Entry Point Investments v. Invis Inc., 2015 ONSC 2009
CITATION: Entry Point Investments v. Invis Inc., 2015 ONSC 2009
COURT FILE NO.: CV-14-509585
DATE: 20150330
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ANTHONY GYIMAH trading as ENTRY POINT INVESTMENTS
Plaintiff
– and –
INVIS INC., RICKY SINGH, POORNA JAYASENA, KVIWINDER SOHI, JASVINDER SOHI, NAOMI EDWARDS, RANJIT DULLAY, DOMENIC REDA
Defendants
Anthony Gyimah, self-represented
Ilan Ishai for the Defendants, Invis Inc., Ricky Singh and Domenic Reda
HEARD: March 16, 2015
REASONS FOR DECISION
[1] The Plaintiff Anthony Gyimah brings a motion for summary judgment for approximately $101,000. He sues for $31,500 plus $75 per day from August 28, 2012, which equals approximately $70,500. Mr. Gyimah’s motion is brought against the Defendants Ricky Singh, Domenic Reda, and Invis Inc., who bring a cross-motion for a summary judgment dismissing the action against them.
[2] For the reasons that follow, I dismiss Mr. Gyimah’s motion, and I grant the cross-motion. I dismiss the action against Invis Inc. and Messrs. Singh and Reda.
[3] Mr. Gyimah’s action concerns a largely undocumented loan that he says he made to facilitate a real estate transaction between the Defendants Naomi Edwards and Ranjit Dullay as purchasers and the Defendants Kviwinder and Jasvinder Sohi as vendors. The Defendant Poorna Jayasena acted for the purchasers in that transaction. Mr. Gyimah contends that all of Ms. Edwards, Mr. Dullay, the Sohis, Mr. Singh, Mr. Reda, and Invis Inc. are liable for the payment of what is now about $101,000.
[4] I foreshadow to say at the outset that Mr. Gyimah’s action against Invis Inc. and Messrs. Singh and Reda fails because I can determine on these summary judgment motions that he has not proven on the balance of probabilities the claim that he pleaded against these defendants in his Statement of Claim.
[5] Mr. Gyimah’s Statement of Claim is set out below verbatim. The crucial allegations upon which the whole action depends are the allegations in paragraphs 13 and 14 that all the defendants entered into an oral loan agreement and an oral guarantee agreement.
- The plaintiff claims:
(a) payment by the defendants of the sum of $84,000.00, now due under the loan.
(b) Prejudgement and post-judgment interest on this amount in accordance with the Courts of Justice Act, R.S.O. 1990, c. C.43.
(c) Costs.
(d) Punitive and exemplary damages in the sum of $100,000.00.
(e) Such further and other belief as the honorable court deemed just.
The plaintiff resides in the Greater Metropolitan area of Toronto in the province of Ontario and trades under the name of Entry Point Financial Group also known also referred to as Entry Point Investments.
The defendant Invis Inc. is a mortgage brokerage licence number 18001 and is a corporation established for the purpose of providing financial mortgage services. The registered office of the corporation is in the city of Mississauga in the province of Ontario.
The defendant Domenic Reda is a mortgage agent, licence number M08003877, and part owner of Invis Inc. Brokerage, office located at the city of Mississauga, in the province of Ontario.
The defendant Ricky Singh is a mortgage agent licence number M08004212 and an employee of Invis Inc. Brokerage office located in the city of Mississauga in the province of Ontario.
The defendant Poorna Jayasena is a lawyer in Ontario and has an office located in the city of Brampton in the province of Ontario.
The defendants Naomi Edwards and Ranjit Dullay are residents Brampton of Ontario.
The defendants Naomi Edwards and Ranjit Dullay were purchasers of the property at 17 Sailwind Road Brampton, Ontario. The defendants Kulwinder Sohi and Jasvander Sohi reside in the city of Brampton and the province of Ontario and were the sellers of the said property.
On or about 16 August 2012 the defendant Domenic Reda contacted the plaintiff Anthony Gyimah and requested a loan of $30,000 to be used for down payment and closing fees on the purchase of a property located at 17 Sailwind Road Brampton, Ontario L6R 2G3, Lot 64, Plan 43M-1388.
Initially the plaintiff turned down the request but Domenic Reda continued calling the plaintiff and also introduced Ricky Singh his co-worker. The defendants Domenic Reda and Ricky Singh eventually convinced the plaintiff to loan the money for the closing of the property.
Initially the plaintiff requested a fee of $5,000 as his transaction fees for making the loan. This fee included the cost of preparing the necessary legal documents to protect the funds. The plaintiff also requested that the repayment of the funds be guaranteed by all parties involved, including the sellers.
The defendant mortgage brokers through their agents Domenic Reda and Ricky Singh offered to prepare all the legal documents and offered the plaintiff $1,500 as lender transaction fees.
The plaintiff and the defendants finally entered into an oral agreement whereby the plaintiff will loan the sum of $30,000 to the defendants and would be paid the sum of $1,500 as lender transaction fees. The parties further agreed that the money loaned together with the transaction fees would be repaid by the end of the second day after the closing of the property and that in the event of default the defendants would pay to the plaintiff the sum of $75.00 per day as liquidated damages until the full sum is repaid.
The parties further agreed that all the defendants would guarantee the repayment of the loan and that the defendants would pay all of the expenses incurred by the plaintiff in enforcing repayment of the outstanding sum.
The defendants agreed that the plaintiff would be provided with instructions regarding how and when to advance the funds.
After the oral agreement was made the defendants Jasvinder Sohi and Kulwinder Sohi issued a Letter of Direction to the law firm of Inderbir Singh Arora instructing them to pay the plaintiff the sum of $31,500 immediately after the closing of the property. The defendants Ranjit Dullay and Naomi Edwards also issued a Letter of Direction to their solicitor Poorna Jayasena directing her to pay the sum of $31,500.00 to the plaintiff immediately upon closing.
On August 28, 2014 [sic, 2014] the defendant Dominic Reda provided the plaintiff with Account Number 1185-6574880 and instructed the plaintiff to deposit the $30,000 into that account. Domenic Reda led the plaintiff to believe that the account belonged to the lawyer who will close the mortgage transaction. The plaintiff subsequently found out that the account did not belong to the lawyer but to the defendants Ranjit Dullay and Naomi Edwards.
In accordance with the oral agreement the plaintiff made the said deposit under the direction of the defendant Dominic Reda.
The house was subsequently closed and the plaintiff has since requested repayment of the sum loaned to the defendants together with the lender fees. The defendants have failed to repay the outstanding sum to the plaintiff.
It subsequently came to the attention of the plaintiff that the defendants Ranjit Dullay, Niaomi Edwards were related to the defendants Jasvinder Singh Sohi and Kulwinder Sohi who were the sellers of the property.
The plaintiff first contacted the defendant Dominic Reda and requested the outstanding amount but Dominic Reda stated that the defendant lawyer Poorna Jayasena had the funds.
The plaintiff subsequently met with Ricky Singh in his office and demanded the legal documents which he had taken responsibility to prepare to protect the plaintiff’s funds. Ricky Singh refused to turn over those documents.
The plaintiff then contacted the lawyer Poorna Jayasena and requested payment of the sum owed to him. Poorna Jayasena has refused to pay the plaintiff the outstanding sum owed to him and stated that he would only release those funds if a Court grants an order to release the funds.
The defendants have breached the agreement made with the plaintiff and have defaulted in paying the sum of $31,500. The plaintiff is therefore entitled to claim the outstanding sum plus liquidated damages as agreed upon by the plaintiff and the defendants.
The plaintiff therefore claims:
(a) the principal sum of $31,500.00
(b) liquidated damages of $75.00 per day starting September 1, 2012 until August 1, 2014 and continuing. (700 days x $75.00) which is a total of $52,500.00
(c) the total amount now due of $84,000.00.
[6] As I will explain below, it does not require a trial to determine that Mr. Gyimah has not proven the oral loan agreement or the oral guarantee on the balance of probabilities. I add that an oral guarantee is, in any event, unenforceable pursuant to s. 4 of the Statute of Frauds, R.S.O. 1990, c. S.19.
[7] Further, the loan agreement as against Ms. Edwards, Mr. Dullay and or the Sohis would appear to be an illegal contract for charging a criminal rate of interest contrary to s. 347 of the Criminal Code.
[8] The motions before the court are motions for a summary judgment. Rule 20.04(2)(a) of the Rules of Civil Procedure provides that the Court shall grant summary judgment if: “the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.”
[9] With amendments to Rule 20 introduced in 2010, the powers of the Court to grant summary judgment have been enhanced. Rule 20.04(2.1) states:
20.04 (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.
[10] Rule 20.04(2.2) states:
Oral Evidence (Mini-Trial)
(2.2) A judge may, for the purposes of exercising any of the powers set out in subrule (2.1), order that oral evidence be presented by one or more parties, with or without time limits on its presentation.
[11] In Hryniak v. Mauldin, 2014 SCC No. 7, the Supreme Court of Canada held that on a motion for summary judgment, the Court should first determine if there is a genuine issue requiring trial based only on the evidence in the motion record, without using the fact-finding powers enacted when Rule 20 was amended in 2010. The analysis of whether there is a genuine issue requiring a trial should be done by reviewing the factual record and granting a summary judgment if there is sufficient evidence to fairly and justly adjudicate the dispute and a summary judgment would be a timely, affordable and proportionate procedure.
[12] In the case at bar, based only on the evidence in the motion record and without using the fact-finding powers under rule 20.04(2.1), there are genuine issues for trial about which version of the largely undocumented events was the true version. Mr. Gyimah has one version of the events, and while there are several factual matters about which there is no contest or no dispute between the parties, Messrs. Singh and Reda have a different account on the material point of whether they were borrowers or guarantors.
[13] Under the approach to summary judgment mandated by Hryniak v. Mauldin, if there are genuine issues requiring a trial, then the Court should determine if the need for a trial can be avoided by using the powers under rules 20.04(2.1) and (2.2). As a matter of discretion, the motions judge may use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice, if their use will lead to a fair and just result and will serve the goals of timeliness, affordability, and proportionality in light of the litigation as a whole.
[14] In the case at bar, in my opinion, the need for a trial can be avoided by using the powers under rules 20.04(2.1) and (2.2) to resolve the genuine issues.
[15] Using the powers provided by rules 20.04(2.1) and (2.2), I conclude that while there are some discrepancies and anomalies in the evidence of Messrs. Singh and Reda, I much prefer their version to Mr. Gyimah’s version of the events.
[16] I have no reason to doubt Mr. Gyimah’s sincerity, and I do not doubt that he genuinely believes his version of the events, but on the material points of controversy, his version is not plausible. Where Mr. Gyimah’s version differs from that of Messrs. Singh and Reda, Mr. Gyimah’s version does not accord with the limited documentary evidence.
[17] Mr. Gyimah is a self-represented party. I have reviewed his cross-examination of Messrs. Singh and Reda. It is apparent that Mr. Gyimah was offended by Messrs. Singh and Redas’ Statement of Defence, which is not a sworn document. When they departed from their pleading and filed affidavits for the summary judgment motion, Mr. Gyimah took Messrs. Singh and Reda to have admitted to being liars and fraudsters. However, it does not automatically or necessarily follow that because a party testifying under oath departs from his or her pleadings that the witness is proven to be a liar. As I shall shortly explain, Messrs. Singh and Redas’ version of the events is far more plausible than Mr. Gyimah’s account of the events.
[18] Mr. Gyimah may be able to show on his summary judgment motion that Messrs. Singh and Reda are not credible witnesses about several matters, but on the material issues of whether there was an oral loan agreement and an oral guarantee agreement between Mr. Gyimah as lender and Invis Inc. and Messrs. Singh and Reda as borrowers and guarantors, Mr. Gyimah has not proven either agreement.
[19] On the run up to the summary judgment motion and on the summary judgment motion, much of Mr. Gyimah’s argument focused on his reliance on the defendants in the lending business and how they abused his reliance by various alleged misrepresentations. Mr. Gyimah, however, pleaded only a breach of contract claim and his allegations of misrepresentations are only relevant insofar as they discredit Invis Inc. and Messrs. Singh and Redas’ evidence that they never entered into a contractual relationship with Mr. Gyimah. Although I have some doubts about whether there was any reasonable reliance and about whether there were any misrepresentations as alleged, there is, in any event, no pleaded tort.
[20] I have reviewed the affidavits and read the transcripts of the cross-examinations and using the powers provided by rules 20.04(2.1) and (2.2), I find as a fact that there was no proven contractual relationship between Mr. Gyimah and Invis Inc. and Messrs. Singh and Reda.
[21] To be more precise, exercising the powers provided by rules 20.04(2.1) and (2.2), I find the following facts.
[22] Mr. Singh is a mortgage broker with Invis Inc., a mortgage brokerage. In the summer of 2012, he met Kviwinder and Jasvinder Sohi, who owned a residential property at 117 Sailwind Road in Brampton, which they were leasing to Ranjit Dullay and Naomi Edwards. Mr. Dullay is a relative of Mrs. Sohi.
[23] After listing their property for sale, the Sohis agreed to sell 117 Sailwind to Mr. Dullay and Ms. Edwards.
[24] After the signing of the agreement of sale, Mr. Singh arranged a first mortgage loan from MCAP for Ms. Edwards and Mr. Dullay. The mortgage commitment letter was dated July 16, 2012.
[25] In mid-August, Mr. Dullay and Ms. Edwards advised Mr. Singh that they needed additional and temporary bridge financing to close the purchase transaction. Mr. Singh agreed to make inquiries on behalf of Mr. Dullay and Ms. Edwards about finding this additional financing, and in the course of doing so, Mr. Singh spoke to his associate Mr. Reda, another agent at Invis Inc.
[26] What followed was that Mr. Reda made an initial contact with Mr. Gyimah, who is a small loan lender. Then, there was a three-way phone call between Mr. Gyimah and Messrs. Singh and Reda. None of these gentlemen had done business together before, but Mr. Reda knew Mr. Gyimah was in the business of short-term small loans.
[27] I find that as a result of the conversations between Mr. Gyimah with Messrs. Singh and Reda that Mr. Gyimah agreed to lend $30,000 to Mr. Dullay and Ms. Edwards on the understanding that he would charge $1,500 for making the loan and that Messrs. Singh and Reda would prepare or arrange for the paperwork for the transaction.
[28] There is a great deal of controversy about what was envisioned or agreed about the preparation of the paperwork to document the loan. I find that all that Mr. Gyimah required to document the loan was directions from the vendor and the purchaser about the allocation of $31,500 from the proceeds of the purchase price being paid by Mr. Dullay and Ms. Edwards, as purchasers, to the Sohis, as vendors. Mr. Gyimah believed that this was a virtually risk-free way to make a loan.
[29] In other words, Mr. Gyimah planned to lend $30,000 to Mr. Dullay and Ms. Edwards who would use the $30,000 and the mortgage proceeds from MCAP to pay the Sohis who would direct $31,500 from the sale proceeds to Mr. Gyimah. Mr. Gyimah understood that the Sohis were prepared to direct the closing funds in exchange for a second mortgage from Mr. Dullay and Ms. Edwards. It was envisioned that the loan would be made and then repaid along with the service charge within about three days. In my opinion, these arrangements are very suspicious, but the plan appears to have been designed more to deceive the first mortgage lender than Mr. Gyimah, who was prepared to have the transaction proceed in this fashion.
[30] Mr. Gyimah was cross-examined for the summary judgment motion and he gave the following evidence about why he believed this was a risk-free loan:
Q.68 There isn’t always some element of risk in a loan?
A. …. In this particular case with this loan, there is no risk. The risk is zero.
Q.69. The risk is zero in this case?
A. Yeah, from this case. This case, the risk was completely zero.
Q.70. That’s an odd thing to say given the fact that you haven’t received payment on the loan.
A. Well that’s why I know that your client was deceitful and why did I say the risk is zero. The property is sold according to them. The property have equity. The seller have provide them direction to be paid through their lawyer. The lawyer of the seller also have provide – they have provide the seller and the buyer lawyer, also that the loan will be provide. These are professionals. The lawyers are professionals. If they get these – that direction – they have to comply. It’s the law. They have to comply. So there is no risk and if the deal cannot go through, there is no risk.
[31] The point here is that Mr. Gyimah was relying on directions binding the purchasers’ lawyer to pay him $31,500 for a three-day loan. Only after the risk-free loan turned out to be a financial misadventure did Mr. Gyimah come to believe that Messrs. Singh and Reda were borrowers or guarantors. However, as a factual matter, they never agreed to be borrowers or guarantors. As a legal matter, any guarantee would be unenforceable because of s. 4 of the Statute of Frauds, which states:
Writing required for certain contracts
- No action shall be brought … to charge any person upon any special promise to answer for the debt, default or miscarriage of any other person … , unless the agreement upon which the action is brought, or some memorandum or note thereof is in writing and signed by the party to be charged therewith or some person thereunto lawfully authorized by the party.
[32] I pause here to say that Mr. Gyimah’s loan to the genuine borrowers has a serious taint. Section 347 of the Criminal Code makes it a criminal offence to enter into an agreement to receive interest at a criminal rate, and, in the case at bar, Mr. Gyimah agreed to lend $30,000 in return for a service charge of $1,500. Repayable annually, that is an interest rate of 5%. However, with the loan and the service charge repayable in three days, the effective interest rate is well beyond the 60% per annum, a criminal rate.
[33] Mr. Gyimah may not be aware that depending upon the length of the time for repayment, the rate of the loan may be criminal. Visualize: if $110 is repaid for a $100 loan, the interest rate (cost of the loan) is: (a) 10% per annum, if the money is repaid in 12 months; (b) 20% per annum, if the $110 is paid in six months; and (c) 120% per annum if the $110 is paid in 1 month (i.e. a criminal rate of interest).
[34] Returning to the narrative, the directions were prepared. All of Messrs. Gyimah, Singh, and Reda deny preparing the direction. I am unable to determine from the evidence who prepared the directions, but nothing ultimately turns on this matter. What is important and what is proven is that the directions were prepared, and Messrs. Singh and Reda arranged to have them signed on August 24, 2012.
[35] I accept Mr. Gyimah’s evidence that he received the directions on August 27 or 28, 2012. At this time, Mr. Gyimah anticipated that the funds were urgently needed, because of an imminent closing of the transaction. He testified that he thought that “we’re running out of time.”
[36] Mr. Gyimah was apparently satisfied with the directions, because on August 28, 2012, he withdrew $30,000 from his own bank account and he deposited the money into Mr. Dullay’s bank account with information provided by Mr. Reda.
[37] Mr. Gyimah then waited for the transaction to close in anticipation that the directions would work their magic, and he would promptly be repaid. He waited until September or October 2012, and when the repayment was not received, he began communicating and making demands on Ms. Jayasena, whom he anticipated would have closed the transaction for the purchasers and applied the closing funds in accordance with the directions received from the vendors and from her clients, the purchasers.
[38] Mr. Gyimah learned that the transaction had not closed.
[39] Ms. Jayasena had been put into $20,000 of funds to close the transaction in early September (Mr. Gyimah’s loan monies), but she had never received the directions allocating the purchase monies.
[40] Ms. Jayasena declined to release the monies to Mr. Gyimah, and he subsequently sued her along with everybody else who had been involved in this sorry affair.
[41] After the action was commenced, Ms. Jayasena paid the $20,000 into court and was let out of the action. Before the action was discontinued against her, she delivered an affidavit to reply to Mr. Gyimah’s summary judgment motion. Mr. Gyimah relies on Ms. Jayasena’s evidence.
[42] For the purposes of this summary judgment motion, it is not necessary to recount any more about the events, because the crucial and determinative matter is whether Mr. Gyimah has proven on a balance of probabilities the allegations in paragraphs 13 and 14 in his Statement of Claim.
[43] In my opinion, Mr. Gyimah may have reconstructed in his own mind with hindsight a belief that Invis Inc. and Messrs. Singh and Reda were borrowers and guarantors. There is no documentation to support a contractual arrangement with these defendants. It is possible to have oral loan agreements, but pursuant to the Statute of Frauds a guarantee must be in writing to be enforceable.
[44] In any event, I am not persuaded that there was any oral agreement. It appears that there was a lending to Ms. Edwards and Mr. Dullay, but they at least had a reason to borrow. And there is also evidence that they used Mr. Gyimah’s money to pay a $10,000 deposit to the real estate agent and to put Ms. Jayasena into funds for $20,000. But Mr. Gyimah’s evidence that Invis Inc. and Messrs. Singh and Reda were also borrowers and guarantors is not plausible. It makes no sense that they would borrow money for somebody else’s benefit or agree to guarantee the repayment of somebody else’s loan. It is also implausible that Mr. Gyimah wished a guarantee for what he regarded as a risk-free loan.
[45] For the above reasons, I dismiss Mr. Gyimah’s motion, and I grant the summary judgment motion of Messrs. Singh and Reda and Invis Inc.
[46] If the parties cannot agree about the matter of costs, they may make submissions in writing beginning with the submissions of Messrs. Singh and Reda and Invis Inc. within 20 days of the release of these Reasons for Decision followed by Mr. Gyimah’s submissions within a further 20 days.
Perell, J.
Released: March 30, 2015
CITATION: Entry Point Investments v. Invis Inc., 2015 ONSC 2009
COURT FILE NO.: CV-14-509585
DATE: 20150330
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ANTHONY GYIMAH trading as ENTRY POINT INVESTMENTS
Plaintiff
– and –
INVIS INC., RICKY SINGH, POORNA JAYASENA, KVIWINDER SOHI, JASVINDER SOHI, NAOMI EDWARDS, RANJIT DULLAY, DOMENIC REDA
Defendants
REASONS FOR DECISION
PERELL J.
Released: March 30, 2015