Court File and Parties

Court File No.: CV-24-00721836-0000
Date: 2025-04-25
Court: Superior Court of Justice - Ontario

Plaintiffs/Defendants by Counterclaim (Responding Parties):
Tandem 2021 Inc., Gyunel Mamedova, and Kamilla Yusuphanova

Defendants/Plaintiffs by Counterclaim (Moving Parties):
Salesgrowth Development Inc., Elizabeth Gartey, and Dimitry Obouhov

Before: Lorne Brownstone

Counsel:

• Plaintiffs/defendants by counterclaim/responding parties appearing in person
• Teresa Cheung, for the defendants/plaintiffs by counterclaim/moving parties

Heard: 2025-04-17

Endorsement

Background

[1] The defendants/plaintiffs by counterclaim (referred to collectively as Salesgrowth) move to enforce minutes of settlement entered into in October 2024. The minutes were signed in the face of a proceeding seeking interim relief. They called for payment to be made by the plaintiffs/defendants by counterclaim on March 8, 2025. Payment has not been made.

[2] The personal responding parties sought to appear on behalf of the corporate responding party. The moving party did not object and I heard from the personal responding parties on behalf of all three responding parties, referred to collectively as Tandem. They requested an adjournment of today’s date.

[3] Tandem’s underlying claim sought, among other things, a declaration that the personal guarantees they provided are void and unenforceable and sought “[a] determination of the true amount due and owing by the Plaintiffs to the Defendants, if any.” The claim alleged collusion on the part of the defendants to “ensure the plaintiffs ultimately accepted [their] predatory loan.” The defendants/plaintiffs by counterclaim (moving parties on this motion) sought repayment of the outstanding principal on the loan they had advanced to the corporate plaintiffs, and which the personal plaintiffs had guaranteed, which had matured in June 2024.

[4] A motion for interlocutory relief was scheduled for October 2024. The parties entered into minutes of settlement settling the entire matter, and Leiper J. signed the consent order requested.

Terms of Settlement

[5] The Minutes of Settlement required that Tandem make a lump sum payment of $180,000 to the defendants’ counsel in trust by March 8, 2025. The parties through their counsel consented to judgment for that amount in the event the payment was not made. The minutes of settlement state in part as follows:

In the event of the Plaintiffs default of the payment of the settlement funds in paragraph 1, the Defendants shall bring a motion on consent for the judgment of the Defendants' counterclaim against the Plaintiffs in the action. Provided the Plaintiffs pay the settlement funds outlined in paragraph 1 by March 8, 2025, this consent to judgment shall be null and void and not filed.

Motion to Enforce Settlement

[6] The motion to enforce the settlement was brought as an urgent motion, scheduled after a case conference before Dow J. on April 1, 2025. Default on payment under the settlement occurred on March 8, 2025. Counsel for Tandem appeared at the case conference before Dow J. and advised that his retainer had been terminated, though no formal steps have been taken to remove him as solicitor of record.

[7] The court granted the April 17, 2025 hearing date on Friday, April 11, 2025, and Salesgrowth served their motion record on Monday, April 14, 2025. Tandem did not respond, but appeared on April 17 seeking an adjournment. Salesgrowth states the matter is urgent because there have been several events of default, and the longer the default exists, the more jeopardy there is to their ability to collect on the debt agreed to be paid in minutes of settlement.

[8] Tandem indicates they wish to obtain information from CIBC indicating that one of the moving parties behaved improperly in securing the loan that was the subject of the initial litigation. The alleged actions of which Tandem complains occurred long before any settlement agreement was entered into. Tandem reiterates and seeks to re-open complaints made in the underlying statement of claim, which obviously predates the settlement agreement.

Adjournment Request

[9] In considering the adjournment request, I must balance the interests of the parties as well as the interests of the administration of justice in the orderly processing of civil trials on their merits: Khimji v. Dhanani. I must consider the factors set out in Khimji and Ariston Realty Corp. v. Elcarim Inc..

[10] In doing so, I find that the prejudice to Salesgrowth in further delaying their motion outweighs the prejudice to Tandem, whose evidence sought to be adduced does not relate to the minutes of settlement but to prior complaints against one of the moving parties which were the subject of the now-settled litigation. In my view, adjourning to permit these documents to be obtained does not advance the administration of justice. The documents sought will be of limited (if any) assistance to Tandem. They will have no, or minimal, impact on the motion to enforce the settlement, which was entered into when all parties were represented by counsel. There is no suggestion that the documents could not have been obtained earlier in the litigation, before the settlement was entered into. Even if the documents may have affected the underlying claim, that claim was settled in October 2024, in the face of a court hearing and when all parties were represented by counsel.

[11] I find that the interests of justice, the need for the administration of justice to process proceedings in an orderly way, and the overall objective of the determination of the matter on its substantive merits weigh definitively in favour of denying the adjournment request. The adjournment would lead to the filing of evidence not about the settlement, but about the underlying claim. It would therefore be of almost no assistance to a determination of whether the settlement should be enforced.

[12] I denied the adjournment request and heard the motion on its merits.

Analysis and Decision

[13] The background to the settlement is set out briefly above. All parties were represented by counsel when the settlement was agreed to. The parties consented to judgment to be relied upon by Salesgrowth if Tandem did not make payment as required on March 8, 2025. Payment was not made on March 8, 2025, or at any time thereafter.

[14] Tandem provided the court with an email that they sent to Salesgrowth’s counsel on March 10, 2025. That email is titled “Request for Loan Repayment Extension.” It states: “We hope this email finds you well. We would like to formally request an extension for the loan repayment until April 8, 2025. We look forward to your response.” Salesgrowth’s counsel responded that it would consider an extension if Tandem provided proof of insurance, and asked what interim payment Tandem could make immediately. No further correspondence was provided. No extension was agreed to.

[15] Although Tandem is of the view that this email supports its position, I find the opposite. In the email, Tandem clearly acknowledges its debt. It seeks an extension. No agreement on an extension was reached. Tandem did not raise the allegations it now seeks to raise regarding the underlying claim. Tandem therefore remains in default of the existing minutes of settlement and there is no reason for the court not to act on the consent order.

Interest Rate and Legislative Changes

[16] The judgment consented to was for the payment of $180,000 plus interest at 48 percent per annum commencing on November 1, 2024, not compounded, and calculated monthly. I asked the parties for submissions on whether such a rate of interest could be obtained from the personal plaintiffs, given the changes to s. 347 of the Criminal Code, RSC 1985, c C-46 and s. 1 of the Criminal Interest Rate Regulations, SOR/2024-114.

[17] Salesgrowth noted that s. 614 of the Budget Implementation Act, 2023, No. 1 (SC 2023, c. 26) provides that the new, reduced rate in the Criminal Code does not apply to a payment if the payment arises from an agreement that was entered into before January 1, 2025, the date the new Code provision came into effect. The minutes of settlement were entered into on October 28, 2024.

[18] In response to my request for submissions about the interest rate, Tandem argued that the personal responding parties should not be subject to the 48% interest rate. In addition, Tandem provided some unsworn factual assertions in an “explanatory letter” and argument on why Salesgrowth’s motion should not succeed. The unsworn factual assertions relate to the underlying claim and not to the minutes of settlement. Likewise, the memorandum of argument refers to the unsworn factual assertions and relates to the underlying loans. These documents do not affect my analysis above about the adjournment request or the enforceability of the consent order in the minutes of settlement.

[19] They raise some concerns about the advice provided to them by counsel. Those concerns are properly raised in a different forum.

[20] Given that the parties were all represented at the time the settlement agreement was entered into, and the interest in the agreement only became applicable if a further default occurred, I see no circumstances that would warrant a departure from the contracted-to rate of interest.

Disposition

[21] Therefore, Salesgrowth shall have judgment in accordance with the consent order. Tandem 2021 Inc., Gyunel Mamedova and Kamilla Yusuphanova shall pay Salesgrowth Development Inc. the sum of $180,000.00 plus interest calculated at forty-eight percent (48%) per annum commencing on November 1, 2024, not compounded, and calculated monthly.

[22] Salesgrowth does not seek costs and none are awarded.

[23] I have signed the order.

Lorne Brownstone
Date: April 25, 2025