Jradi v. TD Canada Trust, 2015 ONSC7052

COURT FILE NO.: 12-CV-452107

Heard: October 20, 2015

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Jradi v. TD Canada Trust

BEFORE: Master Joan Haberman

COUNSEL:
For moving party: Golden, E.

For responding party: Gasee, R.

REASONS

Master Haberman:

[1] There are two motions before the court in this matter. In the first, the defendant (the Bank) seeks a further and better affidavit of documents and leave to amend their statement of defence. In the second, Jradi seeks a timetable to get the matter on for examinations for discoveries.

[2] The issue on the first motion is essentially relevance, so a review of the pleadings and any relevant information that emerged from documentary disclosure will determine the outcome. Although the wording of the relief sought is fairly generic (a proper and complete Supplementary Affidavit of Documents, as required by the enclosed Endorsement of Master Dash made June 12, 2014, ordering the plaintiff (and TD) to deliver supplementary AOD’s in response to TD’s amendments to its Statement of Defence), a review of the amended pleading and the master’s order clarifies the nature of the documentation sought. As Maser Dash stated:

While I would have some concerns that opening up 19 transactions when only three are in issue would overly broaden discovery and trial and thereby delay and prejudice the fair trial of the action, I note that serious allegation of misfeasance are made against the Bank and $4 million is claimed. The broadening of this action as set out in the amendments is not disproportionate to what is at stake.

[3] Thus, what is sought by the Bank in its motion is full disclosure as regards 19 additional transactions involving the plaintiff’s acquisition of cars from a series of apparently related dealers.

[4] The second motion was prompted by the Bank’s refusal to participate in oral discoveries pending resolution of the productions issue. Resolution of the first motion should remove that impediment, while resolving the issue of the scope of disclosure as it applies both to documentary and to oral disclosure.

WHAT THE PARTIES ALLEGE

[5] The factual matrix within which these motions arise is a somewhat complex and, at times, convoluted one. I have set out only the salient facts that pertain to the production motion:

• The claim arises from three loans Jradi obtained from the Bank to assist her in financing the acquisition of 3 used cars, in succession, from Import Motor Sales Company (“IMSC”). The first loan, in the amount of $18,902.06, was obtained in November 2007. The second loan, for $19,679.72, was obtained later that month. The third loan for $19,877.46 was advanced in in late January 2008. Each car was returned before the next was acquired. Each loan was for a five-year term;

• In February 2009, Jradi sold the third car. At that time, she attended at a branch of the TD Bank with a cheque for $14,999.52. While the cheque referenced the VIN of the third car, it did not refer to any of the car loans, all of which were still outstanding;

• The amount of the cheque was less than that was still owned on the third loan but matched what was outstanding on the first loan, so these funds were applied against the first loan. Jradi signed a TD receipt confirming that she understood that this was where the funds had been directed;

• In early September 2009, IMSC’s registration with the Ontario Motor Vehicle Institute Council (OMVIC) was terminated;

• Despite having returned two of the cars soon after acquiring them and notwithstanding the above payment, Jradi continued to make monthly payments towards all three loans until October 21, 2009, by way of direct debit from her account with the CIBC;

• Payments of the three loans amounted to a withdrawal of $1204.84 from the CIBC account each month. This was a significant part of Jradi’s gross monthly income of $4,500;

• For a period of about two years after Jradi claims to have cancelled the first and second loans, she took no issue with these withdrawals;

• On October 21, 2009, Jradi contacted the Bank and, for the first time, alleged that as she no longer owned the first two cars, the withdrawal of these loan payments should stop. At that time she threatened to get her lawyers involved and also to notify the police. She claimed that both she and one other person had were being charged for the same car, which she claimed was fraudgilent (sic);

• The last payment was made on November 30, 2009. A total amount of $23,350 had been withdrawn by the Bank from the CIBC account for payment towards all three car loans by that time. No further withdrawals were made thereafter or have been made to-date;

• By letter of December 12, 2009, Jradi’s previous lawyer wrote to ask for the return of payments made towards the first and second loans;

• Although the Bank did not accede to this request, Jradi took no further steps to advance her claim until commencing this action against the Bank in April 2012, more than 4 years after these events and 2 1/2 years after she was clearly aware of these alleged overpayments;

• The Bank therefore relies on the expiry of the applicable limitation period;

• Jradi has amended her claim twice in response to orders striking parts of it;

• Jradi seeks damages of $3.4 million. This represents, among other things, loan payments she made after she had returned the cars and allegedly cancelled the loans. She also sues for defamation, based on how these events impacted on her credit rating.

[6] In her statement of claim, Jradi explains that IMSC’s policy was to allow a purchaser to try out vehicles for 30 days and to return them if they were not fully satisfied. If a car was returned, what was paid towards it purchase would be credited towards another vehicle.

[7] As Jradi was not satisfied with the first car, it was replaced by the second. The second car also failed to meet her expectations, and it was replaced by the third. The first and second sale were cancelled through IMSC.

[8] It appears Jradi did not contact the Bank directly to make them aware of her two changes of heart, presumably assuming that IMSC would take care of that end of things, as they had arranged the loans for her. In her pleading, rather than saying that she took steps to contact the Bank and cancel the loans, she says the loan…was also to be cancelled, along with the purchase. The Bank denies ever being advised that the first two car purchases, or the loan associated with them, were cancelled until they were contacted by Jradi in October 2009. They deny that IMSC was their agent for the purpose of terminating a loan.

[9] The Bank also alleges that Jradi failed to take advantage of the compensation fund made available by OMVIC for victims of financial loss attributable to registered dealers. They claim that they identified this route to Jradi when she first wrote to them in October 2009 and then they repeatedly drew her first counsel’s attention to it thereafter. The Bank alleges that both Jradi and her counsel indicated they would pursue that avenue but it appears neither did.

[10] As the loans went into default, Jradi’s credit rating was impacted. Efforts by the Bank to resolve issues with the Credit Bureaus were not initially, but were ultimately, effective.

WHY THE BANK CLAIMS WHAT THEY NOW SEEK IS RELEVANT

[11] This motion was prompted by the Bank’s amended statement of defence, which clearly broadened the scope of the action, and thus the scope of disclosure for both parties. Master Dash stated as much is his reasons allowing the amendments, noting that although these new allegations would broaden discovery as well as the trial, they were justified on a proportionality analysis in view of the $4 million claimed and the nature of the allegations made against the Bank.

[12] It is therefore clear that the master had considered and understood that, in allowing these amendments, he was expanding on what would properly be considered relevant in the context of disclosure. In his view, this expansion was justified.

[13] The Bank’s amended statement of defence questions the relationship Jradi had and continues to have with IMSC and a related individual. It also raises the fact that the purchase of these three cars, which seemed to be the source of much confusion, is only a small part of a larger picture, which actually involved other dealers and several other transactions.

[14] The added portion of the pleading read as follows:

65. In addition, the plaintiff had, and continues to have, a relationship with Import Motors and one of its salespeople Amin Eltay also known as Amin Eltayeb, prior to and following the three TD Car Loans;

66. Between November 2007 and February 2009, the plaintiff purchased 6 cars from Import Motoes, leased one car from Import Motors and sold 4 cars to Import Motors (for a total of 11 transactions with Import Motors in less than 16 months) . Between March 2009 and October 2012, she then purchased and /or leased another 8 cars from two other used car dealers connected to Import Motors and/or Eltay (Paramount Fine Cars Inc. and Tibyann Inc.). Finally, after the plaintiff issued her claim herein, she purchased and/or leased another three cars from another entity connected to Import Motors and/or Eltay (7716745 Canada Inc.);

67. TD states that because of these myriad car transaction and her relationship with Import Motors and entities connected to it and/or Amin Eltay, the plaintiff did not raise any issue with the TD before October 2009 in respect of the three TD car loans (by which time Import Motors had ceased carrying on business in September 2009), did not issue a legal proceeding against Import Motors in respect of the three TD Car Loans, did not file a claim with OMVIC against Import Motors in respect of the three TD Car loans, and did not issue a legal proceeding against TD until April 25, 2012;

68. Each and every one of the plaintiff’s 19 additional transactions with Import Motors, Paramount Fine Cars Inc., Tibyann Inc. and 7716745 Canada Inc., entered into after the three TD Car Loans, were part of the consideration the plaintiff received for entering into the three TD Car Loans.

[15] In paragraph 23 of her Amended reply, Jradi neither admits nor denies these paragraphs. Instead, she asserts that her ongoing relationships, if any, with IMSC and its associated corporations and sales staff was a:

…proper customer relationship and reasonable and businesslike in the circumstances. This relationship does not give rise to any grounds for any negative inference or insinuation to be drawn against the Plaintiff Jradi. The fact that the Plaintiff may have been a repeat and/or loyal customer to Import Motors is no basis for any negative inference to be drawn.

[16] In paragraph 27, Jradi further alleges that any relationship she had with IMVSC is irrelevant and not material.

[17] In effect, these assertions amount to a denial of paragraphs 65 and 67 of the amended defence, where the Bank suggests that it is because of these relationships that Jradi took no steps to deal with these issues earlier. It is Jradi’s assertion that these relationships are “proper, reasonable and businesslike” that puts the nature and quality of the relationships clearly in issue. As a result, disclosure, documentary and oral, pertaining to them is, in fact, relevant

[18] In paragraph 25, Jradi also states that the three car loans on which she sues were:

… a series of transactions that were distinct and separate and isolated and stand-alone transactions …separate and distinct from all other transactions…

and that:

…none of their other transactions with Import Motors were ever related to the three “car loan transactions” in issue herein, nor did these other transactions ever form part of the consideration for any of the three car loans in issue herein…

[19] As these assertions conflict with what the Bank states in their paragraphs 65 and 68, Jradi has put the Bank’s assertions in issue and has made them relevant for the purpose of disclosure.

ARGUMENTS, ANALYSIS and CONCLUSIONS

[20] Jradi filed no factum for the motion. In the context of the oral submissions made by her counsel, it was unclear from her response to the motion if she was saying that:

• the transactional documents arising from these 19 other transactions don’t exist;

• most of them no longer exist;

• they are not relevant; and/or

• it would be disproportional for her to now have to produce them.

[21] If none of the documents sought exist or no longer exist, why would she Jradi not focus on that? Why did she get into a discussion of relevance and proportionality? If they no longer exist, why are they not discussed in a proper schedule “C” to Jradi’s affidavit of documents?

[22] Instead, Jradi engaged in a level of debate extending to relevance and proportionality, which suggests that at least some documents pertaining to some of the transactions are still available. While they may not be in her personal possession, disclosure obligations go beyond that, to documents within a party’s power and control to acquire. Her evidence was contained in a jumble referred to as an affidavit of documents which was, in effect, a combination of a responding affidavit to the motion and an affidavit of documents.

[23] Jradi’s counsel then made a series of assertions to support their position that they needn’t make any further documentary disclosure.

[24] First, he noted that the Bank does not state outright what they believe the nature of the relationship between Jradi and IMSC to be. While that may be the case, that is not an issue for debate at this juncture. It was more properly an argument to be made before Master Dash, at the time of the “amend pleading” motion.

[25] If Jradi was of the view that what was proposed lacked particularity, she could, and may well have, raised the issue at that time. As this pleading was permitted, I can only conclude that either that argument was made and rejected or that Jradi failed to make it. In either event, it has no bearing on what I am now bound to decide as the court has already endorsed these amendments.

[26] What is clear is that the Bank is suggesting there was something about the nature of the relationships that was not above board. This is also what Jradi has taken from the pleading. There is, therefore, no confusion in that regard.

[27] Jradi’s counsel then tried to suggest that what was sought was not actually relevant as Jradi has admitted the fact that these additional transactions occurred. However, she has not admitted the alleged role they played in the outcome, as alleged by the Bank in their paragraph 68. Instead, she expressly denied it, thereby putting in in issue.

[28] Finally, without filing any evidence about what would be involved in looking for and then producing these documents, Jradi‘s counsel put forward an argument about proportionality. It is not obvious in the context of what is sought here that locating or producing any of it presents as an onerous task, as asserted.

[29] Further, I agree with Master Dash’s observations, that in the context of the quantum of damages sought and the nature of the allegations made against the Bank, a more thorough investigation is not disproportional. This action could have been brought under the Simplified Rules, but instead, it has been blown into a large and complex proceeding with a significant claim for defamation. Having opted to go this route, Jradi must now address all the issues raised fully.

[30] In view of what has and had not yet been produced, I am satisfied that the level of proof required by Rule 30.06 has been met. The documents sought are relevant and their productions are not disproportional to what Jradi seeks by way of relief in this action, along with the basis for her claims.

[31] In that what is sought supports the buying, selling and leasing of cars, it is highly unlikely that such events would have taken place in the normal course of business without transactional documentation. Jradi, herself, claims in her pleading that her relationship with IMSC and related entities was proper and businesslike. Having made the assertion, it is up to her to now support that assertion with the necessary documents one would expect to find in such business transactions.

[32] The Bank’s motion is therefore granted and these productions shall be made within 45 days.

[33] In view of this order, I am unable to deal with the remainder of the discovery plan and timetable until documentary disclosure has been completed. I have effectively defined the scope of disclosure in the context of documentary disclosure. Obviously, the same scope will apply with respect to oral disclosure.

[34] In view of the above, I assume the parties can work out the remainder of the discovery plan/timetable for themselves. If not, I am prepared to have the matter return on a regular motions list, as less than 2 hours will be needed for it so a special appointment is not merited. I will remain seized of this motion, but not the action itself.

[35] As this is a 2012 action, the file will be sent back to Cooksville so it will be up to the moving party to praecipe it at least three weeks before the next return date, if one is required.

[36] If the parties are not able to agree at to costs among themselves, I can be spoken to within thirty days.

(original signed)_

Master Joan M. Haberman

Released: November 17, 2015