Court File and Parties

COURT FILE NO.: CV-18-134135 DATE: 20180801 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

The Bank of Nova Scotia Plaintiff – and – 1934047 Ontario Inc. and Ogieriakhi Omozusi Defendants

COUNSEL: Oren Chaimovitch, for the Plaintiff Linus Ali, for the Defendants

HEARD: April 26, 2018

Reasons for Decision

de Sa J.:

[1] This is a motion by the Plaintiff, The Bank of Nova Scotia (the “Bank”) for summary judgment against the Defendants. The Defendant, 1934047 Ontario Inc., (the “Corporation”) is a corporation incorporated pursuant to the laws of the Province of Ontario. Ogieriakhi N. Omozusi, also known as Ogie Omozusi, and also known as Ogieriakhi Nehikhare Omozusi (“Omozusi”) is an officer and director.

[2] Omozusi is indebted to the Bank pursuant to a Scotiabank Credit Agreement for Business Overdraft Facility dated June 16, 2003, (hereinafter referred to as the “Overdraft”) whereby the Bank provided Omozusi with a loan in the form of an overdraft limited to $20,000. Omozusi agreed to pay interest on the Overdraft at the Bank’s prime interest rate. The Overdraft was payable on demand.

[3] The Corporation is indebted to the Bank:

a. pursuant to a Scotiabank-Credit Agreement for business – Term Loan dated January 12, 2016, (hereinafter referred to as the “Term Loan”) made pursuant to the Canada Small Business Financing Act, S.C. 1998, c. 36, whereby the Bank provided the Corporation with a credit facility in the form of a term loan in the original principal amount of $232,500. The Term Loan provides for payments of principal and interest to be paid monthly and interest on the principal balance outstanding to be paid at the Bank’s prime interest rate in effect from time to time plus 1.50% per annum.

b. pursuant to a Scotiabank Credit Agreement for business – Credit Line dated July 24, 2015, (hereinafter referred to as the “Credit Line”) whereby the Bank provided the Corporation with a credit facility in the form of a line of credit of up to $25,000. The Credit Line provides for minimum payments of principal to be paid each month together with interest on the principal balance outstanding at the Bank’s interest rate in effect from time to time plus 1% per annum. The Line of Credit provided that the Bank may vary the terms of the Line of Credit, including the interest rate payable thereunder, upon giving the Corporation 30 days written notice. By a letter dated October 26, 2017, the Bank increased the interest rate payable under the Credit Line to the Bank’s prime interest rate in effect from time to time plus 6.00% per annum to take effect November 25, 2017.

[4] The Term Loan is payable in full in the event of default. The Credit Line is payable on demand. Omozusi guaranteed payment to the Bank of the indebtedness of the Corporation to the Bank pursuant to Term Loan and the Credit Line to an unlimited amount.

[5] The Corporation defaulted in its payments to the Bank under the Term Loan and the Credit Line. Written demand for payment of the outstanding indebtedness of the Corporation pursuant to the Term Loan and the Credit Line and written demand for payment pursuant to the guarantees were made on November 30, 2017.

[6] As of November 30, 2017, the amount owing under the Term Loan was $223,971.34, pursuant to the Credit Line in the amount of $21,970.14.

[7] Omozusi also defaulted in his payment obligations to the Bank under the Overdraft. As noted above, the Overdraft is payable on demand. Written demand for payment of the outstanding indebtedness of Omozusi pursuant to the Overdraft was made on November 30, 2017, at which time, Omozusi was indebted to the Bank pursuant to the Overdraft in the amount of $19,948.05.

[8] The Plaintiff’s Statement of Claim was issued and served on the Defendants in January, 2018. Prior to the Statement of Claim, the Defendants made several proposals to rectify the alleged default. The Plaintiff has declined the Defendants’ proposals and demands repayment.

[9] On March 8, 2018, the Defendants provided to the Bank three bank drafts in the amounts of $2,574.14, $255.64 and $238.08. The Bank applied the funds in accordance with the Defendants’ instructions as follows:

a. $2,574.14 to the Term Loan; b. $238.08 to the Overdraft; and c. $255.64 to the Credit Line.

[10] The Plaintiff has brought a motion for summary judgment against the Defendants for payment of the amounts owing.

Test: Motion for Summary Judgment

Is there a Genuine Issue Requiring a Trial?

[11] Pursuant to Rule 20.04(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, the court shall grant summary judgment if it is satisfied there is no genuine issue requiring a trial. Animating the interpretation of 20.04(1) is Rule 1.04 which requires that the rule be liberally construed to secure the just, most expeditious and least expensive determination of a proceeding on its merits having regard to the complexity of the issues and the amounts involved.

[12] The judge in deciding whether to grant summary judgment must ask: can the full appreciation of the evidence and issues that is required to make dispositive findings be achieved by way of summary judgment, or can this full appreciation only be achieved by way of trial? A trial is not required if the judge on the motion can 1) achieve a fair and just adjudication; 2) make the necessary findings of fact; 3) apply the law to those facts; and 4) the motion is a proportionate, more expeditious and less expensive means to achieve a just result rather than going to trial. As the Supreme Court explained in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 SCR 87, at para. 50:

These principals are interconnected and all speak to whether summary judgment will provide a fair and just adjudication. When a summary judgment motion allows the judge to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. Similarly, a process that does not give a judge confidence in her conclusions can never be the proportionate way to resolve a dispute. It bears reiterating that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principals so as to resolve the dispute. [Emphasis added.]

[13] The Defendants acknowledge the indebtedness. They do not dispute the default. They also accept that the Plaintiff is entitled by the conditions of the Overdraft, the Term Loan and the Credit Line to demand repayment in full in the case of default.

[14] Despite these acknowledgments, the Defendants seek a stay of enforcement actions/proceeding by the Plaintiff, and leave to commence paying the alleged indebtedness at the negotiated rate.

[15] I recognize the Defendants are in a difficult situation. However, the issue is not whether the Defendants can satisfy the debt. The question is whether the Plaintiff is entitled to demand repayment by the terms of the agreement. By the terms of the various financial instruments, the Plaintiff is clearly entitled to make the demand and seek repayment of the amounts owing. There is no basis to deny enforcement of the agreement in the circumstances of this case. See: CIBC v. Romas, 2010 ONSC 4492, at paras. 23, 39, 43-47.

[16] I have reviewed the Defendants’ motion for leave to amend their Statement of Defence to include a Counterclaim. According to the Defendants, the Plaintiff’s decision to unilaterally close all of the Defendants’ accounts without notice disrupted the Defendants’ business operations resulting in losses to its business income. It seeks to claim the damages from the business interruption from the Plaintiff as part of this action.

[17] Having reviewed the materials filed, I do not see any merit to the proposed Counterclaim. I will not grant leave to amend the Statement of Defence in the circumstances. In my view, it will unfairly and unnecessarily impede the Plaintiff’s ability to obtain judgment where such judgment is warranted. If the Defendant wishes to pursue any such damages, it can do so by commencing its own claim.

[18] Accordingly, I grant the summary judgement motion and order judgment in favour of the Bank as follows:

(a) Judgment in favour of the Plaintiff in the amount of $224,269.65 together with pre-judgment and post-judgment interest thereon at the Bank of Nova Scotia’s prime interest rate in effect from time to time plus 1.50% per annum from March 8, 2018;

(b) Judgment in favour of the Plaintiff in the amount of $22,259.23 together with pre-judgment and post-judgment interest thereon at the Bank of Nova Scotia’s prime interest rate in effect from time to time plus 6.00% per annum from March 8, 2018; and

(c) Judgment in favour of the Plaintiff in the amount of $19,886.58 together with pre-judgment and post-judgment interest thereon at the Bank of Nova Scotia’s prime interest rate in effect from time to time from March 8, 2018.

[19] I will consider costs submissions of the parties in writing to be received within 4 weeks of this decision.

Justice C.F. de Sa

Released: August 1, 2018