Court File and Parties

COURT FILE NO.: CV-21-3297-00 DATE: 2023-06-15 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Bank of Montreal, Plaintiff AND: Volodymyr Garasymovych, Defendant

BEFORE: Kurz J.

COUNSEL: Allyson Fox, for the Plaintiff

HEARD: May 25, 2023

Endorsement

Introduction

[1] This is a motion for judgment by the Plaintiff ("BMO") under r. 19.05 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 under Courts of Justice Act, R.S.O. 1990, c. C.43, following the service upon and noting in default of the Defendant. BMO seeks judgment in the amount of $10,227.85, inclusive of interest, on a credit card debt plus $40,847.07, inclusive of interest on a personal line of credit.

[2] BMO further seeks a declaration that "the debts incurred herein arose by way of fraudulent misrepresentations and under false pretences and as such survives Bankruptcy pursuant to s. 178 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 [the “BIA”].

[3] I see no issue with the quantum of relief being sought by BMO. The Defendant has been noted and default and BMO’s motion record was nonetheless served upon him. The facts regarding the Defendant’s debt to BMO are deemed admitted under Rule 19.02(1)(a) and are sufficient to ground its claim to judgment.

[4] However, the key issue in this motion is whether I should grant the declaration that BMO seeks. For the reasons that follow, I dismiss BMO’s claim for a declaration under BIA s. 178.

Facts

[5] The Defendant applied for credit with BMO and received both a Mastercard credit card and a personal line of credit (“PLOC”). Both of those credit facilities have gone into default, hence this action. However, for the balance of these reasons I will confine myself to the facts that are relevant to the claim under s. 178 of the BIA.

[6] In its statement of claim, BMO pleads that the Defendant misrepresented his employment and income in applications for the two credit facilities. In particular, it pleads that:

a. “[T]he Defendant represented to BMO that he had been employed by IB Group in Richmond Hill Ontario for three years and earned a monthly income of $7,500”. b. BMO “relied on the Defendant’s misrepresentations and provided credit under these false pretenses”. c. “[I]nformation provided by the Defendant was false and devised solely for the purpose of defrauding BMO to extend credit”. d. “Based on the Defendant’s misrepresentations [BMO] approved the MasterCard and the Personal Line of Credit”.

[7] The only evidence filed by BMO in support of this motion is the affidavit of Jocelyn Sauve, who describes herself as "the Manager at the National Special Handling Office, B2C Operations” of BMO. She claims no personal knowledge of the matters to which she deposes. Rather, the source of her information is her review of “the file in this matter”. What that file is, she does not say.

[8] In her affidavit, Ms. Sauve offers as fact her personal opinion that “the defendant misrepresented his employment and income” in his application for the credit facilities he obtained from BMO. She adds a further claim of fraud: that he engaged in “cheque kiting within his accounts”. That claim is not pleaded and is improperly included in her affidavit. If necessary, I would strike it.

[9] Ms. Sauve offers no evidence of the mode of the Defendant’s alleged fraudulent misrepresentation as to his income, whether written or oral. While one may expect that BMO would have required the Defendant to fill out a credit application form before issuing him credit, no such form is included or even mentioned in Ms. Sauve’s affidavit. Nor does Ms. Sauve offer any evidence of any other manner in which the Defendant made his allegedly fraudulent misrepresentations. Rather, she simply deposes that:

In connection with his application for the MasterCard account and the PLOC made on December 12, 2019 the Defendant misrepresented to [BMO] that he was employed by IB Group Limited as a roofer contractor earning $7,555 monthly. A monthly income of $7,554 would result in annual income of $90,648.

[10] In the absence of evidence of the mode of the Defendant’s allegedly fraudulent misrepresentations, Ms. Sauve relies instead on notations made on BMO’s “proprietary software” on which “[t]his information is recorded”. She does not say who recorded the information or what steps were taken to ensure that it was accurately recorded.

[11] At para. 12 of her affidavit, Ms. Sauve deposes that she attaches as Exhibit “F” to her affidavit “a copy of the Employment/Income screen from [the BMO proprietary software system] showing the income and employment information that the Defendant provided to BMO.”

[12] The exhibit to which she references is a screen shot which is all black background, with figures and numbers in white. The relevant line reads:

Inc: Pri 7554 Pension 0 Other 0 Scr Tit 7554

[13] Ms. Sauve does not explain the meaning of those notations, which are far from self-evident, let alone proof of the Defendant’s representations at the time that he applied for credit. Ms. Sauve offers no guide to the meaning of this screenshot.

[14] Ms. Sauve then refers to a further set of eleven screen shots in BMO’s proprietary software system, which she attaches at Exhibit “G” to her affidavit. She deposes that these screen shots are a “copy of the History Inquiry Screen [from BMO’s software programme] showing the date of the application along with income and employment information that the Defendant provided to BMO”. She fails to set out the screen or screens that she claims to show this information, or how the alleged information is reflected in those screens.

[15] I have reviewed those eleven screens. They suffer from the same defects as the screen shot at Ms. Sauve’s Exhibit “F”. In the absence of direction from Ms. Sauve, the only screen shot of the eleven that appears to be relevant is the one denoted as “2/31”. The relevant information is set out as follows:

PRIMARY INCOME TYPE FREQ $/HR HRS/WK AMOUNT MONTHLY $ SALARIED INCOME -2018 T-4 0 0 90,648 7554 TOTAL MONTHLY INCOME 7554

[16] As I read this document without the assistance of Ms. Sauve, even if it sets out information provided by the Defendant to BMO, the reference was to his 2018 income rather than his 2019 income. In that event, the $90,686 notation purports to reflect the contents of a 2018 T-4 tax slip, which again Ms. Sauve fails to produce.

[17] It is important to point out that these two sets of screen shots represent the only real evidence other than Ms. Sauve’s opinion, derived from her review of the BMO “file”, of the allegedly fraudulent misrepresentation made by the Defendant regarding his income at the time that he applied for credit.

[18] Ms. Sauve continues, referring to the Defendant’s assignment in bankruptcy in 2021, during the pandemic and 14 months after he purportedly filled out the BMO credit application. She attaches a copy of his bankruptcy statement of affairs, in which he claims a total income of $1,700 per month.

[19] Ms. Sauve then offers a copy of the Defendant’s 2019 T1 income tax return, in which he claimed an annual income of $21,000 for 2019. She does not provide a copy of his 2018 tax return. Thus, it is not clear whether any representation he allegedly made as to his 2018 income was accurate. Nor is it clear what representation he made as to his 2019 income.

[20] In sum, there is no direct evidence as to what the Defendant actually represented to BMO about his income at the time that he applied for credit. BMO fails to produce any documentation that the Defendant provided to BMO to prove his income. The only evidence it relies upon as to those representations is the vague and difficult to decipher screen shots described above, created by an unknown BMO employee or employees, based on unknown sources. It is not even clear whether the person who made the notations into BMO’s system was the same person who received the allegedly false representations.

[21] Nonetheless, and based only on the meager evidence set out above, Ms. Sauve offers her opinion as to the falsity of the Defendant’s alleged representations. Continuing on, she opines as to the Defendant’s motivation. She asserts that the income and employment information he supplied to BMO “in connection with [his] credit application was false and was devised for the purposes of obtaining credit from BMO for which the Defendant did not qualify” [emphasis added].

[22] How Ms. Sauve is aware of the motivations of the Defendant when she never met him and lacks any direct information about his income representations to the relevant BMO employee(s) is left to the imagination.

[23] Ms. Sauve adds, again without citing the source of her opinion, that BMO “relied upon the Defendant’s misrepresentations, approved the Defendant’s credit application and extended credit by way of the MasterCard account and the PLOC”.

[24] Ms. Sauve then asserts that the credit obtained by the Defendant was “unauthorized”, although how it could be unauthorized when someone at BMO must have authorized the granting of credit to the Defendant, she fails to say. She concludes that the credit was “obtained by fraudulent misrepresentation under false pretenses”.

[25] On November 16, 2021, BMO obtained an order under s. 69 of the Bankruptcy and Insolvency Act, lifting the automatic stay of these proceedings that follows the Defendant’s assignment into bankruptcy.

Applicable Authorities

Test Under Rules 19.05 and 19.06

[26] Rule 19.05 speaks to the manner in which deemed admissions following the noting of default can be used in a motion, like this. The Rule reads as follows:

BY MOTION FOR JUDGMENT

19.05 (1) Where a defendant has been noted in default, the plaintiff may move before a judge for judgment against the defendant on the statement of claim in respect of any claim for which default judgment has not been signed.

(2) A motion for judgment under subrule (1) shall be supported by evidence given by affidavit if the claim is for unliquidated damages.

(3) On a motion for judgment under subrule (1), the judge may grant judgment, dismiss the action or order that the action proceed to trial and that oral evidence be presented.

(4) Where an action proceeds to trial, a motion for judgment on the statement of claim against a defendant noted in default may be made at the trial.

[27] Under Rule 19.02(1)(a), with a finding of default, a defendant is deemed to have admitted all of the allegations of fact in the statement of claim. However, under r. 19.06: "[a] plaintiff is not entitled to judgment on a motion for judgment or at trial merely because the facts alleged in the statement of claim are deemed to be admitted, unless the facts entitle the plaintiff to judgment." As Favreau J. (as she then was) describes it in Canada Mortgage and Housing Corporation v. CMC Medical Centre Inc., 2017 ONSC 7551, at para. 14, this rule "requires the judge to inquire into whether the deemed factual admissions resulting from the default support a judgment on liability as well as damages."

[28] In support of that statement, Favreau J. cited the decision of Himel J. in Fuda v. Conn, [2009] O.J. No. 188 (S.C.J.), who wrote at para. 16:

[A]lhough the Rules provide the consequences for noting in default, the court has the jurisdiction and the duty to be satisfied on the civil standard of proof that the plaintiff is able to prove the claim and damages. If the court finds the evidence to be lacking in credibility or lacking "an air of reality", the court can refuse to grant judgment or grant partial judgment regardless of fault.

[29] In Elekta Ltd. v. Rodkin, 2012 ONSC 2062, D.M. Brown J., as he then was, stated at para. 14 that the court considering a motion for judgment default must engage in the following enquiry:

(i) What deemed admissions of fact flow from the facts pleaded in the Statement of Claim? (ii) Do those deemed admissions of fact entitle the plaintiffs, as a matter of law, to judgment on the claim? (iii) If they do not, has the plaintiff adduced admissible evidence which, when combined with the deemed admissions, entitles it to judgment on the pleaded claim?

[30] As Rule 19.06 implicitly demonstrates, while the facts set out in the statement of claim are deemed to have been admitted, the legal consequences of those facts are not. As Corkery J. wrote in Nikore v. Jarmain Investment Management Inc., 2009 CarswellOnt 5258 (S.C.J.), at para. 20:

Under Rule 19.02 a defendant noted in default is deemed to have admitted all allegations of fact in the statement of claim. Allegations of law or mixed fact and law do not bind the court as admissions. [italics in original]

[31] Here, the statement of claim makes bald assertions of fraud and fraudulent misrepresentation against the Defendant. But findings of fraud or fraudulent misrepresentation are findings of mixed fact and law. They are not deemed to be proven under Rule 19.02(1)(a). Thus, they must be proven, based on evidence in a motion such as this.

[32] In Hryniak v. Mauldin, 2014 SCC 7, at para. 87 Karakatsanis J. writing for the court, described the four elements of civil fraud, which must be proven on a balance of probabilities as: (1) a false representation by the defendant; (2) some level of knowledge of the falsehood of the representation on the part of the defendant (whether knowledge or recklessness); (3) the false representation caused the plaintiff to act; (4) the plaintiff's actions resulted in a loss.

[33] I add that an allegation of fraud or fraudulent misrepresentation is a serious one. It must be proven with clear and conclusive evidence rather than a boilerplate pleading, As McClung J.A. wrote for the Alberta Court of Appeal in Canada (Attorney General) v. Bourassa (Trustees of), 2002 ABCA 205, at para. 9:

Fraud and its proof have their own distinct biosphere. In commercial disputes, allegations of fraud are frequently levelled. But they must be levelled with caution. At common law the claim must be specified and with particulars, or it will be struck: see Canadian Abridgement, vol. R17D, (2d) ed. (Toronto: Carswell, 1991) at Digest 1689 et seq. Regarding evidence of fraud, Kerr on Fraud and Mistake notes that; "fraud is not to be assumed on doubtful evidence. The facts constituting fraud must be clearly and conclusively established."

[34] McClung J.A. concluded on the point at para. 10 that "[h]e who alleges must prove. It is that simple."

Why This is not a Simple Motion for Judgment Under Rule 19.05

[35] As set out above, what the Plaintiff seeks is not a simple monetary judgment on a debt. It seeks a declaration under s. 178 of the BIA as to the nature of that debt so that it survives bankruptcy. It was open to BMO to make this claim in the Defendant’s bankruptcy, but it chose not to do so for reasons it failed to articulate in this motion. It seems to me that it would be preferable to make such a claim, which is rooted in bankruptcy law, rather than in this default judgment manner, in that bankruptcy. However, I accept that BMO is entitled to make the claim in these proceedings.

[36] In Bank of Montreal v. Mathivannan, 2021 ONSC 2538 I set out the effect of the declaration sought by BMO. I wrote at paras. 22 – 24:

22 To be clear, the issue in this motion is not the amount of the judgment, but its effect. Should I grant BMO the declaration it seeks, it is likely that the judgment will survive any potential bankruptcy by the Defendant. I say that because of the provisions of s. 178(1) and (2) of the Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3 ("the BIA").

23 Under the BIA s. 178(2), a discharge from bankruptcy releases the bankrupt from all claims provable in bankruptcy. However, exceptions to that rule are found under s. 178(1), which refers to claims based on various types of misconduct that are not released by a bankruptcy discharge.

24 Among the exceptions set out in s. 178(1) are debts or liabilities that arise from "fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity": s. 178(1)(d); or "false pretences or fraudulent misrepresentation": s. 178(1)(e). The applicable provisions read as follows:

Debts not released by order of discharge

178(1) An order of discharge does not release the bankrupt from

(d) any debt or liability arising out of fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity or, in the Province of Quebec, as a trustee or administrator of the property of others;

(e) any debt or liability resulting from obtaining property or services by false pretences or fraudulent misrepresentation, other than a debt or liability that arises from an equity claim;

[37] In the face of the consequences that arise from a BIA s. 178 order, courts should be circumspect in granting declarations that survive bankruptcy, particularly when based on unproven allegations of fraud or fraudulent misrepresentation.

[38] That point was made by Stinson J. in B2B Bank v. Batson, 2014 ONSC 6105. In that case, there was a consent to the declaration sought under BIA s. 178. Nonetheless, he refused to grant the declaration based only on a consent. As he explained, the nature of a judicial declaration requires more than a mere consent or admission. The court must find that it is appropriate to grant the declaration. He wrote:

10 Section 97 of the Courts of Justice Act, R.S.O. 1990, c. C.43 states:

The Court of Appeal and the Superior Court of Justice, exclusive of the Small Claims Court, may make binding declarations of right, whether or not any consequential relief is or could be claimed.

A declaratory order is a judicial statement confirming the existence of a legal right: Lazar Sarna, The Law of Declaratory Judgments, 3d. ed. (Toronto: Thomson Carswell, 2007), at p. 1.

11 The mere consent of the parties does not confer jurisdiction on the court to make a declaratory judgment: Nickerson v. Nickerson (1991), 4 O.R. (3d) 447 (Gen. Div.). This principle was articulated in Williams v. Powell, [1894] W.N. 141, quoted in Grys v. Sewell and Jaffaray, [1972] 1 O.R. 733, at p.734 (Master) as follows:

a declaration by the Court was a judicial act, and ought not be made on admissions of the parties or on consent, but only if the Court was satisfied by evidence. His lordship had always so held, and intended so to hold until corrected.

In other words, the mere fact that the parties may have agreed to seek a court judgment containing certain terms does not require or empower the court to implement those terms, unless it is appropriate to do so.

[Emphasis added]

[39] In B2B Bank v. Batson, Stinson refused to grant the declaration because it was hypothetical. The defendant had not yet been assigned into bankruptcy and may not have ever entered bankruptcy. A similar result occurred in Royal Bank of Canada v. Elsioufi, 2016 ONSC 5257, where Dunphy J. adopted the reasoning of Stinson J.

[40] In Bank of Montreal v. Galang, 2020 ABQB 640, Master W.S. Schlosser spoke of the general inappropriateness of granting a declaratory judgment under BIA s. 178 based only on a paper record and deemed admissions. He wrote at para. 4:

4 Moreover, the declaration sought should not be made as a desk application after default: Johansen v Wallgren, 2019 ABQB 695, per Slawinsky J at para 30; citing Yehya v Thomas, 2019 ABCA 164, at para 13. It may not be appropriate on a paper record either: Kent v Watts, 2019 ABCA 326 at para 26, on deemed admissions without notice to the defendant or the trustee, L-Jalco Holdings Inc v Bell, 2017 ONSC 1035.

[41] That being said, here there was notice to the Defendant, who was served with both the statement of claim and the motion record for this hearing.

Problems with the Evidence in this Motion

[42] In refusing the declaration sought by BMO, I rely on two key problems with the form of the evidence presented in this motion: 1) the failure to prove the business records which BMO relies upon and 2) the best evidence rule. [1] The first is exclusionary while the second speaks to the weight of evidence proffered by BMO.

Failure to Properly Prove BMO’s Business Records

[43] Lacking direct evidence, BMO relies on the information contained in its proprietary software for the proof of the facts alleged, i.e. as to the representations made by the Defendant when he applied for credit. Those records are hearsay. Thus, without saying so, BMO seeks to admit those records into evidence under the business records exception to the hearsay rule.

[44] As this is a matter under the BIA, a federal statute, the Canada Evidence Act, R.S.C. 1985, c. C-5 (“CEA”) applies. The business records provision of the CEA is found at s. 30. It reads as follows:

30 (1) Where oral evidence in respect of a matter would be admissible in a legal proceeding, a record made in the usual and ordinary course of business that contains information in respect of that matter is admissible in evidence under this section in the legal proceeding on production of the record.

[45] Thus, the test for the admissibility of any BMO business record in this motion is proof that it was made in the usual and ordinary course of business. No such evidence is offered here.

[46] Section 30(2) of the CEA allows the court to draw an adverse inference from the absence of information regarding a matter or occurrence that could reasonably expected to be contained in the recording. It states:

(2) Where a record made in the usual and ordinary course of business does not contain information in respect of a matter the occurrence or existence of which might reasonably be expected to be recorded in that record, the court may on production of the record admit the record for the purpose of establishing that fact and may draw the inference that the matter did not occur or exist.

[47] That being said, as I pointed out in Harbouredge Commercial Finance Corp. v. Jet Express Transportation Group Ltd., 2020 ONSC 3794, the business records exception to the hearsay rule is not a backdoor route to hearsay or double hearsay recitations of conversations or correspondence offered for the truth of the facts alleged.

[48] As I wrote in Harbouredge, at para. 32:

32 This point was clearly made by Griffiths J., as he then was, in one of the earliest cases dealing with the business records provisions of the Ontario Evidence Act: Setak Computer Services Corporation Ltd. v. Burroughs Busters Machines Ltd. et al., 76 D.L.R. (3d) 641 (Ont. H.C.) ("Setak"). There, Griffiths J. wrote of the manner in which the Evidence Act expanded the common law requirements for the admission of business records, which required that the author of the records have personal observation or knowledge of the facts recorded. However, that expansion was not meant to open a floodgate of unreliable hearsay into evidence. Griffiths J. stated:

The Act was intended to make admissible records which, because they were made pursuant to a regular business duty, are presumed to be reliable. The mere fact that recording of a third party statement is routine imports no guarantee of the truth of the statement, and to construe s. 36 [now s. 35] as admitting hearsay evidence of any third party would make the section an almost limitless drag-net for the introduction of random testimony from volunteers outside of the business whose information would be quite beyond the reach of the usual test of accuracy.

[Emphasis added]

[49] Here Ms. Sauve failed to avert to the computer records to which she refers as being made in the usual and ordinary course of business. Instead, all that she says is that the information regarding the alleged representations made by the Defendant “was recorded by BMO in its proprietary software program [which BMO uses] to input, process, adjudicate, approve and monitor credit applications and credit facilities extended to its customers.”

[50] That absence is particularly apposite in this case as those records not only contain the hearsay evidence inputted by the unknown BMO employee who entered the data in BMO’s electronic records, but also the information allegedly provided by the Defendant. This is the very concern raised by Griffiths J. in Setak.

[51] In sum, BMO fails to prove the business records that it relies upon to prove the allegedly fraudulent representations of the Defendant.

Best Evidence Rule

[52] I may also consider whether the absence of any credit application form filled out by the Defendant or any other direct evidence allegedly produced by the Defendant to the unidentified bank employee violates the best evidence rule. That rule, which may generally be seen as one going to weight rather than admissibility, was summarized by Charron J.A. (as she then was) in R. v. Shayesteh, [1996] O.J. No. 3934, at para. 90 (Ont. C.A.), as follows:

When considering any proposed method of proof, the old principle known as the “best evidence rule”, in my view, can still provide a useful starting point. The rule may be used, not so much as a criterion for determining questions of admissibility and exclusion with respect to any item of evidence sought to be adduced, but as a general guide for choosing the appropriate method of proof. The parties (usually the Crown) should endeavour to put forth the best evidence “that the nature of the case will allow” (Halsbury, 17 Hals., 4th ed., pp. 8-9, para. 8) for consideration by the triers of fact. Such evidence can then be supplemented by secondary evidence to the extent that such secondary evidence remains relevant. What particular use will be made of the evidence during the course of the trial then becomes essentially a matter of discretion for the trial judge depending on the particular circumstances of any given case.

[53] The authors of Sopinka, Lederman & Bryant: The Law of Evidence in Canada, 6th Ed., state at ch. 18.03 that “…the rule continues to find application in the Canadian caselaw, in flexible form. In most cases the question is one of weight and not admissibility.” They add that:

Where the best evidence rule survives, it seems particularly suited to addressing the admissibility or weight of the contents of documents — hence, the alternate terminology of the “documentary originals rule”. For example, where there is a dispute as to the contents of correspondence, the terms of a contract, the authenticity of an affidavit, or the validity of a will, or there is an issue whether a document has been altered or changed, a strict application of the best evidence or documentary originals rule might be applied to exclude or otherwise minimize the weight to be placed on a copy of the document. It should be noted, however, that the rule does not apply to a party who tenders a document solely for the purpose of identifying it or proving its existence. Further, the test of necessity under the principled approach to hearsay should not be applied formalistically to mirror the best evidence rule.

[Citations excluded]

Application of Principles set out Above to this Case

[54] Here, the combination of deemed admission and the knowledge and information evidence of Ms. Sauve are insufficient to prove that elements of fraud that BMO relies upon.

[55] Recall that the four elements of civil fraud set out in Hryniak at para. 87 are: (1) a false representation by the defendant; (2) some level of knowledge of the falsehood of the representation on the part of the defendant (whether knowledge or recklessness); (3) the false representation caused the plaintiff to act; (4) the plaintiff's actions resulted in a loss.

False Representation

[56] Dealing with the allegedly false representations by the Defendants:

1. While BMO’s claims of fraud and fraudulent misrepresentation are broadly pleaded, the deemed admissions in themselves do not prove the fraudulent behaviour or intention claimed. The exact representations made by the Defendant to BMO are not proven with any degree of specificity.
2. There is no direct evidence of what was asked of or actually represented by the Defendant as to his current income. The computer records that BMO relies upon are not admissible as business records for the truth of the facts alleged by Ms. Sauve.
3. Further, in the absence of any actual evidence regarding any dealings between the Defendant and the unknown bank employee, the facts alleged may as easily speak to negligent rather than fraudulent misrepresentation, if a misrepresentation was made.
4. In addition, even if the BMO computer records are admissible, I must consider whether they are so ambiguous as to meet the high test of proving fraud. I must consider that question within the context of the best evidence rule and BMO’s failure to explain the absence of any direct evidence of the actual representations to BMO made by the Defendant. In other words, even if they were admissible, the BMO computer records in themselves are insufficient to prove the fraud alleged by BMO.

Knowledge of Falsity

[57] BMO must prove the defendant’s knowledge of the falsity of his alleged representations. But here there is no evidence of that knowledge. Ms. Sauve’s personal opinion is irrelevant in that regard. But it is the only evidence that BMO produces.

BMO’s Acts and Loss

[58] As to the third and fourth elements of the test articulated in Hryniak, they are covered by the deemed admissions.

Conclusion

[59] For the reasons set out above, I grant BMO judgment on the amounts claimed in paras. 1 and 2 of the statement of claim. I find that BMO has failed to prove the elements necessary to obtain the declaration it seeks. Accordingly, I dismiss that claim.

Costs

[60] Regarding costs, I note that BMO was only partially successful in this action and that some of the costs claimed were in the bankruptcy proceeding rather than this one. I fix costs of the action at $5,000, all inclusive.

Kurz J.

Date: June 15, 2023

[1] I add that the evidence may raise a third concern under the “electronic best evidence rule” but in light of my findings above and the fact that it was not raised in argument, I find that it was unnecessary to consider that potential issue.