Court File and Parties
COURT FILE NO.: CV-17-587147 DATE: 20180911 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: 1880 O’CONNOR INC., Plaintiff/Moving Party AND: UNIVERSAL MEDICAL DIAGNOSTICS INC., MANSOUR ATAOLLAHI and A & M ECHO DOPPLER INC., Defendants/Responding Parties
BEFORE: Justice S. Nakatsuru
COUNSEL: M. Richardson, for the Plaintiff/Moving Party A. Harbinja, for the Defendants/Responding Parties
HEARD: September 10, 2018
Endorsement
[1] This action is about a commercial tenancy of real property located at 1880 O’Connor Drive, Toronto. It is not disputed that the defendants who leased this property breached the lease. The plaintiff moves for summary judgment. The live issues are regarding damages and the counterclaim. It is not without moment that the plaintiff commenced this action resorting to the simplified procedure. There are restrictions for summary judgment motions under the rules. There are also policy considerations: Combined Air Mechanical Services Inc. et al. v. Flesch et al., (2011) 2011 ONCA 764, 108 O.R. (3d) 1 (C.A.) at para. 255-56. That said, cross-examinations have occurred here. I am prepared to deal with this motion on the record as presented.
A. TEST ON A SUMMARY JUDGMENT MOTION
[2] This test is both well-established and well-understood.
[3] Rule 20.04(2)(a) of the Rules of Civil Procedure provides that the 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 in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, held at para. 49:
There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.
[4] A responding party may not rest solely on the allegations or denials in the party’s pleadings. Under rule 20.0(2), they “must set out, in affidavit material or other evidence, specific facts showing that there is a genuine issue requiring a trial”. Each side must “put its best foot forward” with respect to the existence or non-existence of material issues to be tried. A court is entitled to assume that the record contains all the evidence that the parties would present if the matter proceeded to trial.
[5] The court should first determine if there is a genuine issue requiring trial based only on the evidence in the motion record, without using the fact-finding powers set out in rule 20.04(2.1) and (2.2). The analysis of whether there is a genuine issue requiring a trial should be done by reviewing the factual record and granting a summary judgment if there is sufficient evidence to fairly and justly adjudicate the dispute and a summary judgment would be a timely, affordable and proportionate procedure.
[6] If there appears to be a genuine issue requiring a trial, then the court should determine if the need for a trial can be avoided by using the fact-finding powers under rule 20.04. Their use will not be against the interest of justice if their use will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.
B. ANALYSIS
[7] Let me start by saying that even leaving aside the issue of whether settlement privilege attaches to the discussions between the defendants and counsel for the plaintiff, I do not find that these discussions have relevance to the issue of mitigation. At the point that they were had, there had been an alleged breach of the agreement to pay rent. A plaintiff should not be required to forgo their legal rights under the terms of their agreement in order to counter any later allegation they failed to mitigate their damages by failing to accept payment from the defendant.
[8] That said, I find that there are genuine issues requiring trial. First of all, looking at the complete record, I would have been inclined to have determined the issue on summary judgment of whether the term of the lease ended on July 31st or whether it was extended an additional 30 days due to the hand written changes. In my view, this is something that although raised a credibility issue, could have been resolved. However, it is not the only issue that credibility of the witnesses depends. There is little point in determining this very discrete issue on partial summary judgment.
[9] I appreciate that just because a case raises credibility issues does not mean that a trial is required. However, here I am not satisfied that I can fairly make the factual findings relevant to the issues of mitigation and the counterclaim such that a trial can be avoided. On the issue of mitigation, there is conflicting evidence about the number of potential subtenants that were presented to the plaintiff and the reasonableness of the plaintiff’s response to them. The credibility of Mr. Leyzac and Mr. Ataollahi’s evidence needs to be carefully assessed. The written transcript of the cross-examinations and the documentary evidence does not allow me to do this in a fair and just way. Sufficient particulars and emails have been produced whereby a legitimate issue is raised whether Mr. Leyzac’s evidence should be preferred over the evidence produced by the defendant. This credibility assessment can only be meaningfully made after hearing viva voce evidence and a narrative being laid out through a trial process. That narrative includes not only what happened after the breach but the potentially the whole history of the landlord/tenant relationship.
[10] In addition to this, while I am mindful that the defendant has an obligation to put its best case forward, there are other potential witnesses such as Mr. Chopra, who clearly may have significant evidence to give in order to do justice in this case.
[11] Given this state of the evidence, factual findings upon which to grant summary judgment cannot properly be made without a trial.
[12] Similarly, with respect to the counterclaim, while I appreciate the plaintiff’s point about the lack of detail with respect to the plaintiff’s alleged failure to properly maintain the premises and the quantum of damages being claimed, the emails and the affidavit of the Mr. Ataollahi go beyond bald denials or assertions. There are sufficient particulars about the failure of the air conditioning unit and leakages to support the defendants’ position. These again are matters that need to be properly determined at a trial. It would not be fair or just to make a determination in its absence.
[13] In the circumstances of this case, it would not be fair or just to use my expanded fact finding powers. It would not serve the interests of justice. The issues are discrete and a summary trial is anticipated. It really amounts to damages and the counterclaim which would only partially offset the damage award, even if successful. If there are any third parties to be added, it can readily be done in the summary trial. I agree with both counsel that the resources expended on this summary judgment case need not go to waste. The issues have been narrowed. Areas of potential evidence have been identified. The scope of credibility or reliability of the main witnesses that needs to be explored at trial is now clear. A summary trial will be expeditious and proportionate to what is at stake.
[14] As a result, this summary judgment motion is dismissed. Let me say with respect to costs, I would be inclined to refer the matter of costs to the trial judge hearing the trial. That said, if the issues of costs cannot be resolved between the parties, I will entertain written submissions, each one limited to one page excluding any attachments (any Bill of Costs, Costs Outline, and authorities). The responding parties shall file within 20 days of the release of these reasons. The moving party shall file within 15 days thereafter. There will be no reply submissions without leave of the court.