Royal Bank of Canada v. Galant, 2016 ONSC 4205

Royal Bank of Canada v. Galant, 2016 ONSC 4205

CITATION: RBC v. Galant, 2016 ONSC 4205

COURT FILE NO.: 14-49340

DATE: 2016-06-24

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Royal Bank of Canada

Plaintiff

– and –

Gloria Galant and Samuel Slutsky

Defendants

Robert Dunford, for the Plaintiff

Matthew Valitutti, for the Defendants

HEARD: June 21, 2016

the honourable mr. justice G. E. taylor

Reasons for Judgment

1This is a motion for summary judgment by the plaintiff seeking judgment for nonpayment of loans made by the plaintiff to the defendants and for judgment on a Visa credit card issued by the plaintiff to the defendants.

2The defendants do not dispute the amount of the loans, the amount charged to the Visa credit card or that they have failed to repay the amounts owing by them to the plaintiff.

3The defendants are spouses. They reside at 419 Russell Hill Road in the City of Toronto. Title to the property is held in the name of Gloria Galant. Pursuant to a mortgage registered December 30, 2005 Gloria Galant, granted a mortgage over the property to the plaintiff to secure the amount of $3,750,000. Samuel Slutsky guaranteed the mortgage. The plaintiff advanced to the defendants the sum of $3,750,000 which was dispersed to pay out indebtedness of the defendants to multiple other lenders with the balance of approximately $385,000 being paid to Gloria Galant.

4In October, 2007, the defendants applied for and were approved by the plaintiff for a Homeline Plan loan. The Homeline Plan loan was comprised of a mortgage loan in the amount of $3,700,000 and a Royal Credit Line in the amount of $700,000. The Homeline Plan loan was secured by way of a mortgage on 419 Russell Hill Road which mortgage was guaranteed by Samuel Slutsky.

5Pursuant to a charge registered on October 27, 2007, charged 419 Russell Hill Road to the plaintiff to secure the principal sum of $4,400,000. Samuel Slutsky guaranteed the charge. The sum of $3,650,834.10 was used to payout the balance owing on the 2005 mortgage and a further $370,000 was advanced to the defendants to payout certain debts and the sum of $340,748.20 was paid to Gloria Galant.

6In June, 2011, the plaintiff agreed to allocate the sum of $1,282,900 to a second mortgage loan under the Homeline Plan loan. The total liability of the defendants pursuant to the Homeline Plan loan remained unchanged at $4,400,000.

7The Homeline Plan loan went into default on June 14, 2014 and has remained in default to the present date. The plaintiff made demand on the defendants for repayment of the amounts owing pursuant to the Homeline Plan loan on June 30, 2014.

8As of December 16, 2015, the defendants were indebted it to the plaintiff pursuant to the initial mortgage under the Homeline Plan in the amount of $3,247,036.24 and pursuant to the second mortgage under the Homeline Plan in the amount of $1,300,696.14. As of December 16, 2015, the defendants were indebted to the plaintiff pursuant to the Royal Credit Line in the amount of $176,245.95. The total amount owing to the plaintiff by the defendants was therefore $4,724,005.33 as of December 16, 2015.

9As of December 16, 2015 interest on the 2 mortgage loans was being charged at the rate of 1.8 percent per annum and interest was being charged on the Royal Credit Line at the rate of 2.7 percent per annum.

10On September 23, 2014, the plaintiff paid a total of $69,705.63 to the City of Toronto on account of property taxes and water charges.

11On July 31, 2014, plaintiff issued a Notice of Sale under Charge seeking a sale of 419 Russell Hill Road. The defendants remain in possession of 419 Russell Hill Road.

12The plaintiff issued a Visa credit card to the defendants jointly. As of May 26, 2014, the defendants had incurred indebtedness to the plaintiff by way of charges to the Visa credit card totaling $56,601.42. As of May 26, 2014, the interest rate being charged on the Visa credit card was 20.5 percent per annum.

13In response to this motion, Samuel Slutsky swore an affidavit. He states that he and Gloria Galant purchased 419 Russell Hill Road in July 1996 and they constructed a new home on the property. The plaintiff provided financing for the construction of the new home. Samuel Slutsky deposes that he began receiving unsolicited telephone calls from the plaintiff and RBC Dominion Securities encouraging him to borrow more money and invest in the stock market. He says the persons who made the unsolicited telephone calls identified themselves as” financial advisors”. He does not identify any of the financial advisors. He says he followed the advice of the financial advisors and borrowed money from the plaintiff for the purpose of making investments. The investments made by the defendants were unsuccessful.

14Samuel Slutsky deposes that sometime prior to 2005 he transferred the mortgage on 419 Russell Hill Road to Scotia Bank. He says that in or about 2005 he was contacted by an individual who identified himself as a financial advisor representing the plaintiff. He says this person offered a favourable rate of interest if the defendants “switched back from Scotiabank to RBC”. This person is not identified. As a result of this solicitation, the defendants recommenced their dealings with the plaintiff. In 2005 the plaintiff advanced the sum of $3,750,000 to the defendants and provided a Visa credit card to the defendants with a $50,000 limit.

15Samuel Slutsky deposes that in 2007 the plaintiff renewed the mortgage and recommended that the defendants also obtain a line of credit. There was little inquiry into the defendants’ ability to repay the amount of their indebtedness to the plaintiff.

16Rules 20.04 (2) and (2.1) of the Rules of Civil Procedure 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 trial:

1. Weighing the evidence.

2. Evaluating the credibility of a deponent.

3. Drawing any reasonable inference from the evidence.

17In addition, Rule 20.02 (2) provides:

(2) In response to affidavit material or other evidence supporting a motion for summary judgment, a responding party may not rest solely on the allegations or denials in the party’s pleadings, but must set out, in affidavit material or other evidence, specific facts showing that there is a genuine issue requiring a trial.

18In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, the Supreme Court of Canada stated that there will be no genuine issue requiring a trial when the motion judge is able to reach a fair and just determination on the merits on a motion for summary judgment. 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 a proportionate, more expeditious and less expensive means to achieve a just result (paragraph 49).

19In my view, the affidavit of Samuel Slutsky fails to set out any specific facts showing that there is a genuine issue requiring a trial. He alleges that he (and presumably Gloria Galant) was encouraged to borrow additional funds from the plaintiff by unnamed financial advisors. In paragraph 9 of his affidavit he alleges that he began receiving unsolicited telephone calls from the plaintiff and RBC Dominion Securities. In paragraph 24 he refers to being provided with margin account facilities with RBC Dominion Secuities. Throughout most of the affidavit he only refers to unnamed financial advisors without specifying whether they were calling on behalf of the plaintiff or RBC Dominion Securities. There is no evidence that RBC Dominion Securities is the same corporate entity as the plaintiff.

20Nowhere in his affidavit does Samuel Slutsky suggest that he did not request the plaintiff to advance funds, that he or Gloria Galant did not receive the funds which were advanced by the plaintiff or that he and/or Gloria Gallant did not understand the nature of the transactions with the plaintiff.

21In my view, the content of the affidavit sworn by Samuel Slutsky in response to this motion, assuming it would also be his testimony at trial, is so devoid of particulars that it could not possibly result in a dismissal of the action. In coming to this conclusion I am exercising my authority to weigh the evidence and evaluate the credibility of the deponent. I believe that the reason why none of the financial advisors referred to are identified is because either no such persons exist, if they do exist they would not support the allegations made, they were financial advisors on behalf of RBC Dominion Securities rather than the plaintiff.

22From my perspective, the present case is exactly the type of case which the Supreme Court of Canada in Hyrniak had in mind when discussing the importance of a culture shift to create an environment promoting timely and affordable access to the civil justice system. This shift entails simplifying pretrial procedures and moving the emphasis away from the conventional trial in favour of proportional procedures tailored to the needs of the particular case (paragraph 2).

23For these reasons, I have come to the conclusion that there is no genuine issue in this case which requires a trial. Accordingly, there will be judgment in favour of the plaintiff against the defendants for:

a) the sum of $3,247,036.24 owing on mortgage loan number 51207074-001 together with interest at the rate of 1.8 percent per annum from December 16, 2015;

b) the sum of $1,300,696.14 owing on mortgage loan number 51207074-002 together with interest at the rate of 1.8 percent per annum from December 16, 2015;

c) the sum of $176,245.95 owing on Royal Credit Line loan No. 51207132-001 together with interest at the rate of 2.7 percent per annum from December 16, 2015;

d) possession of the premises known municipally as 419 Russell Hill Road, Toronto, described as:

LT 79 PL 1895 Toronto; City of Toronto. Property Identification Number: 21185-0094 (LT);

e) leave to issue a Writ of Possession in respect of the premises;

f) the sum of $56,601.42 owing on Visa credit card No. 4512527000082128 together with interest at the rate of 20.5 percent per annum from May 26, 2014;

g) the counterclaim is dismissed.

24If counsel are unable to agree on the appropriate disposition as to costs they may make written submissions. The written submissions on behalf of the plaintiff are to be delivered to my office within 14 days of the release of these Reasons, not to exceed three pages in length exclusive of a Bill of Costs and Costs Outline. Responding submissions are to be delivered to my office within 28 days of the release of this these Reasons, not to exceed three pages in length.

G. E. Taylor J.