Court File and Parties
COURT FILE NO.: CV-17-25374 DATE: 20180628 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Michael Saad and Chaker Nohra Plaintiffs – and – Ralph Sandstedt and Barbara Sandstedt Defendants
Counsel: Luigi DiPierdomenico, for the Plaintiffs Peter Hrastovec, for the Defendants
HEARD: June 18, 2018
Reasons on Motion
Carey J. :
[1] The plaintiffs move for summary judgment against the Sandstedts on two promissory notes. The first dated October 17, 2012 in the principal amount of $133,333.33 (the “Nohra note”). The second note to the plaintiff, Saad, in the principal amount of $66,666.66 (the “Saad note”).
Overview
[2] 1690025 Ontario Ltd. (the “Company”) was formed as a land development vehicle designed to convert approximately 34 acres of agriculture land in the Town of Leamington into residential building lots.
[3] The plaintiff, Nohra, sold his shares and the plaintiff, Saad, a portion of his shares to the other shareholders, taking back a second mortgage in the form a series of promissory notes guaranteed by all the partners, individually, for $700,000. This litigation concerns only the defendant, couple, who executed notes totalling $200,000 in favour of the plaintiffs.
[4] The plaintiffs seek a judgment on the Nohra note of $71,155.80 as of February 9, 2018 and a judgment in the amount of $35,577.89 as of February 9, 2018 on the Saad note.
[5] In argument, counsel indicated that given a dispute on accounting regarding these notes that they would be content with a summary judgment with a reference ordered for the amount owing.
[6] The defendants oppose the motion saying that there is a genuine issue for trial based on promissory estoppel. They say that they have always believed that by verbal agreement, the repayment of the promissory notes would always be through the sale of lots in the residential subdivision development. This, they say, has always been the practice.
[7] Since the demand was made, notwithstanding the defendants’ position regarding the existence of a collateral agreement about repayment, there have been discussions deemed at resolving this dispute. However, the parties cannot agree at this point.
[8] In argument, counsel for the plaintiff, Saad, indicated that his client was suffering from a fatal illness and that given the discussions regarding settlement a judgment should be entered against the defendants with a reference ordered as to the amount. The defendants submit these are without prejudice negotiations made in good faith that should not affect the equitable argument being raised by them.
Law and Analysis
[9] Rule 20.04(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 mandates that a court shall grant summary judgment if the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence. The Supreme Court of Canada clarified that this will be the case when a motions judge is able to reach a fair and just determination on the merits. This will exist when the process allows the judge to make the necessary findings of fact and apply the law to those facts. It is a proportionate, more expeditious and less expensive means to achieve a just result. See Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 49.
[10] Here, the defendants have raised an issue of promissory estoppel. On the evidence before me on this motion, I find that there is some evidence of a course of action by the parties that the defendants relied upon to conclude that a strict enforcement of the contract terms had been altered. There is binding authority that it would be inequitable in these circumstances for the courts to insist on the strict enforcement of the original terms of a contract. See Maracle v. Travellers Indemnity, [1991] 2 S.C.R. 50; and Newton’s Grove School Inc. v. J2ASM Inc., 2018 ONSC 7691, at para. 18.
[11] Given this conclusion, I am not satisfied that there is no genuine issue for trial. Given that the defendants have raised promissory estoppel, a more fulsome evidentiary record and perhaps a trial may be required. See Fritsch v. Magee, at para. 32. I am unable to consider either the plaintiff Nohra’s health or the ongoing negotiations between the parties as relevant and admissible considerations on this summary judgment motion.
[12] Accordingly, the plaintiffs’ motion is dismissed. There will be an order for the examination of the plaintiff, Chaker Nohra.
[13] If the parties are unable to agree on costs, I will receive written submissions no greater than three pages from the defendants within 15 days of the release of this decision and from the plaintiffs within seven days of receiving the defendants’ submissions. All submissions to be no more than three pages, double spaced.
Thomas J. Carey Justice