SUPERIOR COURT OF JUSTICE – ONTARIO
COURT FILE NO.: C-16-12
DATE: 2013-06-17
RE: Annette Nicholson, Plaintiff
and
Roger Gemnay and Margaret Gemnay, Defendants
BEFORE: The Honourable Mr. Justice T.R. Lofchik
COUNSEL:
Brian Kelly, for the Plaintiff
David M. Steele, for the Defendants
HEARD: June 12, 2013
ENDORSEMENT
[1] This is a motion for summary judgment dismissing the action against the defendant, Margaret Gemnay, pursuant to Rule 20.04 of the Rules of Civil Procedure.
Facts
[2] The action is a claim for damages arising from dealings between the plaintiff and the defendant, Roger Gemnay, wherein the plaintiff advanced a total of $250,000 to Roger for the purpose of using his self-directed investment account, based on representations allegedly made to the plaintiff by him.
[3] Separate sums of $100,000 were advanced to Roger on May 4th, 2010 and May 25th, 2010 by depositing them in a Royal Bank account jointly held by Roger Gemnay and his wife, Margaret Gemnay. Shortly after these funds were deposited in the Royal Bank account, they were transferred out to Roger’s trading account. On June 16th, 2010, the sum of $50,000 was transferred directly into Roger’s trading account.
[4] Within a short time after the plaintiff’s funds went into Roger’s trading account, the funds were lost as a result of trading in the account. This came as a surprise to the plaintiff as she alleges that no trades were to be made without her consent and that the $200,000 deposited in the Royal Bank account was transferred to the trading account without her authorization.
[5] The plaintiff now seeks to recover the monies lost from the defendants, as well as punitive or exemplary damages.
[6] There is also a claim against Margaret seeking to trace funds she obtained from Roger and under the Fraudulent Conveyances Act.
Law
[7] Rule 20.04(2) provides:
20.04(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) ...
(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 trial:
Weighing the evidence.
Evaluating the credibility of a deponent.
Drawing any reasonable inference from the evidence.
19 In Combined Air Mechanical Services v. Flesch, 2011 ONCA 764, 108 O.R. (3d) 1, at para. 37, the Court of Appeal determined that the rule permits a motion judge to decide an action or an issue in an action where he or she is satisfied that no factual or legal issue raised by the parties requires a trial for the fair and just resolution of the action or issue. The court found that in some cases, the motion record and the examination-for-discovery/cross-examination evidence will be sufficient to determine the matter without the need for a trial. The court recognized three types of cases amenable to resolution by summary judgment – the second is actions or issues that are without merit, and the third is where there is no chance of success at trial.
20 At paragraph 50 of Combined Air, the court introduced what it termed “the full appreciation test” to guide courts in applying the enhanced summary judgment powers:
... In deciding if these powers (set out in rule 20.04(2.1) should be used to weed out a claim as having no chance of success or be used to resolve part or all of an action, the motion judge must ask the following question: can the full appreciation of the evidence and issues that is required to make dispositve findings be achieved by way of summary judgment, or can this full appreciation only be achieved by way of a trial?
21 At paragraph 54, the court also instructed:
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.
22 And at paragraph 73, when summarizing its position respecting a claim that a claim has no chance of success at trial, the court said:
... The availability of these enhanced powers to determine if a claim or defence has no chance of success will permit more actions to be weeded out through the mechanism of summary judgment. However, before the motion judge decides to weigh evidence, evaluate credibility, or draw inferences from the evidence, the motion judge must apply the full appreciation test.
23 Of course, the requirement that the parties on a summary judgment motion must put their best case forward still applies under the increased powers regime introduced in Combined Air. That is, the moving party must satisfy the court that there are no issues of fact requiring a trial for resolution and the responding party must show there are material factors to be tried to assess credibility, weigh evidence and draw factual inferences, and that there is a real chance of success at trial. The court is entitled to presume the evidence in the record is everything the parties would rely on if the matter proceeded to trial: 1061590 Ontario Ltd. v. Ontario Jockey Club (1995), 1995 1686 (ON CA), 21 O.R. (3d) 547 (C.A.), at p. 557; Royal Bank v. Tie Domi Enterprises, 2011 ONSC 7297, [2011] O.J. No. 5828, at paras. 4-6, per Allen J.
Discussion
[8] There is no evidence before me that the defendant, Margaret Gemnay spoke to or even knew the plaintiff. Every allegation against Margaret relates to transactions between the plaintiff and Roger Gemnay.
[9] There is no allegation that Margaret did any of the trades that resulted in the loss of the plaintiff’s money.
[10] The bank statements show two sums of $100,000 going into the Royal Bank account and soon after coming out into the trading account with no other withdrawals between the deposit of the monies and the transfer to the trading account.
[11] The $50,000 was deposited into the trading account.
[12] The trading records show the funds were invested and lost.
[13] On this basis, I find that the evidence is clear as to where the funds went so that there is no money to trace.
[14] Roger Gemnay deposes that he did not funnel monies to his wife and there is no evidence to the contrary or reason to believe otherwise.
[15] Any claim under the Fraudulent Conveyances Act is premature until it is established that Roger owes money to the plaintiff and cannot pay. I find that this claim should be dismissed as against Margaret Gemnay, without prejudice to the plaintiff to bring such a claim if she should obtain a judgment against Roger Gemnay that remains unpaid.
[16] The only evidence of the involvement of Margaret Gemnay in the plaintiff’s loss is that some of the monies ultimately last passed through a savings account of which she was a joint account holder on their way to being deposited in the trading account.
[17] There is no evidence that Margaret Gemnay had any part in the money transfers or the trades that led to the loss of the plaintiff’s money. There is no evidence that she received any of the plaintiff’s monies or benefited from the trades with that money.
[18] Plaintiff’s counsel argues that because the monies passed through an account of which she was a joint account holder that renders Margaret Gemnay liable to the plaintiff. I find that argument to be without merit.
[19] Applying the full appreciation test, based on the evidence before me, I find that a trial is not necessary to make dispositive funds with respect to the liability of the defendant, Margaret Gemnay, to the plaintiff. I find that there is no real chance of success against Margaret Gemnay at trial and order that the action be dismissed against her.
[20] Order to go in terms of paragraphs (b) and (c) of the claim for relief in the notice of motion.
[21] The parties may make written submissions on the issue of costs, the moving party defendants’ submissions to be delivered within 10 days of the release of these reasons, plaintiff responding submissions to be delivered within 10 days of receipt of defence submissions or 20 days of the date of these reasons, whichever is earlier and the defendant’s reply within 5 days of that, such submissions be limited to 5 pages, double-spaced of no less than 14 font size, excluding any dockets or time sheets.
T.R. Lofchik J.
Released: June 17, 2013