NEWMARKET

COURT FILE NO.: CV-13-115484-00

DATE: 20140717

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Gholamreza Tabrizi Bakverdi

Plaintiff/Defendant by Counterclaim

– and –

2221465 Ontario Inc.

Defendant/Plaintiff by Counterclaim

J. Markin, for the Plaintiff/Defendant by Counterclaim

A. Herman, for the Defendant/Plaintiff by Counterclaim

HEARD: June 19, 2014

RULING

McISAAC J.

[1] The plaintiff/defendant by counterclaim brings this motion for summary judgment for dismissal of the counterclaim herein. Both sides of the litigation relate to the enforceability of a commercial lease for premises in Mississauga.

BACKGROUND

[2] Mr. Bakverdi purportedly leased the premises from Caledonia Service Station Inc. on June 20, 2011 for a term of five years. He dealt with the company owner, Frank Galluci, who signed on its behalf. To be charitable, this document is not a model of legal drafting; to be uncharitable, it is more likely a juridical morass. The defendant purchased the premises from Caledonia on June 30, 2012. The plaintiff suggests that the purchase price was reduced from $1,850,000 to $1,500,000 when the 2011 lease was “discovered” by the defendant.

THE PLEADINGS

[3] Certain unhappy differences arose between the parties and the plaintiff issued a Statement of Claim in July, 2013 to enforce the terms of the “lease”. In August, 2013, the defendant filed a Defence and Counterclaim alleging that it was not in breach of the “lease” seeking rectification of it and, in the alternative, seeking a declaration that the “lease” was null and void among other heads of relief. In his Defence to Counterclaim, the plaintiff maintained the validity of the lease and his reliance upon its terms. However, he also took the position that the Counterclaim was barred by the two-year limitation period, that is, that any rights accrued thereunder had been exhausted two months prior to its issuance.

LEGAL PRINCIPLES

[4] The Supreme Court of Canada has recently made the mechanism of summary judgment, arguably, more robust: see Hryniak v. Mauldin, 2014 SCC 7, 2014 S.C.C. 7. In the companion case of Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, 2014 S.C.C. 8, at para. 22, Karakatsanis J. for the court indicated that summary judgment would be appropriate when the process:

(1) allows the judge to make the necessary findings of fact;

(2) allows the judge to apply the law to the facts; and

(3) is a proportionate, more expeditious and less expensive means to achieve a just result.

[5] In my view, these conditions are correlated and, to a certain extent, cumulative.

[6] These cases have been recently interpreted and applied by the Court of Appeal for Ontario: see Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450. In particular, Lauwers, J.A. found that the motions judge had fallen into material error in failing to assess the advisability of a staged summary judgment process in the context of a claim based on two promissory notes which was dismissed and a counterclaim based on a related release which was allowed. In particular, he observed:

[37] In the complex situation in this case, it is therefore entirely possible that the trial judge who hears the trial of the issue on the validity of the promissory notes will develop a fuller appreciation of the relationships and the transactional context than the motions judge that could force a trial decision on the promissory notes that would be implicitly inconsistent with the motions judge’s finding that the third Release is fully valid and effective, even though the parties would be bound by that finding. The process, in this context, risks inconsistent findings and substantive injustice.

[38] In light of the factual connection between the promissory notes and third Release, and Ralph’s testimony, it was an error in principle for the motions judge to refer the enforceability of the promissory notes to trial while summarily determining the enforceability of the third Release.

ANALYSIS

[7] Applying these considerations to the instant case, the case against bifurcation is even stronger because the litigation focuses on only one document, the “lease” executed on June 20, 2011. Theoretically, on the present record, I could find that the limitations defence could apply to the counterclaim.

[8] However, on a more fulsome record developed for trial, the presiding judge could be impressed with a claim for avoidance of the limitations defence based on principles of discoverability. Although the trial judge may be bound by my determination on the summary judgment motion, there may arise a significant concern about whether substantive injustice may have resulted to the defendant.

[9] Granting partial summary judgment herein will not resolve the “litigation as a whole” as the claim will proceed to trial in any event. I do not see any significant reduction in trial time if this motion succeeded. I am simply not satisfied that the sought remedy would be “the most proportionate, timely and cost effective approach”: see Hryniak v. Mauldin, supra, at para. 34.

CONCLUSION

[10] For all of these reasons, the motion is dismissed. I have considered the admonition of Karakatnis, J. that, in light of a failed summary judgment motion, I should impose certain trial management orders under r.20.05. However, I am satisfied there are compelling reasons not to do so. First, counsel made no submissions to this effect at the hearing. More importantly, the defendant proposes to file a significantly amended Statement of Defence and Counterclaim in these proceedings. For the same reasons, I am not prepared to seize myself as the trial judge herein.

COSTS

[11] The defendant may file brief written submissions as to costs within 15 day s of the release of these reasons and the plaintiff, 15 days thereafter. I remind counsel that in Baywood Homes Partnership v. Haditaghi, supra, the Court of Appeal referred the costs of the original motion to the trial judge: see para. 46.

McISAAC J.

Released: July 17, 2014