Court File and Parties

COURT FILE NO.: CV-18-00602385 DATE: 20230524

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

HUSSEIN AL-AWADI Plaintiff – and – NASSR AL WISAMY and NAS MOTORS LTD. Defendants

COUNSEL: Riaz S. Ahmed, for the Plaintiff Nassr Al Wisamy, Defendant (Self-represented)

HEARD: May 23 and 24, 2023

BEFORE: Papageorgiou J.

Reasons for Judgment

[1] This summary trial pursuant to r. 76 proceeded before me on May 23, and 24, 2023.

[2] The defendants Nassr Al Wisamy (“Nassr”) and Nas Motors Ltd. (“Nas Motors”) (collectively the “Defendants”) appeared in person.

[3] The Defendants first sought an adjournment from Wilson J., on May 18, 2023 on the basis that they had just retained new counsel. She denied the adjournment.

[4] The Defendants then sought an adjournment before me. They again argued that they had retained new counsel and that they had previously had difficulty finding a lawyer because they could not afford one. I denied the request for an adjournment for the following reasons.

[5] The purpose of r. 76 is to reduce legal costs and enhance access to justice by making available a cheaper and more expeditious procedural regime appropriately geared to the litigation of modest claims. This action was commenced on July 27th, 2018. The Defendants have had a significant amount of time to retain counsel; counsel for Hussein advised that the Defendants had been saying they would obtain a lawyer at many court attendances but they have not.

[6] The pre-trial was held on October 4, 2022 and the trial was assigned at that time. Pursuant to the Trial Management plan, all affidavits were to be served by April 25, 2023.

[7] The plaintiff, Hussein Al-Awadi (“Hussein”) complied with r. 76 and filed a trial record containing an affidavit as required. The Defendants did not file any materials despite knowing about the trial date since October 4, 2022 and having Hussein’s materials a month ago.

[8] Furthermore, as will be seen, this is a simple case about an agreement entered into by the Defendants where Nassr agreed to purchase Hussein’s shares in Nas Motors. The Statement of Claim pleads that the full purchase price has not been paid. Given the simplicity of the case, there is no reasonable explanation for the Defendants’ failure to have provided their affidavit materials within the timelines, and in my view, even if they do not have counsel. As I explained to the Defendants, many people are self-represented.

[9] In any event, as will be seen, in their submissions, despite the fact that the Statement of Defence pleads that Hussein has been paid for his shares, Nassr admitted that he owed the purchase price for these shares. Nassr’s main opposition in this case is to the additional damages claimed by Hussein.

[10] Nassr argued that he wanted to pay the purchase price for the shares, but the additional damages claimed were not related to the failure to pay the full purchase price.

[11] He also argued that he had been unable to pay the full purchase price due to his finances; as I explained to him, the inability to pay is not a defence in law.

Nature of the Case

[12] Hussein claims damages for breach of contract and unjust enrichment in the amount of $100,000.

[13] Hussein was previously a 1/3 shareholder in the defendant Nas Motors together with the defendant Nassr and Ziadoon Abdulrazzaq (“Ziadoon”), each of whom owned 1/3 of the shares.

[14] Hussein introduced Ziadoon to Nassr which is how Ziadoon had come to invest in Nas Motors. Both Hussein and Ziadoon were passive investors in Nas Motors while Nassr operated the business.

[15] Ziadoon and Hussein came to have concerns about Nassr’s management of the business and wanted to sell their shares.

[16] On December 21, 2016, the parties reached an agreement whereby Nassr would purchase both Hussein’s and Ziadoon’s shares for $70,000 each (the “Agreement”).

[17] The Agreement provided that Nassr must make full payment by no later than June 30, 2017.

[18] As at June 30, 2017, Nassr had not yet paid either Ziadoon or Hussein for their shares.

[19] Hussein had a previous business relationship with Ziadoon which became strained as a result of the nonpayment. In an effort to mend his relationship with Ziadoon, Hussein arranged a loan for Nassr which was to be used to pay for the shares. However, the amount loaned would not be sufficient to pay for both Ziadoon’s and Hussein’s shares.

[20] Because Ziadoon did not want to deal with Nassr any longer, Hussein attended with Nassr when the borrowed funds were released by TD Bank.

[21] Nassr and Hussein agreed that the full $70,000 would be paid to Hussein who would then transfer $55,000 to Ziadoon and keep $15,000 in respect of the amounts owed pursuant to the Agreement. Hussein advised Nassr that Ziadoon owed him $10,000 in respect of moneys they agreed would be contributed to the business and that he would therefore keep $10,000 of the $55,000 to be transferred to Ziadoon for his shares. Nassr took no issue with that. Nassr released $70,000 to Hussein based upon their oral agreement at TD Bank that Hussein would then transfer $45,000 to Ziadoon and keep the balance. As agreed, Hussein then transferred $45,000 to Ziadoon, and retained the remainder which was allocated as follows as per their agreement reached at TD Bank when the funds were released: $15,000 was paid towards the $70,000 owed by Nassr to Hussein in respect of the Agreement and $10,000 was in respect of amounts owed by Ziadoon to Hussein.

[22] Nassr made no further payments towards amounts owed to Hussein.

[23] All of the above was admitted by Nassr in his oral submissions.

[24] Hussein also made a loan to Nassr in the amount of $5,000 on November 18, 2016 (the “Loan Agreement”). Despite repeated demands Nassr has failed to pay this amount.

[25] On June 20, 2018, in response to a demand letter, Nassr admitted that the sum of $60,000 was owed to Hussein.

[26] I am satisfied that Hussein is entitled to damages for breach of contract in the amount of $55,000 in respect of the Agreement, and $5,000 pursuant to the Loan Agreement and am awarding these damages as against Nassr.

[27] There is no basis for a claim against Nas Motors pursuant to the Agreement or the Loan Agreement and I am dismissing the claim against Nas Motors.

Additional Damages

[28] Hussein also claims additional damages which he claimed he sustained because of Nassr’s failure to pay the full purchase price. He relies on the following provision of the Agreement:

4. Nassr Al Wisamy understands and agrees that in the event that he fails to make the payment of $70,000 to Hussein Al-Awadi on or before June 30, 2017, he will compensate Hussein Al-Awadi for any damages including but not limited to, late payment, interest, legal costs etc.

[29] When Hussein was re-examined, he stated that the parties had a lawyer present who explained the Agreement to them before they each signed it, although he did not indicate the nature of the retainer. He emphasizes the broad language of the clause which indicates that Nassr will “compensate [Hussein] for any damages” and he emphasizes the word “any”.

[30] However, as I explained, this clause does not eliminate the general common law that requires causation as well as reasonable foreseeability in respect of any damage claim due to a breach of contract.

[31] The nature of these additional damages claimed is as follows.

Credit Card Debt

[32] First, Hussein claims that he incurred credit card debt because of Nassr’s failure to pay the share purchase price as agreed. He points to his credit card statements which show that he was able to pay his credit cards prior to the default, but then had to run up his credit card debt afterwards. He claims the 19 % interest which he was charged on his credit card statements. He provided copies of various credit card bills showing unpaid balances. His affidavit claims that he could not pay off these debts until December 2021, although he did not provide copies of any of these statements past mid-2018. His affidavit sets out that he estimates the overall interest charges he incurred over the past five years to be $40,000 and that he would provide a break-down of the calculations at trial; the aid memoire provided at trial only calculates the outstanding interest to be $13,682.34 in total based upon outstanding balances as at mid-2018.

[33] When Hussein was re-examined and asked whether he discussed with Nassr the kind of damages that Nassr could be liable for pursuant to section 4, he gave an example of owing money on a credit card. He argues that this discussion is one of the relevant surrounding circumstances when the Agreement was entered into. There is no evidence that he discussed with Nassr the particulars of his financial circumstances. I note as well that Hussein did not testify that Nassr ever agreed that he would be liable for Hussein’s credit card interest.

[34] I reject this claim for a number of reasons.

[35] First, the main principle of contractual interpretation is that in determining contractual intention, the main focus is on the words of the contract taking into account the circumstances as they existed when the agreement was created which include “facts that were known or reasonably capable of being known by the parties when they entered into the written agreement”: Dumbrell v. The Regional Group of Companies, 2007 ONCA 59.

[36] In my view, Hussein is effectively asking the Court to write his credit card interest rate of 19 % into the Agreement. However, in this case, the parties have already turned their minds to the issue of interest payable on outstanding amounts given section 4 of the Agreement which references “interest”, but is silent on the interest rate. In the absence of the parties express agreement as to an interest rate, the relevant surrounding circumstance is the fact that pursuant to the common law, the interest rate payable on breach of contract claims is the rate payable pursuant to the Courts of Justice Act, R.S.O. 1990, c. C.43. Hussein’s subjective interpretation of the Agreement relayed to Nassr at the time of execution is not relevant; nor is it a surrounding circumstance: Dumbrell at paras 50-51. It was simply his opinion.

[37] Hussein did not provide any authority for the damages he seeks under this head apart from a general argument that in real estate cases, when a transaction fails to close, courts often award a seller damages in respect of bridge financing which they require because of a buyer’s failure to close a real estate transaction. These cases are distinguishable because the need for bridge financing is reasonably foreseeable in these cases given that most people who sell a home, are also purchasers of another home.

[38] In my view Hussein’s sudden inability to pay his credit cards is not reasonably foreseeable, nor has Hussein proven that his inability to pay his credit cards was caused by the breach. Hussein is a licensed real estate agent who works and was able to pay his ongoing expenses before the breach, without having these funds. There is no explanation in the evidence as to why the breach suddenly caused his inability to pay his ongoing expenses. When I raised the issue with counsel, he argued that Hussein advised him that he allocated his income to an investment when he thought he would get the payment for the shares. This is frankly inconsistent with his position that one of the relevant surrounding circumstances at the time of the Agreement was Hussein’s “trust and skepticism” that Nassr would pay the purchase price. Even if it is true, it was his choice to invest his income rather than use it to pay his ongoing expenses as he apparently did before the breach.

Lost Business

[39] Hussein states that he was previously consistently retained by Ziadoon in his real estate transactions. He claims that because he introduced Ziadoon to Nassr and because of Nassr’s delay in paying Ziadoon for his shares pursuant to the Agreement, Ziadoon lost confidence in Hussein and has ceased using him as a real estate agent. As a result, he has lost real estate commissions in particular with respect to two properties which Ziadoon had purchased in the amount of $28,348.88. He provided no evidence from Ziadoon confirming that this is the reason he stopped using Hussein as his agent and as such, this is at most speculation on his part. As well, these sale transactions were entered into by Ziadoon prior to the Agreement or the breach; therefore, Ziadoon’s failure to retain Hussein in respect of these transactions was not caused by the breach.

[40] In any event, these damages are not a reasonably foreseeable consequence of the breach of contract, which was Nassr’s failure to pay Hussein for his shares. As above, Hussein provided no authority supporting this claim for damages.

Inability to Close a Purchase Agreement

[41] Hussein also claims that he was unable to close an agreement of purchase and sale he entered into on May 30, 2017 with a closing date of July 7, 2017 because of the nonpayment by the Nassr. He testified that he explained to Nassr at the time of execution his view that pursuant to section 4 of the Agreement, that “someone could need the money for anything and if the money was not available and the person loses their transaction” Nassr would be liable for such damages pursuant to section 4. However, there is no evidence that he discussed this particular transaction with Nassr and that he would be unable to close it without the full purchase price pursuant to the Agreement.

[42] He claims he lost the deposit in the amount of $3,000. He also claims (without expert evidence) that the property which he had agreed to purchase for $607,000 now has a value of between $800,000 and $900,000 and claims damages in the amount of $246,000 in respect of that lost opportunity. Hussein attempted to file a supplementary affidavit on this issue, which he indicated set out his analysis of comparable real estate transactions in the neighborhood to show the current market value. I rejected this affidavit because it did not comply with the Trial Management order which required all affidavits to be filed by May 5, 2023. In any event, Hussein cannot act as an expert in his own case.

[43] Moreover, these damages are not reasonably foreseeable and Hussein provided no authority supporting this claim. I again reject Hussein’s argument that his interpretation of the Agreement relayed to Nassr, at the time it was signed, created reasonable foreseeability of these kinds of damages.

[44] Therefore, I am awarding damages for breach of contract in the amount of $60,000 with interest at the Courts of Justice Act rate from the date of default which was July 1, 2017 only.

Costs

[45] Pursuant to s. 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, costs are in the discretion of the court. Rule 57 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, sets out the factors which courts should have regard to when awarding costs. The overall objective is “to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant”: Zesta Engineering Ltd. v. Cloutier, at para. 4; Boucher v. Public Accountants for the Province of Ontario (2004), 71 O.R. (3d) 291 (Ont. C.A.), at para. 26; Davies v. Clarington (Municipality) et al., 2009 ONCA 722, 100 O.R. (3d) 66, at para. 52; G.C. v. Ontario (Attorney General), 2014 ONSC 1191.

[46] Judges have a duty to fix or assess costs in reasonable amounts and have a duty to make sure that the hours spent are reasonably justified: Pagnotta v. Brown, [2002] O.J. No. 3033 (Ont. S.C.), at para. 25.

[47] Further, there must be practical and reasonable limits to the amounts awarded for costs and those amounts should bear some reasonable connection to the amount that should reasonably have been contemplated: Toronto (City) v. First Ontario Realty Corp. (2002), 59 O.R. (3d) 568 (Ont. S.C.), at para. 26; Gratton-Masuy Environmental Technologies Inc. v. Building Materials Evaluation Commission, [2003] O.J. No. 1658 (Ont. S.C.).

[48] Hussein claims partial indemnity costs in the amount of $17,390.71 inclusive of HST for fees and $1,946.12 for disbursements. He has provided a detailed bill of costs which sets out his rate and hours spent which I find reasonable. This matter has been ongoing for five years. His counsel had to conduct investigations, draft pleadings, attend mediation and pretrial conferences as well as prepare for and attend trial.

[49] Nassr’s main argument is that he tried to settle out of court many times. However, he never made a Rule 49 Offers to Settle. He also argues that he has been trying to pay for the shares but could not due to his financial circumstances. Again, this is not a defence to a claim for costs unless the party provides evidence of impecuniosity and he has not done so. Nassr owns his own home and was able to obtain a mortgage on his home in the amount of $160,000 on March 18, 2021 and still did not pay the outstanding amount or make any Offers to Settle.

[50] The costs (inclusive of fees, disbursements and HST) claimed are within the reasonable expectation of Nassr and I award them in full in the amount of $17,390.71 inclusive of HST for fees and $1,946.12 for disbursements.

[51] I am requesting that counsel prepare a Judgment together with interest calculations at the Courts of Justice Act rate and submit same to me and Nassr. It need not be approved as to form and content.

Papageorgiou J.

Released: May 24, 2023

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: HUSSEIN AL-AWADI Plaintiff – and – NASSR AL WISAMY and NAS MOTORS LTD. Defendants

REASONS FOR JUDGMENT

Papageorgiou J.

Released: May 24, 2023