Court File and Parties
COURT FILE NO.: CV-18-00000047-00SR DATE: 2024-05-29
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
HIS MAJESTY THE KING IN RIGHT OF CANADA AS REPRESENTED BY THE MINISTER OF NATIONAL REVENUE Plaintiff C. Barbato and H. Gastle, for the Plaintiff
- and -
THAMIR EL-MADHOUN also known as THAMIR FOUAD EL MADHOUN Defendant Unrepresented, for the Defendant
HEARD: April 16, 2024, by Attendance
REASONS FOR JUDGMENT
L. B. STEWART J.
Overview
[1] Motion for summary judgment arising from student loans.
Facts and Procedural History
[2] The plaintiff administers and has carriage of loans made pursuant to federal student loan legislation for loans made after August 1, 1995.
[3] Between August 24, 2000 and March 30, 2006, the defendant obtained two types of student loans: Direct Financed Canada Student Loans and Canada-Ontario Integrated Student Loans.
[4] The Canada Student loans were made as follows:
| Date | Amount |
|---|---|
| August 24, 2000 | 3,426 |
| May 8, 2001 | 2,679 |
| September 13, 2001 | 2,296 |
| November 30, 2001 | 179 |
| June 26, 2002 | 676 |
| September 10, 2002 | 8,477 |
| TOTAL | $17,733 CAD |
[5] The Canada-Ontario Integrated Student loans were made as follows:
| Date | Ontario Portion | Federal Portion |
|---|---|---|
| February 24, 2004 | 2,481 | 5,610 |
| May 6, 2004 | 5,394 | Nil |
| September 7, 2004 | 3,549 | 8,580 |
| January 4, 2005 | 8,087 | Nil |
| September 6, 2005 | 1,698 | 10,920 |
| January 6, 2006 | 8,412 | Nil |
| March 30, 2006 | 3,440 | Nil |
| Total | $33,061 CAD | $25,110 CAD [1] |
[6] The defendant signed student loan agreements, acknowledging the terms.
[7] Over the years, funds were received by the plaintiff that were applied to the outstanding principals.
[8] The loans also included interest provisions. At the outset, interest ran at prime plus 2.5%. However, at times, interest was not owed due to various federal initiatives. Further, federal legislation reduced the interest to prime. The pre-judgment interest due under the agreements is as follows:
| Time Period | Interest Rate |
|---|---|
| March 1, 2011 to October 31, 2019 | Prime plus 2.5% |
| November 1, 2019 to March 29, 2019 | Prime |
| March 30, 2019 to September 30, 2020 | No interest |
| October, 2020 to March 31, 2021 | Prime |
| April 1, 2021 to date of motion | No interest |
[9] The defendant entered into another consolidation agreement on June 8, 2009 (on which he made five payments) and another consolidation agreement on November 24, 2010. Because the defendant was granted another interest relief period, the loan payments became due on September 1, 2012.
[10] In January, 2013, these loans were referred for legal action. Starting in February, 2013, the plaintiff contacted the defendant multiple times to arrange for payments. In 2013, 2014 and 2020, some funds were recovered through income tax refund set off and applied to the loans.
[11] The plaintiff filed a statement of claim on February 2, 2018 and served it on February 15, 2018.
[12] The defendant, Mr. El Madhoun, did not respond to this motion, although properly served.
Law/Analysis
[13] Rule 20.04(2)(a) of the Rules of Civil Procedure provides that the court shall grant summary judgment if there is no genuine issue requiring a trial with respect to a claim or a defence.
[14] There will be no genuine issue requiring a trial when the court is able to reach a fair and just determination on the merits on a motion for summary judgment. This will occur when the process:
a. Allows the judge to make the necessary findings of fact; b. Allows the judge to apply the law to the facts; and c. Is a proportionate, more expeditious and less expensive means of achieving a just result [2].
[15] This is an appropriate case for summary judgment. I find that the moving party, the Minister of National Revenue, has shown that there is no genuine issue requiring a trial as it relates to the allegations between the parties. Specifically, I find that Mr. El Madhoun entered into student loan agreements with the plaintiff and has not honoured the terms of the agreements in that he has not repaid the loans or interest in full.
[16] I also find that this action was started within the applicable limitation period. Under the Canada Student Loans Act (s.19.1(3)) and the Canada Student Financial Assistance Act (s.16.1(3)), the limitation period recommences if the loan holder acknowledges the debt. In this case, the last acknowledgement of debt by the defendant was with his application for repayment assistance which was granted until February 29, 2012. The statement of claim was issued and served prior to the expiry of the six-year limitation period.
Damages
[17] The loans provided by the plaintiff to the defendant have been proven in the following amounts:
a. Direct Financed Canada Student Loan: $15,355.46; and b. Canada-Ontario Integrated Student Loan: $25,827.74.
[18] In addition, the plaintiff has also proven the following pre-judgment interest:
a. On the Canada Student Loan: $4,731.29 b. On the Canada-Ontario Integrated Student Loan: $11,819.40.
[19] The plaintiff seeks pre-judgment interest to the date of payment. The correct approach is to calculate prejudgment interest until the date of the judgment. As noted below, the court has given the defendant 30 days to pay the judgment, after which post-judgment interest will accrue.
[20] Finally, the plaintiff seeks double post judgment interest. The draft judgment provides for post judgment interest at the contractual variable rate of prime plus 2.5% and 7% interest on top of that. This results in interest on interest and is not correct or fair. The appropriate post judgment interest rate is 7% and will apply 30 days after the order is served.
Costs
[21] The plaintiff seeks substantial indemnity costs, submitting that every attempt was made to contact the defendant and negotiate repayment. However, the affidavit evidence before the court demonstrates only one attempt to contact the defendant between the service of the statement of claim in mid-February, 2018 and this motion for summary judgment [3].
[22] There is no basis to award substantial indemnity costs. Partial indemnity costs in the amount of $3000 are awarded to the plaintiff.
Draft Judgment
[23] The plaintiff may send me a draft judgment for signature through the Guelph court office.
Orders Made
[24] I therefore make the following orders:
a. Summary judgment is granted to the plaintiff b. The plaintiff shall have judgment for the following amounts: i. $15,355.46 for Canada Student Loan; ii. Pre-judgment interest on the Canada Student Loan in the amount of $4,731.29 to the date of this order; iii. $25,827.46 for Canada-Ontario Student Loan; iv. Pre-judgment interest on the Canada-Ontario Student Loan amount of $11,819.40 to the date of this order; v. Costs in the amount of $3,000; vi. Post judgment interest at the rate of 7% which starts to run 30 days following the date of the order. c. The plaintiff will serve this endorsement on the defendant. d. The plaintiff will serve the final judgment on the defendant.
L. B. STEWART J.
Released: May 29, 2024
Footnotes
[1] The plaintiff only seeks the federal portions of these loans on this motion.
[2] Hryniak v. Mauldin, 2014 SCC 7 at para 49.
[3] The law firm representing the plaintiff sent a demand letter on May 10, 2021.