COURT FILE NO.: CV-11-104211
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Solmaz Vazifehkhah Ghaffari, Plaintiff
AND:
Vahid Mehdizadeh Asiyaban, Elham Moaveni also known as Ellie Moaveni and Alan J. Luftspring, Defendants
BEFORE: The Honourable Madam Justice J.E. Ferguson
COUNSEL:
David Mario Farmani, for the Plaintiff Solmaz Vazifehkhah Ghaffari (“Solmaz”) (not in attendance at the motion)
John O’Sullivan, of counsel to the Plaintiff with respect to the Plaintiff’s Motion to Stay the Defendant’s Summary Judgment Motion
Christopher J. Thiesenhausen, for the Defendant, Vahid Mehdizadeh Asiyaban (“Vahid”)
Michael R. Kestenberg and David S. Lipkus, for the Defendants, Allan J. Luftspring (“Luftspring”) and Elham Moaveni also known as Ellie Moaveni (“Moaveni”)
HEARD: April 30, 2012
ENDORSEMENT
1This is a motion by the plaintiff to stay motions for summary judgment brought by the defendants on the ground that they are premature and inappropriate because the most efficient means of developing a record capable of satisfying the full appreciation test is to proceed through the normal route of discovery.
2The defendants’ position is that the motion should be dismissed as this is an appropriate case on which the court should hear a summary judgment motion.
Background
a. The following facts appear to be uncontested by any party:
b. Title to 69 Highland Park Blvd., Markham (“69 Highland”) was transferred on September 16, 2005 to Vahid and Solmaz as joint tenants, subject to a mortgage in favour of DUCA Financial Services Credit Union Ltd.
c. Luftspring, represented Vahid and Solmaz for the transfer and mortgage of 69 Highland;
d. Luftspring, subsequently prepared a Trust Agreement and Power of Attorney executed by Solmaz on February 21, 2006;
e. The text of the Trust Agreement states that Solmaz is a bare Trustee for the beneficiary Vahid;
f. The text of the Power of Attorney grants authority from Solmaz to Vahid, limited to 69 Highland;
g. On April 9, 2009, Garry Shapiro, an Ontario Lawyer, wrote to the defendant, Luftspring, to advise that he acted for Solmaz; asserted her revocation of the Power of Attorney; disputed the validity of the Trust Agreement; and asserted the plaintiff’s position as a valid owner of 69 Highland;
h. Solmaz commenced this litigation by Statement of Claim issued on May 16, 2011.
3A motion was brought by counsel for Vahid seeking a validation order. On November 5, 2009, Howden J. ordered that the trust agreement and power of attorney were valid. Solmaz has all “sorts” to say about the obtaining of the order. The fact is however that when she became aware of order validating the documents she took no steps to set it aside. Rather she has commenced her claim against the defendants which is now the subject of a summary judgment motion.
The Law
4The test for summary judgment remains whether there is a genuine issue requiring a trial. However, since the 2010 amendments to the Rules of Civil Procedure, the motions Judge can weigh the evidence, evaluate the credibility of a deponent and draw reasonable inferences to aid in coming to the determination of whether a trial is necessary.
Rules 20.01 & 20.04 of the Rules of Civil Procedure
5The Court of Appeal for Ontario has recently pronounced definitively and comprehensively on Rule 20 in Combined Air Mechanical Services Inc. v. Flesch . This decision "marks a new departure and a fresh approach to the interpretation and application of the amended Rule 20."
Combined Air Mechanical Services Inc. v. Flesch , 2011 ONCA 764 at paragraph 35
6Combined Air Mechanical Services Inc. overrules in no uncertain terms the pre-2010 Rule 20 authorities precluding a judge on a summary judgment motion from weighing evidence, assessing credibility, or drawing inferences of fact:
The 2010 amendments to Rule 20 [...] specifically authoriz[e] judges to use these powers on a motion for summary judgment unless the judge is of the view that it is in the interest of justice for such powers to be exercised only at a trial.
the amended rule permits the motion judge to decide the action where he or she is satisfied that by exercising the powers that are now available on a motion for summary judgment, there is no factual or legal issue raised by the parties that requires a trial for its fair and just resolution.
Combined Air Mechanical Services Inc. v. Flesch , supra at paragraphs 3, 37
7Judges deciding whether to use the new powers set out in Rule 20.04 (2.1)to weigh evidence, assess credibility, or draw inferences of fact now must follow the full appreciation test:
"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?"
Combined Air Mechanical Services Inc. v. Flesch , supra at paragraph 50
8The court elaborated on the full appreciation test:
We think this “full appreciation test” provides a useful benchmark for deciding whether or not a trial is required in the interest of justice. In cases that call for multiple findings of fact on the basis of conflicting evidence emanating from a number of witnesses and found in a voluminous record, a summary judgment motion cannot serve as an adequate substitute for the trial process. Generally speaking, in those cases, the motion judge simply cannot achieve the full appreciation of the evidence and issues that is required to make dispositive findings. Accordingly, the full appreciation test is not met and the “interest of justice” requires a trial.
In contrast, in document-driven cases with limited testimonial evidence, a motion judge would be able to achieve the full appreciation of the evidence and issues that required to make dispositive findings. Similarly, the full appreciation test may be met cases with limited contentious factual issues. The full appreciation test may also be met in cases where the record can be supplemented to the requisite degree at the motion judge’s direction by hearing oral evidence on discrete issues.
We wish to emphasize the very important distinction between “full appreciation” in the sense we intend here, and achieving familiarity with the total body of evidence the motion record. Simply being knowledgeable about the entire content of the motion record is not the same as fully appreciating the evidence and issues in a way that permits a fair and just adjudication of the dispute. The full appreciation test requires motion judges to do more than simply assess if they are capable of reading and interpreting all the evidence that has been put before them.
The point we are making is that a motion judge is required to assess whether the attributes of the trial process are necessary to enable him or her to fully appreciate the evidence and the issues posed by the case. In making this determination, the motion judge is to consider, for example, whether he or she can accurately weigh and draw inferences from the evidence without the benefit of the trial narrative, without the ability to hear the witnesses speak in their own words, and without the assistance of counsel as the judge examines the record in chambers.
Thus, in deciding whether to use the powers in rule 20.04(2.1), the motion judge must consider if this is a case where meeting the full appreciation test requires an opportunity to hear and observe witnesses, to have the evidence presented by way of trial narrative, and to experience the fact-finding process first-hand. Unless full appreciation of the evidence and issues that is required to make dispositive findings is attainable on the motion record – as may be supplemented by the presentation of oral evidence under rule 20.04(2.2) – the judge cannot be “satisfied” that the issues are appropriately resolved on a motion for summary judgment.
The important element of the analysis under the amended Rule 20 is that, before using the powers in rule 20.04(2.1) to weigh evidence, evaluate credibility, and draw reasonable inferences, the motion judge must apply the full appreciation test in order to be satisfied that the interest of justice does not require that these powers be exercised only at a trial.
Combined Air Mechanical Services Inc. v. Flesch , supra at paragraph 51-55, 75
9The established evidentiary obligations remain. The moving party bears the evidentiary burden of showing there is no genuine issue requiring a trial. After the moving party has discharged the evidentiary burden, the burden shifts to the responding party to prove that its claim or defence has a real chance of success. In response to affidavit material or other evidence supporting a motion for summary judgment, a responding party may not rest solely on the allegations or denials in the party's pleadings, but must set out, in affidavit material or other evidence, specific facts showing that there is a genuine issue requiring a trial. In accordance with the existing jurisprudence, each side must put its best foot forward with respect to the existence or non-existence of material issues to be tried and cannot sit back and rely on the possibility that more favourable facts or better evidence may be presented at trial. The Court is entitled to assume that the record contains all the evidence which the parties would present at trial.
Reference: Rule 20.02(2) and 20.04 of the Rules of Civil Procedure
Combined Air Mechanical Services Inc. v. Flesch , Supra at paragraph 56
Lawless v. Anderson , 2010 ONSC 2723 () at par. 17
TD v. Cuthbert , 2010 ONSC 830 () at par.12-13
Guarantee Co. of North American v. Gordon Capital Corp ., 1999 664 (SCC) , 1999 CarswellOnt 3171 (S.C.C.) at para 27
1061590 Ontario Ltd. v. Ontario Jockey Club , 1995 1686 (ON CA) , 1995 CarswellOnt 63 (C.A.) at paras 35-36
10The court is entitled to draw inferences from the evidence on a common-sense basis, and may look to the overall credibility of a party’s case. Merely raising an issue of credibility will not be an answer. The issue of credibility must be genuine and not spurious.
Reference: Rogers Cable TV Limited v. 373041 Ontario Limited , at paras 4-7
11One consequence of the powers exercisable by a motion judge under the rules is an enhanced ability to determine discoverability issues on summary judgment motions because the fact finding restrictions under the old rule 20 have been very significantly loosened.
Reference: Lawless v. Anderson , supra, at paras 22
12In January, 2012, the Plaintiff elected to serve a motion for directions based on the Combined Air Mechanical Services Inc. v. Flesch decision which states, at paragraph 258 that “a responding party faced with an inappropriate motion for summary judgment may move for directions under rules 1.04 and 1.05 to request that the motion be stayed or dismissed.” That is the motion that is before me.
13However, the test to stay a motion for summary judgment was not enunciated by the court in Combined Air Mechanical Services Inc. v. Flesch .
The court did have the following about a stay at para 58
“A party faced with a premature or in appropriate summary judgment motion should have the option of moving to stay or dismiss the motion where the most efficient means of developing a record capable of satisfying the full appreciation test is to proceed through the normal route of discovery. This option is available by way of a motion for directions pursuant to rules 1.04(1), (1.1), (2) and 1.05.”
14I agree with the defence submissions as to the test a party must meet in order to obtain a stay (I was told that there is no case law yet on the point) which is as follows:
(i) the court should look at the motion for summary judgment and the reasonable chances of success in determining whether a stay is appropriate. The party seeking the stay should put their best foot forward as they would on a motion for summary judgment to say there is a genuine issue requiring a trial or why the matter is too complicated for the motion judge to ascertain the full appreciation of the case;
(ii) the court then ought to determine whether the matter is complicated; what are the issues; the nature of the evidence and law to determine the issues; and whether the case can be determined without the necessity of a full trial; and
(iii) only in the clearest of cases should the court impose a stay.
The Issues
The pleaded limitation defence
15The defendants position on the summary judgment motion is that the claim brought by Solmaz is statute barred. The plaintiff submits that it is not.
16Solmaz has deposed to the following in her affidavit:
“9. The very next day after this conversation, another friend drove me to Luftspring’s office. When I told Luftspring that Vahid said he panicked. Luftspring confirmed that the documents I signed were in fact a Power of Attorney and a Trust Declaration. He reluctantly gave me copies. That was the first time that I realized I had been deceived by Vahid. I still thought Luftspring had made a mistake. Broke and unemployed, I borrowed $500.00 to hire Mr. Shapiro, a respect real estate practitioner. Shapiro wrote Vahid, Vahid’s lawyer Ms. Moaveni, the mortgage lender and Luftspring that the Power of Attorney was revoked and the Trust declaration was invalid.”
“10. After Shapiro sent this letter advising the Power of Attorney was revoked – and the Trust Declaration was disputed, I was convinced and believed that Vahid could not transfer the property without my knowledge and consent and the problem Luftspring had created a completely cured and, once revoked, the Power of Attorney could not be used and could not be re-instated by anyone other than me.”
17Although this is not the summary judgment motion, in essence the court heard submissions as to the merits of that motion in order to apply the test to obtain a stay.
The Law Re: Limitation Periods
18Pursuant to Section 4 of the Limitations Act , 2002, a basic limitation period of two years runs from the day the claim is discovered. A claim is defined as "a claim to remedy an injury, loss or damage that occurred as a result of an act or omission."
Reference: Sections 1 and 4 , Limitations Act , 2002, S.O. 2002, c.24, Sch.B., as amended
19Pursuant to Section 5 of the Limitations Act , 2002, a claim is discovered on the earlier of,
(a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred,
(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was that of the person against whom the claim is made, and
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and
(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).
Reference: Section 5 , Limitations Act , 2002, S.O. 2002, c.24, Sch.B., as amended
20Section 5(2) of the Act provides a rebuttable presumption that a claim is discovered on the day that the act or omission on which the claim is based took place.
21Allen J. identified the test to be applied in determining whether a claim was barred by the Limitations Act¸ 2002 and stated:
Section 5(1)(a) contains a subjective test that focuses on the plaintiff’s actual knowledge of the types of facts enumerated under that provision. The second test under s.5(1)(b) is objective and requires the plaintiff’s knowledge to be assessed in relation to the standard of the steps a reasonable person would take to obtain knowledge of the claim.
Reference: Ferrara v. Lorenzetti Wolfe Barristers and Solicitors , 2012 ONSC 151 at para 7
22The Ontario Court of Appeal has strictly interpreted the Act to mean that the courts do not have discretion to extend the time for commencing an action if the two-year general limitation period has expired.
Reference: Joseph v. Paramount Canada’s Wonderland , 2008 ONCA 469 () at paras 2 , 3, 8, 15, 28
23In the event that the defendant pleads a statutory limitation period, the plaintiff has the burden of proving that the cause of action arose within the limitation period.
Reference: Liu v. Silver , 2010 ONSC 2218 () at para. 13 .
24The motions judge is entitled to assume that no further evidence will be adduced at trial on any issue, including discoverability.
Reference: Moore v. Renault , 2000 CarswellOnt 935 (Ont. S.C.J.) at para. 8 .
25With the exception of Section 5(1)(iv), the common law discoverability rule statutorily encoded in Section 5 of the Act is premised on the fact that the cause of action starts to accrue from the time that the plaintiffs learned of the cause of action or ought to have learned that a cause of action existed through the exercise of reasonable diligence. Once a plaintiff knows or ought to know that some damage has occurred and has knowledge of who caused the damage, the cause of action begins to accrue.
Reference: Moore v. Renault , supra .
Peixero v. Haberman , 1997 325 (SCC) , 1997 CarswellOnt 2928 (S.C.C.) at para 18
26While the common law discoverability principles enumerated by the Supreme Court of Canada in Peixero v. Haberman have not been overturned, the court must apply the statutory discoverability rule contained in Section 5 of the Act .
Reference: B.(K.) v. O. (T.) , 2005 CarswellOnt 5136 (S.C.J.) at para 23
27The only issue that will need to be determined on the summary judgment motion is given the plaintiff’s knowledge as of at least April 9, 2009, a reasonable person, whether they knew or ought to have known, would understand the facts to mean that she lost her beneficial interest in and to the subject property – when she knew or ought to have know of her cause of action. Solmaz submits that she requires the normal process including examinations for discovery in order that a record can be developed which is capable of satisfying the full appreciation test and that it is in the interests of justice to do so. I do not agree. It is appropriate to proceed by way of summary judgment. The documentary evidence is not complicated; there are a limited number of witnesses; and the principles of law are not really in dispute. The issue is whether or not it was reasonable for Solmaz to say that the Shapiro letter had cured the problem so that no cause of action arose which is an appropriate issue to move forward with on a summary judgment motion. The application to stay is dismissed.
28If the parties cannot agree on costs they can provide brief cost submissions within 30 days.
The Honourable Madam Justice J.E. Ferguson
Date: May 4, 2012