SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-12-451095
DATE: 20121102

RE: Verza Investments Inc., Plaintiff/Applicant

AND:

Riadh Holdings Inc. and Riadh Jirjis, Defendants/Respondents

BEFORE: Justice J. Wilson

COUNSEL: Christopher Durdan , for the Plaintiff/Applicant

Monica Goyal , for the Defendants/Respondents

HEARD: November 1, 2012

ENDORSEMENT

[ 1 ] The motion for summary judgment brought by the plaintiff is granted in the amount of $1,200,000.00 for funds advanced to the defendants, plus prejudgment interest as stipulated in the mortgage in the amount of 10% per annum commencing February 1, 2009 in the amount of $330,833.39, (subject to possible readjustment as outlined herein).

[ 2 ] A writ of possession for the property municipally known as 1 Arrow Road, Toronto Ontario (the Property) shall issue on the terms outlined herein.

[ 3 ] The documents before me are clear that funds were advanced to the defendants in the total amount of $1,200,000.00, that the defendants had independent legal advice with respect to the transactions, and that the mortgage debt was properly registered against title of the Property in two phases as funds were advanced. The allegations that the defendants did not understand the transaction, are without any merit. Similarly, the allegations that additional funds were paid in cash other than the funds documented by the plaintiff or by the defendant are without merit. All prior cash transactions are documented as paid in cash. The suggestion that large sums of money were paid when the mortgage was in default without any documentary proof is not credible, and does not accord with the parties’ past practice of recording cash transactions.

[ 4 ] The writ of possession against the Property shall issue effective 30 days from today’s date. If the defendants pay the sum of $6000.00 by way of certified cheque before the expiry of the 30 days, the effective date of the writ of possession is extended for a further 30 day period.

Referral of aspects of the case to a summary trial

[ 5 ] Two aspects of the plaintiff’s claim shall be referred to a summary trial.

[ 6 ] Given the nature of the relationship between the parties, I am not satisfied based upon the material before me that the sum of $300,000.00 fairly reflects the appropriate credit given by the plaintiff’s solicitor for the value of furniture merchandise received by the defendants. The defendants assert that the value of the merchandise received was $75,000.00. I cannot fairly determine this issue based upon the motion material before me. There is an issue therefore about whether the total mortgage outstanding should be $1,500,000.00 as claimed by the plaintiff, or $1,075,000.00 as claimed by the defendants. However, I note when the original mortgage loan was increased, the defendants did not dispute the allocation of $300,000.00 as the value of the merchandise received. The assertion of the overvaluation of the furniture credit was only made after the plaintiff commenced these proceedings.

[ 7 ] Second, there is a dispute about what cash payments were made based upon the documentary records of the plaintiff and the defendants for mortgage interest after February 1, 2009. The plaintiff acknowledges that $74,686.67 was paid in cash and is documented. The defendants assert that the documents support a finding that $119,166.67 was paid in cash. The parties were not able to sort out this issue based on the documentation filed before me, and this issue will be clarified at the summary trial. I make it clear that I do not accept the assertions of the defendants that a further sum of cash was paid unless it is supported by backup documentation. The referral to summary trial on the question of payments is to sort what the documentation confirms by way of cash payments.

[ 8 ] The plaintiff agrees to withdraw its claim for damages for the aborted settlement of this matter.

[ 9 ] The parties agree to adapt the trial procedure for a summary trial under the simplified procedure. The trial record shall consist of these reasons, and any affidavit material the parties may wish to file only with respect to the two discrete issues referred to a summary trial.

[ 10 ] There have been several attempts to settle this matter, including an offer by the plaintiff to purchase the Property and pay out the first mortgage. To date the parties have been unable to resolve matters amongst themselves.

[ 11 ] The parties wish to have the opportunity to attend a pre-trial conference to seek the assistance of a judge to settle matters. If they are able to resolve matters this judgment shall apply.

[ 12 ] The parties and counsel have agreed to attend a pre-trial conference before Justice G. Speigel. That conference is scheduled for November 20, 2012 at 10:00 a.m., clients to attend , subject to confirmation with Justice Speigel’s assistant.

[ 13 ] If the parties are unable to resolve matters, the simplified procedure summary trial is set for one day to be heard the week of January 14, 2013 [not to be heard on January 18,]

[ 14 ] I have heard submissions as to costs. Costs of this motion fixed in the amount of $10,000.00 inclusive of HST and disbursements.

[ 15 ] At my request, counsel prepared a draft judgment reflecting what I indicated my decision would be. I have signed the draft judgment filed.

Justice J. Wilson

Date: November 2, 2012