COURT FILE NO.: 15-55461
DATE: 2018/05/23
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
EMAD ELGUINDY and IRENE ELGUINDY
Plaintiffs
– and –
AZIZ ELGUINDY and AFRODITE ELGUINDY
Defendants
Self Represented
Mitchell J. Bates, for the Defendant Afrodite Elguindy
HEARD: May 18 and May 22, 2018
Turnbull J
RULING ON A MOTION BY THE PLAINTIFFs TO AMEND THEIR STATEMENT OF CLAIM IN MID-tRIAL
[1] The plaintiffs have been permitted to bring a motion to amend their statement of claim in the middle of the trial of this action.
[2] The plaintiffs have brought this action claiming the return of $440,000 they allege they advanced to the defendants as a series of loans. The defendant Aziz is the son of the plaintiffs and he has been noted in default. The defendant Afrodite is defending the action and pleads that any amounts advanced were gifts. The claim was brought in December 2015 immediately after the plaintiffs learned the defendants’ marriage had broken up.
[3] The prayer for relief in the original Statement of Claim read as follows:
The Plaintiffs Claim:
a. Liquidated Debt in the amount of $440,000 (without interest) owed to the Plaintiffs by the Defendants
[4] The claim is particularized in the pleading. The plaintiffs alleged that they advanced the defendants $190,000 to purchase a house in Innisfil Ontario in 2008 and a further $250,000 to purchase a home in Waterdown Ontario in 2010. They allege the funds were repayable at the time Afrodite began working as a real estate agent in 2014.
[5] The plaintiffs repeated these claims in two or three affidavits filed during the course of this litigation, including one motion for summary judgment.
[6] At the outset of trial, the plaintiffs were granted leave, on consent, to amend their Statement of Claim to claim unjust enrichment and quantum meruit. That Fresh As Amended Statement of Claim has been received by the court during these proceedings on May 16, 2018.
[7] Aphrodite’s original Statement of Defence was simply a bald denial of the plaintiffs’ claim and that the entire claim was simply an abuse of process being aided by Aziz.
[8] After the plaintiffs were granted leave to file their Fresh As Amended Statement of Claim, the defendant was permitted to file, on consent, an Amended Fresh As Amended Statement of Defence. She pled in paragraph 9 that the plaintiffs did not the defendants the money to purchase the properties. In paragraph 10, she stated that “Aziz and I did not have to repay the funds and there was never an agreement to repay the funds.
[9] Near the end of the examination in chief of the plaintiff Emad Elguindy, he summarized the amounts claimed by the plaintiffs. He broke down the amounts allegedly advanced and totalled them to be $437,000. In that summary, he specifically referred to $100,000 which was advanced to Afrodite by his wife Irene. He stated that his wife gave Aphrodite $100,000 in his presence to keep it in her account for Irene’s use. He said that it was totally separate from the amounts the plaintiffs had advanced to the defendants for the purchase of the two houses. Aziz also testified that his mother had transferred $100,000 to Afrodite to hold for her. He stated that that money was ultimately transferred to reduce the joint line of credit mortgage which the defendants had placed on title to their matrimonial home. He alleged that Afrodite attempted to use that money as leverage in their matrimonial settlement negotiations.
[10] The plaintiff Irene Elguindy emphatically stated that she transferred the $100,000 to Aphrodite in a bank draft with the request that she hold it for her (Irene’s) use when she needed access to it. She did not want her husband Emad nor her son Aziz to be able to access the funds. She stated that she never received advances from those funds at any time and when she did request Afrodite to advance her approximately $25,000 for a car purchase, the money was not forthcoming. She swore that she never intended this money to be a gift and her son Aziz confirmed that allegation.
[11] Afrodite brought some of the accounts relating to the alleged $100,000 advance to court. They had never been produced in this action to this time. The account had been opened in the name of her daughter Zoe, Aziz and herself. She acknowledged that the funds had been received but they were not given to her and that she did not deposit them into that account.
[12] At the time the funds were received, Afrodite recalled that Irene was living with her and Aziz and their children. It was around the time that Emad was to be released from custody for his conviction on a count of fraud. She testified that the funds were delivered “so that we can have it here for her”. Irene reportedly said that she did not want to be able to access the funds by a debit card and as a result, the funds were put into Zoe’s account. Afrodite agreed that Zoe, Aziz and herself all had access to the funds.
[13] Afrodite testified that she never saw how Irene delivered the funds and that she (Afrodite) did not physically deposit them into the account. She stated that the money sat in the account and when Irene required funds from time to time, they would get them for her. She also testified that whenever she and Aziz were short of funds, they would borrow from that account and then put the money back. She also stated that Irene lived off those funds and the money was being utilized by her all the time. She and Aziz would apparently get the money for her. Aziz denied that in his testimony.
[14] Afrodite testified that in 2014, there was approximately $16,000 to $17,000 left in Zoe’s account which she and Aziz jointly decided to use to reduce the line of credit on the matrimonial home. There is no evidence to this stage of the trial that this was done with Irene’s consent.
[15] It was during her examination in chief that the delivery of the $100,000 was discussed by Afrodite. Her counsel indicated that the bank statements for the BMO account into which the money was deposited were available. I had earlier ruled they were not admissible as they had not been produced before trial. However, when the nature of the alleged $100,000 payment to Afrodite and Aziz was explained by her, in essence agreeing with Irene that they were to be held in trust for Irene for when she needed some or all of the money, I raised the issue of the nature of the claims particularized in the Fresh As Amended Statement of Claim and whether an further amendment to the Statement of Claim should be granted to the plaintiffs. The plaintiffs then indicated they would like to amend their statement of claim.
Position of the Defendant Afrodite
[16] Mr. Bates helpfully provided me with authority to support his contention that no amendment to the statement of claim should be permitted because the claim is statute barred. In Barcham v. Barcham, 2016 ONSC 2406, Lederman J. of this court considered a motion by a plaintiff to amend his statement of claim but rejected the request because the amendments raised a completely new cause of action based on new facts. The claim for the $100,000 repayment arguably raises an issue of trust law and in the view of the defendant, it is statute barred.
[17] Alternatively, he suggests that the defendant would suffer significant prejudice if the amendment is granted in that the plaintiffs’ case is already completed and the defendant Afrodite, the only witness to be called by the defendant, is almost through her examination in chief.
Position of the Plaintiffs
[18] Mr. Elguindy argued that the proposed amendment at tab 2 of the brief entitled Plaintiffs’ Documents in Relation to Request to Amend Claim if Necessary would not prejudice the defendants. He noted that in his original statement of claim and in the Fresh As Amended Statement of Claim, he and his wife have always claimed “Liquidated debt in the amount of $400,000 owed to the Plaintiffs by the Defendants”.
[19] He argues that the $100,000 was included in the calculation of the amount claimed and he particularized it in his examination in chief. The plaintiffs are not seeking an increase in the amount claimed. He submits that the amendment merely clarifies an ambiguity in the pleading but does not constitute a new cause of action. He further submitted that granting such an amendment would not cause substantial prejudice to the defendants.
Analysis:
[20] The essence of this claim is the repayment to the plaintiffs of money advanced to the defendants in a series of payments over a period of time.
[21] In Morgan v Economical Mutual Insurance Group, 2013 ONCA 369, the court had to determine if a proposed amendment clarified a claim in a timely action or set out a cause of action that was time barred.[^1] Using the wording of Gouge J.A. at para. 13 of that decision, in this case I find that “while the claim is not free of ambiguity, the statement of claim of the plaintiffs reasonably communicates to the defendants” that the plaintiffs are after the return of their money which they advanced to the defendants in the amount of $440,000.
[22] The defendants had full knowledge of the advance of funds by Irene. The defendants have the bank statements for Zoe’s account relating to the alleged $100,000 advance and can lead evidence as to how much was received, what was done with the money and who authorized any such disbursements. The bank statements for Zoe’s account which I have looked at extend from June 2013 to October 2014, when the account was virtually emptied with the transfer of the balance to the defendants’ line of credit account.
[23] The Statement of Claim in this matter was issued in December 2015 which is well within the two year limitation period.
[24] The parties, for reasons unknown to me, never conducted discoveries in this action. Presumably, this issue which arose at trial would have reared its head at that time and have been dealt with long prior to the trial starting. The bank statements for Zoe’s account were not produced until shortly after the opening of trial at which time I denied their admission into evidence at the request of the plaintiffs. With the evidence which now has been heard by the court, the documents will clearly be relevant if I grant the plaintiffs leave to further amend their statement of claim.
[25] Rule 1.04(1) mandates that the Rules of Practice be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits. Rule 26 mandates that the court shall permit a party to amend its pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.
[26] I am satisfied that the determination of this case on its merits requires granting leave to the plaintiffs to amend their statement of claim. I am satisfied that any prejudice to the defendant Afrodite can be dealt with on the issue of costs if appropriate because there is $450,000 in court pending the outcome of this litigation. Furthermore, if she requires an adjournment to prepare her evidence to respond to this new particular of the plaintiffs’ claim, an adjournment can be granted, particularly in this case which is being tried by a judge without a jury.
Conclusion:
[27] The plaintiffs are granted leave to amend their Fresh As Amended Statement of Claim by amending deleting paragraph 1 of that document and adding the following as paragraph 1:
- Liquidated debt in the amount of $440,000 (without interest) owed to the Plaintiffs by the Defendants, including $100,000 owed to Irene that the defendants took and did not return.
[28] The defendant Afrodite is entitled to her costs of this motion to be fixed by me at the conclusion of this trial.
Turnbull, J.
Released: May 23, 2018.
[^1]: At para. 7.