Court File and Parties
Court File No.: CV-16-545237 Date: 2020-02-20 Superior Court of Justice - Ontario
Re: Leslie Perrin, Vita Ivanovs and Andrejs Ivanovs, Plaintiffs – and – Anton Barkov and Ulyana Viktyuk, Defendants
Before: E.M. Morgan J.
Counsel: Alan Honner, for the Plaintiffs Karen Sanchez, for the Defendant, Anton Barkov Wolfgang Pazulla, for the Defendant, Ulyana Viktyuk Neal Roth, for the Plaintiff in Piccioni v. Viktyuk (Court File No. CV-15-533232)
Heard: February 18, 2020
Reasons for Judgment
[1] The Plaintiffs move for summary judgment on loans that are due and payable by the Defendants to each of them.
[2] The Defendants are in the real estate business. They buy, improve, and re-sell residential properties. The Plaintiffs are lenders to their business.
[3] In April 2014, the Plaintiff, Leslie Perrin, lent the Defendants $50,000 for a project in which the Defendants were engaged at 134 Viewmount Avenue, Toronto (the “Viewmount project”). The loan is evidenced by a promissory note signed by both Defendants which was issued shortly after the loan was entered into. It calls for the loan to be repaid to Mr. Perrin upon sale of the 134 Viewmount property.
[4] The Plaintiffs, Vita and Andrejs Ivanovs, lent $50,000 to the Defendants for a previous project in which the Defendants were engaged which the parties called the “Woodfield project”. The Defendants repaid $30,000 of this loan, and Mr. and Ms. Ivanovs agreed to roll the balance of $20,000 over into a new loan. This $20,000 loan is evidenced by a promissory note signed by both Defendants and dated September 16, 2012. It was to be payable upon sale of the Woodfield project, Mr. and Ms. Ivanovs later agreed to extend the loan to be payable to them upon sale of the Viewmount project.
[5] The promissory note to Mr. and Ms. Ivonovs states that the interest on the loan is 12% per annum. The promissory note to Mr. Perrin does not mention an interest rate. Mr. Perrin deposes in his affidavit that the interest rate of his loan is also 12% per annum.
[6] The Viewmount project was sold in November 2014. Neither loan was repaid by the Defendants, although Mr. and Ms. Ivonovs have had interest on their loan paid in full until July 2014.
[7] The Plaintiffs have done a calculation of the interest amounts owing on their respective loans. Up until the date of the present motion (February 18, 2020), the amount of interest owing to Mr. Perrin is $36,157.60, and the amount of interest owing on the loan to Mr. and Ms. Ivanovs is $13,318.44.
[8] Accordingly, as of this date the Defendants owe Mr. Perrin a total of $86,157.60, and they owe Mr. and Ms. Ivanovs a total of $33,318.44.
[9] The Defendants put up no real defence to these claims, except that the Defendant, Anton Barkov, says that a trial is needed to ascertain all of the relevant facts.
[10] More specifically, counsel for Mr. Barkov submits that the interest rate for the loans is unclear and will have to be determined at trial. However, I do not see why that is the case. There does not appear to be a real controversy over the rate of interest.
[11] Mr. Barkov was examined for discovery in this action, and his counsel indicates that his discovery transcript constitutes all of his evidence in this motion. Under examination, Mr. Barkov was specifically asked about the interest rate on each of the loans. With respect to the loan from Mr. Perrin, he stated:
Q: So, you don’t have any recollection whatsoever with respect to what the terms of interest would be to this $50,000 loan? A: I don’t see why it would be different from original 12 percent, but I don’t know.
[12] Mr. Barkov’s explanation for his lack of certainty with respect to the 12% interest rate is that his co-Defendant, Ulyana Viktyuk, negotiated the terms of the loans. Noting that the interest rate is unstated in Mr. Perrin’s promissory note, Mr. Barkov testified:
Q: Did either you or Ulyana approach Leslie Perrin for $50,000 investment in the Viewmount property? A: It was money that we borrowed from them for the business, yes. Q: But not specifically for the Viewmount property? A: No. Q: Who approached them? A: Ulyana.
[13] Mr. Barkov also testified that it was Ms. Viktyuk, and not him, who had negotiated the terms of the renewed loan from Mr. and Ms. Ivanovs:
Q: The interest rate there was still at 12 percent? A: Again, I assume so. Q: Did you renegotiate the terms of any interest at any point A: I never – Q: with the Ivanovs? A: negotiated interest.
[14] For her part, Ms. Viktyuk’s position on the terms of the loans could not be clearer. Paragraphs 2 and 3 of her Statement of Defence and Crossclaim specifically admit that the interest on the loans to Mr. Perrin and Mr. and Ms. Ivanovs, respectively, are 12% per annum. This is confirmed in her affidavit filed in response to this motion dated November 15, 2019.
[15] Accordingly, the Defendants’ evidence is that Mr. Barkov assumes that the interest rate is 12% for each of the loans, but defers to Ms. Viktyuk for the precise amount. And Ms. Viktyuk says definitively that the interest rate is 12% per annum on each of the loans.
[16] I have no hesitation concluding that the principle amounts, plus interest at 12% per annum, are due and payable on each of the Plaintiffs’ loans. There is no need for a trial of these issues.
[17] Counsel for Mr. Barkov also submits that summary judgment ought not be granted to the Plaintiffs because the question of priorities has yet to be worked out as between these Plaintiffs and the plaintiff in another related action, Piccioni v. Viktyuk (Court File No. CV-15-533232). The plaintiff in the Piccioni action, Lou Piccioni, is a real estate agent who was also involved as an investor with the Defendants and who has brought a separate claim for monies he says are owing to him in respect of the Viewmount project.
[18] In his examination for discovery, Mr. Barkov referenced the priority dispute with respect to these various loans as his only real concern. When asked about whether the loans were now repayable to the Plaintiffs here, Mr. Barkov responded: “But all of this should be paid to them – I don’t deny that we borrowed this money from them – after we pay to Lou [Piccioni]. That’s it.”
[19] The Piccioni action is a complicated one; in fact, although it relates to the same real estate project as the present action, the financial dealings between Lou Piccioni and the Defendants are far more elaborate than the straightforward loans at issue here. That said, as a matter of judicial economy, the two actions have been ordered by Dow J. to be tried consecutively by the same trial judge.
[20] I pause to note that Justice Dow’s Order is a scheduling and trial management direction, not a substantive determination of any issues. Counsel for Mr. Barkov suggests that the present motion is, in effect, a collateral attack on that Order. That, however, is a misreading of the Order. Dow J. did not require the two actions to proceed to trial; it ordered them to be tried consecutively if and when they proceed to trial. If one were to settle, or one were to be brought to an end by a discontinuance or summary judgment, the other would proceed on its course.
[21] There is nothing in Dow J.’s Order, nor in the position of any of the parties, to suggest that the Piccioni claim and the Plaintiffs’ claims are related on their merits. Each is the subject of a separate legal action, and the issues of liability are not interrelated. As Mr. Barkov himself conceded, the Defendants are obliged to pay the Plaintiffs in the present action, the only question being one of priorities as between the Plaintiffs and Mr. Piccioni.
[22] I will also note that the Plaintiffs have brought a full summary judgment motion, not a partial one. Counsel for Mr. Barkov characterizes this as a partial summary judgment because it only resolves this action and not the Piccioni action. Again, the two actions are entirely separate on their merits. The Piccioni claim does not turn on, and will not generate, any fact finding that impacts on the present claim.
[23] In Butera v Chown, Cairns LLP, (2017), 2017 ONCA 783, 137 OR (3d) 561, para 34, the Court of Appeal stated:
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.
[24] There is no doubt in anyone’s mind – including that of Mr. Barkov himself – that the issues in the present action can be bifurcated from those in the Piccioni action. That is the reason they are not joined in the same action in the first place. While one can understand why it is cost effective trial management for the same judge to hear the two trials consecutively, that does not intertwine the issues in a way which makes the current motion a problematic quest for partial summary judgment.
[25] Mr. Piccioni also appears to agree with that assessment. His counsel was put on notice of the present motion and attended at the hearing. He made a very useful contribution explaining the background and the relationship of the Piccioni case to the present one.
[26] Mr. Piccioni’s position, like that of the Plaintiffs as well as the Defendants here, does not link the liability issues in the two cases. Rather, his counsel submits that if summary judgment is granted to the Plaintiffs it should be accompanied by a qualification that enforcement of the judgment be held in abeyance until liability is determined in the Piccioni action. In that way, the question of priorities can be sorted out by the parties at the enforcement stage, where it belongs.
[27] In my view, that is the proper way to resolve this matter. The fact that there is a priority dispute with the plaintiff in another case is not a reason not to grant judgment on the two loans in issue here. Likewise, the fact that the Defendants have outstanding cross-claims against each other is not a reason not to grant judgment to the Plaintiffs. If the Defendants want to litigate against each other over which one of them is the real cause of the financial failure of the Viewmount project, that does not impact on the Plaintiffs’ rights. Both Defendants have conceded that the Plaintiffs deserve to be paid.
[28] Summary judgment is hereby granted in favour of the Plaintiffs. The Defendants shall pay Leslie Perrin $86,157.60. The Defendants shall pay Vita and Andrejs Ivanovs $33,318.44.
[29] If the judgment is not paid voluntarily by the Defendants, enforcement by the Plaintiffs is to be stayed until the issue of priorities as between the Defendants’ debt to the Plaintiffs and the claim by Mr. Piccioni is resolved, or until further Order of the court. For greater certainty, I am not seized of any further steps in the present case or in the Piccioni case.
[30] The Plaintiffs are entitled to their costs. Their counsel has submitted a Bill of Costs in support of a partial indemnity request for the entire action in the amount of $18,256.36, inclusive of all fees ($17,256.36 plus $1,000 for the appearance at the hearing of the motion) as well as disbursements and HST.
[31] Counsel for Mr. Barkov has submitted a Costs Outline in which she would seek costs of the motion alone in the amount of $15,426.44. Counsel for Ms. Viktyuk and counsel for Mr. Picciioni do not seek costs against any party.
[32] Given that Mr. Barkov’s cost request far exceeds that of the Plaintiffs, the amount sought by the Plaintiffs here will be within his reasonable expectations for the motion and the overall action: see Rule 57.01(1)(0.b) of the Rules of Civil Procedure.
[33] Mr. Barkov shall pay the Plaintiffs costs in the all-inclusive amount of $18,256.36.