Court File and Parties

COURT FILE NO.: CV 15-532400 DATE: 20160628 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 1067323 ONTARIO LTD o/a ECONO GAS, Plaintiff AND: KULDIP DHINDSA, GURINDER SINGH, GILL RAUNI PETROLEUM INC. O/A ELMVALE FUELS and Z & Z 0015 INC., Defendants

BEFORE: Carole J. Brown, J.

COUNSEL: B. Skolnik, for the Plaintiff JSG MacDonald, for the Defendants

HEARD: June 24, 2016

Endorsement

[1] The plaintiff brings this motion for partial summary judgment as against the defendant, Gill Rauni Petroleum Inc., pursuant to rule 20 of the Rules of Civil Procedure.

[2] The plaintiff is a wholesaler and retailer of gasoline products and the defendant, Gill Rauni Petroleum Inc. ("GRP"), carried on business as a wholesaler and retailer of gasoline and related products from a gas bar located in Elmvale, Ontario. The defendant, Z & Z, was the subsequent purchaser of the gas station which was sold by asset purchase agreement with GRP on June 30, 2015.

[3] At all material times, the individual defendants were directors of GRP. The defendant, Gurinder Singh ("Singh") is now deceased. The defendant, Kuldip Dhinsa ("Dhinsa"), states in her supporting affidavit that, while she is a director of GRP, it was Singh who operated GRP from July 2012 to June 30, 2015 when the business was sold. She states that he failed to keep her apprised of the business activities at the gas station and she had no knowledge of sales, revenues, expenses, debts or any supply contracts. She was not provided with any documentation regarding the business operations or finances. She was not advised until June of 2015, by Mr. Singh that he had entered into an agreement to sell the gas station. She stated that she knew nothing of any unsecured creditors of GRP. She had no knowledge of any agreement entered into with Econo Gas. While she has been able to obtain the bank records of GRP, the account does not indicate any payments out to Econo Gas.

[4] It is the position of the moving party that this is a simple action for breach of contract with respect to the purchase and sale of petroleum products delivered by the plaintiff and not paid by the defendant. The moving party claims a total amount owing of $105,495.51, plus interest at 12% pursuant to the Credit Agreement in the amount of $12,451.36, for a total outstanding as at June 24, 2016 of $117,946.87.

[5] The evidence before this Court includes the Corporate Profile Report, which confirms that the directors of GRP were, at the material time, Singh and Dhinsa, the Credit Agreement between Econo Gas and GRP and Gurinder Singh, signed by Sandeesh Singh, president of Econo Gas and Gurinder Singh on behalf of GRP on September 27, 2012, 10 invoices from Econo Gas re GRP dated June 16, 2015 to June 30, 2015, and a Customer History Listing for GRP from January 12, 2015 through July 5, 2015 listing invoice references, charges or costs and credits, as well as the balances. I note that as regards the Customer History Listing, the document begins with a balance forward of $149,100.48, indicating that this amount was purportedly owing when the balance was brought forward on January 12, 2015. There is no supporting documentation as regards this amount, nor any invoices in support. There is no supporting documentation provided as regards the entire Customer History Listing from January 12, 2015 through the time of sale, July 5, 2015, but only the 10 invoices for June 16-30, 2015. There are no orders as regards petroleum ordered by GRP, no documentation as regards delivery of said petroleum and no bills of lading signed as regards deliveries.

The Law

Rule 20 and Summary Judgment

[6] Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 provides for summary judgment where there is no genuine issue requiring a trial with respect to a claim or defence.

[7] The 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. Flesch 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.

[8] On 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.

[9] There 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.

[10] Madam Justice Karakatsansis, writing for the Court, observed as follows in the companion case, Bruno Appliances, supra, at paragraph 22:

...[T]he 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.

[11] To grant summary judgment, on a review of the record, the motion 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.

[12] The 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.

[13] The 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.

[14] The Supreme Court further commented that, in the interest of justice, the inquiry goes further and also considers the consequences of the motion in the context of the litigation as a whole. In cases where some claims against the parties will proceed to trial in any event, it may not be in the interest of justice to use the new fact-finding powers to grant summary judgment against a single defendant. Such partial summary judgment may run the risk of duplicative proceedings or inconsistent findings of fact and therefore the use of the powers may not be in the interest of justice.

[15] The 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

[16] In the present case, I am not satisfied that sufficient evidence has been provided to me to resolve this matter in a fair and just manner on summary judgment. I do not find that sufficient evidence has been presented on all relevant points to allow me to draw the inferences necessary to make dispositive findings. I do not find the evidence allows me to make the necessary findings of fact or to apply the law to these facts.

[17] There is an absence of sufficient evidence in support of the plaintiff's case. The plaintiff's evidence fails to establish breach of contract, orders/deliveries to GRP, and does not include a full accounting of the amounts, if any, outstanding. The plaintiff has failed to put its best foot forward.

[18] There are genuine issues requiring trial. I am not satisfied that that the trial can be avoided by using the powers provided under rules 20.04 (2.1) and (2.2).

[19] I am further aware that the judgment sought is only partial judgment and that the matter will proceed to trial as regards Dhinsa. Thus, partial summary judgment, even if the evidence were complete, which it is not, would not be the more proportional, cost-effective means of proceeding in these circumstances. Such partial summary judgment may run the risk of duplicative proceedings or inconsistent findings of fact, such that use of the summary judgment rule is not in the interest of justice. As observed by Marrocco ACJSC in Arnone et al v Haico, 2015 ONSC 5266, at paragraphs 33 and 34:

[33] Awarding summary judgment to either of the moving parties will reduce neither costs nor trial time. Other issues will still proceed to trial, invariably resulting in a judge reconsidering the same facts and issues with which this motion is concerned.…

[34] There is also a real risk of the parties taking conflicting positions, and there is thus a risk of conflicting decisions.…

[20] In the above-noted circumstances, with the lack of evidence that would permit this Court to make dispositive findings and to determine the issues before it, and due to the fact that this partial summary judgment will not put an end to the matter and may result in inconsistent or duplicative findings, I dismiss the plaintiff's motion for summary judgment. This matter will require a trial with a full evidentiary record.

[21] The parties have provided costs outlines. Based on my findings, the defendant is entitled to its costs which it seeks on a partial indemnity basis in the amount of $10,367, including HST and disbursements. I note that the plaintiff, in its costs outline, had sought partial indemnity damages of $9,428.03, including disbursements and HST. Accordingly, the costs sought by the respective parties are very similar and appear reasonable. I award the defendant its costs in the total amount of $10,367, payable forthwith.

Carole J. Brown, J. Date: June 28, 2016