Court File and Parties
COURT FILE NO.: CV-17-0000282-00OT Milton Court File No.: 2802-17 MOTION HEARD: June 5, 2019
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: The Regional Municipality of Halton Plaintiff/Responding Party
AND:
P. Greco & Sons Limited, et al Defendant/Moving Party
BEFORE: Master J. Josefo
Date of Decision: June 7, 2019
COUNSEL: T. Gordner, Counsel for the Responding Party Plaintiff, the Regional Municipality of Halton (“Halton”), Email: tgordner@mcmillan.ca
P. Starkman, Counsel for the Moving Party Defendant, Lisa Snowball (“Snowball”), Email: paul@starkmanbarristers.com
Reasons for Decision and Order
Background—what is the motion about?
[1] Lisa Snowball, a defendant in this within action, seeks the discharge of a Certificate of Pending Litigation (“CPL”), as well as the release of certain funds held in trust by her real estate solicitor. Halton, the plaintiff, opposes the motion. It submits that the status quo involving the CPL and the funds in trust should continue pending trial.
[2] While that appears straight-forward enough, the underlying factual nexus is quite complex. This herein summary does not go into all the minute details, including of the various Court Orders. Rather, I discuss only what is in my view contextually necessary for this motion.
[3] Halton, a regional municipality, discovered what it asserts in various iterations of its pleading (the most recent is the “fresh as amended Statement of Claim” issued January 17, 2019), fraud. The long-running fraudulent scheme purportedly involved certain Halton employees, vendors, and third parties. Ms. Gordner submitted that there are at present 55 defendants and five actions arising out of the alleged fraud.
[4] Ms. Gordner submitted that one Halton employee, Mr. Nicolas Rewa (“Rewa”), as of May 4, 2018 was convicted of certain criminal charges and sentenced, inter alia, to a period of incarceration. More relevant for purposes of this within motion, Mr. David Norris (“Norris”), described as the “principal, employee, and directing mind” of defendants Sirron Systems Incorporated, Sirron Systems Inc., Sirron Group International, Sirron Electrical Contracting Corporation (collectively, “Sirron”), and a personal defendant, is also pending a criminal trial for the alleged fraudulent activities involving Halton. On or about April 11, 2017, Norris was charged with various offenses including fraud, municipal corruption, accepting a secret commission, and possession of property obtained by crime.
[5] Norris was the boyfriend of Snowball from 2009 through to April 2017. They lived together from January 2011 through to April 2017, during some of the years when the fraud was purportedly being perpetrated. The home where they resided was at 73 Waterford Crescent, in Stoney Creek, Ontario (“Waterford”). Norris purchased Waterford in January 2011, when he and Snowball commenced co-habitation.
[6] Snowball was also at one time an employee of Halton. It was submitted by counsel for the plaintiff and acknowledged by Mr. Starkman that, on average, in her clerical/administrative role, Snowball earned approximately $46,000 annually. Snowball was initially not a defendant in this within action. On a prior motion discussed ahead in these reasons, the Plaintiff was permitted to add Snowball as a party, based on evidence subsequently discovered as the plaintiff has continued to drill down into and learn more about the alleged fraudulent scheme.
[7] The fraud ostensibly involved Rewa agreeing that certain suppliers of legitimate goods and services to Halton would, along with legitimate invoices for services rendered/goods supplied, also issue fictitious invoices. Those fictitious invoices would, obviously, not be for any services rendered or goods received. Halton, through inter alia, Rewa, would unwittingly approve and pay those invoices. Then, the entity in receipt of such payment would split those funds with the particular Halton employee, such as Rewa. Sirron is alleged to have issued such fictitious invoices. Rewa and Norris are asserted to have split the payments received from such invoices.
[8] Rewa also was, at the relevant time, involved with a personal renovation project involving his home. Vendors and suppliers working on that project would, instead of invoicing Rewa, invoice Sirron. Sirron would then submit fictitious invoices to Halton, which invoices Rewa, as the Halton “insider”, would authorize be paid to Sirron. In turn, with the monies received from Halton, Sirron would then pay the invoices of those entities working on the personal renovation project of Rewa.
[9] The total amounts of the fraud ostensibly involves many millions of dollars.
[10] The Waterford property bought by Norris in 2011 was the subject of several transactions involving Snowball. On February 21, 2012, Snowball registered a charge on it for $50,000, representing security for a loan from Snowball and her mother to Norris. Nine months later, on November 22, 2012, Norris sold Waterford to Snowball for the same price which he had paid for it: $449,000. Snowball obtained a mortgage for $371,200, while Norris was listed on this mortgage as a borrower. Yet both Snowball and Norris claim that he is only a guarantor.
[11] Halton asserts that Waterford was purchased, at least in part, with funds fraudulently obtained from Halton. Halton in part relies on various reports from forensic accountant Edward Nagel (“Nagel”), including his report of April 5, 2017. Thus, Halton attempted to obtain a CPL on Waterford.
[12] The first attempt, brought ex parte before Justice Woolcombe on October 17, 2017, was not successful. While recognizing that “this case, or these cases, involve some complexity and that Halton is concerned about protecting what it says is taxpayer money”, Justice Woolcombe did not find sufficient grounds for a CPL based on the then available evidence. The motion was dismissed, however, with the proviso that Halton “may, of course bring the motion back…on better evidence”.
[13] Halton, through Nagel whom it had retained, continued its investigation. As described in fresh affidavit evidence dated February 22, 2018 of Karen Cinq-Mars (“Cinq-Mars”), Halton’s Chief Internal Auditor, payments which Sirron made to Snowball between January 6, 2010 and October 17, 2013 totalled $490,114. This amount is more than the purchase price of Waterford paid by Snowball to Norris on November 22, 2012. Cinq-Mars also deposed in this second affidavit about a tenancy agreement between Norris and Snowball, which involved Snowball leasing Waterford to Norris for $1,000.00 monthly, despite them both cohabitating there.
[14] Based on this new and, it believed, better evidence, Halton again sought a CPL on Waterford. It attempted to move urgently. Yet the Court in Milton (where the action was commenced) found no urgency, as there was no evidence of a pending sale of the property. Thus, the motion for a CPL was traversed to the regular motions list.
[15] On March 7, 2018 Justice Gray granted the CPL on Waterford. At that point Snowball was about to sell Waterford, which fact was, I find, likely not known to Halton. After all, Halton had no evidence of such a sale to justify its attempted urgent motion before March 7th. If Halton had known of the pending sale, I find it likely would have communicated such information to the Court to justify the CPL being granted sooner.
[16] Ultimately, after some difficult negotiations involving the Waterford purchaser, Snowball, and Halton, the parties agreed on consent that the CPL on Waterford would be discharged to allow the sale of that property to close. Snowball and Halton further agreed that a CPL would be put on the new property purchased by Snowball, at 494 Barton Street, Unit 32, Hamilton, Ontario (“Barton”).
[17] The motion before me is brought by Snowball, who seeks to discharge the CPL from Barton, as well as to have the residual funds generated from the sale of Waterford, which are being held in trust by her real estate solicitor, released to her.
How this Motion came to Toronto—and before me; steps taken to date
[18] By Order dated September 24, 2018, on consent (request) of the parties, the Court transferred this motion from Milton to Toronto. Counsel informed me that, given the length of time the motion was expected to take to argue (one full day), a long-motion date could be more quickly obtained in Toronto. Given what subsequently transpired, as described below, it is unclear if, ultimately, the motion was heard any earlier in Toronto.
[19] On October 17, 2018 the Administrative Master assigned me to hear this “long motion” on December 3, 2018. On November 16, 2018, at the request of counsel, given that counsel for the plaintiff sought to file a new affidavit of Nagel, a case-conference was held. I agreed ultimately that this new affidavit dated November 13, 2018 should be admitted. On that basis, on consent the parties came to agreement on a timetable for various further steps to be taken, including each filing further materials, and cross-examinations to take place, as described in my endorsement of November 16, 2018. The new date for the motion was March 5, 2019.
[20] On March 5, 2019, the motion proceeded, yet got bogged down in procedural matters. I issued rulings as necessary. That took a period of time into the afternoon. It was agreed that the motion would reconvene on June 5, 2019, which would allow the parties time for, amongst other matters, further cross-examinations.
[21] On April 12, 2019, at the request of the plaintiff, I held a tele-conference with counsel. It was agreed on consent that the plaintiff could file two additional affidavits, in exchange for the plaintiff not cross-examining Norris on April 15th as had been scheduled. Mr. Starkman was, however, still to cross-examine Nagel on that day.
[22] Finally, on June 5, 2019, the motion proceeded to be argued the entire day. Once I issue this decision, and resolve the last outstanding issue of costs as needs be, unless counsel have other views, I believe that the file should be returned to its “home Court”, being Milton.
Preliminary Issues raised by Snowball supporting discharge of the CPL
[23] The first issue raised by Mr. Starkman was that Halton failed to make full disclosure of material facts to the Court when returning to seek the CPL originally denied by Justice Woolcombe. On that basis of alleged lack of complete disclosure, Snowball submits that the CPL should be discharged.
[24] Rule 39.01(6) of the Rules of Civil Procedure requires that, when parties move without notice, “full and fair disclosure” be made. Such disclosure is not optional. Rather, it is required. Failure to do so is, in and of itself, sufficient to set aside an Order.
[25] In this case, while in a perfect world, counsel for plaintiff should have provided a copy of the endorsement of Justice Woolcombe to the Judge next considering the matter, I do not find in context of this matter that lapse to be fatal. The subsequent, February 22, 2018 affidavit of Cinq-Mars did provide to the Court on the second occasion when the Plaintiff’s motion was considered the additional, and newly discovered, evidence of a connection to the land (Waterford), which connection Justice Woolcombe previously found was missing. In that regard, see in particular paragraph 25 of the Cinq-Mars affidavit which reflects the new evidence as it pertains to “a series of payments” made by Sirron to Snowball. The Cinq-Mars affidavit of February 22, 2018 set out her own conclusions which, as Chief Internal Auditor of Halton, I find she was entitled to make; and which the Court was entitled to weigh and consider when addressing the appropriateness of the CPL.
[26] This is not a case where there was “Judge-shopping”, with the moving party trying, on identical evidence rejected by one Judge, another Judge and hoping for and obtaining a different result. Such would be highly improper, especially not disclosing the earlier result. Yet, in this case, that is not what occurred. Rather, the plaintiff seemingly heeded the endorsement of Justice Woolcombe, which endorsement I excerpted from earlier in these reasons, and presented the requisite “better evidence” that it had obtained, which better evidence allowed it to obtain the CPL.
[27] In my view, the Plaintiff did not breach its obligations of full and fair disclosure of all material facts when the motion was returned. This ground to discharge the CPL thus does not succeed.
[28] Mr. Starkman also argued that Halton had acted in bad faith when, on the eve of the closing of Waterford, it obtained a CPL, thus putting the sale of that property by Snowball in much jeopardy. It is asserted that Halton acted in and demonstrated bad faith in how it negotiated the removal of the CPL from Waterford, and the placing of it on Barton. It was submitted that Halton took a very harsh line with Snowball. Indeed, Mr. Starkman used the word, “extortion” when he described the settlement agreement which Halton proposed that Snowball sign.
[29] I am unable to agree with those submissions. As described in the “Background” section above in these reasons, I find it more likely than not that Halton was unaware of the pending sale of Waterford. Otherwise, it likely would have acted with greater alacrity, and would have used that knowledge to justify an expedited hearing for the CPL, instead of having the matter traversed to the regular list.
[30] Moreover, I also was not directed to (and did not find) reliable evidence of extortion, bad faith, or anything untoward, in how Halton negotiated with Snowball and with the third party purchaser of Waterford (negotiations were via counsel and I have reviewed the relevant emails, etc.). In any case, despite whatever may have transpired in the negotiations, the parties ultimately reached an agreement. In my view, that the parties agreed on a way forward renders much less relevant what may have transpired leading up to the fact of that agreement.
[31] I am fortified in this conclusion given the findings made by my colleague Master Mills in her endorsement dated July 12, 2018. At that time, hearing a motion on this matter in Milton, Master Mills addressed the plaintiff’s motion to amend the claim to add Snowball as a defendant, as well as that Norris attend an examination pursuant to Rule 39.03 of the Rules of Civil Procedure. As described by Master Mills, Snowball, through Mr. Starkman, then similarly alleged that the attempt to add her as a party was an “abuse of process”; with “the foundation for this allegation a previous offer to settle the CPL discharge motion” (referring to the above-noted discharge of Waterford and the placement of the CPL on Barton). Master Mills stated as follows when addressing the allegation:
The plaintiff agreed to the terms which ultimately comprised the March 28, 2018 consent order, but initially also required a Discharge and Cooperation Agreement to be signed by Snowball as a condition of the plaintiff’s consent. Snowball refused to sign any such agreement as a condition of discharging the CPL against [Waterford]. At the time, the plaintiff had a valid and enforceable CPL against [Waterford]. Absent a court order to discharge the CPL, the plaintiff was fully entitled to refuse to consent to any order which impacted its legal rights. There was an offer extended and it was rejected. The plaintiff now seeks to formally assert its claim and recover damages from Snowball for any role she may have played in, or benefit she may have received from the alleged fraud. The existence of a previous offer to settle the CPL discharge motion on terms favourable to the plaintiff does not amount to a characterization of the claim against Snowball as harassment or an abuse of process. The plaintiff has adduced evidence to support the allegation that Snowball is a necessary and proper party to these proceedings.
[32] The above rationale is equally applicable and dispositive of the similar arguments put forth by Mr. Starkman before me. There is no basis on these grounds to discharge the CPL.
[33] Mr. Starkman next argued that all the Nagel affidavits in this matter should be struck for my purposes of considering his motion to discharge the CPL. Various grounds were advanced for this proposition. It was, inter alia, submitted that forensic accountant Nagel, the plaintiff’s purported expert witness, was not in fact an expert witness retained by counsel for the plaintiff. This was because, it was submitted, Nagel was retained directly by the Plaintiff through Cinq-Mars. It was also submitted that Nagel had not set out the requisite information pertaining to his background and underpinning his opinion(s), as Rule 53.03 (2.1) of the Rules of Civil Procedure obliges be done. In that regard, Mr. Starkman highlighted the lack of completion by Mr. Nagel of Form 53, the “acknowledgment of expert’s duty”.
[34] I agree with Mr. Starkman that, pursuant to Rule 39.01(7) of the Rules of Civil Procedure, even on a motion the obligations in Rule 53.03 of the Rules of Civil Procedure apply. Yet, for reasons below, I find that the Plaintiff has essentially complied with its obligation for purposes of this motion. Whether such compliance is sufficient for trial will be, of course, for the trial Judge to decide.
[35] When, during the week prior to this long-scheduled date for argument of the motion, Mr. Starkman raised this issue of non-compliance with Rule 53.03 of the Rules of Civil Procedure, and the lack of a Form 53, the plaintiff took prompt steps to remedy such non-compliance. Nagel signed the form. He also set out, in an exchange of correspondence with Ms. Gordner, an acknowledgment and confirmation of his retainer and duties. I find all this sufficient, even if done after-the-fact of the affidavits being sworn and Nagle’s cross-examinations taking place. Certainly, these requisites were tendered to me at the outset of argument on this issue. Moreover, in the April 12, 2018 affidavit, thus sworn several years ago, Nagel clearly therein sets out his credentials as an expert. He also therein provided much of the necessary information required by Rule 53.03 of the Rules of Civil Procedure.
[36] That those requisites were completed arguably after-the-fact I find is at least in part because the nature and scope of Nagel’s retainer has evolved over time. As he affirms at paragraph four in his April 12, 2018 affidavit, Nagel was originally engaged in November 2015 by Halton. His original mandate was to “conduct a forensic investigation” under the direction of Cinq-Mars who, it must be remembered, was the Chief Internal Auditor for Halton.
[37] Thus, there is, as was advanced by the plaintiff, a reasonable argument that Nagel was initially a “participating expert”. This category of witness is helpfully discussed in the March 26, 2015 decision of the Court of Appeal in Westerhof v. Gee, 2015 ONCA 206, 124 OR (3d) 721. At the outset of his mandate in 2015, Nagel arguably was akin to, if not the treating family doctor as a participating expert, then the specialist brought in to investigate the disease and determine the course of treatment. As he was reporting to Cinq-Mars, he was involved in the underlying investigation, to investigate and determine what was going on, and “identifying those responsible for any losses suffered by Halton” (again, found in paragraph four of his April 12, 2018 affidavit).
[38] As discussed above, Nagel’s status has changed over time. He has continued working on (and swearing affidavits for) this matter, yet his responsibilities and mandate has transitioned toward that of an opinion expert, at least, again, for purposes of this motion. I have found that, pursuant to the requisites in Rule 53.03 (2.1) of the Rules of Civil Procedure Nagel is more likely than not an opinion-expert. Accordingly, I need not determine if Nagel was (also) a participating expert.
[39] DBDC Spadina Ltd v. Walton, 2014 ONSC 4644, 121 O.R (3d) 449 is helpful and on point when discussing imperfect compliance with Rule 53.03 of the Rules of Civil Procedure. In that decision, the expert had not even sworn an affidavit, albeit he was cross-examined. The Justice nevertheless found him to be an expert. In this case, even if the compliance was less than timely, albeit for reasons in part of the evolving mandate, overall, Nagel clearly is providing opinion evidence (and also again, arguably, may be a participating expert).
[40] Above I alluded to the multiple affidavits sworn by Nagel—there are in fact four— and that he has been cross-examined by Mr. Starkman three times. The “background” section of these reasons references the prior attendances of the parties before me on a number of occasions. Not once did Mr. Starkman raise this issue at those prior attendance. Nor did Mr. Starkman bring a separate motion to challenge the Nagel affidavits. Rather, I find that he has treated Nagel as an expert witness, taking the opportunity to cross-examine him, not once, not twice, but three times.
[41] It would accordingly not be just to, in the days prior to this motion being argued (which motion was long scheduled), allow a party to, in essence say, “Gotcha!” If necessary, pursuant to Rule 2.01 of the Rules of Civil Procedure, in order to “determine the real matters in dispute”, I find that any technical breach by the plaintiff of Rule 53.03 of the Rules of Civil Procedure is cured. I am able to, and do rely upon, the Nagel affidavits (and his cross-examination testimony) as I consider this matter.
[42] This argument raised by Snowball also thus fails.
Applicable Law to the Discharge of a CPL/Applying the Law to this case
[43] I now turn to the main issue, relying on my summary of the background of this matter earlier in these reasons. As I address this issue and come to my conclusions it is important to observe that the material filed for this motion comprised six full banker’s boxes of materials. Not all of it was immediately necessary on the motion. Yet, as I write, there are a multiplicity of records strewn on my desk and shelf, within easy reach and reference. The oral argument did end up taking up a full day, and I took copious notes of what counsel each said very well in their submissions.
[44] Yet in these reasons I will not attempt to go through each and every document, affidavit, financial statement, or other piece of evidence filed. Nor will I repeat back to counsel all that they well stated to me in their submissions. Rather, I will focus on what I find to be important in coming to my conclusions. To do otherwise, would lead to this already lengthy decision rivalling War and Peace. If the standard was that the jurist must discuss all the evidence and all submissions, indeed, even simple cases (which this one is not) would take pages upon pages to write. Complex cases would consume an entire forest. Happily, that is not what counsel expects in this matter; nor is it the requisite standard for judicial writing.
[45] It is also important to observe at this juncture that the emphasis of Mr. Starkman’s submissions were on the preliminary issues, relying to a large extent on those issues for the discharge of the CPL. Mr. Starkman’s other submissions focused largely, albeit not exclusively, on what he asserted was the lack of evidence that there was a connection to the land.
[46] Section 103 of the Courts of Justice Act (“CJA”), in conjunction with Rule 42 of the Rules of Civil Procedure, provides for the authority to issue and discharge a CPL. The test to obtain a CPL is not a very high hurdle to overcome. In essence, the moving party must demonstrate a reasonable claim to an interest in land. Phi (in trust) v. Laidlaw Transit Ltd., 2006 CarswellOnt 5681 described the “burden on the moving party [as] not high”. Even if the plaintiff/moving party’s claim is not strong, so long as there is a “triable issue sufficient to find a reasonable claim to an interest in land”, the CPL will be granted.
[47] Once the CPL has been granted, as in this case, the motion for discharge is under Rule 42.02(1) of the Rules of Civil Procedure. The moving party must satisfy the onus pursuant to Section 103(6) of the Courts of Justice Act. Pursuant to the case-law, that onus for the discharge of a CPL is higher, in my view, than is the onus to be met to obtain a CPL in the first place.
[48] Ontario Inc. V. Denofrio, 2000 CarswellOnt 2842 is a decision which discusses the equitable test. Therein, Justice Panet reviews that “a Judge must exercise …discretion in equity and look to all of the relevant matters between the parties in determining whether or not the certificate should be vacated”. That decision also provided that, “genuine disputes as to issues of fact should not be decided on a motion such as this”, with questions of and findings upon credibility reserved to the trial judge. The decision also observes that one basis for discharge is where the party which obtained the CPL does not have an interest in the land.
[49] Yet, if there remains a triable issue that there is an interest in land, even if the evidence of this interest is not strong, then the equities of the case must be considered. See also in that regard Notarfonzo v. Goodman, 1981 CarswellOnt 416 [1981], which holds that even if the plaintiff which obtained the CPL has a weak case, the CPL will not be discharged unless “there is a certainty” that the case will fail to show an interest in land. Again, then, the onus rests with Snowball to clearly establish a lack of interest in Waterford on the part of Halton.
[50] I also considered the “Dhunna Factors”, which arise from 572383 Ontario Inc. v. Dhunna, 1987 CarswellOnt 551 [1987], a decision of Master Donkin. Addressing and applying these factors, in this case the land is not unique. One was a typical house (Waterford), while Barton is an ordinary residential condominium. Most importantly, extrapolating from these factors, is that there is no evidence of any intended sale of the Barton property. Preserving the status quo would thus not cause any (additional and alleged) harm to Snowball which is not compensable in costs if she ultimately prevails in defending the claims asserted against her. Moreover, if she does prevail in the litigation, as the plaintiff is a regional municipal corporation, it clearly would have the financial ability to satisfy even a large costs award.
[51] As I apply the law to the facts of this matter, I express agreement with the submission made by Ms. Gordner that this case is somewhat of a moving target. There was not, I agree, one “clean” fraudulent act, easily identifiable, with the fraudulent funds easily traceable. Rather, what there is in this case is a series of transactions, some allegedly fraudulent with others being legitimate transactions in the usual course of business for the plaintiff, with its usual suppliers. That is likely one reason why it took so long for the fraud to be discovered, and why it has taken so long for Nagel to tease out all the minute details. Again, referring to the number of productions, including financial statements, bank records, etc., and all the financial “puts and takes” which fill volumes of materials, I can understand why this is and has been something of a challenge to unravel.
[52] Again, it is not appropriate for me to make findings of fact in deciding this motion. The trial Judge will ultimately assess and weigh the evidence, including the evidence of Nagel. What I can, however, appropriately and safely conclude is that there is much evidence of Nagel which I find reliable for my limited purposes. I further find that this evidence, without going through it all in chapter and verse, convincingly demonstrates a triable issue that there is, on the part of the plaintiff, an interest in the land in question.
[53] The February 22, 2018 affidavit of Cinq-Mars, to which I have earlier alluded in these reasons, also sets out (at paragraph 25) triable evidence that payments were made by Sirron to Snowball during the relevant time, which payments again arguably funded the purchase by Snowball of Waterford. At least some of those funds arose from the allegedly fraudulent activities of Sirron and Norris.
[54] The evidence before me also purports to show that Norris paid rent to Snowball; and, pursuant to the February 28, 2019 Nagel affidavit (paragraphs 14-18), that Norris also ostensibly contributed to certain household improvements for Waterford, even though, pursuant to the lease agreement, he did not have to do so. Moreover, Snowball testified when cross-examined that Norris did not so contribute, despite the financial records indicating that this testimony was seemingly not an accurate recollection (or perhaps was just not accurate; again, I am carefully attempting to avoid any ostensible findings on credibility or of fact). Yet that Norris contributed to Waterford, as the evidence seemingly demonstrates, leads to the reasonably drawn inference that he was doing so with at least some of the allegedly ill-gotten funds from Halton.
[55] Tab D to the plaintiff’s factum dated May 30, 2019 sets out the tracing of funds purportedly taken from Halton and which funds went, to some extent, back and forth between Norris and Snowball. This document, with its references to earlier filed materials, also demonstrates, clearly, a triable issue of interest in the land.
[56] In the fourth supplementary Motion Record of Snowball, at tab 50, there are some statements which ostensibly show Snowball paying the mortgage for Waterford. The payments are in the range of $870.00, twice monthly, totalling approximately $20,000 annually. As was also described in the Nagel affidavit of May 2018 (paragraphs 28-36), Snowball ostensibly advanced or loaned Norris and/or Sirron the amount of over $600,000.
[57] Again, the evidence is that these parties were transferring funds back and forth. Yet the crux of the matter, for me, is how was an individual earning approximately $46,000 annually able to afford, first, the purchase of Waterford with the resulting mortgage payments, and also, ostensibly loaning Sirron monies on such a regular basis? More to the point: why would Snowball be loaning Sirron such monies? The position of Snowball, that it was Norris who approached her for this rather than obtain a line of credit to fund Sirron’s receivables, and that he relied on his girlfriend to finance his receivables, is I find quite challenging to accept. After all, the evidence before me is that Sirron had earnings of the millions of dollars, annually. The evidence also is that for years its customers paid on a 60-90 day basis, which ostensibly led to consistent cash-flow issues. Yet a business with such ongoing, cyclical issues would normally have revolving credit facilities arranged through a financial institution, rather than rely on the owner’s girlfriend who earns little but purportedly runs up her credit card and bank loan to fund the boyfriends’ business.
[58] In medical school, nascent doctors are taught that, “when one hears hoof-beats, think horses, not zebras”. In other words, consider the more likely, rather than the more fanciful or less likely explanation for something. In this case, for purposes of this motion I am unable to accept the less likely and more fanciful explanations offered by Snowball. I also observe that, at this point, the only financial opinions are from Nagel. Snowball has not yet put forth any such evidence, rather just urging me to discount what is before me. Yet, for reasons above, I am not prepared to discount such evidence which I found of assistance as I considered all of the equities in this matter.
[59] Balancing all the equities, the totality of the evidence on this motion, including the opinion evidence, the financial statements, the affidavits and the cross-examination testimony, all do, again, raise at least a triable issue of the plaintiff having an interest in the land in question. Accordingly, I find that justice is better served by preserving the status quo and leaving the CPL in place, as well as leaving the funds in trust with the real estate solicitor.
[60] The motion of the defendant is thus denied.
[61] In coming to these conclusions, I did not need to address the request of the plaintiff that I strike material from the defendant’s material. Thus, I make no finding in that regard.