CITATION: Stevenson v. Loan Away Inc. et al, 2017 ONSC 6512
COURT FILE NO.: CV-17-2211-00
DATE: November 1, 2017
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
RICHARD STEVENSON AND LAURIE STEVENSON
Self-Represented
- and -
LOAN AWAY INC., EUGENE FARBER, COLIN PYE, LL.B AND ANNA SEMENOVA
Alastair J. McNish For the Defendants
HEARD: October 5, 2017
The Honourable Mr. Justice H.S. Arrell
REASONS FOR JUDGMENT
INTRODUCTION:
[1] The defendants bring this motion to strike out the claims of the plaintiffs as against the individual defendants Eugene Farber, Colin Pye, and Anna Semenova as disclosing no reasonable cause of action; and to strike the entire claim, against all defendants, as frivolous and an abuse of process.
[2] In the alternative the defendants seek an order striking out allegations in the statement of claim with regards to paragraphs 1 (b), (c), (d), 2 (a) – (i), 38, 39, 40, 41, 42, 43, 45(iv), (v), and (v1), of the statement claim, as disclosing no reasonable cause of action.
[3] The plaintiffs oppose the motion in its entirety.
FACTS:
[4] The plaintiffs are self-represented.
[5] Mr. Stevenson borrowed $1500.00 from the defendant Loan Away on February 12th, 2016. He signed a loan agreement. Mr. Stevenson made payments towards the loan on a weekly basis from February 25th, 2016 to May 26th, 2016. His payments ceased at that time. On June 3rd, 2016, Mr. Stevenson made a proposal under the Bankruptcy and Insolvency Act. Mr. Stevenson advised Loan Away of the contact information of his trustee in bankruptcy which was BDO Canada.
[6] On November 12th, 2016, the plaintiffs obtained preapproval for a mortgage refinancing on their home. On November 17th, 2016, the defendant Anna Semenova, who was an employee of Loan Away, registered a charge on title against the plaintiffs’ property in favour of Loan Away for the amount outstanding on the loan.
[7] On February 12th, 2016, the defendant Colin Pye, an in house counsel for Loan Away, advised the trustee in bankruptcy that the defendant Loan Away was relying on a “security of payment” provision in the loan agreement as authority to register the charge on title and that Loan Away would not discharge the charge until Mr. Stevenson had paid back his obligations to Loan Away in full. It was not until January 26th, 2017 that everything got straightened out and the plaintiffs completed their mortgaging refinancing on their home.
[8] The actual special damages that flow from this delay of 70 days are alleged to be approximately $5000.00 consisting of per diem interest on the mortgage paid out, courier and bank fees, and legal costs. In addition, the plaintiffs claim $3,800,000.00 in additional general, punitive, aggravated, and restitutionary damages from the four defendants.
[9] The plaintiffs allege fraud against the three individual defendants.
[10] As of May 11th, 2017, the principle balance owing to Loan Away was $4,947.24. It is unknown to the court as to the current balance alleged to be owing.
[11] The plaintiffs claim under the various heads of damages as a result of the delay in refinancing their mortgage; additional financial loss; emotional distress, and mental suffering, including for Mr. Stevenson, anxiety, chest pains, stress, headaches, frustration and insomnia, and likewise for Ms. Stevenson. They also claim they have sustained these damages for a loss of enjoyment of life, a loss of amenities of life, and that they were unable to participate in social activities and were unable to properly care for family members as required. They indicate that their family Christmas and New Years was ruined because of the emotional distress and mental suffering they were both enduring, all of which was caused by the defendants.
ANALYSIS:
[12] The defendants move, under Rule 21.01 to strike the claim as disclosing no reasonable cause of action. The test is that the defendants must show that it is “plain and obvious” that the claim of the plaintiffs’ cannot succeed. The threshold of this test is high. The facts as alleged in the statement of claim are deemed to be true for the purposes of a Rule 21 motion, but a pleading will be found to be legally insufficient if there has been a failure to plead material facts necessary to establish the legal elements of a recognized cause of action. See Trillium Power Wind Corporation v. Ontario (Minister of Natural Resources) 2013 ONCA 683 at paragraphs 30 – 31.
[13] The defendants urge me to find that there is no reasonable cause of action against the defendant Eugene Farber who is the owner and president of Loan Away. I disagree.
[14] The essence of the allegations by the plaintiffs against Mr. Farber are that as a director of the defendant Loan Away, he was negligent and breached his duty and the required standard of care as a director, by failing to ensure that his employees were properly trained, supervised, and that there were proper guidelines and procedures in place to prevent unlawful and negligent work practices. The onus will be on the plaintiffs to prove that there was unlawful and fraudulent activities taking place within Loan Away and by Loan Away employees, and that Mr. Farber was either aware of these unlawful activities or was negligent in not knowing of these activities because of improper supervision. In essence, that is what the plaintiffs have pleaded. Under Rule 21, I must accept that those pleadings can be proven. If so, there is clearly a personal cause of action against Mr. Farber if he was aware of these alleged illegal activities as they could not possibly be in the course of his employment.
[15] The defendants argue that Mr. Pye and Ms. Semenova are likewise not proper defendants and the claims against them should be struck. I disagree.
[16] The plaintiffs allege Mr. Pye was not an employee of Loan Away but of Ontario Energy Group acting on behalf of Loan Away and that he intentionally conspired with the defendant, Ms. Semenova, to commit fraud on the plaintiffs. If indeed those facts are proven, then clearly there is a personal claim against both Mr. Pye and Ms. Semenova, as again those alleged activities could not possibly be in the course of their employment.
[17] The defendants seek to strike out the claims for punitive, aggravated, and resistitutionary damages for “illegal business practises” under the Business Practises Act. This is redundant as the plaintiffs already claim for the same damages for fraud etc. and will be struck.
[18] The defendants correctly point out that a breach of contract does not allow for punitive and aggravated damages, but only for actual loss. As well, the Negligence Act deals only on how to proportion liability and does not provide for the payment of damages. However, no specific claim for damages under those Acts are made and they are only referenced as Acts which may be relied on.
[19] Finally the defendants allege that the pleading as a whole is frivolous, vexatious, and an abuse of process. I don’t disagree that the amount being claimed by the plaintiffs for the damages they allege they have suffered is ridiculously high given the facts of this case. They would be well advised to reduce their claims to something much more reasonable. This court has also made it clear to the plaintiffs that there is a very high test in proving fraud and they run a real risk of a substantial cost award against them if unsuccessful. However, that choice is the plaintiffs’, and to date, they have elected not to alter their claim. Clearly this may well be an issue at the end of the trial, for the trial judge, when exercising his/her discretion regarding costs.
CONCLUSION:
[20] Paragraphs 1(d), and 2(e) of the plaintiffs’ statement of claim are struck out. The balance of the defendants’ motion is dismissed.
[21] I received oral submissions from the parties at the end of the motion regarding costs. They wished me to fix costs now. There has been some mixed success on this motion although clearly the plaintiffs have been more successful than the defendants. I assess the plaintiffs’ costs at $500.00 payable within 30 days.
Arrell, J.
Released: November 1, 2017
CITATION: Stevenson v. Loan Away Inc. et al, 2017 ONSC 6512
COURT FILE NO.: CV-17-2211-00
DATE: November 1, 2017
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
RICHARD STEVENSON AND LAURIE STEVENSON
- and -
LOAN AWAY INC., EUGENE FARBER, COLIN PYE, LL.B AND ANNA SEMENOVA
REASONS FOR JUDGMENT
HSA