BARRIE COURT FILE NO.: CV-17-906

DATE: 20230816

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

7084421 CANADA LTD.

Plaintiff

– and –

CORY SHANE SAVARY

Defendant

Mr. G. Anthony, Representative for the Plaintiff

Mr. J. Schmidt and Ms. S. Del Rizzo, Counsel for the Defendant

HEARD: August 4, 2023

REASONS FOR DECISION ON SUMMARY JUDGMENT

CASULLO, J.:

Overview

[1] 7084421 Canada Ltd. (“708”) seeks summary judgment for amounts owed by Cory Savary (“Mr. Savary”) in respect of Mr. Savary’s default on a mortgage provided by 708 (the “Mortgage”). The Mortgage was secured on four separate properties, including Mr. Savary’s principal residence in Kawartha Lakes (the “Property”).

[2] 708 also seeks, inter alia, an order for possession of the Property, and reinstatement of the writ of possession.

[3] For the reasons that follow, 708’s motion is dismissed.

Background

[4] In June of 2015, 708 prepared a mortgage commitment in Mr. Savary’s favour, and advanced funds under that loan (“Loan”) as construction financing for new homes being built by Mr. Savary. The Loan was registered as a blanket mortgage, in the amount of $570,000, against the Property, as well as three vacant lots in Peterborough.

[5] Mr. Savary prepared a draw schedule outlining when funds would be advanced. For each of the draws that Mr. Savary received, he allegedly signed acknowledgments. I employ the word “allegedly” because, while 708 submits Mr. Savary signed the acknowledgments, Mr. Savary denies doing so.

[6] On June 2, 2016, the Loan went into, and remains in, default.

[7] On June 14, 2017, 708 issued a statement of claim seeking $414,919.64 in damages.

[8] Mr. Savary served a statement of defence.

[9] On April 16, 2021, Justice McCarthy granted 708’s motion for summary judgment.

[10] On June 15, 2021, Justice de Sa set aside the summary judgment. His reasons indicated that the parties agreed that the only issue to be determined was the quantum owing under the Mortgage.

[11] On October 23, 2021 the Plaintiff served the Defendant with a Request to Admit (“RTA”).

[12] The Defendant did not reply to the RTA.

[13] On January 27, 2022, Justice Verner heard the Defendant’s undertakings motion, and adjourned the matter to an expedited hearing given the long delay in having the substantive issues determined. In light of this direction, it is unclear why it took 1.5 years for the motion to be heard.

Test for Summary Judgment

[14] Rule 20.01(1) of the Rules of Civil Procedure, RRO 1990, Reg. 194, provides that a defendant may move for summary judgment dismissing all or part of a plaintiff’s claim.

[15] Rule 20.04(2) mandates that a court shall grant summary judgment if satisfied that there is no genuine issue requiring trial.

[16] In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, the Supreme Court of Canada provides guidance with respect to summary judgment motions at para. 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.

The Court continued, at para. 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.

Why Summary Judgment is not Appropriate

What amount is owing to 708?

[17] On this motion 708 seeks summary judgment in the amount of $409,591.68. This represents the total amount Mr. Anthony says is owing, less the monies received for the sale of the vacant properties.

[18] Despite my asking a number of times exactly what amount Mr. Savary owed in principal, versus what he owed in interest (the principal being the amounts provided in each draw), Mr. Anthony said he could not provide that number. This was so because interest was added onto the amount borrowed, and carried forward to the next payment, given that Mr. Savary did not pay the interest owning at the same time he was provided funds. This answer did not make particular sense to the court.

[19] Mr. Savary provided bank statements for the draws he agrees he was provided by 708. These total $274,066.01. Pursuant to his lawyer’s rough calculations, between September 2015 and December 2019, 10% interest per year on $274,066.01 equals about $110,000, bringing the total Mr. Savary owes to 708 to $384,000. This is before Mr. Savary is credited for the vacant properties sold by 708.

[20] Mr. Savary submits that despite consistently asking Mr. Anthony to provide him with payout statements outlining what he owed 708, no payout statements were ever provided, bringing 708 afoul of its obligations pursuant to s. 22(3) of the Mortgages Act, R.S.O 1990, c. M. 40.[^1]

[21] As Justice de Sa held in 2021, the only issue to be determined is the quantum of what Mr. Savary owes to 708.

[22] However, this cannot be resolved on the motion record. I have considered using the enhanced fact-finding powers in Rule 20.04(2.1), but find I cannot evaluate the credibility of either party based on the written record alone. While I considered ordering oral evidence pursuant to r. 20.04(2.2), in my view a trial with cross-examination of witnesses will be necessary to determine credibility.

[23] On the record before me I am satisfied that the amount of money Mr. Savary owes 708 is a genuine issue requiring a trial. However, given the credibility issues, I am not prepared to order a trial of only that issue pursuant to r. 20.04(2.3).

Request to Admit

[24] As noted above, Mr. Savary did not reply to 708’s RTA.

[25] Once 20 days had passed following its service of the RTA, 708 grounded its summary judgment motion on the basis that Mr. Savary was deemed to have admitted the truth of the 133 facts and 17 documents, contained in the RTA.

[26] Counsel for Mr. Savary fairly conceded during submissions that no reply was made, despite confirming his office received the RTA. He submitted that this was through inadvertence, not design. Counsel then sought leave to set aside the admissions, submitting that it was clear, through material served by Mr. Savary subsequent to the RTA, that Mr. Savary was disputing the admissions, and 708 should not be taken by surprise by this.

[27] This is a significant ask on behalf of Mr. Savary. 708 had no notice Mr. Savary would be seeking such relief. Granting leave would alter the entire landscape of 708’s position at trial. Leave should be sought on a proper record, giving 708 an opportunity to formally reply to the motion. Clearly, this motion should be brought before the trial.

Costs

[28] Given the mixed result achieved by each party, there shall be no award of costs.

CASULLO J.

Released: August 16, 2023

[^1]: Section 22(3) provides that a mortgagor may require the mortgagee to furnish a statement in writing setting out the amount of the principal or interest, as well as the amount of any expenses incurred by the mortgagee. If the mortgagee fails to provide a statement, any rights that the mortgagee has to enforce the mortgage is suspended until the mortgagee has complied with s. 22.