Court File and Parties

COURT FILE NO.: CV-16-561227 DATE: 2019-06-27

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

BOBBIE MANN Plaintiff – and – MARCUS CHAC-WAI and YOLANDA JANISZEWKI and MIMAR HOLDINGS CORPORATION Defendants

Counsel: Gwendolyn L. Adrian, for the Plaintiffs Rolf M. Piehler, for the Defendants

HEARD: May 2, 2019

M. D. FAIETA j.

Reasons for Decision

Introduction

[1] The claim and counterclaim in this proceeding arise out of a partnership between the plaintiff Bobbie Mann (“Bobbie”) and the defendant Marcus Chac-Wai (“Marcus”) where they would buy, renovate and sell houses with the expectation of earning a profit. Bobbie would provide the required funds and the Marcus would perform the renovations. Bobbie claims that she lent the defendants about $1 million for the renovation of several properties. She states that Marcus and his spouse, the defendant Yolanda Janiszewski (“Yolanda”) are principals of Mimar Holdings Corporation (“Mimar”). Bobbie denies that she knew or agreed to be an officer or director of Mimar. Bobbie seeks an order for the repayment of $1 million and a declaration that she holds an equitable mortgage against one of the properties owned by Mimar.

[2] While the parties acknowledge in their pleadings that there was a partnership between Bobbie and Marcus, they disagree as to what activities/purchases fall within the scope of the partnership. In particular, they dispute whether the monies received by the defendants from Bobbie were personal loans or investments into the partnership.

[3] The defendants allege that Bobbie has failed to share with Marcus and Mimar the profits from the sale of other renovated properties. Their counterclaim seeks, amongst other things, an accounting of all partnership revenues and expenses, damages for Bobbie’s alleged wrongful actions to deprive the defendants of their partnership profits.

[4] The defendants bring a motion for summary judgment to dismiss the plaintiff’s claim. For the reasons described below I have dismissed this motion.

Background

[5] Bobbie alleges that she met Marcus in the summer of 2012 when he and Mimar did construction work on a property that she owned located in Mississauga (the “Grange property”). Mimar had agreed to do the work for the sum of $190,000.00. Bobbie denies the allegation made by the defendants that she also agreed to pay Marcus an additional 15% as compensation for being the general contractor on the Grange property renovation.

[6] The defendants admit that Bobbie and Marcus were business partners since about November, 2012 and that they would purchase, renovate and sell properties in the expectation of earning a profit. The defendants also admit Bobbie placed a considerable amount of trust in Marcus throughout their relationship.

[7] Bobbie alleges that, in November 2012, she agreed to lend money to Marcus for the purpose of completing the renovation of a property located in Mississauga (the “Doulton property”) on the understanding that he would repay her from the proceeds of sale by the end of 2013 once the renovations were complete and the house was sold. The Doulton property was owned by Mimar. Yolanda states that the Doulton property is the matrimonial home that she shares with Marcus and her four children. Bobbie alleges that she advanced a total of $435,075.00 to Mimar by bank draft and wire transfers between November 2012 and April, 2013. Marcus and Yolanda deny that any funds advanced by Bobbie were used for the renovation of the Doulton property.

[8] Bobbie states that in January 2013 she agreed to lend Marcus additional monies for personal living expenses on the understanding that these additional loans would also be repaid upon the sale of the Doulton property. To this end, Bobbie arranged for two credit cards, secondary to her credit card accounts, to be issued to the defendants. The plaintiff claims that the defendants incurred charges of $338,269.00 on one account and $435,075.00 on another account. Bobbie alleges that she paid all of the charges. Bobbie states that Marcus subsequently paid all charges on the two credit cards except for $65,843.41 which remains outstanding. Bobbie states that in total, there is about $1 million in outstanding loans owed to her by the defendants.

[9] The defendants state that the amounts advanced by Bobbie to Mimar from November 2012 to April 2013 were used to renovate a property owned by Bobbie at 2106 Grange Drive, Mississauga that she had purchased in 2010 and sold in 2015.

[10] The defendants allege that the partnership purchased and renovated three other properties for which Bobbie received all of the profits:

• a property at 1528 Greenridge Circle, Oakville that was purchased for $625,000.00 and sold for $1,045,000.00 in April, 2014;
• a property at 168 Brentwood Road North, Toronto that was purchased for $825,000.00 in April, 2014 and sold by the plaintiff for $1,075,000.00. The defendants allege that Bobbie failed to remit any of the net proceeds of sale to the defendants; and
• a property at 49 Loyalist Road, Toronto that was purchased for $775,000 in July, 2013 and sold for $1,145,000.00 in November, 2016.

[11] The defendants deny that any of the funds advanced by Bobbie were used to renovate to the Doulton property. The defendants deny that the credit card expenses were used to renovate the Doulton property. Instead, the vast majority of the credit card expenses were used to renovate the other properties described above, as well as a property located at 14740 Keele Street, King, Ontario. The defendants allege that the Keele property represents partnership profits and that they are entitled to a certificate of pending litigation against that property.

[12] Bobbie alleges that the Greenridge property was purchased by Mimar following the renovation of the Grange property. Bobbie also alleges that Mimar borrowed $400,000.00 and that this loan was secured by a mortgage against the Greenridge property and that she did not receive any benefit from that mortgage.

[13] Bobbie denies that the defendants conducted or facilitated any renovations in relation to the Brentwood property.

[14] Bobbie alleges that she was the sole owner of the Loyalist property. She alleges that Marcus and Mimar did some renovation work but neither obtained a building permit nor completed the work. She alleges that the work was negligently performed and as a result the property suffered a partial collapse in April, 2014 and required significant remedial action which was paid entirely by Bobbie. No further work was done at the Loyalist property by Marcus and Mimar following the collapse.

[15] Bobbie denies that Marcus or Mimar undertook any renovation work at the Keele property. She alleges that she paid the full purchase and renovation price for that property.

[16] On September 28, 2016, the plaintiff obtained an order to have a CPL registered against the Doulton property.

[17] On November 8, 2016, the defendants obtained leave on an ex parte basis to register a CPL against title to the Loyalist property, owned at that time by the plaintiff, given its pending sale.

[18] On November 15, 2016, Bobbie obtained an order that the Loyalist CPL be discharged and, in its place, her solicitor on the sale of the Loyalist property was required to hold back 50% of the net proceeds of sale ($223,408.05) which represented the defendants’ alleged entitlement to profits from the parties’ partnership.

[19] On June 1, 2017, Justice Muir dismissed the plaintiff’s motion for release of the aforementioned holdback to the plaintiff. He also granted leave to Marcus and Mimar to issue a CPL against the Keele property.

[20] On March 8, 2018, a discovery plan and timetable was imposed by order of Master Jolley.

[21] On June 8, 2018, Master Sugunasiri dismissed the plaintiff’s motion to strike the defence for failure to comply with Master Jolley’s order. She also dismissed the defendants’ cross-motion to postpone the plaintiff’s CPL registered against the Doulton property to allow re-financing. The defendants were ordered to pay costs of $9,600.00, on both motions, to the plaintiff.

[22] All parties were examined for discovery in August, 2018.

[23] On November 2, 2018, this court heard a motion brought by the plaintiff to have the funds paid into court, pursuant to the order dated November 15, 2016, discharged to her. This decision has not been released.

[24] On November 20, 2018, this motion for summary judgment was scheduled for March 21, 2019, although not heard until May 2, 2019 due to a shortage of judges.

[25] The parties were cross-examined on their affidavits on January 30 & 31, 2019.

Analysis

Issue: Is this an appropriate case for summary judgment?

[26] Rule 20.04(2)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, states that a 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.

[27] The following principles govern a motion for summary judgment:

• 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: Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 at para. 49. The question is whether the added expense and delay of fact finding at trial is necessary to a fair process and just adjudication: Hryniak, para. 33. In other words, a judge must determine whether he or she is confident that he or she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute: Hryniak, para. 50;
• Summary judgment remains the exception, not the rule: Mason v. Perras Mongenais, 2018 ONCA 978, para. 44;
• A judge is entitled to assume that the record contains all the evidence that the parties will present if there is a trial. A party must put its best foot forward: Hashemi-Sabet Estate v. Oak Ridges Pharmasave Inc., 2018 ONCA 839, para. 33;
• If there appears to be genuine issue requiring a trial based only on the evidence before the court, a judge shall consider the evidence submitted by the parties and the judge may weigh the evidence, evaluate the credibility of a deponent and draw any reasonable inference from the evidence unless it is in the interests of justice for such powers to be exercised only at trial: Rule 20.04(2.1); Hryniak, para. 66. Where factual disputes exist on the written motion record, a judge typically will resort to such presumptively available powers when evaluating whether a genuine issue requiring a trial exists: Crescent Hotels and Resorts Canada Co. v. 2465855 Ontario Inc., 2019 ONCA 268, para. 9.
• For the purposes of exercising the powers described in Rule 20.04(2.1) a judge may order that oral evidence be presented: Rule 20.04(2.2). This power should be employed when it allows the judge to reach a fair and just adjudication on the merits and it is the proportionate course of action: Hryniak, para. 65. A judge need not exercise these expanded fact finding powers where the motion is clearly unmeritorious or where such powers are tactically sought in order to add time and expense: Hryniak, para. 68.
• “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”: Butera v. Chown, Cairns LLP, 2017 ONCA 783, 137 O.R. (3d) 561, para. 34; Service Mold + Aerospace Inc. v. Khalaf, 2019 ONCA 369, para. 14. An issue is not readily bifurcated if the motion judge's findings will either constrain the trial judge or lead to the risk of inconsistent findings on the same issues at trial: Vandenberg v. Wilken, 2019 ONCA 262, para. 13.

[28] This motion proceeded on the basis of: (1) the affidavits of Marcus Chac-Wai and the transcript from his cross-examination; (2) the affidavit of Yolanda Janiszewski and the transcript from her cross-examination; (3) the affidavit of Bobbie Mann (four volumes) and the transcript from her cross-examination.

[29] I find that this is not an appropriate case for summary judgment for the following reasons:

• First, granting the defendants’ motion for summary judgment would leave the counterclaim outstanding. Accordingly, this is a case of partial summary judgment. This is not one of rare cases where it is appropriate to grant partial summary judgment. The issues raised by the plaintiff’s claim (including whether the Doulton property is a partnership property and whether the monies given by the plaintiff to the defendants constituted a loan or a contribution to the partnership) are not readily bifurcated from the defendants’ counterclaim. The factual matrix of the parties’ entire relationship, including their behaviour in relation to the other properties allegedly part of their partnership business, is relevant to assessing these issues.
• Second, there is little documentary evidence to support the positions taken by the parties. This is not a case where a judge can confidently determine the merits of a claim from the review of the documentary evidence, including the transcripts of the cross-examination of the parties. To proceed with a motion for summary judgment in these circumstances where credibility of the parties is at issue would create a real risk of inconsistent findings. Given the importance of oral evidence in this case, I find that is not in the interest of justice to exercise the enhanced powers under Rule 20.04 to determine the motion for summary of judgment but rather will best determined by the trial judge who hears the oral evidence of the parties and perhaps other persons. Fairness and efficiency dictates that this claim (and counterclaim) be determined at trial at the earliest possible opportunity rather than by motion for summary judgment.

Conclusions

[30] For the reasons given, I dismiss the motion for summary judgment.

[31] I encourage the parties to make every effort to come to an agreement on the issue of costs, failing which the plaintiff shall provide her submissions by July 15, 2019, the defendants shall provide their submissions by July 29, 2019, and the plaintiff shall provide any reply submissions by August 8, 2019. Each submission shall be a maximum of five pages in addition to an Outline of Costs and any Offers to Settle.

Mr. Justice M. D. Faieta Released: June 27, 2019