ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 10-24289
DATE: 2012/09/28
B E T W E E N:
LAKEPOINT MORTGAGE INVESTMENT FUND 1 INCORPORATED
George Limberis, Counsel for the Plaintiff
Plaintiff
- and -
LEONARD LYN, SINGH LYN LLP, TRINITY DIVERSIFIED NORTH AMERICA LTD., FORGE D'URZO aka FORTUNATO D'URZO, SCOTT CHRISTOPHER WEBSTER, ROBERT JOSEPH HYDE, MARIO SERGIO, FINBANK MORTGAGE AND FINANCE CORPORATION, TRINITY GLOBAL REALTY LIMITED, TRINITY DIVERSIFIED MECHANICAL LTD., TRINITY GLOBAL INSURANCES INC., TRINITY TRUST INSURANCE LIMITED, TRINITY MEMORIALS INC., PALADIN CORP., TRINITY LAOTIAN LTD., TRINITY GLOBAL CORP., CANADIAN PROFESSIONAL SERVICES INC., VENTURE SYNERGIES INC., CORPORATE & PERSONAL FINANCIAL SERVICES INC.
George Corsianos, Counsel for the Defendants: Trinity Diversified North America Ltd., Forge D'urzo aka Fortunato D'urzo, Finbank Mortgage and Finance Corporation, Trinity Global Realty Limited, Trinity Diversified Mechanical Ltd., Trinity Global Insurances Inc., Trinity Trust Insurance Limited, Trinity Memorials Inc., Trinity Laotian Ltd., Trinity Global Corp., Corporate & Personal Financial Services Inc. No one else appearing.
Defendants
HEARD: July 20 th , 2012
RULING ON LONG MOTION
Parayeski J.
[ 1 ] The plaintiff moves for summary judgment in respect of monies loaned by it to the defendant Trinity Diversified North America Ltd. (hereinafter “TDNAL”)
[ 2 ] In his affidavits in response to this motion, TDNAL’s principal, one Fortunato D’Urzo, acknowledges that it borrowed money from the plaintiff. The indebtedness is recorded in an debenture executed sometime in 2007. The debenture itself is not otherwise dated. A fax print line across the top of some of the pages of the copies which are exhibits to various affidavits filed for this motion shows some date in December of 2007. The plaintiff is one of four lenders shown on the debenture. In its simplest form, a debenture is an acknowledgement of unsecured corporate debt.
[ 3 ] In his affidavit sworn on May 7 th , 2012, Mr. D’Urzo states that TDNAL made payments against the loans documented by the debenture until “the late fall of 2010”. The affidavit of a director of the plaintiff, one Velibor Lukic, sworn on April 25 th , 2012, states that no payments have been made since November of 2010. In my view, that alone is evidence of default under the debenture. In addition, TDNAL is insolvent. That, too, constitutes default. It matters not that Mr. D’Urzo struggled mightily, with the assistance of his counsel, to avoid admitting the simple fact of default while being cross-examined on his affidavits filed in response to this motion.
[ 4 ] Under the terms of the debenture, default triggers “the whole of the principal balance remaining unpaid, together with interest and all other monies evidenced by this debenture becoming due and payable at the option of the lenders”. The relevant paragraphs of the debenture call for notice by the holders. I am prepared to find that the commencement of the present action itself is sufficient notice of the plaintiff to TDNAL.
[ 5 ] The debenture does refer, somewhat obliquely, to promissory notes which were never prepared. In my view, this does not negate the fact that monies were loaned and are now due from TDNAL to the plaintiff.
[ 6 ] TDNAL waffles with respect to the amount it borrowed from the plaintiff. In his affidavit sworn on May 7 th , 2012, Mr. D’Urzo states that “about three million dollars ($3,000,000.00)” were loaned to it by the plaintiff. In his affidavit sworn on May 23 rd , 2012, Mr. D’Urzo states “I believe that in fact the amount [borrowed from the plaintiff] is closer to $2,800,000.00. However, with the Mareva [injunction] in place and the loss of substantially all of the employees of TDNAL, it is difficult to exactly determine at this time the exact amount”. In his affidavit sworn on August 16 th , 2012, Mr. D’Urzo states that “at best, $2,890,000.00 may be owed and there may be further amounts which were repaid which I cannot now recall”. He goes on in that affidavit to state that TDNAL’s “CFO / bookkeeper” has serious health issues and is only available “on sporadic basis” ( sic ).
[ 7 ] In contrast, the plaintiff has presented cogent evidence to the amount of debt involved. In his affidavit sworn on April 15 th , 2012, Mr. Lukic provided, as exhibits, copies of a series of 14 cheques totaling $2,990,000.00 from the plaintiff to TDNAL, which he says shows the amount loaned.
[ 8 ] TDNAL’s own financial statements appear to show $2,890,000.00 as the relevant debt. This amount is the total of the cheques referred to above, net of an acknowledged payment of $100,000.00, which payment is described in Mr. D’Urzo’s affidavit sworn on April 16 th , 2012.
[ 9 ] TDNAL also resists being ordered to pay the plaintiff any monies because the debenture shows three other lenders who are not part of this action. Given TDNAL’s insolvency, payout to one creditor at this time might create an inappropriate preference as the four lenders rank pari passu. The plaintiff’s answer to that issue is that it is content to have the money paid into court pending further order, thus avoiding any preferential payment to it.
[ 10 ] I am fully satisfied that there are no genuine issues requiring a trial. The evidence before me permits a fulsome understanding of all relevant points. Accordingly, the plaintiff is entitled to the relief set out in sub-paragraphs (a) and (b) of paragraph 28 of its amended factum. I note that sub-paragraph (a) seeks judgment for $2,800,000.00, rather than the $2,890,000.00 shown on TDNAL’s financial statements and discussed above. That is the plaintiff’s choice.
[ 11 ] For clarification, the “Fund Companies” referred to in sub-paragraph (b) are the three other companies named in the debenture. Their names shall be spelled out in full in the judgment.
[ 12 ] Judgment accordingly.
[ 13 ] If the parties cannot agree upon costs of this motion, they may make brief written submissions to me in that regard. Any such submissions shall be no more than three typewritten pages in length, not including a costs outline. The moving party shall have until October 15 th , 2012, to make its costs submissions. The responding defendants shall have until October 31 st , 2012, to file theirs. Costs submissions should be forwarded to my attention at the John Sopinka Courthouse in Hamilton, Ontario.
Parayeski J.
Released: September 28, 2012
COURT FILE NO.: 10-24289
DATE: 2012/09/xx
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
LAKEPOINT MORTGAGE INVESTMENT FUND 1 INCORPORATED
Plaintiff
- and –
LEONARD LYN, SINGH LYN LLP, TRINITY DIVERSIFIED NORTH AMERICA LTD., FORGE D'URZO aka FORTUNATO D'URZO, SCOTT CHRISTOPHER WEBSTER, ROBERT JOSEPH HYDE, MARIO SERGIO, FINBANK MORTGAGE AND FINANCE CORPORATION, TRINITY GLOBAL REALTY LIMITED, TRINITY DIVERSIFIED MECHANICAL LTD., TRINITY GLOBAL INSURANCES INC., TRINITY TRUST INSURANCE LIMITED, TRINITY MEMORIALS INC., PALADIN CORP., TRINITY LAOTIAN LTD., TRINITY GLOBAL CORP., CANADIAN PROFESSIONAL SERVICES INC., VENTURE SYNERGIES INC., CORPORATE & PERSONAL FINANCIAL SERVICES INC.
Defendants
RULING ON LONG MOTION
Parayeski J.
MDP//dm
Released: September 28, 2012