Court File and Parties

COURT FILE NO.: CV-19-81579

DATE: 20210519

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 1951584 ONTARIO INC, Plaintiff

AND:

ANTRANIK KECHICHIAN and OPTICAL VISION OF CANADA LTD., Defendants

AND:

ESSILOR GROUPE CANADA INC., 9109862 CANADA INC., 9346-3495 QUEBEC INC., 9346-3503 QUEBEC INC., GESTION ERIC SAVARD INC. and ERIC SAVARD, Third Parties

BEFORE: Mew J.

COUNSEL: John Russo, for the plaintiff Antranik Kechichian, unrepresented Gary G. Boyd, for Kaufman LLP Chad Pilkington, for the third parties, Essilor Groupe Canada Inc. and 9109862 Canada Inc.

HEARD: 26 January 2021, at Ottawa (by Zoom)

ENDORSEMENT

[1] The plaintiff is a commercial lender. Through predecessor corporations, it made a total of six loans to certain predecessor corporations of the corporate defendant and to the defendant Antranik Kechichian in his personal capacity. The loans were secured by way of various general security agreements and guarantees.

[2] It is not necessary to particularise the loans or the corporate amalgamations and consequential liabilities, since they are not in dispute. Outstanding is $895,571.90 plus contractual interest.

[3] The security obtained by the plaintiff included a collateral charge/mortgage granted by a predecessor corporation to the corporate defendant in respect of condominium units located at 2450 Lancaster Road, Ottawa. The plaintiff has made good on arrears of condominium fees owed by Laurier Optical and claims, in addition to the sum of $895,571.90, a further $40,671.38 plus interest with respect to condominium fees paid by the plaintiff in order to preserve its security.

[4] The plaintiff seeks summary judgment for these amounts as well as an order for possession of the unit subject to the collateral mortgage.

[5] The plaintiff’s motion was heard concurrently with summary judgment motions brought by other lenders in actions bearing court file numbers CV-19-82023, CV-19-82025 and CV-17-72986 (Ottawa).

Defendants’ Request for an Adjournment and Other Relief

[6] Prior to the substance of these motions being heard, Mr. Kechichian sought an adjournment and orders permitting him to (a) examine certain witnesses said by him to be directly or indirectly involved in intentional fraud and theft of leased assets; and (b) to amend his third party claims/counterclaims of in matters CV-19-81759, CV-19-82023, CV-19-82025 and CV-17-72986 to add his former lawyers Kaufman LLP, Stefania Scordo, Sabrina Brosseau Malo, Laurent Debrun and Pierre Verville.

[7] The defendants are embroiled in multiple proceedings in Ontario and Québec against various parties allegedly involved in the 2016 sale of the Laurier Optical brand and franchise system (“Laurier Optical”) to Gestion Éric Savard and its affiliated companies (the “Savard companies”). Those proceedings include actions against, inter alia,his former lawyers at Kaufman LLP and against Essilor Groupe Canada Inc. and 9109862 Canada Inc. (the “Essilor parties”).

[8] The claims against Kaufman are, essentially, professional negligence claims that the lawyers failed protect his interests and those of various companies owned by him and members of his family in relation to the Laurier Optical transactions.

[9] As against the Essilor parties, the defendants allege that as part of a larger transaction in which the assets of Optical Vision Canada (“OVC”) were sold, the Essilor parties agreed to assume OVC’s debts but ultimately did not.

[10] The defendants claim that the Essilor parties are therefore liable for those debts and that they and Kaufman LLP should indemnify the defendants against claims such as those advanced by the plaintiffs in this action and the related actions in which summary judgment to enforce security and personal guarantees are now sought.

[11] A number of claims brought by the defendants in Ontario against Kaufman LLP and its lawyers and/or against the Essilor parties have been summarily dismissed, on grounds, inter alia, that the relief sought is duplicative of claims brought by the defendants in extant proceedings in Québec (see e.g. Kechichian v. Savard, 2021 ONSC 1011). Furthermore, subsequent to the hearing of this motion being argued, M. Smith J. acceded to a request by Kaufman LLP to declare Mr. Kechichian and Optical Vision of Canada Ltd. to be vexatious litigants: Kaufman LLP v. Kechichian, 2021 ONSC 1173.

[12] Mr. Kechichian originally sought an adjournment of these summary judgment motions so that he could examine, inter alia, Marie Josée Neveu, Sylvie Pelletier, and Marc Tersigni, as witnesses, on the then pending summary judgment motions at a Case Conference before Master Kaufman on 11 January 2021. Noting the objection to this by the moving parties to the summary judgment motions, Master Kaufman deferred consideration of the request to the motions judge and gave certain directions relating to the delivery of materials by the defendants on the parties affected by the defendants’ proposed relief.

[13] I denied the defendants’ request to adjourn the summary judgment motions. I did so for two reasons, which can be succinctly stated.

[14] First, there is nothing in the record to suggest that evidence of the proposed witnesses will be of relevance to the issues raised as between the plaintiffs and the defendants on the summary judgment motions.

[15] Second, the relief sought in these proposed amended claims is duplicative of relief already sought by the moving parties in one or more other and extant proceedings.

[16] For those reasons, I also dismiss the defendants’ motion to amend their third party claims/counterclaims.

Summary Judgment Motion

[17] Mr. Kechichian does not deny that the subject loans went into default. Nor does he challenge the terms of the guarantees or the amounts owing. However, he resists enforcement on the basis that before pursuing payment under the loans and guarantees, the plaintiff had an obligation to seize, protect and or sell the collateral before the opportunity to do so was lost as a result of insolvency proceedings involving Laurier Optical.

[18] In light of the concessions made by Mr. Kechichian on behalf of the defendants, it is not necessary for me to engage in a detailed discussion and analysis of all of the submissions made on behalf of the parties. It is sufficient to deal with the issue of whether the plaintiff did indeed have a duty to seize, protect and/or sell the collateral subject to the security agreements before pursuant payment under the loans and guarantees.

[19] It is the duty of a creditor, in the absence of an agreement to the contrary with a debtor or guarantor, to preserve and protect security. However, debtors and guarantors may contract out of their right to have the security realized for their benefit.: Bauer v. The Bank of Montreal, 1980 CanLII 12 (SCC), 1980 2 S.C.R. 102 at pp.106 and 109-110.

[20] It is clear from an examination of the terms of the general security agreements and guarantees entered into between the predecessors of the plaintiff and the corporate defendant, that they provide that there is no obligation on the plaintiff to enforce its security as a prerequisite to looking to a guarantor. Furthermore, the agreements entitle the plaintiff to pursue the defendants as primary debtors; it had no obligation to pursue any other recourse or recovery first or simultaneously. The guarantees are continuing, absolute and unconditional.

[21] In Meridian Credit Union v. Vrankovic, 2013 ONSC 7546, the court, after relying on the language of a guarantee, which enabled the lender to call upon the guarantee without realising on its security first, rejected a guarantor’s submission that there was an overarching duty in law to do so. At paragraph 5, the court held:

… the guarantee clearly provides that the lender does not have to realize on its security first or at all prior to calling upon the guarantee. Accordingly, any such defence would fail on a clear interpretation of the terms of the guarantee. The only submissions made by Peter Vrankovic on the hearing of this matter was to argue that the bank should have first realized upon the security. As noted, this argument fails in law as a defence to a lawsuit on the guarantees.

[22] To similar effect, in TD Canada Trust v. B & B Enterprises (London) Ltd., 2008 ONCA 441, it was alleged that the creditor bank had acted negligently in failing to take steps to preserve the value of inventory which constituted its security interest, thereby increasing the defendant’s indebtedness under a guarantee. The court, at paras. 23 and 24, rejected that argument in the face of an express provision in the guarantee that the bank was not obliged to protect any security interest of enforce its security as a prerequisite to enforcing the guarantee.

[23] These cases are applicable to the present circumstances. As a result, I find no triable issue on the defences raised by the defendants.

Disposition

[24] The plaintiff is entitled to judgment for the amount of $895,571.90, which includes $18,159.10 representing monies paid to discharge condominium liens registered against the condominium units.

[25] The plaintiff is also entitled to an amount representing further payments which it has made in respect of condominium fees for the units since 31 January 2020. As of the date the motion was argued, that amount was said to be $40,671.38. The plaintiff is entitled to judgment for that amount in addition to the sum of $895,571.90.

[26] The loan agreements each provide for the payment of contractual interest. Such interest is payable at the rates stated in the agreements up to the date of this endorsement. The plaintiff has requested that post-judgment interest should also accrue at the contractual rates. I decline to exercise my discretion to so order. Post-judgment interest shall accrue at the rate provided for in accordance with section 127 of the Courts of Justice Act, R.S.O. 1990, c. C.43.

[27] The plaintiff is entitled to judgment for possession of the properties municipally described as Units 6-10, 2450 Lancaster Road, Ottawa. There shall also be an order granting the plaintiff leave to issue writs of possession for the subject units.

Costs

[28] I am presumptively of the view that the plaintiff is entitled to its costs of this motion and of the action. The plaintiff shall, within 21 days of the release of this endorsement, provide written submissions not exceeding four pages in length, as well as a costs summary which should have attached to it copies of any offers to settle or other documents pertinent to the issue of costs. The defendants should provide a responding submission, not to exceed four pages, by no later than 14 days after the plaintiff’s submissions are delivered.

[29] Counsel for the Essilor parties and for Kaufman LLP also attended to address the motion to adjourn and other relief sought by the defendants against their clients. Both counsel filed materials dealing with the issues raised by the defendants that concerned their respective clients. Counsel for Essilor also filed a costs outline and seeks costs of the attendances before me and Master Kaufman fixed in the range of $3,000-$5,000 all inclusive. Kaufman LLP seeks costs of its participation in these motions of $1,500. Mr. Kechichian made no submissions in response. I would fix these costs, payable by the defendants forthwith, in the amount of $3,000 in favour of the Essilor parties and $1,500 in favour of Kaufman LLP.

[30] All submissions can be sent by email to my judicial assistant.

Mew J.

Date: 19 May 2021