COURT FILE NOS.: CV-16-555422 & CV-16-553443

DATE: 20180410

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN (CV-16-553443):

NATIONAL LEASING GROUP INC.

Plaintiff/Moving Party

– and –

2275518 ONTARIO INC., operating as ABIRA HEALTHCARE, RANDO DRUGS LTD., GRACE DIENA, DANIEL DIENA, 1125154 ONTARIO LIMITED, YEE HONG REHABILITATION CENTRE LIMITED PARTNERSHIP (Responding Parties) and ELIYAHU PINHAS DIENA and TELEPACER INC.

Defendants

David Downs, for the Plaintiff/Moving Party

Jerome Stanleigh, for all Defendants except Telepacer Inc./ for the Responding Parties

BETWEEN (CV-16-555422):

2275518 ONTARIO INC., operating as ABIRA HEALTHCARE, RANDO DRUGS LTD., GRACE DIENA and DANIEL DIENA

Plaintiffs/Responding Parties

– and –

TELEPACER INC.

Defendant/Moving Party

Darryl Singer, for the Defendant/Moving Party

HEARD: February 6, 2018

B.A. ALLEN J.

REASONS FOR DECISION

BRIEF OVERVIEW

Background to Motions

[1] There are two Rule 20 summary judgment motions before the court. The motions arise from two actions involving equipment leasing contracts.

[2] National Leasing Group Inc. (“National Leasing”) by five leases (“the Leases”) leased equipment to differing combinations of defendants: 2275518 Ontario Inc. operating as Abira Healthcare, Rando Drugs Ltd., Grace Diena, Daniel Diena, 1125154 Ontario Limited and Yee Hong Rehabilitation Centre Limited Partnership (“the Lessee Defendants”). Telepacer Inc. (“Telepacer”) is a vendor that supplied equipment and on four of the Leases. Another vendor, which is not a party to these actions, supplied the equipment on one of the Leases. The defendant Daniel Diena is the principal of the corporate defendants except Telepacer. Copiers and fitness equipment were leased for use in businesses connected to Mr. Diena. There is a separate action in this court by a different leasing company against some of the Lessee Defendants, Blue Chip Leasing Corporation v. 2275518 Ontario Inc. et al., CV-16-544271, (“the Blue Chip action”) in which no concurrent motion was brought.

[3] Mr. Diena conducted the business in relation to the Leases. He ordered the equipment for his business and for the other Defendant Lessees.

[4] There is no issue that Mr. Diena signed each of the Leases. There is no dispute that Mr. Diena made payments under the Leases for about one year. The Lessee Defendants counterclaim for the amounts they claim they paid under the Leases. There is a dispute between the parties as to the amount the Lessee Defendants paid on the Leases.

[5] Mr. Diena defaulted on the Leases and National Leasing demanded payment. National Leasing issued a statement of claim on May 25, 2016 against the Lessee Defendants for damages for amounts owing. On June 23, 2016, the Lessee Defendants (the first four) issued a statement of claim against Telepacer claiming non-delivery of the equipment.

[6] National Leasing supports Telepacer’s position that the equipment was delivered. However, National Leasing’s position does not depend on such a finding. National Leasing claims breach of contract. The terms of the Leases in National Leasing’s view bind Mr. Diena to the payment terms whether the equipment was delivered or not.

[7] Telepacer seeks summary judgment against the Lessee Defendants dismissing the claim against them (“the Telepacer Motion”).

[8] National Leasing is seeking summary judgment for the unpaid Lease amounts owing together with associated fees and their costs on a substantial indemnity basis, all such relief provided for under the Leases (“the National Leasing Motion”).

Stage in the Litigation

[9] Pleadings are closed in both actions. Affidavits of documents were exchanged. Discoveries of Mr. Diena by National Leasing and Telepacer took place in May 2017. Answers to and denials of undertakings have been made by the parties. Cross-examinations on affidavits were conducted in January 2018. What this means is that the summary judgment motions come at a time when there is a fairly extensive evidentiary record before the court.

ISSUES

a) On the Telepacer Motion, was the equipment under the Leases delivered to the Lessee Defendants?

b) On the National Leasing Motion, did Mr. Diena breach the Leases and is he bound by the terms to pay the outstanding amounts?

THE LAW ON SUMMARY JUDGMENT

[10] Rule 20.04(2)(a) of the Rules of Civil Procedure provides that the court shall grant summary judgment if it is satisfied there is no genuine issue requiring a trial. The moving party has the burden to prove on a balance of probabilities that there is no genuine issue requiring a trial. In determining whether there is a genuine issue requiring a trial the court is required to consider the evidence submitted by the parties.

[11] The judge may weigh the evidence, evaluate the credibility of the deponent and draw any reasonable inference from the evidence, unless it is in the interests of justice for such powers to be exercised only at a trial.

[12] The Supreme Court of Canada in Hryniak v. Mauldin held there will be no genuine issue requiring a trial when the motions judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This is possible when the motion: (a) allows the judge to make necessary findings of fact; (b) allows the judge to apply the law to the facts; and (c) is a proportionate and less expensive means to achieve a just result. If the summary judgment process provides the motions court with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, there will be no genuine issue requiring a trial: [Hryniak v. Mauldin, 2014 SCC, at paras. 49 and 66, (S.C.C.)].

[13] The moving party must put its “best foot forward” on the motion by setting out in its affidavit material or other evidence specific facts showing there is no genuine issue requiring a trial: [Rule 20.02(2)]. It is only after the moving party has discharged its evidentiary burden of proving there is no genuine issue requiring a trial for its resolution that the burden shifts to the responding party to prove that its claim has a “real chance of success”: [Sanzone v. Schechter, 2016 ONCA 566, at para. 20, (Ont. C.A.)].

[14] The “best foot forward” principle is developed in Sweda Farm v. Eggs Farmers as being applicable in many types of cases. It is applied in cases large and small, with multiple, complex issues and those with single issues:

Summary judgment motions come in all shapes and sizes, and this is recognized in the Supreme Court of Canada’s emphasis on “proportionality” as a controlling principle for summary judgment motions. The principle does not mean that large, complicated cases must go to trial, while small, single-issue cases should not. Nor does it mean that the “best foot forward” principle has been displaced; quite the reverse. If anything, this principle is even more important after Hryniak …

[Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200, at para. 32, (Ont. C.A.; aff’d 2014 ONCA 878; leave to appeal dismissed, 2015 CarswellOnt 10365 (S.C.C.)]

[15] The responding party must put their best foot forward or risk losing and having summary judgment awarded against them.

The evidentiary burden is on the responding party to present affidavit material or other evidence to support their allegations or denials in their pleading. Absent of this evidence, an adverse inference can be drawn.

[Royal Bank of Canada v. Biddell, et al, 2015 ONSC 37, 2015 ONSC, at para. 37, (Ont. S.C.J.)]

[16] Affidavits that are self-serving and contain only bald assertions are insufficient to create triable issues in the absence of detailed facts and supporting evidence: [Jagosky v. Corporation of the Town of Huntsville, 2010 ONSC 4590, at paras. 54-55 (Ont. S.C.J.); aff’d 2011 ONCA 324)].

[17] The court is entitled to assume the parties have advanced their best case and put forward the best evidence on which they will rely to support their case. The court can take it that the evidence filed by the responding party is “as good as it gets”: [Byfield v. Toronto Dominion Bank, 2102 ONCA 49, at para. 10, (Ont. C.A.); Danos v. BMW Group Financial Services Canada, 2014 ONSC 2060, at para 47, (Ont. S.C.J.)].

THE TELEPACER MOTION

The Leases

[18] Mr. Diena does not deny negotiating for equipment with the vendor Telepacer. Equipment was to be delivered to various clinics and pharmacies throughout Ontario which Mr. Diena claimed were managed by his business. The Leases involved three photocopiers and 23 items of fitness equipment.

[19] As will be seen with the evidence under National Leasing’s motion, Mr. Diena admits that two photocopiers, seized from SmartStop by a bailiff engaged by National Leasing, were delivered.

[20] In about July 2014, Mr. Diena contacted Michael Sprague (“Mr. Sprague”), an independent sales vendor for Telepacer, to discuss leasing some copiers and fitness equipment. The equipment was ordered from Dynamic Technologies, a company owned by Mr. Sprague. Mr. Diena signed four equipment Leases with Telepacer and signed one with another vendor. According to Telepacer, the copiers and fitness equipment were first delivered on August 6, 2014 to the premises at SmartStop Self Storage located at 4548 Dufferin St., Toronto (“SmartStop”). Mr. Diena has two storage units there, one at unit 1236 and the other at 1237. Each storage unit has its own access code. Mr. Diena is the only person with the entry code to the units. The importance of this evidence will become clear later.

[21] Mr. Diena wanted more equipment. In September 2014, Mr. Sprague met with Mr. Diena and provided Mr. Diena a quote. Mr. Diena signed another Lease for a copier and treadmills for his rehabilitation clinic. Mr. Diena requested the delivery be made the second week in October 2014. According to Telepacer, the copier and fitness equipment were delivered on October 14, 2014. On the day before delivery Mr. Diena asked that the goods be delivered to SmartStop.

[22] In about November 2014, Mr. Diena approached Mr. Sprague to lease more equipment. Mr. Diena signed a further Lease. According to Telepacer, the equipment was delivered on December 17, 2014. After each delivery Mr. Sprague called Mr. Diena to ensure Mr. Diena was satisfied with the equipment.

[23] On December 23, 2014, Mr. Diena met with Alex Epaminondas, a sales representative for Telepacer, about a maintenance contract for a piece of equipment Telepacer sold him. According to Mr. Epaminondas, Mr. Diena told him he had received all the equipment and was satisfied with it.

[24] In March 2015, Mr. Diena requested more fitness equipment and a copier for Royal Medical Pharmacy located on Royal York Rd. in Toronto (“the Royal York Pharmacy”). Mr. Diena requested that the equipment be delivered prior to financing approval. It was delivered on April 14, 2015 before approval was extended. It was an independent transport company retained by Telepacer, Carmel Transport (“Carmel”), that delivered the equipment to SmartStop.

[25] A delivery to be made on May 22, 2015 involved two Leases, one for fitness equipment through National Leasing and a copier through another leasing company. At that time, Mr. Diena was looking to lease more equipment than National Leasing was prepared to approve. As the delivery man retained by Telepacer confirms below, Mr. Diena called to direct that this delivery be rescheduled to the end of May or June 2015 due to construction going on at the Royal York Pharmacy.

Telepacer’s Evidence on Equipment Deliveries

[26] Mr. Diena denies receiving the equipment under the Leases and further denies knowing the whereabouts of the equipment. Telepacer’s witnesses, the truck drivers who claim they made the deliveries and the sales representatives who communicated with Mr. Diena during the relevant times, each attest to the fact the equipment was delivered.

[27] Sri Poopalasingham (“Sonny”) drove for Carmel, a transport company he owned. Carmel and Sonny are independent of Telepacer. Sonny testified that in the summer of 2014 he delivered three exercise bikes to Mr. Diena at SmartStop for Telepacer. Sonny’s evidence is that a man he thought was Mr. Diena met him and redirected the equipment to another location. According to Sonny, the man indicated he did not want the equipment to remain at SmartStop and directed that the equipment be loaded onto another truck parked outside SmartStop.

[28] Mr. Diena asserted on cross-examination that there was insufficient room on the lot outside SmartStop to transfer the equipment but that there would be sufficient room if the transfer was done inside the gate at SmartStop. Sonny stated that this was the same arrangement Mr. Diena made with the October 2014, December 2014, April 2015 and May 2015 deliveries. Mr. Diena met Sonny and directed him to load the equipment onto another truck. According to Sonny, on each delivery, Mr. Diena and Sonny signed delivery slips provided by Telepacer. Sonny stated that he did not have his own delivery slips.

[29] On May 22, 2015, Telepacer invoiced the final Lease. One of Telepacer’s other independent sales representatives, Ajitha Gunawardana (“Ajitha”), stated that Telepacer attempted on July 15, 2015 to deliver a copier to the Royal York Pharmacy. Due to construction the delivery could not be made. July 23, 2015 was the next proposed delivery date. According to Mr. Ajitha, Mr. Diena agreed to that date but directed the equipment be delivered to SmartStop. Mr. Diena indicated he would arrange for the delivery of the equipment from the Royal York Pharmacy to SmartStop.

[30] Another independent truck driver, Alnasir Hasham (“Al”), owner of the company Al-in Transport, stated that he delivered the copier under the May 22, 2015 Lease to Mr. Diena to SmartShop. Al stated that Mr. Diena allowed his entry into SmartShop. He also stated that he drove to the loading dock and unloaded the copier into a storage unit at SmartStop. On January 18, 2018 on cross-examination, Al identified Mr. Diena as the person who met him and allowed him into the SmartStop storage unit.

[31] Al asserted he was given cash payments by Telepacer for deliveries and stated that he discarded delivery slips after each delivery. Like Sonny he had no delivery slips to evidence the deliveries.

The Termination of Telepacer’s Relationship with Mr. Diena

[32] As noted above, Mr. Diena had wanted to lease additional equipment which he was not able to lease in May 2015. According to Mr. Epaminondas, in late August 2015 Telepacer had a conference with Mr. Diena regarding a new lease for additional equipment. Telepacer informed Mr. Diena he was unable to secure further financing for him. Mr. Diena became very agitated and began yelling. Mr. Epaminondas asked Mr. Diena about a lawsuit. Mr. Epaminondas stated that he had heard from another leasing company that indicated it was not interested in doing business with Mr. Diena because of a previous lawsuit.

[33] The August 2015 conference was the last contact between Mr. Diena and Telepacer. At this point Telepacer declined to do further business with Mr. Diena. In September 2015, Mr. Diena ceased making Lease payments and began to contend that he never received any of the deliveries. According to Mr. Epaminondas, Mr. Diena had never complained to Telepacer about non-delivery of equipment before September 2015.

Mr. Diena’s Evidence about the Deliveries

[34] Mr. Diena was the only witness for the Lessee Defendants. The Lessee Defendants do not deny that Mr. Diena signed for delivery of the equipment on the day the Leases were executed. Mr. Diena states that it is customary in the business that funds for the equipment are not released until the lessee confirms delivery even if delivery has not been made.

[35] Mr. Diena asserted that on the dates August 6, 2014, December 17, 2015, May 29, 2015 and July 23, 2015, when Telepacer says the deliveries were made, he was not at SmartStop. On two of the dates he indicates he was out of the jurisdiction.

[36] As evidence, attached to his affidavit, are Visa credit card statements which show purchases of gas and other items outside Ontario on August 7 and 8, 2014, December 17, 2014 and May 29, 2015. There is an entry on a May 28, 2014 Visa bill that appears to show he was in Lakewood, New York at a foreign exchange facility. There is a further entry for December 18, 2014 that seems to show he was at another foreign exchange facility in New York.

[37] In answer to a question on cross-examination as to why he continued to pay on the Leases when he had not received the equipment, he responded he did not know the equipment was not delivered. Mr. Diena asserts that it was only through an audit by his accountant that the non-delivery was discovered. It was then that he visited his various businesses and confirmed the equipment was not delivered. Mr. Diena said this is what prompted him to stop Lease payments in September 2015. Mr. Diena agrees that he made payments for several months but says he just assumed the equipment would be delivered soon after the execution of the Leases.

[38] Mr. Diena states that the invoices Telepacer filed were prepared at the time of execution of the Leases and are not proof that the equipment was delivered on the dates Telepacer claims they were delivered. Mr. Diena also points out that the fact that Telepacer’s delivery drivers did not have delivery slips to prove the deliveries were made supports his position that the deliveries were not made.

[39] Mr. Diena also relies on what he refers to as conflicts in Telepacer’s evidence.

[40] Mr. Diena presented an activity log for his SmartStop unit 1236 to prove there were no entries into or exits from the unit on the dates Telepacer’s witnesses stated that deliveries were made. He stated that he was the only person with the code to enter and exit and he did not receive any deliveries on any of the dates alleged by Telepacer’s witnesses. Mr. Diena did not provide activity log sheets for unit 1237 and he did not explain why.

[41] Mr. Diena also pointed to what he considered evidence that the delivery that Telepacer insists was made on May 29, 2015 did not occur. He points to an email communication from the sales representative, Agitha, dated May 27, 2015. That email states that ten days would be needed to deliver the fitness equipment and further states that the copier bound for the Royal York Pharmacy would be delivered on the same day.

[42] Mr. Diena also asserted that there was insufficient space in his SmartStop unit for the items Al says he delivered on October 14, 2014. He attached poor quality photocopies of what he says is his storage unit. The photographs are undated and there is nothing to establish the unit depicted was either of his units.

ANALYSIS

[43] For the following reasons, I do not accept Mr. Diena’s evidence that the fitness equipment and copiers were not delivered. Mr. Diena’s evidence lacks the ring of truth necessary for a favourable credibility finding. In responding to Telepacer’s motion the responding party must put its best foot forward. The court is entitled to assume that the evidence presented on the motion is as good as it will get for the party opposing the motion:

A responding party must still “lead trump or risk losing” and “put its best foot forward” by setting out specific facts and coherent evidence that is organized to show a genuine issue.

… a self-serving affidavit containing only bold assertions is insufficient to create triable issues in absence of detailed facts and supporting evidence”

[Jagovsky v. Corporation of the Town of Huntsville, 2010 ONSC 4590, at paras. 54-55, (Ont. C.A.)]

[44] Mr. Diena made self-serving bald statements that the deliveries were not made and provided no persuasive supporting evidence to prove that allegation.

[45] The facts are that Mr. Diena signed the Leases and paid on them for nearly one year. The evidence is that the equipment was ultimately to be delivered to businesses associated with Mr. Diena. This is supported by Telepacer’s sales agents and delivery men who state that the equipment was first delivered to SmartStop. It was their understanding equipment would ultimately be delivered to rehabilitation clinics and pharmacies. Telepacer’s evidence is that at least one of the deliveries, the one originally set to be delivered on May 22, 2015, was made by Sonny to SmartStop and then later picked up and delivered by Al to the Royal York Pharmacy in July 2015.

[46] It would be reasonably expected that the businesses for which the equipment was ordered would have contacted Mr. Diena over the course of the year and complained about not receiving equipment. Mr. Diena brought no evidence about any such complaints. This I find tends to support Telepacer’s evidence that the equipment was delivered.

[47] For reasons given above, the photographic evidence Mr. Diena presented of what he says is the inside of his storage unit is of absolutely no value in disproving Telepacer’s evidence that deliveries were made.

[48] The Visa bills that he enters as evidence which Mr. Diena says show he was not in the jurisdiction when two of the deliveries were said by Telepacer to have been made are weak proof, if any proof at all, that deliveries were not made on the dates the deliveries are said to have been made. There is nothing to prove that it was Mr. Diena who used his credit cards that day. He has presented no travel documents or plane tickets to establish his trips to New York. He stated with no proof that he requested his Nexus border crossing records to prove his trips and that he did not receive a response.

[49] Further, being in New York on those days does not prove Mr. Diena was not in Toronto on the dates of the deliveries. I think I can take judicial notice of the fact that a trip from New York to Toronto especially by plane is sufficiently short as to allow Mr. Diena to be in New York and Toronto on the same day. The same is true of the Visa bill for gas purchased on August 7 and 8, 2014 in Tecumseh, Ontario and Thorold, Ontario. The Visa bills are no proof that Mr. Diena could not have been in Toronto on the same days given the relatively short distance of those places from Toronto.

[50] I considered Telepacer’s evidence that the delivery services were independent of Telepacer. The Leases contain a term providing for this. The drivers were not employees or agents of Telepacer. I can see no reason why those witnesses would fabricate deliveries they did not make. The drivers may not have remembered exact dates over the years before they swore their affidavits. But I find this is insufficient proof, in view of other evidence that supports the drivers’ evidence, to prove the deliveries were not made.

[51] Mr. Diena finds fault with the fact that Telepacer’s delivery men did not have delivery slips to prove the deliveries. However, I accept Telepacer’s submission that the delivery services were not sophisticated operations. In fact, Telepacer paid one of them in cash. In face of the other evidence that supports that the deliveries were made, I find the absence of delivery slips does not meaningfully detract from Telepacer’s position.

[52] Noticeably absent from Mr. Diena’s evidence are witnesses from the businesses where the equipment was supposed to be installed. One would think that there would have been displeasure at not receiving the equipment and that the proprietors of those businesses would have something to say in support of Mr. Diena on this motion. But no affidavits from those persons were filed.

[53] Mr. Diena contends he has no idea where the equipment is. There is the further fact that Mr. Diena did not report the lost equipment to the police when he discovered the loss in September 2015. After all, he had paid on the Leases for months. When confronted by Telepacer about reporting to the police, Mr. Diena made a vague statement in an affidavit that he reported the loss but he attached to his affidavit no occurrence documents from the police as proof he went to the police. It is highly unlikely that the police would not document such a valuable loss if it were reported. The question then is why Mr. Diena would not automatically go to the police without the need to be provoked by someone else.

CONCLUSION ON TELEPACER MOTION

[54] There is a sizeable evidentiary record before me from which I find there is strong support that Mr. Diena received the deliveries. I find his affidavit amounts to self-serving and unsubstantiated statements supported by evidence of low or no probative value and is incapable of discounting Telepacer’s evidence.

[55] I grant Telepacer’s motion. I dismiss the Lessee Defendants’ action against Telepacer.

THE NATIONAL LEASING MOTION

Amounts Paid by National Leasing and Judgments Sought

[56] National Leasing made payments on five Leases. They did not learn of the defaults on the Leases until October 1, 2015. The Leases involve 23 items of fitness equipment and three copiers. The Lessee Defendants allege none of the equipment was delivered except, as disclosed on this motion, two copiers that were seized by a bailiff engaged by National Leasing.

[57] As noted earlier, National Leasing takes the position that the Lessee Defendants are liable under the terms of the Lease irrespective of whether the equipment was delivered or not.

[58] The following are the items associated with the respective Lease numbers:

Lease no. 2679241* 1 photocopier and 3 pieces of fitness equipment

Lease no. 2689075* 1 photocopier and 3 pieces of fitness equipment

Lease no. 2697458 7 pieces of fitness equipment

Lease no. 2703618 10 pieces of fitness equipment

Lease no. 2705247** 1copier

*copiers seized by bailiff

**copier leased from the vendor other than Telepacer

[59] National Leasing provided records to show it paid Telepacer and the other vendor in full for the equipment on the Leases. The Leases, except Lease no. 2697458, have remained in default from November 1, 2015 and thereafter. Lease no. 2697458 has remained in default since December 1, 2015 and thereafter. National Leasing claims as its primary position summary judgment from the Defendant Lessees on all five Leases in the following amounts:

2275518 Ontario Inc. (“227 Ontario”) $229, 297.15

Rando Drugs Ltd. (“Rando Drugs”) $178,542.67

Grace Diena $145,777.55

Daniel Diena $43,942.07

1125154 Ontario Limited (“112 Ontario”) $50,745.48

Yee Hong Rehabilitation Centre

Limited Partnerships (“Yee Hong Rehab”) $50,754.48

[60] National Leasing seeks four alternative judgments:

• full judgment on four Leases and partial summary judgment on one Lease;

• full summary judgment on three Leases and partial summary judgment on two Leases;

• full summary judgment on four Leases and partial summary judgment on one Lease;

• full summary judgment on three Leases and partial summary judgment on two Leases.

[61] The partial summary judgments are sought in the alternative in relation to Lease no. 2679241 and Lease no. 2689075 because the equipment under those leases was recovered. Partial summary is sought in relation to Lease no. 2705247, the Lease with the vendor other than National Leasing. The alternative judgments are different combinations of the Leases with Telepacer and the other supplier and the Leases related to the two recovered copiers.

[62] Pursuant to the Lease terms National Leasing seeks 24% interest from November 1, 2015, the cost of administrative and other fees, and legal costs on a substantial indemnity basis.

[63] National Leasing filed affidavits from Daniel Schwartz, a legal designate with National Leasing. He attests to the fact that National Leasing paid the full amounts on all the Leases. Attached to his affidavit are copies of cheques and electronic payment confirmations that establish the payments were made. Equipment vendor invoices for the copier associated with the other vendor are also attached to the affidavit.

Amounts Received from Lessees

[64] Included in Mr. Schwartz’s affidavit evidence is an account of amounts paid by the Defendant Lessees which data is drawn from accounts receivable reports attached to his affidavit. By Lease number, the amounts Mr. Schwartz states were received by National Leasing from customers are as follows:

Lease no. 2679241 $13,633.17

Lease no. 2689075 $15,851.40

Lease no. 2697458 $13,004.87

Lease no. 2703618 $ 7,196.45

Lease no. 2705247 $12,160.98

Total $61,846.87

[65] The Lessee Defendants’ counterclaim is for $120,610.00, the total amount they claim they paid on the Leases. National Leasing disputes the Lessee Defendants’ calculation and provides what they assert is the source of the Lessee Defendants’ error.

[66] Referring to the accounts receivable reports, Mr. Schwartz explains that National Leasing received payments totaling $58,999.45 on a prior lease of two photocopiers under lease no. 50372042, not one of the Leases before this court. Adding $61,846.87 and $58,999.45 the total is $120,846.32, an amount close to the amount of the counterclaim. From this National Leasing concludes the correct amount paid on the Leases in dispute, subtracting the amount for the previous lease, is $61,846.87. The Defendant Lessees have provided no documentary evidence to dispute this.

[67] On December 10, 2015 and March 10, 2016, National Leasing sent out demand letters. The Leases allowed for demands for accelerated balances. In January 2016, National Leasing engaged Napier Bailiffs Ltd. to investigate and attempt to recover the leased equipment. An affidavit from the bailiff indicates he recovered the two photocopiers referred to above under Lease nos. 2679241 and 2689075 from a storage unit on Dufferin Street in Toronto. National Leasing had the copiers auctioned and Napier sold them for the sums of $340.00 and $100.00.

[68] The total accelerated amounts claimed after adjustments for credit on Lease nos. 2679241 and 2689075 for the net amounts realized from the sale of the photocopiers are as set out in paragraph 64 of these Reasons for Decision.

[69] I have found that the equipment was delivered. The Lessee Defendants provide no evidence to counter the amounts National Leasing paid Telepacer and the other vendor. As noted earlier, the Lessee Defendants provided no support for the amount they claim in their counterclaim.

Pertinent Provisions under the Lease

[70] The Leases contain the same terms. National Leasing relies on several terms in the Leases as follows:

[71] Just above the signature line on the second page of the Lease are the following words:

By signing this Lease, you, as lessee agree to the terms and conditions of this Lease and certify that all Equipment has been delivered, is fully installed and is in good operating order. You, as lessee unconditionally accept the Equipment and request that we, as lessor accept this Lease and pay the supplier of the equipment.

[72] National Leasing asserts that had it been warned after the first or even the second Lease that equipment had not been delivered, it would not have entered into the subsequent Leases to finance more equipment.

[73] Mr. Diena conceded on cross-examination that he did not read the Leases before he signed them saying that in retrospect perhaps he should have done so.

[74] National Leasing relies on other terms of the Leases which I paraphrase in part as follows:

• Non-cancellable – the lease cannot be cancelled by lessee for any reason during the term of the lease, including for loss of the equipment;

• Late charges - at 24% interest per annum and all other reasonable administrative fees;

• Default – on default all rent and other payments become due immediately; costs of collection, repossession of equipment and of enforcement of lessor’s rights, including costs on a solicitor/client basis shall be cumulative;

• Miscellaneous – the liability of each lessee is joint and severable; the lease constitutes the entire agreement; an acknowledgement by lessee that suppliers and sales representatives are not agents of the lessor.

[75] National Leasing cites a case of the Divisional Court involving a lessee that did not read the lease documents before signing them in a circumstance where the vendor made a misrepresentation. The court held the consequences rested with the lessee who allowed the documents to come into the lessor’s possession. This resulted in the lessor acting in good faith in the ordinary course of business and changing its position in reliance on the documents. The terms of the lease were enforced: [Laker Leasing Ltd. v. 1191356 Ontario Ltd (cob Progressive Auto Collision), [2000] O.J. No. 1646 (S.C.J.); appeal dismissed [2000] O.J. No. 971 (Div. Ct)].

[76] National Leasing also relies on a decision of the Supreme Court of Canada which held that as between the innocent party and the other party, the law must consider that the innocent party was innocent of any negligence, carelessness or wrongdoing whereas the other party by their carelessness allowed wrongdoers to cause a loss. The court decided that justice required that the person who with reasonable care could have avoided the loss should bear the resulting loss: [Marvco Color Research Ltd. v. Harris, 1982 CanLII 63 (SCC), [1982] S.C.J. No. 98, at para. 10, (S.C.C.)].

[77] National Leasing also cites leasing cases with circumstances similar to those before the court where the leasing company had no relationship with the vendor or supplier. The leasing companies in those cases, like National Leasing, only became involved to finance the leasing of items already selected by the lessee. The equipment was not delivered and the lessee did not advise the leasing company.

[78] In the case before me, similar to the cases cited by National Leasing, the lessors relied on the lessee’s acknowledgement that the lessee selected the equipment and the lessor purchased the equipment at the lessee’s request and on the lessee’s instructions. The courts determined that the lessees were bound by the agreements they signed. The Faithshire case is a summary judgment motion in which judgment was granted: [Faithshire Leasing Corp. v. 1589630 Ontario Inc. 2009 CarswellOnt. 5518 (S.C.J.); appeal dismissed 2010 CarswellOnt. 2998, 2010 ONCA 352 (Ont. C.A.); Canadian-Dominion Leasing Corp. v. George A. Welch & Co., [1981] O.J. No. 3088, 33 O.R. (2d) 825 (Ont. C.A.)].

[79] National Leasing submits there is no genuine issue requiring a trial as to the amounts they claim under the Leases. National Leasing primarily seeks summary judgment for the amounts owing under the Leases together with administrative and other fees, interests at 24% per annum, and their costs on a substantial indemnity basis, all of which are provided for under the terms of the Leases.

CONCLUSION ON THE NATIONAL LEASING MOTION

[80] I grant full summary judgment in favour of National Leasing on all five Leases.

[81] I do not grant partial summary judgment as claimed in the alternative by National Leasing. I am satisfied with National Leasing’s evidence on the Leases of the two seized copiers and on the Lease arranged by the other supplier. The payment records filed by National Leasing support its position that it made the payments on Lease nos. 2679241 and 2689075, the Leases for the two copiers that were seized. National Leasing’s calculation gives credit for the amounts recovered on the sale of the copiers. National Leasing’s records also show that National Leasing paid the full amount on Lease no. 2705247, the lease arranged by the other vendor.

[82] I find National Leasing put its best foot forward in presenting a detailed affidavit and documentary evidence to support the outstanding amounts it claims.

[83] The Lessee Defendants relied principally on allegations in its pleading and bald assertions in Mr. Diena’s affidavit. They did not present evidence to oppose National Leasing’s evidence of the amounts they paid. Neither did the Lessee Defendants oppose National Leasing’s interpretation of the terms of the Leases. There is a dispute on the total amount the Lessee Defendants paid on the Leases. I am satisfied on the evidence National Leasing presented that the amount claimed by the Lessee Defendants is incorrect.

[84] There is no need for a trial. There are no genuine issues for a trial judge to consider.

ORDER

Summary Judgments

[85] I grant summary judgment in favour of Telepacer and dismiss the Lessee Defendants’ action against Telepacer.

[86] I grant summary judgment on all five Leases against the respective Lessee Defendants for the respective amounts claimed by National Leasing and owed on the respective five Leases plus any administrative and other fees provided for under the Leases.

Pre-Judgment Interest on National Leasing Judgment

[87] I grant pre-judgment interest as follows:

• at 24% annually from November 1, 2015 to April 10, 2018 on Lease nos. 2679241, 2689075, 2703618 and 2705247 to be paid on outstanding the amounts pursuant to the terms of the Leases; and

• at 24% annually from December 1, 2015 to April 10, 2018 on Lease no. 2697458 to be paid on the outstanding amounts pursuant to the terms of the Lease.

[88] Total judgment and pre-judgment interest amounts owing by the respective Lessee Defendants:

Lessee Defendant Judgment Interest Totals

Abira Healthcare $229,297.15 $133,469.92 $362,767.07

Rando Drugs $178,542.67 $103,734.74 $282,277.41

Grace Diena $145,777.55 $84,538.87 $230,316.42

Daniel Diena $43,942.07 $24,877.23 $68,819.30

1125154 Ontario Limited $50,754.48 $29,735.17 $80,489.65

Yee Hong Rehabilitation $50,754.48 $29,735.17 $80,489.65

Centre Limited Partnership

Lessee Defendants’ Counterclaim against National Leasing

[89] I dismiss the Lessee Defendants’ counterclaim against National Leasing.

COSTS ON BOTH MOTIONS

[90] Telepacer and National Leasing were successful on their motions. The summary judgments dispose of the two actions in their entirety. My decision on costs will therefore be as to costs of the motions and the actions.

[91] At the time of the proceeding before me I was not fully aware of the circumstances of the Blue Chip action. After the proceeding before me, on consent of the other parties, counsel for National Leasing provided a written account which explained counsel for Blue Chip’s attendance, and what costs he was seeking, at the proceeding before me. On February 6, 2018, at the commencement of the proceeding, counsel for Blue Chip requested an opportunity to make submissions on costs against the defendants in the Blue Chip action for his attendances at Civil Practice Court in relation to a concurrent summary judgment motion brought by those defendants which did not go forward.

[92] As noted above, Blue Chip leased equipment on a separate lease and brought the separate action referred to above and is not seeking costs against National Leasing. Accordingly, I will not entertain costs submissions from counsel for Blue Chip.

[93] I urge the parties to attempt to settle costs on their own. Failing that they shall deliver Cost Outlines and Written Submissions within 30 days of this Order. The parties to each action shall exchange their respective costs submissions. The submissions shall not exceed three pages double-spaced, Times New Roman font, 12-pt.

B.A. ALLEN J.

Released: April 10, 2018

COURT FILE NOS.: CV-16-555422 & CV-16-553443

DATE: 20180410

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN (CV-553443):

NATIONAL LEASING GROUP INC.

Plaintiff/Moving Party

– and –

2275518 ONTARIO INC., operating as ABIRA HEALTHCARE, RANDO DRUGS LTD., GRACE DIENA, DANIEL DIENA, 1125154 ONTARIO LIMITED, YEE HONG REHABILITATION CENTRE LIMITED PARTNERSHIP (Responding Parties) and ELIYAHU PINHAS DIENA and TELEPACER INC.

Defendants

BETWEEN (CV-16-555422):

2275518 ONTARIO INC., operating as ABIRA HEALTHCARE, RANDO DRUGS LTD., GRACE DIENA and DANIEL DIENA

Plaintiffs/Responding Parties

– and –

TELEPACER INC.

Defendant/Moving Party

REASONS FOR DECISION

B.A. ALLEN J.

Released: April 10, 2018