Court File and Parties

Court File No.: CV-18-00607146

Date: October 20, 2025

Superior Court of Justice – Ontario

Re: Saira Kassam and Al-Latif Kassam, Plaintiffs

And: Moiz Noorani (otherwise known as Moiz Amirali Noorani), Oriental Recycle Service Inc., and Office Cubical Services Inc., Defendants

Before: Justice Papageorgiou

Counsel: F. Scott Turton, for the Plaintiffs

Heard: October 14, 2025

Endorsement

Overview

[1] The plaintiffs bring a motion to strike out the Statement of Defence and then obtain a default judgment or alternatively a motion summary judgment in respect of loans.

Decision

[2] For the reasons that follow, I grant default judgment against the defendant, Moiz Noorani ("Mr. Noorani"), but not against the corporate defendants.

[3] I note that the defendants did not file any materials in response to the motion and I did not grant an adjournment for reasons set out at the conclusion of this decision.

Issues

• Issue 1: Should the defendants' Statement of Defence be struck for failing to answer undertakings?
• Issue 2: Are the plaintiffs entitled to default judgment and against whom?
• Issue 3: What is the quantum of the plaintiffs' damages?
• Issue 4: Why was the adjournment not granted?

Analysis

Issue 1: Should the defendants' Statement of Defence be struck for failing to answer undertakings?

[4] The defendants were examined for discovery on February 16, 2022.

[5] One of the issues in this lawsuit is that the defendant Mr. Noorani represented that he was using the loaned funds to buy minerals.

[6] When examined, Mr. Noorani gave undertakings relating to the purchase of these minerals which he asserted were being stored in Sudbury. He said they had not been sold because of a slowdown in the market.

[7] The undertakings were not answered.

[8] The plaintiffs obtained an order of Associate Judge Abrams as against all defendants on December 14, 2022 requiring undertakings to be answered by January 31, 2023.

[9] To date, they have still not been answered.

[10] The plaintiffs sought to bring a contempt motion, but Koehnen J determined that a motion for summary judgment was more appropriate.

[11] Justice Koehnen set a schedule for the delivery of materials, as follows:

i. The defendants will deliver any remaining answers to undertakings and documents by February 13, 2025.

ii. Plaintiff's motion record to be delivered by April 15, 2025.

iii. Responding motion record to be delivered by May 15, 2025.

iv. Reply motion record to be delivered by May 30, 2025.

v. Cross examinations to be completed by July 4, 2025.

vi. Plaintiff's factum to be delivered by August 12, 2025.

vii. Defendants' factum to be delivered by August 26, 2025.

[12] The plaintiffs served a motion seeking the striking out of the defence on the basis of the unanswered undertakings as well as default judgment and, in the alternative, summary judgment which was not exactly what Koehnen J. directed.

[13] However, the defendants took no issue with this. They did not attend CPC or before Koehnen J. to assert that the plaintiffs could not also seek this additional relief. Instead, they simply failed to file any materials. The defendants did not even argue that the motion should not proceed as drafted.

[14] Therefore, I am satisfied that the motion should proceed as brought.

[15] Rule 60.12 provides as follows:

Failure to Comply with Interlocutory Order

60.12 Where a party fails to comply with an interlocutory order, the court may, in addition to any other sanction provided by these rules,

(a) stay the party's proceeding;

(b) dismiss the party's proceeding or strike out the party's defence; or

(c) make such other order as is just. R.R.O. 1990, Reg. 194, r. 60.12.

[16] This action was commenced 7 years ago, and concerns matters that occurred before then. The discovery occurred in 2022 and the order requiring answers was made in 2022.

[17] The defendants are in breach of two court orders at this stage.

[18] The plaintiffs cite Rimon v. CBC Dragon Inc., 2024 ONCA 128 which applied the principles in 2020 ONCA 310 that the following considerations are relevant:

(i) whether the party's failure is deliberate or inadvertent; (ii) whether the failure is clear and unequivocal; (iii) whether the defaulting party can provide a reasonable explanation for its default, coupled with a credible commitment to cure the default quickly; (iv) whether the substance of the default is material or minimal; (v) the extent to which the party remains in default at the time of the request to strike out its pleading; and (vi) the impact of the default on the ability of the court to do justice in the particular case (para 51)

[19] In this case there is no explanation for the failure to provide the answers. There was a vague submission by Mr. Noorani's counsel that Mr. Noorani was having some health issues, but he was present at the motion, and I permitted him to speak when he asked. Mr. Noorani did not say anything about his health issues when he spoke on his own behalf. He said that he had been working on the undertakings and that he had some ready and needed time to organize them and would need two weeks. If that was the case, why were they not filed or delivered even in a disorganized manner?

[20] There is nothing inadvertent about a three-and-a-half-year delay. This conduct is clear and unequivocal and there is also no explanation for any delay, let alone a delay of this length. The defendants remained in default at the time of the motion.

[21] Furthermore, the schedule set by Koehnen J. was generous and effectively gave the defendants another opportunity to answer the undertakings. They still failed to.

[22] I add that the defendants have been represented by the same counsel throughout this matter.

[23] Finally, this case is primarily about a loan. I have before me the loan documents signed by Mr. Noorani. He does not deny that he signed them or that the money was advanced. As such, there is no injustice to Mr. Noorani in this case as this matter is a simple loan enforcement as against him.

[24] I am satisfied that the Statement of Defence should be struck out and that this matter should be dealt with as a motion for default judgment as against them.

Issue 2: Are the plaintiffs entitled to default judgment and against whom?

[25] Pursuant to r. 19.02, having not defended the proceeding, a defendant is deemed to admit the truth of all allegations of fact made in the Statement of Claim.

[26] However, pursuant to r. 19.06 a plaintiff is not entitled to judgment on a motion for judgment or at a trial merely because the facts alleged in the statement of claim are deemed to be admitted, unless the facts entitle the plaintiff to judgment.

[27] In particular, r. 19.05 provides that a motion for judgment which involves unliquidated damages shall be supported by evidence given by affidavit.

The test on a motion for default judgment

[28] The test on a motion for default judgement was set out in Elekta Ltd. v. Rodkin, 2012 CarswellOnt 2928 (ONSC) as follows: A. What deemed admissions of fact flow from the facts pleaded in the Statement of Claim? B. Do those deemed admissions of fact entitle the plaintiff, as a matter of law, to judgement on the claim? C. If they do not, has the plaintiff adduced admissible evidence which, when combined with the deemed admissions, entitle it to judgement on the pleaded claim?

[29] I am satisfied that the plaintiff has established that Mr. Noorani is liable for repayment of the loans at issue based upon the following deemed admissions in the Statement of Claim and the evidence also filed.

[30] The plaintiff, Al-Latif Kassam, came to know Noorani in the 1990's when they were roommates in Toronto. They were not in any close communication for a number of years after that however they re-connected in or about 2015. At that time Mr. Noorani told him that he had become a successful businessman and entrepreneur and owned a business, Office Cubical Services Inc., that generated more than two million dollars in annual revenue. Mr. Noorani indicated that his wife, Rosmin Kassam, was a hairdresser, and that while she had no involvement in the operation of Office Cubical Services Inc., she had her own successful business operating a number of hair salons in Toronto.

[31] In or about July 2016, when Mr. Kassam was in Toronto, Mr. Noorani approached him and said that he had established a business Oriental Recycle Service Inc. which was purchasing minerals. He sought funds from Mr. Kassam and his wife. The plaintiffs did not know anything about this mineral business.

[32] Relying on the representations made by Noorani the plaintiffs proceeded to advance loans. They believed that these funds were being used to acquire minerals which would be the means by which the loans would be repaid.

[33] The plaintiffs loaned US$219,000 to the defendant Mr. Noorani through 3 separate written loan agreements.

[34] The first loan in the amount of US$70,000 was made pursuant to a written loan agreement dated October 12, 2016. The loan was due July 6, 2017. There was no interest rate on this loan prior to the maturity date. Pursuant to clause 3.3 and Exhibit A to the loan agreement, any loan amount that remained outstanding past the maturity date, would incur 2% interest per month.

[35] The only parties to the first loan agreement are Mr. Noorani and the plaintiffs. It specifically says that it is considered to be personal and unsecured.

[36] The second loan in the amount of US$140,000 was made pursuant to a written loan agreement dated January 29, 2017. The interest rate was 4% and the agreement required repayment in full by February 27, 2018. It was further agreed, pursuant to clause 3.3, that if the loan remained unpaid past the maturity date, 2% interest per month would be incurred.

[37] The only parties to the second loan agreement are Mr. Noorani and the plaintiffs. It specifically says that it is considered to be personal and unsecured.

[38] The third loan in the amount of US$8,000 was made pursuant to a written loan agreement dated May 25, 2017 and was due on June 25, 2017. Clause 3.3 provides that if the loan remained outstanding past the maturity date, the debt would be 2% interest per annum.

[39] The only parties to the third loan agreement are Mr. Noorani and the plaintiffs. It specifically says that it is considered to be personal and unsecured.

[40] The defendant Mr. Noorani did not repay the loans by the due dates.

[41] When the due date for payment of the loans came, what the plaintiffs received from Mr. Noorani was not money, but stories of how the funds to repay them were held up by the Canada Revenue Agency, but that Mr. Noorani was working on freeing the funds and repayment would then occur. Those representations continued through 2018 until the plaintiffs commenced this action in October 2018.

[42] It is clear Mr. Noorani is liable on the loans.

[43] However, I am not satisfied that the corporate defendants are liable on the basis of the deemed admissions, even with the additional evidence before me.

[44] It is trite that a party is not entitled to default judgment unless the deemed admissions and evidence entitle the party to this.

[45] The plaintiffs rely on the document called Exhibit A which is attached to the written loan agreements where it states:

"Security Borrower agrees that until the principal and interest owed under this loan agreement are paid in full, this note will be secured by a separately prepared security agreement giving Lender a security interest in the equipment, fixtures, inventory and accounts receivable of the business known as Oriental Recycle Service Inc. or any other associated business deemed appropriate and as applicable at the time. Borrower agrees that until the principal and interest owed under this agreement are paid in full, this note will be secured by the mortgage, deed of trust covering the real estate deemed appropriate and as applicable at the time."

[46] The Statement of Claim also pleads that the intention of the loan agreements was to make Oriental Recycle jointly responsible to pay the loan which is also now deemed admitted.

[47] However, as noted the loan agreements were only entered into by Mr. Noorani. As well each of the loan agreements had a provision that stated that they are considered to be personal and secure.

[48] Just because there is a deemed admission that Mr. Noorani is the controlling mind of the corporate defendants, it does not mean that when he enters into agreements on his own behalf, the corporate defendants are liable. It might have been otherwise if he signed these agreements and/or Schedule A as a director of the corporate defendants, but he did not do this.

[49] The fact that it is deemed admitted that he used one of the corporate defendant's bank accounts to receive a portion of the loaned funds also does not provide a basis for liability. All that means is that, as it says, he used its bank account to receive the funds that were loaned to him, not that the corporation received those funds and entered into the loan.

[50] As well regarding the intention of the parties, while I do have a deemed admission of the intention of the parties, I still have to consider the actual agreements before me to objectively interpret them. The subjective intention of the parties is not relevant to contractual interpretation. The materials before me, when examined as a whole, do not support the conclusion that the corporations bear any liability for the loans.

[51] As well, there is no specific pleading that the corporate defendants misrepresented.

[52] The plaintiffs also take the position that Exhibit A to the loan agreements means that any of Mr. Noorani and his privies, including the named co-defendants, must provide security over the businesses and real estate that Mr. Noorani controls or has an investment in.

[53] I make the same point here. Just because Mr. Noorani is a director and controlling mind, it does not mean that he can force the corporations to provide security over any businesses he controls or has an investment in after he defaults on what is a personal loan.

[54] Although the plaintiffs also argue that they were entitled to an equitable charge in respect of these corporations they provided no law on this or the basis for this conclusion in the circumstances of this case.

[55] For the same reasons, there is no basis for awarding summary judgment to the plaintiffs against the corporate defendants on the basis of the materials before me.

[56] I say all this with the proviso that all that has happened here is that I have not awarded judgment to the plaintiffs as against the corporate defendants on the basis of the materials before me. There has been no motion to dismiss the plaintiffs' claim against the corporate defendants and so the action will continue. The plaintiffs are free to seek amendments to their pleading and also proceed to trial as against them to seek to establish liability on any of the bases set out in the Statement of Claim with better evidence.

[57] This decision is also without prejudice to the plaintiffs in respect of the corporate defendants' liability.

[58] The plaintiffs provided no law in support of the liability of the corporate defendants. They may bring another motion supported by law in respect of the alleged liability of the corporate defendants if they are able to find any that supports their positions.

Issue 3: What is the quantum of the plaintiffs' damages?

[59] The plaintiffs provided detailed calculations:

[60] The interest on the first loan from July 6, 2017 to October 14, 2025 at the contract rate is $139,002.74 for a total outstanding amount of US$209,002.74.

[61] The interest on the second loan from February 27, 2018 to October 14, 2025 is $256,280.55 for a total outstanding amount of US$396,280.55.

[62] The interest on the third loan from June 26, 2025 to October 14, 2025 is $15,938.63 for a total of US$23,938.63.

[63] The total amount of all loans and interest is US$629,221.92.

Issue 4: Why was the adjournment not granted?

[64] In Khimji v. Dhanani et al., the Court of Appeal set out principals applicable to adjournments. Courts should balance the interests of the plaintiff, the interests of the defendant, the interests of the administration of justice in the orderly processing of civil trial on their merits, and the need to effectively enforce court orders.

[65] In that case, the majority concluded that the refusal of the adjournment was justified principally because the plaintiff had ignored the order of the court where counsel was removed from the record and the court's direction that the plaintiff should find new counsel. The court concluded that the plaintiff made no effort to retain new counsel until the eve of trial.

[66] I note here that the backlog at that time was not as bad as it is now. Further, in this case, I again point out that the defendants here had the same counsel throughout this proceeding. The problem was that the defendants' lawyer could not get instructions.

[67] Again, another important fact is that there was no denial that Mr. Noorani signed the loan agreements or that the funds had been advanced.

[68] The plaintiffs seek costs in the amount of $24,684.94. I award $15,000. I have reduced the amount because the amount claimed was not supported by a breakdown of the time spent for various stages. I am nevertheless satisfied that the type of matter would have required $15,000 in time even in the absence of the detail, given the amount in issue, the issues at stake, the importance to the plaintiffs and the loan agreements that set out that they are entitled to any costs of enforcement.

Papageorgiou J.

Date: October 20, 2025