Court File and Parties

COURT FILE NO.: CV-16-558758 DATE: 20170405 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: The Bank of Nova Scotia AND: 2379458 Ontario Ltd. operating as MTY-Mr. Sub and Country Style

BEFORE: Carole J. Brown, J.

COUNSEL: Randy Schliemann, for the plaintiff No one appearing, for the defendants although duly served

HEARD: April 5, 2017

Endorsement

The Bank of Nova Scotia (“BNS” or “the Bank)” moves for summary judgment as against the corporate defendant pursuant to the defendant’s obligations to the Bank.

[1] Ms. Schliemann advises that the representative of the defendant was apprised on numerous occasions that the corporate defendant would require a lawyer pursuant to Rule 15.01 of the Rules of Civil Procedure, or that he would have to bring a motion to represent the defendant.

[2] On January 31, 2017, the defendant was advised by this Court that the corporate defendant required a lawyer to represent it pursuant to the rules of court. No action was taken to retain a solicitor to represent the defendant or to bring a motion for leave to have the corporation represented by a non-solicitor pursuant to Rule 15.01 of the Rules of Civil Procedure.

[3] However, the defendant has failed to retain counsel or to bring a motion for leave to have the corporation represented by a non-solicitor pursuant to Rule 15.01(2).

[4] No one appears for the defendant corporation today.

[5] Pursuant to a credit agreement dated January 28, 2014, BNS granted to 2379458 Ontario Limited a loan in the principal amount of $107,282.50 with interest to accrue at the plaintiff’s prime rate of interest +2.75% per annum. The defendant agreed to make monthly payments on principal in the amount of $993.

[6] On same date, the Bank granted a credit line payable on demand to the defendant in the principal amount of $25,000 with interest to accrue at prime +2.25% per annum.

[7] On February 18, 2016, the Bank advised the defendant that the rate of interest applicable to the line of credit would be increased to prime +7% per annum effective 30 days from the date of the correspondence.

[8] As security for the Bank granting the loan and credit line, the defendant executed and delivered to the Bank a General Security Agreement dated January 28, 2014 which was duly registered in accordance with the provisions of the Personal Property Security Act, thereby granting BNS a security interest in the assets of the company and entitling the Bank to immediate possession of the company’s assets upon default of the company’s obligations.

[9] As at March 2016, the company was in default of its covenants and obligations to the Bank. The loan was two months in arrears and the credit line was over limit.

[10] As a result, by letter dated March 17, 2016, the Bank, through its lawyers, made demand upon the defendant for the full amounts due and owing on the loan and credit line and enclosed therewith a Notice of Intention to Enforce Security pursuant to section 244(1) of the Bankruptcy and Insolvency Act.

[11] Despite expiry of the demand given, the defendant failed or refused to pay any amount to the Bank, and interest continues to accrue to this date. As at February 28, 2017, the amounts due and owing by the Company, inclusive of principal and interest were at $100,775.81 on the loan and $16,802.59 on the credit line.

The Law and Analysis

[12] In Hryniak v Mauldin, 2014 SCC 7, [2014] S.C.J. No. 7, the Supreme Court of Canada determined that there would be no genuine issue requiring a trial where a judge is able to reach a “fair and just determination on the merits” of the case. This will be the case when the process: (1) permits the judge to make the necessary findings of fact on the basis of the evidence adduced, (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.

[13] Pursuant to Hryniak, the motion judge should first determine if there is a genuine issue requiring a trial based only on the evidence before the court, without using the new fact-finding powers set forth in Rule 20.04. There will be no genuine issue requiring a trial if the summary judgment process provides the court with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportional procedure. If there appears to be a genuine issue requiring a trial, the motion judge should determine if a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). The judge may, at his or her discretion, use those powers, provided that doing so does not offend the interest of justice, i.e., that it 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.

[14] The moving party bears the onus of establishing that there is no triable issue. However, a responding party must “lead trump or risk losing”: 1061590 Ontario Limited v Ontario Jockey Club, [1995] O.J. No. 132, 21 O.R. (3d) 547 (Ont.C.A.). The responding party may not rest on the allegations or denials in the pleadings, but must present by way of affidavit or other evidence, specific facts and coherent, organized evidence demonstrating a genuine issue. The motions judge is entitled to assume that the record contains all evidence that the parties will present if there is a trial. It is not sufficient for the responding party to say that more and better evidence will be available at trial. The court must take a “hard look” at the evidence to determine whether there is a genuine issue for trial.

[15] The loan and credit line are fully documented. Proper and reasonable notice was given in a timely manner, with a letter of demand dated March 17, 2016 containing a due date for repayment of March 31, 2016. The action was not commenced until August 17, 2016. Thus the Bank afforded the company well more than 30 days in which to pay the amounts owing, which, I find, is sufficient notice.

[16] No evidence was filed on behalf of the defendant.

[17] I am satisfied that there is no issue requiring a trial. BNS has demonstrated and documented its entitlement to judgment against the corporate defendant pursuant to the defendant’s obligations and its covenants to the Bank.

[18] Considering the principles of timeliness, affordability and proportionality, as I must in determining whether summary judgment should issue, I am satisfied that a full trial is unnecessary and summary judgment should, in all of the circumstances of this case, issue.

[19] Summary judgment is granted as against the defendant, with PJI to the date of judgment, and costs on a substantial indemnity basis pursuant to the Credit Agreement Section of the loan agreement (page 19) in the amount of $6,000.

Carole J. Brown, J. Date: April 5, 2017