Court File and Parties

COURT FILE NO.: CV-17-4729-00 DATE: 2021 02 23

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Between Peel Condominium Corporation No. 346 Plaintiff

And Florentine Financial Corporation, Shanawaz Khan, Salim Khan, and A&H Asset Auction Inc. Defendants

BEFORE: Bloom, J.

COUNSEL: Victor Yee, for the Plaintiff, the Moving Party Greg Marley, for the Defendants, the Responding Parties

HEARD: February 17, 2021

Endorsement

I. Introduction

[1] The Plaintiff moves for summary judgment in respect of claims in its Amended Claim issued June 5, 2017. The Defendants oppose that motion.

II. Procedural Background and Undisputed Facts

[2] The Plaintiff is a non-profit condominium corporation consisting of 4 units and their common elements; the property is located at 80 Devon Road, Brampton, Ontario.

[3] The Defendant, Florentine, is the owner of unit 3. The Defendant A&H is the occupant of the unit. The Defendant, Shanawaz Khan, is the sole director of Florentine and A&H. The Defendant, Salim Khan, is her son and a former member of the Board of Directors of the Plaintiff.

[4] The Plaintiff in oral argument sought an order for summary judgment against Florentine for $55,150.24 for common expense arrears owed as of February 2, 2021 (abandoning its claim against the other defendants for that relief); an order granting summary judgment to the Plaintiff as against the defendants in the sum of $3,144.22 for a payment described as the “Van Ryenn cheque”; an order on summary judgment under s. 134(5) of the Condominium Act that amounts ordered payable to the Plaintiff are recoverable against Unit 3 as common expenses; an order on summary judgment under s. 134 of the Act declaring that Florentine is required to pay Unit 3’s common expenses to the Plaintiff on the 1st of every month; an order on summary judgment under s. 135 of the Act declaring that the Defendants have acted oppressively regarding the Plaintiff; an order on summary judgment declaring that Mr. Khan has acted in breach of his director’s duty under the Act; and pre-judgment and post-judgment interest at 18% per annum compounded monthly on sums awarded to the Plaintiff.

[5] The Defendants counterclaim for remedies for oppression.

[6] The proceeding had been transferred to this court from the Small Claims Court by order of Justice Fragomeni of this court on May 11, 2018.

III. Positions of the Parties

A. Position of the Plaintiff

[7] The Plaintiff relies on the affidavit evidence of William Hristovski, President of the Plaintiff. He provided evidence that Salim Khan in the period October 30, 2013 to March 30, 2016 was the Managing Director of the Plaintiff; that after he left the Board, the Board discovered from the financial records of the Plaintiff which it obtained from him, that all 4 units of the condominium were in arrears as to common expenses; and that he had hidden the common expense arrears from the other Board members to allow the unit 3 expense arrears to be hidden.

[8] Mr. Hristovski also provided evidence that Salim Khan issued a cheque on behalf of the Plaintiff to Van Ryenn Group in the amount of $3,144.22 on March 8, 2016; that the payee was controlled, operated, or closely related to some or all of the defendants; that the work for which the cheque was issued may have only been done for unit 3 or may not have been authorized by the Board; and that the cheque was not authorized by the Board.

[9] The Plaintiff did not cross-examine on the affidavit evidence of the Defendants; it asks the Court to either award summary judgment in accordance with its claims or use the enhanced powers under Rule 20.04(2.1) and (2.2) of the Rules of Civil Procedure.

B. Position of the Defendants

[10] The Defendants also did not cross-examine on the affidavit evidence filed by the Plaintiffs. They rely on the affidavit evidence of Salim Khan. He provided evidence that the Plaintiff was managed and administered informally and by mutual agreement; that all Board members had access to the Plaintiff’s records; that they knew or ought to have known of the common expenses arrears of the units; and that he was authorized to sign for the Plaintiff the “Van Ryenn cheque” for property management services.

[11] The Defendants raise a limitations defense to all or part of the unit 3 common expense claim based on the knowledge of the Board of the arrears. The amount of the arrears is also disputed on bases besides the limitations defense.

IV. Governing Principles

[12] In Royal Bank of Canada v. 1643937 Ontario Inc., 2021 ONCA 98 at paras. 23 to 27 Justice Roberts for the Court set out the principles governing motions for summary judgment:

The Framework for Summary Judgment

[23] At the heart of this appeal is the motion judge’s approach to summary judgment and, specifically, her treatment of the evidence and record before her. Absent an error of law, a misdirection, or the creation of an injustice through a decision that is clearly wrong, a motion judge’s determination of these questions is generally entitled to considerable deference on appeal: Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at paras. 81-84. However, here, appellate intervention is required, as the motion judge fell into error and misdirected herself because she failed to determine whether summary judgment was appropriate, having regard to the entire evidentiary record and the Hryniak analytical framework.

[24] This determination required the motion judge to follow the analytical approach set out in Hryniak, at para. 66, which is summarized as follows:

1. First, the motion judge should have determined if there was a genuine issue requiring a trial based only on the evidence before her, without using the enhanced fact-finding powers under r. 20.04(2.1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

2. Second, if there appeared to be a genuine issue requiring a trial, the motion judge should have determined if the need for a trial could be avoided by using the enhanced powers under r. 20.04(2.1) – which allowed her to weigh evidence, evaluate the credibility of a deponent, and draw any reasonable inference from the evidence – and under r. 20.04(2.2) to order that oral evidence be presented by one or more parties.

[25] While summary judgment is an important tool for enhancing access to justice and achieving proportionate, timely, and cost-effective adjudication, there is no imperative on the court to use it in every case: Trotter Estate, 2014 ONCA 841, 122 O.R. (3d) 625, at para. 49; Lesenko v. Guerette, 2017 ONCA 522, 416 D.L.R. (4th) 349, at para. 30. As affirmed by the Supreme Court in Hryniak, at para. 28, the overarching goal remains to have “a fair process that results in a just adjudication of disputes.”

[26] Indeed, notwithstanding the parties’ agreement that the action and counterclaims could be determined by summary judgment, it is still incumbent on the motion judge to decide whether it is appropriate to grant summary judgment: Rules of Civil Procedure, r. 20.04(2)(b).

[27] In determining whether summary judgment is appropriate, motion judges are required to engage with the Hryniak analytical framework process, as described above, look at the evidentiary record, determine whether there is a genuine issue requiring a trial, and assess, in their discretion, whether resort should be taken to the enhanced powers under rr. 20.04(2.1) and (2.2) of the Rules of Civil Procedure. To do otherwise runs the risk that, in an effort to dispose of a case in a summary fashion, motion judges will not properly analyze the evidence: Trotter, at para. 49. Unfortunately, that is what occurred here.

[13] Justice Roberts also emphasized the utility of cross-examination in the process of determining whether entitlement to summary judgment has been established.

[14] In Butera v. Chown, Cairns LLP, 2017 ONCA 783 at paras. 26 to 34 Justice Pepall for the Court discussed the principles governing the granting of partial summary judgment:

[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, this court applied Gold Chance International Ltd. v. Daigle & Hancock, [2001] O.J. No. 1486, [2001] O.T.C. 266 (S.C.J.) to state that partial 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), 120 O.R. (3d) 438, [2014] O.J. No. 2745, 2014 ONCA 450 and in Canadian Imperial Bank of Commerce v. Deloitte & Touche (2016), 133 O.R. (3d) 561, [2016] O.J. No. 6319, 2016 ONCA 922. Baywood was decided in the context of a motion for summary [page568] 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 (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.

[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 [page569] 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.

[15] In Mason v. Perras Mongenais, 2018 ONSC 1477 at paras. 16 and 19 Justice F.L. Myers provided further guidance on the principles which should govern the granting of partial summary judgment:

16 The Supreme Court of Canada recognized that this determination and the related decisions to utilize the enhanced fact finding powers under Rules 20.04 (2.1) and (2.2) in the interests of justice, involve a balancing of facts and law. They are judgment calls that attract deference. (See Hryniak at para. 81 and following). There will be cases where a summary process would resolve so little of value and/or create too much risk of costly duplication or inconsistent verdicts to be viewed as either just or proportionate. But to implement a change in the legal culture -- a "culture shift" -- judges have to be able to say that in appropriate cases, viewed in the context of the litigation as a whole, partial summary resolution achieves the goals of fairness and promoting access to justice as was the case in Hryniak itself.

19 It readily follows that where a trial is required involving the same parties, the same witnesses providing the same evidence about the same facts in issue as are relied upon for summary judgment, the risk of duplication and inconsistent outcomes is particularly acute. In such cases, the benefits of summary judgment as a cost saving or tool for efficiency are lost since a trial is required on all the same facts among all the same parties anyway.

V. Analysis

[16] I have considered the principles of law set out above and the evidence placed before me. In my view, the motion for summary judgment must be dismissed because there are genuine issues requiring a trial with respect to the claims of the Plaintiff. The claims turn principally on the credibility of witnesses as to the operations of the Board and the actions of Salim Khan as a member of the Board. There was no cross-examination of any affiant to assist in the necessary findings of credibility and fact.

[17] Further, because the factual background is the same for all of the claims, partial summary judgment is inappropriate given the risk of duplication of findings of fact and inconsistent findings of fact. The enhanced powers available under Rule 20.04(2.1) and (2.2) do not permit me to avoid an order dismissing the motion at bar. A trial is required to make the necessary findings of fact in relation to the claims of the Plaintiff.

[18] Since I am dismissing the motion by the Plaintiff based on the need for a trial with respect to its claims, I need not consider how the counterclaim would have been treated procedurally if I had granted the Plaintiff’s motion.

VI. Costs

[19] I will receive written submissions as to costs of no more than 3 pages, excluding a bill of costs. The Plaintiff shall serve and file its submissions within 14 days from release of these reasons. The Defendants shall serve and file their submissions within 14 days from service of the Plaintiff’s submissions. There shall be no reply.

Bloom, J. DATE: February 23, 2021