Court File and Parties

COURT FILE NO.: 5261/11 DATE: August 31, 2016

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Youssef Youssef and Amcha Youssef Plaintiffs

- and -

Said Meddaoui, Houria Meddaoui and Amira Meddaoui, also known as Amira Moussa Defendants

COUNSEL: B. Thomas Granger, Q.C., for the plaintiffs Sean Flaherty for the defendants

HEARD: March 9, 2016

MITROW J.

INTRODUCTION

[1] This is a motion for summary judgment brought by the defendants to dismiss the plaintiffs’ action.

[2] The plaintiffs issued a statement of claim seeking to set aside a transfer of land as a fraudulent conveyance based on the allegation that the defendant Said Meddaoui at the time of the transfer was indebted to the plaintiffs pursuant to an unpaid judgment debt.

[3] The main argument advanced by the defendants was that Said Meddaoui had been released from any liability on the judgment by virtue of an assignment in bankruptcy and subsequent discharge from bankruptcy, and further that Said Meddaoui had acquired his interest in the land after the date of his discharge and that the transfer of land from Said Meddaoui was made more than ten years after his discharge from bankruptcy.

[4] The defendants also sought an order removing any writs of seizure and sale issued and/or filed against the defendant Said Meddaoui as a result of the judgment.

[5] For reasons that follow, the relief sought by the defendants on the motion for summary judgment is granted.

BACKGROUND

A. The Parties

[6] The plaintiffs, Youssef Youssef (“Mr. Youssef”) and Amcha Youssef (“Ms. Youssef”) are married to each other.

[7] The defendants, Said Meddaoui and Houria Meddaoui are married to each other. The remaining defendant, Amira Meddaoui, also known as Amira Moussa (“Amira Meddaoui”) is the daughter-in-law of Said Meddaoui and Houria Meddaoui; she is married to their son, Mahamed Said “Mike” Meddaoui (“Mike Meddaoui”), who was not a party in this action.

[8] There is also a familial connection between the opposing parties as the plaintiff Ms. Youssef is the niece of the defendant Said Meddaoui.

B. The Pleadings

[9] The plaintiffs issued their statement of claim in this action on September 30, 2011. In order to provide a proper background, and context, to the defendants’ motion, it is appropriate to examine the pleadings in this action. The claims alleged in the statement of claim can be summarized as follows:

a) the plaintiffs asked to set aside a transfer of land in London, Ontario registered on December 13, 2010; this transfer shows all three defendants as transferors and the defendant Amira Meddaoui as the sole transferee;

b) the plaintiffs allege that this transfer was made for no consideration;

c) further, the plaintiffs allege that this transfer was made with the intent to “defeat, hinder, delay or defraud” the plaintiffs in recovering money owing pursuant to an order obtained by the plaintiffs dated August 11, 1993 (“the judgment”) awarding to the plaintiffs the sum of $261,441.58; the defendants named in the judgment are Said Meddaoui and Mike Meddaoui;

d) the plaintiffs plead and rely on the Fraudulent Conveyances Act, R.S.O. 1990, c. F.29, and the Assignments and Preferences Act, R.S.O. 1990, c. A.33;

e) that from time to time the defendant Said Meddaoui made payments towards the judgment totaling $160,000 with the last payment being made in 2010, following which Said Meddaoui allegedly advised that no further payments would be made; and

f) in addition to setting aside the aforementioned transfer and declaring the transfer null and void, the plaintiffs’ claims include the following: damages in the amount of “$400,000 (estimated)” as a result of the registration of the transfer; punitive and exemplary damages in the amount of $100,000; a certificate of pending litigation against the property that was transferred; pre-judgment interest and post-judgment interests; and costs.

[10] The defendants filed a statement of defence followed soon thereafter by an amended statement of defence (the latter containing a minor correction). Any further reference in these reasons to “statement of defence” means the “amended statement of defence.”

[11] The position of the defendants as pleaded can be summarized as follows:

a) that Said Meddaoui was never served with the statement of claim that resulted in the judgment;

b) that in or about 1989, the plaintiff Mr. Youssef invested money in a corporation owned by Mike Meddaoui, that the company went “broke” in the early 1990s, and that Mr. Youssef lost his investment;

c) that in the mid-1990s, Mike Meddaoui filed an assignment in bankruptcy and subsequently was discharged;

d) that Said Meddaoui had no knowledge of the judgment until shortly before he filed the assignment in bankruptcy in March 2000; Said Meddaoui was discharged from bankruptcy in December 2000;

e) in relation to the payments made by Said Meddaoui, as alleged by the plaintiffs, Said Meddaoui denies payments were made as alleged; instead Said Meddaoui alleges that he borrowed $30,000 from Mr. Youssef in 1991 and paid $40,000 to Mr. Youssef in 1992, in full satisfaction of this loan inclusive of interest;

f) the defendants do concede that a payment was made to Mr. Youssef in 2010; the defendants allege that this payment was in the amount of $110,000 and, in exchange for the payment, that Mr. Youssef executed a release; the defendants allege, as their explanation for the $110,000 payment, that Mr. Youssef had been badgering the Meddaoui family constantly for repayment of all the money owing on the judgment; that this badgering increased to the point that Mr. Youssef began threatening members of the Meddaoui family; that as a result of the alleged threats, Said Meddaoui became worried and, given that his cultural role as head of the family included resolving disputes, that Said Meddaoui made arrangements to pay $110,000 to the plaintiffs “to put an end to the threats” from Mr. Youssef (see paragraphs 15 to 17, statement of defence);

g) the defendants rely on the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3. (“BIA”) and allege that as a result of Said Meddaoui’s discharge from bankruptcy, that the alleged debt owing by Said Meddaoui to the plaintiffs pursuant to the judgment had been “extinguished” at the time of the transfer; and

h) the relief requested by the defendants is to dismiss the action with costs on a substantial indemnity basis.

C. The Defendants’ Motion in 2012

[12] The defendants brought a motion initially returnable October 9, 2012, requesting an order that the writ of seizure and sale filed by the defendants in January 2011 to enforce the judgment be withdrawn, and an order for summary judgment dismissing the plaintiffs’ claims.

[13] That motion was preceded by various correspondence between the defendants’ counsel, Mr. Mackay, and the plaintiffs’ previous counsel at that time, Mr. Mills, who had issued the statement of claim.

[14] The gist of the correspondence from the defendants’ counsel reiterated the defendants’ position that the judgment was “extinguished” by Said Meddaoui’s bankruptcy; the defendants also relied on a release signed by the plaintiff Mr. Youssef in 2010.

[15] Mr. Mills, by letter dated November 8, 2012, forwarded a copy of a draft amended statement of claim; the amendments included additional claims as follows: an order that Said Meddaoui’s discharge from bankruptcy did not discharge and release him from the amount still owing pursuant to the judgment; an order that Said Meddaoui’s certificate of discharge from bankruptcy be annulled; an order that payments made by Said Meddaoui after his discharge from bankruptcy constitute “an acknowledgement and revival” of his indebtedness pursuant to the judgment notwithstanding the certificate of discharge from bankruptcy.

[16] In relation to the additional facts pleaded in the proposed amendments to the statement of claim, the plaintiffs focused on two areas: first, the circumstances of obtaining the judgment, including that it was on consent and that Said Meddaoui was well aware of its existence and, in fact, consented to the judgment, as did Mike Meddaoui; and, secondly, in relation to the claims that Said Meddaoui’s certificate of discharge be annulled and that his indebtedness pursuant to the judgment continues notwithstanding his discharge from bankruptcy, the plaintiffs plead that Said Meddaoui failed to disclose property that he owned in Lebanon at the date of the bankruptcy, that Said Meddaoui failed to quantify his liability on the judgment debt, and the plaintiffs allege that Said Meddaoui committed various offences under the BIA, including fraud.

[17] Subsequent to the service of the first motion, there were a number of adjournments of the motion, mainly at the request of the plaintiffs; some of the adjournments related to additional information that the plaintiffs indicated they needed to obtain and some adjournments related to the proposed amendments to the statement of claim; some adjournments also related to the allegations of the plaintiffs that Said Meddaoui owned property in Lebanon at the date of his assignment in bankruptcy that he had failed to disclose and the plaintiffs wanted time to gather evidence in relation to the property owned by Said Meddaoui in Lebanon.

[18] Eventually the defendants’ motion was withdrawn, and it was agreed that the plaintiffs would pay $7,000 in costs; the endorsement regarding the consent costs order was dated February 13, 2013.

[19] Thereafter, some further correspondence was exchanged between counsel, broaching the topic of a potential settlement; however, in the meantime, the $7,000 costs remained unpaid and in August 2013, the defendants issued a writ of seizure and sale to enforce the $7,000 costs order. In December 2013, the costs order was paid as a result of a property sale by the plaintiffs.

[20] The plaintiffs do not dispute the defendants’ evidence that the defendants’ motion was withdrawn in anticipation of the plaintiffs bringing a motion to amend their statement of claim and, further, that the withdrawal of the defendants’ motion was made on a without prejudice basis. Also uncontradicted is the defendants’ evidence that no motion was ever made to amend the plaintiffs’ statement of claim, despite correspondence from Mr. Mills dated November 15, 2012 that a motion to amend was being contemplated.

[21] Accordingly, the pleadings that define this action are the statement of claim as issued and the statement of defence.

[22] In relation to the present motion, potential settlement was explored. A letter dated January 6, 2015 from Mr. Mills acknowledged Mr. Mackay’s most recent letter of November 14, 2014 as to potential settlement. Mr. Mills indicated that he had been attempting to obtain instructions and that he has again written to the plaintiffs.

[23] Despite a follow-up letter from Mr. Mackay in May 2015, it was the defendants’ uncontradicted evidence that no further response was received from Mr. Mills.

THE TEST ON A MOTION FOR SUMMARY JUDGMENT

[24] Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 governs motions for summary judgment. The relevant portions of R. 20 that deal with evidence and the disposition of summary judgment motions are reproduced:

20.02 (1) An affidavit for use on a motion for summary judgment may be made on information and belief as provided in subrule 39.01 (4), but, on the hearing of the motion, the court may, if appropriate, draw an adverse inference from the failure of a party to provide the evidence of any person having personal knowledge of contested facts.

(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.

20.04(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; or

(b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment.

(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:

1. Weighing the evidence.

2. Evaluating the credibility of a deponent.

3. Drawing any reasonable inference from the evidence.

(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.

[25] In Hryniak v. Mauldin, 2014 SCC 7, the Supreme Court of Canada discussed “The Roadmap/Approach to a Motion for Summary Judgment,” stating at para. 66:

66 On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers 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. Their use will not be against the interest of justice if they 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.

DISCUSSION

A. The Evidence Filed on the Motion

[26] The defendants’ evidence is comprised of an affidavit from Amira Meddaoui, Said Meddaoui, Mike Meddaoui (with the affidavits from the latter two deponents being the affidavits served in 2012 when the plaintiffs brought their first motion), and a brief supplementary affidavit from a law clerk that includes as an exhibit the transcript of Mr. Youssef’s cross-examination on affidavit conducted on January 29, 2016.

[27] The plaintiffs’ evidence is comprised of an affidavit from Mr. Youssef.

B. The 1993 Judgment and Subsequent Bankruptcy and Discharge from Bankruptcy of the Defendant, Said Meddaoui

[28] While the affidavit material deals with the circumstances and background of the events leading to the judgment against Mike Meddaoui and Said Meddaoui, it is not necessary to dwell on those facts in any detail. The defendants concede in their factum (at paragraph 16) that any issues as to whether the judgment was properly obtained, including whether there was proper notice to Mike Meddaoui and Said Meddaoui, are not relevant for the determination of the defendants’ motion; and the defendants request the court to assume for the purpose of their motion that the judgment is valid.

[29] For his part, Mike Meddaoui deposes that, as a result of his financial problems, that he filed an assignment in bankruptcy in early 1995. The documents from this assignment in bankruptcy confirm that the plaintiff Mr. Youssef was listed as a creditor for the amount of $170,000. Mike Meddaoui’s statement of affairs disclosed minimal assets and disclosed liabilities to unsecured creditors exceeding $1.8 million. Mike Meddaoui was discharged from bankruptcy on October 18, 1995 as confirmed by the certificate of discharge. The plaintiff Ms. Youssef was not listed as a creditor on Mike Meddaoui’s statement of affairs.

[30] The documentation in relation to Said Meddaoui’s bankruptcy discloses the following:

a) declared assets of $3,250; an unsecured liability of $49,878.40 to the Canada Revenue Agency; a further ten unsecured creditors were listed, including the plaintiff Mr. Youssef but, for all of those creditors, the specific amounts owing were not listed and instead the amounts were described either as “unknown contingent” or “contingent”; in relation to Mr. Youssef, the amount was described as “unknown contingent”;

b) Ms. Youssef was not listed as a creditor;

c) the assignment of bankruptcy was made on March 9, 2000; and

d) Said Meddaoui was discharged from bankruptcy on December 12, 2000 as indicated in the certificate of discharge.

[31] For the purposes of the defendants’ motion, it is noted that the statement of claim contains no allegations that in any way call into question the validity of Said Meddaoui’s discharge from bankruptcy. In fact, the statement of claim fails to refer to Said Meddaoui’s bankruptcy at all. The statement of claim, as pleaded, alleges that some payments were made towards the judgment, and alleges that Said Meddaoui participated in the property transfer (previously referred to earlier) to evade enforcement of the balance owing on the judgment. Furthermore, the statement of claim makes no mention of another material fact, being the release signed by the plaintiff Mr. Youssef (this document is discussed in further detail below).

[32] The plaintiff Mr. Youssef, on his own evidence, was aware that Said Meddaoui had filed for bankruptcy; further, prior to the issuance of the statement of claim, the defendants’ counsel, by way of letter dated May 11, 2011, provided plaintiffs’ counsel with a copy of the release signed by the plaintiff Mr. Youssef.

[33] As indicated earlier, the evidence on the motion establishes that Said Meddaoui was discharged from bankruptcy on December 12, 2000. Further, in relation to the plaintiffs’ claim seeking to set aside the transfer of land, the land registry office records confirm, and the plaintiffs do not dispute, that the defendant Said Meddaoui did not acquire any interest in the subject land until January 19, 2004, which is over three years subsequent to his discharge from bankruptcy. This transfer was from Houria Meddaoui to Said Meddaoui and Houria Meddaoui.

[34] I deal briefly with the issue that the plaintiff Ms. Youssef was not listed as a creditor when Said Meddaoui made his assignment in bankruptcy.

[35] The jurisprudence establishes that a failure to list a creditor results in a limited remedy to the creditor pursuant to s. 178(1)(f) of the BIA:

178 (1) An order of discharge does not release the bankrupt from

(f) liability for the dividend that a creditor would have been entitled to receive on any provable claim not disclosed to the trustee, unless the creditor had notice or knowledge of the bankruptcy and failed to take reasonable action to prove his claim;

[36] In Schreyer v. Schreyer, 2011 SCC 35, the Supreme Court of Canada addressed the effect of the husband’s failure to list the wife as a creditor when the husband made an assignment in bankruptcy. A discharged bankrupt may be sued in the case of a failure to list a creditor but only for the amount of the dividend that the creditor otherwise would have received. The following is stated at para. 34:

34 The appellant now seeks a remedy based on the respondent's failure to list her as a creditor at the time of the bankruptcy. In substance, she argues that because of that failure, which was a breach of the statutory duties of a bankrupt debtor, she should be allowed to disregard her husband's discharge and to pursue her claim against the family farm, which is an exempt property for the purposes of the BIA. In this respect, s. 178(1)(f) BIA appears to provide the creditor with only a limited remedy (Wood, at pp. 294-95). Parliament did not intend that every omission from a list of creditors would deprive the discharge of its effect. Parliament realized that many such omissions may be accidental omissions or administrative oversights. It thus chose a more limited remedy that enables a creditor to claim a dividend he or she did not receive. In the case of a failure to list a creditor, a discharged bankrupt may be sued, but only for the amount of the dividend the creditor would otherwise have received. In the case at bar, this remedy would have been irrelevant, because no dividend was paid to Mr. Schreyer's creditors. I note that it has not been alleged that the failure to disclose was fraudulent, which might have brought into play another exception to the effect of the discharge, that of fraud under s. 178(1)(d) BIA.

[37] During argument, the plaintiffs did not dispute the potential applicability of s. 178(1)(f). It is further noteworthy that this issue is not addressed in the plaintiffs’ affidavit material, nor is it raised in the statement of claim. I find that any failure by Said Meddaoui to list Ms. Youssef as a creditor when making his assignment in bankruptcy has no effect on the validity of Said Meddaoui’s discharge from bankruptcy.

[38] Subject to the provisions of s. 178(1), an order of discharge releases the bankrupt from all claims provable in bankruptcy: s. 178(2), BIA. There is no dispute that the judgment, as against the defendants named therein, is a debt provable in bankruptcy.

[39] Where a moving party has discharged its obligation and demonstrated a prima facie case that there is no genuine issue requiring a trial, then there is an evidentiary burden placed on the responding party to support its position that a genuine issue requiring a trial exists: see Toronto Dominion Bank v. 466888 Ontario Ltd., 2010 CarswellOnt 4753 (S.C.J.) at para. 2, cited by the plaintiffs.

[40] I find that the defendants have made out a prima facie case for summary judgment dismissing the plaintiffs’ action: the plaintiffs’ claim to set aside the transfer of the subject property as a fraudulent conveyance is based on the defendant Said Meddaoui being indebted to the plaintiffs at the time of the transfer in 2010; Said Meddaoui was discharged from bankruptcy in 2000; he did not acquire an interest in the subject property until 2004; at the time of the transfer of the subject property, Said Meddaoui had been released from his obligation under the judgment as a result of his discharge from bankruptcy.

[41] In coming to the conclusion that a prima facie case has been made out by the defendants, the issues as defined in the pleadings have been taken into account. It is unnecessary, at this point, to consider the effect of the release.

C. Is there a Genuine Issue Requiring a Trial?

[42] The plaintiffs point to the payments made by Said Meddaoui subsequent to the judgment; the defendants submit that these payments may be indicative of an agreement entered into “either coincident with or subsequent to the bankruptcy” (see paragraph 41(a) of the plaintiffs’ factum).

[43] The theory of the plaintiffs’ case, and the evidence filed on behalf of the plaintiffs, was that at the time that Said Meddaoui made an assignment in bankruptcy, that the defendants, along with Mike Meddaoui, had advised the plaintiffs not to take any steps in the bankruptcy proceeding because Mr. Youssef and his wife would be paid in full because they “were family.” Accordingly, the plaintiffs submit that they each forbore their right to file a claim in Said Meddaoui’s bankruptcy based on the aforementioned alleged representations that they would be paid. It is the plaintiffs’ position that on the basis of the agreement made with the defendants, and/or on the basis of detrimental reliance, that the defendant Said Meddaoui remains liable on the judgment notwithstanding his discharge from bankruptcy.

[44] This theory of the plaintiffs’ case requires careful scrutiny.

[45] The statement of claim does not plead an alleged agreement entered into between the opposing parties at the time of Said Meddaoui’s assignment into bankruptcy. During argument, it was the plaintiffs’ submission that there was a contract and, further, that the facts support a claim of detrimental reliance; it was submitted on behalf of the plaintiffs that paragraphs 11 and 12 of the statement of claim were sufficiently wide to establish claims of contract and/or detrimental reliance. I set out paragraphs 11 and 12:

11. The Plaintiffs plead that as a result of the said Transfer that the Plaintiffs are unable to enforce their Writ of Seizure and Sale against the said property and as a result they have suffered damages in the amount of $400,000.00 (estimated). Full particulars of the damages will be provided during the course of this action.

12. The Plaintiffs plead that the Defendants completed the Transfer in flagrant disregard of the rights of the Plaintiffs and under the circumstances an (sic) aware of (sic) punitive or exemplary damages is warranted.

[46] I am unable to give effect to the plaintiffs’ submissions. Paragraphs 11 and 12 deal with the main subject of the statement of claim – the impugned transfer – and reasonably cannot be interpreted as the basis of a claim in contract and/or detrimental reliance arising out of alleged representations made by the defendants and Mike Meddaoui at the time of Said Meddaoui’s assignment in bankruptcy.

[47] Aside from the issue of claims in relation to contract and/or detrimental reliance not being pleaded, there is also the issue of the release executed by Mr. Youssef.

[48] While there is a dispute as to the amounts paid towards the judgment, the defendants do admit that $110,000 was paid in 2010 to satisfy the judgment.

[49] In following the theory of the plaintiffs’ position, little turns on whether the payments made were $110,000 or whether the payments were $160,000 as alleged by the plaintiffs – both are substantial amounts.

[50] The relevant evidence relating to the release is as follows:

a) A document titled “Confirmation of Financial Settlement” dated April 28, 2010 was signed by Mr. Youssef. This document is reproduced below:

This letter is to confirm clearance of conscience for Said Meddaoui and Ali Meddaoui as of April 28, 2010 with regards to debt owed to Youssef Youssef.

This letter further indemnifies Ali Meddaoui and Said Meddaoui from personal debts owed to Youssef Youssef as of April 28, 2010.

Signed in the city of London on April 28, 2010.

[handwritten signature]

Youssef Youssef

Cheque received in the agreed amount from Said Meddaoui and Ali Meddaoui dated April 28, 2010 clears conscience as agreed to on meeting of April 25, 2010.

Witness: Mike Youssef

Signature: [handwritten signature]

Date: [April 28/2010 handwritten]

b) A document in Arabic was signed by Mr. Youssef and Said Meddaoui; this document also is signed by two witnesses on May 21, 2010; the relevant portion of the text from this document is reproduced below from the English translation:

In the name of God the Merciful

This is an agreement on the 19th of May 2010 between the following parties:

Youssef Mohamed Youssef and his wife and children

Said Ali-Meddaoui and his wife and children

This Agreement that:

It has been agreed that Mr. Said Ali Meddaoui will pay an amount of money to Mr. Youssef Mohamed Youssef to cover all what is owing to him.

According to what’s been stated this agreement is to be considered as a discharge and a release to Mr. Said Ali Meddaoui from Mr. Youssef Mohamed Youssef.

This Agreement is signed by the following:

Youssef Mohamed Youssef (Signature)

Said Ali Meddaoui (Signature)

and signed by the following witnesses:

Fadel Abdo (Signature) 21/05/2010

Ehab Qalawi (Signature)

Khaled Omar (Signature)

Remarks:

From this day on Mr. Youssef Mohamed Youssef should never claim to have any amount of money that needs to be returned by Mr. Said Ali Meddaoui and Mr. Mohamed Said Meddaoui.

The following cheques are also part of this agreement and in the case of not being able to cash any of them this agreement will be invalid:

[details as to the three cheques omitted]

c) The material filed on the motion includes a copy of a certified cheque dated May 17, 2010, drawn on the account of Meddco Properties Inc. in the amount of $100,000 payable to Mr. Youssef; copies of two other cheques (or drafts) mentioned in the release are not included in the motion material.

[51] In his affidavit, Mr. Youssef raises no issue about the validity or enforceability of the release as against himself; he refers to the release in his affidavit, deposing that at the time he received the $110,000 that he signed a release; however, he adds that his wife did not execute the release nor did he have authority to sign a release on her behalf.

[52] The plaintiffs’ submissions, and evidence, in relation to the release focused primarily on the fact that it was not signed by Ms. Youssef.

[53] The defendants did not pursue with any vigour, nor did they provide any authorities, that this release should be construed as binding on Ms. Youssef even though it was not signed by her. For the purpose of the motion, and based on the evidentiary record, it is not possible to conclude that the release binds Ms. Youssef.

[54] However, in relation to Mr. Youssef, and taking the plaintiffs’ case at its highest, namely that a valid and enforceable agreement existed, obligating Said Meddaoui to satisfy the balance of the money owing on the judgment notwithstanding his discharge from bankruptcy, I find that the release and confirmation of financial settlement, and the payment of $110,000, are sufficient to release Said Meddaoui from all further payments traceable to the judgment, or any alleged agreement to pay the judgment notwithstanding Said Meddaoui’s discharge from bankruptcy.

[55] The assumption that a valid agreement exists to pay the judgment notwithstanding the discharge from bankruptcy, avoids discussion of various issues raised by the defendants in relation to the alleged agreement, including that the payments made were only voluntary, and that there was no consideration. Further, it was the defendants’ submission that the payment of $110,000 and the documentation signed in 2010 constituted a “pre-litigation” settlement, designed to avoid further litigation.

[56] In relation to Ms. Youssef, and focusing on the fact that the release is not binding on her, the plaintiffs submit that Ms. Youssef also was persuaded not to file a proof of claim in Said Meddaoui’s bankruptcy based on representations that the judgment would be paid. However, the defendants point out that it was only recently that the plaintiffs, for the first time, have alleged that they were told not to file any proof of claim in Said Meddaoui’s bankruptcy and, if they do so, the judgment would be paid. It is noteworthy that even the draft amended statement of claim contains no allegations about the defendants and/or Mike Meddaoui telling the plaintiffs not to file a proof of claim – that the judgment would be paid.

[57] In relation to Ms. Youssef, the defendants submit that on the evidence Ms. Youssef was not aware of any such alleged representations and, as such, she could not have been influenced by something she was not aware of.

[58] The defendants submit that there is no evidence from Ms. Youssef on the motion, and that in the circumstances Ms. Youssef was obligated to step forward and provide evidence.

[59] The evidence from Mr. Youssef in his brief affidavit is contradictory as to what Ms. Youssef allegedly knew and when.

[60] Mr. Youssef deposes that when Said Meddaoui made an assignment in bankruptcy that he was made aware of the bankruptcy, but that Ms. Youssef was not made aware of the assignment in bankruptcy (paragraph 12).

[61] Mr. Youssef further deposes that “after being advised that Said Meddaoui was making an assignment in bankruptcy I was advised by the Defendants and Mahamed Meddaoui also known as Mike Meddaoui not to take any steps in the bankruptcy as Amcha Youssef and myself would be paid in full by the Defendants and Mahamed Meddaoui also known as Mike Meddaoui” (paragraph 13).

[62] The aforementioned two paragraphs in Mr. Youssef’s affidavit point to the conclusion that Ms. Youssef was not aware of the assignment in bankruptcy and the alleged agreement only involved Mr. Youssef and not Ms. Youssef.

[63] Later (see paragraphs 17 and 19), Mr. Youssef deposes that the statements made by the defendants and Mike Meddaoui were made to both Mr. Youssef and Ms. Youssef. An inconsistency is created because Mr. Youssef has deposed that Ms. Youssef was not made aware of the assignment in bankruptcy; however, it is quite unbelievable that Ms. Youssef could be unaware of the bankruptcy and yet be privy to alleged representations by the defendants and Mike Meddaoui not to file a proof of claim because the judgment would be paid.

[64] The defendants point to Mr. Youssef’s cross-examination on affidavit and specifically refer to questions 94 to 107 and 120 to 135; the defendants submit that during his cross-examination, Mr. Youssef maintained, inter alia, that his wife was never made aware of the alleged discussions about not taking steps to file a proof of claim in Said Meddaoui’s bankruptcy.

[65] I find that the transcript evidence relied on by the defendants does little to assist the defendants; it is fraught with interruptions, questions that lack clarity and numerous non-responsive, ambiguous or confusing answers. Most prophetic was the questioner’s warning (at questions 129 and 130) that the transcript would be hard to read.

[66] The transcript evidence, at best, does nothing to resolve the confusion created in Mr. Youssef’s affidavit.

[67] The plaintiffs submit that the court has not heard from Ms. Youssef. They argue, inter alia, that she is the one person who can say what she knew and when she knew it – this is one of the arguments advanced by the plaintiffs as to why a trial should be held.

[68] I am unable to accept that submission. Rule 20.02(2) obligates the plaintiffs to place before the court all the evidence that they rely on showing that there is a genuine issue requiring a trial. It is not open to the plaintiffs to ask the defendants and the court to wait until trial for Ms. Youssef’s evidence – that evidence should have been given on the motion.

[69] The court is entitled to assume that the record on the summary judgment motion contains all the evidence that the parties will present at trial; and the plaintiffs, as responding parties, are assumed to have “put their best foot forward” and “played trump”: see Toronto Dominion Bank, supra, at para. 45 and the authorities cited therein.

[70] The conflicting evidence in Mr. Youssef’s affidavit is not reliable. Even if the plaintiffs’ claims in relation to the existence of an agreement, or detrimental reliance, were properly pleaded, the evidence fails to establish, on a balance of probability, that there was any agreement between Ms. Youssef and Mike Meddaoui and any of the defendants, or that Ms. Youssef can assert a claim of detrimental reliance.

[71] It is noted that the following threshold issue may be raised where an attempt is made to revive a debt provable in bankruptcy subsequent to the discharge from bankruptcy: in what circumstances, if at all, can a bankrupt, after discharge from bankruptcy, enter into a binding agreement with the bankrupt’s creditor to pay off, in whole or in part, the amount owing to the creditor at the date of bankruptcy? I raise this issue without coming to a conclusion, as that matter was not addressed by counsel during argument nor in their facta.

[72] While some cases have permitted this practice, it is noted that some of the jurisprudence speaks negatively on the practice of former bankrupts entering into agreements, post-bankruptcy, to pay their pre-bankruptcy creditors: Engels v. Merit Insurance Brokers Inc., 2000 CarswellOnt 2061 (S.C.J.) at para. 17 where the concept of debtors and creditors making side deals to avoid the Bankruptcy and Insolvency Act was viewed by the court as “somewhat unsavory” and not to be judicially encouraged; Cleve’s Sporting Goods Ltd. v. Jones (Trustee of), 1986 CarswellNS 43 (Nova Scotia Supreme Court – Appeal Division), where the Court of Appeal, although noting there is conflicting case law in Canada, refused to uphold a written contract between a discharged bankrupt and his former creditor (entered into after the discharge from bankruptcy), stating that attempts to rehabilitate debts incurred prior to bankruptcy is against the policy of the Bankruptcy Act, and that permitting the enforcement of the contract would nullify the provisions of the statute; see also Houlden and Morawetz, Bankruptcy and Insolvency Analysis, Bankruptcy and Insolvency Law of Canada, Fourth Edition, H. § 67 – Effects of Order on Discharge.

[73] The plaintiffs’ evidence further raises the issue of Said Meddaoui failing to disclose an interest in land in Lebanon at the time of his assignment in bankruptcy. Mr. Youssef deposes briefly (paragraph 17) that he was “aware” of Said Meddaoui’s “substantial and valuable land holdings” in Lebanon that were not disclosed as an asset in his bankruptcy.

[74] No other evidence is provided by Mr. Youssef. The defendants include in their material an email dated January 24, 2013 that purported to be from a person retained by the plaintiffs to value the land owned by Said Meddaoui in Lebanon. This email was forwarded by Mr. Mills to Mr. Mackay. The brief email purports to be a “drive by appraisal”; it identifies a specific lot and notes that the minimum value for the lot “not including completed palace” is $84,360 for the “early years of 2000.” The email concludes that full details will be available later for review. There is no evidence as to whether a complete report was ever received and there is no evidence explaining what is meant by “completed palace” or what its value, if any, might be.

[75] The evidence on behalf of the defendants is that Said Meddaoui informed the trustee in bankruptcy that he had a one-fifth interest in the property in Lebanon, that the other owners (apparently Said Meddaoui’s brothers) were not prepared to do anything with the property; that Said Meddaoui did not know the value of the property; and that the trustee had informed Said Meddaoui that the property did not have significant value and that the costs to realize on the property would exceed its value.

[76] The evidence regarding the property came from the affidavit of Amira Meddaoui, rather than directly from Said Meddaoui, who should have provided that evidence.

[77] However, the foregoing summary is given primarily to provide some context regarding the issue of disclosure raised in the plaintiffs’ material.

[78] The fact remains, however, that allegations relating to non-disclosure of assets by Said Meddaoui were not pleaded in the statement of claim and they cannot be raised now in the motion for summary judgment.

[79] I would summarize the conclusions reached as follows:

a) The evidence that is relevant on the motion for summary judgment is defined by the pleadings;

b) Said Meddaoui’s discharge from bankruptcy released him from any obligation to pay the judgment debt;

c) As a result of being released from the judgment debt, there was no basis on which to set aside the transfer of land made by Said Meddaoui approximately ten years after his discharge from bankruptcy and in circumstances where he had acquired his interest in the land over three years after his discharge from bankruptcy;

d) The statement of claim did not advance any claims in contract or otherwise as to an agreement between the plaintiffs and defendants; the pleadings did not allege that Said Meddaoui remained liable to pay the judgment notwithstanding his discharge from bankruptcy because the defendants had told the plaintiffs that the judgment would be paid and further told the plaintiffs not to file a proof of claim in the bankruptcy proceeding;

e) Even if such claims had been pleaded, then:

i. Mr. Youssef had released Said Meddaoui from all such claims; and

ii. the evidence failed to establish that Ms. Youssef was a party to, or was aware of, any arrangement or agreement to withhold filing proof of bankruptcy in exchange for a promise by the defendants or others to pay the judgment debt;

f) The allegations made by the plaintiffs on the motion for summary judgment in relation to Said Meddaoui failing to disclose assets were not pleaded in the statement of claim and cannot be raised at this stage of the proceeding.

[80] I am satisfied that there is no genuine issue requiring a trial and that the defendants are entitled to a dismissal of the plaintiffs’ action. In the present case, the summary judgment process and the evidentiary record have provided the court with the evidence required to fairly and justly adjudicate the dispute.

[81] The defendants also seek to dismiss the plaintiffs’ action for delay. Given the foregoing reasons, it is not necessary to deal with this request.

[82] The defendants’ request for removal of any writ of seizure and sale issued against Said Meddaoui is appropriate and is included in the order below.

ORDER

[83] For reasons set out above, I make the following order:

a) The plaintiffs’ action is dismissed;

b) Any writs of seizure and sale which have been issued and/or filed against Said Meddaoui with respect to the order of Jenkins J. dated August 11, 1993, made in the Ontario Court (General Division) bearing court file number 15649/93, requiring the defendants named therein to pay the sum of $261,441.58, plus interest at the rate of 15% per year commencing August 5, 1993, are vacated, and shall be removed, discharged and/or withdrawn;

c) If the parties cannot agree on costs, then written costs submissions may be filed with the trial coordinator as follows: by the defendants within three weeks; by the plaintiffs within two weeks thereafter; and by the defendants, a reply, if any, within one week thereafter; the written costs submissions shall not exceed three typed pages (two typed pages for reply) plus copies of any offers, bills of costs, time dockets and authorities.

“Justice Victor Mitrow” Justice Victor Mitrow

**Released:** August 31, 2016

COURT FILE NO.: 5261/11 DATE: August 31, 2016 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: Youssef Youssef and Amcha Youssef Plaintiffs - and - Said Meddaoui, Houria Meddaoui and Amira Meddaoui, also known as Amira Moussa Defendants REASONS FOR JUDGMENT MITROW J. Released: August 31, 2016