. Caputo’s signature on an Application for Credit and Personal Guarantee, this would not make him liable to Hanson. His liability depends on whether he signed the Personal Guarantee or was aware that it had been submitted in his name to Hanson.
[ 52 ] A determination as to whether Mr. Caputo is liable in these circumstances, or whether the Personal Guarantee was a forgery and part of a fraud committed against Hanson, can only be made based on evidence given at trial and on determinations as to credibility that can best be made there. I have come to this conclusion based on the following considerations:
a) Mr. Caputo denies that he attended a meeting with anyone from Hanson, and Mr. Corrado did not identify him as the person whom Mr. Girimonte introduced as Mr. Caputo. The truthfulness of Mr. Caputo’s account can only be determined through the testimony of Mr. Girimonte, whom neither party sought to call at the hearing of the present motion, or of Mr. Corrado, whom neither party confronted with either Mr. Caputo or Mr. Gulizia, or photographs of them, to confirm the identity of the person who met with him in June 2009.
b) Mr. Caputo denies that he completed, signed, or submitted a personal guarantee with respect to the Credit Application by Elements. The truthfulness of this assertion can only be ascertained through the examination of Mr. Gulizia, Ann or others, at the building that Unique Auto Body Ltd. occupied at 100 Union Street in Toronto.
c) Carol Deganis, the credit manager at Hanson, corresponded only with persons other than Mr. Caputo in 2009 with respect to payment inquiries on the Elements account. Mr. Caputo acknowledged that he received one telephone call from Ms. Deganis, in November 2009, at which time he denied having applied for credit or signed a personal guarantee. The reason why the communications from Ms. Deganis or her assistants to “Ann”, the receptionist at Elements (and, according to Mr. Caputo’s submissions at the hearing of the motion, the wife of Mr. Gulizia), can only be ascertained through the examination of Ann at trial.
d) It is not disputed that Mr. Caputo has personally guaranteed the debts of Elements to other suppliers, which he asserts were restricted to $5,000.00 or $10,000.00, and which he says that he personally managed and ensured were always kept in good standing. The truthfulness of these assertions can only be determined through the testimony of representatives of Elements’ other suppliers, Unilock, Lane Landscaping, and Stone Academy Lanes.
[ 53 ] While the amendments to Rule 20 have broadened a motion judge’s jurisdiction to make findings of credibility, I find that this is not a case in which it is in the interest of justice for me to exercise the powers under Rule 20.04(2.1). As Lauwers J. stated recently in Earl Zurba v. Lakeridge Health Corporation, et al: [11] “ It would be more consistent with the interest of justice for such powers to be exercised at a trial when credibility can be properly assessed. That assessment of the evidence requires live witnesses in a trial context.”
[ 54 ] In a similar vein, the Court of Appeal for Ontario in Combined Air Mechanical Services Inc. v. Flesch, [12] in 2011, held that the motions judge should exercise the discretionary powers afforded to him by Rule 24.02 in a motion for summary judgment by answering the following question:
Can the full appreciation of the evidence and issues that is required to make dispositive findings be achieved by way of summary judgment, or can this full appreciation only be achieved by way of a trial? [13]
[ 55 ] In the present case, it is not a single witness or two whose testimony is required to enable the court to make the necessary findings of fact. A number of witnesses will be required for this purpose. The broad scope of evidence required for determination of the issues precludes a mini-trial as the most appropriate procedure. [14]
[ 56 ] The Court in Combined Air stated that there are three types of cases where summary judgment may be granted: (1) where the parties consent to summary judgment, (2) where the claim or defence has no chance of success, and (3) where the motion judge is satisfied that the issues can be fairly and justly resolved by exercising the powers in Rule 20.04. In disposing of cases under the second class, the motion judge may utilize the discretionary powers under Rule 20.04 to determine whether a claim or defence has no chance of success. [15]
[ 57 ] In the present case, the parties have not consented to summary judgment. For the reasons set out above, I do not find that Mr. Caputo’s defence has no chance of success. For the same reasons, I am not satisfied that the issues can be fairly and justly resolved by exercising the powers available to me under Rule 20.04.
CONCLUSION AND ORDER
[ 58 ] Based on the foregoing, I find that:
- There are genuine issues for trial as to whether:
a. Mr. Caputo signed the Application for Credit and Personal Guarantee and faxed then to Hanson.
b. Mr. Caputo was aware that the Application for Credit and Personal Guarantee had been prepared in his name and faxed to Hanson.
- The findings as to the material facts in 1, above, depend on the credibility of Mr. Caputo, Mr. Corrado, and others. The trial judge will be better equipped to make determinations as to the credibility of these witnesses, after hearing them examined and cross-examined.
[ 59 ] For these reasons, the Plaintiffs’ motion is dismissed.
[ 60 ] At the commencement of the hearing, Hanson provided a provisional Costs Outline, listing its costs in the following amounts:
a) $ 20,122.92, on a partial indemnity scale, consisting of:
(i) Fees in the amount of $18,681.91;
(ii) Disbursements in the amount of $1,441.01.
b) $30,184.37, on a substantial indemnity scale, consisting of:
(i) Fees in the amount of $28,022.86;
(ii) Disbursements in the amount of $2,161.51.
[ 61 ] Mr. Caputo provided a provisional Costs Outline, listing his costs in the following amounts:
(a) $ 24,575.11, on a partial indemnity scale, consisting of:
(i) Fees in the amount of $21,151.23;
(ii) Disbursements in the amount of $2,626.38.
(b) $29,278.41, on a substantial indemnity scale, consisting of:
(i) Fees in the amount of $25,695.78;
(ii) Disbursements in the amount of $2,626.38.
[ 62 ] If the parties are unable to agree on the costs of this motion, Mr. Caputo may deliver written submissions, not to exceed four pages, together with his Costs Outline, by May 20, 2012. Hanson may respond with written submissions, also not to exceed four pages, and its Costs Outline, by May 25, 2012. Mr. Caputo may reply with written submissions, not to exceed two pages, by May 30, 2012.
Price J.
Released: May 8, 2012
COURT FILE NO.: 9288/09
DATE: 2010-05-08
ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: HANSON HARDSCAPE PRODUCTS INC. Plaintiff - and – ELEMENTS STONE & PAVING INC. and SEBASTIAN DANNY CAPUTO Defendants REASONS FOR ORDER Price J.
Released: May 8, 2012
[1] Rule 20.04(2) (a), Rules of Civil Procedure, R.R.O. 1990, Reg. 194, as amended by RCP Amendment Regulation 438/08 in force Jan. 1, 2010.
[2] Fillion v. 680543 Ontario Ltd. (1994), 68 O.A.C. 289 (Div. Ct.).
[3] Hi-Tech Group Inc. v. Sears Canada Inc. (2001), 2001 24049 (ON CA), 52 O.R. (3d) 97, 2001 CarswellOnt 9, [2001] O.J. No. 33, 11 B.L.R. (3d) 197, 4 C.P.C. (5 th ) 35 (C.A.).
[4] ITN Corp. v. ACC Long Distance Ltd. (1992), 1992 7453 (ON SC), 9 O.R. (3d) 447.
[5] Guarantee Co. of North America v. Gordon Capital Corp. (1999), 1999 664 (SCC), 3 S.C.R. 423.
[6] Rule 20.04 (2.1) and (2.2), RCP Amendment Regulation 438/08 in force Jan. 1, 2010.
[7] Irving Underman Ltd. v. Galanis (1991), 1991 7275 (ON CA), 4 O.R. (3d) 248, 20 R.P.R. (2d) 49 (note), 83 D.L.R. (4 th ) 734, 50 O.A.C. 176 (C.A.).
[8] Tarion Warranty Corporation v. Heritage Homes By Invidiata (Phase 3) Inc. 2010 ONSC 3869, [2010] O.J. No. 2881, paras. 18 and 25
[9] 1526183 Ontario Ltd. v. Grant Equipment Corp. 2010 ONSC 928, [2010] O.J. No. 812
[10] CIT Financial Ltd. v. 1247550 Ontario Ltd., [2001] O.J. No. 1709.
[11] Earl Zurba v. Lakeridge Health Corporation, et al, Jan. 7, 2010 (ON.S.C.) Court File No. CV-06-082356, at para. 53.
[12] Combined Air Mechanical Services Inc. v. Flesch, 2011 764 (ONCA)
[13] Combined Air Mechanical Services Inc. v. Flesch, above, at paras. 35 and 50 ; Sheriff v. Apps, 2012 565 (ONSC), at para. 22.
[14] MCAP Leasing Limited Partnership v. Lind Furniture (Canada) Ltd., [2010 O.J. No. 1153, paras. 26 and 50 to 52.
[15] Combined Air, above, at paras. 72 to 73