COURT FILE NO.: CV-11-425006

DATE: 20120918

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: PETER NEUMANN
Plaintiff

AND

MAHMUD HUSSEIN and OMNI SEARCH SERVICES LTD.
Defendants

BEFORE: Justice Chapnik

COUNSEL:
Paul Luizos, for the Plaintiff

William R. Gilmour, for the Defendants

HEARD: September 10, 2012

ENDORSEMENT

[ 1 ] The plaintiff moves for summary judgment against both defendants for repayment of monies owed to him. At the conclusion of the hearing, I indicated to counsel that I was satisfied the motion for summary judgment should be granted and I undertook to provide written reasons for my decision. These constitute those reasons.

THE FACTS

[ 2 ] The plaintiff advanced to the defendant, Mahmud Hussein, a sophisticated businessman, various amounts of money on numerous occasions in different forms, including cheques, money orders and cash.

[ 3 ] On or about April 5, 2004, Mr. Hussein executed a demand promissory note in favour of the plaintiff for $465,000 plus 10 percent interest per annum, compounded daily and payable on May 5, 2004.

[ 4 ] On or about February 6, 2011, Mr. Hussein gave a cheque dated February 12, 2011 to the plaintiff and his wife drawn on the account of the defendant, Omni Search Services Ltd. (“Omni”) in the amount of $500,000 which was subsequently returned by the bank marked “NSF.”

[ 5 ] Omni, concedes through counsel, that given the cheque issued is a Bill of Exchange, the plaintiff should have judgment against Omni, as claimed, for the sum of $500,000, plus interest in accordance with the Courts of Justice Act, R.S.O. 1990, c. C.43, and I so order.

[ 6 ] The plaintiff’s claim against Mr. Hussein is for the sum of $940,214.11, plus prejudgment interest from April 20, 2011 at the rate of 10 per cent per annum and costs.

[ 7 ] Despite numerous demands and repeated requests for payments, no monies have been paid to the plaintiff pursuant to the loan.

THE ISSUE

[ 8 ] The only issue argued by the defendant is based on a limitations defence. Clearly, by the time the statement of claim was issued on April 21, 2011, Mr. Hussein’s debt to the plaintiff was outstanding for more than two years.

[ 9 ] Mr. Hussein contends that the plaintiff’s claim is statute-barred by virtue of the Limitations Act, . S.O. 2002, c.24 Sched. B. (the “ Act ”), which requires an action to be commenced within two years of the date the course of action arose.

ANALYSIS

[ 10 ] As noted, the demand promissory note was executed on April 4, 2004 and payable on demand May 5, 2004. The statement of claim was not issued until April 2011 and amended May 26, 2011.

[ 11 ] Two questions arise in the circumstances of this case, firstly, how does the fact that the $500,000 cheque was drawn on Omni’s account affect the issue of limitations in respect of Mr. Hussein’s liability, or does it?

[ 12 ] Secondly, what effect does the defendant’s admission of liability have on the limitations issue?

[ 13 ] As to the Omni cheque, it is noted that Mr. Hussein is the sole shareholder, director and officer of Omni. Moreover, Mr. Hussein routinely used the Omni account for his “personal purposes,” that is, the company serves no corporate purpose but is utilized by Mr. Hussein as his personal account and bank statement. Indeed, he treated himself and Omni as “one and the same.” The following exchange is found in the transcript of Mr. Hussein’s cross-examination held August 1, 2012 (at Q. 795):

Q. You were using Omni Services . . . as your personal account to repay a personal loan?

A. No, the . . . if I’m liable, Omni’s Search is also liable, because I wrote the cheque from. . .

Q. So, you’re treating them as one and the same?

A. Yes.

[ 14 ] The cheque itself was written , signed and delivered to the plaintiff by Mr. Hussein or his agent.

[ 15 ] Pursuant to s. 13 of the Act , a payment on account in respect of a liquidated claim starts the clock in respect of a limitation period. With every payment, a debtor acknowledges or re-acknowledges his or her liability sufficient to restart the running of the two-year limitation period: ABC Lumber Ltd. v. Bodrenok , 2010 ONSC 769 , 89 C.L.R. (3d) 140 at para. 39.

[ 16 ] In all the circumstances the limitation period defence in this case based on the fact that the $500,000 cheque was drawn on Omni’s account, must fail.

[ 17 ] As to the second issue - in cross-examination, the defendant did not dispute that he owes the monies claimed to the plaintiff. At Q. 796, Mr. Hussein stated he was willing to pay $340,000 “as of right now” within 60 days or “more, if proven.” Both his conduct and words indicate an intention to pay.

[ 18 ] This acknowledgment of liability is sufficient to restart the running of the two-year limitation period: Maralle v. Travelers Indemnity Co. of Canada , 1991 SCC 58 , [1991] 2 S.C.R. 50, para. 13.

[ 19 ] On this basis as well, the limitation defence fails.

CONCLUSION

[ 20 ] This court has achieved a full appreciation of the evidence and the issues without the need for a trial: Combined Air Mechanical Services Inc. v. Flesch 2011 ONCA 764 , 108 O.R. (3d) 1. There is no issue or claim in this case that requires trial for its resolution within the meaning of rule 20.04(2)(a). Accordingly, the plaintiff’s motion for summary judgment is allowed.

[ 21 ] Judgment shall issue in favour of the plaintiff as against Mahmud Hussein in the sum of $940,214.11, as claimed, plus prejudgment interest from April 20, 2011 to date at the rate of ten percent per annum. As noted above, the plaintiff’s claim, as framed, against Omni is also allowed, and judgment shall issue against it in the amount of $500,000, plus interest pursuant to the Courts of Justice Act .

[ 22 ] As indicated at the hearing and in accordance with the reasonable expectations of the parties, costs are awarded to the plaintiff as against both defendants, jointly and severally, in the sum of $20,000, inclusive of HST and disbursements.

CHAPNIK J.

Date: September 18, 2012