Court File and Parties

COURT FILE NO.: CV 17-218 DATE: 2019 March 4 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Darshan Atwal, Plaintiff and: Amandeep Singh Manu, Defendant

AND BETWEEN:

Amandeep Singh Manu, Plaintiff by Counterclaim and: Darshan Atwal and Balwinder Kaur Atwal, Defendants to the Counterclaim

BEFORE: The Honourable Mr. Justice R. J. Harper

COUNSEL: Derek Sinko, Counsel, for the Plaintiff (Defendant to the Counterclaim) Sharoon Gill, Counsel, for the Defendant (Plaintiff by Counterclaim)

HEARD: February 27, 2019

Endorsement

Background

[1] The Defendants by Counterclaim, Darshan Atwal (Darshan) and Balwinder Kaur Atwal (Balwinder) bring this summary judgment motion to dismiss the Counterclaim of the Defendant Amandeep Singh Manu (Amandeep).

[2] The main action by the Plaintiff (Darshan) is for the repayment of a loan in the amount of $100,000.00 that Darshan alleges he made to Amandeep on January 21, 2014.

[3] The Counterclaim alleges that the sum of $225,000.00 is a debt that is owed to him by Darshan’s wife Balwinder. Amandeep alleges that there was an agreement entered into by Burkal Manu (Burkal), Balwinder’s nephew, with Amandeep by which Burkal was to pay Amandeep the sum of $225,000.00 on or before November, 20, 2012. This payment was for his fifty per cent (50%) interest in a pizza restaurant in Brampton, Ontario.

[4] Amandeep further alleges that Balwinder signed an agreement dated March 2, 2012 that provided that she would assume the responsibility of her nephew to pay the total amount of $225,000.00 by November 20, 2012. The parties agree that no payment was made by either Burkal or Balwinder by November 20, 2012. However, money was advanced by Darshan to Amandeep in the amount of $100,000.00 on January 24, 2014.

[5] Amandeep states in his Counterclaim that the $100,000.00 was in partial payment of the $225,000.00 owed to him and that a balance of $125,000.00 is still owed to him pursuant to the agreement signed by Balwinder.

[6] Darshan and Balwinder take the position that there was never any agreement and even if there were an agreement to pay Amandeep $225,000.00 that claim is statute barred by the Limitations Act, 2002 as no claim was issued within a 2 year period of the money coming due. As such their Counterclaim should be dismissed.

[7] Darshan claims that he had no knowledge of any agreement and the $100,000.00 was a loan that he made to Amandeep in order to help him with his financial difficulties. He claims that the loan was to bear no interest if it was paid within 6 months and if not the loan would bear interest in the amount of 10% per annum. Darshan claims that loan was a demand loan. Darshan demanded full payment of the loan on May 30, 2017. No payment has been made subsequent to this demand.

[8] Amandeep claims there was never a loan from Darshan and the money advanced was in partial payment of the agreement.

Issues

a. Should partial summary judgment be granted dismissing the Counterclaim of Amandeep that alleges that Balwinder owes him the balance of $125,000.00 representing the amount owing from her agreement to pay $225,000.00 on behalf of her nephew Burkal as it is statute barred? or

b. Should the summary judgment motion be dismissed since the issues in the Claim and Counterclaim are not severable?

Law and Analysis

[9] In Butera v. Chown, Cairns LLP, 2017 ONCA 783 the Ontario Court of Appeal summarized many of the issues relating to partial summary judgment. Commencing at para. 22:

[22] I now turn to the second ground of appeal which relates to the granting of partial summary judgment.

[23] In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, the Supreme Court rewrote the law on summary judgments. Justice Karakatsanis, writing for a unanimous court, commenced her analysis by stating: “Ensuring access to justice is the greatest challenge to the rule of law in Canada today.” She described accessibility as being achievable through justice that is proportionate, timely and affordable. As noted in that decision, r. 1.04(1) and (1.1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, specifically codify the proportionality principle:

1.04(1) These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.

(1.1) In applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding.

[24] The Superior Court of Justice has since considered a multitude of summary judgment motions using the principles established in Hryniak.

[25] Hryniak does not address partial summary judgment per se except in the context of exercising the enhanced fact-finding powers contained in r. 20.04(2.1). In that regard, Karakatsanis J. observed that it may not be in the interests of justice to use the new fact-finding powers to grant summary judgment against a single defendant if the claims against other parties will proceed to trial in any event. Such partial summary judgment runs the risk of duplicative proceedings or inconsistent facts. On the other hand, Karakatsanis J. noted that the “resolution of an important claim against a key party could significantly advance access to justice and be the most proportionate, timely and cost effective approach.”

[26] The pre-Hryniak appellate jurisprudence on partial summary judgment limited its availability. At para. 3 of Corchis v. KPMG Peat Marwick Thorne, [2002] O.J. No. 1437 (C.A.), this court applied Gold Chance International Ltd. v. Daigle & Hancock, [2001] O.J. No. 1032 (S.C.J.) to state that:

[P]artial summary judgment ought only to be granted in the clearest of cases where the issue on which judgment is sought is clearly severable from the balance of the case. If this principle is not followed, there is a very real possibility of a trial result that is inconsistent with the result of the summary judgment motion on essentially the same claim.

[27] Since Hryniak, this court has considered partial summary judgment in Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, 120 O.R. (3d) 438 and in Canadian Imperial Bank of Commerce v. Deloitte & Touche, 2016 ONCA 922, 133 O.R. (3d) 561. Baywood was decided in the context of a motion for summary judgment on all claims, but where only partial summary judgment was granted. CIBC involved a motion for partial summary judgment.

[28] In both Baywood and CIBC, the court analyzed the issue from the perspective of whether (i) there was a risk of duplicative or inconsistent findings at trial and whether (ii) granting partial summary judgment was advisable in the context of the litigation as a whole. In both cases, the court held that partial summary judgment was inadvisable in the circumstances.

[29] The caution expressed pre-Hryniak in Corchis is equally applicable in the post-Hryniak world. In addition to the danger of duplicative or inconsistent findings considered in Baywood and CIBC, partial summary judgment raises further problems that are anathema to the stated objectives underlying Hryniak.

[30] First, such motions cause the resolution of the main action to be delayed. Typically, an action does not progress in the face of a motion for partial summary judgment. A delay tactic, dressed as a request for partial summary judgment, may be used, albeit improperly, to cause an opposing party to expend time and legal fees on a motion that will not finally determine the action and, at best, will only resolve one element of the action. At worst, the result is only increased fees and delay. There is also always the possibility of an appeal.

[31] Second, a motion for partial summary judgment may by very expensive. The provision for a presumptive cost award for an unsuccessful summary judgment motion that existed under the former summary judgment rule has been repealed, thereby removing a disincentive for bringing partial summary judgment motions.

[32] Third, judges, who already face a significant responsibility addressing the increase in summary judgment motions that have flowed since Hryniak, are required to spend time hearing partial summary judgment motions and writing comprehensive reasons on an issue that does not dispose of the action.

[33] Fourth, the record available at the hearing of a partial summary judgment motion will likely not be as expansive as the record at trial therefore increasing the danger of inconsistent findings.

[34] When bringing a motion for partial summary judgment, the moving party should consider these factors in assessing whether the motion is advisable in the context of the litigation as a whole. A motion for partial summary judgment should be considered to be a rare procedure that is reserved for an issue or issues that may be readily bifurcated from those in the main action and that may be dealt with expeditiously and in a cost effective manner. Such an approach is consistent with the objectives described by the Supreme Court in Hryniak and with the direction that the Rules be liberally construed to secure the just, most expeditious, and least expensive determination of every civil proceeding on its merits.

[10] In both Baywood and CIBC, the court analyzed the issue from the perspective of whether (i) there was a risk of duplicative or inconsistent findings at trial; and (ii) whether granting partial summary judgment was advisable in the context of the litigation as a whole. In both cases, the court held that partial summary judgment was inadvisable in the circumstances.

[11] In N.K.P. Painting Inc. v. Jasper Construction Corp., 2018 ONSC 5692, Justice Charney reviewed the more recent cases dealing with partial summary judgment commencing at para. 35:

[35] In Mason, Myers J. stated the concern as follows (at para. 14):

While judges are required to be careful to understand the risks of duplicative proceedings and inconsistent findings that might undermine the justness and proportionality of granting summary judgment to less than all of the defendants, nevertheless, the Supreme Court recognized that resolving an important claim against a key party could also significantly advance the goals of securing the most efficient, affordable and proportionate outcome for all. The Supreme Court advised caution before granting partial summary judgment but it did not preclude partial summary judgment in appropriate cases.

[36] And, after reviewing the Court of Appeal’s decisions in cases such as Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450 and Butera and its progeny (see paras. 17 - 33), Myers J. summarized the law as follows, at para. 23:

Discrete issues, like limitation periods, which do not overlap with the merits that are left for trial, occupy the most efficient end of the spectrum. Cases like Baywood, where the same parties will go to trial with the same witnesses testifying to the very same facts as are in issue on a motion for summary judgment represent the other end of the spectrum. In the middle, are cases like this one and Hryniak where the litigation against a party can be brought to an end by partial summary judgment. Although not all parties will go to trial, the issues to be resolved summarily are not perfectly discrete and have some relation to the issues that remain for trial. The question then is whether the risks of duplication and inconsistent findings outweigh the benefits of summary resolution and preclude summary resolution from being proportionate where the case is brought to an end against some but not all of the parties. To resolve this issue, the judge must exercise his or her judgment to determine the comparative balancing discussed in Hryniak.

[37] The case at hand falls into the middle category identified by Myers J.

[38] I also adopt the analysis of Sanfilippo J. in York Regional Standard Condominium Corporation No. 1206 v. 520 Steeles Developments Inc., 2018 ONSC 3766, at paras. 93 - 94:

Recent cases where partial summary judgment is upheld all have a common element: the partial summary judgment resolved a discrete issue that could be separated from the other claims or parties in the surviving case…

The jurisprudence highlights that a motion judge hearing a summary judgment motion must balance the competing objectives set out in Hryniak: namely, the court must weigh the efficiencies achieved by some summary resolution against the risk of duplicative or inconsistent findings in the surviving elements of the case. The motion judge must be certain that the net result of the partial summary judgment process is an overall increase in efficiency in adjudicating the case…

[39] See also: Crawford v. Toronto (City), 2018 ONSC 1729 at para. 42 and "Sanokr-Moskva" LLC v. Tradeoil Management Inc., 2018 ONSC 2967, at paras. 12 -17.

[12] In the case before me, there is no issue of discoverability of any of the claims. If there was an agreement between Balwinder and Amandeep for the payment of $225,000.00, that money was to be paid by November 20, 2012. Even if the payment advanced to Amandeep on January 24, 2014 was an advance on the $225,000.00, there was no action to collect the balance of that amount within a two year period from the date of that advance.

[13] There is a discrete issue of whether or not the limitation period applies to the claims advanced in the Counterclaim advanced by Amandeep.

[14] I do not need to make any finding nor do I make any finding with respect to the merits of Darshan’s claim that the $100,000.00 advanced by Darshan was a loan.

[15] In this summary judgment motion I do not need to make a finding of whether or not the claim for the $225,000.00 is a legitimate claim on its merits. All I need to do is to make a determination, based on Amandeep’s own evidence that did not advance a claim for any part of the $225,000.00 within the two year limitation period.

[16] Amandeep’s evidence is:

a. Burkal was required to pay him $225,000.00 for a one half interest in a pizza restaurant by November, 2012;

b. Balwinder assumed the responsibility to pay that sum on Burkal’s behalf;

c. Balwinder did not make the payment by November 20, 2012;

d. No action was commenced by Amandeep to collect on the $225,000.00 within a two year period;

e. Amandeep claims that he was paid $100,000.00 toward the $225,000.00 on January 24, 2014;

f. Amandeep did not take any action to collect on any portion of a balance of the $225,000.00 that he claims was owing to him within the two years from what he claims to be an advance or $100,000.00.

[17] The Limitations Act, 2002 at Sections 4 and 5 provide:

Basic limitation period

4 Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered. 2002, c. 24, Sched. B, s. 4.

Discovery

5 (1) A claim is discovered on the earlier of,

(a) the day on which the person with the claim first knew,

(i) that the injury, loss or damage had occurred,

(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,

(iii) that the act or omission was that of the person against whom the claim is made, and

(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a). 2002, c. 24, Sched. B, s. 5 (1).

Presumption

(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved. 2002, c. 24, Sched. B, s. 5 (2).

Demand obligations

(3) For the purposes of subclause (1) (a) (i), the day on which injury, loss or damage occurs in relation to a demand obligation is the first day on which there is a failure to perform the obligation, once a demand for the performance is made. 2008, c. 19, Sched. L, s. 1.

[18] I find that the claim of Amandeep for the $225,000.00 is statute barred pursuant to the Limitations Act. This action is severable since no findings need to be made relative to the nature of the $100,000.00 payment in order to find the action is statute barred.

[19] There is no prejudice to Amandeep with respect to his ability to defend the action of Darshan for the $100,000.00. He is still able to claim a set off. Even though Balwinder would no longer be a party to that action, Amandeep can still summons her as a witness and seek leave to cross examine her as an adverse witness.

[20] I find that this case does fall within the rare and exceptional cases in which partial summary judgment should be granted. In finding that this case falls within the considerations set out in both Baywood and CIBC, (supra) (i) there is no risk of duplicative or inconsistent findings at trial and (ii) granting partial summary judgment is advisable in the context of the litigation as a whole.

[21] I find that issues in this case may be readily bifurcated from those in the main action and that this matter can be dealt with expeditiously and in a cost effective manner. This approach, in my view is consistent with the objectives described by the Supreme Court in Hryniak and with the direction that the Rules be liberally construed to secure the just, most expeditious, and least expensive determination of every civil proceeding on its merits.

[22] There is no genuine issue that requires a trial. For all of the above reasons the motion for partial summary judgment is granted.

Costs

[23] If the parties can’t agree on costs, submissions in writing may be provided no later than April 4, 2019

The Honourable Mr. Justice R. J. Harper

Date: March 4, 2019