Temple v. Moorey, 2019 ONSC 2283

COURT FILE NO.: CV-18-0498-00 DATE: 2019-04-09

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

NICHOLAS TEMPLE and SUSAN TEMPLE Plaintiffs

- and -

RICHARD MOOREY and CHARLEEN MOOREY Defendants

COUNSEL: M. Maher, for the Plaintiffs Self-Represented, Not Appearing, for the Defendants

HEARD: April 8, 2019, at Thunder Bay, Ontario

BEFORE: Madam Justice H. M Pierce

Reasons on Partial Summary Judgment Motion

Introduction

[1] The plaintiffs loaned money to the defendants who wished to invest in a restaurant. The money was secured by two promissory notes as well as a general security agreement.

[2] The promissory notes and a general security agreement were presented to Mr. Moorey on or about June 12, 2018 and were executed by both defendants on June 22, 2018.

[3] Mr. Temple was the sole lender on a $10,000.00 promissory note; both Nicholas and Susan Temple were lenders on a second promissory note in the amount of $48,511.66. Despite a demand for payment made to the defendants’ solicitor on September 18, 2018, the notes remain unpaid. A previous costs order granted by Mr. Justice Newton is also unpaid.

[4] Paragraph 11 of the general security agreement provides that the plaintiffs, as secured parties, could charge for expenses incurred in collecting on the collateral, including legal fees. Accordingly, the plaintiffs are seeking partial summary judgment with respect to the sums secured by the promissory notes as well as full indemnity costs of $8,322.94 inclusive of disbursements and HST. In addition, the plaintiffs claim the costs of appearance at the motion of $440.00 plus HST.

[5] With the assistance of their own counsel, the defendants served a statement of defence in which Ms. Moorey pleaded the defence of non est factum and the defendants claimed an equitable set-off. Neither defendant filed affidavits in response to the plaintiffs’ motion for partial summary judgment; nor did they appear at the return of the motion.

Summary Judgment

[6] Rule 20.04 (2) of the Rules of Civil Procedure gives the court jurisdiction to grant summary judgment “if the court is satisfied there is no genuine issue requiring a trial with respect to a claim or a defence.”

[7] In Hryniak v. Maudlin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 4, the court declared:

…a trial is not required if a summary judgment motion can achieve a fair and just adjudication, if it provides a process that allows the judge to make the necessary findings of fact, apply the law to those facts, and is a proportionate, more expeditious and less expensive means to achieve a just result than going to trial.

[8] For the reasons that follow, this is such a case.

The Defence of Equitable Set-Off

[9] Section 176 (1) of the Bills of Exchange Act, R.S.C., 1985, c. B-4, defines a promissory note as follows:

176 (1) A promissory note is an unconditional promise in writing made by one person to another person, signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money to, or to the order of, a specified person or to bearer.

[10] There is no doubt that the instruments upon which the plaintiffs sue are promissory notes as defined by the Act. The undisputed evidence is that they were signed by the defendants who defaulted on payment once a demand was made.

[11] In 1652620 Ontario Inc. v. Cornerstone Builders Ltd., 2018 ONCA 973, 299 A.C.W.S. (3d) 522, the Ontario Court of Appeal considered whether a claim of equitable set-off was available as a defence to a motion for partial summary judgment for monies due under a bill of exchange, such as a promissory note. The court concluded that it was not.

[12] In King v. McHugh (2009), 82 C.P.C. (6th) 263 (ONSC), the court applied this reasoning. At para. 13, Mr. Justice Gunsolus explained:

The rule that equitable set-off cannot be asserted as a defence to a claim on a bill of exchange is a well settled one, with the principle basis being supported by many years of jurisprudence. The principle underlining the rule is that a bill of exchange is meant to be in the nature of cash….

[13] The defendants have not filed affidavit evidence in support of their defence of equitable set-off. Even if they had, it is clear that such a defence is not sustainable in the face of a claim for judgment on a promissory note.

The Defence of Non Est Factum

[14] The onus is on the defendant to prove a defence of non est factum. In Words and Phrases: Judicially Defined in Canadian Courts and Tribunals, vol. 5, J-N, annual cumulative supplement, Jeffrey Smith et. al eds. (Toronto: Thomson Carswell, June 2006) at p. 5-156, the editors cite Duca Community Credit Union Ltd. v. Fulco Automotive Ltd. (1994), 71 O.A.C. 351 at 380 (Div. Ct.) as follows:

[Non est factum] is an extremely restricted defence. To invoke it, the person relying on it must show that he or she is not barred from doing so by reason of carelessness. In the absence of carelessness, it is then necessary to show that the document signed was different from the one that the person thought she was signing.

[15] The larger promissory note is titled “Joint and Several Demand Promissory Note, Richard and Charleen Moorey indebted to Nick and Susan Temple.” The smaller note has a similar title but refers only to the defendants being indebted to Nick Temple.

[16] As the defendant, Charleen Moorey, did not file affidavit evidence to establish her defence of non est factum, there is no evidence for the court to consider with respect to this defence.

Conclusion

[17] The plaintiff, Nicholas Temple, shall have partial summary judgment against the defendants in the amount of $10,000.00. The plaintiffs, Nicholas Temple and Susan Temple shall have partial summary judgment against the defendants in the amount of $48,511.66. In addition, the plaintiffs shall have pre-judgment and post-judgment interest in accordance with the Courts of Justice Act, R.S.O. 1990, c. C.43.

Costs

[18] The general security agreement signed by the defendants provides for the payment of the plaintiffs’ legal fees. The plaintiffs claim costs on a full indemnity scale of $8,322.94 inclusive of disbursements and HST, plus costs of appearance at the motion.

[19] The costs outline submitted by the defendants is mistitled as the costs outline of the defendant. However, it is clear by the text that the hours claimed are for the plaintiffs’ counsel.

[20] The plaintiffs previously appeared before Mr. Justice Newton on February 14, 2019 and were awarded costs of $500.00. Accordingly, the plaintiffs cannot double-claim for those attendances on this motion.

[21] The plaintiffs’ bill of costs also claims for time spent in what might be considered legal education: for example, enforcement of promissory notes, consultation with senior counsel, and review of the Rules of Civil Procedure. While this time may be necessary for an effective presentation, it is not time that is recoverable against the opposing party.

[22] The bill of costs claims two hours for attendance at the motion, for a total of $440.00. In fact, argument of the motion did not exceed one half hour. The fees claimed and HST should be reduced accordingly. The plaintiffs shall have their costs against the defendants fixed as follows:

Fees: $5,000.00 HST $ 650.00 Disbursements $1,338.18 HST $ 173.96 Total $7,162.14

[23] Partial summary judgment shall issue accordingly.

“original signed by” The Hon. Madam Justice H.M. Pierce

Released: April 9, 2019

COURT FILE NO.: CV-18-0498-00 DATE: 2019-04-09 ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: NICHOLAS TEMPLE and SUSAN TEMPLE Plaintiffs - and - RICHARD MOOREY and CHARLEEN MOOREY Defendants REASONS ON PARTIAL SUMMARY JUDGMENT MOTION Pierce J. Released: April 9, 2019 /sab