Court File and Parties

COURT FILE NO.: CV-22-1422 DATE: 2023/10/20 SUPERIOR COURT OF JUSTICE-ONTARIO

RE: LEANNE BRISCOE a.k.a. PEGGY LEANNE BRISCOE, Plaintiff AND: 9327959 CANADA INC. and STEPHAN YAWORSKI a.k.a. STEPHAN ROY YAWORSKI a.k.a. STEPHAN ROY MICHAEL YAWORSKI, Defendants

BEFORE: Gibson J.

COUNSEL: Lea Nebel and Ines Ferreira, Counsel for the Plaintiff Michael Jaeger, Counsel for the Defendants

HEARD: July 5, 2023

Endorsement

Overview

[1] This is a motion for summary judgment brought by the Plaintiff, Leanne Briscoe (“Briscoe”) pursuant to Rules 20.01(1), 20.04(2)(a) and 76 of the Rules of Civil Procedure.

[2] Briscoe is a lawyer licensed to practice law in the Province of Ontario.

[3] The defendant, 9327959 Canada Inc. (“932”), is a corporation incorporated pursuant to the laws of Canada, with its registered office at 8 Talbot Street, Scotland, Ontario.

[4] 932 is the registered owner of the property municipally known as 1030 Dundas Street South, Cambridge, Ontario (the “Property”), which contains a single detached house. The Defendant, Stephan Yaworski a.k.a. Stephan Roy Yaworski a.k.a. Stephan Roy Michael Yaworski (“Yaworski”), is the sole officer and director of 932.

[5] On March 9, 2021, Briscoe loaned the Defendants the sum of $150,000.00 (the “Loan”) evidenced by a promissory note (“Promissory Note”) executed by the parties. The Loan was advanced for a renovation investment project at the Property.

[6] Pursuant to the terms of the Promissory Note, the Defendants jointly and severally agreed to repay the principal amount of the Loan to Briscoe upon the sale of the Property, plus interest equal to the greater of $45,000.00 or twenty percent (20%) of the net profits of sale of the Property. The Promissory Note further provided that if the Property was not sold by December 4, 2021, the Defendants would immediately repay Briscoe the principal amount of the Loan along with interest in the amount of $45,000.00.

[7] The Property was not sold by December 4, 2021, triggering immediate repayment of the Loan. Briscoe has demanded payment. The Defendants have not complied.

[8] The Defendants deny the applicability and enforceability of the Promissory Note and Joint Venture Agreement. It is the Defendants’ position that the Plaintiff knew or ought to have known that the due date with respect to the Promissory Note is subject to the rights of prior lenders, market conditions, and net profitability. This includes but is not limited to prevailing housing prices, which unfortunately have dropped, and increased costs of development of the project. The Defendants say that if the Property is sold now, and all encumbrancers have to be satisfied in priority, there will be a net loss.

[9] Further, the Defendants submit that the purported requirement to pay the Plaintiff if the Property is/was sold prior to December 4, 2021, is invalid and unenforceable as there was no consensus ad idem in regard to the deadline. The Defendants have plead the doctrine of rectification and the doctrine of frustration of contract, stating that market conditions in late 2021, and currently, render it impossible to sell the Property at a profit.

[10] The Plaintiff moves for summary judgment, saying that there are no genuine issues for trial and that it is appropriate to grant summary judgment in her favour.

[11] This matter falls within the scope of the Rule 76 Simplified Procedure. The Defendants submit that, although summary judgment is available in the context of actions brought under the Simplified Procedure, credibility is an issue here, and it would be preferable to have the matter dealt with by summary trial. They ask that the Plaintiff’s motion for summary judgment be dismissed.

Summary of Facts

[12] In January 2021, Yaworski contacted Briscoe to gauge her interest in providing a short-term loan for a renovation project Yaworski was undertaking at the Property. Yaworksi, who is a mortgage agent with Mortgage Alliance Company of Canada, had first contacted Briscoe about a year earlier, through a mutual contact, to see if she would be interested in property investment opportunities.

[13] On January 20, 2021, Yaworkski emailed Briscoe details about the Property. Yaworksi provided Briscoe with approved drawings for the work to be completed at the Property along with an opinion of value on completion, the project budget and a sample Joint Venture Agreement (“JVA”) for consideration.

[14] On February 8, 2021, Yaworski emailed Briscoe a further version of the JVA for consideration. On February 17, 2021, Yaworski sent an email to a lawyer named Dan Seeley-Baechler (“Seeley-Baechler”), introducing Briscoe and advising Briscoe that she needed to obtain independent legal advice for the proposed loan on the recommendation of Yaworski’s lawyer, Bruno Teixeira (“Teixeira”). Ultimately, Briscoe retained Seeley-Baechler to provide legal advice with respect to the potential loan.

[15] On February 18, 2021, Yaworski provided Seeley-Baechler with a copy of a draft JVA for his review. On March 2, 2021, Yaworski emailed Briscoe a draft promissory note for review. The next day, March 3, 2021, Seeley-Baechler emailed Yaworski on Briscoe’s behalf expressing concerns with the proposed JVA and proposed an alternative structure for the loan being “a modified promissory note” which would permit Briscoe to register a charge against title to the Property as security for the loan. Yaworski would also sign an irrevocable direction instructing Teixeira to repay the loan out of the net sale proceeds of the Property, in priority to all other claims, save for the existing first mortgage to Brightpath Capital Corporation, the second mortgage to Jodie McMaster, and the first JVA with Moliceiro Inc.

[16] On the same day, March 3, 2021, Yaworski agreed to proceed forward based on the terms proposed by Seeley-Baechler instead of the JVA. The terms of the Promissory Note were drafted by Yaworski subject to comments by Briscoe and her lawyer.

[17] On March 9, 2021, Briscoe advanced the Loan to the Defendants. The Loan was evidenced by the Promissory Note dated March 9, 2021, executed by Yaworski, on behalf of 932, and also in his personal capacity. Pursuant to the terms of the Promissory Note, 932 and Yaworski jointly and severally agreed to re-pay the Loan to Briscoe upon the sale of the Property, plus interest equal to the greater of $45,000.00 or twenty percent (20%) of the net profits of sale of the Property.

[18] The terms of the Promissory Note also provide that the Property was to be sold by December 4, 2021 and, in the event the Property was not sold by that date, Briscoe would be paid out, as per paragraph 2 of the Promissory Note:

In the event that the Property is not sold prior to December 4, 2021, the Payor shall immediately repay the Payee the principal amount of this Note along with interest in the amount of $45,000.00, with the Payee retaining the right to further payment of interest equal to 20% of the net profit on the sale of the Property if that sum exceeds $45,000.00.

[19] The Promissory Note also provides that:

The Payor further agrees to pay all costs of collection, including legal fees on a solicitor and client basis, in case any payment of the principal or interest thereon is not made at the maturity thereof or when otherwise due.

[20] Pursuant to the terms of the Promissory Note, the Defendants agreed that Briscoe could secure the Loan by registering a charge against title to the Property on the same terms and conditions contained in the Promissory Note. On November 15, 2021, Briscoe registered a charge against title to the Property.

[21] On November 25, 2021, Briscoe emailed Yaworski and asked for an update on the Property, as the Promissory Note was coming due on December 4, 2021. Yaworski texted Briscoe the same day indicating that “[A]s for dundas. Due to material and trade delays from covid the project will not be complete until approx. the middle of march”.

[22] On November 29, 2021, Briscoe emailed Yaworski with another reminder that the money owing from the Promissory Note was due December 4, 2021 and attached a copy of the Promissory Note. Briscoe reminded Yaworski that the agreement was explicit as to payment terms and that the Loan was due December 4, 2021, even if Yaworski had not sold the Property. Briscoe received no response from Yaworski.

[23] On December 9, 2021, Briscoe emailed Texeira and Yaworksi advising that she was formally requesting payment of the Loan pursuant to the Promissory Note since Yaworksi was not responding and/or ignoring requests for payment. On the same day, Texeira responded stating that “Mr. Yaworski has further advised that the properties located on Dundas Street […] will be listed for sale early Spring 2022.”

[24] On March 29, 2022, Briscoe followed up with Yaworski as the Property had not sold and to Briscoe’s knowledge, it had not been listed for sale. Yaworski continued to ignore Briscoe’s requests for information and repayment of the Loan. On April 10, 2022, Briscoe followed up with Teixeira regarding payment and Teixeira stated he would inquire with Yaworski as to the status of repaying the Loan.

[25] On April 28, 2022, Briscoe sent another email to Teixeira and Yaworski indicating that she had still not heard from Yaworski. On the same day, Yaworski responded to Briscoe stating that there were delays with the Property due to inspection issues with the City inspector. Still, Yaworski did not make any arrangements to repay the Loan.

[26] In November 2022, Briscoe retained litigation counsel, Lea Nebel at Blaney McMurtry LLP (“Nebel”), to assist with collection efforts. On November 21, 2022, Nebel sent a formal written demand letter to Yaworski and later sent a courtesy copy of the demand letter to lawyer Michael A. Jaeger (“Jaeger”) of Boddy Ryerson LLP who represents the Defendants.

[27] On December 9, 2022, Yaworski contacted Briscoe and left a voicemail message indicating that he had a proposal for her. Briscoe responded to Yaworski by text message stating “Please email me and copy my lawyer Lea Nebel.” Yaworski replied requesting an off the record conversation stating that he had a proposal but would not provide it in writing. Briscoe advised Yaworski that she would not discuss any repayment proposal without obtaining it in writing and Yaworski never responded.

[28] On December 13, 2022, Briscoe commenced this action against the Defendants. On January 27, 2023, the Defendants delivered their Statement of Defence alleging, among other things, that the requirement to pay Briscoe if the Property was not sold prior to December 4, 2021, as stated in the Promissory Note, is invalid and unenforceable.

[29] The Defendants allege at paragraph 9 of their Statement of Defence, that “The parties understood and agreed at all material times that any payment, together with interest (if applicable), would be due only upon sale of the premises”.

[30] This position is inconsistent with the Promissory Note executed by the parties. On March 2, 2021, when Yaworski emailed Briscoe the first draft of the promissory note it stated that the Borrowers were to repay the $150,000, without interest, payable beginning on December 4, 2021 or upon the sale of the Property, whichever comes earlier. In the Terms of Repayment, the draft promissory note provides, at section 10, that the “[t]otal payment is due on December 4, 2021 or on sale of “Security” whichever comes first”.

Issues

[31] The issues before me in this matter are:

1. Is this Rule 76 matter appropriate for a summary judgment motion? and,
2. Is there a genuine issue for trial?

Law and Analysis

Issue no. 1: Is this an appropriate case for summary judgment?

[32] Rule 20.04(2)(a) of the Rules of Civil Procedure provides that a Court shall grant summary judgment if the Court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.

[33] Rule 20.04(2.1) of the Rules of Civil Procedure goes on to state as follows:

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 interests of justice for such powers to be exercised only at trial:

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

[34] In Hryniak v. Mauldin, 2014 SCC 7, at paragraph 66, the Supreme Court of Canada held that on a motion for summary judgment, a Court should first determine if there is a genuine issue requiring a trial based only on the evidence in the motion record, without using the fact-finding powers as outlined in Rule 20. The analysis of whether there is a genuine issue requiring a trial should be done by reviewing the factual record and granting a summary judgment if there is sufficient evidence to fairly and justly adjudicate the dispute and a summary judgment would be a timely, affordable and proportionate procedure.

[35] Then, if there appears to be a genuine issue requiring a trial, a Court should determine if the need for a trial can be avoided by using the powers under Rule 20.04(2.1) and (2.2). A Court may, at its 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.

[36] The Supreme Court of Canada encouraged the use of summary judgment motions to resolve cases in an expeditious manner where the motion can achieve a fair and just adjudication.

[37] In Fernandes v. Araujo, 2014 ONSC 6432, at paragraph 46, the Court summarized the Hryniak v. Mauldin approach as follows:

The Court on a motion for summary judgment should undertake the following analysis:

1. The court will assume that the parties have placed before it, in some form, all of the evidence that will be available for trial;
2. On the basis of this record, the court decides whether it can make the necessary findings of fact, apply the law to the facts, and thereby achieve a fair and just adjudication of the case on the merits;
3. If the court cannot grant judgment on the motion, the court should: a. Decide those issues that can be decided in accordance with the principles described in 2), above; b. Identify the additional steps that will be required to complete the record to enable the court to decide any remaining issues; c. In the absence of compelling reasons to the contrary, the court should seize itself of the further steps required to bring the matter to a conclusion.

...[T]he test is now whether the court's appreciation of the case is sufficient to rule on the merits fairly and justly without a trial, rather than the formal trial being the yardstick by which the requirements of fairness and justice are measured.

[38] The onus is on the moving party to show that there is no genuine issue requiring a trial. However, the responding party must “lead trump or risk losing”. The responding party may not rest on the allegations or denials in the pleadings, but must present by way of affidavit or other evidence, specific facts and coherent organized evidence demonstrating a genuine issue. The motion judge is entitled to assume that the record contains all evidence that the parties will present if there is a trial: Paradise Homes North West Inc. v. Sidhu, 2019 ONSC 1600, at paragraph 16.

[39] Further guidance on the application of these principles has recently been given by Brown J.A. for the Court in Moffitt v. TD Canada Trust, 2023 ONCA 349.

[40] Rule 20.04(2) provides that the Court shall grant summary judgment if it is “satisfied that there is no genuine issue requiring a trial with respect to a claim or defence”. The issue to be determined under this Rule is not whether a trial is possible, but whether a trial is necessary. To facilitate the determination of that question, the Court is empowered by Rule 20.04(2.1) to weigh evidence, evaluate credibility and draw any reasonable inference from the evidence, save only if it is “in the interest of justice for such power to be exercised only at trial”.

[41] The Court of Appeal made it clear in Combined Air Mechanical Services Inc v. Flesch, 2011 ONCA 764, at paragraphs 253-254, that the test for summary judgment in simplified procedure actions is governed by Rule 20. A motion for summary judgment in Rule 76 proceedings is appropriate where the case is document-driven or where any contested evidence is limited in nature.

[42] I consider that this is an appropriate case for summary judgment.

[43] I consider that, on the basis of this record, I can make the necessary findings of fact, apply the law to the facts, and thereby achieve a fair and just adjudication of the case on the merits.

[44] Rule 76 is designed to get parties to an adjudication with minimum procedure and expense. In appropriate cases, summary judgment can be a useful and appropriate tool to promote efficient disposition of cases. I consider that it is appropriate in the present case. This is a document-driven case, dealing with a contractual agreement between the parties.

Issue # 2: Is there a genuine issue for trial?

[45] There is sufficient evidence on the record before the Court to allow me to make the necessary findings of fact. The Promissory Note is clear and unambiguous and the terms were agreed to by the parties with the benefit of counsel as supported by the record. The interpretation of the Promissory Note can readily be resolved by the Court on this motion based on a plain reading of the Promissory Note. The Defendants admit the following facts: (a) Briscoe made the Loan; (b) the Loan is evidenced by a Promissory Note executed by the Defendants; and (c) the Defendants have not repaid the Loan or any interest to Briscoe.

[46] The Defendants challenge the interpretation of the Promissory Note by stating that: (a) payment to Briscoe is conditional on payment of the first and second mortgage; (b) payment to Briscoe is premised on the housing prices and a net loss on the sale of the Property would mean Briscoe would not be repaid; and (c) the requirement to pay Briscoe if the Property was not sold by December 4, 2021 is invalid and unenforceable because the Defendants allege that there was no consensus ad idem with respect to such deadline.

[47] The Plaintiff submits, and I agree, that the Defendants’ interpretation of the Promissory Note is untenable for the following reasons: (a) The terms of the Promissory Note are clear and unambiguous and state that the funds are “payable beginning on December 4, 2021 or upon the sale of the Property, whichever comes earlier”; (b) There is no term in the Promissory Note that payment is premised on the housing market as this would clearly defeat the purpose of an assurance or repayment; and (c) The deadline for repayment is not only clear but explicit as to the date of repayment of the Loan.

[48] The Defendants submit that this case requires credibility assessment in terms of the purported verbal discussions between the parties that supplemented the written agreement.

[49] This is an appropriate case for the Court to use its enhanced fact-finding powers. Rule 20.04 (2.1) provides that where 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: (i) weighing the evidence; (ii) evaluating the credibility of any deponents on affidavit evidence; and (iii) drawing any reasonable inferences from the evidence from the evidence.

[50] Summary judgment rules must be interpreted broadly. A motion judge may exercise these powers if it 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.

[51] I consider that the interests of justice will be served by the exercise of my discretionary powers in this case because the material facts and evidence necessary to make a determination are before the Court. I am not persuaded that there are issues of credibility that would require live evidence. The issues in dispute concern the terms of the Promissory Note signed by the parties and are amply part of the record and thus, the Court may draw reasonable inferences from the evidence before it without requiring a trial.

[52] The Defendants negotiated the terms of the Loan including the default provision that the Loan would be due in full plus $45,000.00 in the event the Property was not sold by December 4, 2021. The Promissory Note is clear and unambiguous. Yaworski guaranteed repayment of the Loan by signing the Promissory Note on behalf of 932 and in his personal capacity. Yaworski had access to legal advice from Teixeira before signing the Promissory Note. Yaworski knew or ought to have known that if the Property did not sell by December 4, 2021, he would be personally liable for repayment of the Loan along with 932.

[53] The Court is entitled to assume that the evidence contained in the parties’ motion material is all the evidence the parties would rely upon if the matter proceeded to trial: Starcall Wireless Communications Inc. v. Bell Mobility, 2017 ONSC 2813, at paras 29-30.

[54] I consider that there is no genuine issue for trial in this case for the following reasons. The Defendants do not dispute that the loan was made. It is not disputed that the loan has not been repaid. They say that the contract between the parties had a verbal element and was more than was in the written agreement.

[55] The Defendants’ position that the repayment was subject to the rights of prior lenders and market conditions, and that there was no consensus ad idem, is untenable. The terms of the written agreement were clear and unambiguous. The Defendants had access to legal advice. Yaworksi signed the Promissory Note as written. If the Defendants had wanted other conditions, they could have negotiated that these be put in the written agreement, but they did not. It is very clear on the face of the Promissory Note when the loan was due. It was not stated to be contingent on the sale of the Property.

[56] The parties on the motion are expected to put their best foot forward when presenting their evidence. The court is entitled to presume all evidence that would be available at trial is in front of the court on the motion so that it is assured of a sufficient evidentiary record on which to make necessary findings of fact, and to apply the law.

[57] Defendants, as responding parties on a motion for summary judgment, may not rest solely on the allegations or denials in their Statement of Defence. Rule 20.02 requires responding parties to set out, in affidavit material or other evidence, specific facts showing that there is a genuine issue requiring a trial.

[58] Yaworski had the ability in his affidavit evidence to provide details of alleged supplementary verbal agreements, specifically when these were made, and what was actually said. He did not do so. Parties on a summary judgment motion have an obligation to put their best foot forward. Yaworski has not done so, but rather relies on bald allegations, and requests that a trial should be held on this basis. This is an insufficient response.

[59] The Plaintiff submits, and I agree, that a trial would unfairly require Briscoe to incur further legal costs to enforce her rights of an otherwise straightforward matter dealing with a payment default. It would also permit the Defendants to further delay repayment without any juristic reason for doing so and without any benefit to Briscoe. The amount of the Loan and the terms of the Promissory Note do not warrant a trial of the issues, which are straightforward.

[60] The Defendants also submit that the action is a nullity because Briscoe delivered a Notice of Intention to Enforce Security pursuant to the Bankruptcy and Insolvency Act (the “BIA Notice”) addressed to the corporate Defendant and did not send a separate notice addressed to the personal Defendant, Yaworski.

[61] I do not agree. Since the Loan is secured by a mortgage against the Property, the BIA Notice was issued to 932 as the registered owner of the Property and mortgagor. A separate BIA notice addressed to Yaworski was not required in respect of the mortgage security granted by 932. In any event, Yaworksi received a copy of the BIA Notice and knew of Briscoe’s intention to enforce the mortgage security if required to obtain repayment of the Loan.

Conclusion

[62] Applying the requisite principles, I find that there is no genuine issue for trial in this case. Briscoe is entitled to summary judgment.

[63] The Plaintiff’s motion for summary judgment will be granted.

Order

[64] The Court Orders that:

1. Judgment is granted in favour of the Plaintiff in the amount of $195,000, plus pre-judgment interest.

Costs

[65] The parties are encouraged to agree upon appropriate costs. If the parties are not able to agree on costs, they may make brief written submissions to me (maximum three pages double-spaced, plus a bill of costs) by email to my judicial assistant at mona.goodwin@ontario.ca and to Kitchener.SCJJA@ontario.ca. The Plaintiff may have 14 days from the release of this decision to provide her submissions, with a copy to the Defendants; the Defendants a further 14 days to respond; and the Plaintiff a further 7 days for a reply, if any. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs as between themselves. If I have not received any response or reply submissions within the specified timeframes after the Plaintiff’s initial submissions, I will consider that the parties do not wish to make any further submissions, and will decide on the basis of the material that I have received.

M. Gibson, J. Date: October 20, 2023