Baywood Homes v. Haditaghi,

• Jurisdiction: Ontario
• Judge: Rouleau, Lauwers and van Rensburg, JJ.A.
• Neutral Citation: 2014 ONCA 450
• Citation: (2014), 322 O.A.C. 322 (CA),2014 ONCA 450,120 OR (3d) 438,322 OAC 322,120 O.R. (3d) 438,(2014), 322 OAC 322 (CA),322 O.A.C. 322
• Date: 04 March 2014
• Court: Court of Appeal (Ontario)

Baywood Homes v. Haditaghi (2014), 322 O.A.C. 322 (CA)

MLB headnote and full text

Temp. Cite: [2014] O.A.C. TBEd. JN.016

Baywood Homes Partnership, 2131059 Ontario Limited, 2206659 Ontario Limited, 1367169 Ontario Limited and Ralph Canonaco (plaintiffs/appellants) v. Alex Haditaghi, also known as Alex Vahid Haditaghi also known as Vahid Haditaghi, Majid Haditaghi, also known as Michael Haditaghi also known as Mark Haditaghi, Moneylogix Group, Inc., Mortgagebrokers.com Inc., Moneylogix Group Inc., Mortgagebrokers.com Financial Group of Companies Inc., Gary Cilevitz, Michael Knarr, also known as Mike Knarr and Farideh, Ronhbakhsh, also known as Farideh Rouhbakhsh (defendants/respondents)

(C57087; 2014 ONCA 450)

Indexed As: Baywood Homes Partnership et al. v. Haditaghi et al.

Ontario Court of Appeal

Rouleau, Lauwers and van Rensburg, JJ.A.

June 9, 2014.

Summary:

The plaintiff Ralph Canonaco, a home-builder, and the defendant Alex Haditaghi, a mortgage broker, together with their colleagues and respective companies, engaged in a complex series of transactions involving a property. The results were beneficial to Alex but detrimental to Ralph. Disputes arose. Initially, Alex sued Ralph on two promissory notes, signed by Ralph at roughly the same time as he executed a release agreement (the third release). Ralph countered with an action which alleged fraud and other improprieties. The consolidated proceeding consisted of Ralph's action and Alex's counterclaim on the two promissory notes. Alex moved for summary judgment dismissing the action and granting his counterclaim. A mini-trial was conducted under rule 20.04(2.2), relating only to the two promissory notes.

The Ontario Superior Court, in a decision reported at [2013] O.T.C. Uned. 2145, granted summary judgment dismissing Ralph's action. The motions judge concluded that the action was completely precluded by the third release which he found was authentic and valid. The motions judge did not grant summary judgment on Alex's counterclaim, finding that he was unable to conclude that the promissory notes were valid. He referred the issue of their validity to trial. Ralph appealed.

The Ontario Court of Appeal allowed the appeal and required both the claim and counterclaim to proceed to trial. In light of the Supreme Court of Canada's decision in Hryniak v. Mauldin (2014), "[t]he motions judge was obliged to assess the advisability of a staged summary judgment process in the context of the 'litigation as a whole.' This he failed to do."

Practice - Topic 5

General principles and definitions - Nature and interpretation of practice rules - [See first Practice - Topic 5702 ].

Practice - Topic 5246

Trials - General - Pretrial conference (incl. mini trial) - General - [See first and fourth Practice - Topic 5702 ].

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - The Ontario Court of Appeal stated that " In Hryniak [Hryniak v. Mauldin (2014)] the Supreme Court of Canada rejected this court's 'full appreciation' test for summary judgment in Combined Air Mechanical Services v. Flesch ... . Rule 20.04(2.2) empowers motion judges to order 'that oral evidence be presented by one or more parties,' under the heading of 'Oral Evidence (Mini-Trial)'. The summary judgment rules, as interpreted in Hryniak, do permit the fact-finding process to be staged, but only where ... that: '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.' ... [T[he 'power to order a "mini-trial" should be employed when it allows the judge to reach a fair and just adjudication on the merits and it is the proportionate course of action.'" - See paragraphs 31 and 32.

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - The defendants moved for summary judgment dismissing the plaintiffs' action and granting the defendants' counterclaim on two promissory notes - Under rule 20.04(2.2) of the Rules of Civil Procedure (Ont.), the motions judge ordered a mini-trial relating to the two promissory notes - He decided that a full trial on the enforceability of the promissory notes was necessary - By contrast, he concluded that the action was precluded by a release agreement that was authentic and valid - The promissory notes and the release were signed at roughly the same time and in the context of the same series of transactions - The plaintiffs appealed - The defendants submitted that the process undertaken by the motions judge was consistent with Hryniak v. Mauldin (2014) (S.C.C.), released after the decision - The Ontario Court of Appeal disagreed - "[T]he motions judge made a material error in principle in his approach to this motion in light of the Supreme Court of Canada's decision in Hryniak. He erred in failing to assess the advisability of the summary judgment process in the context of the litigation as a whole." - See paragraph 33.

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - In a summary judgment and mini-trial context, the motions judge relied heavily on certain admissions that were made by the plaintiff during cross-examination on his affidavit, but which only came before him by way of a transcript - The statements, which the motions judge characterized as fatal admissions, were never put to the plaintiff during the mini-trial - The Ontario Court of Appeal, in allowing the plaintiff's appeal, stated that "[w]hat happened here illustrates one of the problems that can arise with a staged summary judgment process in an action where credibility is important. ... Great care must be taken by the motion judge to ensure that decontextualized affidavit and transcript evidence does not become the means by which substantive unfairness enters, in a way that would not likely occur in a full trial where the trial judge sees and hears it all." - See paragraph 44.

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - The Ontario Court of Appeal stated that "Judges are aware that the process of preparing summary judgment motion materials and cross-examinations, with or without a mini-trial, will not necessarily provide savings over an ordinary discovery and trial process, and might not 'serve the goals of timeliness, affordability and proportionality' (Hryniak [v. Mauldin (2014) (S.C.C.)] ...). Lawyer time is expensive, whether it is spent in court or in lengthy and nuanced drafting sessions. ... [S]ometimes, as in this case, it will simply not be possible to salvage something dispositive from an expensive and time-consuming, but eventually abortive, summary judgment process. That is the risk, and is consequently the difficult nettle that motion judges must be prepared to grasp, if the summary judgment process is to operate fairly." - See paragraph 45.

Practice - Topic 5706

Judgments and orders - Summary judgments - Counterclaim or set-off - [See second Practice - Topic 5702 ].

Practice - Topic 5707

Judgments and orders - Summary judgments - On an admission - Sufficiency of admission - [See third Practice - Topic 5702 ].

Practice - Topic 5710

Judgments and orders - Summary judgments - Evidence - [See first and third Practice - Topic 5702 ].

Practice - Topic 5714

Judgments and orders - Summary judgments - On negotiable instrument - [See second Practice - Topic 5702 ].

Practice - Topic 8825.6

Appeals - General principles - Duty of appellate court on reviewing summary judgment decisions - The Ontario Court of Appeal stated that in Hryniak v. Mauldin (2014), the Supreme Court of Canada ruled that the exercise of powers under the new summary judgment rule (rule 20.04(2.2)) attracted appellate deference - "The question as to whether there is a genuine issue for trial is a question of mixed fact and law; in the absence of an extricable error in principle, or palpable and overriding error, this determination should not be disturbed on appeal." - see paragraph 30.

Cases Noticed:

Hryniak v. Mauldin (2014), 453 N.R. 51; 2014 SCC 7, appld. [para. 29].

Combined Air Mechanical Services Inc. et al. v. Flesch et al. (2011), 286 O.A.C. 3; 108 O.R.(3d) 1; 2011 ONCA 764, refd to. [para. 31].

Statues Noticed:

Rules of Civil Procedure (Ont.), rule 20.04(2.2) [para. 1].

Counsel:

David W. Foulds and Jennifer A. Whincup, for the appellants;

George J. Karayannides, for the respondents.

This appeal was heard on March 4, 2014, before Rouleau, Lauwers and van Rensburg, JJ.A., of the Ontario Court of Appeal. In reasons written by Lauwers, J.A., the Court delivered the following judgment, released on June 9, 2014.