2257573 Ontario Inc. v. Sanmugalingam, 2015 ONSC 333
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: 2257573 Ontario Inc., Plaintiff
AND:
Manithan Sanmugalingam, Defendant
BEFORE: Carole J. Brown, J.
COUNSEL: Antonio Villarin, for the Plaintiff
Emmanuel Balthasar, for the Defendant
HEARD: December 17, 2014
ENDORSEMENT
1The moving party plaintiff seeks summary judgment ordering sale of the mortgaged property located at 2730 Kennedy Road, Scarborough, Ontario, with a reference, granting possession of the subject property to the plaintiff. The plaintiff further seeks an order for payment of the mortgage debt.
2The defendant maintains that there are triable issues in this case which can only be decided on a full record at trial. The defendant maintains that there are genuine issues requiring a trial as regards the amount advanced to the defendant; the reason for the mortgage; whether the plaintiff Corporation's Director had an overall interest in a series of properties he was trying to purchase; and whether the defendant is a person of disability who did not understand the nature of the transaction.
The Facts
3The defendant borrowed $80,000 from the plaintiff Corporation and gave a third mortgage on his property located at 2730 Kennedy Road which was registered as instrument AT2696724 on May 20, 2011. The registered charge incorporated the standard charge terms. It was the evidence of the defendant, contained in his affidavit in support of the summary judgment motion that the money was borrowed for the defendant's cousin, Pakerathan Muthukumawsramy.
4Pursuant to the terms of the registered mortgage, the defendant was to pay monthly interest of $1,200 from June 20, 2011 to May 20, 2012, at which time the $80,000 principal was to be repaid to the plaintiff.
5For purposes of the mortgage, the defendant signed a number of documents, including a Direction for the lawyer of the plaintiff to issue a cheque for $73,803.14 payable to his cousin, with the balance to be paid in various specified sums, as directed by the defendant to himself, to AMV Law Professional Corporation for legal fees and to register the mortgage and notice. The defendant's cousin personally guaranteed the loan, and provided 12 post-dated cheques on closing.
6Based on the plaintiff's evidence, it appears that the defendant or his cousin paid a total of $13,500 on the mortgage, including a cheque for $1,200 paid on June 20, 2011, a transfer of $4,800 on September 29, 2011, a bank draft of $2,500 paid on April 30, 2012 and a cheque for $5,000 paid on May 20, 2012.
7The principal on the mortgage was not paid back on May 20, 2012 and no interest was paid on the principal after May 20, 2012. The evidence of the plaintiff was that despite demands by the Director of the plaintiff Corporation for repayment of the outstanding principal and interest, no repayment was received.
8This action was commenced March 7, 2013 by statement of claim. The statement of defence and counterclaim dated May 16, 2013 was served and filed. In the statement of defence, the defendant admits to having signed the mortgage, but states that he was not advanced any funds. He appeared to contest the amounts paid in interest, but could only adduce evidence of payment of the amounts set forth at paragraph 6, above. He did not state in the defence that the mortgage and interest were repaid in full as required by the charge documentation.
9In his defence, he raises the issue of another mortgage, which appears to be a second or collateral mortgage for $60,000, but states that he had instructed the solicitor not to register that mortgage as the transaction did not go through as agreed.
10He counterclaims in the amount of $50,000 with respect to this other mortgage for which he alleges that the plaintiff refused to give a discharge statement, such that the defendant was unable to discharge the mortgage, resulting in his being unable to refinance his property to pay the balance on the subject mortgage, and accordingly incurred damages. While the defendant's position was that it was his intention to pay off the amount owing on the subject mortgage on sale of another property, scheduled to close January 5, 2012, the evidence indicates that this sale never closed, but rather fell through.
11As regards his allegations regarding his inability to understand the nature of the transaction, the defendant produced a Psychiatric Report from Rouge Valley Health System dated April 7, 2014, which was written for his application for long-term disability under the Canada Pension Plan. The Report described his state as a major depressive disorder. The Report does not describe him as or conclude that he is a person of disability who could not or did not understand the nature of the transaction, as he alleges.
The Issues
12The issue to be determined by this Court is whether summary judgment should issue or, alternatively, whether there is a genuine issue requiring a trial.
Rule 20 and Summary Judgment
13Rule 20 provides for summary judgment where there is no genuine issue requiring a trial with respect to a claim or defence.
14The Supreme Court of Canada, in Hyrniak v Mauldin, 2014, SCC 7 and Bruno Appliances and Furniture Inc. v Hyrniak, 2014 SCC 8, has recently reinterpreted Rule 20, taking into account the recognized need for access to justice for the majority of Canadians. The Supreme Court held that summary judgment rules must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims. It found that the Court of Appeal, in Combined Air Mechanical Services Inc. et al v. Fleisch et al, 2011 ONCA 764, placed too high a premium on the "full appreciation " of evidence that can be gained in a conventional trial, given that such a trial is not a realistic alternative for most litigants. It held that a trial is not required if a summary judgment motion can achieve a fair and just adjudication, if it provides a process that allows the judge to make the necessary findings of fact, apply the law to those facts and is a proportionate, more expeditious and less expensive means to achieve a just result than going to trial.
15On a motion for summary judgment, the judge must first determine if there is a genuine issue requiring trial based only on the evidence before the judge without using the judge's new fact-finding powers.
16There will be no genuine issue requiring a trial if the summary judgment process provides the motion judge with the evidence required to fairly and justly adjudicate the dispute on the merits within the meaning of Rule 20.04(2)(a) and is a proportionate, more expeditious and less expensive means to achieve a just result. Where a summary judgment motion allows the judge to find the necessary facts and resolve the dispute, proceedings at trial would generally not be proportionate, timely or cost-effective. However, a process that does not give the judge confidence in conclusions to be drawn can never be the proportionate way to resolve the dispute.
17Madam Justice Karakatsansis, writing for the Court, observed as follows in the companion case, Bruno Appliances, supra, at paragraph 22:
The motion judge should ask whether the matter can be resolved in a fair and just manner on a summary judgment motion. This will be the case 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 the proportionate, more expeditious and less expensive means to achieve a just result. If there appears to be a genuine issue requiring a trial, based only on the record before her, the judge should then ask if the need for a trial can be avoided by using the new powers provided under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice.
18To grant summary judgment, on a review of the record, the motions judge must be of the view that sufficient evidence has been presented on all relevant points to allow him/her to draw the inferences necessary to make dispositive findings under Rule 20.
19The Supreme Court recognized that concerns about credibility or clarification of evidence can often be addressed by calling oral evidence on the motion itself, using the powers given to the court pursuant to Rule 20.04(2.1). However, it also recognized that there may be cases where, given the nature of the issues and the evidence required, the judge cannot make the necessary findings of fact, or apply the legal principles to reach a just and fair determination.
20The enhanced fact-finding powers granted to motion judges in Rule 20.04(1.1) may be employed on a motion for summary judgment unless it is in the "interest of justice" for them to be exercised only at trial. The Supreme Court observed that inquiry into the interest of justice to be served by summary judgment must be assessed in relation to the full trial and the relative efficiencies of proceeding by way of summary judgment as opposed to trial, including the cost and speed of both procedures, the evidence available at trial versus that on the motion, as well as the opportunity to fairly evaluate such evidence.
21The parties must each "put their best foot forward". A party is not entitled to sit back and rely on the possibility that more favourable facts may develop at trial. The court is entitled to assume that all of the evidence the parties intend to rely on at trial is before the court.
Analysis
22In this case, the issue involves the third mortgage, which is the subject of this action and whether there was default on that mortgage. Further, whether the defendant was under a disability which rendered him incapable of understanding the nature of the mortgage transaction.
23As regards the mortgage and default thereon, I am satisfied, based on the evidence before the court, that the monies were advanced as directed by the defendant. There is no evidence to refute this. Further, I am satisfied that there was default on the mortgage, that the interest was not paid in full and that the principal was not repaid pursuant to the terms of the mortgage on May 20, 2012. There was no evidence adduced by the defendant to suggest otherwise.
24While the defendant maintains that payment of this mortgage was impeded by failure to provide a discharge statement, there is no evidence to support this claim, nor to support the contention that he would otherwise have been able to repay the subject mortgage. Indeed, the only evidence before the court was that an agreement of purchase and sale on another property had fallen through, that he had indicated an intention to use the proceeds of disposition from that sale to repay this third mortgage, but due to the fact that it did not close, no proceeds of disposition were available to make payment on the third mortgage. There is no evidence to suggest that the two mortgages were dependent on one another. I do not find the second mortgage issue to be relevant to the determination of whether this mortgage was in default or not.
25As regards the defendant's allegation that he was disabled and unable to understand the nature of the mortgage transaction, I am of the view that the Psychiatric Report written in support of an application for long-term disability under the Canada Pension Plan does not support the defendant's contention that he was a person under disability who was unable to understand or appreciate the mortgage transaction in which he was involved.
26Finally, as regards the defendants counterclaim, there is no evidence to support any damages as claimed.
27Based on the evidence adduced by the defendant as regards all of the issues involved, I find that he did not put his best foot forward and that he failed to adduce all of the evidence that would be adduced at trial, as required. The court is entitled to assume that all of the evidence the parties intend to rely on at trial is before the court on a summary judgment motion. On this motion, the defendant did not provide evidence to support his contentions.
28Based on all of the evidence before me presented by the parties, I am satisfied that I am able to find the necessary facts, draw inferences and resolve the issues in dispute necessary to make dispositive findings. I do not find it necessary to resort to use of the powers granted to the court pursuant to Rule 20.04(2.1) to do so. Based on all of the foregoing, there is no genuine issue requiring a trial and the summary judgment motion as regards the issues in dispute is the most proportionate, timely and cost-effective means of resolving those issues.
29Accordingly, I grant the plaintiff’s motion for summary judgment.
Costs
30I would urge the parties to agree upon costs, failing which I would invite the parties to provide any costs submissions in writing, to be limited to three pages, including the costs outline. The submissions may be forwarded to my attention, through Judges’ Administration at 361 University Avenue, within thirty days of the release of this Endorsement.
Carole J. Brown, J.
Date: January 16, 2015