SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: CV-13-0356
DATE: 20130821
RE: 1758704 ONTARIO INC. and 1191305 ONTARIO INC., Plaintiffs
AND:
CARL PRIEST, Defendant
BEFORE: THE HON. MR. JUSTICE J.P.L. McDERMOT
COUNSEL: K. William McKenzie and Krista J. McKenzie, for the Plaintiffs
Brad Teplitsky, for the Defendant
HEARD: June 25, 2013
ENDORSEMENT
Introduction
[1] This was a motion for summary judgment brought by the Plaintiffs under a promissory note signed by Mr. Priest and his company, 1737161 Ontario Ltd. (“1737161”) on May 18, 2010. There is no issue that the monthly payments owing under the note are not presently being paid; had they been, the note would have been paid in full by now. The real issue, as will be explained below, is whether the note can be enforced in light of ongoing proceedings in a companion action to which the promissory note is related. That was an application brought by 1737161 for an injunction to prevent the sale or dealing with equipment seized by the Plaintiffs (the “injunction application”); the consideration for the purchase of that equipment included the promissory note now in issue in these proceedings.
[2] This motion was originally brought before MacKinnon J. of this court on June 5, 2013, who also heard on that date a motion to vacate an injunction granted by C.J. Brown J. in Toronto in the injunction application. There was insufficient time to argue the motion for summary judgment on that date; McKinnon J. ordered that issue to be adjourned to June 25, 2013 peremptory on both parties. According to McKinnon J.’s endorsement, Mr. McKenzie was to file any further material necessary for argument of the motion on or before June 10, 2013; he filed his Motion Record on June 8, 2013. The Defendant was to file his responding material on or before June 17, 2013; the Defendant did not meet this requirement and filed his Responding Motion Record on June 19, 2013. Mr. Priest later filed his Supplementary Responding Motion Record on and a further motion record on June 24, 2013.
[3] The latter related to the cross-examination of the principal of the Plaintiffs, Martin (Marty) Donkers. The parties apparently had agreed that Mr. Teplitsky be permitted to cross-examine Mr. Donkers regarding this summary judgment motion. Cross-examinations took place on June 20, 2013. A review of the transcript of the cross-examination indicates that Mr. Teplitsky had no meaningful cross-examination whatsoever; a majority of the questions asked were answered by Mr. McKenzie and not his client and there were numerous objections. The transcript showed this to be hard litigation; the animosity between counsel appeared to override the subject matter of the cross-examination making it a useless exercise.
[4] At the commencement of the motion, Mr. Teplitsky initially moved for Mr. Donkers to be examined at the motion because of the abortive cross-examination held on June 20, 2013; Mr. McKenzie also moved that the Defendant’s material be struck as it did not meet the timelines set out by McKinnon J. in his June 5 endorsement. I advised that Mr. Donkers would not be examined during argument of this motion because of the one hour time period allotted for the motion. After an initial argument, again during which counsel attacked each other to no good purpose, counsel eventually both relented and indicated that the motion proceed on the materials before the court without further cross-examination.
[5] Finally, I must admit to being confused as to the state of the pleadings in this litigation. The Plaintiffs’ motion record had attached to it a Statement of Defence dated May 24, 2013 which indicated that the Defendant’s sole defence to this litigation was that it was an abuse of process based upon the injunction litigation. Mr. McKenzie advised that this was the only Statement of Defence that had been served on his office. The responding motion record had, however, attached a second Statement of Defence dated June 19, 2013 which was much more comprehensive. That Statement of Defence relied upon an alleged agreement that the Plaintiffs would forbear on suing on the note or alternatively that the Plaintiffs’ seizure of the equipment was unlawful. Mr. McKenzie stated that his office had never been served with that Statement of Defence and, in fact, this appears to be confirmed by the fact that the Statement of Defence found on the court file was the document that was dated June 19, but it had no affidavit of service attached to it. It was unclear, as at the date of the argument of the motion, as to whether there was even a valid defence before the court or one which was properly served and filed.
[6] The motion was argued in any event based upon the defences raised in the second Statement of Defence and I will consider it on that basis, as it is in the interests of justice to deal with all of the issues before the court at this time.
Background Facts
[7] No real issue is taken with the facts in this matter. On May 6, 2010, 1737161 entered into an Asset Purchase Agreement to buy from the Plaintiffs the assets relating to a mulch and container business known as Earth Works Recycling and AES. According to paragraph 3.02 of the agreement, the purchase price of $558,740 was to be made as follows:
The Purchase Price specified in Section 3.01 shall be paid and satisfied by a delivery of a promissory note by the purchaser in the amount of Five Hundred and Fifty Eight Thousand and Seven Hundred and Forty Dollars ($ 558,740.00) bearing interest at a rate of 7% per annum calculated half yearly and not in advance and repayable in blended monthly payments of principle and interest of Seventeen Thousand Two Hundred and Thirty Five ($17,235.00) commencing one month after the closing date and having a term of three years. The said promissory note shall collaterally be secured by a general security agreement of the assets being purchased hereunder. The said promissory note shall be personally guaranteed by Carl Preist (sic.), being the principal of the purchaser. The general security agreement shall contain a provision that no asset secured by the agreement will be conveyed or sold without the prior written consent of the vendor.
[8] The Asset Purchase Agreement also contained pre-conditions for the seizure and sale of the vendor’s assets under the Asset Purchase Agreement. Paragraph 3.03 provided as follows:
That upon default of any payment owing hereunder the Vendor shall forthwith provide notice of such default to the Purchaser of (sic.) its solicitor by fax or by electronic communications at fax numbers or email addresses to be designated by the Purchaser. Upon such default existing for a period of fifteen (15) days following receipt notification of such default, the Vendor shall thereafter be entitled to forthwith have all licences and certificates howsoever related to the assets included hereunder reverted back to name of the Vendor or it might direct which to such reversion of said licenses and certifications the Purchaser does hereby consent and agree. Further in the evened (sic.) of such default, the Vendor shall have the right to seize all chattels and assets included hereunder pursuant to its security documentation however to mitigate its losses and without interference from the Purchaser.
[9] The transaction closed on May 18, 2010. A General Security Agreement was provided which provided security on the assets sold to 1737161; I was advised during argument that it was registered under the Personal Property Security Act,[^1] although no financing statement was provided in either party’s material. The General Security Agreement contained no clause mirroring paragraph 3.03 of the Asset Purchase Agreement above.
[10] As well, the Promissory Note spoken of above was also provided on closing. It was, however, not drafted strictly according to the terms of the Asset Purchase Agreement which called for it to be provided by 1737161 and guaranteed by Carl Priest. Instead, a note was provided which was signed by both the company and Mr. Priest; that note contained the payment terms set out in the Asset Purchase Agreement; it provided for payments of $17,235 per month from June 18, 2010 to and including May 18, 2013. The note also provided for acceleration in the event of default as follows:
Default in any payment of said principle or interest, or any part thereof, shall, at the option of the holder hereof, exercisable at any time and without notice or demand, render the entire unpaid balance of the said principal together with accrued interest at once due and payable.
[11] Contrary to the assertions made by the Plaintiffs’ material, the obligations of Mr. Priest and 1737161 under the note are not stated to be joint and several; the nature of each obligation is uncharacterized. However, it is clear under the Asset Purchase Agreement that the primary obligation for repayment of the purchase price of the assets was the Promissory Note; the collateral for the note was the General Security Agreement. It also appears that, under the Asset Purchase Agreement, the obligation of Mr. Priest was intended to be in the nature of a guarantee rather than as a principle debtor.
[12] Monthly payments of $17,235 were made under the note by 1737161 until October 18, 2012. On November 18, 2012, a payment was made of $4,133 (which was made pursuant to a different agreement regarding the acquisition from the Plaintiffs of a truck and trailer); in the envelope containing that cheque was a letter from Mr. Priest to Mr. Donkers which stated that Mr. Priest and his company “are in the final stages of obtaining funding to pay the last 7 payments to 1191305 Ontario Inc.” and requesting that Mr. Donkers “call Carl at your earliest convenience.”
[13] On November 19, 2012, Mr. Donkers e-mailed Mr. Priest complaining that there was only one cheque in the envelope; Mr. Priest responded stating “Hey Marty I had sent you a letter with the cheque as I do not have a phone number”. Mr. Donkers responded on November 20, stating that he had “dug through the trash bin” and that he had the letter. In his e-mail, he stated that, “putting together financing to pay the balance is up to you.”
[14] No payments on either of the loans have been made since. However, on the weekend of December 8 and 9, 2012, the assets of Simcoe Recycling Services as secured by the General Security Agreement were seized from its premises, admittedly by the Plaintiffs. It appears that the seizure and any sale of the goods may have been improper or, at the very least, irregular; no notice of default appears to have been given to the debtor as required under s. 3.03 of the Asset Purchase Agreement; as well allegations were made in the Defendant’s factum that no notice was been provided to 1737161 as set out in s. 63 of the Personal Property Security Act even though certain goods appear to have been sold by auction. The factum also alleged that goods were actually sold contrary to the order of C.J. Brown J. and that misrepresentations were made by the Plaintiffs to McKinnon J. in argument of the motion on June 5, 2013; I could, however, find nothing supporting any of these allegations in any of the affidavits filed by Mr. Priest in response to the motion.
[15] Mr. Priest acknowledged in his own materials that he signed the Promissory Note and he also acknowledged in cross examination the outstanding amount owing under the note.
[16] In early January, 2013, in the injunction application, 1737161 commenced proceedings in Toronto for an injunction against the Plaintiffs; it sought an order enjoining the Plaintiffs from disposing of the goods stated to be wrongfully seized on the weekend of December 8 and 9, 2012. On January 24, 2013, and on consent, an order was obtained from C.J. Brown J. in Toronto which enjoined “the Respondents, their agents and servants… from disposing of or dealing with the assets owned or used by the Applicant in its recycling business prior to their seizure by the Respondents pending the hearing of this application pending further Order of the Court”.
[17] Subsequent to this order being made, on April 25, 2013, this action on the note was brought by the Plaintiffs against Mr. Priest. As noted above, it is unclear as to whether the Defendant has properly served and filed a defence to this action, and there are two different Statements of Defence in the parties’ materials.
[18] In any event, until now, the active matter has been the injunction application. Mr. Priest firstly noticed that one of the seized pieces of equipment, a tub grinder, had been left with a local auctioneer, apparently contrary to the January 24, 2013 order. A motion for contempt was made returnable respecting that issue in Toronto on June 4, 2013. In the meantime, the Respondents in the injunction application (the Plaintiffs in this proceeding) brought a motion returnable in Barrie on June 5, 2013 to traverse the matter to Barrie from Toronto and to discharge the injunction.
[19] On June 4, 2013, C.J. Brown J. made a finding that the Respondents were apparently in breach of the January 24 order insofar as they were attempting to auction off equipment which was subject to the injunction ordered by her. She said that she was satisfied that “there is ‘dealing’ with the asset, namely placement of the asset for auction.” She ordered that “[t]he Respondent is enjoined from selling or dealing with any of the assets subject to my order of Jan 24, 2013 until further order of the Court.”
[20] This was largely a pyrrhic victory as, on the next day, a “further order of the Court” was made. McKinnon J. heard the venue motion and the motion to dissolve the injunction on that day. He ordered the matter to be moved to Barrie and also determined that the injunction should be dissolved. He did this largely because he found that Mr. Donkers had consented to the injunction on the representation that Mr. Priest had obtained financing, and would pay the debt under the note. Mr. Priest had also undertaken to provide the bank financing approval letter at cross-examinations, but had not done so. McKinnon J. stated, “Mr. Priest and A have acknowledged that they owe money and have not paid.” He stated that the injunction was “now unjustified” and ordered it dissolved.
[21] McKinnon J. ordered that 1737161 and Mr. Priest disclose the location of certain chattels which were not seized on December 8 – 9 and which were subject to the General Security Agreement. During argument, much was made by Mr. McKenzie of the fact that this order had not yet been complied with. Apart from the fact that the affidavit of Martin Donkers did not prove non-compliance with that order, the breach of the order in the injunction application is largely irrelevant to summary judgment in these proceedings. This is especially so where the Plaintiffs had apparently attempted to auction off equipment contrary to the injunction originally granted in the injunction application.
Analysis
[22] The Plaintiffs request summary judgment against Mr. Priest under the promissory note which was signed by him. As noted there is no issue with respect to his execution of the promissory note. Moreover, he does not deny that the amount claimed in the Statement of Claim, plus per diem as set out in materials, remains outstanding under the note. He acknowledges that no further payments have been made under the promissory note since October 15, 2012.
[23] The jurisdiction for summary judgment is set out in Rule 20.04(2) and (2.1) of the Ontario Rules of Civil Procedure[^2] the relevant provisions of which are as follows:
(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;
(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 a trial:
Weighing the evidence.
Evaluating the credibility of a deponent.
Drawing any reasonable inference from the evidence.
[24] This rule was recently amended, purportedly to increase the powers of a motions judge in granting summary judgment and no reading of the rule is complete without considering the Court of Appeal decision in Combined Air Mechanical Inc. v. Flesch, 2011 ONCA 764. In that decision, the court held that the rule originally was applicable to only two classes of cases, being either where the parties had agreed to deal with a matter by way of summary judgment or determination by motion, or alternatively where there was, “no merit” or “no chance of success”: see paragraphs 40 to 44 inclusive. According to the Combined Air case, however, the rule now encompasses a third class of cases where “the interests of justice” require the case to be dealt with by way of motion rather than through a trial. It is to be noted that the latter two classes of cases are not mutually exclusive; there are overlaps from case to case: see paragraph 75 of the report.
[25] In determining whether summary judgment is appropriate, I am directed by Combined Air to apply the “full appreciation test”, viz., “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?” (paragraph 50). In other words, can I fully appreciate the evidence based upon the written record before me, or does the fair disposition of the present issue require a trial?
[26] A word on the evidence proffered by Mr. Priest. There were numerous allegations made in his factum, many of which were not supported by the evidence filed. For example, there were allegations made in the factum regarding the notices given by the Plaintiffs to Mr. Priest and the inconsistent amounts stated by the Plaintiffs as owing. These notices were not attached as exhibits to any of Mr. Priest’s affidavits and neither were the details as to service of these documents recited in any of the affidavits. In paragraph 34 of the factum, Mr. Priest’s counsel asserts that a majority of the assets were sold on April 8 and recites that this was set out in Mr. Priest’s affidavit sworn June 23, 2013; in fact, the only assets stated to have been sold in that affidavit were the truck and the trailer which are not in issue in these proceedings.
[27] The failure to provide this evidence is important as the Combined Air case has not changed the duty of the Defendant in a motion for summary judgment to put his or her “best foot forward” in response to a motion for summary judgment. That requirement was originally set out in Rogers Cable TV Ltd. v. 373041 Ontario Ltd. (1994), 1994 7367 (ON SC), 22 O.R. (3d) 25 (C.A.) at p. 28 and was re-confirmed in Combined Air at paragraph 57. One important qualification in the present case is whether the ability of the Defendant to put his best foot forward was impaired by the inadequate cross-examination afforded Defendant’s counsel on June 20, 2013; as noted above, because of interference by counsel and the objections made, Mr. Teplitsky was not provided any sort of reasonable opportunity to examine Mr. Donkers at all. Accordingly, in reviewing the evidence, I must determine whether the Defendant’s inability to properly examine Mr. Donkers has prevented the Defendant from fulfilling his duty in providing all of the evidence necessary to properly reply to the motion.
[28] There are specific defences raised by Mr. Priest’s counsel. Mr. Teplitsky states that summary judgment should not be granted because there are the following issues for trial:
a. Was there a default under the note considering the correspondence between the parties?
b. Was the seizure of assets lawful and if not, does this constitute a defence under the note or make the note void?
c. The Plaintiffs have failed to provide an accounting of the sale of the assets or proper notices regarding default and sale of the assets, which makes it impossible to determine the amount due and owing under the note.
[29] I will consider each of these issues in turn.
(a) Was there a default under the note considering the correspondence between the parties?
[30] The crux of this argument surrounds the statement made by Marty Donkers on behalf of the Plaintiffs when default occurred under the note. On November 18, 2012, Mr. Priest sent a note to 1191305 Ontario Inc. (“1191305”) which said that the Defendant was “in the final stages of obtaining funding to pay the last 7 payments to 1191305 Ontario Inc.” It is acknowledged that the monthly cheque under the note was not enclosed with that correspondence on that date, which put the note into default. The ultimate response of Marty Donkers to Mr. Priest’s note was that “putting together financing to pay the balance is up to you.”
[31] Mr. Teplitsky argues that the statement by Marty Donkers constituted an agreement “that the remaining seven payments would be paid in a lump sum after the debtor obtained refinancing.”[^3] He notes that the majority of the note had already been paid by the Defendant and that it is inequitable to take action on the note under those circumstances. The argument of Mr. Teplitsky is, in effect, that the Plaintiffs waived the requirements of monthly payments to be made under the note and that the statement made by Marty Donkers was an agreement that the Defendants would have time to refinance the remaining seven payments under the note.
[32] Although not specifically argued, it is trite that a waiver of a contractual right must be clear and unequivocal; it must be a specific waiver of a party’s legal rights under a document and a general or imprecise statement will not do. As such, I do not find the statement made by Mr. Donkers to be a waiver of the Plaintiff’s rights under the note. All that the statement can be taken to say to Mr. Priest is, in effect, to “do what you have to do.” It does not constitute a forbearance to sue; it also is not a specific waiver of 1191305’s rights under the promissory note. At best it is an indication that if 1737161 wished to refinance the loan and pay out the remaining balance due and owing, it was free to do so; there is, however, no agreement, implied or express, that 1191305 was not going to bring action on the note or the collateral security thereunder. That waiver would have to be specifically set out to have legal effect and it was not.
[33] Furthermore, if there was an agreement, where is the consideration for that agreement not to sue? Without consideration, an agreement is unenforceable in equity and the Defendant has failed to show that, if there was an agreement, there was any consideration for the alleged agreement that 1191305 would forbear in suing 1737161 or Mr. Priest under the note.
[34] Moreover, the Defendant has not provided sufficient evidence of any agreement not to bring action under the note or to effect a seizure of the security under the General Security Agreement. As noted by counsel, and as pointed out by McKinnon J., no documentation was produced to indicate that there were attempts by the Defendant to refinance the promissory note. There was no evidence of further e-mails from Mr. Priest to Marty Donkers to confirm when and how the loan would be paid out. The affidavit of Mr. Priest sworn April 12, 2013 states that the Defendant has the funds to pay out the final payments owing under the note; if this is true, there is no explanation of why, to date, no payments whatsoever have been made under the loan. Evidence to corroborate the Defendant’s position that there was an agreement not to sue, and that the Defendant was ready to pay out the obligation is that of Mr. Priest’s to produce; indeed, it could come from nowhere else. Unfortunately, the evidence provided by the Defendant is totally lacking in this regard.
[35] In short, the Defendant has not provided any evidence of any agreement not to sue other than the single phrase in Marty Donker’s e-mail of November 20, 2012, and this alone does not constitute an agreement not to sue or to waive any rights that 1191305 has or had under the promissory note or collateral security. That correspondence lacks the required specificity at law to constitute such a waiver, and there was otherwise no consideration proven for such an agreement. The Defendant’s argument on this ground fails.
(b) Was the seizure of assets lawful and if not, does this constitute a defence under the note or make the note void?
[36] Under this heading, the Defendant argues that the notices required under paragraph 3.03 of the Asset Purchase Agreement were not given prior to seizure of the assets. He also states in his factum that no notice of the sale of assets was given under the Personal Property Security Act and as such, any sale of the goods was illegal. As such, he states that the negligent or improper dealing with the assets secured by the General Security Agreement voids the note or, at least, constitutes a triable issue.
[37] The difficulty with this contention is the evidence, or the lack thereof, provided by the Defendant regarding the seizure of assets under the General Security Agreement. Firstly, most of the contentions regarding the notices regarding the seizure of the goods are bare allegations made in the Defendant’s factum; they are not supported by any of the affidavits filed in the Defendant’s Responding Motion Record or Supplementary Responding Record. There are no copies provided by the Defendant of any of the notices which were given regarding the seizure of the assets which are presently being dealt with in the injunction application. And even were the factum to be considered to be evidence (which of course it is not), it is also inconsistent; at one point in the Defendant’s Responding Factum, the Defendant speaks to inconsistent Notices being given by the Plaintiffs to the Defendant but at another point the Defendant states that no notices whatsoever were given.[^4] And regardless of this inconsistency, again no affidavit evidence of any of these actual deficiencies in the seizure and/or sale of the assets were filed or provided by the Defendant.
[38] Did the failure by the Plaintiffs to provide a meaningful cross-examination of Marty Donkers affect the Defendant’s ability to put its “best foot forward” in defending this motion for summary judgment? I do not think so. If the assertions in the Defendant’s Factum are correct, then the Defendant had it in its power to provide affidavit evidence of the inconsistent notices or improper sale of assets as set out in the Factum. This was not done; as noted, none of the affidavits contained the evidence of improper seizure and sale of the secured assets. Mr. Teplitsky did not point me to any portion of the transcripts filed which would support the contention of improper seizure and sale as alleged in the Defendant’s Responding Factum.
[39] Finally, I note that the primary obligation in this matter is the promissory note. The General Security Agreement is the collateral to the note. Improper dealing with collateral may have afforded a defence to a guarantor of the obligation, but in the promissory note, Mr. Priest’s obligation is set out as a primary obligation rather than as being one of a guarantor. It is problematic as to whether the dealings with the collateral can affect liability under the primary obligation in any event.
[40] It is not in the interests of justice that there be a trial in this litigation as to whether the collateral was properly dealt with, and the Defendant has failed to provide evidence of improper dealing with the collateral sufficient to make out a defence. Accordingly, this defence under the note also fails.
(c) The Plaintiffs have failed to provide an accounting of the sale of the assets or proper notices regarding default and sale of the assets, which makes it impossible to determine the amount due and owing under the note.
[41] As noted by counsel, apart from the other aspects being litigated between the parties, we know the amount owing under the note, which is acknowledged to be the amount claimed under the Statement of Claim plus the applicable per diem to the date of payment. No issue was taken by Mr. Priest to this amount.
[42] There are, however, substantial claims by both parties arising out of the seizure and sale of assets noted above. They are not being considered in the present litigation but I presume that they are in the injunction application. When I asked Mr. McKenzie as to how to account for the assets sold through auction, he said that I needn’t concern myself with that; this was similar to where a bank sells a home under power of sale proceedings, but may claim and obtain judgment as to the full amount owing, while under an obligation to account for the sale of the security sold under power of sale.
[43] This would seem to be an accurate analogy, except for the fact that there is a difference where the Plaintiffs and 1737161 are engaged in bitter litigation, the outcome of which will result in a net amount owing, if any, under the promissory note. Apparently there are claims for storage and bailiff’s charges being made by the Plaintiffs in that litigation, which cannot be claimed under the note, but which may affect the net amount recovered for the sale of the machinery. As well, I presume that 1737161 will make claims for damages for improper seizure and sale of the assets. All of these will affect the ultimate amount owing under the promissory note, and as such, the quantum owing is presently uncertain.
[44] Compounding this concern is the inadequate cross examination of Marty Donkers afforded to Mr. Teplitsky by Mr. McKenzie. Plaintiff’s counsel refused to allow answers to be given regarding whether any of the assets had been sold; those questions, if answered, would go to the issue of whether there is to be any funds to be credited to the amount which may have been owing by Mr. Priest under the note. When Mr. Teplitsky asked whether there was any credit to be given for the sale of assets under the General Security Agreement, Mr. McKenzie refused to allow his client to answer and gave a lengthy statement about how “there is not one penny has ever been paid or credited on the promissory note.”[^5] Mr. Teplitsky was not given any opportunity to examine Mr. Donkers on what had been sold, what had been received and as to what the Plaintiffs’ costs were with regard to the seizure. After refusing to allow his client to answer any questions whatsoever or after answering questions on his client’s behalf, Mr. McKenzie then indulged in questioning his own client in reply about issues that he objected to when raised by Mr. Teplitsky; that appears to be the only point in the cross-examination where Marty Donkers answered any questions whatsoever.
[45] Had Mr. Teplitsky been afforded a fulsome cross-examination as to those issues, my determination may have been different, but he was not, and in my view the amount owing by Mr. Priest under the promissory note remains uncertain, and will remain uncertain until the injunction application is resolved. Under the circumstances, it is therefore my view that the amount owing under the promissory note, taking into account the seizure and the sale of the goods, remains uncertain, and will remain so until the injunction application is fully resolved. Rule 20.04(3) allows for a trial where the only issue is the actual amount owing under the obligation. I am going to order that the trial of that issue take place along with or immediately after the trial of the injunction application.
Order
[46] There will therefore be an order to go as follows:
a. The Plaintiffs will have judgment against the Defendant on the promissory note, and the Statement of Defence is struck.
b. There shall be a trial of the issue of the net amount outstanding and owing under the note, to be tried with or immediately after the resolution of the injunction application.
[47] The parties may make written submissions with regard to costs, by the Plaintiffs and then the Defendant on a ten day turnaround. Costs submissions to be no more than three pages in length, not including costs memoranda or offers to settle on the motion.
McDERMOT J.
Date: August 21, 2013
[^1]: R.S.O. 1990, c. P.10
[^2]: R.R.O. 1990, Reg. 194
[^3]: Statement of Defence dated June 19, 2013, paragraph 3
[^4]: See paragraphs 30 and 32 of the Defendant’s Responding Factum, which speaks of two different notices having been given by the Plaintiffs dated January 3 and April 2, 2013; at paragraph 51, the Defendant’s counsel asserts that “The Plaintiffs did not give any notice of default or right to cure any default contrary to the provisions of the Purchase Agreement and the PPSA.”
[^5]: Cross-examination of Martin Donkers dated June 20, 2013 at p. 14, line 22.