Court File and Parties

COURT FILE NO.: CV-19-82025 (Ottawa)

DATE: 20220531

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: THE BANK OF NOVA SCOTIA, Plaintiff

AND:

HALA JARADA, Defendant

AND:

ANTRANIK KECHICHIAN, Third Party

BEFORE: Mew J.

COUNSEL: John Siwiec and Noémie Ducret, for the Defendant, Hala Jarada (Moving Party)

Antranik Kechichian, Litigant in Person (Responding Party)

HEARD: 27 May 2022, at Ottawa (by Zoom)

ENDORSEMENT

[1] In reasons for decision released on 19 May 2021, I granted summary judgment in favour of Hala Jarada on her third party claim against Antranik Kechichian and her crossclaim against him in a related action: see The Bank of Nova Scotia v. Jarada, 2021 ONSC 3620. I did so on the basis of, inter alia, my finding that Mr. Kechichian had agreed to fully indemnify Dr. Jarada in respect of any liabilities that she might incur as a result of loan documents that he had asked her to sign, including personal guarantees, arising from certain business loans given by the Bank of Nova Scotia.

[2] In the same reasons for decision, I declined to grant motions for summary judgment brought by the Bank of Nova Scotia against Dr. Jarada, finding that there were triable issues to be resolved between those parties relating to Dr. Jarada’s defences of non est factum and undue influence. As a result, I could not determine the quantum of Dr. Jarada’s claims for indemnity until the Bank’s claims against Dr. Jarada had been resolved, by trial, settlement or otherwise. Accordingly, I deferred determination of the issue of Mr. Kechichian’s obligation to indemnify Dr. Jarada until the quantum of that claim could be properly assessed.

[3] On 8 July 2021, Dr. Jarada settled the claims made against her by the Bank for $150,000. She now seeks summary judgment in that amount, plus costs of $4,629.04, against Mr. Kechichian.

[4] Mr. Kechichian resists judgment on the basis that partial summary judgment should not have been granted in Dr. Jarada’s favour. He also seeks a stay of this motion pending an appeal of my 19 May 2021 decision. In that regard, there is no evidence that an appeal has, in fact, been commenced. However, Mr. Kechichian, who is subject to a vexatious litigant order made by Marc Smith J. on 17 February 2021 (Kaufman LLP v. Kechichian, 2021 ONSC 1173), explained that he has been making attempts to launch an appeal, but that there has been confusion over the application of the vexatious litigant order to his proposed appeal. He went on to describe some of the difficulties he has encountered in that regard.

[5] At the conclusion of the hearing in this matter I informed the parties that I would grant judgment on Dr. Jarada’s claim, with reasons to follow. These are my reasons.

[6] At the time she settled with the Bank, the potential liability of Dr. Jarada to the Bank, based on the loans and guarantees that the Bank sought to enforce, including principal, contractual interest and indemnity costs, was $440,207.23.

[7] A claimant can only recover the amount of a settlement by way of an indemnity if the settlement represented a reasonable figure: Biggin & Co. v. Permanite, [1951] 2 K.B. 314, [1951] 2 All E.R. 191 (C.A.); Family Trust Corp. v. Harrison (1986), 7 C.P.C. (2d) 1 (Ont. Dist. Ct.), at para. 12; Bellissimo v. Alfano, 2012 ONSC 4575 (affd. 2013 ONCA 88). The reasonableness of a settlement is a question of fact.

[8] In Supershield Ltd. v. Siemens Building Technologies FE Ltd., [2010] EWCA Civ 7, [2010] 1 Lloyd's Rep 349, at para. 28, Toulson L.J. provided the following guidance to courts faced with the task of determining whether a settlement was reasonable:

Because of its uncertainty and expense, prudent parties usually try to avoid litigation where possible. It has to be borne in mind that the “settlement value” of a claim is not an objective fact (or something which can be assessed by reference to an available market) but a matter of subjective opinion, taking account of all relevant variables. Often parties may have widely different perceptions of what would be a fair settlement figure without either being unreasonable. The object of mediation or negotiation is then to close the gap to a point which each finds acceptable. When a judge is considering the reasonableness of a settlement he will have in mind these factors and another: that he is likely to have a less complete understanding of the relative strengths of the settling parties than they had themselves (unless he is to embark on a disproportionately detailed investigation), and especially so in complex litigation. The issue which the judge has to decide is not what assessment he would have made of the likely outcome of the settled litigation, but whether the settlement was within the range of what was reasonable. If he decides that it was, an appellate court will not interfere with his decision unless persuaded that he erred in principle or (which is intrinsically unlikely) that his decision was incapable of justification on any reasonable view.

[9] To similar effect, in IPEX Inc. v. AT Plastics Inc., 2016 ONSC 1859, Belobaba J. wrote, at para. 22, that, in assessing reasonableness of a settlement, circumstances to be taken into account include the strength of the claim, whether the settlement was the result of legal advice, the uncertainties and expense of litigation, and the benefits of settlement rather than continued litigation.

[10] The parties to this motion have not addressed the issue of reasonableness of the settlement in their evidence or written submissions. Whereas in situations where a party has been noted in default, the reasonableness of a settlement which is the subject of a claim for indemnity may be presumed (see Family Trust, at para. 12), that is not the case in a defended proceeding. The party seeking judgment – in this case, Dr. Jarada – bears the onus of establishing that her settlement with the Bank was reasonable.

[11] In oral submissions, counsel for Dr. Jarada underscored the uphill challenge faced by borrowers or guarantors who raise non est factum and undue influence defences to claims by lenders for enforcement of commercial loans. Notwithstanding that, the Bank was not prone to entering into unreasonable settlements. The settlement of the Bank’s claim against Dr. Jarada reflected the risks faced by both parties.

[12] Mr. Kechichian filed an affidavit, which in large measure rehashes submissions that were made by Mr. Kechichian in relation to the previous summary judgment motion, supplemented by some subsequent correspondence with Dr. Jarada. In addition to explaining why, in his view, Dr. Jarada should not prevail, Mr. Kechichian describes the significant pressures, health wise and financially, that these and other cases relating to the demise of Laurier Optical, have imposed on him and his family.

[13] He asks for a stay of the enforcement of any order made by the court at this time until his appeal rights have been exhausted.

[14] Issues between the parties that have already been determined by the court cannot now be relitigated. The only issue on this motion is what amount Dr. Jarada’s judgment against Mr. Kechichian should be for.

[15] It would have been preferable to have had additional evidence about the settlement itself: the solicitor’s affidavit filed by the moving party on this motion was wholly deficient in that regard. Notwithstanding this shortcoming, and unlike the typical situation described in Supershield, I have had the benefit of a long acquaintance with this, and related proceedings. Furthermore, a substantial evidentiary record was filed on the original summary judgment motion, from which the strengths and weaknesses of the Bank’s case against Dr. Jarada can be divined.

[16] The settlement entered into by Dr. Jarada represented 34 cents on each dollar of her potential liability, before consideration of costs that the Bank could have claimed from her up to the date of settlement, and the additional costs exposure to the Bank that she would have faced if the case had gone to trial, as well as her own legal costs of defending the Bank’s claims.

[17] It is also noteworthy that Dr. Jarada had the benefit of the advice of senior counsel, and settled in accordance with that advice.

[18] Accordingly, I am satisfied on the basis of the evidence that is before the court, and in consideration of Dr. Jarada’s legal defences to the Bank’s claims, that the settlement was within the range of what was reasonable in the circumstances.

[19] A costs summary provided by Dr. Jarada seeks $4,629.04 for costs. This reflects costs on a partial indemnity scale. I find the amount claimed to be reasonable.

[20] Judgment will therefore go in the amount of $150,000 plus costs of $4,629.04.

[21] On the question of whether my order should be stayed pending a possible appeal, the authority for me to make such an order is provided for by Rule 63.02(1)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[22] Dr. Jarada resists a stay on the basis that the applicable standard for granting a stay is analogous to that for granting an interlocutory injunction. While Mr. Kechichian has not yet delivered a notice of appeal, or some other motion to an appellate court for leave to commence an appeal, Dr. Jarada argues that it is unlikely that Mr. Kechichian can make out that there is a serious question to be determined on appeal.

[23] Perhaps so. But in the circumstances, having regard to the overall justice of the case, and being aware that Mr. Kechichian faces great challenges, he should have the opportunity to make a bona fide attempt to launch an appeal from my decision without the added pressure of having to deal with the enforcement of the judgment that has now been made against him.

[24] I therefore order a stay of my order until 10 June 2022. If by that time, Mr. Kechichian has not provided Dr. Jarada’s lawyers with satisfactory evidence of a pending appeal or a motion before an appellate court, my judgment will become immediately enforceable. If, however, an appeal, or motion to an appellate court, has been initiated, the stay of my order will remain in force until the earlier of (a) further order from this court or the appellate court, or (b) the final disposition of the proceedings in the appellate court.

[25] The need to obtain the responding party’s approval of the form and content of the formal judgment to be taken out is dispensed with.

[26] I may be spoken to in the event of any issues arising in relation to the operation or effect of the stay or proceedings that I have ordered.

Mew J.

Date: 31 May 2022