Court File and Parties

COURT FILE NO.: CV-18-312 (Brantford) DATE: 20220502

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Angela Gerard Huntjens – and – Johannes Antonius Huntjens Plaintiffs – and – Justin Obradovic Defendant

COUNSEL: Caitlin M. Turner, for the Plaintiffs/Moving Parties Doug LaFramboise, for the Defendant/Responding Party

HEARD: February 25, 2022, by Zoom

The honourable justice d.j. gordon

REASONS FOR DECISION

[1] In their motion, first returnable on October 13, 2021, the plaintiffs seek summary judgment against the defendant, as hereafter described. The motion is opposed, the defendant saying a trial is required. The claims arise from the purchase of certain artwork by the plaintiffs from the defendant in May 2018.

Background

[2] Ms. Huntjens and Mr. Huntjens are married. Both are presently 85 years of age. They reside in Brantford. She is a retired professor and civil servant. He is a retired minister. They have been art collectors for many years, with a special interest in Canadian art. After retirement, they operated a small business, purchasing and selling artwork. The business was discontinued after the events occurring in this case.

[3] Mr. Obradovic is 32 years of age. He resides in Toronto. While little information was provided as to his background, it appears he has a college diploma in Police Foundations but has never worked in that sector. He had prior employment with Dollarama and Coca-Cola for a total of three months. He is presently unemployed.

[4] In May 2018, Mr. Obradovic had artwork for sale. He says he is not an artist and has never owned an art gallery. There were several meetings that month involving the parties or, at least, Mr. Huntjens and Mr. Obradovic. A number of paintings were sold by Mr. Obradovic, perhaps fourteen, as reported by Ms. Huntjens and Mr. Huntjens. Mr. Obradovic says he has not sold artwork to anyone since the transactions herein.

[5] In dispute on this motion is the agreed purchase price. Mr. Obradovic says it was $130,000.00 being the amount actually paid. Ms. Huntjens and Mr. Huntjens claim the agreement was for $80,000.00, the different of $50,000.00 being a replacement cheque for one Mr. Obradovic reported as having “bounced” but which had actually cleared.

[6] The motion pertains to that $50,000.00 and matters related to the payment of same.

Litigation History

[7] The following chart sets out the steps in this case:

i) Statement of Claim, issued November 15, 2018;

ii) Order granted by Glithero J. on November 30, 2018, on a without notice basis, granting leave to the plaintiffs to issue and register a Certificate of Pending Litigation (“CPL”) against title to certain property owned by the defendant known as Unit 421, 8 Drummond Street, Toronto;

iii) Order granted by Harper J., on January 30, 2019, on a without notice basis, for substitutional service by regular mail to the defendant at the Drummond Street address (attempt for personal service at that residence had been unsuccessful);

iv) The Statement of Defence is dated February 12, 2019, prepared and served by Mr. Obradovic as a self-represented party (Mr. LaFramboise was subsequently retained at an unknown date);

v) The defendant’s motion for an order discharging the CPL was heard on July 16, 2019. In his endorsement, released July 18, 2019 (2019 ONSC 4343), Broad, J. dismissed the motion, with costs later awarded on September 6, 2019, in the amount of $7,506.35 (subsequent orders were granted by Harper J., on July 2, 2020, and Sheard, J., on August 26, 2020, directed Mr. Obradovic to comply with this costs order, failing which his pleadings would be struck, with further costs awards of $2,900.00 and $1,000.00.);

vi) All parties had provided affidavits for the motion to discharge the CPL, with cross-examinations occurring on May 28, 2019;

vii) On January 5, 2021, the plaintiffs served their affidavit of documents, and a Notice Whether Action under Rule 76, confirming the action would continue as a simplified proceeding. Correspondence from counsel for the plaintiff advised that the only claim now being pursued was with respect to the $50,000.00 and related matters;

viii) This motion for summary judgment was returnable on October 13, 2021, and adjourned until called for February 25, 2022.

ix) All parties provided affidavits for this motion with cross-examinations occurring on January 19, 2022.

The Original Claims

[8] Para. 1 of the Statement of Claim identifies the original claims of the plaintiffs as follows:

1. The Plaintiffs, Angela Gerard Huntjens and Johannes Antonius Huntjens, claim: (a) An Order for rescission of the contracts, hereinafter defined, and damages for breach of contract in the amount of $80,000.00; or in the alternative, damages for the difference between the fair market value of the artwork that the Plaintiffs purchased from the Defendant, hereinafter described, and the amount that the Plaintiffs paid for the artwork. (b) An Order requiring the Defendant to return to the Plaintiffs their paintings and their archaeological collection, hereinafter defined, in specie. (c) In the alternative to an Order requiring the Defendant to return to the Plaintiffs their paintings and their archaeological collection, damages in the amount of $8,000.00; (d) In the alternative to all above claims, damages for negligent misrepresentation in the amount of $138,000.00; or, in the alternative, damages for the difference between the fair market value of the artwork the Plaintiffs purchased from the Defendant, and the amount the Plaintiffs paid for the artwork. (e) In the further alternative to all above claims, damages for fraudulent misrepresentation in the amount of $138,000.00; or, in the alternative, damages for the difference between the fair market value of the artwork the Plaintiffs purchased from the Defendant, hereinafter described, and the amount the Plaintiffs paid for the artwork. (f) An Order declaring that the Defendant has been unjustly enriched on account of the Plaintiffs’ $50,000.00 overpayment to the Defendant, and an Order for compensation and restitution for the said unjust enrichment in the amount of $50,000.00; (g) An equitable tracing of all funds provided to the Defendant on account of the Plaintiffs’ purchase of artwork, outlined below; (h) An Order declaring that the Plaintiffs have a purchase money resulting trust, resulting trust, or in the alternative a constructive trust interest in the property known municipally as 421-8 Drummond Street, Toronto, Ontario M8V 1Y8, legally described in PIN 76618-0001 (LT) as UNIT 1, LEVEL 1, TORONTO STANDARD CONDOMINIUM PLAN NO. 2618 AND ITS APPURTENANT INTEREST; SUBJECT TO AND TOGETHER WITH EASEMENTS AS SET OUT IN SCHEDULE A AS IN AT4716724; CITY OF TORONTO; (i) Pursuant to s. 103 of the Courts of Justice Act and Rule 42.01 of the Rules of Civil Procedure, leave to issue and register a certificate of pending litigation against the property known municipally as 421-8 Drummond Street, Toronto, Ontario, M8V 1Y8, legally described in PIN 76618-0001 (LT) as UNIT 1, LEVEL 1, TORONTO STANDARD CONDOMINIUM PLAN NO. 2618 AND ITS APPURTENANT INTEREST; SUBJECT TO AND TOGETHER WITH EASEMENTS AS SET OUT IN SCHEDULE A AS IN AT4716724; CITY OF TORONTO; (j) Punitive damages in the amount of $10,000.00; (k) The costs of this action payable to the Plaintiffs on a substantial indemnity basis; and, (l) Such further relief that this Honourable Court deems fair and just.

[9] In this Statement of Claim, the plaintiffs alleged the artwork sold by the defendant was not authentic, seeking rescission and damages on the basis of breach of contract, negligent misrepresentation and fraudulent misrepresentation. The plaintiffs are not pursuing those claims in accordance with their notice served on January 5, 2021.

[10] Paragraphs 1(f) to (i) in the Statement of Claim as above, pertain to this motion for summary judgment. Para.s. 60-68, set out in the plaintiffs’ allegations as follows:

UNJUST ENRICHMENT

60. In or about June 2018, the Plaintiffs discovered that the Defendant had cashed both $50,000.00 cheques (cheque nos. 010 and cheque no. 011), notwithstanding the fact that: (a) The Plaintiffs had put a stop-payment on cheque no. 010; and, (b) The Defendant had indicated that cheque no. 010 had “bounced”.

61. The Plaintiffs have repeatedly tried to contact the Defendant requesting the return of the sum of $50,000.00 on account of the overpayment. The Defendant has failed to respond to the Plaintiffs’ requests.

62. The Plaintiffs plead and rely on the doctrine of unjust enrichment. In particular, the Plaintiffs state that: (a) The Defendant has been enriched on account of the $50,000.00 overpayment; (b) The Plaintiffs have suffered a corresponding deprivation on account of the overpayment; and, (c) There is no juristic reason for the Defendant’s enrichment.

63. Consequently, the Plaintiffs seek an order of restitution for unjust enrichment in the amount of $50,000.

CERTIFICATE OF PENDING LITIGATION

64. After notifying the Defendant that the Plaintiffs had put a stop-payment on cheque no. 010, the Defendant indicated to the Plaintiffs that the money that he was to receive from the sale of the Artwork was supposed be used by him to purchase a property located in Toronto.

65. Shortly after the Plaintiffs discovered that the Defendant had cashed cheque nos. 010 and 011, the Plaintiffs discovered that the Defendant purchased a property on July 9, 2018, known municipally as 421- 8 Drummond Street, Toronto (the “Toronto Property”).

66. The Property is registered solely in the Defendant’s name, notwithstanding the fact that the Defendant used at least $50,000.00 of the Plaintiff’s money to purchase the Toronto Property.

67. Having used the Plaintiffs’ money to purchase the Toronto Property, and on account of the Defendant’s unjust enrichment described above, the Plaintiffs seek an equitable tracing of the $50,000.00 overpayment and a constructive trust interest in the Toronto Property, which they seek to protect by the registration of a Certificate of Pending Litigation against the Toronto Property.

68. In the alternative, having used at least $50,000.00 of the Plaintiffs’ money to purchase the Toronto Property which is held solely in the Defendant’s name, the Plaintiffs seek an equitable tracing of the $50,000.00 overpayment, as well as an equitable tracing of the additional $80,000.00 provided to the Plaintiff, and a resulting trust interest in the Toronto Property.

[11] Para.s. 69 to 74 are the allegations regarding the claim for punitive damages claimed in para. 1(j) above, as follows:

PUNITIVE DAMAGES

69. The Plaintiffs state that the Defendant caused them to believe that the Artwork they purchased from him were original pieces of art created by the artists listed above.

70. The Plaintiffs state that the Defendant provided them with fabricated documents to substantiate the authenticity of the Artwork, which the Plaintiffs relied on.

71. The Plaintiffs state that the Defendant was aware that the Artwork he sold them were not originals created by the artists listed above.

72. The Plaintiffs further state that the Defendant lead them to believe that he was unable to deposit one of the $50,000.00 cheques that they provided to him, causing the Plaintiffs to provide the Defendant with a second $50,000.00 cheque.

73. The Plaintiffs state that the Defendant knowingly deposited both $50,000.00 cheques to the Plaintiffs’ detriment.

74. The Plaintiffs state that the Defendant’s conduct was deceitful, high-handed, callous and reprehensible. The Plaintiffs seek punitive damages in the amount of $10,000.00.

Agreed Facts

[12] There is a significant evidentiary dispute between the parties with only the following agreed facts:

i) Mr. Huntjens and Mr. Obradovic first met on May 22, 2018, in the parking lot at “Buy Mine Sell Yours” pawn shop in Mississauga;

ii) The plaintiffs, or at least Mr. Huntjens, purchased a number of paintings from Mr. Obradovic plus an exchange of at least one item from the plaintiff’s personal collection;

iii) Three cheques were delivered by the plaintiffs, or at least by Mr. Huntjens, to Mr. Obradovic, as follows: a) $30,000.00, dated May 31, 2018; b) $50,000.00, dated May 31, 2018; and c) $50,000.00, dated June 2, 2018; and

iv) Mr. Obradovic entered into an agreement of purchase and sale on May 31, 2018 (initial offer, dated May 30, 2018) to purchase the Drummond St. property for $368,000.00, with a deposit of $20,000.00 delivered on June 2, 2018, the transaction closing on July 9, 2018.

Evidence

i) The First Meeting

[13] While there is agreement as to when and where the first meeting occurred, how it came about is in dispute.

[14] Mr. Huntjens has known the owner of Buy Mine Sell Yours pawn shop for many years. He says this individual sent him an e-mail in May 2018, arranging a meeting to view paintings that Mr. Obradovic was selling.

[15] Mr. Obradovic denies the meeting was pre-arranged. He says Mr. Huntjens approached him in a parking lot and, after observing paintings in this vehicle, asked if they were for sale.

[16] Mr. Huntjens examined a painting presented by Mr. Obradovic, said to be attributed to Franz Johnson. Mr. Huntjens declined to purchase the painting, saying he was not satisfied it was authentic. He then provided his e-mail address and phone number to Mr. Obradovic in case he had other paintings for sale.

[17] Mr. Obradovic had no memory of the discussion or of the paintings in his vehicle or whether any paintings were sold to Mr. Huntjens on this occasion. Nor could he recall receiving Mr. Huntjens’ e-mail address. Mr. Obradovic did say no cheque was received at this meeting.

ii) Second Meeting or No Meeting

[18] Mr. Huntjens reports a second meeting with Mr. Obradovic occurring on May 27, 2018 following an exchange of e-mail messages, copies of same being tendered in evidence.

[19] On May 25, 2018, the following message was received by Mr. Huntjens from canadianfinearts@mail.com (“CFA”) at 4:50 p.m.:

Hi Johnannes,

Its justin from, the pawn store, I was wondering what your thoughts are still on the franz Johnston painting? I have other great canadian artwork for sale as well if your interested in purchasing?

[20] Mr. Huntjens indicated photographs of other paintings were attached to this e-mail.

[21] Mr. Huntjens responded to this e-mail at 5:02 p.m. saying:

Hi Justin

I think I will forego the Franz Johnston. What else do you have that might be of interest?

Let me know

Johannes

[22] Mr. Huntjens received another message from CFA at 7:16 p.m., as follows:

1.) arthur lismer oil on canvas liad on board 16” x 20” directly from artist himself

2.) Manly macdonald I thik 20” x 24”oil on canvas board

3.) john young Johnston oil on board I believe 6” x 8” original frame

4.) jock macdonald painting 12” x 16”

5.) Edwin holgate 8.5” x 10.5”

[23] At 10:47 p.m., Mr. Huntjens replied, saying:

These are quite interesting. Are they all signed? What kind of money are you looking for? Have you taken these to other auction houses? I certainly would like to see them.

Johannes

[24] On May 26, 2018, at 8:26 a.m., Mr. Huntjens received the following message from CFA:

I have taken them for apraisals, and had two paintings professionally cleaned and varnished, all of them are signed? Is there any painting in pictuclar your interested in?

[25] Mr. Huntjens replied at 9:23 a.m., saying:

I am especially interested in # 3 and # 5 which are the same painting. What does the signature say on this one.

Johannes

[26] At 12:37 p.m., Mr. Huntjens sent a further message to CFA, as follows:

Hi

Actually I am interested in the lot. Where can we meet to see them. I am flexible about time and location. The # 3 and # 5 I mentioned are the same painting in the fotos you sent me earlier. It shows trees and a lake in the background.

I assume it is a Lismer.

Johannes

[27] At 1:32 p.m., Mr. Huntjens received a message from CFA as follows:

Hi Johannes,

The lismer is beautiful painting, It was taken heffels I have paper work and was estimated in 2007 between 40-60k,

I have been downsizing my grandparents antiques slowly painting by painting when theres room in a toronto auction. I am liquidating all my artwork to purchase a home so donty let the price scare you im a reasonable and I would be interested in selling the whole lot of paintings if your interested in purchasing?

I am available sunday afternoon after woork as i work pretty much every day now let me know how thatday works for you.

[28] Mr. Huntjens replied at 3:44 p.m., saying:

Hi Justin

The only Sunday that is open for me is tomorrow. After that I am going to Kamloops BC to visit a daughter and her family. We could leave it for later, July or August, which will give me time to get my finances in order and decide how to pay for your paintings.

Let me know what works best.

Johannes

[29] At 4:03 p.m., Mr. Huntjens received a response from CFA as follows:

Hi Johannes if you would like to cal me it might be better then emails I can be reached at 647 703 0948 lets try discuss meeting up sunday.

[30] On May 27, 2018, at 5:47 a.m., Mr. Huntjens delivered the following message to CFA:

Hi Justin

After talking to you on the phone, I have decided I’d better come to see you and take a good look at the paintings. Give me a time and place to meet and I will be there.

Best

Johannes

[31] At 8:34 a.m., Mr. Huntjens received a reply from CFA as follows;

Hi Johannes,

Can we meet up later today?

there is a tim hortons near my house on lakeshore, I am in eotbicoke

3719 Lake Shore Blvd W, its right across the st from the no frills plazz,

you can reach me at my cell at 647 703 0948 to confirm you are coming,

thanks justin

[32] According to Mr. Huntjens, the meeting took place later that day at the parking lot in Toronto. He indicated Mr. Obradovic brought paintings, attributed to Arthur Lismer, Edwin Holgate, John Johnstone and Jock MacDonald, all said to be renowned Canadian artists. Mr. Huntjens went on to say the paintings all had the expected markings, stamps and signatures and that Mr. Obradovic assured him they were authentic.

[33] Mr. Huntjens reported an agreement was reached for the purchase of the four paintings, conditional on Mr. Obradovic providing supporting documentation as to authenticity, for $30,000.00. He delivered a cheque to Mr. Obradovic, post-dated to May 31, 2018.

[34] Mr. Obradovic says there was no meeting on May 27, 2018. Rather, he reports the second meeting occurring on May 31, 2018, as hereafter discussed. Mr. Obradovic also reports the CFA account does not belong to him. He denies sending or receiving the emails set out above.

iii) Third Meeting or Second Meeting

[35] Another meeting occurred on May 31, 2018.

[36] Mr. Huntjens reports exchanging further e-mails with Mr. Obradovic between May 28 and 30, 2018. Mr. Obradovic, he said, was offering more artwork for sale. Mr. Huntjens expressed an interest but reminded Mr. Obradovic as to the requirement for the documentation regarding the prior transaction.

[37] Mr. Obradovic denies sending or receiving such emails or, indeed, any e-mails.

[38] Mr. Huntjens and Ms. Huntjens advised the meeting took place at their residence in Brantford. Mr. Obradovic says the meeting occurred at McDonald’s in Brantford and that only Mr. Huntjens was present.

[39] At this meeting, Mr. Huntjens indicates Mr. Obradovic delivered a “Prospective Consignment Receipt” from Heffel Fine Auction House, dated May 18, 2005, a copy being presented in evidence. This document was to substantiate the authenticity of the four paintings delivered on May 27, 2018. The name of the consignor is handwritten on this receipt, the first name being illegible but the surname is “Obradovic”.

[40] Mr. Obradovic denies presenting the Prospective Consignment Receipt to Mr. Huntjens.

[41] Mr. Huntjens and Ms. Huntjens report purchasing six additional paintings from Mr. Obradovic on this occasion, two by Arthur Lismer and one each by Manly MacDonald, J.W. Morrice, Lawren Harris and Thomas Hodgson. The purchase price, they say, was $50,000.00 with Mr. Obradovic to provide documentation for authenticity for the six paintings. A cheque was delivered to Mr. Obradovic.

[42] Mr. Obradovic refers to this meeting as to the second occasion with Mr. Huntjens. He could not recall how it was arranged. Mr. Obranovic reports selling two sets of paintings to Mr. Huntjens on May 31, 2018. He could not remember the names of the artists and denies providing any information to Mr. Huntjens. Mr. Obradovic does not recall how many paintings were sold.

[43] According to Mr. Obradovic, the total purchase price was $130,000.00, receiving two cheques at this meeting, one for $30,000.00, the other for $50,000.00. Both cheques were deposited to his bank account on May 31, 2018. The final payment, he said, was to be made on a later date after Mr. Huntjens had cleared funds.

[44] Mr. Obradovic acknowledged receiving one painting from Mr. Huntjens, at this meeting, but could not remember the name of the artist or what he did with it.

iv) Fourth Meeting or Third Meeting

[45] A final meeting occurred on June 1, 2018.

[46] Mr. Obradovic indicates he met Mr. Huntjens at McDonald’s in Brantford to receive the final payment of $50,000.00.

[47] Mr. Huntjens and Ms. Huntjens say the meeting took place at their residence, having been arranged after certain events and the exchange of e-mail messages.

[48] Following the meeting on May 31, 2018, Mr. Huntjens and Ms. Huntjens became concerned with the authenticity of the paintings, in particular the painting attributed to Lawren Harris. In result, Ms. Huntjens called Scotiabank to place a stop payment on the cheque for $50,000.00 delivered to Mr. Obradovic that day. She understood the bank to have accepted her telephone instructions in this regard.

[49] Following the meeting on May 31, 2018, Mr. Huntjens received an e-mail from CFA at 8:47 p.m. that evening, as follows:

Sorry I got voice mail tried contact you I will try again, I contacted my father there is original paperwork with the painting if you have in questiond? I would like to get it to you assap to ease your mind, there was also aparently 2 apraisal paper works paid separately from 2 galleries and one bill from an art restorer and another from custom framer. There was a mistake someone wanted to sell it but wanted to do a private deal and upload to a website and did not remove it. They atr the painting without out family consent we thought he was a famous collector from hong kong who just wanted to take a picture to potential buyer we did not no he put it for sale on his website.

All paintings have always been close to our family and ones where purchased where from galleries and auctions. We do have the paperwork with all the paintings incase you decide to see in the future. I will tey my best to locate all bills of sale for you Johannes.

My sincere apologies for any mix up.

enjoy your trip!

[50] At 9:28 p.m., Mr. Huntjens replied, saying:

Hi Justin

I was pleased to get your email just now. Looks like we are going to be able to sort it all out in the end. When I noticed that the Harris had been sold “attributed” at another sale, I cancelled the cheque with the bank to protect myself.

The situation got even more puzzling when we noticed that the Harris painting in the Joyner catalogue you gave us went unsold in 1990 but then 25 yrs later we noticed that the very same painting had been sold by Heffel for a high amount.

We’ll get it sorted out I am sure, especially if you are able to locate the appraisals.

I realize now that the person I used to meet at the Old Town Hall Auctions was your dad! He is an artist like you is he not? That’s why I was confusing the two of you.

Sorry to have to disturb you at this stage but I hope you understand my dilemma.

Hope you are having a wonderful weekend with your family.

Take care

Johannes

[51] Mr. Huntjens received another e-mail from CFA at 10:08 p.m., as follows:

Hi Johannes

So the check bounced, omg is there anyway before you leave we can sort this out or re send a check assap? I have the closing date on the house i just purchased it and now the legal finaianes and sold you the paintings at great price3 in order to cover the price of the house? can you call me back assap to discuss how to resolve this problem. I am so sorry like money for me is so tight now and I am selling everything for this house.

I did not know about the sale price in 1990, I was toko young before then and was not born. I assume the painting did not meet the auction estimate or the consigner. How wever lawren ahrris works now sell way ore then they did for example i went to an auction i outbided 300k when I was younger with invester and painting sold for 600k and 4 months later 900 k and i stopped look went resaold at 1.4 million

sorry tom thomson works I believe you could purchase under 50 k bback then

I hope we can connect and sort this matter out, my father keeps allot of documents and he is building a house at the moment and I have allot boxes of paper works as my grandparents had business and kept everything

Is there anyways can re-send the check tommorow or can I come back pick it up? Or we can do like interact email transfer?

I am so sorry I have to close on this hopuse and I will loose the property and I have 3 days to close on it.

Thanks

can you call me back tonight

[52] The meeting was arranged for June 1, 2018. Mr. Huntjens and Ms. Huntjens indicate there was a discussion with Mr. Obradovic regarding authenticity of the paintings and his promise to provide documentation. They report Mr. Obradovic to have then signed a document, a copy being tendered in evidence, as follows:

Letter of Agreement

I, Justin Obradovich, hereby agree that I will provide provenance documents (records of sales, appraisals from galleries and auction houses) regarding the Lawren Harris sketch on board of Joe Lake to Johannes Huntjens

Signed:

Justin Obradovich

June 2, 2018

[53] Although the document is dated June 2, 2018, as is the cheque described in the following paragraph, all parties report the meeting occurred on June 1, 2018.

[54] Mr. Huntjens and Ms. Huntjens had assumed the bank had placed a stop payment on their prior cheque and accepted Mr. Obradovic’s statement the cheque bounced. They also accepted his promise to provide documentation as to authenticity and delivered a cheque for $50,000.00, dated June 2, 2018. This cheque, they say, was to replace the prior cheque dated May 31, 2018. It was deposited to the bank account of Mr. Obradovic on June 1, 2018. Mr. Huntjens and Ms. Huntjens advised that a further discussion at this meeting resulted in a trade of artwork. Mr. Obradovic, they say, delivered four paintings attributed to J.W. Beatty, Eric Riordan, Nora Collyer and A.C. Leighten. In exchange, Mr. Huntjens and Ms. Huntjens presented four paintings, two by Jesus Carlos de Vilallonga and one each by Sydney Mooney and Paul Vanier Bealieu, as well as archaeological artifacts, in total having a value of $8,000.00.

[55] Again, Mr. Obradovic denies sending or receiving e-mails with Mr. Huntjens. The meeting, he said, was only to receive the final cheque. Mr. Obradovic indicates there were never any discussions as to the authenticity of the paintings. Mr. Obradovic did not address the agreement dated June 1, 2018 in his affidavit but on his cross-examination he denied signing this document nor has he ever delivered any further documentation.

v) Discovery by Plaintiffs

[56] Following the meeting on June 1, 2018, Mr. Huntjens and Ms. Huntjens travelled to British Columbia to visit with their daughter and her family. They returned to Brantford in mid June and discovered both cheques for $50,000.00 had been cashed by Mr. Obradovic.

[57] On June 13, 2018, at 6:14 p.m., Mr. Huntjens sent the following email to CFA:

Hi Justin

By now you will have realized that you have mistakenly cashed both my cheques for $50,000 in addition to the first one for $30,000. After we gave you the cheque for $50,000 on May 31st we tried to put a stop through the bank on the first cheque when we had some concerns about authenticity of the Harris painting in particular.

The bank tells us that you had already cashed the first cheque before they were able to stop the payment on May 31st. Then on June 1st we gave you another cheque for $50,000 once we were satisfied about the authenticity.

This means that you must refund us the $50,000 you owe us. We hope you will be able to do this as soon as possible.

We just got home today and went to the bank when we received out statement. They gave us copies of the canceled cheques which you signed.

Take care

Johannes

[58] When no response was received, Mr. Huntjens delivered another e-mail to CFA on June 15, 2018, at 12:13 p.m., saying:

Justin

By now it looks like you are avoiding my emails. Consequently I have no choice but to seek legal help in resolving this issue.

This is to let you know that if I don’t hear from you, I will go to my lawyer and get him to go ahead with legal proceedings.

I just cannot let this matter go unchallenged.

The bank has informed that they have the recording of my call asking them to cancel the original cheque of $50,000

Legally that is all I need to prove my case in court.

I am sorry to see this relationship end this way, but I have no choice.

Johannes

[59] On June 16, 2022, at 1:40 p.m., Mr. Huntjens received the following e-mail from CFA:

sorry I am not home, I have been out of town working next 2 weeks and without a phone and no wifi, I hardly hve chance read emails.

I do not know of your situation, I have not been to a bank to confirm or deny this, I will be back in the city in 2 weeks and will try to resolve or clear this up when I come back from work.

[60] On June 29, 2018, at 9:16 a.m., Mr. Huntjens sent the following e-mail to CFA:

Hi Justin

Are you back in town? We have to connect and get this situation resolved asap. You owe me $50,000 and I have no choice but to contact my lawyer and the bank should this matter not be resolved.

Johannes

[61] There was no response to this e-mail. Mr. Huntjens and Ms. Huntjens then contacted their lawyer. This action was commenced.

[62] Again, Mr. Obradovic denies ever communicating with Mr. Huntjens by e-mail. He also denied sending the e-mail dated June 16, 2018, suggesting it may have been photoshopped by Mr. Huntjens. Mr. Obradovic said he did not know when Mr. Huntjens became dissatisfied with the purchase, nor does he remember if Mr. Huntjens called or e-mail him as to his concerns.

vi) Stop Payment

[63] As previously stated, Ms. Huntjens reported contacting Scotiabank by telephone on May 31, 2018, to place a stop payment on the cheque for $50,000.00 delivered to Mr. Obradovic that day. In his cross-examination, Mr. Huntjens made reference to attending at the bank for this purpose.

[64] Financial institutions record telephone conversations. Counsel for Mr. Huntjens and Ms. Huntjens obtained the audio recording from the bank on February 21, 2021 by secure encrypted e-mail. A transcript was prepared by Cindy Jones Verbatim Reporting Service and presented in evidence.

[65] The telephone conversation was between Ms. Huntjens and Sajad, an employee of Scotiabank. Sajad posed a number of questions to confirm the identity of Ms. Huntjens. She then requested a stop payment. The following exchange occurred:

Sajad: …if you don’t mind me asking what’s the reason for the stop?

Ms. Huntejsn: Ah, we were buying paintings.

Sajad: Okay, and then you kind of revoked that? You don’t want to buy it anymore basically?

Ms. Huntjens: that’s right, yeah. We found out there may be some question of authenticity.

[66] In response to Sajad’s question, Ms. Huntjens advised the cheque was payable to “Justin Obradovich”, adding an “h” to his name. Sajad eventually confirmed the stop payment, saying:

Thank you so much. You should be good to go. I did it for Justin that last name, and $50,000.00, cheque number 10, and it’s written today.

vii) Instagram and Facebook

[67] Mr. Huntjens says Mr. Obradovic had represented an affiliation with Canadian Fine Arts Gallery, as referenced in the CFA e-mails. Upon reviewing the transcript of the cross-examination of Mr. Obradovic and discovering that Mr. Obradovic denied the CFA account was his and denied ever communicating by e-mail, Mr. Huntjens made further inquiry on social media.

[68] Mr. Huntjens discovered an Instagram account under canadianfineartsgallery. Artwork was posted by Justin Obradovic (1989 to present). The account owner is described as Justin The Artist Cop. Mr. Huntjens made reference to videos posted on this account, narrated by a person, who, he says, sounds like the person he met on the previously described meetings.

[69] Mr. Obradovic denied that this is his Instagram account. He also says he is not an artist. Mr. Obradovic was born in 1989.

[70] Mr. Huntjens also located a Facebook account for Justin Obradovic. Artwork is posted to this account. There is also a photograph of an individual Mr. Huntjens says looks like Mr. Obradovic. This person has a mustache and a beard.

[71] Mr. Obradovic denied this was his Facebook account. He also denied it was his photograph. The following exchange occurred at his cross-examination:

Q. Okay. Do you agree that this face looks like your face?

A. No.

Q. What are the differences in this face and yours?

A. I can't see the face.

Q. Okay. I will zoom in for you.

A. Caitlin, there is a phone in front of the face.

Q. Can you see that this person has a beard?

A. No, I cannot. There is a camera in front of it.

Q. Can you see that this person has a mustache?

A. No, I cannot.

Q. Okay.

A. You are showing a picture that is obstructed.

Q. Do you agree that you have a mustache ---

A. No.

Q. --- today? No, you don't agree that you have a mustache today? Okay, can you describe your facial hair for me today?

A. Clean shaven.

Q. You are describing yourself as clean shaven?

A. Mm-hmm.

Q. I would like the record to show that when I am looking at Mr. Obradovic on the record I am seeing a mustache and a beard.

viii) Property Purchased

[72] Mr. Obradovic entered into an agreement of purchase and sale regarding the Drummond St. property on May 31, 2018. The purchase price was $368,000.00. A deposit of $20,000.00 was paid on June 2, 2018, the funds coming from the same bank account as the cheques from Mr. Huntjens and Ms. Huntjens had been deposited.

[73] Closing of the transaction occurred on July 9, 2018. The title abstract reveals a mortgage from Mr. Obradovic, in favour of The Bank of Nova Scotia, in the face amount of $460,000.00, being registered immediately after the deed.

[74] The bank statement produced by Mr. Obradovic shows $213,597.00 on deposit prior to receiving and depositing cheques from Mr. Huntjens and Ms. Huntjens on May 31, 2018. The three cheques from Mr. Huntjens and Ms. Huntjens, in the total amount of $130,000.00, brought this account to $343,628.00 by June 1, 2018. The deposit cheque for $20,000.00 cleared the account on June 4, 2018, reducing the account balance to $323,628.00.

[75] At his cross-examination, Mr. Obradovic was asked about the funds paid to acquire the property and to undertake to produce his real estate lawyer’s file, bank statements to show further withdrawals and the mortgage file including mortgage application. Mr. Obradovic refused to answer any questions regarding financing the purchase, other than to say the transaction was fully leveraged by the mortgage. He also refused to undertake to provide the documents requested, claiming such were not relevant.

Analysis

[76] There are a number of issues identified by counsel in their factums and submissions.

i) Notice of Motion

[77] Mr. LaFramboise submits the notice of motion is flawed as it is unclear what relief the plaintiffs seek and, hence, the court cannot deal with it. Ms. Turner argues the document is clear and the defendant and his counsel are well aware of the relief sought.

[78] In their notice of motion, the plaintiffs request the following:

1. Summary Judgment in favour of the Plaintiffs;

2. An Order that if the Defendant defaults in payment of Judgment, the whole of the Defendant’s interest in and to the lands known municipally as 421-8 Drummond Street, Toronto, Ontario M8V 1Y8, legally described in PIN 76618-0001 (LT) as UNIT 1, LEVEL 1, TORONTO STANDARD CONDOMINIUM PLAN NO. 2618 AND ITS APPURTENANT INTEREST; SUBJECT TO AND TOGETHER WITH EASEMENTS AS SET OUT IN SCHEDULE A AS IN AT4716724; CITY OF TORONTO, shall be sold and all proceeds applied to the Plaintiffs’ Judgment, plus prejudgment interest and post judgment interest.

3. An Order requiring the Defendant to pay pre-judgment interest in accordance with the Courts of Justice Act;

4. The costs of the action on a substantial indemnity basis, or in the alternative, on a partial indemnity basis;

5. The cost of this Motion on a substantial indemnity basis, or in the alternative on a partial indemnity basis; and

6. Such further and other relief as to this Honourable Court may seem just.

[79] While para. 1 could have been more specific, such is particularized in the grounds for the motion, at para.s 6-10, as follows:

6. The Plaintiffs elected not pursue their claim for breach of contract, negligent misrepresentation and fraudulent misrepresentation by letter dated January 5, 2021 and by service of Notice Whether Action Under Rule 76.

7. The Plaintiffs also claimed damages for unjust enrichment in the sum of $50,000.00 because the Defendant successfully cashed both a $50,000.00 cheque he told the Plaintiffs had bounced and a $50,000.00 replacement cheque.

8. The Plaintiff sought an Order declaring the Plaintiffs to have a purchase money resulting trust, resulting trust, or a constructive trust interest in the property owned by the Defendant at 421-8 Drummond Street, Toronto, Ontario, M8V 1Y8 (the “Property”) because the Defendant used the funds from the improperly cashed $50,000.00 cheque to purchase the Property.

9. The Plaintiffs claimed punitive damages of $10,000.00 on the basis that the Defendant was aware that the paintings he was selling to the Plaintiffs were not authentic and based upon the Defendant’s conduct in depositing a replacement cheque when he knew that the original cheque had been successfully deposited.

10. The Plaintiffs seek summary judgment with respect to their claims for unjust enrichment, punitive damages, and purchase money resulting trust, resulting trust, or constructive trust in the Property, plus interest and costs.

[80] A copy of the correspondence from plaintiffs’ counsel to defendant’s counsel, dated January 5, 2021, and referred to in para. 6 above was presented in evidence. The defendant was then informed as to the limited claims being pursued against him.

[81] Hence, the notice of motion as a whole informs the defendant and the court what relief is specifically requested. The complaint is rejected.

ii) Rule 76

[82] Mr. LaFramboise also objects, it would appear given his submissions, as to the manner the plaintiff has proceeded with their claims.

[83] As stated above, the correspondence of January 5, 2021, gave notice as to the limited claims. A Notice Whether Action Under Rule 76 was served with this letter, indicating the plaintiffs intended to continue the action by way of simplified procedure. The defendant did not consent. Hence, the case continued under ordinary procedure.

[84] At para. 19 of his factum, Mr. LaFramboise wrote:

19. The plaintiff [presumable he meant to say the defendant] did not agree to having the litigation reduced to only the $50,000.00 cheque so how can the plaintiffs

[85] This sentence is incomplete and the basis for his complaint is unclear.

[86] Although the Statement of Claim was not amended, the plaintiffs have given notice to the defendant and the court as to the limited relief being pursued. They are bound by their commitment. Such, however, is not a concession that the paintings were not fraudulent, as Mr. Obradovic suggests. It simply means the issue of fraud and related matters no longer are being pursued and, hence, no determination will be made on those claims.

[87] The plaintiffs may choose the relief being sought without the defendant’s approval. If there is a legitimate concern, it may be relevant on the issue of costs. But, there can be no impact on the motion itself.

iii) Authenticity of Artwork

[88] In their affidavits in support of the motion for summary judgment, Mr. Huntjens and Ms. Huntjens continue to allege the artwork purchased from Mr. Obradovic is not authentic. Some evidence, in this regard, may assist in terms of background to the case or in connection with the payment in dispute.

[89] However, the evidence goes further by attaching reports from purported experts in support of the allegation. Presumably, such was presented on the basis of information and belief, generally permitted under Rule 20.02(1).

[90] This evidence is problematic. First, the plaintiffs are not pursuing their claim for rescission, breach of contract, negligent misrepresentation and fraudulent misrepresentation. Second, the evidence does not comply with the Evidence Act or Rule 53.03.

[91] In Buffa v. Gauvin (1994), 18 O.R. (3d) 725 (Gen. Div.), Borins J., as he then was, rejected evidence, on a summary judgment motion, of medical reports and hospital records presented as exhibits to a lawyer’s affidavit.

[92] In my view, the reports are inadmissible. I have not considered this evidence on the motion for summary judgment.

iv) Stop Payment

[93] In his affidavit, Mr. Obranovic challenges the adequacy of the evidence regarding the stop payment of the cheque for $50,000.00 dated May 31, 2018. He also suggests Mr. Huntjens and Ms. Huntjens ought to have sued Scotiabank. In his factum and submissions, Mr. LaFramboise makes similar comments, suggesting the evidence as to stop payment is “unsubstantiated” and, as well, if such event did occur, the plaintiffs have a duty to mitigate their damages by suing the bank.

[94] It appears Mr. Obradovic and Mr. LaFramboise misunderstand the evidence.

[95] Financial institutions have been providing telephone banking services for several years. This method can be used to request a stop payment.

[96] Counsel for Mr. Huntjens and Ms. Huntjens obtained the audio recording by encrypted e-mail and a transcript was prepare by a certified reporter, as previously discussed. I am satisfied there are no issues as to continuity of the evidence and that the transcript is accurate.

[97] The evidence clearly indicates Ms. Huntjens attempted to request a stop payment and that the bank accepted her instructions. However, Ms. Huntjens provided an incorrect spelling for Mr. Obradovic and, more likely, as Mr. Huntjens suggests, the cheque had already cleared the account before the stop payment was in place.

[98] Regardless, this is not a mitigation issue. Even if the plaintiffs had a cause of action against the bank, they are not precluded from suing Mr. Obradovic. They cannot recover against both as such would be double recovery.

v) Summary Judgment

[99] Rule 20.01(1) allows a plaintiff to move for summary judgement. Rule 20.04 provides as follows:

20.04 (2) The court shall grant summary judgment if, (a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or (b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment.

Powers

(2.1) In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:

1. Weighing the evidence.
2. Evaluating the credibility of a deponent.
3. Drawing any reasonable inference from the evidence.

a) Principles

[100] The relevant principles pertaining to summary judgment are now well known as a result of Hryniak v. Mauldin, 2014 SCC 7. Mr. LaFramboise relies on the Court of Appear decision, where the case was known as Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, which, in part explains his submissions on this topic. While the Court of Appeal decision was upheld by the Supreme Court of Canada, in Hyrniak, Karakatsanis J. provided a more expansive consideration on summary judgment. She also concluded the Court of Appeal had placed too high a premium on the “full appreciation” of evidence that can be gained by a conventional trial. It is this full appreciation test that Mr. LaFramboise incorrectly relies on his submissions.

[101] Given the nature of submissions from counsel on this issue, it appears necessary to address Hyrniak in detail, rather than summarize, so that the parties will better understand my ultimate decision.

[102] In Hyrniak, Karakatsanis J. addressed what she described as a “necessary culture shift” having regard to access to justice in Canada, offering this conclusion at para. 28:

[28] This requires a shift in culture. The principal goal remains the same: a fair process that results in a just adjudication of disputes. A fair and just process must permit a judge to find the facts necessary to resolve the dispute and to apply the relevant legal principles to the facts as found. However, that process is illusory unless it is also accessible – proportionate, timely and affordable. The proportionality principle means that the best forum for resolving a dispute is not always that with the most painstaking procedure.

[103] When is there no genuine issue requiring a trial? Karakatsanis addressed this question in great detail, in particular at para.s 49, 50, 66 and 67, as follows:

[49] 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.

[50] These principles are interconnected and all speak to whether summary judgment will provide a fair and just adjudication. When a summary judgment motion allows the judge to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. Similarly, a process that does not give a judge confidence in her conclusions can never be the proportionate way to resolve a dispute. It bears reiterating that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute.

[66] On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.

[67] Inquiring first as to whether the use of the powers under Rule 20.04(2.1) will allow the dispute to be resolved by way of summary judgment, before asking whether the interest of justice requires that those powers be exercised only at trial, emphasizes that these powers are presumptively available, rather than exceptional, in line with the goal of proportionate, cost-effective and timely dispute resolution. As well, by first determining the consequences of using the new powers, the benefit of their use is clearer. This will assist in determining whether it is in the interest of justice that they be exercised only at trial.

[104] Despite this “culture shift”, the evidentiary requirements in Rule 20.02 have not changed. Parties are required to “put their best foot forward”. They are prohibited from saying “more and better evidence will (or may) be available at trial.” The court is entitled to assume the record contains all of the evidence the parties would present at trial. See: Pizza Pizza Ltd. v. Gillespie (1990), 75 O.R. (2d) 225 (Gen. Div.); Dawson v. Rexcraft Storage & Warehouse Inc. (1998), 164 D.L.R (4th) 257 (Ont. C.A.); and New Solutions Extrusion Corporation v. Gauthier, 2010 ONSC 1037.

b) Credibility

[105] There is a significant evidentiary dispute. Underlying this dispute are credibility issues. In this case, the parties have presented affidavit evidence on the motion to dismiss the CPL and on this motion for summary judgment. They have been cross examined on two occasions. Assuming the parties have presented all of the evidence that would be tendered at trial, the only difference between a motion and a trial is whether oral evidence is provided.

[106] Findings on credibility are required. Hyrniak, at para. 66 above, authorizes the motions judge to evaluate credibility by using the expanded powers in Rule 20.04(2.1)(2) if it is not contrary to the interests of justice. See, also: Enterprise Rent-A-Car Canada Company v. The Minister of Finance, 2020 ONSC 5339 at para. 49.

[107] Motions judges are cautioned on making credibility determinations. Great care must be taken. See: Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450; and Cook v. Cook, 2017 ONCA 49.

[108] The concerns expressed in the above appellate decisions are not present in this case. I conclude the pleadings and the evidentiary record allow for credibility findings. Indeed, such are overwhelming in this case. It would be an injustice to force this case to proceed to trial.

[109] For the reasons that follow, I find the evidence of Mr. Obradovic is neither credible nor reliable. Rather, it is, with limited exceptions, untruthful and fabricated. From the outset, the litigation strategy has been to deny, delay and obstruct. There are matters that support this conclusion: inconsistency between pleadings and evidence, lack of documentary disclosure and selective memory.

[110] Pleadings are the foundation of every case. As required by Rule 25.06(1), every pleading shall contain a concise statement of the material facts on which the party relies. Lawsuits are decided within the boundaries of the pleadings. Findings based on matters not plead cannot stand. See, for example: Rodaro v. Royal Bank of Canada (2002), 59 O.R. (3d) 74 (Ont. C.A.).

[111] The Statement of Defense was prepared by Mr. Obradovic prior to retaining counsel, making it easier to understand the facts on which he relies. At para. 4, Mr. Obradovic does plead “canadianfinearts@mail.com is not my email account”. However, at para.s 13, 14, 23 and 24 he says:

13. I met Mr. huntjens outside of a pawn shop (unknown location) best my relocation in Toronto? he saw some paintings in my car and asked me if I wanted to sell art privately to him. I trusted his art expertise I received a first cheque prior or around the same worth $30,000 without any inquire from him asking for documentation presented or COA (certificate of authenticity)

14. Mr Huntjens ask me if I have any more paintings for sale and I told I have unknown art/artwork by artist and your welcome to view, he agreed to view them, He agreed to purchase the paintings for 100,000 and give me two cheques, one of which he bounced leading call him and advise his cheque bounced. I thought he was fraudulent dealer trying to scam me out of my money and panic state I frantically called him after the bank told me it was rejected. He immediately requested me to come over and issue another cheque which we made same location at Macdonald’s for coffee.

15. Mr. Huntjens contacted me on the phone made violent threats against me questioning one of the paintings which I replied I am sorry I am not an art expert not a store or a gallery which I can give refunds, I advised him that I am selling all paintings to you without knowledge of art, no guarantee authenticity selling as is as found signed by the artist. I advise again no COA was provided and that he made no mention to bring any of the artwork to a gallery for an appraisal or authenticity. Of no interest did he mention it and the sale was finalized upon payment.

[24] Mr. Huntjens was so surprised when I cashed the first cheque. I thought that’s what you do when get a cheque go to the bank and deposit it, he was even more shocked another cheque cleared. I was worried Mr. Huntjens as he seemed shady and possibly tried to scam and fraud me out of money

[112] These paragraphs are inconsistent with his evidence presented in affidavits and his cross-examination. In this pleading, Mr. Obradovic acknowledges receiving the $30,000.00 cheque at an earlier meeting. In his affidavit, sworn May 22, 2019, he confirms the first sale occurring on May 27, 2018 and that he received a cheque for $30,000.00 post-dated to May 31, 2018. Yet on cross-examination, he denied a meeting occurred on May 27, 2018, saying all the paintings were sold on May 31, 2018, when he received cheques for $30,000.00 and $50,000.00.

[113] In the Statement of Defence, Mr. Obradovic says the $50,000.00 cheque “bounced”. Yet in his affidavits and cross-examination he acknowledged both cheques cleared on June 1, 2018. Reference to a “bounced cheque”, however, is consistent with the evidence of Mr. Huntjens, in particular the e-mail from CFA on May 31, 2018, at 10:08 p.m. saying “so the cheque bounced”.

[114] Mr. Obradovic also alleged “violent threats” were made by Mr. Huntjens and that he was “shady and possibly tried to scam and fraud me out of money”. No evidence was ever presented to support these serious allegations.

[115] It is also of interest that Mr. Obradovic disclosed his address on the Statement of Defence as 2-49 Thirty Fifth St., Toronto, saying, at para. 26 he had lived there for four years. Yet, on his cross-examination, when asked where he lived in May and June 2018, Mr. Obradovic said “in my car”. The transcript reveals the following exchange:

A. In my car.

Q. Where did you park your car?

A. I think it was Halifax.

Q. Okay, so where were you living when you were interacting with Mr. Huntjens? You said that you were living in your car, your car was parked in Halifax. Where were you staying during these transactions with Mr. Huntjens?

A. I had no fixed address.

Q. Whose car did you drive or did you take a car to get from wherever it is you started out to get to Brantford that day?

MR. LAFRAMBOISE: There is no relevance there, counsel.

MS. TURNER: Well, I think ---

MR. LAFRAMBOISE: It's a refusal.

MS. TURNER: Okay.

MR. LAFRAMBOISE: It's a refusal. Please, get to the crux of the case, ask him what type of gas he put in his car when he got there, okay.

MS. TURNER: I don't think that gas is relevant. I don't need to ask that question. Thank you, though.

MR. LAFRAMBOISE: The car is not relevant either, so move on, please.

[116] Pursuant to Rule 30.02(1) parties are required to disclose “every document relevant to either matter in issue”. An affidavit of documents is mandatory under Rule 30.03(1), making disclosure in the same manner as above.

[117] Mr. Obradovic did not provide an affidavit of documents. At his cross-examination, when asked if he had produced all documents in his possession and relevant to this case, Mr. Obradovic answered “yes”. Clearly, that response was incorrect. While he may claim to have no documents pertaining to the artwork, he did have documents relevant to the purchase of the Drummond Street property. Mr. Obradovic and Mr. LaFramboise refused to provide these documents.

[118] Litigants do not determine what documents are relevant. Relevancy depends on the issue. Mr. Obradonovic was well aware from the Statement of Claim, and subsequent events, that the funding of Drummond Street was in dispute. Indeed, Mr. Obranovic ignored a clear warning from Broad J. who, at para 35 in his endorsement, dismissing the motion to discharge the CPL, said:

[35] The defendant refused on his cross-examination to produce the file of the lawyers who acted for him on the purchase of the property which may have shed light on the amount paid by the defendant on closing and the source of those funds. If necessary an adverse inference may therefore be drawn against the defendant on the issues of the amount paid on closing and the source of those funds.

[119] Failure to answer proper questions or to provide documentary disclosure invites an adverse inference under Rule 20.02 or Rule 34.15. See: Sopinka, Lederman & Bryant, The Law of Evidence in Canada, Third Edition: Markham, LexisNexis, 2009, at para 6.449; Dawson v. Rexcraft Storage & Warehouse Inc. (1998), 164 D.C.R. (4th) 257 (Ont. C.A.); and Indcondo Building Corp. v. Steeles-Jane Properties Inc. (2001), 14 C.P.C (5th) 112 (Ont. S.C.J).

[120] As Nordheimer J., as he then was, said in Indcondo, at para. 7, the opposing party could have moved to compel answers, but their failure to do so does not preclude from asking the court to draw on adverse inference.

[121] While the adverse inference is pertinent to the last topic in this analysis, the outright refusal by Mr. Obradovic to answer questions or produce documents on relevant issues has a serious impact on his credibility.

[122] Mr. Obradovic has what is sometimes referred to as “selective memory syndrome”. He answers questions when he thinks it assists his case; otherwise, he has no memory, even of recent events. The transcripts of his cross-examinations indicate Mr. Obradovic could not remember, for example:

i) how he became introduced to Mr. Huntjens or where they first met or what happened at the first meeting, other than Mr. Huntjens asking if he had art for sale;

ii) what he sold to Mr. Huntjens, including the number of paintings or the names of artists;

iii) when and how he acquired the paintings he sold to Mr. Huntjens;

iv) the exchange of artwork, later advising he received one painting from Mr. Huntjens but could not recall who the artist was or what he did with it;

v) whether Mr. Huntjens provided his e-mail address;

vi) when the meeting on May 31, 2018 was arranged by Mr. Huntjens;

vii) when he received the second cheque for $50,000.00, later saying June 1, 2018 after reviewing his bank statement;

viii) where McDonald’s was located in Brantford; and

ix) being advised by Mr. Huntjens as to the stop payment on the cheque.

[123] Of further interest, at his first cross-examination on May 22, 2019, Mr. Obradovic acknowledged his phone number was 647-703-0948. But at the second cross-examination on January 31, 2022, Mr. Obradovic could not remember if this was correct. In the e-mail, received by Mr. Huntjens on May 27, 2018, at 8:37 p.m. from CFA, the message says “…you can reach me at my cell at 647-703-0948 to confirm you are coming!” This is consistent with the plaintiffs’ evidence.

[124] It is reasonable to expect the vendor of paintings sold for $80,000.00 or $130,000.00 to have some information or knowledge of the items and of the meetings when the transactions occurred. Yet Mr. Obradovic cannot remember. His evidence is not credible or believable.

[125] Mr. Huntjens and Ms. Huntjens presented their evidence in a straightforward manner and without exaggeration. Their evidence was consistent, with one exception regarding the stop payment on the cheque. This is a minor matter and, clearly, Mr. Huntjens’ recollection was incorrect given the audio tape of the conversation of Ms. Huntjens and Sajad at Scotiabank. Their evidence is supported and corroborated by the documentary record.

c) Is a Trial Required?

[126] There is a significant evidentiary record presented on this motion, presumably all of the evidence that would be tendered at trial. The evidentiary dispute will be resolved primarily on the basis of credibility. Given my comments above, I am not persuaded oral evidence is required.

[127] There can be no concern with affidavits being prepared by lawyers when, as here, cross-examination has occurred on two occasions. The parties had ample opportunity to present their evidence.

[128] I adopt the comment by Myers J., at para. 61 in Enterprise Rent-A-Car, supra:

When credibility shines through a transcript, repeating an out-of-court examination in court is not necessary, efficient, or proportional. This is especially the case because the witness’s comportment and appearance are not major factors in credibility analysis. In this case, the contemporaneous documents (and lack thereof) and the cross-examination transcript tell the tale.

d) Findings

[129] In many trials, evidence is tendered regarding e-mail messages. In this case, such clearly describe and define the relationship between the parties and the transactions. The only unusual feature is that Mr. Obranovic denies ever communicating with Mr. Hunjtens by e-mail or that canadianfinearts@mail.com is his account.

[130] Whether Mr. Obradovic “owns” this account is unknown. However, it is clear on the evidence that he was using the account to communicate with Mr. Huntjens. So I find. Mr. Obradovic’s evidence is rejected. It is not credible or believable and it is inconsistent with his own Statement of Defence.

[131] The e-mail account is comparable to and consistent with the Instagram and Facebook accounts. Such are affiliated with Canadian Fine Arts Gallery. The information provided in those accounts confirms the identity of Mr. Obradonovic, despite his denial. Deny, delay and obstruct!

[132] I also conclude the agreement was for fourteen paintings for $80,000.00 plus an exchange of art. The evidence of Mr. Huntjens and Ms. Huntjens in this regard is clearly supported by the documentary record. Payment of $30,000.00 was delivered on May 27, 2018. The payment of $50,000.00 was delivered on May 31, 2018. Both cheques were deposited to the bank account of Mr. Obradovic on May 31, 2018.

[133] The cheque for $50,000.00, delivered on June 1, 2018, but dated June 2, 2018, was to replace the earlier cheque and so I find. Mr. Obradovic confirms the e-mail message in his own Statement of Defence, saying the cheque “bounced”. His subsequent evidence to the contrary cannot stand.

[134] Mr. Huntjens and Ms. Huntjens understood the stop payment was effective, supporting the message received as to the cheque having “bounced”. The stop payment order was too late. Mr. Obradovic had already cashed the cheque earlier in the day.

e) The Claim for $50,000.00

[135] Mr. Obradovic was not entitled to the second payment of $50,000.00. This represents an overpayment on the agreement as previously found.

[136] In result, the plaintiffs are entitled to judgment in the amount of $50,000.00.

f) Punitive Damages

[137] The plaintiffs seek a modest award of $10,000.00 for punitive damages.

[138] Punitive damages are necessary to address the misconduct of Mr. Obradovic. He lead the plaintiffs to believe their cheque had bounced despite having already deposited the funds to his account. He refused to admit the obvious, denied his own actions and caused unnecessary court proceedings. The inconsistencies are compelling. Denunciation and deterrence are necessary considerations and punitive damages are required as there are no other penalties available in this case. See: Whiten v. Pilot Insurance Co., 2002 SCC 18, at para. 123; Pate Estate v. Galway-Cavendish and Harvey (Township), 2013 ONCA 669, para.s 195-239; and BMO v. Cadogan, 2020 ONSC 7102, para. 27.

[139] The assessment of punitive damages is a difficult task, but unnecessary in this case given the amount sought. The conduct of Mr. Obradovic, in my view, would normally have attracted a higher award.

[140] In result, punitive damages are awarded to the plaintiffs in the amount of $10,000.00.

g) Constructive Trust

[141] Unjust enrichment has long been recognized in Canadian law. See: Pettkus v. Becker, [1980] 2 SCR. 834 (SCC); Peel (Regional Municipality) v. Canada, [1992] 3 SCR 762 SCC; Garland v. Consumer’s Gas Co., 2004 SCC 25; and Kerr v. Baranow, 2011 SCC 10.

[142] A three-part test applies:

i) an enrichment to the defendant; ii) a corresponding deprivation to the plaintiff; and iii) an absence of juristic reason for the enrichment.

[143] Here, the $50,000.00 was an overpayment. When funds are transferred, there is an enrichment. See: Garland, supra, at para. 36. When those funds represent an overpayment, or a lack of entitlement by a defendant, the corresponding deprivation is obvious. There can be no juristic reason for the enrichment as there was no agreement for same, nor was this a gift. For comparison, accidental overpayment by an insurer to an insured was determined to be an unjust enrichment. See: Gore Mutual Insurance Co. v. Carlin, 2018 ONCA 628.

[144] The plaintiffs are entitled to a declaration the defendant was unjustly enriched in the amount of $50,000.00. A determination of unjust enrichment may lead to a constructive trust remedy, either a “personal restitutionary award” or a “restitutionary property award”. See: Kerr, supra, at para.s 28 and 46. The proprietary remedy becomes necessary when a monetary award is inappropriate or insufficient. See: Kerr, supra, at para. 50.

[145] A monetary ward is granted above. The plaintiffs seek to extend it to a property award and in the same amount (although the remedy available may be determined as a percentage of the property value). Such relief may be granted in particular circumstances, including:

i) there is a close connection between the property and the benefit received. See: Kerr, supra, at para.s 50-57; and Boal v. International Capital Management Inc., 2018 ONSC 2275, at para. 67.

ii) a monetary award is insufficient. See: Kerr, supra, at para. 52;

iii) the funds can be traced to the property. See: HarbourEdge Mortgage Investment Corporation v. Community Trust Company, 2016 ONSC 448, at para. 50; and Jacobs v. Yehia, 2015 BCSC 267, at para. 30; and

iv) when the funds are traced to a bank account, mixing same with other funds is not a bar to recovery. See: B.M.P Global Distribution Inc. v. Bank of Nova Scotia, 2009 SCC 15, at para. 85.

[146] A monetary award is insufficient when, as here, there is a good reason to doubt it would be voluntarily paid by Mr. Obradovic. He reports being unemployed and his financial circumstances are unknown. Mr. Obradovic resisted payment of the cost award, granted by Broad J. on September 6, 2019, until August 2020 and only paid it when failure to do so would have resulted in striking of his Statement of Defence. Of great concern, as well, is his litigation strategy and conduct in the events leading up to this lawsuit.

[147] The timelines are important. The plaintiffs’ cheques of $30,000.00 and $50,000.00 were deposited by Mr. Obradovic on May 31, 2018. Later that evening, he finalized an agreement to purchase the Drummond Street property. On June 1, 2018, a further cheque from the plaintiffs for $50,000.00 was deposited to his account. A bank draft on June 2, 2018, for $20,000.00 represented the deposit on the agreement of purchase and sale. The transaction was completed on July 9, 2018.

[148] While Mr. Obradovic had funds in his account to cover the deposit, such were mixed with those provided by the plaintiffs, specifically the $50,000.00 deposited on June 1, 2018.

[149] How Mr. Obradovic closed the transaction is less than clear. All that was disclosed was the registration of a mortgage for $460,000.00 the face amount greatly exceeding the purchase price of $368,000.00 and raising multiple questions. Mr. Obradovic refused to provide any disclosure regarding this mortgage or any other particulars as to the closing funds or even his bank statements after June 2018. Did he invest any funds of his own? How much did the bank advance? Are there other properties or assets acquired and secured? As previously stated, Mr. Obradovic was well aware funding of the purchase of the Drummond Street property was in issue. Such was identified in the Statement of Claim and subsequent proceedings. Disclosure was referred to in the endorsement of Broad, J. on July 18, 2019, long before cross-examination on this motion.

[150] In these circumstances, this is one of the strongest cases for an adverse inference. Hence, I conclude Mr. Obradovic avoided disclosure as he knew it would not only harm his position in this lawsuit but that it would assist the plaintiffs. An adverse inference must be drawn that Mr. Obradovic used the $50,000.00 provide by the plaintiffs to close the purchase on the Drummond Street property. This was made clear in the e-mail message sent by Mr. Obradovic to Mr. Huntjens on May 31, 2018, when he reached out over the “bounced” cheque, needing a replacement cheque as he had “…sold you the paintings at a great price in order to cover the price of the house…”

[151] As a result of this finding, the plaintiffs have established the close connection of their funds to the property. In result, the plaintiffs are entitled to a proprietary award, a declaration of constructive trust interest in the Drummond Street property in the amount of $50,000.00 and for sale of the property to satisfy their judgment in the event of Mr. Obradovic fails to pay.

Summary

[152] For these reasons, the plaintiffs’ motion for summary judgment is granted. Judgment shall issue in accordance with the terms herein.

[153] I expect counsel will resolve the issue of costs; failing which brief written submissions shall be exchanged and delivered to my attention by e-mail, care of kitchener.scjja@ontario.ca within 30 days of the release of this decision.

Gordon, J

Released: May 2, 2022