COURT FILE NO.: CV-17-57487
DATE: 2023-12-15
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Mohammad Ali Rabbani
Plaintiff
– and –
Alex Aidan Fitzgerald Furney aka Alex Furney and Maryam Furney and Hassan Hashemi
Defendants
L. Vittas, for the Plaintiff
D. LaFramboise, for the Defendants, A. Furney and M. Furney
H. Hashemi, Self-represented Defendant
HEARD: December 12, 2023
the honourable justice m. j. donohue
REASONS FOR JUDGMENT
Procedural Overview
[1] The plaintiff brought this summary judgment motion in early 2020. There have been multiple adjournments. The action was at least twice on the trial list, but the defendant Furneys requested adjournments. The matter is currently on the April 15, 2024 trial list.
[2] The summary judgment motion was last before the court on December 13, 2022 but did not proceed as the defendant Furneys did not file a factum.
[3] The motion for today’s date, December 11, 2023, was set by me on October 12, 2023.
[4] New counsel appeared today for the Furneys, having been retained four days prior.
[5] Counsel requested an adjournment to permit cross-examinations. This was denied in light of the motion being in abeyance for over three years. As well, the Furneys were advised by Justice MacNeil on July 26, 2023 to serve notices of examination but did not take any action.
[6] Mr. Furney attended the hearing and sat at counsel table with his counsel. Ms. Furney did not appear.
The Claim
[7] The plaintiff seeks judgment to collect funds advanced to the defendant Furneys pursuant to three promissory notes and a mortgage made with the defendant Hashemi, and subsequently assigned to the plaintiff.
[8] The plaintiff’s motions are pursuant to rule 20. The law on rule 20 motions was succinctly stated by Henderson J. in Frame v. Watt, 2016 ONSC 718, at paras. 25-30:
[25] Rule 20.04(2)(a) provides that the 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.
[26] Rule 20.04(2.1) and (2.2) provide the motions judge with additional powers that may be used to determine whether there is a genuine issue that requires a trial.
[27] It is trite law that on a Rule 20 motion a judge must take a hard look at the evidence to determine whether or not there is a genuine issue for trial. Further, the onus of establishing that there is no genuine issue for trial is on the moving party. See the case of 1061590 Ontario Limited v. Ontario Jockey Club, 1995 ONCA 1686, 21 O.R. (3d) 547 at para. 35. [emphasis added.]
[28] In the case of Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, the Supreme Court of Canada established a two-step approach to Rule 20 motions. In the first step, the motions judge is to take a hard look at the evidence to determine whether there is a genuine issue requiring a trial. If there is no genuine issue for trial, summary judgment will be granted.
[29] In the second step of the process, a motions judge shall consider the evidence submitted by the parties, and may exercise the additional powers of weighing the evidence, evaluating credibility, and drawing reasonable inferences as set out in Rule 20.04(2.1) to determine whether there is a genuine issue, unless it is in the interest of justice for such powers to be exercised only at a trial. See Hryniak at paras. 49-52.
[30] The use of the additional powers available on a motion for summary judgment 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. See Hryniak at para. 66.
[9] Further, I note that, pursuant to rule 20.02(2), a responding party may not rest on the mere allegations or denials of the party’s pleadings, but must set out, in affidavit material or other evidence, specific facts showing that there is a genuine issue requiring a trial.
The Interest Rate
[10] As set out in the plaintiff’s factum of March 18, 2021, they sought judgment of the following:
Promissory note #1
Principal amount $29,282 @ 10% interest rate (per annum)
From March 31, 2017
Promissory note #2
Principal amount $17,572 @ 16% interest rate (per annum)
From March 31, 2017
Promissory note #3
Principal amount $30,000 @ 15% interest rate (per annum)
From March 1, 2017
Mortgage
Principal amount $55,000 @ 15%
From October 23, 2016
[11] It was submitted that the plaintiff was pursuing the Furneys for interest amounts that offended the Criminal Code and the Interest Act.
[12] The criminal rate under s. 347(2) is an effective annual rate of interest that exceeds 60% on the credit advanced under an agreement.
Promissory Note #1
[13] This note for $20,000 on November 1, 2016 was to be paid by December 1, 2016 (one month). It claims interest of 10% interest per month. It also claims interest of 10% per annum.
[14] The Furneys in submissions stated that 10% per month would be 120% per annum which offends the Criminal Code provision.
[15] Ms. Furney deposed that she worked in the financial industry over 30 years and was a highly trained employee of top “banks, trust companies and major companies.” She stated that it was “understood” that the high interest rates were only for the initial short-term period stated and would not apply to the longer term.
[16] Mr. Furney deposed that at no time did they “agree to pay interest at the excessive rate of 10% per month past the first month.”
[17] Mr. Hashemi testified under cross-examination that this was his understanding of the agreement as well. His evidence was that it was a short-term loan for one month with 10% interest on that month but thereafter it was 10% per year.
[18] There is accordingly no disagreement as to what interest was agreed to or that is being claimed on promissory note #1 being 10% per annum. This does not offend the Criminal Code provisions.
Promissory Note #2
[19] No submission was made as to any lack of clarity of this promissory note that 16% was the interest rate. The document signed by the parties states it clearly.
Promissory Note #3
[20] No submission was made as to any lack of clarity on this promissory note as the document clearly states 15% per annum.
Mortgage
[21] The mortgage document consolidated some loans advanced to a total of $49,000 ($25,000 and $24,000). There was an additional $6,000 interest for one month for short-term lending. This is a 12% interest claim for that month. The total registered as a charge was $55,000 with an annual interest rate of 15%. These combined rates of one month interest of $6,000 and 11 months of 15% are still less than the criminal rates.
[22] The mortgage loan was signed September 23, 2016 by Mr. Hashemi and Mr. Furney with the same solicitor acting for both parties and the parties waived any conflict.
[23] In May 2017, the solicitor acted to transfer the $55,000 charge to the plaintiff Mr. Rabbani. When the solicitor registered the charge, he put the amount of the mortgage as $122,000.
[24] It was submitted by the Furneys that this additional $67,000 was an interest claim that was more than 60% of the principal owed and so it was fraudulent and not payable.
[25] The evidence by Mr. Hashemi was that he noted this error, contacted the solicitor, and had it rectified.
[26] There is no evidence before this court that the plaintiff nor Mr. Hashemi were claiming 10% per month or 15% per month on this debt. The charge on the property is based on the source document which was the mortgage which claimed 15% per annum.
[27] There is no genuine issue for trial on what the parties agreed to as the interest rates on these funds nor do they offend the criminal rate.
No Consent to Assignment
[28] The defendant Furneys submitted that they did not “consent” to the debts to be assigned or transferred by Mr. Hashemi to the plaintiff.
[29] Their position was that the assignment was contrary to the Conveyancing and Law of Property Act, R.S.O. 1990, c. C.34, section 53 as they were not given notice.
[30] Mr. Hashemi was properly added pursuant to rule 50.03(3) of the Rules of Civil Procedure, R.R.O. 1990, Reg 194, as a defendant in the action. His evidence supports all the claims made by the plaintiff and the assignment was absolute. There is no prejudice to the defendant Furneys: see Nadeau v. Caparelli, 2016 ONCA 730, 132 O.R. (3d) 721.
[31] The evidence is that although the promissory notes, mortgage, and consents to judgment were made with Mr. Hashemi that it was actually the plaintiff who advanced the funds.
[32] The Furneys deposed that they had no dealings with the plaintiff, however, the evidence shows that on April 11, 2017 they were seeking to borrow further funds from Mr. Hashemi and they acknowledged that the plaintiff had “taken over” the loans and mortgage.
[33] There is no need for the trial on this issue of the assignments and transfers of the debts.
Payments Made on Claims Owing
[34] Mr. Furney deposed that they had paid approximately $80,000 to Mr. Hashemi towards the promissory notes. He has provided no other particulars of dates or amounts of such payments. He has not provided any documentary proof of such payments such as bank statements or cheques.
[35] Ms. Furney provided evidence of two payments to Mr. Hashemi in 2016 totalling $9,500, however, these pre-date the promissory loans. In her affidavit she deposed that her husband had had ongoing business and financial activities over several years and that they had paid Mr. Hashemi approximately $80,000 “as a result of various financial dealings.”
[36] This does not support that payments were made on the loans in issue.
[37] There is evidence before the court that as of February 3, 2017 the Furneys were acknowledging the full amount of the three promissory notes that were owing. These documents were denied at this hearing by the Furneys but a subsequent document prepared and signed by them on April 11, 2017 acknowledges the full amount owing on all three notes and the mortgage owing. In that letter, they request a further loan from the plaintiff and suggest a consolidated consent to judgment. This action was commenced shortly thereafter.
[38] The evidence of Mr. Hashemi and the plaintiff is that no payments have been made on these debts.
[39] The documents make it clear that the Furneys acknowledged the full amount owing. There is no need for a trial on this issue.
Extinguished Debt
[40] The mortgage debt was registered on title to the property at 1384 York Road, Niagara-on-the-Lake.
[41] The property was sold under power of sale proceedings and no funds were paid on this charge. This is not disputed.
[42] The defendant Furneys submitted that the sale of this security “extinguished” the debt. They provided no authority or support for this submission.
[43] The acknowledged debt however remains despite the security being extinguished and there is no need for a trial on this issue.
Agreement Not to Enforce
[44] The position of the defendant Furneys was that they had an agreement with Mr. Hashemi that he would not take any enforcement action against them on these debts.
[45] In her affidavit, Ms. Furney deposed that “it was understood that the due dates of the promissory notes and mortgage were not firm dates but that as long as we kept up the payments that we agreed to with Hashemi from time to time, they would not be called or enforced.”
[46] The evidence is overwhelming that no payments were made however such that the Furneys breached that agreement. Mr. Hashemi was accordingly entitled to pursue enforcement.
[47] Their signatures on consents to judgment and their proposal of a consolidated consent to judgment of $175,000 speaks rather to the Furneys expectation of enforcement proceedings.
[48] I find there is no need for a trial on this issue.
Other Issues Raised
[49] It was submitted that not all the funds were actually received; that the original notes and consents to judgment had not been provided in this litigation; and that funds were not paid in cash as deposed by the plaintiff and by Mr. Hashemi.
[50] The Furneys in their pleadings however admit the debts. Ms. Furney in her affidavit confirmed that “Alex and I did sign consents to judgments in favour of Hashemi in 2017 [to] provide Hashemi with comfort and security in the event of an unforeseen change of circumstance (such as disability or death of Alex or myself)….”
[51] At the hearing, the original documents were provide to the Furneys’ counsel for review.
[52] Whether funds were paid in cash as stated by the plaintiff and Mr. Hashemi or some other method it is acknowledged repeatedly that the Furneys received the funds.
Order
[53] I find that this is simply a collection matter which has been delayed for an inordinate amount of time with no genuine issue for trial. On this liquidated claim, I find the defences raised cannot survive “the good hard look”.
[54] Accordingly, I grant summary judgment relief as sought by the plaintiff:
a) $29,282 plus 10% per annum interest rate from March 31, 2017;
b) $17,572 plus 16% per annum interest rate from March 31, 2017;
c) $30,000 plus 15% per annum interest rate from March 1, 2017;
d) $55,000 plus 15% interest rate from October 23, 2016.
[55] I invite submissions on costs, and once determined by me the draft order is to be prepared by the plaintiff, served, and provided to the court.
[56] The parties are to return before me in a virtual appearance at 9:30 a.m. to finalize the order. Such date is to be arranged through the trial coordinator.
Counterclaim and Set-off
[57] The defendant Furneys counterclaim against the plaintiff for fraudulently registering the charge on title for $122,500 rather than $49,000. The defendant Furneys claim damages suffered as they allege their proposed lender to put their mortgages in good standing withdrew on discovering the higher charge.
[58] Both the plaintiff and the defendant Hashemi deposed that they attended at the solicitor’s office to transfer the charge. Mr. Hashemi testified that on discovering the error in the amount he had the solicitor correct it.
[59] Although this action and counterclaim have been on at least two trial sittings and is scheduled for trial on April 15, 2024, in all the filings and evidence the Furneys have not provided any evidence of the proposed lender’s denial of funding nor evidence of the solicitor to support their counterclaim. They have rested on bald allegations.
[60] The defendants claim these damages as set-off. They have the obligation of proving the legal and factual basis for the claim. To date, they have simply made allegations that the plaintiff directed this increased charge to be registered. This is insufficient. The Furneys have not put their “best foot forward”.
[61] Accordingly, I see no basis to deny the plaintiff his full claim and no basis to stay his judgment because of the allegations of set-off in this case.
[62] The plaintiff sought a dismissal of the counterclaim at the hearing. The notice of motion of January 30, 2020 did not seek this specific relief. Accordingly, I will allow this issue to proceed to trial. On the return of the matter before me, a timetable may be established for the Furneys to serve their trial record.
Crossclaim and Counterclaim of Mr. Hashemi
[63] Mr. Hashemi claimed a crossclaim as against the Furneys. On the return of the matter before me, he may advise whether he wishes to have a dismissal of his counterclaim and crossclaim.
Costs
[64] The plaintiff is to file written submissions on costs by Monday, December 18, 2023. Such submissions are not to exceed one page but may attach a bill of costs and any applicable offers.
[65] The defendant Furneys are to serve and file written submissions on costs by Thursday, December 21, 2023, also not to exceed one page plus attached bills of costs and offers.
[66] The plaintiff may serve and file reply submissions if needed by Thursday, December 28, 2023.
[67] Costs submissions are to be submitted to St.Catharines.SCJJA@ontario.ca. to my attention.
M. J. Donohue J.
Released: December 15, 2023
COURT FILE NO.: CV-17-57487
DATE: 2023-12-15
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Mohammad Ali Rabbani
Plaintiff
– and –
Alex Aidan Fitzgerald Furney aka Alex Furney and Maryam Furney and Hassan Hashemi
Defendants
REASONS FOR JUdgment
M. J. Donohue J.
Released: December 15, 2023